Mr. Chairman, before we debate this particular measure, I should like to move—

We are obviously concerned here with one of a conglomeration of measures. This particular measure is only one. The principal measure is quite clearly item No. 26 on the Order Paper, namely the Status of the Transkei Bill. That is the principal measure, and none of these other measures can be given effect to until that particular measure has been approved by Parliament. All these other measures are dependent upon the acceptance of that Bill, or are concomitant with it. What we are in fact doing in discussing this measure now is naming the offspring even before the marriage has been consummated; or, to put it differently, we are dividing the spoils of the marriage even before it has been annulled. What would happen, for example, if the Status of the Transkei Bill were not accepted or if the Government were to change it in any radical form? If that were to happen, we would be wasting our time, because we would be dealing with a measure which would be entirely superfluous. We obviously do not want to waste our time. Let us look at clause 1 of this Bill which is now before us. The new section 64A, which is inserted by this clause, states specifically—

Here, quite clearly, we are putting the cart before the horse. If we were to accept this measure in this form, I submit that it would inhibit discussion under the main measure, because we would already have had accepted in principle the fact that the Transkei was going to become independent. In view of these factors, I want to say that it would be proper for us first of all to discuss the main measure. Only after that measure had been accepted by the House would it be proper for this Committee to consider all the other subsequent measures which follow upon it. That is why I have moved that we should report progress and ask for leave to sit again.

Mr. Chairman, I think the hon. member for Hillbrow is a few months too late with his suggestion. There is only one reason why today, at this stage, after this Bill has already been read a Second Time, he showed up with these theoretical objections like a Rip van Winkle, and that is the behaviour of the members of the PRP yesterday. The members of the official Opposition now feel that they are one step behind the PRP. They allowed themselves to be caught on the wrong foot yesterday, and are afraid of the Press. They are afraid that a march may be stolen on them. [Interjections.]

The hon. members on the side of the Opposition must now stop this childishness. I want to tell the hon. member for Hillbrow this year at least two other Bills have been taken through all their stages, Bills which have just as much to do with the independence of the Transkei as this one. I refer him to a Bill which we accepted a few weeks ago, which affords an independent Transkei the right to allow appeals to the Appeal Court in Bloemfontein. Why did they not raise this objection then? The hon. member sat with a mouth full of teeth then, because at that stage the PRP had not yet raised their objections. Sir, the hon. members of the UP are allowing themselves to be taken on tow by the few hon. members who are sitting there. The sooner they forget about that little party and continue with their work, the sooner they will look like a decent Opposition. Sir, these things are happening in this House today because there is no longer any control over what the Opposition does and says.

I want to point out further to the hon. member that right at the beginning of the session, months ago, we approved the Bantu Trust Amendment Bill. In that legislation we give the Trust the right to purchase land in an independent homeland. Why did the hon. member not raise his objection then? Now he quite childishly wants us to believe that this is a new objection of theirs and that this objection has substance. Surely this is ludicrous. After all they are only doing this because the members of the PRP did what they did yesterday.

I want to appeal to hon. members of the official Opposition. I want to ask them to behave like adults and like representatives of the nation, who have been sent here to accomplish a task. They must stop wrangling and fighting among themselves as they have been doing lately, because while they are doing so, the business of this House cannot run smoothly. I want to tell hon. members that we are wasting the country’s money. We are wasting this House’s money and making this House ludicrous as a result of the manner in which they are behaving here. The sooner the hon. the Leader of the Opposition realizes his responsibility in this connection and issues the necessary instructions to his Whips and all aspirants sitting over there, who are making and breaking as they please today and creating disorder in that party’s discipline, the sooner we shall be able to dispose of the work of this House and fulfil our obligations.

Mr. Chairman, it ill behoves the Chief Whip on the other side to talk about “wanorde”. The Order Paper should have been properly prepared. It is only logical that the status of the Transkei should be discussed first, before the matter which is now under discussion. The hon. member gave us an example of what we had already passed, i.e. the question of the Appeal Court. That does not, however, necessarily depend on the independence of the Transkei, If the people of the Transkei want to come to our Appeal Court, we say that they can come to our Appeal Court. That is quite a different issue.

May I ask the hon. member whether he raised this matter when we had discussions on the Order Paper?

At that time this matter was not so high on the Order Paper and the hon. the Minister will remember that in our discussions we asked when the Transkei Bill was coming, because so many matters were dependent upon it. [Interjections.] I should like to tell the hon. the Leader of the House that he was not present at the discussions which we had; the hon. the Minister of Bantu Administration and Development was there when he told us about the Bills still to come.

I gave it voluntarily, not on request.

Exactly! At that meeting he told us of the Bills still to come. As far as the Appeal Court is concerned, the right to come to our Appeal Court is a right we have given to the Transkei if they want to use it. If they do not want to exercise that right, it is up to them. It does not adversely affect the residents of the Transkei, It is an additional right we are giving them. The amendment to the Bantu Trust and Land Act allowing the trust to buy land in independent homelands, was a right we gave the Bantu Trust to protect the people who are living in those areas, viz. the farmers who want to sell in those areas. That is a relief we are giving to people.

As far as this Bill is concerned, we do not know how it is going to affect these people. We were waiting for the Transkei Bill, and why have we only got it now? It is the most important Bill to be introduced—as Die Burger says—in the history of this Parliament. We have to wait right until the end of the session before we get it. We did not know what is in that Bill. There may be provision for this sort of thing in that Bill, because there is a reference to agreements which have been made by this Government with the Transkei Government. Has there been any agreement on this issue? We want to know how the people are going to be affected afterwards. It is only logical that this matter should have been discussed after the Transkei Bill has been passed, and I cannot see why the Government will not agree. What is the objection to discussing this after the Status of the Transkei Bill has been passed.

Mr. Chairman, I must say that I was most disappointed with the case put forward by the hon. Chief Whip on the other side. I do not believe that he tried in any way to deal with the merits of the argument put forward by the hon. member for Hillbrow. Not in any way did he try to deal with the merits. He came instead with a political attack on what he considers to be a division within this party. I am sure that you will allow me, Mr. Chairman, to reply to the hon. member. We have not been motivated in any way by anything which the gentlemen of the Press or the gentlemen of the PRP have said about this matter. I believe that the hon. member for Hillbrow put forward a perfectly logical argument, an argument which is so logical that the NP finds itself in a position that it cannot counter. That is why the hon. Chief Whip gets up now, hurls abuse and launches into what is nothing more than a political red herring, a tirade, to try and draw the attention of the House away from the real facts of what we are dealing with now.

What are we dealing with? We are being asked here this afternoon to consider a Bill which makes provision that immediately prior to the date on which the Transkei becomes independent certain things which apply at that date shall apply afterwards.

May I ask the hon. member a question?

No, Sir.

Why not?

The hon. Chief Whip must give me a chance to speak. When I have made my case, I shall answer any questions which he has. We are being asked to consider something which will happen, or rights which will purtain, prior to the date on which the Transkei becomes independent. What is that date?

26 October.

If one of us asks the hon. the Minister of Labour, who is in charge of this measure, what that date is, he cannot answer.

26 October.

On what authority does the hon. the Minister say that it shall be 26 October? He has no authority whatsoever for saying so, because there is a Bill before this House—which I am not permitted to discuss now—which suggests that this House may decide that the Transkei shall become independent on 26 October. At this stage, however, there is no such decision. How can we consider a matter like that? If we want to take the matter further, in subsection (2) of clause 1 of the Bill which is now under discussion, it is provided—

Can we in this House assume as a fact that the Transkei will cease to become a part of the Republic? I do not believe we can assume that at all.

But Parliament has accepted the principle of this Bill.

The hon. the Minister of Indian Affairs is quite correct when he says that Parliament has accepted the principle of this Bill, but what is the principle of this Bill? It is simply that people’s rights shall be protected. Now, however, we are dealing with the details, and I believe that before we are entitled to consider the details of this measure, we must have the other details cleared up, those details which go to make up this Bill. The hon. the Chief Whip referred to the provision that allows the Transkei to use our Appeal Court. That applies now, not only after the Transkei receives independence, and the hon. Chief Whip knows that, yet he comes along here and misleads the House. He also dealt with the question of the Bantu Trust and the transfer of land to the Transkei Government. He knows that that can happen now and is not dependent upon independence.

I now want to say something to the hon. the Leader of the House. The question of these Bills was raised. I have the word of the hon. the Chief Whip on our side that this matter was raised at last week’s Whips’ meeting.

Where do you get your information from?

From my Chief Whip. [Interjections.]

Mr. Cheeseman!

I believe that the “Mr. Cheeseman” who is leaving the House now, is the one who is being disloyal to South Africa. That is the hon. member who wants to bring the name of South Africa into disrepute. He is “Mr. Cheeseman”.

Order! The hon. member who said “Cheeseman” must withdraw it.

Is it not parliamentary to use the word “Cheeseman”?

Order! The hon. member must withdraw it.

I withdraw it, Sir.

Mr. Chairman, on a point of order: May the hon. member say the Chief Whip of this side of the House is misleading this House?

Mr. Chairman, I shall withdraw it and rephrase my statement. The hon. Chief Whip made certain statements by which he certainly misinformed the House. I do not know whether he had the intention of misinforming the House, but I do not question his integrity at all. His statements, however, certainly had the effect of misleading the House at the time he made them. If the hon. Leader of the House looks at the Order Paper he will find that there are 11 measures on the Order Paper at the moment affecting the question of whether the Transkei shall or shall not become independent. I consequently believe that it is important that that principle be established before we can deal with any of those 11 measures, including the one before us now. [Interjections.] I do not believe it is necessary for me to have to detail those 11 measures now, but in the interests of justice and in the interests of not making Parliament a laughing stock—a matter the hon. the Chief Whip on that side is so worried about—I believe that you Mr. Chairman, should now report progress and ask leave to sit again after we have dealt with the measure which will decide whether the Transkei shall or shall not become independent.

Mr. Chairman, may I ask the hon. member why he did not raise this objection during the Second Reading debate?

He said so a moment ago. You would have heard it had you listened.

Mr. Speaker was in the Chair at the time and can therefore bear witness to the fact that the hon. member for Hillbrow raised this particular point in his speech. He said then that the Government was putting the cart before the horse and that this should be considered after the Transkei Bill, but because the principle embodied in the legislation was simply the protection of the rights of people, he said that we would let the Second Reading proceed. The hon. member for Hillbrow said so.

Now you have changed your mind.

No, we have not changed our minds at all. We believe that the detail must be left till after the other debate. Mr. Chairman, I support the motion.

Mr. Chairman, like the Chief Whip, I want to appeal to hon. members not to waste the time of this House any longer at this stage. The hon. members on the opposite side do not have a valid case at all because of four very clear reasons. The first question is whether a precedent is not being created here. It has been very clearly indicated that a precedent has already been created during this session in that legislation of a similar nature in connection with the Transkei has been accepted. During the Second Reading debate the hon. member for Hillbrow, in spite of a certain remark he made, said that the official Opposition supports the Bill. He gave no indication at all that the Opposition objected to the legislation being dealt with at this moment. Furthermore, hon. members, who had the opportunity to register their objections when the Order Paper was prepared, gave no indication at all that they were not satisfied with the order in which the various orders of the day were settled. Therefore it is not justified for hon. members to advance the arguments they are advancing now.

I feel that we should proceed with the legislation. Hon. members on both sides of the House gave the Bill their support. The hon. member who participated in the Second Reading debate on behalf of the PRP, indicated that he would ask a question on a technical point during the Committee Stage, and that was the only indication that there would be any discussion at all during the Committee Stage. I therefore want to ask hon. members not to waste the time of the House any longer.

Question put and the Committee divided:

AYES—33: Aronson, T.; Basson, J. D. du P.; Baxter, D. D.; Bell, H. G. H.; Deacon, W. H. D.; De Villiers, I. F. A.; De Villiers, J. I.; Enthoven (’t Hooft), R. E.; Graaff, De V.; Hickman, T.; Hughes, T. G.; Jacobs, G. F.; Lorimer, R. J.; McIntosh, G. B. D.; Miller, H.; Mills, G. W.; Murray, L. G.; Oldfield, G. M.; Pitman, S. A.; Pyper, P. A.; Raw, W. V.; Slabbert, F. van Z.; Streicher, D. M.; Van Coller, C. A.; Van Eck, H. J.; Von Keyserlingk, C. C.; Waddell, G. H.; Wainwright, C. J. S.; Webber, W. T.; Wiley, J. W. E.; Wood, L. F.

Tellers: E. L. Fisher and W. G. Kingwill.

NOES—73: Albertyn, J. T.; Ballot, G. C.; Bodenstein, P.; Botha, G. F.; Botha, J. C. G.; Botha, L. J.; Botha, P. W.; Botha, S. P.; Brandt, J. W.; Clase, P. J.; Coetsee, H. J.; Coetzee, S. F.; Cronje, P.; De Beer, S. J.; De Klerk, F. W.; De Villiers, D. J.; De Wet, M. W.; Du Plessis, P. T. C.; Du Toit, J. P.; Greeff, J. W.; Grobler, M. S. F.; Henning, J. M.; Herman, F.; Horn, J. W. L.; Janson, J.; Kotzé, G. J.; Kotzé, S. F.; Kotzé, W. D.; Le Grange, L.; Le Roux, F. J. (Brakpan); Le Roux, F. J. (Hercules); Ligthelm, N. W.; Malan, G. F.; Malan, J. J.; Marais, P. S.; Maree, G. de K.; McLachlan, R.; Mulder, C. P.; Nel, D. J. L.; Niemann, J. J.; Nothnagel, A. E.; Palm, P. D.; Potgieter, S. P.; Raubenheimer, A. J.; Schlebusch, A. L.; Scott, D. B.; Simkin, C. H. W,; Snyman, W. J.; Steyn, D. W.; Steyn, S. J. M.; Swanepoel, K. D.; Terblanche, G. P. D.; Treurnicht, A. P.; Ungerer, J. H. B.; Uys, C.; Van den Berg, J. C.; Van der Merwe, S. W.; Van der Spuy, S. J. H.; Van der Walt, A. T.; Van der Watt, L.; Van Rensburg, H. M. J.; Van Wyk, A. G; Van Zyl, J. J. B.; Venter, A. A.; Viljoen, P. J. van B.; Vilonel, J. J.; Vlok, A. J.; Vosloo, W. L.; Wentzel, J. J. G.

Tellers: N. F. Treurnicht, A. van Breda, C. V. van der Merwe and W. L. van der Merwe.

Question negatived.

Clause 1:

Mr. Chairman, while the Committee has rejected my motion, it has at least had the useful by-product that is has illustrated once again the disarray in the ranks of the PRP. It has given certain members of the PRP an opportunity of making a gesture of defiance.

Mr. Chairman, the proposed new section 64A(4) refers to employers in the Transkei. The injunction is, clearly, that they are required in terms of this provision to retain, for purposes of this section, certain records. The question has been posed what right Parliament has to pass legislation which will provide an instruction to a foreign independent power to do certain things. It illustrates once again the point I tried to make, viz. that it would have been very useful for the Status of the Transkei Bill to have been discussed first. One would imagine that the Government had entered into certain agreements with the Transkei Government and that this particular measure is the result of such an agreement. This has not been indicated to vs. It just shows why it would have been so useful to deal with these Bills the other way round. We should like the hon. the Minister to explain to us precisely what agreements have been entered into with the Transkeian Government in regard to this particular provision.

Mr. Chairman, as was probably noticed, I did not participate in the voting a little earlier. The reason is simply that when we discussed the Second Reading of this Bill, I, on behalf of these benches, supported the Bill, as did the United Party. It thus seemed to me somewhat inconsistent, if not childish, for this matter to be raised at this stage. [Interjections.]

Order! The hon. members should discuss the clause and not a Party’s conduct in this House.

Yes, Sir, I shall abide by your ruling. I want to refer to subsection (4) of the proposed new section 64A. The hon. the Minister will recall that I raised a question in the Second Reading as to the implementation of this provision. No one wants to pass legislation which cannot be implemented. I raise the question again, particularly under clause 1(4), as to how it will be possible— should the Transkei become a sovereign independent State—for another State to impose certain regulations or instructions on employers living in another separate State. If there is an agreement or an arrangement, and if discussions have been held, obviously, this hon. House should hear about it, and I would like to ask the hon. the Minister again what his reply is to this.

Mr. Chairman, the matter which has now been raised, concerns clause 1(4), which deals with the actual implementation of this agreement. I should just like to mention that a provisional agreement exists between this Government and the Transkei Government. This is an agreement which will be of force and effect also when the Transkei becomes independent. The said agreement covers the full implications of this legislation. In the first instance it is provided that, when the Transkei becomes independent, the validity of unemployment insurance will not immediately be done away with. All such unemployment insurance will remain in effect for another three years, and people who will qualify for benefits from such unemployment insurance, are the same people who would have qualified for benefits in any event, even though the Transkei had not become independent.

An agreement has quite correctly been reached about the manner in which this will take place. The agreement was reached between this Government and the Government of the Transkei. This is an agreement in terms of which the Transkei Government will appoint the necessary people, with whose training the Government of the Republic will assist in order to ensure that the process continues so that no problems will arise in respect of the implementation thereof. Great care will be taken that the card system kept by both employers and employees, is handed over and that the entire procedure in this regard will run smoothly until the date of expiry. All this is being done by way of the agreement. There will therefore be no practical or technical problems in connection with this matter.

Clause agreed to.

House Resumed:

Bill reported without amendment

Mr. Chairman, I believe the hon. the Minister has had some throat trouble. If he has difficulty in replying to any of the matters, I would be quite happy to leave those matters over until the Third Reading. If, at any stage, he feels like it, I just want to indicate to him that we would be quite happy to do that.

The point that I want to raise in connection with clause 1, relates to industrial policy. The hon. the Minister is raising the limit for industrial policies from R600 to R1 000. There are many of us who have some problems in connection with the whole existence of industrial policies as such, particularly because of the abuse to which they can be put. The question that I would like to put to the hon. the Minister, is whether he, by increasing the amount from R600 to R1 000, actually means that he is permanently wedded to the concept of industrial policy, or whether he is prepared to give consideration to a whole review of the concept of industrial policies in the insurance world?

Mr. Chairman, I want to thank the hon. member for Yeoville for his consideration. At the moment my voice is working and I hope it continues. I think that as far as the point that he raised is concerned, we are quite prepared to look at that matter more broadly. If the hon. member would like to discuss that with me, I shall be happy to do so.

Clause agreed to.

Clause 2:

Mr. Chairman, I support the concept of converting foreign insurers to domestic insurers. There is no amendment that we intend moving to this. But there is one issue which, I believe, has been raised with the hon. the Minister, and that is the position in regard to the payment of stamp duty and transfer duty in respect of the transfer of assets from a foreign insurer to a domesticated entity. This is not the correct piece of legislation to give relief there, that will have to be done under other legislation. But, is it intended to give any relief where this compulsory conversion does take place?

What is the question?

Are you prepared to consider giving relief in respect of stamp duty and transfer duty in respect of the transfer of assets from a foreign entity to a domesticated entity?

That is a point to which I have not applied my mind, but I am prepared to look into it.

Clause agreed to.

Clause 6:

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

1. (1) On page 19, in line 3, to omit “two” and to substitute “three”;
2. (2) on page 19, in line 21, to omit “two” and to substitute “three”.

The object of these amendments is not to indicate that I am wedded to the figure of R300 000 as opposed to R200 000, but to focus attention on the fact that I believe—and I believe there are many people who believe it with me—that whereas the figure of R100 000 in respect of capital was grossly inadequate, many of us feel that the figure of R200 000 is still grossly inadequate, despite the fact that there is a provision which follows on it in respect of the percentage of premium income. We believe that if one enters this type of business, one needs to be of substance and it needs to be a concern which has adequate reserve capital. I, for one, even think R300 000 is probably not the right kind of figure. On the one hand one does not want to put small entrepreneurs out of business, but on the other hand one has to give security to people who invest their money in this type of activity. That is why in my view R200 000 is grossly inadequate. If the hon. the Minister wanted to go beyond R300 000 he would certainly find support from our side, because we believe that companies in this type of business need to be substantial concerns, particularly if you consider the fact that in this kind of activity there is going to be more and more spread of shares as time goes on. There is no reason why the real capital which the people who are in business have invested, should not be more substantial as a protection to policy holders and people of that sort.

Mr. Chairman, I readily concede that this is an arbitrary amount to a certain extent. As the hon. member for Yeoville has just said, it is necessary to increase the present amount in any event. After discussions with interested parties, a figure of R200 000 was decided upon, i.e. double the present amount. I want to suggest that we accept this figure of R200 000 and see how it works out in future. We can always effect an amendment later, if necessary. However, the matter was discussed very thoroughly it was considered very carefully, and I am not prepared simply to change the figure with a stroke of the pen without having gone into the matter once again together with the parties concerned. At the moment I should like the clause to remain as it is. However, I want to concede that this is an arbitrary amount. It had to be increased. However, the hon. member for Yeoville himself said that we should not go too high, as this might have a detrimental effect on small undertakings.

Amendments negatived (Progressive Reform Party dissenting).

Clause agreed to.

Clause 7:

Mr. Chairman, in form and substance my amendment on this clause is identical to the previous one and, as the hon. the Minister has already replied to it, I shall not waste any time on it. I merely want to draw attention to the object of this amendment. The issue is whether the capital is adequate in these circumstances. Mr. Chairman, I now move the amendment printed in my name on the Order Paper, as follows—

Mr. Chairman, the reply I have just given, suffices. Therefore, I am unable to accept this amendment.

Amendment negatived (Progressive Reform Party dissenting).

Clause agreed to.

Clause 10:

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

1. (1) On page 25, in line 47, after “Minister” to insert:

1. (2) on page 25, in line 53, to omit “towards” and to substitute “resulting in”;
2. (3) on page 27, in lines 12 to 14, to omit subparagraph (vi);
3. (4) on page 27, in lines 19 and 20, to omit “, classes of such persons”.

I am not going to repeat all the arguments I put forward during my Second Reading speech why I am not in favour of this clause. I shall restrict myself to motivating the amendments. The first amendment seeks to oblige the hon. the Minister to consult with the chairman of the Incorporated Insurance Brokers’ Association of South Africa before he issues a proclamation in terms of clause 10. The motive behind this is merely that the other side should be heard. Any proclamation under this clause would be on the initiative taken by certain insurance companies by putting a case to the hon. the Minister. It is important that before a proclamation is made that, in all fairness and in the interests of the industry as well as the public, the other side should be heard. I accept the undertakings given by the hon. the Minister that he would, in any event, consult with all people concerned before he issues a proclamation. But as the hon. the Minister will accept, Ministers of Finance change from time to time and he himself has said that no Minister can be tied to obligations made by his predecessors. I feel that in the interest of equity, the industry generally and the public in particular—as insurance brokers are the people most affected and as they are the watchdogs of the public with regard to insurances—that there should be an obligation on any Minister of Finance at any particular time to hear the other side.

The question could be asked why it should be the chairman of the Incorporated Insurance Brokers’ Association that should be consulted. The reason is that this association represents the majority of the major insurance brokers and the vast majority of, broker premium income in South Africa is handled by members of this association. This association works closely with other associations representing brokers, and therefore if the hon. the Minister is to be obliged to consult with the chairman of the brokers’ association, he would get a fair picture of how intermediaries in general view a proposed proclamation. As the hon. the Minister knows, this clause has caused disquiet as well as a certain degree of tension in the market. If the brokers, i.e. the intermediary side of the industry, knew they would be consulted before a proclamation was issued and that all future Ministers of Finance would also always be obliged to consult before proclamations were issued, they would feel that at least their side will always be heard. That is the motivation for the first amendment.

The second amendment in my name seeks to remove the word “towards” and to substitute “resulting in”. The word “towards” is far wider than the hon. the Minister actually wants to go. There are many activities which take place and in which intermediaries are involved which do not result in a policy being serviced, or effected or maintained but in the widest sense of the word they could be seen as activities towards those objectives. Let me give the hon. the Minister an example: A committee on which insurers and intermediaries serve together to investigate certain aspects of insurance. The moneys that have to be provided for such a committee to proceed with its activities, would normally be provided by the intermediaries and the insurance companies jointly. As the clause reads, it could be interpreted as meaning that as those activities are towards effecting policies, obtaining policies or servicing policies the Insurers cannot contribute. If the hon. the Minister were to accept my amendment, accept the words “resulting in” then there is no room for any misunderstanding. It is quite clear what the hon. the Minister is aiming at, i.e. that the proclamation in terms of this clause will in fact control commissions, remuneration for activities which result in maintaining, effecting or servicing policies.

The third and fourth amendments standing in my name have as object to make sure that any proclamations as far as commission is concerned, is blanketed over all intermediaries for a particular service done. It is obviously not fair that there should be discrimination between the remuneration of one form of intermediary and another for the same work. In addition, in the absence of any legal definitions of different classes of intermediaries, anybody can call himself an insurance broker, an insurance consultant, a chief agent or an agent. These are not legally defined terms and there is no form of licensing whereby an intermediary has to qualify to be able to place himself in a certain category. Therefore, if one does discriminate in a proclamation, for example between a chief agent and a broker, it is in fact meaningless because chief agents can call themselves brokers and brokers can call themselves chief agents. Therefore, until such time as proper licensing and proper legal definitions have been given to these various terms, it would be in fact unworkable to differentiate between various classes of persons.

