House of Assembly: Vol94 - WEDNESDAY 12 AUGUST 1981
It is my privilege to announce that the House of Assembly is today honoured by the presence of Their Excellencies Paramount Chief K. D. Matan-zima, President of the Republic of Transkei, and Mrs. Matanzima. On behalf of the members of the House of Assembly I wish to welcome Your Excellencies most sincerely at this important Parliamentary occasion. May this visit contribute to the further promotion of good relations between the Parliaments of our two countries.
Mr. SPEAKER announced that in terms of Standing Order No. 17 he had appointed the following members to act as temporary Chairmen of Committees: Messrs. W. H. Delport, G. C. du Plessis, Z. P. le Roux, B. W. B. Page, H. H. Schwarz, R. A. F. Swart, C. Uys, Drs. L. van der Watt and H. M. J. van Rensburg (Mossel Bay) and Mr. A. A. Venter.
Mr. Speaker, I move—
The national Budget, besides being an accounting report of the State’s finances, is also a major instrument of economic policy. The modem preoccupation with economic policy can, however, easily lead one into believing that developments in the economy are predominantly determined by official policy measures. It is, therefore, necessary to remind ourselves on occasion that economic policies can often exert only a marginal effect on the pattern and intensity of economic events, and that their effects on the economy are usually overshadowed by the autonomous forces operating in the economic system and by the effects of external influences.
It is with this in mind that I wish to introduce this year’s Budget by briefly referring to the operation of the more important of these influences on the South African economy since the last main Budget was introduced in March 1980, that is, some 16 months ago.
Recent and Current Economic Conditions
When the last Budget was presented, the upward phase in real economic activity had not yet gained its full momentum, despite the exceptional expansion of activity which had taken place in the financial sphere mainly, though by no means entirely, as a result of the sharp increase in the price of gold over the preceding year. In the real sphere of production and job creation, the South African economy was still performing below its capacity. In conjunction with the substantial surplus which still existed on the current account of the balance of payments at that time, this meant that it was both desirable and feasible for the rate of real economic growth to accelerate further, and these considerations naturally influenced the nature of the March 1980 Budget.
The actual course, of economic events in South Africa since the introduction of last year’s Budget has in many ways borne out the diagnosis and expectations upon which that Budget was based. It is by now well known that the level of real economic activity rose sharply in the course of 1980, with increases of 8,5% in real private consumption spending and 24,5% in real private fixed investment, and a growth rate of no less than 8% in the real gross domestic product. At the same time, the surplus of R2 830 million on the current account of the balance of payments nearly equalled the record surplus of the previous year, and despite a substantial net outflow of capital, mainly in the form of short-term credits, the net gold and other foreign reserves showed a rise of R531 million.
Important further changes occurred in the real sphere of the economy during the first half of 1981. As expected, the high growth rate in 1980 brought the economy to a situation of full utilization of scarce production resources. Despite the considerable training programmes which had been pursued in both the public and private sectors, shortages of a wide variety of the more skilled categories of manpower became critical towards the end of 1980, and virtually full utilization of existing production capacity was reached in most sectors of manufacturing. Indeed, fuelled by an excessive increase in the money supply, demand began to exert undue pressure upon available resources during the second half of 1980 with inevitable inflationary consequences—a situation which persisted during the first half of 1981, and to which I shall return presently.
Despite the further increase in nominal demand during the first half of 1981, the rate of growth of real gross domestic product slowed down between the second half of 1980 and the first half of 1981, although it must immediately be added that real gross domestic product was still 4½% higher in the first half of 1981 than in the first half of 1980. This slower rate of increase was largely the inevitable result of the physical constraints to which I have referred.
The continued strength of demand was also reflected in the fact that real gross domestic expenditure, which had risen by as much as 12% in 1980, continued to rise strongly after the turn of the year, and was still about 10% higher during the first half of 1981 than during the first half of 1980. Real private consumption expenditure increased at an appreciably slower rate during the first quarter of 1981, but displayed a noticeable upswing in the second quarter, and was about 6% higher during the first half of 1981 than during the corresponding period of the previous year. Real private fixed investment continued to rise strongly, although at a lower rate than during 1980. Taken together with all other available economic statistics, these expenditure tendencies confirm that the economy has remained extremely buoyant throughout the first half of 1981.