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

1. (1) On page 25, in lines 48 and 49, to omit “prohibiting any consideration from passing or being offered, or”;
2. (2) on page 25, in line 52, after “person” to insert:

The first amendment mainly deals with the word “prohibition”. I can understand the motivation behind limiting the consideration for services in connection with insurance brokerage activities, if I may use the broad term, but I cannot understand a desire to prohibit any consideration. The prohibition on any consideration seems to me to be utterly illogical, because in terms of this provision the Minister could in fact be given the power to put the whole of the insurance brokerage industry in South Africa out of business by a stroke of the pen. With respect, Sir, that is something which one cannot agree to. One can understand, whether one agrees with it or not, the fact that, by reason of certain problems in the industry, the commission should be limited. I can understand the logic of that— whether one agrees with it or not is irrelevant, because that principle has presumably been accepted at Second Reading—but I cannot understand why one should want to put an end to a whole industry which is necessary and essential in this field in South Africa.

As regards the second amendment, I can understand the power being given to limit the remuneration or commission which is paid to people who are brokers, who are in part-time activity, or who are agents, but I cannot understand why this power should be extended to enable the remuneration of full-time employees to be limited. That is something which I do not think the Minister has in mind, but in terms of the clause as it stands he is being given the power. This is something which we believe should not take place, because it will establish a precedent. Once this is put into one piece of legislation, it will mean that you will in fact be able to limit the remuneration of anybody in any kind of activity, and that is obviously undesirable.

I am not, with these two amendments, trying to destroy the clause. On the contrary, I am trying to give effect to what the hon. the Minister himself indicated during the Second Reading in so far as this clause is concerned. Finally, as regards the clause itself, I am not sure that the problems which exist in the industry will be overcome by action in terms of this provision. I believe that there should be negotiation and voluntary control in respect of this matter, and that if the powers under this clause have to be exercised, a mistake will be made. For that reason I regret to say that we cannot support the clause as a whole, because we do not believe it is in the interests either of the insurance industry or of the insurance brokerage industry. Even once this provision is on the Statute Book, we hope that the Minister will seek not to use these powers but rather to have voluntary restraints in the industry which should be adequate in the circumstances.

Mr. Chairman, I do not want to repeat any of the arguments which I raised in regard to this clause during the Second Reading. We on this side of the House do have reservations about the implementation of this clause, because to me it seems that the Government is taking unto itself powers to interfere directly with the private enterprise system and with market mechanisms. I think, however, that we have to be realistic in regard to the conditions that exist in the insurance industry and which exist in the relationship between the insurance industry and the insurance brokers. At present an unhealthy position does exist, where insurers are competing for business on the basis of offering higher and higher commissions to intermediaries. It is not by any means happening in all cases that insurance brokers are being paid out of proportion to the services they render. I think in many cases insurance brokers render very valuable services and fully earn the commissions that they are paid, but in other cases that condition does not prevail. That applies in many cases, and we on this side of the House recognize that something should be done in this connection. We would like to see a voluntary agreement being reached in the industry whereby the industry could put its own house in order without compulsion being used. If the hon. the Minister were successful through negotiations in getting the industry to put its house in order, we would agree to him taking action in terms of this clause. The hon. member for Randburg has moved an amendment to the effect that action should only be taken after consultation with the body representing the brokers. I think that that is only half an amendment. I think that if action has to be taken, it must certainly be taken after consultation with the industry. However, the industry consists not only of brokers; it consists of insurers as well. I would strongly suggest to the hon. the Minister that if he has to use these powers, he does it after consultation, not only with the Association of Brokers, but also after consultation with the Association of Insurers. It is not going to be an easy task to lay down a fair and equitable scale of remuneration for intermediaries, and I do believe that the hon. the Minister must exercise the closest co-operation with the industry if he is going to use the powers which he is taking in terms of this clause.

Mr. Chairman, I should like to refer to two of the amendments which have been moved, one of them by the hon. member for Randburg and the other by the hon. member for Yeoville. With reference to the clause, the principle of the clause, which was accepted at the Second Reading, is that machinery should be established to control or prohibit malpractices which could arise in the broking industry. This principle is that it must be ensured that the insurer can be given the maximum benefits at the lowest premium. That is the crux of the matter. This principle has two legs. One leg deals with control and limitation. This is stated very clearly in clause 10, which deals with the limitation of consideration and the prohibition of consideration for certain services. When we look at the limiting aspect of this principle, it actually means that one wishes to limit measurable considerations, measurable commissions which can be abused in order to violate this principle of the maximum benefit at the lowest premium. A very good example we can mention is annuity insurance, where a maximum amount is taken from the first year’s premium which is generally accepted to be too high at the moment. That can be limited. Therefore it is a measurable consideration which can be limited. The second principle, where the malpractices occur most frequently, is the principle which is not measurable, where consideration is given which is not directly related to the quality of the insurance. The idea is that this sort of consideration should be prohibited. It takes the form of consideration such as salaries or fringe benefits, for instance, and there are even cases where overseas trips are offered to certain intermediaries of brokers who sell the largest number of policies. The irony of the matter is that the policies of the insurer who does not want to contribute towards that consideration just do not count for the quota of the broker or the intermediary for earning the overseas trip. It is this type of malpractice which can arise which this clause aims to restrict. If the amendment of the hon. member for Yeoville is accepted, the whole principle will in fact be destroyed. The greatest malpractices could then arise. Therefore I suggest that this amendment of the hon. member for Yeoville totally destroys the principle which was accepted at the Second Reading. Therefore I suggest that this amendment of the hon. member for Yeoville is totally out of order and therefore cannot be allowed. Mr. Chairman, if you will not concede this point to me and if the amendment has to remain as it is, I am certainly unable to support it.

I should now like to refer to the last amendment of the hon. member for Randburg. He requires amendments to be made in respect of persons or classes of persons who may be restricted, in other words, where regulations can be made to prohibit certain persons from performing certain tasks or from selling certain forms of insurance. However, his amendment has precisely the opposite effect from what he has in mind. It will in fact have the effect of imposing a restriction and discriminating, because one does not put plaster on the whole body, after all, if only a part of the body has been hurt. The principle of the proposed new section 23A(2)(a)(iv), (vi) and 23A(2)(b) deals with the necessity for discrimination so that this clause may be applied only where malpractices may arise. Therefore I cannot support that amendment of the hon. member for Randburg either.

Mr. Chairman, this is obviously an important clause. I think the discussion has shown that. Let me say at once that I do not particularly wish to take powers to force anything on the industry at all if the industry could reach voluntary agreement among short-term insurers. We have a voluntary agreement about commission in respect of long-term insurers, as the hon. member for Yeoville and others will know. I do not say it is ideal, but at least the various parties have come together and reached agreement. However, the position is not as satisfactory when it comes to short-term insurers. The Registrar is using his best offices to bring about the proper climate and conditions for voluntary agreement. Whether that will succeed or not, we shall have to see, but it is against that background that I shall be replying to the specific amendments moved because I share the particular philosophy that if things can be done voluntarily, there is no need for the Minister to intervene. The position, however, has certainly not been satisfactory in many respects and is not in all respects satisfactory at the moment.

I now want to come to the hon. member for Randburg who said there should first be consultation with the chairman of the Incorporated Brokers’ Association. It is not an unreasonable suggestion, but I do not really think it is necessary because in all these matters prior consultations take place as a matter of course. Indeed, it would be hard to imagine a Government official who conducts more consultations in his particular field of activity than does the Registrar of Financial Institutions. One of the reasons why we held this legislation over from the previous session was precisely because it seemed to us, as a result of certain reactions that are still coming in, that it would be necessary for the Registrar and his staff to pursue certain consultations still further, even though they had been pretty detailed up to that stage. I would therefore merely like to assure the hon. member for Randburg that the type of prior consultations he has in mind will most certainly always take place. The further point which I think arises here—if I remember correctly, the hon. member for Constantia raised it—is that if one includes the Brokers’ Association, some of the other societies or groups in the insurance field will certainly feel that, if there is to be such a provision in the legislation, provision should also be made for them. After all, we have the South African Registered Insurance Brokers’ Association, the Life Underwriters’ Association, the Life Offices Association, the South African Insurers’ Association, etc. They could certainly claim that they and their members are very much concerned in a measure like this. Rather than try to make legislative provision for this sort of consultation with a whole number of societies, institutions or organizations, I prefer to leave the matter as it is and give a complete assurance that these consultations will most certainly take place on any occasion where this sort of thing is under discussion. Of course, it stands to reason that any of the affected organizations can at any time approach the Registrar, or myself as Minister, as they do from time to time, and raise any of these matters. Their representations will be given very careful consideration. That is the spirit in which I would approach that amendment.

I should like to continue with the amendments of the hon. member for Randburg. I refer to the one which seeks to omit the word “towards” in line 53, page 25, and to substitute “resulting in”. As I understand it, the substitution of “resulting in” for “towards” will have the effect of placing beyond the scope of the proposed controls the payment of remuneration in cases where the remuneration is not related to specific issues of policies and where the intermediary is remunerated on what could be a salary than a commission basis. I do consider it necessary that the Minister should have power to control remuneration in such cases as well, should such wider powers become necessary. It is a question of enabling powers, and certainly, as we see it, circumstances may arise where it may be very necessary to have this broader perspective. We therefore prefer to make provision for that. It will certainly not be possible for me to have that discretion if we effect an amendment as proposed.

I now come to the third amendment of the hon. member for Randburg. He wants to omit all the words after “only” on page 27 up to line 14. As I understand it, this amendment will have the effect of precluding a restricted application of the controls to a specific class of intermediary. The area required to be controlled may be limited, for example, to brokers only or to company representatives only. We do consider it necessary to have the controls sufficiently flexible so as to be able to restrict their applications to the problem area, and to exclude those classes of intermediary whose remuneration may seem to present no problem. This will, of course, not be possible if I accept the amendment. That is all there is to it.

The final amendment of the hon. member for Randburg seeks the omission of “classes of such persons” on page 27. I think this is a consequential amendment, consequential to the hon. member’s third amendment, and therefore it does not call for further comment from me. Perhaps I can just inform the hon. member for Randburg that the Life Offices Association, with whom these clauses were very carefully discussed too, in fact supports the provisions as they appear in the Bill. As regards the amendments that have been proposed since the Bill’s publication, we have not had representations asking us to change these provisions. In view of the very full consultations we have had over a long period, I would therefore be rather reluctant to change the provisions now. Certainly, we must have powers to intervene if it is absolutely essential that we should do so. I want to say again that, personally, I hope that it will not be necessary to do so, but that the industry will look after its own affairs. I believe the industry is certainly able to do that.

I shall now turn to the other amendments. In the first instance, there is the amendment of the hon. member for Yeoville in regard to the question of prohibition referred to on page 25 of the Bill. I should like to give the assurance that it is certainly not my intention to use any of the powers I am given in terms of this clause to place a general prohibition on the remuneration of insurance intermediaries. However, the powers must be adequate to deal effectively with certain undesirable forms of consideration which, I think, could well be expected to arise in consequence of control, should it have to be resorted to. Subsection (2) provides for a flexible and selective application of a prohibition or limitation. A limitation of consideration, passing or offered, can easily be circumvented by resorting to forms of consideration that are not readily assessible in monetary terms. I think the hon. member for Wonderboom also referred to this. For example, various so-called “perks”, such as the use of cars, telephone services, etc., can be resorted to. It is also envisaged that it may become desirable to prohibit remuneration in cases where the intermediary’s activity does not justify remuneration. For example, the mere reporting of a likely insurance prospect would not seem to me to merit remuneration in this sense, nor would the so-called switching of a policy. It is really for those reasons that I have some difficulty in accepting the relevant amendment of the hon. member. However, I wish to repeat that I certainly have no intention of imposing any kind of general prohibition.

The hon. member for Yeoville also moved that after “person” in line 52, page 25, the words “other than a full-time director, official or employee” should be inserted. This amendment does not indicate to whom the full-time director, official or employee is related. If, as would seem to be the case, the words to be inserted are intended to relate to “a registered insurer or an underwriter at Lloyds”, as in line 51, the effect would be to restrict the scope of the proposed control measures to independent intermediaries, whereas the object of the provision is to bring within its scope the remuneration of all intermediaries irrespective of their relationship to the insurer. I trust I have given a reasonable interpretation to the question of to whom precisely those officers are related. Because we want to make provision to embrace the remuneration of all intermediaries, I do have some trouble in accepting that amendment. That is all I wish to say at the moment.

Mr. Chairman, if I may react to some of the comments made by the hon. the Minister on my first amendment, viz. that the Minister should be obliged to consult with the Chairman of the Brokers’ Association, I want to say that what I am basically trying to get at here is the principle of audi alteram partem, i.e. that the other side be heard. I think the hon. the Minister will agree with me that if a proclamation was made, it would be made at the initiative of certain insurance companies who would explain to the Minister, as they have done, that the position was such that such a proclamation was necessary. However, in the circumstances, the other side, that of the intermediaries, should be heard. I do not think it is necessary that legislation should oblige the Minister to consult every one on the other side, because if one desires to oblige the Minister to do this, it could become an impossible task. My object in mentioning just the one body is that it is the largest body.

If the hon. member for Constantia feels that there should be consultation with the Insurers Association as well, I shall not object to that at all. However, I feel that in their case, they would already have been heard, and that is why a proclamation is being considered. The purpose here is that the other side should be heard. If I could relate this to the answer given by the hon. the Minister on the third and fourth amendments moved by me. The hon. the Minister said that if there was disorder in any one category of intermediaries, he would want to act against that category of intermediary only without acting against the other categories. I believe, however, that the hon. the Minister is going to find himself with a problem, because there is no such thing as a legally defined category of intermediaries. Anybody can call himself whatever he wants to call himself. You can have an insurance brother who is at the same time an insurance consultant and is also the chief agent for various companies. Therefore he is not only a brother but he is also a chief agent—in other words, a representative of the companies themselves. Let us assume that the hon. the Minister wishes to act against insurance brokers only. In practice he would find that persons exist who whilst being insurance brokers—the class the hon. Minister wishes to act against—are also insurance consultants and chief agents—classes the Minister does not want to act against. Until such time as there is a legal definition for each class of intermediary, I believe the task of the hon. the Minister is going to be very difficult in this respect.

As the hon. the Minister has said—and we all accept it—there are problems in the industry, problems which we all wish to see put right, but acting in terms of this clause could be very counter-productive. If pressure is brought to bear on the Minister to act against brokers on the assumption that they are alleged to be the problem, but that it is not necessary to act against agents because as representatives of the companies they can be controlled by the companies, a very unfair discrimination could arise—and that is that company agents who do not represent the public could receive a greater renumeration for the same work than brokers who do represent the public. This would not be in the interest of the public.

I am not suggesting that this will happen under this hon. Minister or this registrar, but to avoid this clause being used in the future in a way that could well be discriminatory and counter-productive, it should be suitably amended.

The two points therefore are that the legal principle audi alteram partem should apply and that, secondly, a proclamation that singles out one class of intermediary only for control would be unfair and would cause a disruption in the industry, apart from the fact that it would be very difficult to implement in practice.

In connection with my second amendment, I want to point out that it appears from the hon. the Minister’s reply in this debate, that the hon. the Minister wishes to go much further than he indicated in his Second Reading speech. The effect of this is going to mean a reappraisal of many joint activities presently undertaken by companies and brokers— ranging from seminars, committee work, even sending commissions overseas to investigate matters relating to common problems in the industry. The reason for this is that it will preclude companies providing any monies for these activities. I believe the hon. the Minister should certainly consider this aspect again.

Mr. Chairman, I shall be very brief. There are just two points. The first is on the amendment I moved. The hon. the Minister said there was no intention to prohibit and yet he seeks the power to prohibit in case the other powers are not wide enough. Sir, with respect, that is not really a valid reason for rejecting the amendment. Now the second point. The hon. the Minister is quite right. As the amendment has been drawn up, the meaning of it is quite clear. It relates to people who are full-time directors, officials or employees of registered insurers or underwriters at Lloyds. The significance of not accepting this amendment is that if, for example, a company wants to employ a chief agency manager as a full-time employee or a marketing manager as a full-time employee or a director in charge of marketing, the Minister can decide what his salary should be. With great respect, that cannot be the intention. If it is, then it should not be the intention, because quite clearly the salary structure of a registered insurer has nothing whatsoever to do with any problems that exist in the insurance industry in respect of commission at the present moment. With great respect, Sir, a company must be allowed to pay people what that company thinks they are worth. You cannot now apply control in respect of the salaries of full-time employees. Sir, I would ask the hon. the Minister to consider this again. If he does decide now not to accept it now, perhaps he will consider it before it goes to the Other Place.

The last point I want to make is that I accept completely that there will be, if anything is done in the registrar’s office, consultation on the broadest basis. I think it is necessary to say, so that there will be no misunderstanding, that the reason for the moving of this amendment by the hon. member for Randburg is not because of any lack of confidence in the fact that the registrar consults. I, for one, know that the registrar is sometimes available too much to people. In fact, possibly the registrar’s staff is the most accessible staff that I know of in any Government department. The question of consultation as far as they are concerned, is not at issue. I think the object one wants to achieve here is to make it clear—this is a very wide and important power—that the people most fundamentally concerned should be consulted, before their living is affected, on the widest possible basis. I think that is the sole motivation behind this.

The other point I think needs to be made is that I do not believe that any regulation like this will be as strong as getting the cooperation of the industry. The Minister knows, as well as I do, that whatever rules are made, someone will find a way around them. The only way of really solving this problem is to get the co-operation of the industry, getting them involved. Because if you do get them to co-operate, then the question of finding a way around something is going to become academic. That is why we make this appeal. The real answer to this is to get the cooperation of these people. I think it can be obtained and I think the hon. the Minister should try to ensure that he explores every avenue to attain this. This is a far better way of dealing with this problem than any form of regulation.

The other point I think needs to be made is that it is easy for the long-term insurers to find a solution here. I do not think they are as volatile as the short-term insurers. Yet the need to get the co-operation of the short-term insurers is probably more acute than it is in the case of the long-term insurers, because there is where the greatest danger to the policy-holders lies, if anything should go wrong. That is also where the greatest problem lies in respect of the increase in premium. That is why I want to stress, before I conclude, the fact that the co-operation of the industry is going to be worth three times as much as the most water-tight regulations the Minister can make.

Mr. Chairman, I could not agree more with the hon. member for Yeoville when he stresses the importance of co-operation with the industry. However, I can say again without reservation that the Registrar of Insurance and of Financial Institutions and his staff make an absolute point—and I am glad that he has confirmed it—of carrying on these consultations virtually at any time in order to improve the whole climate in which this important industry operates. I think the effects are to be seen the whole time. I think conditions have improved a great deal and I think they will continue to improve. I hope they will improve to the extent that we do not have to make use of this kind of provision.

I have listened to the hon. member’s arguments with great care. I have briefly stated my own position on the various amendments. I should like to stand by that. But I can assure the hon. member for Yeoville—when he asked me whether I would particularly reconsider the amendment in which he wants it to read “other than a full-time director, official or employee”—that I shall certainly look at it carefully. It has been done, but my point is: What is to prevent someone calling a man who normally would do this business and receives a commission, an employee? He should fall under the provisions of this clause, but because he is called something else, he might escape altogether. This is one of the difficulties one finds in practice. However, I shall certainly look at it very carefully again, specially in the light of this special request made to me. If necessary, I shall be happy to discuss it further with the hon. member. I do not think I can say much more than that.

Mr. Chairman, I should like to ask the hon. the Minister how he intends issuing a proclamation which affects one class of intermediary and not another class of intermediary. For instance: If the hon. the Minister wanted it to affect brokers only, how could he make it work and how would he stop people who are brokers from calling themselves chief agents or insurance consultants? Does the hon. the Minister have any idea as to how he can make the proclamation applicable to one class of intermediary and not another?

In practice, this is of course a very important point. Classes of intermediaries will have to be defined within the regulations. That is a matter which will be gone into very carefully indeed, also in consultation with the industry and the brokers. It will obviously have to be laid down in the regulations following from this.

Amendment (1) moved by Mr. R. E. Enthoven (’t Hooft) negatived (Progressive Reform Party dissenting).

Amendment (1) moved by Mr. H. H. Schwarz negatived (Progressive Reform Party dissenting).

Amendment (2) moved by Mr. H. H. Schwarz negatived (Official Opposition and Progressive Reform Party dissenting).

Amendment (2) moved by Mr. R. E. Enthoven (’t Hooft) negatived (Progressive Reform Party dissenting).

Amendment (3) moved by Mr. R. E. Enthoven (’t Hooft) negatived and amendment (4) dropped (Progressive Reform Party dissenting).

Clause agreed to (Progressive Reform Party dissenting).

Clause 15:

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

1. (1) On page 29, in lines 28 and 29, to omit “(excluding a negotiable deposit)”;
2. (2) on page 29, after line 54, to insert:

The question of negotiable deposits is one which we certainly want to raise. We believe that the hon. the Minister should motivate this to a greater extent. It is known that this has already been implemented in practice, but what worries us is that the hon. the Minister is taking away from insurance companies something which is, in fact, mere cash. It is an investment which can be realized with short notice if it is needed. We believe that the motivation behind this is not an investment motivation, but a motivation to encourage greater investment in securities of the Government or semi-Government institutions. Our objection is that there is an ever-increasing demand on financial institutions in South Africa to invest with the Government. This is another example of it. Unless the hon. the Minister can motivate to show that there is another reason, the inference we have drawn must be the logical one.

The second amendment arises out of a debate which took place during this session. It does appear to be desirable that, if the securities issued by the S.A. Bantu Trust can be held as assets by insurance companies and third schedule assets held in another way— there is a similar amendment coming later— then it will assist in so far as the ability to pay farmers for farms that are being taken from them in pursuance of this Act is concerned. We believe that it is not enough for the securities to be issued, but that there should also be a home for them. A home for them could in fact be the insurance companies and other institutions. Without this being included in the third schedule a home will not be readily found for the securities issued by the S.A. Bantu Trust.

Mr. Chairman, in dealing with the first amendment moved by the hon. member for Yeoville, I should like to say that during the last few years banking institutions obtained funds by way of the issue of negotiable certificates of deposit on a very large scale. In the case of some institutions, and practically in the case of all those falling in the category of smaller banks, the liability in respect of negotiable certificates of deposit represented between 40% and 61% of their total liabilities to the public, and between 48% and 68% of total deposits. I think it has clearly been shown during periods of tight money conditions, especially over the last two years, that that position is not desirable. The technical committee on banking and building society legislation went into this matter very thoroughly. It is on the recommendations of this committee that it was decided not to impose direct restrictions on the issue of negotiable certificates of deposit, but rather to narrow the market for these instruments by removing them from the assets which rank as Part I assets for insurance and prescribed investments for the other financial institutions. That, in fact, is the reasoning behind this. It is based upon the very positive recommendation after very careful study by the technical committee. In his second amendment the hon. member for Yeoville moved that there be inserted—

The effect of this would, of course, be to accord recognition of the securities of the S.A. Bantu Trust as Part I assets. I should really say that up to now no request for such recognition has been received from the authorities concerned. Whether they will do so later, we shall have to wait and see. However, I understand the Bantu Trust does not at present have the authority to issue such securities. If it is deemed necessary for the Bantu Trust to raise funds in this manner, the registrar does have the power to approve such securities in terms of paragraph 6 of the third schedule to the Insurance Act. The power is therefore in the registrar’s hands. I think we shall have to see what emerges here, and play it by ear, as they say. I can quite see the hon. member’s point. If that were to happen and the Trust wished to procede in this way, according to the information given to me, they would have to take the necessary powers to enable them to issue such securities.

Mr. Chairman, I am indebted to the hon. the Minister for his explanation regarding negotiable certificates of deposit but the difficulty with that explanation is that in order to remedy an issue in the banking sector, what is in fact happening is that you are penalizing insurance companies by restricting their investments. In other words, because it is felt that there is too much paper being issued in the banking sector in respect of negotiable certificates of deposit, you are depriving the insurance industry of a very important medium of investment. With great respect, Sir, I still think, particularly if we bear in mind what one has to invest with instead of investing in negotiable certificates of deposit, that it is quite clear that there is still a further issue behind it all, and that is to get some more money into the Government coffers from insurance companies.

Secondly, may I suggest that the hon. the Minister should create the occasion to talk to the Deputy Minister of Bantu Development, because only a few days ago, when I suggested this, he said: “Oh, no; there is power for the S.A. Bantu Trust to issue this.” Mr. Chairman, I cannot be wrong twice. I can only be wrong once as far as this is concerned. Either I am right now, or I was right before. To my mind, if there is not power, there should be power. If this power is given, I think these should rank as Part I assets. I do not think there is any question about it. If we want a precedent, we need only look at the new paragraph 4A which is being inserted here, because the Bantu Affairs Administration Boards are allowed to have their securities rank as Part I assets. To me it seems illogical that the Bantu Trust should not be treated in the same way. I would therefore ask the hon. the Minister to get together with the Department of Bantu Administration on this matter in order to sort out what I believe is not a political issue at all, but which is something that should be done in order to arrive at a logical position.

Mr. Chairman, as regards the last point raised by the hon. member, I shall certainly have a chat with my colleague, the hon. the Deputy Minister. I am, however, not ruling that out. I think we shall just have to see how this develops. I think the hon. member has done well to draw our attention to this at this early stage. As far as NCDs are concerned, the hon. member will realize of course that we are not making it impossible for insurers to invest in NCDs. All we are saying is that those will not rank as Part I assets. It is, as I have said, as a result of this very positive recommendation, after very careful study, by a highly technical committee that we felt it was desirable to do so. I hope the hon. member will feel that, in the light of this explanation, he can accept that position.

Amendment (1) negatived (Official Opposition and Progressive Reform Party dissenting).

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

Clause agreed to.