In the meantime, however, under the impact of the decline in the price of gold and the widespread recessionary tendencies abroad, the value of South Africa’s net gold output declined sharply, from R10, 1 billion in 1980 to a seasonally adjusted annual rate of about R8 billion in the first half of 1981, while other exports also declined marginally below the high 1980 figure of R9,6 billion. By contrast, the continued rapid expansion of domestic investment and consumption brought about a rise in imports, from R14,2 billion in 1980 to a seasonally adjusted annual rate of over R17 billion in the first half of 1981. Taking into account also the remaining current payments and receipts, the result was a turnaround in the balance of payments on current account from a surplus of R2,8 billion in 1980 to a seasonally adjusted annual deficit of over R3 billion in the first half of 1981.
Up to a point, these developments were entirely to be expected and to a large extent represented the natural outcome of normal cyclical fluctuations. In recent months, however, the persistence of abnormally high interest rates in the United States and many other overseas countries, the sharp further appreciation of the United States dollar against virtually all other currencies, the unexpectedly sharp decline in the price of gold and the general deterioration in world economic conditions have combined to create new problems for the South African economy which must be viewed in a responsible light, and to which I shall return.
Against this volatile background, the exchange rate of the rand has understandably shown marked fluctuations. Thus, on average against all other currencies, the rand appreciated by 14,5% between the institution of the new system of managed floating in January 1979 and the end of 1980. Thereafter, very largely as a result of the substantial appreciation of the US dollar, it depreciated by 11,1% on average against all other currencies during the first seven months of 1981, although over the same period it depreciated by only 6,1% against the Swiss franc and 1,9% against the German mark, and in fact appreciated by 0,7% against the pound sterling and by 0,9% against the French franc.
Against the US dollar, the rand appreciated by 16,6% between January 1979 and the end of 1980, and then depreciated during the first seven months of 1981 by as much as 21,7%. This depreciation of the rand has served to cushion the adverse effects on the domestic economy of the declining dollar price of gold, and of various other exports that are sold in dollars, since it has meant that the proceeds of these exports in rand have not declined to the same extent as their proceeds in dollars. This, in turn, has tended to exert a fairly significant anti-cyclical effect, though, at the same time it has, of course, tended to be inflationary.
Fiscal Policy during 1980-’81
In my Budget speech in March last year I described the Government’s broad economic policy for the period ahead as one of “growth from strength”. This emphasis on growth was accompanied by an equally strong emphasis on financial discipline, as I saw no conflict between growth and discipline in the circumstances then prevailing. As I have indicated, there still existed substantial surplus production capacity in the economy at that time and the large current payments surplus provided considerable scope for the supply of goods and services to be augmented by increased imports. The economy was therefore clearly capable of more rapid growth without immediately running into demand inflation or payments difficulties.
In accordance with the policy of promoting growth without sacrificing discipline, last year’s Budget combined continued restraint on government spending with a substantial lowering of personal income tax rates, the removal of the import surcharge and the abolition of loan levies. These concessions largely represented adjustments needed to prevent the so-called “fiscal drag”—the combination of inflation and a progressive tax system—from increasing the real tax burden on the community and thereby retarding economic growth. In other words, the Budget was designed to encourage real growth not through an increase in government spending, but by freeing the economy from the chains of “fiscal drag”, and thereby providing both the scope and incentive for the expansion of output and employment in the private sector.
The determination to maintain strict fiscal discipline was evident not only from the continued restraint on government spending but also from the provision made to finance the “deficit before borrowing” without any resort to money creation by the banking system. In addition, the Budget contained strong elements of “built-in” or automatic stability in the sense that it was deliberately framed in such a manner that if either the average gold price, or the growth rate, or the rate of inflation, turned out to be higher than estimated, tax receipts would automatically be higher and the “deficit before borrowing” lower than the estimates in the Budget. As I stated at the time, this, together with a deliberate policy of borrowing in excess of the Treasury’s requirements and transferring the proceeds to the Stabilization Account, would then place the authorities in a position to offset to a significant extent the expansionary monetary impact of other forces.