Clause 21:

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

If we look at the clause as it stands, we find that a new definition of “dependant” has been drawn up, which reads as follows—

In other words, Sir, it is the person who manages the fund who decides who the dependants should be. The proviso which I would like to have added to that definition, reads as follows—

In other words, where a member of a fund decides that he is going to nominate his own dependant, and such dependant is a spouse or a descendant, i.e. a child or a grandchild, then the manager of the fund has to accept that nomination. That is the purpose that I have in mind here. If you did not do this, then the manager of the fund could nominate someone that he considers, in his discretion, to be the dependant, and one could in fact have a spouse and a dependant excluded, or any one of them. That is the motivation behind the amendment which I have moved.

Following on this, the hon. the Minister moved an amendment which reads as follows—

The difficulty that I have with this amendment is that although it seeks to remove part of the fault, it still does not give the member of the fund the real discretion of deciding whom of his dependants should be the ones to receive the benefit. That is what I seek to achieve, and my difficulty is that I am not sure that the Minister has achieved the object which I have with his amendment.

Mr. Chairman, I would like to say that I regard this amendment as being a useful one. I think that it clearly has merit. However, as the wording stands, it will have the effect of requiring nominations to be made in the case of existing funds, which in some cases could present difficulties. After this amendment appeared, the registrar took the opportunity to discuss the position with the Association of Pension and Provident Funds and also with the Life Offices Association, in as far as the Life Offices Association is concerned with underwritten pension schemes. After these discussions, it was felt that the wording of my amendment would perhaps be preferable, because the insurance people themselves want a wording which will meet all situations, as they put it. This, for what it is worth, does carry their approval arising out of the proposal made by the hon. member for Yeoville. It is in that sense that I have taken the liberty to move an amendment as it were on the amendment of the hon. member for Yeoville after those very careful discussions. I think the spirit is the same, while in essence they are virtually the same. This seems to be the preferred wording. I accordingly move my amendment, which reads as follows—

Mr. Chairman, I think the intention of the hon. the Minister and myself is identical in respect of this matter. It is merely a question of which one of the two amendments achieves the object best, and therefore one cannot feel strongly about it. I think the reason why on the one hand the Association of Pension Funds might feel that the amendment of the hon. the Minister is better, is because I am looking at it more from the member’s point of view, whereas they are looking at it more from the manager’s point of view. What I would not like to see happening is that in terms of an amendment and in terms of a definition of “dependant” a man who has contributed to a pension fund might be deprived of the right or might have in the result a situation that the very people whom he wants to receive the benefit, do not receive it, but somebody else who is not related to him, has no blood ties, makes that decision for him. That is why I look at it from the point of view of the member. I do not only look at it from the point of view of the pension fund. Because this is a technical matter where one seeks to achieve the same object, I am quite happy if the hon. the Minister’s amendment is accepted—as it obviously will be with his majority in the House backing him—but that he would still look at the point which I have made this afternoon, so that if he comes to the conclusion quite objectively after discussion with the people in the registrar’s office, that his amendment in fact does not achieve the object which I want to achieve, and with which I think the hon. the Minister agrees. Because, obviously, a man who is a contributor to a pension fund should be able to say: “I want my children to have it” or “I want my wife to have it”. It should not be left to somebody else to decide that matter. If he comes to that conclusion he has another opportunity of amending it and I hope that he will give that consideration.

Mr. Chairman, the amendment proposed by the hon. the Minister is undoubtedly an improvement in that it gives greater clarity in defining a dependant. We on this side of the House support the hon. the Minister’s amendment. However, we have also studied the amendment placed on the Order Paper by the hon. member for Yeoville, and to a certain extent I believe that there is an aspect of that amendment which the hon. the Minister could well bear in mind when he takes this Bill to the Other Place. I am referring to the question of a person who is nominated by the member of a pension fund. I think the amendment of the hon. member for Yeoville indicates the position of the nominated person in relation to the member. The hon. the Minister’s amendment defining the dependant adds the words—

Perhaps the hon. the Minister would give consideration to including the word “nominated” before the word “descendant”. In other words, his amendment would then read—

Thus the member who nominates a particular person whom he wishes to see benefit as a member of that fund should receive the due consideration when the definition of a “dependant” is considered.

Mr. Chairman, I do not think there is very much difference between us on this point. I shall most certainly have this matter looked at very carefully in the light of the point made by the hon. member for Yeoville and the point made by the hon. member for Umbilo. If it should prove necessary to amend this further, in the light of the points they have made, I shall do so in the Other Place.

Amendment moved by the Minister of Finance agreed to and amendment moved by Mr. H. H. Schwarz dropped.

Clause, as amended, agreed to.

Clause 23:

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

1. (1) On page 37, in lines 19 and 20, to omit “(excluding a negotiable deposit)”;
2. (2) on page 37, after line 40, to insert:

1. (3) on page 39, in line 55 after “person” to insert:

1. (4) on page 41, in line 19, after “fund” to insert:

1. (5) on page 41, to insert the following subparagraph to follow subparagraph (i) of paragraph (b) of the proposed subsection (5B):
   1. (ii) a company of which an officer or his spouse or a member of the fund or his spouse is a director; or
2. (6) on page 41, in lines 22 and 23, to omit “such a first-mentioned company” and to substitute:

I do not intend to waste any time on points I have already argued. I have tried unsuccessfully to persuade the hon. the Minister to accept my first amendment. I merely repeat that I think there is a case for its acceptance.

I have also argued the point in respect of my second amendment and the Minister has replied. I do not think, therefore, that there is anything more to say about that.

In respect of my third amendment, I refer to the proposed new section 5(A) on page 39. The proposed new section reads—

As this stands at the moment, I believe it, means that anyone can be appointed. What I am seeking to achieve is that the person to be appointed should be a qualified person, and the only one which to my mind seems logical is an appraiser appointed in terms of the Administration of Estates Act, and that is why I have moved the relevant amendment.

My fourth amendment deals with the restrictions that exist in respect of the lending of money to certain entities. I think the hon. the Minister is as aware as I am of abuse which has taken place and also the potential for abuse in this field. What I have tried to do here is to make abuse even more difficult, in other words by limiting the ability to lend money or to invest in the shares of certain companies. The proposed new section (5B)(b) states that one may not grant a loan or invest in the shares of the company “controlled by an officer or a member of the fund”. I would like to add “or by a director of the employer”. In other words, a pension fund should not be used in order to finance the activities of the employer who is concerned with that pension fund.

The second amendment seeks to include a further category of company to which money may not be lent, namely a company of which an officer or his spouse or a member of the fund or his spouse is a director. In other words, they may not control the company, but they may still be directors. I think we have to cover the position of wives. Very often you find that there is abuse because although the man himself is not involved, his wife is a director.

The sixth amendment is purely a consequential amendment which flows from an earlier one.

Mr. Chairman, taking the first amendment by which the hon. member wants to insert after “person” the words “who is an appraiser appointed in terms of the Administration of Estates Act…”, I should like to say that in view of the very large number of member loans granted by pension funds, it may not always be possible in practice for the funds to obtain the services of such sworn appraisers. I think, too, that in a case like this it will be desirable to consult the Association of Pension and Provident Funds carefully on this issue, but as yet we have not been able to consult them. I do not want to rule this amendment out, but the Bill was drafted in this form, as I have already indicated, in order not to cause practical difficulties where there are such a large number of valuations required. I should like to suggest that we leave the provision as it is at the moment. The Registrar will follow up the proposal of the hon. member and should it be necessary, we will find an early opportunity to incorporate an amendment of this kind. My information is that there are practical difficulties along the lines proposed and, indeed, those have been brought to our attention. I shall nevertheless be quite prepared to deal with the hon. member’s proposal in that way.

The hon. member also moved to insert after “fund” in line 19, page 41, “or by a director of the employer”. I am able to support this amendment in principle since the proposed addition will be a further safeguard. The amendment is therefore acceptable, but I think it will be necessary to qualify “employer” as set out in the amendment printed in my name on the Order Paper and which I now move—

It is a question of wording, and my amendment follows on the amendment of the hon. member for Yeoville.

The hon. member for Yeoville also moved two amendments on page 41 of the Bill. The first one seeks to insert—

and the second one seeks to omit “such a first-mentioned company” and to substitute Certain words. My difficulty here is that these are father important matters. I would not say that the hon. member’s suggestions have no merit at all, but I think here again the Registrar has to have an opportunity to consult carefully with the Association of Pension and Provident Funds. The registrar has not as yet had an opportunity to have such consultations. However, the registrar will certainly have such consultations. I may say that I am prepared to have further discussions with the hon. member in the light of what comes out of those consultations.

I think that the hon. member will agree that for the time being we should keep his suggestions concerning negotiable deposit certificates and the Bantu Trust in abeyance, as I have already explained my position in those respects.

Amendments (1), (2) and (3) moved by Mr. H. H. Schwarz negatived.

Amendment moved by the Minister of Finance agreed to and amendment (4) moved by Mr. H. H. Schwarz dropped.

Amendment (5) moved by Mr. H. H. Schwarz negatived and amendment (6) dropped.

Clause, as amended, agreed to (Official opposition and Progressive Reform Party dissenting).

Clause 24:

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

This amendment arises out of the wording of this clause in terms of which no pension can really be attached, hypothecated or be subject to any order of a court. In consequence, it is completely immune. One accepts the principle that pensions should be immune to ensure that people will have a certain income in their old age. However, the difficulty that arises is that one may have what is called a “top-hat” pension, viz. a tremendously large pension of, say, R20 000 to R30 000 per annum. If one then does not pay one’s debts, nothing can be done in terms of this clause, even though the pension is that large. Particularly in terms of the Magistrates’ Court Amendment Act which was put on the Statute Book this session, when one investigates a person’s financial position, the effect is that, although the man may have a tremendously large pension, the creditor cannot get the money he is owed. Therefore the purpose of my amendment is that R3 000 of the pension should be protected but that the rest should not be protected but may be taken into account in respect of section 65 of the Magistrates’ Court Act. That is the purpose of my amendment.

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

Let me say, Sir, that we on this side of the House agree with the principle involved in this Clause. This is consistent with other pension legislation in that it provides that a pension shall not be attachable. If one checks through various other Statutes, it soon becomes apparent that this is indeed a very sound principle. However, the hon. member for Yeoville has moved an amendment which does indicate that a situation could arise which would make it necessary to provide for some ceiling or level beyond which the pension would not be immune. We on this side of the House believe there is some merit in the amendment of the hon. member, although perhaps the figure of R3 000 per annum, which he has set, could perhaps be a higher figure—say, an amount in the region of R5 000 per annum—due to the rapid decline in the purchasing power of money. We are all aware of the way in which pensions are eroded over a number of years so that a pension soon becomes rather small in comparison with the cost of living as regards the necessities the pensioner has to buy either for himself or for himself and his dependants.

Let me now motivate my amendment. In the proposed new section 37C provision is made that pension benefits on the death of a member shall not form part of the estate of the deceased member, with the proviso that should there not be a claim within a period of six months from any dependant, or should the fund itself not be able to trace any dependant within that period of six months, the benefits that have accrued to the member shall then be paid over to the estate of the member concerned. The object of this amendment is to grant a longer period of time so as to enable dependants who, for various reasons, might no longer be resident at their previous address and who may have moved to another address—they might even have moved to an entirely different part of the country—to make a claim as being dependants in terms of this particular provision. A further period of three months—maybe even a period of nine months—would seem to be a reasonable period whereby the dependants must make claims as being dependants as far as the benefits are concerned that had accrued to a deceased member. Therefore, we believe that it would be of assistance, particularly to the dependants, to give them more time in order to enable them to make a claim, should their claim be necessary. At the same time one cannot make this period too long, because obviously the fund is anxious to finalize the matter and would not like the matter to continue indefinitely. However, they are specifically excluded as being part of the estate of the deceased member and, therefore, every opportunity should be given them—those persons who are claiming to be dependants— of making their claim timeously. That is the reason why I want to ask the hon. the Minister to give sympathetic consideration to accepting this amendment, so as to provide for the granting of a longer period of time to such dependants.

Mr. Chairman, the effect of the proposal moved by the hon. member for Yeoville is that an amount of R3 000 per annum of a pension benefit would be protected in the event of an order against the judgment debtor. I am quite happy to accept that. I am pleased to say that I accept that amendment.

As for the hon. member for Umbilo, I believe he did raise this matter in general terms during the Second Reading debate. In representations the Life Offices Association have stated that they feel that a period of nine months is unnecessarily long, because normally the fact that a deceased member does or does not have dependants can be established earlier, according to them. A longer period would operate prejudicially, and perhaps unfairly, against heirs and creditors. In the case of a member who has left no dependants, it means, of course, that the books must also be kept open. I would like to point out that the proposed new section 37C provides that a deceased member’s benefits may be paid into the estate after the lapse of six months. The fund is therefore free to delay the paying over of benefits to the estate. The position is designed to facilitate the administration of pension funds.

As I have said, I personally have no very strong feelings, but—as I have also mentioned—the matter has been taken up with the people who have to deal with it every day and their feeling is that they hope we will adhere to six months rather than nine months. If I may, I would suggest to the hon. member that we had better wait and see how this works out. If, despite the advice the Life Offices Association has given us, it nevertheless proves that six months is not a period which is as easily handled as the insurers think, I would be quite prepared to consider making this sort of amendment. I would trust that we might handle it that way.

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

The same words appear in the proposed new section 37A, and in order to remove any possible doubt as to the authority—i.e. the authority that is being mentioned in the new proposed section 37C—to make a payment to a guardian or a trustee, it is desirable for the wording of the two proposed sections relating to this, to be the same. Therefore the amendment I am moving here, is being moved at the request of an institution concerned. I believe it is reasonable and will lend greater force to the wording of the clause.

Amendment moved by Mr. H. H. Schwarz agreed to.

Amendment moved by the Minister of Finance agreed to.

Amendment moved by Mr. G. N. Oldfield negatived.

Clause, as amended, agreed to.

Clause 28:

Mr. Chairman, this matter has been fully debated and I think it is pointless to have another vote, and therefore I will not move this amendment of which I have given notice.

Clause agreed to.

Clause 34:

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

1. (1) On page 51, to omit all the words after “he” in line 33 up to an including “holders” in line 39 and to substitute:

1. (2) on page 53, in line 27, to omit “five” and to substitute “three”.

The position in regard to participation bonds is important. As this clause reads at the moment, it means that a participation may not be recovered by an investor unless a majority, in value, of the participants in the bond agree. This is unfair to the individual investor. When you invest in a bond, the bond runs for a period of time. There is a minimum period of time laid down. I believe that when that minimum period of time has expired the individual investor should be allowed to get out of the bond and to get his money back, whether or not the majority of investors agree. He has been tied for a period of time and he could virtually be tied for ever if the majority does not agree. I think this is a wrong principle, and that is why I believe that a participant should be entitled to recover his participation even if the majority do not agree.

My second amendment deals with the negotiability or rather, and more correctly, the transferability of a participation. Originally it was three years, but was then changed to five. I believe that even if the investment itself should remain for a period of five years, the ability to transfer a participation, if it is to be restricted—and I must say I do not believe that it should be restricted at all; I think it should be negotiable—would, I believe be sufficiently restricted if the period was to be three years!

Mr. Chairman, I should like to say something about the first amendment moved by the hon. member for Yeoville. I do not believe that the hon. the Minister will be prepared to accept this amendment, for obvious reasons. Were the procedure proposed by the hon. member for Yeoville to be adopted, I believe it would and could result in the mortgagor being expected to make provision at short notice for what is demanded of him, and that it must be borne in mind that this could happen at a very difficult time. It may happen that the mortgagor is simply unable to comply with what is demanded at that time, and it must also be borne in mind that it can be followed up; in other words, this mortgage may be called up piece by piece and demands for payment can be made of the mortgagor from time to time, at short intervals. I believe that this may involve tremendous disadvantages for a mortgagor and in some respects may have a very unreasonable effect on his interests. It could also be unfavourable to the mortgagers as a group should demands of this nature be made from time to time. Under given circumstances it may occur, should the mortgagor be unable to comply with the requirements, that execution proceedings could be instituted against him. Should this be followed up from time to time, it may also affect the rights and interests of the mortgagees as a collective group. I therefore think that under this provision, as is proposed at present, the majority participants will be able to call it up, and I think that this will be the correct procedure. I do not believe that these amendments as moved by the hon. member for Yeoville, embody the appropriate procedure.

Mr. Chairman, I think the hon. member for Ermelo stated my standpoint as well. I worked very hard on these amendments and therefore I should like to summarize my standpoint in this connection.

†I should like to say that the proposal of the hon. member for Yeoville will of course defeat the object of the amendments which are introduced by clause 34(a). As the Act now reads, any participant may, after the expiry of a minimum period of five years, demand repayment of his participation. Many investors do not withdraw their money on the expiry of the minimum investment period. The result is that a large proportion of the funds of the schemes is at present on a short-term basis. If mortgagers could be required to repay such funds at short notice, the position of schemes and of mortgagors may be seriously affected, especially during a period of scarcity of investment funds. The arrangement now proposed, whereby joint action by participants holding a majority in value, of the participations is required before repayment of the mortgage loan can be demanded, will afford participants the necessary protection, will ensure the stability of schemes, safeguard the position of mortgagors and will remove the existing anomaly, i.e. that the interests of the other holders of participations in a bond, as well as the interests of the mortgagor, are subordinated entirely to the demands of a participant holding a minority participation, in value, in a bond. The holder of a minority participation will, in any event, still be able to withdraw from the scheme after expiry of the prescribed minimum period. He will be able to do so by transferring or ceding his participation, with approval of the manager of the scheme, to another investor. I should like to add that the amendments contained in this clause have been dealt with in close consultation with the Association of Participation Mortgage Scheme Managers. With his next amendment the hon. member for Yeoville wants to omit five years and to substitute three years for the scheme. The minimum period for which moneys must remain invested in the name of a particular investor in participation bonds included in the scheme, was extended by Parliament during 1972 from three to five years. Therefore, until quite recently, the period was three years. Traditionally investments in mortgage bonds are fairly long-termed. The extension of the minimum investment period during 1972 became necessary in order to curb the flow of short-term funds to participation bond schemes, in competition, particularly with the building societies, and to bring the minimum period of such investments into line with the period for which comparable investments had to remain with other institutions, e.g. the five-year fixed-period shares in building societies.

If participants in these schemes are again allowed to transfer or cede their participation after the expiry of only three years, as requested in the amendment, then the object of the 1972 amendment will be defeated and managers of these schemes will again attract short-term money. What concerns me is that at this time, when capital is certainly not in over-abundance, we are not going to make things easier for some of the other institutions, particularly the building societies, if we revert to the position as it was before 1972. Under the present circumstances I should certainly rather maintain the status quo. I am therefore in difficulty about accepting this amendment.

The difficulty that exists at the present moment is that there is a tremendous shortage of money for industrial development. One cannot obtain funds from decentralization authorities when one actually needs it and while one should actually be encouraging people to start new investments in South Africa. One of the functions of the participation bonds schemes has been to provide money for a type of activity which is not catered for by the building societies or any other financial institution. I think the hon. the Minister will agree with me that that is part of the function of the participation bonds scheme, particularly in regard to certain types of industrial development. The participation bond industry is in the doldrums. I think everybody will agree with that. By saying that it might draw money away from other financial institutions, e.g. building societies, the hon. the Minister is putting his finger on a situation of an industry which caters for industrial development in many respects at a time when the economy should, in fact, be encouraging this type of activity in order to get an economic revival in the type of activity we need and not in the type of activity which does not add to South Africa’s economic strength. One of the difficulties I have—and this is why I move the amendment—is that I see the participation bond industry as an essential part of the structure in South Africa, particularly in order to encourage revival in certain industrial activities. We are actually harming industry very much.

I did not ask that the investment should be reduced to a three-year period, I said that it should be left at five years. However, I asked that we should at least make it transferable after three years, so that it gives some encouragement to this industry. I believe that, if we were to kill the participation bond industry, we would be doing a disservice to the financial structure of South Africa, because I believe it plays a part in that structure. If we look at the figures in regard to new money that has come into this, the case is made out. I think the hon. the Minister knows what the figures are. They certainly are very unsatisfactory. At the moment there is no danger of their doing the building society movement harm, because the transferability itself is not going to make a dramatic difference. However, it may help to deal with a very real situation. No one can say that we are not now in a stage where people who want to engage in the type of activity related to industry should not be allowed to have a source of money to allow development.

I should like the hon. the Minister to tell me where in fact the industrialists who cannot get money from the IDC or from other decentralized authorities, can get money from in order to develop industrial premises or to build new premises. At the moment he cannot get it anywhere. One can get a few lease-backs from insurance companies, but that is about all there is. However, ordinary mortgage money is just not available. I do not believe it is in the interests of the economy of South Africa to kill off the participation bond industry.

Mr. Chairman, I must say at the outset that we cannot disagree with the last statement made by the hon. member for Yeoville. We agree with him that we dare not kill off the participation bond industry in the country. As the hon. member pointed out, it has its function. As a matter of fact, I believe it has grown into a very important sector of the financing industry in the country.

I find myself with a difficulty, however, as far as his second amendment is concerned. In terms of the Act, a person who participates in a participation bond knows at the time when he invests his money that it is invested for a minimum period of five years. I think the hon. member for Yeoville will concede that. Now he seeks to introduce an amendment in terms of which that person will be entitled to transfer his rights after three years. I agree that in terms of his amendment such a person may not call up his rights, so that the mortgage is not affected by the amendment at all, but he seeks to provide that the investor may, after three years, have the right to pass his rights on to a third party. What will the effect of this be? I think the hon. the Minister put his finger on it when he said that this would have the effect of drawing into this market short-term money. It can be argued both ways, as to whether this short-term money should be brought into this particular sphere of the financial world, or whether it should be left in the hands of, for instance, the building societies and other similar institutions which are today handling short-term investments. My view is that it should stay with the building societies and similar organizations, which also have a function in the financial world of South Africa today. I admit that the hon. member for Yeoville made a very valid point regarding industrial development and long-term investment, but I believe that this is another sector of the market; it is not the short-term market.

Tell us where we get the money from.

As regards the question of where we get the money from, I think the hon. member for Yeoville will agree with me that we have to go to the hon. the Minister—although not under this Bill—and talk to him about making money available for that very purpose. I do not, however, believe that this is the place to do it.

In the hon. member for Yeoville’s first amendment he seeks, in his own words, to protect the rights of the individual investor. Sir, that is a very noble sentiment, but must we look to the rights of the individual investor or must we look to the rights of the majority of the people concerned? If his amendment were accepted, I believe that it would jeopardize or prejudice the rights of the majority of the members concerned. The hon. member for Ermelo has pointed out that the mortgagee might not be in a position to raise the money at the time, and the question I think the hon. member for Yeoville must ask himself is: What happens if this amendment of his is accepted and a participant does call up his share of that participation bond, and the debtor is unable to pay or to raise the money? What is the next step?

What is the next step when the whole lot is called up?

Mr. Chairman, the hon. member now makes my case. When the whole lot is called up, it relates to the interests of all the participants in that participation bond. If, however, it is called up at the instance of one participant, it can prejudice or jeopardize the rights of the other participants. For that reason I do not believe that we can support the hon. member’s amendment.

Mr. Chairman, I would merely like to say that I certainly do not underestimate the importance of the participation bond movement. I think it has played a very important part in our financial structure, and undoubtedly is destined to play a very important part. I have already seen some of the senior officers of this association recently, and I have arranged to see them in Pretoria shortly after the end of this session to have a thorough discussion with them on whatever problems they may wish to raise with me and the registrar. We shall certainly consider their representations with great sympathy. As things are, however, and for the reasons I have tried to give, I would certainly find it difficult to accept these amendments.

Amendments negatived (Progressive Reform Party dissenting).

Clause agreed to.

Clause 37:

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

1. (1) On page 57, in lines 32 and 33, to omit “and, in connection with a company, includes any director or officer of such company”;
2. (2) on page 59, in line 18, after “which” to insert:

   has its shares listed on the Johannesburg Stock Exchange or which

3. (3) on page 61, in line 47, after “Registrar,” to insert:

   after notice in the Gazette calling for comment and

4. (4) on page 61, in line 60, to omit “in the opinion of the Registrar”;
5. (5) on page 63, in lines 18 and 19, to omit “in the opinion of the Registrar”;
6. (6) on page 63, in lines 19 and 20, to omit “or otherwise unsatisfactory”;
7. (7) on page 63, to omit all the words after “the” in line 42 up to and including “factoring” in line 47 and substitute:

   debentures are secured and are not repayable for a period of at least three years

8. (8) on page 65, in line 47, to omit “in writing notify a’ ’ and to substitute:

   , after affording a hearing to the banking institution concerned, in writing notify such

I should like to deal with each of these amendments in turn. The first amendment is on page 57, in line 32, and I there seek to exclude from the definition of “associate” a director or officer of a company. Because there are a large number of amendments I shall be very brief. The definition of “associate” is, in my submission, so wide that even if two completely independent persons sit on the same board of directors, they are for the purposes of this Act deemed to be associates. This really cannot be the intention because you may in fact have directors who are business opponents sitting on the same board as outside directors. In many cases, too, you have directors of boards whose interests are quite conflicting. They merely happen to sit on the same board because they represent shareholding interests in that board or otherwise fulfil certain functions. This provision has a very wide effect. If I may refer the hon. the Minister to clause 42, he will see that this affects the ability to hold a percentage of shares in a bank. You may find, for example, that the hon. member for Simonstown and the hon. member for Pinelands, purely by accident, are sitting on the same board, and they would be deemed in terms of this law to be associates.

It would be a jolly interesting board.

It would be a very interesting board. They would be deemed to be associates and it would be quite ludicrous to suggest that. For them, therefore, to be restricted in respect of their own investments in a bank I think really illustrates the point. With great respect, I think that in these circumstances to include “director” goes too far in respect of the definition of “associate”.