It is now a matter of history that the Budget succeeded in achieving its main objectives. As planned, it provided scope for higher private sector growth without itself exerting any net inflationary or over-expansionary influence on the economy. Since the average gold price did, in fact, turn out to be considerably higher than the conservative estimate used for budgetary purposes, the actual revenue from gold mining taxation and leases exceeded the Budget estimates by about R1 148 million. As a result of the buoyancy in the economy, certain other forms of revenue also exceeded the estimates.
Despite additional net expenditures of R448 million, the elements of “built-in” stability therefore came into play to such an extent that the overall impact of the Budget in the end turned out to be anti-cyclical and therefore stabilizing—a satisfactory outcome in view of the strong expansion induced by the higher gold price and the other developments referred to earlier. In this manner, the strategy of deliberately basing the Budget on a conservative gold price, while at the same time making full provision for preserving fiscal discipline in the event of a higher average price, produced the desired results.
The stabilizing anti-cyclical effect of the Budget was clearly indicated by three developments. The first was that real government spending, as measured in the Budget, increased by only about 2,6% during the year ended March 1981, as compared with a 12% increase in real gross domestic expenditure. As during the immediately preceding year, the ratio of government spending to total spending therefore declined once again.
The second development was that the “deficit before borrowing” declined from R1 656 million, or 3,2% of gross domestic product, in the fiscal year ended March 1980, to a mere R288 million, or about 0,5% of gross domestic product, in the year ended March 1981. In relation to gross domestic product, this was the smallest government “borrowing requirement” in recent budgetary history.
The third development was that, far from adding to the money supply by resorting to net bank credit, the Exchequer actually exerted a contractionary influence on the money supply by transferring R1 242 million to the Stabilization Account, thereby contributing most substantially to a reduction in the Exchequer’s net indebtedness to the monetary banking sector in the year ended March 1981.
In practice, the funds in the Stabilization Account were not fully sterilized but used to finance the stockpiling of oil and other strategic imported commodities through the National Supplies Procurement Fund. But the domestic monetary and economic effects of this virtual exchange of foreign currency reserves for strategic commodity reserves were, of course, very different from those of ordinary government expenditure. And even if the broader statistical concept of the “government sector”, including the National Supplies Procurement Fund and the other extra-budgetary funds, is used, the net claims of the banking sector on this broad “government sector” increased by only R122 million during the year ended March 1981. If this small figure is viewed against the much larger amounts invested in the stockpiling of strategic imported commodities, the stabilizing anti-cyclical monetary and economic impact of the government’s financial operations during the year ended March 1981 emerges clearly indeed.
Monetary Policy during 1980-’81
The successful outcome of the 1980-’81 Budget is most gratifying. From the economic facts I have presented today, however, it is evident that not all aspects of economic stabilization policy in South Africa during the year ended March 1981 were equally satisfactory. In retrospect, for example, it is evident that whereas fiscal policy was, on balance, restrictive, the instruments of monetary policy in use at the time could not prevent the money supply and bank credit to the private sector from rising at an excessive rate—a development which contributed to the overheating of the economy and the general demand inflation which came into being during the second half of 1980 and persisted well into 1981.
Taken at a seasonally adjusted annual rate, the broad money supply—the so-called M2—increased by 27% in the second quarter of 1980, 41% in the third quarter, 25% in the fourth quarter and 46% in the first quarter of 1981, before slowing down to 29% in the second quarter. Although these figures have been distorted by so-called “disintermediation” and “reintermediation”, i.e. shifts from “on-balance sheet” to “off-balance sheet” bank financing and then back again, they nevertheless indicate excessive monetary expansion, particularly when compared with the broad guideline of 10 to 12% for the increase in M2 which I suggested at the time of the 1980 Budget.