The second amendment, on page 59, relates to the definition of “financial company”. What I am suggesting here is that when a company has its shares listed on the Stock Exchange—and there is only one Stock Exchange in South Africa—that should be regarded as being an adequate spread of the shares. What this means is that the registrar has complete discretion to decide what he thinks is an adequate spread of shares. That may be appropriate in respect of a company which is not quoted, but we believe that if a company is a quoted company, that should be regarded as being adequate from the point of view of the shares. The only remaining point is that the function of the company then should be such that its activities consist mainly of the making of investments. In other words, it should be a quoted company on the Stock Exchange whose business is mainly the making of investments, and that should be adequate. In respect of the other matters, the registrar should exercise his discretion.

Are you not going to tell us about trusts that hold shares in newspaper companies?

If you would like to know, I shall tell you with pleasure. I am trying to help you, but you do not know it. If you knew what this Bill meant, then you would support me in these amendments which I am suggesting. I hope that you will now get up and support me.

Order! The hon. member must address the Chair.

There are other companies than newspapers in the world.

May I then proceed to the next amendment, after that brief interlude into another field with the hon. member for Simonstown. The following amendments, with the exception of No. 8, all relate to what I think can be termed the “grey market clause”, if I may refer to it in that form. The first of these amendments, namely No. 3, means that before the registrar declares a manner of obtaining money as banking, he should publish a notice in the Gazette calling for a comment from interested parties. There is provision here that he should consult with the Governor of the Reserve Bank, but this can affect the businesses of many people, and we believe that in these circumstances he should give people the opportunity of making representations to him. I have said that he does consult on a very wide level and I believe that he will consult, but the difficulty that I have here is that he may be concerned with one particular company which is conducting a particular type of business. Knowing the way that the registrar works, I would imagine that before he would act here, he would consult with that company. There may, however, be many other businesses in the same field which may be able to put forward a completely different picture if they are also given an opportunity of making their representations. That is why we believe there should be public notice.

My fourth amendment requests that “in the opinion of the registrar’ ’ be deleted in line 60 on p. 61 of the Bill. The reason why I suggest this is that the acceptance, as a regular feature of business, of deposits from the general public should be a question of fact and not a question of opinion. I say this because it is a question of fact. That is why I ask that the words “in the opinion of the registrar” be deleted.

My fifth amendment also requests the deletion of the words “in the opinion of the registrar” in line 19 on page 63 of the Bill. Here again, whether security is or is not sufficient should be a question of fact. It should not be a question of the opinion of the registrar.

My next amendment requests the deletion of the words “or otherwise unsatisfactory” in lines 19 and 20 on page 63. Why I request this is because the point at issue is whether the securitý is adequate, or not. There should not be other reasons affecting this decision. If the security is adequate, the fact that some other aspect of the security may be involved, is irrelevant. It is the adequacy of the security that is at issue.

My seventh amendment deals with the question of debentures. A prospectus has to be issued with debentures, and anybody who gets a prospectus should know all the facts. There is consequently no need to protect the investor in regard to this matter. Secondly, if the debenture is secured, it is also not a deposit in the true sense of the word at all. Thirdly, if the period is at least three years, this is not really a question of a disguised deposit. The hon. the Minister may know—the registrar’s office certainly does—that it is possible to draw a prospectus for a debenture with a debenture payable on demand. He may recollect that having occurred. If one makes the period three years and makes the debenture a secured debenture, there is no reason why one should not be allowed to issue debentures and then use the money for the purpose of conducting a credit business in the ordinary course of events.

My eighth amendment falls into a slightly different category because although it comes under this clause, it relates to different matter. In regard to undesirable practices, the registrar now gets far wider powers than he has ever had before under the Banks Act. We believe that before the registrar notifies the banking institution that a practice is irregular or undesirable, there should be a proper hearing, and that is why I have moved this amendment. Once the registrar has made up his mind that something is undesirable or irregular, it may be very difficult to persuade him otherwise, and such a decision on his part could have a wide-ranging effect on a business. He has taken the view in the past that certain practices have been undesirable, although he has not quite had the power to deal with them. However, I think he has dealt relatively satisfactorily with the banking industry which has been co-operative in this regard.

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

1. (1) On page 65, in line 47, to omit “registrar” and to substitute:

   Minister, after consultation with the Registrar and the Governor of the Reserve Bank.

2. (2) on page 65, in line 51, after “may” to insert:

   , after allowing a period of three weeks wherein such banking institution may make representations in regard to such notification, and after considering such representations in consultation with the Registrar and the Governor of the Reserve Bank,

3. (3) on page 67, in line 4, after “offence” to add:

   : Provided that the Minister shall table a report on such notice in both Houses of Parliament within fourteen days if Parliament is then in session or, if Parliament is not then in session, within fourteen days after the commencement of its next ensuing session.

During the Second Reading debate I expressed the opinion that under this clause the Registrar of Financial Institutions was being granted too wide powers in the powers which he has been granted to declare certain banking institutions irregular and undesirable. In his reply to that debate the hon. the Minister was at pains to draw my attention to section 3 of the Banks Act which lays down that the registrar performs his duty subject to the control of the Minister and that parties affected by decisions of the Registrar do have the right of appeal to the Minister. I was quite aware that that was the position, but I was also aware that in the principal Act, the Banks Act, the functions which have been assigned to the registrar are administrative functions. In fact, in terms of the Banks Act, the registrar has an administrative job. Admittedly, in carrying out his job in terms of the Act, he does have wide powers of discretion and of interpretation. I may mention that, for example, he has wide powers of discretion when he determines whether a bank complies with the requirements of the Act in regard to registration. It is for the reason that he has such wide powers, that he has such a great deal of discretion, that there is an appeal to the Minister by parties which are affected by the Registrar’s decisions.

However, I maintain that the powers envisaged in this Bill in terms of the proposed subsection (7) are not powers to administer the Act; they are powers to legislate in terms of the Act. They are powers to make rules, rules which, if contravened, will constitute an offence and subject the party which contravenes them to punishment. What is more, the very nature of the rules which can be made in terms of the proposed subsection is such that considerable harm could be done to a banking institution if rules are not very, very carefully made. The words “irregular or undesirable practice” or “undesirable method of conducting business” which are the terms used, are very wide generalities and can be interpreted extremely widely. In fact, I should like to draw the attention of the hon. the Minister to the fact that in section 1(6) of the Banking Act which deals with irregular practices, there are already actually spelt out seven undesirable practices. In other words, seven undesirable practices have been described, spelt out and incorporated in the Act. Now it is proposed that additional undesirable practices can be decided on by the registrar whereas up to now undesirable practices have been incorporated in the Act and have been decided on by Parliament. I therefore think that the powers which the hon. the Minister proposes should be delegated to the registrar in terms of this subsection are too wide and should be circumscribed considerably more than they are in the Bill. I wish to emphasize that nowhere else in the Banking Act does the registrar have powers to make rules or regulations. The power to make regulations is provided for in the Act, but that power is given to the Minister and not to the registrar.

Taking all the factors I have mentioned into account, and also the importance and far-reaching nature of the powers it is proposed to delegate to the registrar, I believe that the amendments I have moved are fully justified. In the first place they would place the power and responsibility of determining what constitutes an irregular and undesirable practice in the hands of the Minister and not in the hands of the registrar. The Minister could then only act after consultation with the registrar and the Governor of the Reserve Bank.

My second amendment would allow a banking institution, which is affected by any determination under this clause, a period of three weeks in which to make representations in regard to any declaration made. I believe that this precaution is a very necessary one in view of the very serious effects which any determination could have on the business of a banking institution. My third amendment provides that all determinations made in terms of this clause should come under the scrutiny of Parliament. I think that such a procedure is only right and proper since, as I have already mentioned, other practices which are regarded as undesirable have already been described and included in the Banking Act and have been legislated for by Parliament. I think that at least Parliament should be able to scrutinize any determination made in terms of this clause.

Finally, I should like to remind the hon. the Minister that in another Bill which has just passed through both Houses of Parliament during this session, i.e. the Trade Practices Bill, provision is made for, inter alia, the declaration of undesirable and unfair trade practices. In terms of that provision, the Minister concerned may only declare a practice to be undesirable after he has had a recommendation from an independent committee—and he must abide by the recommendations of that committee. He cannot declare a practice undesirable unless he has that recommendation. Sir, I think that the powers that are given to the registrar in terms of this clause are extremely wide. I am not proposing that the Minister should circumscribe these powers to the extent that they have been circumscribed in the Trade Practices Bill, but I do consider that they should be considerably more circumscribed than they are in this Bill.

Mr. Chairman, I should like to support the three amendments moved by the hon. member for Constantia. This clause, in its application, can have serious repercussions. It can cause great losses and at the same time it can cause a lot of hardship to the affected parties. It may well be that a specific practice or method of conducting business may be irregular or undesirable. Obviously, none of us want to create a situation which encourages irregular or undesirable business practices. We, on our side, would like to stamp put any irregular or undesirable business practices, and I think the hon. the Minister is with us on that particular point. However, somebody has to have the responsibility of passing judgment on a business practice. We feel that that responsibility must rest in the hands of the hon. the Minister. The hon. the Minister must accept that responsibility and, after due consultation with the registrar and the Governor of the Reserve Bank, he must take a decision. We feel that if the hon. the Minister does not accept that responsibility, he will actually be passing the buck to the registrar. If the hon. the Minister refused to accept the first amendment, it means that one person, viz. the registrar, will have powers that are far too wide, as was pointed out by the hon. member for Constantia. In fact, that person would have almost unlimited powers.

The second amendment merely recognizes the audi alteram partem rule: the other side must be given the opportunity to state its case. I am certain that the hon. the Minister will agree with that amendment, because the other side will not be heard as the clause is worded at the moment. However, in terms of the amendment, the audi alteram partem rule will apply and the other side will be given the opportunity of being heard in this particular case. Surely, the hon. the Minister will not wish to penalize a banking institution without acting in a reasonable and in a fair manner towards that institution, of giving that institution the opportunity of being heard in a fair and equitable sort of manner.

The third amendment is a guarantee to the offending banking institution that the registrar’s decisions must stand open to the public eye, and also, at the same time, be open to scrutiny and debate. This is a safeguard that should be welcomed by the hon. the Minister and also by the registrar, a safeguard that the decisions have to be well reasoned and justified—decisions which will also have to be justified towards this House in a final analysis. With those few words I want to support the amendments proposed by the hon. member for Constantia.

Mr. Chairman, I am replying briefly to the first amendment moved by the hon. member for Yeoville. I must say that the example he mentioned, i.e. an association between the hon. member for Simonstown and the hon. member for Pinelands, was perhaps not as far-fetched as he thought. I believe that there is in fact a common basis on which they might reach agreement in certain circumstances. Therefore I believe that there are adequate grounds for maintaining that even in that case they could, in certain circumstances, be regarded as associates; certainly as associates in their actions towards this side of the House.

The hon. member for Yeoville asked for the exclusion of a director, and yet he had no objection to a business partner being regarded as associate. As far as I am concerned, there is no difference. In my view, whether the two serve together on the board of a company or whether they serve together in one concern as business partners, creates exactly the same position. As far as clause 27 is concerned, the principles that were accepted here during the Second Reading were the concepts of possession and control. This was made very clear by the hon. the Minister in his Second Reading speech. It was also made very clear in the recommendations of the Franzsen Commission. An “associate” is defined in detail on page 57 of the Bill, where “associate” is defined, and the meaning thereof is clearly stated. With regard to a company, “associate” also includes the director or official of that company. I want to go so far as to maintain that if it were to be excluded—if the idea of a director were to be excluded—the whole concept of possession and control would be rendered worthless, inadequate and ineffective. What this amounts to, therefore, is that the whole intent and principle of this Bill is emasculated because a procedure is being created on the strength of which the whole idea of possession and control may be circumvented. Sir, if we look at the other clauses and determine how associates are defined there and how essential it is that this should be defined restrictively, then one becomes thoroughly convinced, particularly if one refers to pages 63-65, to subclauses (b) and (c), to the indirect interests to which reference is made, that it most definitely belongs here and should not therefore be excluded.

In regard to the two amendments moved by the hon. member for Constantia, I should just like to point out that this is an administrative measure. These are indeed the powers the registrar as such possesses and he is indeed pre-eminently the person who has to decide on these matters. Let us bear in mind that one still has the position that literally every decision of the registrar is going to be subject to appeal and approval of the Minister. That is why I do not think the amendment is valid. I think the argument of the hon. member for Walmer, that the other side should also be heard, is valid. However, provision has been made for that. There is nothing preventing a person from putting his case to the registrar or to the Minister in due course. Therefore I personally think that there is no need for these amendments.

Mr. Chairman, I should like to make it clear to the House what the attitude of this side of the House is in regard to the eight amendments moved by the hon. member for Yeoville. We will support amendments (2), (3) (6) and (8), but the other four we are not able to support for the reasons I shall advance. As far as amendment (1) is concerned, which deals with the definition of “associates”, as the definition stands in the Bill, a director or an officer of a company is regarded as being as associate of that company. This clause has any real meaning only if the company itself has an interest to which the definition of “associates” applies. I believe that in the majority of cases, if a company has a particular interest—in this case it would probably be a share-holding interest in a bank—a director of that company who has the same interest would act in harmony with the company and in fact company and director would act as associates. It could happen that that would not be the case, but I regard that situation as being a comparatively rare one; certainly that is my experience. As far as amendment (4) is concerned, I believe there is a very fine dividing line between the process of accepting deposits as a regular feature of business and doing so on a spasmodic or non-regular basis. Very often it is difficult to determine whether accepting deposits is regular business or not.

We can take the case of retail trading concerns which do accept loans at call and use these loans in their business. They may be doing so on a fairly regular basis. However, in certain circumstances, in terms of this Bill, they will be excluded from being classified as banking institutions. I believe it is very necessary for someone to have the power, where there is this difficult dividing line between accepting deposits on a regular basis and on a spasmodic basis, to decide whether they are being accepted as banking businesses in the ordinary meaning of that term. Obviously that person should be the Registrar of Financial Institutions.

As far as the fifth amendment is concerned, it seeks to remove the registrar’s discretion in deciding whether the security for a deposit is sufficient or insufficient. I do not think there is any absolute test whether security is sufficient or not. It is not a matter of fact, as the hon. member for Yeoville said, unless very elaborate, hard and fast rules are laid down to cover every particular case. That is obviously not feasible. In the absence of hard and fast rules according to which one can determine whether security is sufficient or not, it becomes a matter of opinion. Clearly, in the case of this legislation, the right person to exercise that opinion is the Registrar.

Finally, as far as amendment (7) is concerned, I believe that if this amendment were to be accepted, the registrar immediately would have to exercise his powers in terms of subsection 2(b), page 61, and declare the acceptance of money against debentures to be the business of a banking institution if that money is used to grant loans, credit or to conduct leasing or factoring business. I say this because the amendment of the hon. member for Yeoville would exclude from the Banking Act debentures if they were secured by notarial bonds against loans, debtors or lease agreements. That security could, in fact, be financed by the funds which were provided by the debentures in the first place. I think it is that type of operation which this clause is designed to bring within the ambit of the Banking Act, an aim which has our full support. This amendment of the hon. member for Yeoville would only be acceptable to us if it were clear that debentures were secured by adequate security quite unconnected with the assets for which the finance provided by the debenture was to be used. I think, however, the clause, as at present framed, is preferable to any possible amendment to the hon. member’s amendment.

Mr. Chairman, when one looks at the first amendment as moved by the hon. member for Yeoville, the question of associates comes up. Here I should like to draw the attention of the hon. member to page 57 of the Bill where in clause 37(a)(i) it says that the definition of “associate” is first of all “in connection with a person”, and then, in lines 32 and 33, it says—

It is in relation to a company that a director is an associate, and it does not follow that the directors are associates among themselves. As I have said, they are associates specifically in relation to a company. I should just like to point that particular interpretation out.

The object of the proposed legislation is to prohibit persons other than a registered bank controlling company or registered banking institution from obtaining control of a banking institution or a bank controlling company. If the suggested omission of these words is agreed to, it will, of course, be possible for a financial company and two or more of its directors or officers together to hold the majority of shares in a banking institution or bank controlling company and thus have control of the institution. That, of course, is what we are trying to prevent in this instance. It would not be possible for me to accept an amendment of that kind. It would largely negate what, in fact, we are trying to do, and that is to prevent this type of control of a bank.

The next amendment of the hon. member for Yeoville deals with the question of shares being listed on the Stock Exchange. If the proposal were accepted, the registrar’s approval would not be required in the case of companies listed on the Johannesburg Stock Exchange. The intention is that the registrar’s approval must, in fact, be obtained before a company can qualify as a financial company in respect of a particular banking institution or bank controlling company. When considering applications in this regard, the registrar will not necessarily apply the same criteria as those normally used by the Stock Exchange in the case of a listing application. That is quite an important point. It is not deemed necessary to make listing a statutory condition for qualifying as a financial company. Therefore, it is again very difficult for me to accept this amendment moved by the hon. member for Yeoville.

The third amendment of the hon. member for Yeoville reads as follows—

As has been mentioned in the course of the debate, in terms of section 3 of the Banks Act the registrar performs the functions assigned to him by the Act under the control of and subject to appeal to the Minister. That is written into the Act. Everything he does is done under the control of the Minister and, as far as other parties are concerned, subject to appeal to the Minister. The procedure for such appeals to the Minister is in fact laid down in regulations under this Act. I have with me the Government Gazette of 20 October 1972 in which the procedure in regard to appeals to the Minister is set out. Any person who feels that the decision of the registrar notified in the Gazette is not justifiable, may obviously appeal to the Minister. The type of irregular business which it is the intention to stop may require speedy action. In dealing with the matter the registrar will naturally liaise fully with the parties concerned. It is an absolute matter of course that he does this in all his work.

I should now like to proceed to the next amendment of the hon. member for Yeoville, which reads—

I do not think it is practicable to define, for the purpose of the Banks Act, “deposits” and “general public”. Consequently it is necessary to designate a person to determine whether, in a given set of circumstances, the transactions constitute the acceptance of deposits from the general public as a regular feature of the business. If such a person is not designated, hundreds of cases would, I imagine, have to be taken to court for a decision. Here again, however, the registrar’s decision is clearly subject to appeal to the Minister. I must point out that if you look at the practicalities here, I do not see how you can leave that out. Someone clearly has to say what the position is, and that duty is given to the registrar.

Then there is another amendment on page 63, to omit “in the opinion of the registrar”. Again, as I have just tried to show, it is necessary that somebody should take a decision to determine whether the security furnished is adequate or satisfactory. It seems to me that the registrar is the obvious person to do that.

A further amendment on page 63 is to omit the words “or otherwise unsatisfactory”. I would say here that the security offered for loans obtained from the public may be sufficient to safeguard the investment, but be of a nature which is not acceptable for the purpose in question. For example, a subsidiary in a strong group may borrow large amounts in total from the public, giving guarantees by the parent company as security. It may not be possible to show that the security is insufficient, but the transactions will not be acceptable as in essence they will constitute deposit-taking. The object of the Banks Act is of course not solely to protect the savings of the public. Equally important, I think, is the fact that it is also aimed at ensuring good order in the banking sector and in the exercise of monetary policy. That is why we want to be very sure that this matter is sufficiently tight to give us that discretion.

A further amendment on page 63 relates to debentures. If the Act should permit the issuing of debentures by non-banking institutions for the purpose of conducting what is considered to be banking business, it can be foreseen that the mobilization of money by way of such debenture issues will become indistinguishable from the taking of deposits, particularly as regards its effect in the financial markets and the influence it may have on the exercising of monetary policy. It is accordingly considered that banking business should not be conducted with the proceeds of debenture issues.

On page 65, in line 47, the hon. member wants to omit the words “in writing notify a” and to substitute “after affording a hearing to the banking institution concerned, in writing notify such”. In principle there is no objection to the suggested hearing, and in practice the registrar will invariably have a discussion with the institution concerned before arriving at a final decision. There may, however, be some danger in writing the requirement, that the institution first be afforded a hearing, into the Act, as in some cases it may be abused in order to delay a notification by the registrar. I think that is a possibility. Wherever practicable an institution will be afforded a hearing by the registrar prior to notification being issued to it. Again, Sir, I would remind the Committee that an institution will of course be able to appeal to the Minister against any such decision of the registrar.

The hon. member for Constantia has moved, on page 65, in line 47, to omit “registrar” and to substitute “Minister, after consultation with the registrar and the Governor of the Reserve Bank”. The determination as to whether a practice or method of conducting business is irregular or undesirable is in practice, as the matter stands, within the functions assigned to the registrar. The Act, however, does not provide a remedy where an institution persists in a practice or method which has been declared to be irregular or undesirable.

I think that has been a clear weakness. The proposed new section 1(7) will merely clarify the position by making the continuation of a practice or method which the registrar has by due notice declared to be irregular or undesirable, a punishable offence. In terms of section 3 of the Act—if I may just repeat this—the registrar performs the functions assigned to him by the Act under the control of and subject to appeal to the Minister The procedure for such appeals has been set out in the Government Gazette. A bank is therefore afforded an opportunity to lay before the Minister a fully argued case if it feels aggrieved by a decision of the registrar, always remembering that it is specifically stated in the Act that the registrar acts under the control of the Minister. In fact, as I know only too well, the registrar does perform his duties in very close association with the Minister. The registrar must therefore clearly act with responsibility when declaring a practice or method of conducting business as irregular or undesirable, and it is quite normal practice for the registrar to consult with both the Minister and the Reserve Bank before making a decision of this kind. In this connection, Mr. Chairman, I would like to draw your attention to the Banks Act and the position of the registrar. The registrar, for example, as the Act now stands, has complete discretion as to whether he will register or not register a banking institution. It is therefore entirely up to him. He can also decide whether he wants to register a bank on a temporary basis or whether he wants to extend that temporary basis or make it a permanent registration. If one goes through the Act one will find a number of very far-reaching discretions given to the registrar, but I think that was clearly done because written into the Act is what I consider to be a very far-reaching requirement, namely that he must at all times act under the control of the Minister. It is not often that you will find in statutes that an officer who does certain things is required to act under the control of the Minister. That is often presumed, but here it is specifically stated.

The hon. member for Constantia has an amendment, on page 65, in line 51, after “may” to insert the words “after allowing a period of three weeks wherein such banking institution may make representations …” I would suggest, in the light of the explanation I have tried to give here, that this proposal might well fall away. The procedure in respect of appeals to the Minister affords the institution a similar opportunity to place its case before the Minister.

Then, on page 67, in line 4, after “offence”, the hon. member has moved an amendment requiring the Minister to table reports on this matter. I would merely say here that in a number of other matters the registrar is given discretion to make decisions and indeed in certain instances publication in the Gazette is also required. For example, the registrar may by notice in the Gazette add to the list of securities which rank as prescribed investments. It is quite a far-reaching decision when you come to think of its impact on the institution. In none of these other cases is it required that a copy of the notice or decision be laid before the Houses of Parliament. I must say that one does not like in any way to do anything which Parliament may feel it should do in the first instance, but I do not honestly think that a case has been made out for this procedure. If the Committee is going to adopt this amendment, this procedure might well create a certain measure of administrative uncertainty. Therefore, for those brief reasons, I really do not see my way clear to accepting these amendments.

Amendments moved by Mr. H. H. Schwarz negatived (Progressive Reform Party dissenting).

Amendments moved by Mr. D. D. Baxter negatived (Official Opposition dissenting).

Clause agreed to.

Clause 48:

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

The first amendment asks that in respect of subsidiaries, the authority of the registrar should not be unreasonably withheld, while the second, which is much more important, relates to the representative of a foreign bank, i.e. a representative who is permanently resident here. In accordance with the present wording, visiting bankers who come here to see the hon. the Minister or others are all covered by this section. I do not think this was ever intended. I think that what is really intended here is to refer to the formal representative of a foreign bank who is resident in South Africa. One certainly does not want any and every representative of a foreign bank who comes to South Africa to have to have himself registered. I am sure that was never the intention underlying this provision. The proposed new section 27D at present reads as follows—

In other words, the physical presence here of any visiting representative would be undesirable. I am sure that is not what the hon. the Minister has in mind.

Mr. Chairman, with regard to the first amendment, I think it really does go without saying that where a statute confers discretionary powers on an official, clearly the latter must exercise those powers in a reasonable manner. If it should happen that the registrar should ever bring himself to act unreasonably, obviously the aggrieved party would have the immediate right of appeal to the Minister. I think the Committee will agree with me that the risk of an official of the standing of the Registrar of Financial Institutions acting unreasonably is to all intents and purposes negligible. I would therefore prefer to leave the wording as it is and not to embody the amendment.

I hope I understand the hon. member’s second amendment correctly, though I am not altogether sure I understand its aim. The insertion of the suggested words would mean that the registrar’s consent would not be required in cases where representatives of foreign banks remain in the Republic under temporary residential permits. That is how I read this clause. I have read the relevant provision many times, but that is the only interpretation I can arrive at. If permanent residence is made a requirement for representatives of foreign banks, it would create problems in view of the existing position. I should very much like to hear whether I am interpreting the hon. member correctly.

Mr. Chairman, in relation to the first amendment, I just want to say that the test of reasonableness to be applied by the courts cannot be applied to statutes; it can only be applied to regulations and by-laws. This is an accepted principle of law and I regret to inform the hon. the Minister that his arguments are not correct.