These increases in the quantity of money were closely related to the simultaneous existence during 1979 and 1980 of a record surplus on the current account of the balance of payments and the continued application, albeit with some relaxations, of exchange controls over both residents and nonresidents. This combination of circumstances inevitably resulted in an accumulation of money in the hands of companies and individuals. Equally important, it also brought about a sustained increase in the liquidity of banking institutions, which, in turn, enabled them to create even more money by expanding their credit to the private sector in response to the rising demand for such credit. In the course of 1980 and the earlier part of 1981 this increase in bank credit became the main statistical “cause” of the rise in the money supply.
A further feature of this situation was the abnormally low level of interest rates which prevailed in South Africa during most of 1979 and 1980. These rates were low not only in relation to interest rates in the United States, the United Kingdom and several other industrial countries, but also in relation to our own rate of inflation. Indeed, throughout this period most South African interest rates were negative in real terms.
In addition, within our own interest rate structure, the rates on Treasury bills, bankers’ acceptances, call money and other short-term paper were abnormally low in relation to Bank Rate and prime commercial bank overdraft rates. At the time of the introduction of last year’s Budget, for example, when Bank Rate was 7% and the commercial banks’ prime overdraft rate 9,5%, the Treasury bill rate had declined to just over 4% and acceptance credits could be arranged freely at an all-inclusive cost of around 6% or 7%. It was this distortion, coupled with the excessive liquidity of many companies, which brought about much of the “disintermediation” to which I have referred.
Although these problems of monetary policy were dealt with extensively in last year’s Budget speech, the excess liquidity in the banking sector and, indeed, in the private sector as a whole, and the distorted interest rate structure continued throughout the rest of 1980 and into 1981. These conditions were exacerbated first by a temporary increase in bank credit to the government sector during the second quarter of 1980, and then by a particularly sharp increase of over R1 100 million in the net foreign reserves during the third quarter. It was only from October onwards, when the net reserves were allowed to decline so as to drain some of the excess liquidity out of the economy, that the position gradually began to return to normal and that interest rates began to rise to more appropriate levels.
More recently, a combination of natural economic forces and a firm contractionary monetary policy has brought about a metamorphosis of the monetary and banking situation. Although the broad money supply and bank credit, inflated by “reintermediation”, have until recently continued to rise at too high a rate, conditions in the financial markets have tightened considerably and both short-and long-term interest rates have increased sharply to levels much more in line with overseas rates. In an attempt to add effective monetary discipline to the existing fiscal discipline, the Reserve Bank has permitted interest rates to rise to market-related levels and has increased its own bank rate in four stages from 7% at the beginning of 1981 to its present level of 12½%. The Reserve Bank has also made increased use of open-market operations, rediscount policy and variations in the discount it offers on forward dollars. Preliminary indications suggest that these measures are taking effect and that since the end of April both the money supply and bank credit have been rising at a noticeably slower rate.
Implications for Budgetary Policy
The analysis I have presented leads me to the conclusion that the present situation calls for a budgetary policy of “consolidation and adjustment”—consolidation of the enormous economic gains made during the recent upward cyclical phase, and adjustment to the adverse impact on the South African economy of the set of conditions created by the prevailing world recessionary tendencies, the abnormally high interest rates in the United States and elsewhere, the spectacular appreciation of the US dollar and the sharp decline in the gold price.
A policy of outright stimulation of demand through increased deficit spending financed by bank credit, must be rejected out of hand, even if the South African economy appears about to follow Western Europe into what is technically called a “downward phase of the business cycle”—if it has not already done so. In framing fiscal policy, much more has to be taken into account than just that consideration.
In the first place, inflation remains a major problem, and with the economy still operating at full capacity, any premature stimulation of demand would almost certainly result in an acceleration of the rate of price increases.
Secondly, the recent adverse changes in the external circumstances affecting the South African economy can neither be shrugged off nor neutralized by fiscal or monetary manipulation. What economists call the “balance of payments adjustment process” must not only be permitted to proceed but also assisted by fiscal and monetary policies, even if this means restraining demand at a time of slower real growth. There are no “soft options” in dealing with situations of this kind. A country cannot solve its economic problems by attempting to live beyond its means. It was Franklin D. Roosevelt who said in 1932—
In this respect, an important element in determining appropriate budgetary policy at this time is the movement of the gold price. Despite the recent decline in the gold price, I see no reason to revise my basic confidence in gold. In fact, I would point out that the present price is still almost a third higher than two years ago, and that throughout last year, inter alia, in my 1980 Budget speech, I had consistently cautioned against basing one’s expectations on the high price of gold which then prevailed.
In my view there can be little doubt that at the present price levels the industrial demand, which is a very important component of the aggregate demand for gold, will be picking up sooner rather than later. Together with other factors, such as the fact that Russia has been selling little gold, there is every reason to expect that the price of gold will start rising again, possibly even as early as the end of this year. In the meantime, however, we have no choice but to acknowledge that the decline in the gold price has in a very real sense made us as a nation less affluent than we would otherwise have been.
Ever since I became Minister of Finance in early 1975, I have been calling for an authoritative round table conference, preferably arranged by the International Monetary Fund, to thrash out the proper monetary role of gold, in order to bring discipline to bear in international financial arrangements and thus, inter alia, set the stage for an effective attack on rampant world inflation. After much opposition over the years, the American Administration has at last appointed a Gold Commission to make precisely that enquiry, and not only South Africa will await its outcome with interest.
Whilst on the subject of gold, I cannot resist quoting a passage from a booklet entitled “Gold or Paper” published as long ago as the ’thirties by C. J. Langenhoven, the famous Afrikaans writer, where he said—
As far as other exports are concerned, there is little clear prospect of an early general improvement. Just recently, in the World Economic Outlook prepared by the Staff of the International Monetary Fund, it was forecast that the rate of growth in real gross national product of all the industrial countries combined—which fell from 3,7% in 1979 to 1,2% in 1980—would recover only marginally to 1,5% in 1981. It was further forecast that the total volume of imports of this important group of countries, which declined by 1% in 1980 after having grown by 8% in 1979, would remain stagnant for the whole of 1981. The main implication for South Africa is that there is no reason to expect a rapid increase in the volume and value of non-gold exports in the immediate future. To ignore these facts in our policymaking would be irresponsible.
Given the expected cyclical slowing down of the rate of growth and the firm restrictive monetary policy now being applied, as reflected in the willingness of the Reserve Bank to accept market-related interest rates, there appears to be good reason why government spending should show a moderate increase in real terms in 1981-’82, provided always that it continues to rise at a slower rate than real gross domestic expenditure. Nor can there be any objection if the “deficit before borrowing” were to rise to a more normal figure in relation to gross domestic product than the abnormally low percentage of 0,5 registered in 1980-’81, provided it continues to be financed without net recourse to money creation via the banking sector.
It is with these considerations in mind that the present Budget has been drawn up. As I proceed with the presentation of my detailed proposals, the full pattern of our fiscal strategy in the 1981-’82 financial year will unfold, and it ought then to become apparent that the proposed moderate increase in government spending and the more realistic deficit before borrowing are consistent with the requirements of the policy of consolidation and adjustment which I am proposing.
Inflation
In my Part Appropriation speech earlier this year, I indicated that I intended to call a meeting of top level representatives of the business sector, organized labour, consumers, academics and the public sector, to discuss the inflation question in depth, and to formulate proposals for dealing with it. This meeting was held in Johannesburg on 26 March.
The meeting was remarkable for the degree of consensus which was reached on the best ways to combat inflation, and confirmed the Government’s own view of the serious threat that inflation poses to the stability of the economy, and, indeed, to our whole concept of values in society. No matter how it is looked at, inflation causes serious distortions in any economy. Bearing in mind that there are groups in every society who are not in a position to protect themselves adequately against the ravages of rising prices, it is gratifying that the average real earnings of the working population as a whole have increased in recent years—that is, despite the high inflation rates—in 1980, for example, by 3,3% for Whites and by 4,3% for all other population groups. This means that wages and salaries, expressed in current 1980 rand values, rose on average by some 18% last year, a very substantial rise by any standards.