As far as the second amendment is concerned, I suggest that the hon. the Minister should think about it again before the Bill goes to the Other Place. As the Bill reads at the moment, if Mr. Schmidt comes from Germany to South Africa and he is here as the representative of a foreign bank, the proposed section 27D applies even if he is just here for a week. However, that was not the intention. The unfortunate thing is that the proposed section reads—

In other words, their physical presence is enough. What I have in mind, is not that he should be permanently resident with a view to becoming a national of this country; but I have in mind the man who comes here to establish an office. He should be registered, but the man who comes on a temporary visit for a week, two weeks or a month does not have to be registered. That is all that I have in mind. If the hon. the Minister can achieve that in a way which overcomes this difficulty, I shall be quite happy to see that.

Mr. Chairman, as the hon. member has in mind the case of somebody who comes here to represent a foreign bank, I should like to have an opportunity to have another look at the matter. If necessary, I can re-check the wording and if I find that an amendment is desirable, I can move it in the Other Place. We certainly do not want to have any ambiguity on that point.

Amendment (1) negatived (Progressive Reform Party dissenting).

Amendment (2) negatived.

Clause agreed to.

Clause 50:

Mr. Chairman, hon. members will perhaps recall that I indicated in my Second Reading speech that I wish to move an amendment to this clause. After thorough consideration of representations which were made to me, I am of the opinion that cases may occur in future in which it would be in the best interests of the country, having regard to all the circumstances, to allow a foreign bank or banks to acquire a greater share than 30%—the maximum as provided at present in this Bill—in a banking institution. Naturally, this will only be practicable in the case of relatively small banking institutions. I therefore deem it necessary for the Minister to be empowered to approve in specific cases that a foreign bank or banks may acquire up to 50% of the shares of a banking institution, and owing to practical considerations, temporarily even more than 50%, on condition that it is reduced to 50% within a reasonable period as determined by the Minister.

Consequently I move the amendment printed in my name on the Order Paper, as follows—

Mr. Chairman, I want to indicate immediately that we support these amendments. In fact, as the hon. the Minister knows, this is the line we have taken for some time and we have also made representations in this regard. We therefore welcome the amendments.

I think I may say at this stage that there are many other things in this Bill which have been changed over a period of time and which resulted from representations we have made. I must say that the whole attitude towards this piece of legislation has to my mind been one of complete co-operation. I think this is the way in which one does get legislation which is of a non-political nature and which is, in fact, good legislation. I should like to express my appreciation for the fact that there are many amendments which we did not move today but which have already been incorporated in the Bill, amendments which we have suggested before. In cases where we could substantiate such amendments convincingly, we found people were prepared to listen to us.

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

I want to motivate this amendment by saying that a very real problem exists in regard to the investigations to determine whether in fact a shareholder is a nominee shareholder, an associate shareholder or even a foreign shareholder. I am not sure that my amendment is a complete answer to that problem and I am sure the hon. the Minister will agree with me that the Bill as it stands does not provide a complete answer either. In the case of a foreign shareholder, there is no real problem if the matter is put honestly. However, in the case of nominees it becomes very difficult. Some relief has been given to the companies in the redrafting of this Bill, but there is still not complete relief. I believe that the nearest one can get to it is that if a transferee declares that he is not a foreign shareholder, an associate of any shareholder or a nominee, the company should be prepared to accept it. In these circumstances I ask the hon. the Minister to consider my amendment.

As this is the last amendment I wish to move, I want to say one final thing. I believe that the deputy registrar is retiring from office and, as he is present this afternoon, I hope you will permit me, Sir, to say that I think that the banking sector, the insurance sector and the other people who have been associated with him, can all pay tribute to him for the service he has rendered to financial institutions in South Africa. I would like to add my tribute for what the deputy registrar, Mr. Van Deventer, has done for financial institutions in South Africa.

Mr. Chairman, I should just like to indicate that we of the Official Opposition will support the amendments moved by the hon. the Minister. They have the merit of introducing to this legislation a greater degree of flexibility we have pleaded for all along in respect of this legislation. We on this side of the House agree with the principle of parity in shareholding in banking institutions between domestic shareholders and foreign shareholders; in fact we see great merit in the concept of partnership in banking of this nature. What is important, however— and this has been improved by these clauses—is how one reaches that position in cases where foreign shareholders have a majority shareholding. It is very important that this reduction from a majority position to a parity position should be arranged with great discretion and great patience and I believe that the amendments before us will enable the Minister to do that better than before.

Mr. Chairman, I want to reply briefly to the amendment moved by the hon. member for Yeoville. My problem with his amendment is that I think that this matter should be left to the discretion of the registrar. The idea that a declaration as such will be conclusive and adequate could create problems for us because there is not full control over all the persons who are able to make such a statement. I am thinking for example of foreigners from overseas, or in the neighbouring states. One has no control over such a person and if the hon. member’s amendment were to be accepted, it would be to the effect that, if and when a statement were to be made, it should be accepted as adequate and conclusive. I do not think this will give us an adequate measure of control.

Mr. Chairman, I think the hon. member for Ermelo has put the sort of view I would be inclined to adopt here. A transferee would not normally be in a position to declare that he is not an associate of any other shareholder of the bank; of any particular bank. That is, of course, the practical position. However, the bank will be in a position to determine what information should be called for from the transferee in order to establish whether the requirements of the proposed new section 28D(1), read with the proposed new section 28B, will be met. That is how we came to word this clause as it stands.

The hon. member for Yeoville has obviously given very careful thought to this, and has put up a very carefully worded amendment. I will look at it carefully again. At the moment I cannot accept it as it stands, but I will certainly look at it again, and see whether, in the light of his arguments, we have covered the position. I would like to recheck on that. I would also just like to say that I share the hon. member’s opinion about this debate which has been on a very technical sort of issue. In fact, I believe that this omnibus set of amendments has covered something like eight or nine Acts, some of them extremely important financial measures in this country. I would therefore like to thank all hon. members who have participated, for the very constructive manner in which this has been done. It certainly is very helpful to myself as well as to the office of the registrar when we can have such positive and such constructive discussions on these issues.

Amendment moved by Mr. H. H. Schwarz negatived.

Amendments moved by the Minister of Finance agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with amendments.

Mr. Speaker, I move—

Mr. Speaker, the hon. the Minister of Finance has a throat ailment which prevents him from presenting this speech. I am therefore presenting it on his behalf.

The Bill before this House seeks to repeal the existing obsolete measures for the provision of cover by the State against war damage and substitutes for them powers which are being conferred on the authorities to establish insurance schemes as circumstances require. To elucidate the matter I shall go into the existing position briefly.

The War Damage Insurance Act (Act No. 21 of 1941) was passed during the Second World War. As the long title of that Act indicates, provision is made in that measure—

The most important provisions of that Act may be summarized as follows—

1. (a) “war damage” is in general defined as any damage to property in the Republic, other than a vessel or property on a vessel, amounting to not less than R10, caused by a member of the armed forces of the enemy (other than prisoners of war) or of the armed forces of the Republic or of its allies or by persons committing public violence or any action taken in quelling such public violence.
2. (b) The Minister of Finance shall, at the result of any person, enter into a contract of insurance with that person for the payment of compensation for any loss exceeding R2 000 which that person may have suffered as a result of war damage to his property. In the case of public violence or any action taken in quelling such public violence the insurance contract may also cover damage not exceeding R2 000. Compensation shall only be paid in respect of 90% of any war damage caused mainly by fire. The Minister shall from time to time fix the premium rates which are applicable to such contracts of insurance and shall publish those rates in the Gazette.
3. (c) The Minister shall establish a War Damage Insurance Fund into which premiums as well as any moneys appropriated by Parliament for this purpose shall be paid. All damages and the cost of administering the Act shall be paid out of the fund. Surplus moneys in the fund shall be invested with the Public Debt Commissioners.
4. (d) Any person who has suffered any loss up to R2 000 as a result of war damage—other than damage caused by public violence or the quelling of such public violence—shall be entitled to compensation from such moneys in the fund as have been appropriated by Parliament, without any premium being payable. Not more than R2 000 shall be paid to any one person.
5. (e) The Minister of Finance shall be responsible for the administration of the scheme and may enter into agreements with any associations or individuals for the assessment of any damage and performance of any other word arising from the Act.

During the Second World War the scheme was administered by the Treasury, assisted by an advisory committee. Insurance companies acted as agents of the Treasury for the Collection of premiums and the assessment of damage. The total premium income for the duration of the war amounted to R3 163 000, while the total claims amounted to R14 300.

The Minister of Finance indicated the Second Reading of this legislation that the Act was intended to cover purely temporary circumstances. The Act would remain in force with regard to the state of war which was prevailing at that time. Consequently, on 31 October 1948, the surplus in the fund after all claims had been paid, i.e. R3 198 000, was paid over, in terms of section 7(1) of the Second Finance Act, No. 49 of 1948, to the Public Debt Commissioners for repayment of State debts.

Therefore, although the War Damage Insurance Act of 1941 is still on the Statute Book, it has virtually fallen into disuse since 1948 because the temporary circumstances for which it was intended at the time came to an end. But the fact remains that it stands on the Statute Book, and the public may at any time when war conditions arise, claim the cover which it offers.

In peacetime the owners of merchant ships may normally obtain insurance cover through the insurance industry against war risks in respect of damage, loss of expenditure sustained or incurred in connection with their ships. However, all these insurance policies contain clauses to the effect—

1. (a) that the cover automatically lapses if any hostile detonation of a nuclear weapon occurs, wherever and whenever it may occur, and regardless of whether the insured ship is involved in it or not;
2. (b) that the cover automatically lapses upon the outbreak of war between any of the five major powers; and
3. (c) that the insurance cover may be cancelled by either the insurer of the insured upon 14 days’ notice: Provided, however, that the cover may be reinstated after an agreement has been reached between the insurer and the insured on a new premium rate and/or conditions.

War damage insurance is consequently inoperative in case of a nuclear war or a war between any of the five major powers. In the case of lesser wars, as well as political seizure of ships, it is in fact possible to obtain cover, but as a result of the coming into operation of the cancellation clause, the new conditions which may be negotiated in the case of such a contingency could probably result in a premium scale which might be beyond the means of shipowners. As a result of this situation, and arising from representations received from the shipping industry for the introduction by the authorities of an effective and economic war risk insurance scheme, section 6 of the Finance Act, No. 76 of 1964 was passed. Section 6(1) of this Act provides that if the Minister of Economic Affairs is satisfied that the owner of a South African merchant vessel is unable to obtain insurance cover against the risk of loss, damage or expense arising from any nuclear war or war between any of the five great powers, the payment of compensation for such loss, damage or expense may be guaranteed by the State. Where any insurance contract provides for the release of the insurer in the event of a nuclear war, any other hostilities or war, or any political or detention of the vessel in question, section 6(2) of the Act provides that the Government may furnish a guarantee to the effect that the difference between the normal premium scale and any higher premium scale which may be negotiated for the cover will be paid by the State.

Up to now none of the powers granted by this section have been used.

On 28 April 1968 the previous Minister of Finance appointed a committee of inquiry with the terms of reference to inquire into and report on desirable amendments to the War Damage Insurance Act of 1941, with particular regard to the definition of “war damage” and the establishment by the State of a war insurance fund or funds. The committee also had to consider whether the provisions of section 6 of the Finance Act of 1964 with regard to commercial vessels should not be incorporated in the War Damage Insurance Act. The committee reported in 1972 and pointed out that the War Damage Insurance Act of 1941 at present required the State to pay compensation, without any premiums being charged for war damage—other than damage caused by public violence or the quelling of public violence—suffered by any person in the Republic, up to an amount of R2 000. This statutory provision, which is still applicable today, entails the possibility of the State having to pay considerable compensation in the case of damage of any appreciable extent. However, there is at present no war insurance fund from which any such payment may be made. On the other hand, although the Act still provides that the Minister may enter into an insurance contract with any person, there is at present no scheme in this regard.

Furthermore, the committee found that the present legislation does not cover contingencies arising from a state of political hostility between the Republic and another country or countries without the two parties engaging in actual warfare. Section 6 of the Finance Act, 1964, provides for the furnishing of State guarantees in respect of the risks attached to an undeclared war, but only if the war is between the five great powers and only in respect of merchant vessels and the cargoes on such vessels.

Since the Second World War, and even since 1964, the war risk situation in general has changed considerably. A few of the more important changes are the following: The development and distribution of nuclear weapons; the rapid development and improvement of conventional weapons with their greatly improved striking power over long distances; and the diversity of the present-day war risks, from nuclear warfare, conventional warfare, terrorist attacks and violence on the one hand, to undeclared warfare and hostile acts, such as political seizure of merchant ships and commercial aircraft in foreign waters and countries on the other. With this complicated modern situation in regard to war damage risks, it is clear that future contingencies are not predictable. It is therefore unpractical and almost impossible at this stage to devise elaborate measures and comprehensive schemes which will ensure that adequate cover is available at all times and under all circumstances against all forms of war damage risks, which simultaneously take into consideration the financial ability of the State to bear these risks.

The existing War Damage Insurance Act of 1941 and section 6 of the Finance Act of 1964 are obsolete and do not cover the present circumstances. The committee recommended that that Act and the said section be repealed, and that in their place a more flexible statutory framework be established so that it will be more readily possible to make adjustments to changing circumstances and to the specific requirements and circumstances which may arise from time to time. The statutory provisions which are required should be of as least a restrictive nature as possible and should invest the executive with adequate powers to establish schemes administratively and cope with the situation in the light of the requirements and circumstances. Legislation ought therefore to be of a purely empowering nature because the application thereof in practice will entail the drawing up of considerable regulatory and other administrative directions, terms and conditions. Of necessity the legislation has to grant wide discretionary powers.

A Bill has been drafted which contains purely empowering provisions. These entail that the Minister of Finance shall have the power to establish a scheme or schemes, in the light of the requirements and circumstances which apply from time to time, in terms of which the persons whom he stipulates may—

1. (a) obtain insurance cover against loss of, or damage to, the types of property as determined by the Minister;
2. (b) subject to the limits and in respect of the types of properties determined by the Minister—
   1. (i) receive compensation from the fund for war damage; and
   2. (ii) obtain Government guarantees in respect of the difference between normal premium rates and the higher premium rates which may be charged in consequence of a state of war.

The Bill also provides for a war damage fund into which premiums payable in respect of insurance contracts and government guarantees, and moneys appropriated by Parliament and other legislative authorities for the defraying of war damage, shall be paid, and from which the expense of the State in regard to war damage shall be defrayed. Provision is not again being made in the Bill for the payment of compensation up to a specific amount because it has been decided that the most practical approach is to establish a voluntary insurance scheme or schemes.

I shall now furnish a brief explanation of certain provisions of the Bill. The first clause contains, as is customary, the definitions. In this regard the definition of the term “war damage” is important. The proposed definition comprises the following principles—

1. (a) War damage is limited to damage, loss, or expenditure sustained or incurred in respect of property including merchant vessels, commercial aircraft and any cargo on board such merchant vessel or commercial aircraft. For the rest it is being provided that property which will qualify for the purpose of the legislation shall be prescribed by the Minister of Finance by regulation.
2. (b) The damage, loss or expenditure shall amount to at least R50 before it qualifies for the purposes of the legislation.
3. (c) Except in respect of merchant vessels, commercial aircraft and the cargo on such vessels or aircraft, the damage, loss or expenditure shall have been sustained or incurred in regard to or in respect of property in the Republic.
4. (d) The damage, loss or expenditure shall arise from any hostilities or actions of a war-like nature with conventional weapons by the armed forces of any hostile power or the armed forces of the Republic or of its allies and may be extended to include damage by unconventional warfare, i.e. nuclear weapons, and acts of violence of a political nature.

Clause 2 empowers the Minister of Finance to establish, from time to time, a war damage fund, into which premiums received and moneys appropriated by Parliament and any other revenue shall be paid.

Clause 3 empowers the Minister of Finance, by notice in the Gazette and subject to the terms and conditions which he determines, establish a scheme or more than one scheme whereunder the persons or bodies stipulated by him, may obtain the following—

1. (a) insurance cover against war damage risks;
2. (b) compensation for war damage sustained;
3. (c) guarantees for the compensation of war damage which may be suffered; and
4. (d) guarantees for the payment of the difference between normal insurance premiums and higher premiums which may be payable in terms of an insurance agreement if war should break out or actions of a specific hostile nature should occur.

Depending on the nature and extent of the war risks which may arise by virtue of specific circumstances, it will be possible to establish various kinds of schemes. In other circumstances it might be necessary to go further as well, and it will be possible to pay compensation for certain war damage actually sustained without any premiums having to be charged.

The underlying premise of this clause is therefore to make it possible to establish a diversity of schemes depending on the requirements prevailing at that particular time.

War damage insurance ought not to be compulsory. Consequently no provision is being made in this Bill for the exercising of any compulsion on the part of the authorities to ensure participation in any scheme or schemes.

Clause 4 determines the purposes for which the moneys in the fund shall be utilized, while clause 5 creates a temporary escape mechanism in cases where liabilities exceed the revenue in any specific year.

It is desirable that compensation paid in terms of a scheme under this legislation will be used to restore or to replace damaged or destroyed assets, particularly factories, ships, homes, etc., or to utilize the moneys “usefully” for other purposes. Clause 6 therefore provides that the Minister of Finance may link the payment of moneys due to such conditions of utilization.

Clause 7 provides that the legislation shall be administered by the Treasury. The intention is that this task shall be entrusted to the Registrar of Financial Institutions because he and his office are conversant with insurance principles and practices and are in close contact with the insurance industry. For the rest the office is an integral part of the Department of Finance and is therefore in direct contact with the State bodies responsible for the financial and general economic policy of the Government.

During the Second World War the Treasury was assisted in the administration of the War Damage Compensation Act by an advisory committee. This Bill also provides for the appointment, if necessary, of a war damage insurance committee to be of assistance with the administration of the legislation. The underlying idea is to allow the insurance industry to act as agent of the State in so far as the handling of insurance contracts, the collection of premiums, the assessment of damage, etc., is concerned.

Clause 11 provides for the making of regulations by the Minister of Finance on any matter which may be necessary to achieve the purposes of the legislation.

I recommend this legislation to the consideration of this House.

Mr. Speaker, I have listened with great interest to the Second Reading speech in this Bill, which was so ably delivered by the hon. the Minister of Water Affairs. We on this side of the House appreciate the very comprehensive history and background which have been given of this legislation. It certainly enables us to understand the legislation and to appreciate it better than we would otherwise have been able to.

We on this side of the House agree with the principle that a war damage insurance and compensation law is required in this country in present circumstances. We regard this legislation as being part and parcel of the precautions that need to be taken for the defence and security of our country, just as much as military precautions and civil defence precautions need to be taken under present circumstances. It is because this legislation cannot very easily be separated from the defence and security situation of our country that the hon. member for Durban Point will have a few words to say on the subject in this debate.

This Bill is primarily an enabling measure. It gives the hon. the Minister the power to introduce a war damage insurance and compensation scheme. Let me say that I fervently hope that even if a scheme has to be devised and introduced, it will not have to be used in practice. The existing Act, i.e. the Act of 1941, as the hon. the Minister said during his Second Reading speech, was designed to cover circumstances as they existed in the Second World War and although that Act is still in force, it needs up-dating and modernizing to make it suitable for present-day conditions, and not only for present-day conditions, but for conditions that may arise in the future. It is because the circumstances that a war damage insurance scheme has to cover cannot be foreseen and cannot be accurately predicted that this measure must be in the nature of an enabling measure and that the Government should have flexibility to determine, not only the nature of the war damage to be covered, but also the type of property to be insured against damage and for which compensation may be provided in the light of circumstances that may exist now or in the future. Therefore, we have no objection to the manner in which this legislation has been framed.

This measure differs from the 1941 Act in certain important respects, as the hon. the Minister has said in his Second Reading speech. That measure provided war damage insurance and compensation for fixed property and goods situated within South Africa. It specifically excluded ships, aircraft and the cargoes carried by ships and aircraft. That exclusion was suited to the conditions that existed during the Second World War. Ships and cargoes, which were by far the most important of those three items, were able to be insured through insurance companies which in turn could reinsure those risks during the last World War with the British Government who ran, through the British Board of Trade, their own war insurance scheme. Civil aircraft were not the war damage risk that they could be under present circumstances because aircraft were hardly used at all during the last World War for non-military purposes. The position, of course, is very different now. Obviously there is no longer recourse to any British sources for compensation or insurance. The insurance industry may underwrite war damage insurance in isolated instances, but it is very unlikely to undertake to cover war risks in the event of our country becoming involved in any serious hostilities. Certainly the insurance industry would not provide compensation as is provided for in this Bill. In any case, war damage insurance provided by the insurance industry only covers ships and cargoes carried by those ships while they are actually at sea. It does not cover the period of transport between factory and ship or ship and destination. Obviously, therefore, provision must be made in our legislation for war damage insurance and compensation for these three items. So, besides providing war damage insurance to cover specifically described property, this Bill also enables the hon. the Minister to determine other types of property to be covered. Also, besides providing cover for specific types of war damage, such as damage resulting from the use of nuclear weapons and damage in circumstances of civil disorder directed against the security of the State, it also enables the hon. the Minister to determine other types of war damage.

I believe that the wide discretion provided for in this Bill is necessary in the circumstances. It is necessary because the circumstances in which this measure may be implemented—though I hope it will not have to be implemented—cannot be determined or foreseen. The other aspects of this Bill are unexceptional and I therefore have pleasure in stating that this side of the House will support the measure.

Mr. Speaker, I stand up to indicate the support of the PRP for this Bill. It is a vast improvement on the 1941 Act, which is being repealed. There are just three points to which I should like to direct the attention of the hon. the Minister. Firstly, we would be happy if the definition of “war damage” were extended to include all political aggression and not merely external aggression. I am thinking, for example, of internal insurrection, political riots, strikes and civil commotion. Secondly, we feel that all property, and not only prescribed property, should be covered because the prejudice a man suffers as a result of loss of property is the same no matter what the nature of that property is. Thirdly, we feel that the provisions and the accounts for South West Africa should be kept separate from those of the Republic.

Mr. Speaker, in view of the coverage that has been given to the subject in the introductory speeches of the hon. the Minister and the hon. member for Constantia, I shall not deal with the insurance aspect. I think that aspect has been adequately covered. I should like, however, to raise two matters concerning direct compensation.

Firstly, I want to ask whether it is the intention of the Government to establish such a fund immediately and to make immediate provision for coverage by compensation as a result of war damage. We are, in fact, in a state of undeclared war in certain areas, and damage has already been inflicted on private property, whether accidentally or by the enemy one does not know. This, however, is the nature of the present situation in areas covered by this Bill. I would therefore like to know whether immediate provision is being made for claims for damage which may occur or has already occurred.

I think that another aspect has been missed here. I am referring to civil defence. The civil defence organization is a vital part of the security of the country. However, there is no provision made, for example, for movable property such as the vehicles of persons working for civil defence or for damage that might occur as the result of their actions in civil defence. This action is not directly linked with enemy action or the action of hostile forces, and not necessarily even connected with warfare itself, being part and parcel of the security procedure which is necessary to protect the country. I would like the hon. the Minister to assure us that he will give consideration, in any scheme which is drawn up, to adequate coverage for those who are involved in providing home front security in the form of civil defence. I would, in fact, like to see the matter taken further than only fixed property because in civil defence, in particular, people use their own vehicles and equipment. In that respect there is no protection for them. There is no insurance for life or property. I do, however, believe they would be covered by this fund when damage is linked with warfare.

One other assurance I would ask from the hon. the Minister is that the limits of insurance should be more realistic than R2 000 per property, which is the existing figure. R2 000 offers no protection when it comes to a factory or even to a private home. I think we need a much more realistic figure as far as the available compensation is concerned.

Mr. Speaker, I should like to thank those hon. members who have spoken for their support of this Bill, which I am sure is a timeous one in the conditions in which we live.

The hon. member for Randburg wanted the definition of “war damage” extended, but I think the definition is perhaps a little wider than he possibly reads into it, because if he looks at clause 1(vi)(a)(iv), he will see that the definition also covers any prescribed property in the Republic. It reads further—

That, of course, is a very broad interpretation indeed. I think it covers the point the hon. member had in mind.

Only if weapons are used.

Yes, but weapons can be used as a result of political violence.

The hon. member for Durban Point wanted to know whether there could be immediate payment for damage already suffered. The answer is “no”. This is enabling legislation which gives the Minister certain powers. We want to have these powers immediately, so that we can be in a position to deal with any eventuality.

Will you establish a fund immediately?

It is something voluntary, and obviously the Minister will be in a position to enter into contracts or schemes with whatever party wants to be covered. That is one possibility. It is up to other parties to approach the Minister, and if he is approached, he will immediately react.

I am talking of compensation as opposed to insurance.

If it is essential to compensate, we can make compensation available. The fund can be financed from premiums on policies entered into under schemes, it can be financed by moneys appropriated by Parliament, or in whatever other legitimate way. Civil defence people who suffer any loss as a result of the sort of situation which is very widely described here, will definitely be covered, depending on the Minister’s decision. The Minister can decide what property is involved and it is very simple to extend the definition to cover all the properties which the hon. member has in mind. I think he mentioned the motor vehicles of these people. It will certainly be possible in terms of the legislation to provide cover. The Bill is very widely drafted and, as the hon. member for Constantia said, is enabling legislation. There is no limit put on the amount, and I think we will find that as a result of this Bill, we will for the first time be in a position to deal adequately with any eventuality of the kind envisaged.

Question agreed to.

Bill read a Second Time.

Committee Stage taken without debate.

Bill read a Third Time.

Business suspended at 18h30 and resumed at 20h00.