Taking into consideration the high growth rate achieved in 1980, it is also gratifying that the average increase of 13,8% in the consumer price index for 1980 was only slightly higher than the 13,2% rise experienced in 1979. For the twelve months from July 1980 to June 1981 the consumer price index rose by 14,6% over that of the comparable previous twelve months. What is important is that, and this is unique in a long period, there has been a successive—admittedly small—decline in the three most recent monthly rates of increase in the consumer price index, compared each time with the corresponding month of the previous year.
This relatively favourable turn of events, however, which has also been reflected in the index of production prices—or the wholesale price index, as it was previously called—is no cause for complacency about the inflation rate which, however it is looked at, is too high.
At the inflation conference I called in Johannesburg, as well as the meeting of the Economic Advisory Council, a wide variety of policies to contain and reduce inflation was considered in depth. At both meetings there was general agreement that the different kinds of longer-term or structural anti-inflationary measures that I listed in the 1980 Budget speech, such as the training and better use of labour resources and the promotion of more effective competition in all sectors of the economy, must be continued as vigorously as possible. It was also agreed that, in the shorter term, the intensification of controls over imports by quantitative measures should be avoided, so that the domestic supply of goods could continue to be supplemented from abroad to the extent that the balance of payments allowed.
In both meetings, the futility of trying to combat inflation through selective price controls was also underlined. It was agreed that such controls inevitably lead to distortions between the prices of controlled and uncontrolled products, and by giving rise to shortages and production cost backlogs in respect of controlled products, sooner or later result in a situation where very large and disruptive price adjustments have to be made to catch up with price increases in the economy at large.
While it was strongly felt that the way to fight inflation did not lie in the direction of a formal wages and prices policy, it was at the same time emphasized that an awareness amongst all interested parties of the inflationary consequences of excessive price, wage and salary increases, and the application of self-discipline by all parties involved in negotiations and decisions on these matters, are essential conditions for the more effective control of inflation.
I shall revert to this point presently when I refer to conditions of service in the Public Service.
In this context the point was made that the policy of deliberately narrowing the wage gap between the different population groups, which has been followed for good reasons over the past number of years, must necessarily in the shorter term be inflationary.
There may still be some difference of opinion as to whether an excessive increase in the money supply is always the main factor that initiates the inflation process, or whether such increases at times may tend to play an accommodating role in an inflation process initiated by other factors. However, I know of no serious economic commentator in South Africa who would disagree that without the necessary increase in the money supply, no inflationary process can run its course.
The fact is that there was general agreement at the two meetings that at the particular stage of full employment of the more skilled categories of manpower and of production capacity now prevailing in South Africa, the most crucial elements of an anti-inflationary policy are effective fiscal discipline and effective control over the money supply—always assuming, to repeat, an economy which pays due attention to the virtues of competition; which finds a modus operandi for the fair, reasonable and adequate, but not excessive remuneration of labour; and which effectively condemns that small minority of members of business and the professions who, under conditions of inflation are tempted to exploit the public for their own selfish ends. It is this latter code of conduct—or, should I say, lack of it—which led a former British Prime Minister—not all that long ago—to talk of the “ugly face of capitalism”. It is a malpractice which neither the Government nor the private sector can allow.
The House may rest assured that, so far as the Government is concerned, there is no higher priority than the combating of inflation.
Against this broad policy background, I shall now proceed to deal with the Government’s Accounts. I start with the 1980-’81 financial year.
Financial Year 1980-’81
The past financial year will go down in history as an exceptionally buoyant year for revenue. Inland revenue, originally estimated at R9 841 million, in the end amounted to R11 833 million, an increase of some R1 992 million, or 20% on the original estimate. This high level can chiefly be ascribed to the high gold price, and to the upswing in the general economy. Customs and excise receipts amounted to R1 469 million, an increase of R399 million, or 37% over the main Estimates. This increase, in turn, was mainly attributable to higher customs revenues flowing from substantially higher levels of imports during the year. Total revenue for the 1980-’81 financial year, particulars of which are reflected in the revised Revenue Estimates which I shall table today, therefore amounted to R13 302 million.
Aggregate expenditure is now estimated to have totalled R13 590 million, or some 3,4% in excess of the R13 142 million which appeared in the main Estimates.
The deficit before borrowing, originally set at R2 287 million, therefore amounted to only R288 million, in relation to gross domestic product—the lowest deficit on record. Loan redemptions, originally estimated at R1 430 million, eventually amounted to R1 783 million, which, together with the deficit before borrowing, resulted in a lower financing requirement of R2 071 million.
The active borrowing programme of the Exchequer, which aimed primarily at reducing excess liquidity in the money and capital markets, plus the surplus carried over from the previous year, yielded a total of R3 622 million during 1980-’81, leaving an initial surplus of R1 551 million. Of this amount, a sum of no less than R1 242 million was transferred to the Stabilization Account, leaving a net Exchequer surplus of R309 million at the end of March, 1981. This transfer to the Stabilization Account removed a very substantial amount from the domestic monetary aggregates. Together with several hundred million rand previously credited to this Account, the gross amount was fully invested via the National Supplies Procurement Fund in essential strategic commodities.
Of the surplus of R309 million now remaining, I feel that the greater part should be allocated to some of our most deserving and urgent needs. I therefore wish to move that the following items be financed from this source—
Defence
In the light of recent developments in and around Southern Africa, defence must remain one of our very highest priorities. I therefore propose that an amount of R172 million be transferred to the Special Defence Account. This includes an amount of R160 million to cover a debit brought forward from previous years and R12 million as compensation for the sale of certain stockpiled fuel. Provision for the transfer of these amounts will be made in the Finance Bill later this session.
South West Africa
The old South West Africa Account was a parallel account to the State Revenue Account. It has become customary to make good any shortfall on this Account by transferring funds to it from the State Revenue Account by way of the Finance Act.
Due to constitutional developments in South West Africa, the South West Africa Account was abolished recently and a Central Revenue Fund established. The old method of financing budgetary aid to South West Africa can no longer be regarded as sound accounting practice and I have, consequently, with effect from the 1981-’82 financial year, decided to provide for budgetary aid to South West Africa in the main Estimates in the normal way.
With reference to the 1980-’81 financial year, it is necessary to transfer a further amount of R80 million to the Central Revenue Fund via the Finance Act.
Development Bank for Southern Africa
The Government has already indicated its firm intention, in active collaboration with other interested countries, to set up a multinational regional development bank for Southern Africa to act as a vehicle for development assistance to economic regions in the sub-continent. Negotiations with the initial participating states have already reached an advanced stage and the articles of agreement constituting the envisaged development bank are now being drawn up. Recent indications are that the bank may be in a position to open its doors for business in April next year, or soon thereafter.
So far as South Africa is concerned, the bank will take over from the relevant government departments most of their programmes of economic development assistance to participating members. To ensure its success, it will have to attract funds from both domestic and foreign sources and secure the involvement of the private sector, as well as, of course, that of the public sector. And while in the nature of things the greater part of the bank’s finances will in the earlier stages have to come from South African sources, other member states will, I am sure, want gradually to raise their own financial contributions as they experience the benefits of participation in the bank’s development achievements in their own areas. These matters will be dealt with in greater detail when the necessary legislation to establish the bank is introduced during the current session of Parliament.
The over-riding importance of the new institution as an instrument of development within the framework of the Prime Minister’s concept of a constellation of states for Southern Africa ought then to be clear to all.
At the moment negotiations to participate as founder members of the development bank have been conducted with the independent states of Transkei, Bophuthatswana and Venda as well as with the governments of the self-governing states. The idea is that the latter group will be constituent parts of the South African membership. In the course of time it is hoped that at least all the governments in the existing Southern African Customs Union will be interested to enjoy the economic benefits of the geographical spread of real growth in Southern Africa.
In order to provide for South Africa’s initial subscription to the bank’s capital, I wish to propose that an amount of R17 million be set aside for this purpose at this time.
This leaves me with a surplus of R40 million—i.e. R309 million less R269 million—to be carried over to the current financial year.