Evening Sitting

Mr. Speaker, I move—

Mr. Speaker, it is only right that I should state at the beginning of the Third Reading that we are now dealing with an improved Bill. As a result of the amendments which the hon. the Minister was prepared to accept I believe that there is now a far better chance that in the implementation of this Bill the Teachers’ Council will in fact be able to achieve its envisaged objects. At the beginning of the Second Reading I could only say that I was satisfied with the disciplinary powers, but now I can tell the hon. the Minister with more certainty that as a result of the acceptance of the amendments relating to the drafting of the code of conduct, we are dealing with a Bill with an improved professional content. The fact that the code of conduct will no longer be subject to the right of veto of the Committee of Heads of Education as was originally envisaged, is in my opinion a major step in the right direction.

One of the first tasks awaiting the council will therefore be the compiling of the professional code of conduct. It will be no easy task. In the last analysis the co-operation of every teacher is necessary. The code of conduct is the one aspect concerning which there must be total acceptance by every member of the profession. Every teacher must be prepared to give it his whole-hearted support.

†In other words, Sir, there must be a complete commitment on behalf of every teacher to adhere to this code of conduct.

*I have enough confidence in the council and in the teaching profession as a whole, too, to be convinced that they will tackle this task with the utmost vigour. If they do so, the teaching profession will have a code of conduct which, in my opinion, will not only be their own product through and through, but may even serve as an example for other professions. The second task is that every teacher will have to take it upon himself to abide by this code of conduct at all times. Thirdly, the council has a great responsibility to ensure that when the code of conduct which they themselves have approved is contravened by any member of the profession, disciplinary steps be taken against him. It would not help the teaching profession if the council was not prepared to punish a person who contravened the code of conduct.

I now want to refer to what I believe will be a fourth task in regard to the implementation and execution of this Bill. This is not really a task which the council itself can do anything about. However, it is a matter which is still in the hands of the hon. the Minister in a half-finished form, as the implementation of the Bill will show us. As far as the registration of teachers is concerned, it will be seen from the implementation of the Bill that in point of fact, the council will only play the role of a spectator. Nowhere are they placed in a position of power with regard to registration. As far as qualified teachers are concerned, the role of the council is solely advisory and as far as the unqualified teachers, viz. those who will be given provisional registration, are concerned, there is not even a reference to advisory powers. In this respect, as I have said, the council will only play the role of a spectator or a clerk whose job it is to record inscriptions. During the Committee Stage the hon. the Minister promised to see what he could do about these aspects. I take it that he will try to do something about this before the Bill is submitted in the Other Place. The hon. the Minister also informed us yesterday that he had negotiated with representatives of the Federal Council. With all respect, I want to tell the hon. the Minister that as regards the matters concerning administration which have not yet been rectified, he will have to initiate negotiations with the people who can in fact make the concessions to him, and not with the Federal Council. Those people are really the Administrators or the Committee of Heads of Education. It is clear to me that the fly in the ointment—to put it very frankly—is some of the education departments. By that I mean the provincial education departments, irrespective of the role played in the matter by heads of education, the Administrators and the executives of provincial councils. All I want to say to those who adopt this obstinate attitude is that when the implementation of this legislation causes friction in this regard, they will have only themselves to blame. However, what they must have no illusions about is the fact that as a result of this obstinate attitude of theirs, the council will in future be deprived of the opportunity to carry out all the tasks—I stress “all the tasks”, because most of the tasks to be performed by the professional council are in the hands of the council—which one would like to place in the hands of a professional council of this nature.

Are you now saying that the National Education Council is obstinate?

No, I am not saying it is the National Council which is obstinate. If hon. members had not been conversing so loudly, the hon. the Minister would perhaps have heard me say that the fly in the ointment was not the Federal Council. I have just said that the fly in the ointment appears to be the education departments—whether it be the Administrators, the Committee of Heads of Education, or the executives of the provincial councils. I also said that the hon. …

Order! I have asked hon. members to be more quiet. I have made this request repeatedly and I want them to be more quiet now, please. It is not fair to the hon. member that he should have to try to make his speech against such a constant clamour of voices. The hon. member may proceed.

I want to tell the hon. the Minister that the negotiations must be initiated with these specific people. As I have said, the implementation of the Bill will show that by not granting their co-operation, they may prevent the council from performing all the functions it ought to perform as a professional council. Furthermore, I just want to say the following briefly. I have already put this to the hon. the Minister, and he has given us a positive undertaking that there is other legislation which will have to be amended as well. The hon. the Minister already realizes this. However I now want to address a very friendly invitation to hon. members opposite. I do not address the invitation to all of them, because there are some of them who do in fact co-operate. Unfortunately, however, there are some hon. members who are always just sitting and waiting in the hope that one of the hon. members on this side may say something which they could make an issue of by interpreting it as an insult to the teachers. [Interjections.] Perhaps this is exactly what we have just heard there once again. As I have indicated, the implementation of this Bill is going to reveal one more important defect. At present this Bill stands on two sound professional legs, viz. the code of conduct and the disciplinary powers. I regard those two legs as sound.

The third leg, viz. the professional requirements for registration, is still very shaky. That is the defect. My invitation to hon. members is rather to forget all the negative attitudes they are displaying. Put your shoulders to the wheel and assist the hon. the Minister, and me and other hon. members on this side of the House, so that that defect, too, may be rectified. [Interjections.] Rather do that than maintain that everything is 100% in order. After all, hon. members also have an influence in their provinces. They must convince those who could still hamper the proper implementation of the Bill, and convince them in a way which will make them gain a better understanding of these matters. Let the following be our slogan in implementing this Bill: “There may not be losers in education. If there are losers, they will be our own children. ’ ’ If this Bill is to be a means to an end, then I hope that that end, apart from the primary aim of inspiring and promoting respect for the teaching profession, will include solving the other problems in education. Now I want to say a few brief words about the powers of the council. Clause 18(g) envisages co-operation with other councils or institutions whose objects or purposes are similar. The effect of this, according to the hon. the Minister, will definitely be that other population groups will also desire to become members of a registration council or to register, or to become members of a teachers’ council, and the other Ministers involved here will have to see to it that the grass does not grow under their feet. There is a feeling among the Coloureds that this must be implemented there and I believe that the Teachers’ Council, and the Federal Council too, of course, will have to do their very best to offer their co-operation to the other population groups as far as possible.

To conclude, I just want to tell the hon. the Minister that in his reply to the Second Reading, I believe he had the incorrect information when he said that in the past this side of the House had only advocated a registration council and not a professional council. I want to point out to the hon. the Minister that I have taken part in eight or ten discussions of the Vote, and on each occasion that I have spoken, I have clearly stated that what we wanted was a professional council. If we have perhaps made use of the term “registration council” from time to time, then that does not derogate from this in any way, because this was advocated in the sense which the Federal Council had in mind, and in this connection I can quote from one of its documents, the following excerpt in connection with a registration council, which was to have the following powers—

The general powers of the council must be the following: Prescribe the minimum qualifications required for registration as a teacher and also prescribe the code of professional ethics to be observed by all registered teachers.

†Now, Sir, whether you call it a professional council or a registration council, if it can have those powers, then that body is indeed a professional council.

*I conclude by saying that we wish the council and the teaching profession all of the best.

Mr. Speaker, it is a pity that the hon. member for Durban Central had to use the opportunity afforded by the Third Reading as well to continue to be negative about this very fine piece of legislation we have before us. One could understand an argument being conducted over a certain aspect in the Second Reading and even during the Committee Stage, but after the adequate replies given by the hon. the Minister towards the end of the Second Reading and also during the Committee Stage, one expected a far more positive note to have been sounded by the Opposition during the Third Reading. I hope that the hon. member who is going to speak after me, the member of the PRP party, will at least sound a much more positive note.

Sir, this legislation lends itself, as I have said, to a positive discussion. It goes without saying that the last word in regard to this legislation cannot be said now, and that this legislation has to be exposed to an evolutionary process. The hon. the Minister has already said this. In the past this was the case with most statutory boards. They had to find their way, and having found it the final pattern was of such a nature that most people were satisfied with it. What is important to us about this legislation, however, is that with its acceptance a new era is not only being ushered in for the teachers of this country, but also for education in its entirety. What is also important and what probably cannot be stressed sufficiently, is that under clause 3 esteem for education, for the teaching profession and the prestige of those engaged in the teaching profession shall be upheld and promoted. It ought to be the point of departure of all of us to build on that object to ensure in that way that the legislation develops in such a way that it can comply with these requirements. This legislation is of course making history. Except for Scotland, our approximately 45 000 White teachers out of a grand total of 20 million teachers throughout the world, are the only teachers who are being placed in a position, by means of a statutory board, to realize, maintain and promote the objectives contained in clause 3.

Since the earliest days we in the Republic of South Africa have always been fortunate to have a teachers’ corps who were educators in the true sense of the word. Up to now they have always compelled respect from the pupils and the community. This has also assured them of a special place in the community, so much so that teachers of this country have frequently been lauded by poets. In this way G. A. Watermeyer said that teachers were the casting moulds of the youth and of those casting moulds he said—

This is the teacher, and it is for this teacher and his position in society that legislation gives us certain directions. Therefore I maintain that we should, particularly in these days in which the struggle for the soul of our people has intensified, enable our teachers by means of statutory powers to preserve the domains which they have conquered with difficulty over the years, and rightly so too. In contrast to this one still finds in many countries of the world an attitude that there is no place for the teacher in society. I can quote many examples where the teacher is regarded as a person who occupies a low position on the scale by means of which the position of people in society is measured. We in this country have, over the years, ensured that our teacher occupies a special place in our society. This legislation will contribute to assuring the teacher of that position in future.

It imparts professional status upon the teacher, and rightly so. To impart professional status on a person, one has to consider that person’s formal education. In my opinion we can say, with great pride in the case of South Africa, that there is nothing lacking in the training of our teachers. To this we may add that our teachers’ corps maintain a very standard in their conduct, in practice and in the sphere of ethics. We should take off our hats to them for that.

Who wrote your speech?

I write my own speeches; I think that is more than one could say of the hon. member for Durban Point.

I do not read my speeches.

In conclusion I want to say in regard to the economic status of teachers that a word of gratitude should be expressed to the hon. the Minister who indicated that he accorded priority to the matter and that in the months which lie ahead a definite improvement will be effected in this respect. As a former teacher I want to thank the hon. the Minister for this.

Mr. Speaker, there is very little in what the hon. member for Springs said that can be faulted, except, of course, the acrimonious remarks he levelled at the hon. member for Durban Central. I must honestly say that I did not find anything negative in the speech made by the hon. member for Durban Central. In my opinion there was a very constructive spirit in everything he said. This positive spirit is something which has been reflected on both sides of this House during all the stages of the Bill. The Minister in particular proved himself to be very accommodating during the Committee Stage with regard to the debating of the Bill. Surely this is a demonstration that both sides of this House are in earnest about the Teachers’ Council being important, and that all of us support its establishment and will, together, try to make it as effective as possible. In fact, I think a record has been broken in that eight of the 18 amendments which we moved were accepted. This serves to demonstrate the measure of co-operation which there can be if everyone believes in the importance of a specific institution such as the Teachers’ Council.

The establishment of the Teachers’ Council should be seen within the broader context of education in South Africa, particularly with a view to the problems with which education is having to cope with at present. In this respect I am thinking specifically of the shortage of teachers, particularly in certain technical and scientific subjects. Scientific subjects are very closely associated with the manpower which can be produced by the educational system in a society. The problems which exist in education are also very closely associated with the status of the teacher.

A few years ago there was no doubt that the teacher was held in high esteem and enjoyed an elevated status. However, as South Africa became industrialized and urbanized, the teaching profession had to compete with other professions, not only in respect of status, but also in respect of salary. One of the basic problems we are faced with is the fact that the status and prestige of the teaching profession is being threatened. The Bill in fact seeks to enhance the prestige and status of the teaching profession and also to establish a code of conduct. In this way the teaching profession will once again occupy an honoured position in society.

A council such as the Teachers’ Council is only one of the many steps which will have to be taken to restore the teaching profession to its former position of honour, to restore it to health. This is a very essential measure. I believe that we in South Africa, particularly if we consider the future and the need for manpower, have a great need for a coordinated approach to education in the broadest sense. I am referring to the entire educational system in South Africa, for all population groups, and the task of this system to provide South Africa with skilled manpower and to raise the level of literacy and education in general. That is why we in these benches believe that a co-ordinated federal council will eventually have to be established, in which all groups of society may be represented. Because this particular measure

On what basis?

On the basis that if a teacher is a teacher, then it makes no difference whether he is a White or a Black teacher. He has the same problems as far as his status is concerned, and he encounters the same problems in enhancing his prestige in the eyes of the community. That is why I believe that this measure under these circumstances may be seen as a positive step in that direction. That is why we in these benches support the measure, but we believe that it will merely be the beginning, and that it will ultimately have to form part of a greater, federated council.

Mr. Speaker, may I ask the hon. member whether his idea of federal liaison has a bearing on or is based on a geo-political line between Black and White?

Mr. Speaker, in the last resort it does not make much difference to me. All that I find important is that the Teachers’ Council which will in fact be established will be a federated and coordinating teachers’ council which will be such that there will be no differentiation in the status of teachers and in the income which they enjoy, regardless of race or colour.

You must reply to my question.

That is what I am trying to do. Only in this way can one assess the educational requirements of South Africa in general to their true extent.

Mr. Speaker, at the Third Reading of the Bill I want to thank all the members on this side of the House as well as the members of both Opposition parties, in the first place, for their support of the Bill. Everyone concedes that it is an important Bill. Why? Because what is at issue here is the status of teachers in our community and for that reason, too, the education of our children. I want to tell hon. members very candidly that this is as I wanted it to be, for when I made my first speech as Minister of National Education here in the House of Assembly I asked for the support of both Opposition parties for education. I pleaded that we should lift this matter out of the political arena and that we should, in the interests of all our children, do our best in this country for education and teaching. I also requested the newspapers for their support, and for that reason I now want to convey my sincere thanks for the support which I did receive. I went out of my way, and was very accommodating by accepting no fewer than eight of the 18 amendments moved by hon. members opposite, and I hope they will not forget it. I afforded hon. members the opportunity to be co-builders of the legislation, legislation which, as the hon. member for Springs rightly said, ushers in a new era in education. If we would in this way co-operate and build together on the education of our children and in respect of our teachers in future, then we can do it. I want to say that there are undoubtedly very fine prospects for education in the Republic of South Africa, and we have to accomplish these things, because it is in the interests of South Africa and all its people that we do.

I agree with the hon. member for Rondebosch that this is only one measure, but is in fact an essential measure, to elevate the position of the teacher in our society and to do the best for education of our children. We shall undoubtedly have to come forward with other measures. There is no doubt at all about that. In fact, work is already in progress in this regard, and this work will have to be done quickly, because we realize how essential it is that this should happen. I want to plead again that we, in this Parliament, as well as our people, should realize that it is essential that the climate should be created in South Africa which will cause the teaching profession to come into its own. Teaching is not simply ordinary work. Teaching is far more than ordinary work, and this should be said loudly and clearly in South Africa. Without any doubt at all this Bill is therefore very important because it affords all of us in this country the opportunity to demonstrate with it, in addition to the other measures which still have to come, that we in South Africa accept that education is not ordinary work, but that it is far more. What is education if we say it is far more? It is making an effort. It is taking action, showing the way, giving instruction, lending assistance and giving guidance to children. After all, children are our greatest possession. We have nothing more important than children in South Africa. They are the future of our people, and that is why they are so important. We say and we believe that it is more blessed to give than to receive. To truly be a teacher, and this we have to realize, is to give of yourself; and to give of yourself, is true giving. We must make the teachers in this country feel, and also tell them, that there is appreciation of the fact that they are giving themselves to education, and to our children. It means a sacrifice of their time and energy. It requires an involvement which in fact requires the teacher’s whole life. Since I became Minister of National Education I have received many kinds of complaints from teachers throughout the country, for example about salaries and other minor matters. However, no one has complained to me that the life of a teacher is not meaningful. I know of no teacher who, after a long period of service in education, retired and alleged that they had lived a useless life. This I find to be what is splendid, what is enduring about education, something which has been as true for more than a century in South Africa as it still is today, viz. that although teaching is tiring— and we should not lose sight of this; it is tiring—it is also meaningful; it gives sense and meaning to the life of the person who engages in it. In this regard I want to endorse what Nietsche said so strikingly in this regard. I quote—

This, I think, makes education very meaningful and splendid. I was present the other day when the centenary of the Transvaal Education Department was held. The minister there expressed it so well when he said, in his survey of education over the past hundred years in the Transvaal: “Thank you for the hundred years of grace.” If we consider education in that light, i.e. that we say thank you for the grace, for the teachers who became involved in the matter in this way, the legislation which we are passing here is meaningful and we are making a contribution to restore the teaching profession to its rightful place in our community and by doing the best for our children in that way.

I do not want to conclude on a negative note. In any event, I think I have already said enough. But I still want to refer to a single point before I resume my seat. I want to tell the hon. member for Rondebosch that our policy is very clear, and that there should be no doubt about this. Our policy differs from that of the hon. member for Rondebosch, as he stated it once again here this evening. Our policy is that there will be a Teachers’ Council for Whites. In addition we do not begrudge any other population group in South Africa also having its own—each of them—professional teachers’ council, just as we have. Surely that is fair, good and just, and there is nothing wrong with that. It also works much better in practice, for at present there are still many major differences in respect of qualifications, and hon. members must not think that I am simply talking for the sake of talking here. We sat down around the conference table and worked out this matter for hours and days, just the matter of the non-Whites and their representatives. Therefore we are not coming forward with a half-baked measure. However, having said that our policy is a separate council for each nation according to requirements, we are providing in clause 18(g) that a co-ordinating council or an umbrella council may subsequently be established in which these people may discuss matters of common interest with one another. We must understand this matter now, and not be destructive in our criticism of the Teachers’ Council for Whites, for it will not get us anywhere, and it will create the impression—as previous speakers have in fact done in this debate, something with which I have serious fault to find; the newspapers also reported it in this way—that in respect of our non-White population groups bad relations are being created, and this is not necessary at all. We want only the best for them, the non-Whites, as well, and we shall help them to achieve the best. Let us therefore understand one another in this regard.

I want to thank the hon. member for Springs very sincerely for his contribution. This morning I had the privilege of being in his constituency and attending the centenary of the Transvaal Education Department, as well as the fifteenth anniversary of the Republic. There were almost 30 000 children present there. It was truly inspiring. I want to congratulate the hon. member on this wonderful function. I also want to congratulate him on his very positive contribution in the interests of education which he made here this evening as a former teacher.

[Inaudible.]

That hon. member was not here for the entire debate.

I come now to the hon. member for Durban Central. I also want to thank him for the positive contribution he made here this evening. I shall gladly remember the words with which he concluded his speech. He said he wished the Teachers’ Council and education everything of the best in the Republic of South Africa. I have appreciation for that. However, there is one minor error which I have to rectify so that there will be no misunderstanding. I find it a pity that the hon. member referred here to the recalcitrance of the Administrators and the Committee of Heads of Education, and did so after so much success has up to now been achieved. I know the hon. member had no ill intentions, but I should like to place this matter in its correct perspective. That kind of comment can only, in the nature of the case, mar further negotiations, and I did after all promise here that further negotiations would take place. We should therefore be a little more careful.

The hon. member should, in addition, understand that there can be no question here of a veto right, not on the part of the Committee of Heads of Education nor on the part of the Federal Council nor on the part of this Teachers’ Council. These bodies simply have to sit down around a conference table and decide what further powers they are prepared to confer upon the Professional Teachers’ Council. I have promised that I would be prepared to act as chairman there. I shall try to help to do my best to effect a sound agreement. I do not have any doubt at all that such an agreement can in fact be achieved.

I am afraid that a misunderstanding may subsequently arise, and therefore I now want to mention two points briefly. I hope I understood the hon. member correctly. As I understood him, what his argument amounted to was that the responsibility of ensuring that a teacher is able to stand in front of a class should be taken away from the provinces—i.e. from the head of education—and given to the Teachers’ Council.

You misunderstand me.

If the hon. member says I misunderstand him, I am satisfied.

Look at my amendment that I moved yesterday.

Very well, I am satisfied. However, I want to sound a serious note of warning. We must be extremely careful. Although we agree that we should grant wider powers to this Teachers’ Council, we must not harm education in the process in that we go too far and give them powers which really do not belong to them.

I undertook to consider certain things before I referred the Bill to the Other Place. I shall keep my word, as hon. members know.

Hear, hear!

Yes, “Hear, hear!” Surely that is true. Please let there be no misunderstanding now. I do not know when the legislation is going to the Other Place, and I cannot therefore guarantee that I will be able to liaise with the Administrators and with all the other bodies concerned before that time in order to effect changes.

In my opinion the consequences of this legislation could be legion. I think the teaching profession deserves a far higher status, and I believe that this council will achieve this. However, we must all commit ourselves to helping in this regard. The enhanced status will not only be determined by conduct, but also by the qualifications of the teachers. A greater discipline will have to be created, not only among their own number, but also in our schools and in our society. Surely it will be to the advantage of the whole of South Africa if greater discipline is created in this way. I also express the hope that a child will be able to say plainly to his friends: “That is my teacher. This is what he accomplished, this is what he did, and I follow him, because he has proved to me, as child, that he is a leader. ” So we see it as an ordered community.

Poor children who were taught by him!

That hon. member would not have made a good teacher; do you know what he would have been good at? He would have been an excellent circus clown. [Interjections.] I want to be frank and say that if I were a circus owner, I would employ Vause Raw as my first choice! However, I am dealing with serious matters, and I should like to conclude. [Interjections.] Look, we are not being jocular now.

I want to state that through this Bill we are rendering a service to our community which should not be underestimated. If the great expectations which are cherished in regard to this Bill are fulfilled, as well as the greater demands which are being made in the sphere of education, then that will help us to occupy our rightful place in the comity of nations and it will undoubtedly help to accomplish the essential function of our people. I trust that the essential blessings of the Almighty will be present upon our educational matters and when we discuss them, and upon the Republic of South Africa.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

Hon. members will have noted from the explanatory memorandum which was tabled that this measure is, for the most part, of an administrative nature. The chief aim is to combine all provisions relating to the financial management of the Post Office in the Post Office Act, in view of the repeal of the Exchequer and Audit Act of 1956 by the new Exchequer and Audit Act of 1975 which came into effect on 1 April this year. At the same time adjustments to the Post Office Act for which there is a practical need are being effected, various obsolete provisions are being deleted, and certain provisions are being rearranged with a view to a later consolidation of the Act. By means of clause 3 of the Bill, the new sections 2A to 2D, which contain the financial powers of the Postmaster-General, and in which his other powers are also set out in full, are being inserted in the Bill.

The exercising of the powers set out in the new section 2B was subject to the approval of the Minister, but naturally provision is made for extensive delegation of authority by the Minister and by the Postmaster-General as well, which is essential to the efficient management of an undertaking as large as the Post Office.

One of these powers to which I would like to give special attention is that contained in subsection (3) of the new section 2B in accordance with which special rates which may be lower than the normal rates, and in terms of which particular users of the services of the department may be exempted from the payment of fees, may be determined when rates are being prescribed.

It is of course true that where rates lower than the normal rates are determined, or users of services are exempted from payment, the Post Office is giving up revenue and rendering certain services on an uneconomic basis. This is not in accordance with normal business principles. Furthermore, it is also true that such concessions may involve indirect subsidies to certain groups by the Post Office, whereas it is desirable that welfare and other aid granted to specific groups by the State, be identified as such and canalized through the department responsible for the provision of aid. The power to make concessions may therefore clash with the basic principle that the Post Office must be run as a business undertaking and that it is not the task of the Post Office to render welfare services. Whether it does clash with this principle depends on the way in which it is applied. I should like to make it clear that it is not the intention to deviate from the basic principle I have mentioned to any notable extent by way of this power. The Post Office needs the power because it is a public undertaking and must also comply with international agreements and established practices. Specific examples of the concessions involved are the gratis transmission of weather reports to ships at sea in terms of the International Telecommunications Regulations, the gratis transmission of health reports from ships to harbour masters or advice to ships by doctors, the provision of gratis telephone services to visiting warships of other countries, and the gratis delivery of post for the blind. I must stress that whereas for practical reasons the Post Office needs the flexibility afforded by this power, it will only be possible to apply it to a limited extent and by way of exception if the Post Office is to comply with the basic statutory directive to run its affairs in accordance with business principles.

A chapter on finance is being inserted in the Act by means of clause 5. Its provisions are largely domestic, and for the most part consist of the re-enactment—with certain adjustments—of existing provisions and the inclusion of provisions which correspond to provisions of the new Exchequer and Audit Act, 1975.

Arrangements in the new chapter to which I should like to refer are, firstly, those contained in the proposed section 12F(6), in accordance with which it will not be necessary to submit an Additional Post Office Appropriation Bill in a financial year in which the total amount voted is not exceeded by more than 2%. Since in terms of subsection (5) the Minister will be empowered to authorize expenditure in excess of voted amounts or for purposes for which amounts were not voted, up to this limit, it is not deemed justifiable that Parliament should have to deal with special legislation which only provides for amounts of this size which have already been spent. Such expenditure may still be reviewed by Parliament when, as required by section (6), it is submitted for approval together with the subsequent main Post Office Budget.

Secondly, there is the arrangement in the proposed section 12G in accordance with which the Post Office is authorized, during a maximum period of two months after the start of the financial year, to incur expenditure in respect of that financial year in anticipation of the passing of a Post Office Appropriation Bill. I undertook in the Other Place to shorten this period by one month and I shall move an amendment to that effect. As hon. members note, all three Government budgets—the main budget and the Railways and the Post Office budgets—are usually submitted in March of each year. The budgets of the Railways and the Post Office both have to be dealt with timeously so that the appropriation bills may be published in the Gazette before or on 1 April. In the case of the Post Office Budget, administrative problems due to the time factor have occurred on more than one occasion in the past. I should like to explain that the new arrangement merely seeks to provide leeway in this regard and that it is not the intention to introduce the Post Office Budget later than in March every year.

†Mr. Speaker, the next matter to which I should like to refer is the adaptation of the provisions relating to the Post Office Savings Bank proposed in clauses 18, 20 and 25.

The main object of the proposed changes is to bring about greater flexibility in the administration of the Savings Bank by providing for matters like limitations on deposits in ordinary accounts, Savings Bank certificates and the manner in which interest on Savings Bank certificates may be paid, as determined by regulation. The stipulation that Savings Bank certificates may only be issued to persons who hold ordinary accounts is also being removed, and the minimum amount for which a Savings Bank certificate may be issued is being reduced to R50. These changes will enable the Post Office further to streamline and improve its Savings Bank facilities.

As hon. members know, the Treasury transferred the control of the Savings Bank to the Post Office in 1974; since that time it has been run by the Post Office for its own account. I should like to make it clear, however, that the Treasury, as the central monetary authority of the country, retains control over the interest rates and those other conditions not fixed by the Act which apply to deposits in the Savings Bank. For this reason this Bill stipulates that, where such matters may be determined by the Minister or prescribed by regulation, this must be done in consultation with the Minister of Finance.

Lastly, I should like to deal with the proposed amendments to section 78 of the Act that are put forward in clause 33, and particularly the arrangements with regard to cable television and antenna systems contained in the proposed new subsections (1B) and (3). Under section 78, the Post Office controls telecommunication lines that are not confined to particular sites. The term “telecommunications line”, as used in the Bill, includes cable systems which, for instance, may be used to distribute television transmissions from a central point to a number of receivers in a specific area.

Such a system may consist merely of a central antenna on a high point from which broadcasts picked up by the antenna are fed by cable to a number of receivers in a so-called “shadow” area as a means of improving reception. Systems like this only take place of individual antennas, and their control is proper to local authorities. These antenna systems are excluded from Post Office control under the proposed new subsection (3). However, where such a cable system is used to distribute transmissions that are generated in the system itself, it in effect becomes a broadcasting system. To ensure proper control over such cable television systems, the proposed subsection (1B) precludes their use without the approval of the Minister of National Education, who is responsible for broadcasting, or without due regard to the views of our national broadcasting organization.

In the event that the Minister of National Education approves the use of any cable television system, he will under subsection (1B) be able to lay down conditions with regard to its use and to determine fees to be paid by persons connected to the system.

Mr. Speaker, before concluding I should like to draw attention to a printing error in the English version of the Bill that might cause misunderstanding. I refer to clause 1, page 5, where in the definition of “depositor”, the words and figures after “Savings Bank certificate” in line 24 up to the semicolon in line 26 should be disregarded. Their appearance in the Bill is a bona fide printer’s error which will be clerically corrected when the Bill is reprinted. As hon. members will note, these words and figures do not appear in the Afrikaans version.

*Mr. Speaker, I do not think it is necessary for me to go into the details of the remaining provisions of the Bill at this point. The details are elucidated in the explanatory memorandum, and may in my opinion, be more fruitfully discussed with reference to specific points which hon. members may wish to raise in this connection. I shall carry out the undertakings I have given in the Senate concerning the proposed new section 12G as contained in clause 5, and in respect of clause 18, by moving amendments at the appropriate time.

Mr. Speaker, the hon. the Minister has said that this Bill is mainly of an administrative nature and that it effects adjustments for which a need exists in practice, but unfortunately the hon. the Minister was silent on what we in the official Opposition consider to be the main principle of this legislation. The main principle of this legislation, in our opinion, is the profit motive of the Post Office. This is being introduced into the Post Office for the first time and we find it strange that the hon. the Minister did not emphasize this aspect. The other point which we also consider to be very important and which we thought that the hon. the Minister would emphasize is the fact that he is now paving the way for a new status for the Post Office, that of a State corporation. Sir, the Minister emphasized that the services provided on an uneconomic basis were subsidized by other departments and he mentioned a few examples. But we feel that the Minister did not go far enough. He should have declared that the Post Office would provide effective services to the consumers, to the public in general, in spite of the fact that some of these services are uneconomic. As far as clause 5 of the legislation is concerned, the hon. the Minister said that its provisions were mainly of a domestic nature, but he did not say that this clause was introducing the principle of a profit motive for the Post Office. The Act used to provide for affairs to be administered on business principles, but there was no profit motive in the administration of the Post Office. Certain other amendments to the Post Office administration create the impression that the Minister is paving the way for a kind of institution which will no longer be a department, but which will be a State corporation.

†Sir, there is clear evidence that the hon. the Minister is attempting to give the Post Office the status of a State corporation. If one follows this Bill, one sees, first of all, that the profit motive is being introduced for the first time, there is also the question of reserves, for which the Post Office has not had any authority in the past, and then there is the utilization of moneys appropriated for a particular financial year, after the close of that financial years, and for another financial year for which they were not appropriated. Lastly, there is the incurring of expenditure without the authority of a Part Appropriation Bill. This question of using unexpended moneys after the end of the year and incurring expenditure without appropriation, introduces very dangerous financial principles, as Parliament has no control over them at all. We find that if that is the case, the Post Office will be in exactly the same position as a State corporation in relation to Parliament. We know what the position is in regard to State corporations, and we know of the trouble we have had with the SABC. We know that we have never been able to debate fully all the other State corporations. They spend money as they please and whenever we ask questions about it, we do not get proper answers. It seems to me a most retrograde step—and we on this side of the House believe it to be that—to introduce this principle into this Bill and, what is more, not to say a word about it at its introduction. Surely it is the most important principle that this Bill contains, and we believe that the hon. the Minister should have made it his duty to explain just why there is this change of policy, why there is now a profit motive and why the Post Office should now be turned into what is tantamount to a State corporation. It must be so, Sir, because if one compares the provisions of this Bill with the Exchequer and Audit Act, it is quite clear that that is the case, because the Exchequer and Audit Act prohibits the expenditure of moneys other than in the financial year for which moneys were appropriated. This Bill goes against that all the way. We also expected at this time that the hon. the Minister would produce a statement of policy on the Post Office. This is an appropriate occasion. If the hon. the Minister was going to change certain basic principles in regard to the Post Office, then this was the appropriate opportunity to have said what his basic policy for the Post Office was. Unfortunately we do not know what it is. I should like to suggest to the hon. the Minister that he thinks along the lines of the United States where the authorities have stated quite clearly what their postal policy is, inter alia—

I believe that it is a most important principle and one that should also be in the Minister’s policy statement. But we have not heard it. They continue to say the following—

We have not heard a word about that from the hon. the Minister. They go on to say—

The most important part we find in the last sentence, as follows—

I think this is one of the most important principles the hon. the Minister should incorporate also in his policy statement. I think the hon. the Minister should also take another leaf out of the United States’ policy and say something along the following lines—

I do not want to quote any more, but it is quite clear to me that if the hon. the Minister had really wanted to do something when he introduced this legislation, we would have been treated to a policy statement, something of the nature of what I have just read. I should like to suggest to the hon. the Minister that, as he avoided doing so when he introduced the Bill during the Second Reading, he might consider doing it at the commencement of the Committee Stage or perhaps during the Third Reading. The hon. the Minister could perhaps also do it in his reply to the Second Reading debate. Perhaps the hon. the Minister is giving in to a little doubt; that is why I did not suggest it in the first instance. If the hon. the Minister would like to borrow my book, I am quite prepared to hand it to him so as to give him an opportunity of doing just this.

I should now like to deal with some of the aspects of this Bill which I think we should debate in some detail. The Bill makes it clear that the Post Office is no longer regarding itself as a department with the prime object to provide a service, notwithstanding the fact that that service is not profitable.

For the first time we now have in a Post Office Bill the word “profit”. Hon. members will know that the Act speaks about the “total earnings” of the department. This Bill substitutes the word “profit” for the words “total earnings”. We on this side of the House believe that what is meant by this is the statement in the Bill of what items should be charged against total earnings to arrive at a profit. If one looks at that particular clause, one finds that it refers to the maintenance, replacement, renewal and depreciation of fixed assets, the payment of interest on loans, the redemption of loans, the provision of new fixed assets and the meeting of any other financial liabilities. Those are all provided for as items that should be deducted from total earnings so as to arrive at a profit.

However, the Bill goes further. It provides for what is called “reasonable reserves”. This is a subject which is going to cause us a great deal of trouble. Why the question of reserves crops up, I do not know, but I believe I can take a good guess. When the balance sheet for the Post Office was produced for the year ended 31 March 1976, for the first time in the records of the Post Office balance sheet, there appeared an item, “Reserves”. The figure given is R19 256 000. I believe that what happened—and this is the reason why this Bill is before us in this form—is that the Auditor-General spoke to the hon. the Minister and said to him that he noticed there was an item of R19 256 000 as reserves, and then told the hon. the Minister that, in terms of the Post Office Act, he had no right to have reserves. I believe that, simply because the hon. the Minister had R19 256 000 and did not know where to put it in the books of the Post Office, he came to the House on an ad hoc basis and said that he regarded R19 256 000 as a reasonable reserve and that, therefore, the Post Office Act had to be amended to provide for a reasonable reserve. I believe that that is the reason. If there is a better reason than that, I hope the hon. the Minister will tell me, because I do not think the reason I have given is a good one at all.

There is a clear indication that the hon. the Minister has in mind that Post Office charges shall be such that sufficient income must accrue to the Post Office to allow it to show a profit, a profit of such proportions that a reserve fund can be accumulated. That is something quite new. It is also a matter on which the hon. the Minister was completely silent in his Second Reading speech. If these provisions are considered together with the new principle that it is no longer necessary for the State President to approve alterations in the fees, rates and charges levied by the Post Office, it is quite obvious that the Minister may raise the fees, rates and charges if he feels that the profit he will make from the existing tariff is not sufficient to produce the profit required. I think this is a very important point. Formerly the State President had to approve the increase in the rates and charges, but now the Minister does it himself. If we pass the legislation in this form, it is an open invitation to the hon. the Minister to say: “I do not think that I made enough profit this year, so I am going to put up the rates and charges.” It goes further, however, because if the hon. the Minister is incompetent and if he is inefficient and runs a really bad show as far as the Post Office is concerned, so bad that he is running it at a loss, then, in order to cover his inefficiency and incompetence, he can put up the rates and charges. He does not have to go to the State President any more, because he can do it on his own. What is more, he can do it whenever he pleases. All he has to do is to publish a notice in the Government Gazette and that is that.

There will be no redress.

He does not even suggest in this legislation that it might be a good point to give commerce and industry and the public at large some notice of the fact that he is going to put up these rates and charges; he can put them up right away. I am wondering what the hon. the Minister’s attitude is going to be today, because we are going to move an amendment in the Committee Stage in regard to the question of putting up the rates and charges. We will suggest to the hon. the Minister that there should be a time limit within which notice should be given to the public at large of the intended increase in these rates.

The other point which we should deal with is the fact which I think the hon. the Minister should always have uppermost in his mind, namely that the Post Office is a monopoly. It is very definitely a monopoly, and because it is a monopoly one must be very careful of how it operates. If one has a monopoly and it operates adversely, there is nothing one can do about it. Everybody has to suffer because of this monopoly. If it is a monopoly, it must operate in such a way that it gives the best treatment to everybody that uses it and even those who do not use it. At the same time it is an essential part of the infrastructure. If the service is to be provided under a monopoly, it should be provided in such a way that it is efficient. It should also be provided in such a way as to give the best service possible, whether there is any profit in it at all or whether there is no profit, whether it breaks even or whether it runs at a loss. That makes no difference at all because a service must be provided and it must be a good service.

The degree of efficiency of the mail service, I believe, determines to a large extent how civilized a country is. In South Africa we fall far short of the international norm for a good postal service. The hon. the Minister has heard me say before what the international norm for a good postal service is, but I think that it is so important that I am going to repeat it. A good postal service, according to the international norm, is one post office to serve 20 to 40 square kilometres and approximately 3 000 to 6 000 inhabitants. If we regard postal agencies as fully-fledged post offices—and we know that postal agencies are certainly not fully-fledged post offices, but for the purpose of my argument I am prepared to regard them as such—and we add them to the number of fully-fledged post offices, then there are just short of 3 000 post offices in the Republic. This means that in the Republic each post office serves an area of 696 square kilometres and 8 962 inhabitants. These figures are far short of one post office for an area of 20 to 40 square kilometres and 3 000 to 6 000 inhabitants.

During the past 18 months 13 post offices were closed on account of poor support or their proximity to other post offices. Seven post offices were closed on account of the fact that they were not bringing in sufficient income. In addition, five post offices were degraded to postal agencies as a result of poor support. I believe that these figures already show that a profit motive exists in the mind of the hon. the Minister. If he is given his head, he will close more post offices if keeping them open will affect his profit adversely. That is why I think it is so important that we should deal with this profit motive here this evening. In an undertaking such as the Post Office such a monopoly will only be justified if an efficient service is given at a reasonable cost. Already this is not the case. The present structure of the Post Office, with its lack of facilities for the public in respect of postal services, is not efficient. If more post offices are closed, it will be even more inefficient. Telecommunications has a fairly constant backlog of 100 000 telephones, thousands of crossed lines, wrong numbers and incorrect metering.

Back to the old story again.

It is still true, is it not?

We are subjected to all this although the telecommunications part of the Post Office runs at a profit. What will happen when profit, which is now not the main motive, becomes the main motive? That is what it is going to become. The Post Office has a monopoly in radio frequencies for two-way radio communication. The result is that the Post Office refuses to grant permission for frequencies if it can supply a service. The Post Office only supplies a service on a rental basis and the equipment remains the property of the Post Office. The rental for a base station and three portable units is R100 per month, payable to the Post Office. Private enterprise, however, is prepared to sell the same service on a monthly instalment basis so that the user becomes the owner of the equipment after all the instalments are paid. At the same time private enterprise renders monthly services to the equipment. The total monthly instalment for the private system is R73,60 per month and the monthly service charge is R15,75 per month, making a total monthly payment of R89,35. When one takes into consideration that the private system becomes the property of the user after payment of the instalments— which is not the case in so far as the Post Office system is concerned—the comparative figures of R100 per month for the Post Office service and R89,35 for the private system assume greater significance. There is the question of a monopoly. If this monopoly is going to be conducted well it has to be conducted at reasonable competitive prices. In this particular case the Post Office cannot compete. Because the Post Office cannot at present handle mail as efficiently as users would have it handled, many firms either already deliver mail themselves or engage someone else to do it. The effect of this is to make for less support of the Post Office and this may in due course cause the hon. the Minister to close further post offices for lack of support.

Shocking!

When a post office in the suburbs does not provide efficient service the postal users are apt to patronize the general post office in the city. This also makes for lack of support and the eventual closing of the inefficient post office. When this Bill is passed, the hon. the Minister will have the excuse to close any post office which does not show a profit, irrespective of the fact that it could render efficient service if well supported.

I now come to the point why all this legislation is necessary. It is only necessary, as far as I can make out, because the hon. the Minister believes that he should do certain things which have been tried in other countries and have been a complete flop. In the USA there was an attempt to float a Post Office service corporation. At the last minute these plans did not materialize. Similar attempts have been made in other parts of the world. In every case, however, the result has been a worse service, in fact a curtailed service, and irate mail users. There is no reason at all for us in this country to embark on such a course. However, I believe that is the course the hon. the Minister is embarking on. He thinks that because the Post Office must be run as a business, it has to be run at a profit. That is quite unnecessary. The Post Office must be run in a businesslike fashion, but it does not need to show a profit in order to be run as a business. The hon. the Minister has made it clear in his speech that he regards the profit motive as one of the most important of motives. I therefore move as an amendment—

1. (a) a principle of authorizing the Postmaster-General, with the approval of the Minister, to determine, to the detriment of the public interest, fees, rates and charges for services rendered by the Department which are higher than are required to meet all reasonable costs and provisions necessary for the efficient operation of the Post Office; and
2. (b) principles which may lead to the Department being administered as a State corporation not accountable to Parliament.”.

Mr. Speaker, this day exactly 28 years ago, on 26 May 1948, the telephones rang across South Africa’s plains. However there were not many telephones in those days because a United Party Government was in power. We could not even send telegrams, because there was no service, and that was owing to a United Party Government. In the course of 28 years South Africa has had the blessing, good fortune and prosperity of an NP Government, whereas from the UP we have had the poor kind of speech we had this evening from that Hon. member.

Mr. Speaker, may I ask the hon. member a question?

That hon. member can speak in a moment. Since that time the telephone service in South Africa has grown and flourished as few things in this world have done. This evening the hon. the Minister of National Education said that one of the country’s greatest assets was its children. I think that after its children, the most important asset is South Africa’s telecommunications system. There is nothing in a country so important as post and telecommunications services. Nothing can happen in this country if postal and telephone services are not functioning well. No branch of our society can function without these services, whether it be the Railways, the Defence Force or the UP. Postal and telecommunications services are the most important services we have. It is tragic that the hon. member for Wynberg raised with so many petty and trifling matters here while we were engaged in discussing so important a matter.

What is petty and trifling about his argument?

South Africa can count herself fortunate that that hon. member is not in the business world. Before dealing with the points raised by the hon. member, I want to quote the proposed section 12A(1)—

However, the hon. member wants to suggest that services are not rendered in every part of South Africa. He compares our position with the position abroad, but in the process he drew comparisons which did not apply to South Africa in any way. One of the points he made was that in South Africa there was one post office for every 666 square km. He compares this state of affairs with the number of square miles per post office in the densely populated countries of Europe. He should really bear in mind that we are a developing country and not a developed country. This really makes quite a big difference. The hon. member launched an attack on the principle that the Post Office should make a profit. Would the hon. member have jumped up and shouted “Hurray” if the hon. the Minister had said that the Post Office should operate at a loss? Where is the money to come from if we operate at a loss? With what does the hon. member want to finance capital works? With what does he want to pay the administration costs of the Post Office? With what does he want to pay salaries if the Post Office is to operate at a loss?

You know where the money must come from.

It must not come from the poor people.

Surely there has to be revenue. A Post Office based and run on sound business principles, as the NP runs our Post Office, will make a profit. It was very striking that the hon. member omitted to mention that in spite of the profit made by the Post Office, it cut its postal rates by 20% this year.

Not all the postal rates were cut.

Will the hon. member for Wynberg reply to me on this score? No, he will not, because now he is sitting and chatting with his Whip. If there is a profit, why have we cut the postal rates by 20%? Why did we do so?

The cut was only in respect of airmail rates.

This year the Post Office showed what could be done if, with the hon. the Minister giving the lead, a sound policy based on business principles was implemented and services provided. The Post Office does not operate at a loss as the Post Office of the United States does. The hon. member gave us the Post Office of the USA as an example, but surely we are not simply spelling out a policy here; we are doing the work and we are providing the service!

Where is that service provided?

The Post Office provides South Africa with a service. In 1948 I could not even phone my neighbouring constituency to hear what the result was there, but now I can phone New York within two minutes. Surely that is service! Within five minutes we can phone to Windhoek to hear whether the United Party has appointed a candidate there. Surely that is service and that is how the Post Office has progressed. That is why we are proud of the Post Office.

The hon. member also launched an attack on the expression “reasonable reserves”. Surely it is only good business to have reserves and we are running the Post Office on business principles. I do not want to reproach the hon. member on this score, because he is not a financial expert; he is an attorney, a lawyer. I cannot discuss legal aspects with him. I am not going to take it amiss of him for not understanding these matters; they are somewhat beyond him. Nor do we take seriously the blunder he made. I can understand him having made such a blunder. Surely any business has a balance sheet and anyone who knows anything about the economy or finance, or has perhaps done a year of bookkeeping at university, will know what a balance sheet is and what a reserve is. Surpluses are deposited in the reserve. That is a reasonable reserve.

Why, then, is it not called a surplus?

The hon. member goes on to maintain that they will not have the right to discuss this aspect or advance criticism in this regard. Surely that is not true. Surely this is in no way a State corporation. The Post Office budget is introduced in the House every year by the hon. the Minister. Hours are set aside for this purpose. So much so that they do not even have enough speakers to take part in the debate concerned. They had a very difficult time of it this year. They were unable to speak for the full time allocated to them. There was too much time for them in which to level criticism. What was the difficulty? There was nothing to criticize. The affairs and the administration of the Post Office, the Minister’s policy and the whole policy of the NP in the service of South Africa was too good and the hon. members opposite did not want to say thank you. They could have devoted half the time to conveying their thanks for the good service provided.

I want to convey my heartfelt thanks to the hon. the Minister and the department for the fine explanatory memorandum provided. I am sorry the hon. member did not thank the hon. the Minister for this. I should have liked him to do so. The explanatory memorandum facilitates the task of the Opposition. There are so few of them that they are very hard put to it to inspect the legislation and make speeches about it. Now the hon. the Minister comes along and helps them to this extent. All that remains is for him to write their speeches for them. This memorandum contains all the explanations required. Although the hon. member did not do so, I hope that the next speaker will thank the hon. the Minister for this. In fact, I shall thank the department and the hon. the Minister for this memorandum on their behalf. It helps the Opposition a great deal that these matters are set out so clearly in the memorandum. I am very pleased, too, that we have this Post Office Amendment Bill before us this evening, because all the provisions which are necessary for the Post Office and in accordance with which the Post Office has to run its affairs, are lucidly set out in one Bill. As hon. members will know, some of the Acts relating to the Post Office have virtually been repealed in their entirety as a result of all those sections that have been replaced. I want to ask the hon. the Minister please to introduce a consolidating measure, not next year, but in 1978. That would give this piece of legislation a full year in which to be implemented. In the course of the year we shall be able to identify any remaining difficulties to be ironed out. Perhaps we shall also have to come up with amendments. As far as this is concerned, I want to invite the Opposition to come up with recommendations and criticism in the year that lies ahead so that we may further improve this Bill. If it should appear to be necessary at that stage, we could then effect the amendments in question in 1978 when we consolidate this legislation. However, I want to predict now that we shall have no recommendations or amendments from the Opposition because they will not find any weakness in this Bill.

I took it upon myself to go into this matter thoroughly and even though this legislation is complicated, the Minister and his department have thought far ahead. Nowadays we cannot afford to waste or fritter away the time of this House and in this connection I want to draw the attention of the House to one minor matter, viz. that the Part Appropriation, for example, can now be eliminated to some extent. I have pointed out in the past that unnecessary overlapping sometimes occurs in this House. For example, the same matters are simply repeated in the no-confidence debate and in a series of other debates. This Bill now entails the benefit that the Part Appropriation can be eliminated and only the main budget submitted to the House. In my opinion this is a very positive step in the right direction. In conclusion, I just want to say to the hon. member for Wynberg that in spite of the criticism he levelled at the Post Office and in spite of the comparison he drew with America, I do not want to draw any further comparisons. However, it would do the hon. member good to take an unprejudiced look, for a change, at the services provided by the Post Office and at the finances of the Post Office, and to compare them impartially with the position in other countries. We do not deny that the Post Office is experiencing problems in South Africa. For example, distances in South Africa are five times as great as in European countries. However, when we compare the Post Office with the Post Offices of other countries in the world on that basis, ours is one of the best in the world. In conclusion I once again want to thank the hon. the Minister for this legislation.

Mr. Speaker, the hon. member for Sunnyside started his speech by pointing out that he was very proud of the fact that in 1948 the Nationalist Government came to power in South Africa. I do not want to detract from their pride, but I should like to point out that in 1948 the NP managed to muster three times the number of members that they have present in the House this evening.

Oh, dear me!

I wonder whether the NP is celebrating tonight. Perhaps that is the reason for such a small number of their members being present here.

Sir, because I know that very soon you are going to ask me to come back to the Bill, I shall do so at once. Let me say at the outset that, unlike the official Opposition, we are in fact going to support this Bill.

Is that their birthday present?

We are going to support the Bill because, unlike the official Opposition who appear to see it as a very negative and evil thing with the prime purpose of making money out of the poor South Africans, I think that that is not the prime purpose of this Bill if one studies it very carefully. If one studies the Bill, one sees that it is obviously an endeavour to provide the Postmaster-General and his entire staff with the management means in order to improve the efficiency and effectiveness of the Post Office and also to improve the services which it renders to the South African public. I hope that that is so. I think that if one looks at all the provisions contained in the Bill, one finds that that is clearly what the aim was of the people who drafted the Bill.

I think that the Post Office in South Africa today renders a very large range of extremely important and significant services to South Africa and its people. I want to say immediately that in many respects the Post Office has not yet achieved the level of efficiency and service we should like to see. It is our job from time to time to point out to the hon. the Minister where the Post Office is failing and where it can bring about improvements to its services. I think that this particular Bill was drawn up to give further powers, further tools, further management means to the Post Office to achieve a better service and higher levels of ability and efficiency. Mr. Speaker, I believe it is important that, where efficient management is wanted, managers must be given the means to provide that efficient management. One must give them the power they require; one must give them the power to delegate; one must give them the authority and responsibility which they require. However, one very important point is that when one has entrusted to one’s top managers—and after all, the people who run the Post Office are top management people in South Africa—these powers and these responsibilities, as well as this authority, one is entitled to call them to account for their performance. I believe that our job this evening in this House is to entrust to the Post Office and to its officials the powers for which they have asked, to show confidence in them, to wish them the best in the carrying out of these duties and responsibilities, and to make it very clear that, as far as the services that they render and as far as the efficiency of those services are concerned, we in this House will call them to account as regards their performance, from time to time when the opportunity arises.

The hon. member for Wynberg was very concerned and distraught at the fact that the word “profit” appears in this Bill. I do not believe that it is the primary intention of this Bill in any way to make of the Post Office a profit-making organization. The primary responsibility of the Post Office is to provide efficient services at the lowest possible rates to South Africa, its people, its industry and its commerce.

Why do you not read the clause?

I should imagine that that is the primary purpose of the Post Office.

Read the clause!

It is not the primary purpose to be a profit-making organization. However, if we believe in the concept of free enterprise, if we believe in the advantages and in the incentives which derive from the concept of making a profit …

Ah, you are talking a lot of rubbish!

Mr. Speaker, I am not talking rubbish! The hon. member for Constantia, who is the finance spokesman in this House for a party which is supposed to stand for free enterprise, says it is nonsense to say that a profit incentive—and I was going to say it before he opened his mouth—is an incentive for higher efficiency, and, in fact, can lead to the reduction of costs …

But it is a profit for the State.

Mr. Speaker, the concept, in the first instance, of having a profit on one’s balance sheet is the opposite of having a loss and it is true to say that in any organization, irrespective of what that organization is, if the concept of a profit is being introduced—obviously it is not the primary consideration, but it is a concept and a consideration nevertheless—it can, and we hope it will, lead to the inspiring of the organization and of its people to reach higher levels of efficiency. It can also—this has been proved on numerous occasions—reduce costs to the customers of an organization. I do believe and I do hope that this is the intention of the hon. the Minister in bringing this Bill before the House.

I also believe that the objection to the provision for reasonable reserves is not a valid one, because any organization, once again, is entitled to produce reasonable reserves for that organization in order to stabilize the services that are rendered, and in order to stabilize expenditure. Provided the hon. the Minister is sincere when he says “reasonable reserves”, and provided he is sincere when he says that the primary aim is not to make a profit but to provide service, I believe we should go along with what the hon. the Minister has put forward in this Bill. Of course, we must retain for ourselves the right, on behalf of the South African people, to call the hon. the Minister and his department to account in respect of the performance and the service that they deliver and in terms of the rights and the powers which we have extended to him.

Mr. Speaker, the new section 2(2) reads as follows—

I believe that the words “shall have the supervision” is possibly not very good English, and that it should read: “The Postmaster-General shall supervise control and exercise responsibility …”I think the word “responsibility” should be included, because I believe that authority without responsibility is unacceptable. It is actually the responsibility and the accountability which is important as far as this Bill is concerned. Certainly, this Bill gives the Postmaster-General and his staff very wide powers; extended and additional powers.

I believe, as I have said previously, that that is vitally important in order to give the Postmaster-General and his staff the opportunity of providing a more efficient service. This will in fact give them the chance to streamline the organization much further than they have done already. The important point is that decisions will be taken much faster, much more effectively and will come into effect faster as a result of the additional powers which have been extended to the Postmaster-General and his staff in respect of this particular provision.

I would like to say, with regard to the fees, rates and charges—as provided for in the proposed new section 2B(1)(e)—that I hope that it is again the intention of the hon. the Minister and of his department to apply the utmost discretion in the raising of fees, rates and charges, and that at all times the attempt will be made to avoid at all costs the increasing of such fees and charges, particularly bearing in mind the effect which such charges have on the inflationary spiral in South Africa. Because it is a service to commerce and to industry, it is of necessity so that when fees and charges are raised in basic services to commerce and industry, such increases must result in increased costs to the consumers of South Africa as a whole and will therefore contribute to inflation. Therefore I hope that the hon. the Minister, the Postmaster-General and his department, and all the people to whom he delegates this authority, will apply the utmost discretion and the utmost caution before such increases are considered or brought about. The following provision on which I should like to comment is the proposed new section 2B(m) where the following words appear in line 35—

I should like to suggest that the hon. the Minister should consider the following wording—

Then the next provision I should like to comment on—and I should like to comment on it by way of approval—is the proposed new section 2(C) which states that: “The Postmaster-General may in his discretion approve the write-off of the whole or any portion of an amount owing to the department by any person, if he is satisfied that the recovery of the amount would cause undue hardship to the debtor” or that the assets of the debtor or in the estate of the debtor would adversely or detrimentally affect the person. I think it is important that we should approve of this humanitarian provision in this Bill, and it is important to me certainly, as it is pleasing to know, that the department, in introducing this legislation, did in fact give thought and consideration to the effect that these provisions may have on people who are destitute and who certainly cannot afford to be subjected to these provisions. The proposed new section 2(D)(2) reads as follows—

I have difficulty in regard to this particular provision, namely that if a power is delegated to any particular official and that official, in terms of that power, negotiates with another party, certain agreements being reached based on those negotiations, it would possibly be unfair and unwise of the Postmaster-General to have the power to amend or withdraw any decision made in the exercising of that power. If that provision is allowed to stand, a person who has made a contract, or has reached an agreement, in terms of a provision of a service by the department to him or his organization, the Postmaster-General is empowered to withdraw that decision. This could severely prejudice the third party who made that agreement with the Post Office. I believe there should be some further thinking, in regard to that provision, in order to avoid the difficulties or the prejudice which could result from the summary withdrawal of such a decision.

Then we come to chapter II and the proposed new section 12(A), where we deal with what might be described as a statement of the policy of the department, a statement which the hon. member for Wynberg thought was very important. This proposed new section states that “the affairs of the department shall be administered on business principles …” I think that is important because this is what this Bill is all about. The intention and the purpose is that this department should operate on sound business principles. One cannot, however, instruct an organization to operate on sound business principles if one does not, at the same time, hand to that organization the management tools and the powers enabling it to operate on sound business principles, and with due regard being had to the promotion, by means of efficient postal and communications services, of commerce, industry and agriculture in all parts of the Republic and the promotion of the Republic’s foreign exchange.

Here I would like to say, as I said at the outset, that by no means has the Post Office at this stage achieved the efficiency or the level of service which is needed by the fast-growing South African economy. There are still large backlogs with regard to telephone services, and there are still a large number of problems being experienced by telephone users, particularly by the one-man business operators who operate from their homes and people like nurses and doctors who perform essential services. These people need a telephone but cannot get one. I do not wish to expand on this, but I want to urge to the hon. the Minister that it is absolutely essential that he should give urgent attention to the improvement particularly of the telephone services in those areas where the telephone services are a vital aspect of the daily life of the people concerned. I refer to small businesses and to people who require the telephone either for their business, for health reasons or for any other bona fide reasons.

I should like to make use of this opportunity to reply to an offer which was made previously by the Government to myself and to the hon. member for Randburg at the time. The hon. the Minister said that he was prepared to take steps to eliminate the backlog of telephone applications in Soweto, provided that I and the hon. member for Sandton would be prepared to forego the installation of backlog-services in our constituencies. I think it is most important that we state very clearly what our attitude is in regard to the provision of services for all South Africans. My party’s attitude is simply that every single applicant for a telephone service or any other service provided by the Government must be treated on the merits of his application without any regard whatsoever to the race, colour or creed of the applicant concerned. In other words, we believe that all applications for telephone services, whether they come from Soweto, Bryanston or anywhere else in the country, should be treated by the hon. the Minister and his department on a colour-blind basis. They should not see or consider the colour of the applicant when they consider the application. I certainly hope that in future the hon. the Minister and his department, in considering applications for services of this nature, will not differentiate in any way between the various race groups, but that they will demonstrate that they are prepared to provide a service on a non-discriminatory basis and purely on the merits of the applications.

The proposed new section 12C is a provision I should like to approve of. It introduces the principle that all State departments who obtain services from the Post Office, should pay their way. I think it is important that we should indicate that it is something of which we approve. The proposed new section 12F(3) reads as follows—

I think there is a difficulty and a danger here, because one might have a large saving on a very large amount that has been voted. That money is then available to be appropriated in respect of any other matter for which money has to be voted, and for which very little has been made available. I think one has the difficulty here that since an indiscretion could be committed in the appropriation of such excess funds, it might be necessary for the hon. the Minister to consider, when excess funds are reallocated, a percentage of the vote to which they are reallocated—whatever the percentage may be—as the maximum additional funds that can be allocated to such a vote. In terms of the proposed new section 12F(4) and (5) provision is also made for additional expenditure of funds. I think it must be clear—I hope the hon. the Minister will confirm that it is clear—that this will happen only in exceptional circumstances and that there will be a justification for the allocation of such additional funds.

I see that the hon. the Minister restricts the additional overall expenditure of funds to 2%. I think that an allowance of an additional 2% on a very large provision of funds, is very responsible and modest. I think the hon. the Minister may find that in times to come that may not be sufficient and that he may have to increase it to 5% for instance.

Then, the proposed new section 12F(6) reads as follows—

In other words, the Minister will report to Parliament such additional expenditure. I should like the hon. the Minister to consider the extension of subsection (6) to cover also the provisions in subsections (3) and (4) and not only those in subsection (5).

A number of provisions in this Bill deal with the handling of the finances of the Post Office and the investment of the funds of the Post Office. I think it is important that the utmost degree of control and also morality should be applied by the department in the handling of the finances such as who will handle it where funds of the department will be invested. I say this because, inherent in these provisions, there is the danger, at least, of a charge being made that preferential investment of funds can be made by the Post Office and that preferential contracting can take place with regard to who will handle the financial affairs of the Post Office. I think the hon. the Minister should consider the possibility of cycling the handling and investing of finance between institutions, or spreading the handling or investing of funds amongst institutions.

The proposed new section 12R(5) deals with a person employed by the Post Office who caused the department any loss or damage for a number of reasons. As I read the reasons why a person can be acted against, it would appear that theft is excluded. By and large it is because of the omission of the regulations or the non-compliance with the requirements of the job that such a person can be acted against in a certain manner. What I should like the hon. the Minister to tell us is what provisions are made in the case of an employee or ex-employee who is found to have transgressed in this manner. Will he have the opportunity of what we call a fair hearing? In other words, will he appear before a board or committee with an opportunity of being represented and with an opportunity to answer any charges laid against him? Once again, it is a humanitarian and very good discretion that the postmaster can decide not to act against such a person or to penalize him. I also believe that it is a good thing that such a person can appeal to the Minister and to a court of law if he feels that he has been further wronged by such action.

Apart from the reservations which we have and the questions we have asked, we believe the Bill is by and large a good one providing the means and the machinery for the department to carry out its work in a more efficient and more effective way in the interests of all its customers. We hope the hon. the Minister will be able to report that that is, in fact, the case when next he reports to the House.

Mr. Speaker, I just want to reply briefly to what was said by the hon. member for Sunnyside. He said that the hon. member for Wynberg deems it advisable for the Post Office to show a loss every year. The hon. member for Wynberg has never suggested anything of the kind. He simply said that he cannot see why it is necessary for the Post Office to have to show an exorbitant profit. If the hon. member for Sunnyside is so sensitive about the word “profit”, why has the word “surplus” not been used in the Bill?

Mr. Speaker, may I ask the hon. member what the difference is between profit and surplus?

I am not going to reply to the hon. member’s question, because my time has already been curtailed. The hon. member also referred to the fact that he was unable to make a telephone call during the 1948 election. I want to remind the hon. member that the position has certainly not improved a great deal. When an hon. Senator stood for elections in Durban North, he was probably unable to use a telephone either. He had to send telegrams. A great number of telegrams have been sent and that costs a great deal of money. The hon. member said that it is easy to make a telephone call to New York these days. I challenge him to try and make a telephone call to Somerset West any evening during the week.

†The hon. member for Bryanston has apparently not read the legislation. He may have read the memorandum, but he certainly did not read the legislation. How he can say that he is very hopeful that services will be provided at a lower cost, I do not know. There is no mention of that in the Bill. The hon. member also said that there is need for efficient management in the Post Office. We did not know that there was a need for more efficient management in the Post Office. We are very pleased with the management in the Post Office. We think it is of the highest quality. Whatever fault we have to find with the legislation is not in regard to the management of the Post Office.

The hon. member also spoke of a free enterprise system. I do not know how the hon. member can speak of a free enterprise system when he speaks about the Post Office. In a free enterprise system there must be competition, but the Post Office is one of the most monopolistic enterprises in South Africa. Therefore, I do not see how he can speak about a free enterprise system.

The proposed section 12A, as set out in clause 5 of the Bill, essentially makes provision for operating on business principles. We have no quarrel with that as long as it is done in a businesslike manner. However, we become frightened when these businesslike principles are coupled with profits and the profits are coupled with reasonable reserves. We wonder why so much emphasis is placed on the profits the Post Office must now suddenly show. When one runs a monopoly there is a tendency to increase charges. There is no competition to keep costs down. If charges keep on rising and one has to show a profit, who will pay for this in the end? Will it be the user of telephone services, or will it be the general taxpayer? This is what worries us.

We know that some of the services of the Post Office are uneconomic. We are fully aware of this, and it is only right that, for instance, the postal service should not show a profit. In a country such as this, with great distances and large numbers of post offices which are barely running economically, it is hardly possible that the postal services can show a profit. What we are worried about, however, is this: Must the other services of the Post Office carry the uneconomic services? This is what is happening and what has happened in the past. The telecommunications service, which runs at a profit, is being loaded more and more each year in order to carry the losses on these other services. It was avoided this year, and we give full credit to the management and the staff of the Post Office for that. We know that great sacrifices were made, and for this we are very grateful. We feel, however, that as costs rise and escalate, eventually charges will have to go up. Will they go up on the telecommunications side, and will the person who uses the telephone have to pay for all the other uneconomic services? The new section 2B(1)(e), as inserted by clause 3 of the Bill, empowers the Postmaster-General to determine and alter from time to time fees, rates or charges. This is worrying to us, and we wonder whether it is reasonable that the Postmaster-General may, willy-nilly, without giving notice to the general public or the users of the Post Office, increase charges.

Mr. Speaker, may I ask the hon. member a question?

No, I am not prepared to answer questions at this stage. Let us take the case of a business which relies to a great extent for its advertising on postal services. Such a firm may spend thousands of rand on having pamphlets printed, which they then intend to distribute through the post. Suddenly an increase in postal tariffs is sprung upon them. This is most unfair to that type of business, and I feel that it is only fair that some notice should be given. I wonder whether the hon. the Minister will consider introducing into this legislation a provision in terms of which notice must be given in the Government Gazette of the intention of the Postmaster-General to increase certain charges.

I should like to refer also to the provision relating to the Savings Bank. One of the services which the Post Office operates, and which is a very profitable service, is the Savings Bank service. We welcome the proposed changes in this respect. We know that the Post Office virtually has a monopoly in savings bank services, when one compares them with the services of other institutions such as the building societies, because the Post Office can offer attractive features to investors, such as tax-free investments, which the building societies and the banks cannot offer. We have, however, complained in the past that the Post Office does not provide the facilities which these other institutions provide. They have a great advantage over these people, and we feel that they should provide better facilities.

Another provision in the Bill which we find particularly worrying is the new section 53(4), as inserted by clause 18. This new subsection prohibits the paying of interest on that portion of an amount invested in the Post Office which exceeds the maximum amount that one may invest in that particular type of saving. For instance, if you are allowed to invest a maximum of R10 000 in Post Office savings certificates, no interest may be paid on an investment exceeding that amount.

I shall be moving an amendment in that connection.

Mr. Speaker, I thank the hon. the Minister for that information, because that is what is necessary. While I am on this new section, Sir, we should also like to know what is meant by the differentiation in the limitation on the deposits and accounts of different categories of depositors. Why are all depositors not treated in exactly the same way? Why must there be a differentiation in the limitation on their deposits?

Mr. Speaker, my time has almost expired, and I want to say in conclusion that I support strongly the amendment moved by the hon. member for Wynberg, because this legislation will undoubtedly not only lead to increased costs for postal services, but also inhibit any form of control by Parliament.

Mr. Speaker, I have a great deal of sympathy for the hon. member for Wynberg. When one has to act as the chief spokesman of one’s party in the House of Assembly and when, on top of that, one belongs to the Opposition party and has to criticize, whereas in fact one has not criticism to advance, then one is faced with a very formidable task. That is the impression I gained this evening from the speech by the hon. member for Wynberg.

Oh no, that cannot be true.

I shall prove what I say. I also listened to speakers of the other Opposition party, and the impression I gained was that a clash between the official Opposition and the PRP was more of an issue than the Post Office Amendment Bill. It was very clear to me that it was a clash between Big Brother and Little Brother, and I want to ask the hon. member to acknowledge that it is difficult for age to keep up with youth. He has to take that fact into account in his political activities too.

That is nonsense. Rather talk about the Bill.

I studied the hon. member’s amendment and, I must say, a more unrealistic amendment I have never seen in my life before. I made it very clear in my Second Reading speech, and it is stressed in the explanatory memorandum too, that the issue here is financial and administrative measures, but the hon. Senator sought a very sinister significance in the measure.

I am no Senator.

I beg your pardon, Mr. Speaker, I mean the hon. member for Wynberg. The hon. member’s long term in the Provincial Council confused me.

The hon. member’s amendment is entirely unrealistic. I believe it is common knowledge that my politics and those of the hon. member for Bryanston are poles apart, but as far as this measure is concerned, the hon. member for Bryanston adopted an entirely understandable standpoint this evening. The hon. member adopted a positive approach to the matter. He did not accept everything in the Bill, because he raised points of criticism, and at the Committee Stage he will come back to them again. The hon. member wants certain replies from me, but at the moment I do not have sufficient time in which to answer him. However, I hope we shall be able to iron out these matters at the Committee Stage. The hon. member said that there was no reason why he and his party should not support the Second Reading of this Bill. The hon. member therefore adopted a positive approach to the measure and I appreciate that. We shall discuss the points raised by him again at a later stage.

What is the effect of the amendment moved by the hon. member for Wynberg? The hon. member does not want the Bill to progress further than the Second Reading. In other words, everything that is good in the Bill must be wiped out. I want to repeat that the amendment moved by the hon. member is unrealistic. The amendment maintains that the Postmaster-General is now being authorized to increase rates and recover moneys contrary to the public interest. The hon. member for Sunnyside quoted the provision which determines how the Post Office has to manage its affairs. That provision expressly states that it must be run on business principles and in the interest of all the sectors mentioned in it, even the most far-off places. How can the two standpoints be reconciled with each other? The Post Office is compelled by law to fulfil certain functions and it will have to fulfil them, or else it will be called to account in Parliament.

The second part of the amendment by the hon. member for Wynberg concerns steps or movements in the direction of a state corporation. I do not think he could motivate that claim even in the wildest flights of his imagination. We are dealing here with measures which, as the hon. member for Bryanston said, are calculated to enable the Post Office to provide the service we expect it to provide. That is why I say that to me, the standpoint of the PRP is more positive and acceptable than the negative standpoint of the UP. The correct standpoint would have been to deal with this Second Reading quickly in the limited time at our disposal so that we could discuss these different points further at the Committee Stage.

The hon. member for Wynberg said that he expected me to make a statement here about my policy for the Post Office. Where have you ever heard such foolishness? A few weeks ago I introduced the main budget of the Post Office here. That was the opportunity for me to state my standpoint as a Minister handling the portfolio for the first time. I did so. At that stage I said what I was going to do and what I envisaged doing. In fact, I did so at the start of my budget speech. Now, while we are considering our amending legislation, the hon. member asks me to begin with a statement of policy. Never in my life or in my experience in this hon. House have I ever heard such a standpoint. I am therefore not going to repeat what I said in the budget debate. I indicated at that time what my policy was and the Act lays down the guide-lines to be followed by the Post Office and by me.

Whereas so much has been said this evening about the profits and the reasonable reserves of the Post Office, I find it quite striking—I want to say that it is ironical—that in the very year in which the Post Office has achieved its highest productivity, a year which the officials of the Post Office themselves declared a productivity year, and a year in which it is in fact the only one of the three branches of the national economy which has not increased its rates, the charge should be now levelled by the Opposition that we want to make profits, and do so in such a way that the public will suffer, and that we want to retain reserves to which we are not entitled. As far as this matter is concerned there is no alteration whatsoever in the approach adopted by the Post Office. There can be no difference in its approach. The task of the Post Office as prescribed to it by law is to provide a service to the widest possible public on a business footing, in accordance with business principles. I have pointed out, with reference to the comparison with other countries drawn by the hon. member for Wynberg on the basis of the number of Post Offices they have per surface unit, that our Post Office provides services in very sparsely populated areas of the country, services on which we can make no profit whatsoever. In fact, we provide the services at a heavy loss. Because this is our task, however, we continue to provide those services, as we must. Hon. members who have complained about the closing of a few post offices must not adopt a simplistic approach to the matter. Surely there are also limits to what one can do and what one cannot do. This, too, we must take into account.

As far as the motive of service of the Post Office is concerned, there is no change in its policy whatsoever. We are continuing as in the past and I concede to the hon. member for Bryanston that there are still backlogs, that there are long waiting lists for telephones and that there are many other deficiencies, too. I concede this, but I say that we must see those shortcomings in perspective, too, and must acknowledge that we have made good progress. A great deal has been said about the aspects of profits. However, it is not the aim of the Post Office to profiteer. It goes without saying that the Post Office must strive to cover its costs as far as possible. However, there is no question of profiteering. The motive of service is put first, and we have to try to reconcile it with the other motive. The Franzsen Commission which investigated the financing of the Post Office made it very clear that the Post Office should strive to finance 50% of its services from its own resources and 50% from loans. If the Post Office had to borrow a mere 25% or 30% of its capital and obtain all the rest from its rates and other services, then I would say the Post Office would be acting contrary to the interests of the public, as the hon. member wanted to suggest by way of his amendment here this afternoon. However, as long as there are indications that we are moving in the direction of a 50-50 ratio— which we have not even achieved yet—then there is no danger of interests being prejudiced. Without this legislation before us, the Post Office could continue rendering its services for a long time, because this Bill contains measures which, for the most part, already appear in other legislation. However, many of those provisions are obsolete and there is also doubt as to the legal interpretation of certain of those measures. This has to be rectified as the hon. member for Bryanston said, in order to enable the Post Office to provide the services which it wishes to, and must, provide.

Section 2(2) of the Post Office Readjustment Act which was passed in 1968 and in accordance with which the Post Office still functions, enables the Post Office by implication to have reserves. This has been the interpretation since 1968. The hon. member can shake his head if he wants to. Apparently he never bothered about this before when he was in the Provincial Council. Now that he has become the chief spokesman on his side, however, he is acting very crafty.

You have talked a lot and said nothing.

The Post Office has interpreted that section in that way since 1968.

That is not so!,

I challenge the hon. member to prove that this is not so in later debates. The Auditor-General has not said that this is an incorrect interpretation. The legal advisers, too, adopted the same standpoints as the Post Office. However, the Auditor-General requested that this matter be rectified in the legislation at present before us to eliminate doubt. That is why the provision is in this Bill; not because there has been a change in policy. I repeat that, even if this measure were rejected, the Post Office would still be able to continue to do its work as in the past. However, this point will crop up again in meetings of Select Committees and in discussions in this House. It goes without saying that there is still a great deal to be said about the matter of rates and reserves, and that there are various other points, too, which have been raised, but since we are called upon to vote on the amendment this evening, I must let those aspects stand over for discussions at the Committee Stage.

Question put: That all the words after “That” stand part of the Question,

Upon which the House divided:

AYES—77: Albertyn, J. T.; Badenhorst, P. J.; Ballot, G. C.; Barnard, S. P.; Boraine, A. L.; Botha, G. F.; Botha, J. C. G.; Botha, L. J.; Botha, M. C.; Botha, P. W.; Clase, P. J.; Coetsee, H. J.; Coetzee, S. F.; Cronje, P.; Cruywagen, W. A.; Dalling, D. J.; De Beer, S. J.; De Klerk, F. W.; De Villiers, D. J.; De Wet, M. W.; Du Plessis, G. F. C.; Du Plessis, P. T. C.; Du Toit, J. P.; Eglin, C. W.; Enthoven (’t Hooft), R. E.; Greyling, J. C.; Grobler, M. S. F.; Grobler, W. S. J.; Henning, J. M.; Herman, F.; Hoon, J. H.; Janson, J.; Koornhof, P. G. J.; Kotzé, G. J.; Kotzé, S. F.; Kotzé, W. D.; Le Grange, L.; Le Roux, F. J. (Brakpan); Ligthelm, N. W.; Lorimer, R. J.; Malan, G. F.; Malan, J. J.; Marais, P. S.; Maree, G. de K.; McLachlan, R.; Meyer, P. H.; Mulder, C. P.; Nel, D. J. L.; Nothnagel, A. E.; Palm, P. D.; Pitman, S. A.; Potgieter, S. P.; Raubenheimer, A. J.; Schlebusch, A. L.; Scott, D. B.; Snyman, W. J.; Steyn, D. W.; Swanepoel, K. D.; Terblanche, G. P. D.; Treurnicht, A. P.; Ungerer, J. H. B.; Van den Berg, J. C.; Van der Walt, A. T.; Van der Watt, L.; Van Heerden, R. F.; Van Rensburg, H. E. J.; Van Rensburg, H. M. J.; Van Zyl, J. J. B.; Venter, A. A.; Viljoen, P. J. van B.; Vilonel, J. J.; Vlok, A. J.; Vosloo, W. L.

Tellers: N. F. Treurnicht, A. van Breda, C. V. van der Merwe and W. L. van der Merwe.

NOES—21: Aronson, T.; Basson, J. D. du P.; Baxter, D. D.; Bell, H. G. H.; Deacon, W. H. D.; De Villiers, J. I.; Graaff, De V.; Hickman, T.; McIntosh, G. B. D.; Miller, H.; Murray, L. G.; Olivier, N. J. J.; Pyper, P. A.; Raw, W. V.; Van Coller, C. A.; Wainwright, C. J. S.; Webber, W. T.; Wiley, J. W. E.; Wood, L. F.

Tellers: T. G. Hughes and W. G. Kingwill.

Question affirmed and amendment dropped.

Bill accordingly read a Second Time.