†Before I come to the 1981-’82 financial year, I wish to refer to three matters of topical interest, namely the preservation and transferability of pension rights, building societies, and the use of Government securities for the purchase of farming land.
(a) Preservation and Transferability of Pension Rights
Hon. members may recall that, in the course of my Second Reading Speech on the Part Appropriation Bill earlier this year, I referred to the recommendations on the preservation and transferability of pensions submitted to me by the Interdepartmental Committee of Inquiry into Certain Specific Pension Matters under the chairmanship of the former Registrar of Financial Institutions.
The Committee investigated, inter alia, a disturbing tendency which has emerged inasmuch as employees, often young people, resign their positions in order to claim their pension contributions, which they then spend, often on luxury articles. Thereupon it frequently happens that the persons involved seek to re-occupy their previous positions. The loss of eventual pension benefits to themselves and their families consequent upon their resignation seems to be the last thing to concern them. And, from the taxpayer’s point of view, such people eventually tend to become a burden on the Exchequer when they expect social pensions to be provided by the State.
There are also many bona fide cases where employees move from one job to another and have difficulty in transferring their pension benefits.
I am convinced that the principle of the preservation and transferability of pension contributions is the only possible way to avoid an eventual national pension scheme in which taxpayers in general will have to foot the heavy bill of guaranteeing every South African of whatever race or creed a pension. Old age pensions alone financed from taxpayers’ money are already amounting to more than R340 million this year and, depending on the assumptions made as to population increase and the number of pensioners, inflation, wage rates and so forth, it has been calculated that the amount could well exceed R6 000 million by the turn of the century.
The Registrar of Financial Institutions has taken cognizance of the comments and criticisms received and has been authorized to publish a revised draft Bill for information and further comment by interested parties. This draft Bill will differ in one important respect from the original recommendations of the Committee: Pension rights and contributions which exist at the time of the enactment of the Bill will not be preserved or become transferable on a compulsory basis. Instead, employees who have such rights at that time will be given the right to choose whether or not they wish such pension monies to be preserved and made transferable. In the case of rights accruing after the Bill is enacted, however, I feel it is reasonable to expect that the requirement for preservation and transferability should be compulsorily complied with.
I trust that all interested parties will respond with comment and constructive criticism to the proposals embodied in the draft Bill in order to ensure a fair and favourable result to all.
(b) Building Societies
The rising level of interest rates which is an inevitable concomitant of the policy of monetary restraint, has also affected the building societies. I was recently informed by the Association of Building Societies that the interest rates offered by building societies on funds invested with them would have to be raised to enable them at least to retain those categories of funds which traditionally have been invested with them. They also indicated that any such increase in rates would compel them to increase further the interest rates charged on home mortgages.
I would naturally have preferred that any interest rate adjustments by building societies be postponed till the Report of the Commission of Inquiry into Certain Matters affecting Building Societies in South Africa comes to hand, hopefully within a few weeks from now. However, the Association impressed upon me that if an announcement on interest rates were delayed until then, some societies would for technical reasons not be able to adjust their mortgage rates before the middle or even the end of October; and that, such is the competition for funds in the market at present, they would in the meantime lose large amounts of funds traditionally invested with them, let alone be able to attract new funds.
Now I must stress that the Minister of Finance does not determine mortgage bond rates; nor, as Minister of Finance, do I have any wish or intention to have such a discretion. The only building society interest rates which I determine are those applying to tax-free investments. The determination of all other rates, including the mortgage bond rate, is the responsibility of the building societies.
In the present instance I deemed it wise to consult the chairmen of both the Building Societies Commission and the Commission of Inquiry into the Monetary System and Monetary Policy in South Africa. In the light of these consultations I have decided to approve the request of the building societies that they be allowed to increase their rates on tax-free shares from 8¼% to 8¾%, and that simultaneously the ümit on tax-free indefinite period shares be raised from R10 000 to R20 000 per taxpayer. These concessions ought not only to improve their ability to retain this type of investment, but to assist them materially in being more competitive in a tighter money market situation.
As the Association consulted me on the matter, I impressed upon their members my considered view that any further increase in the bond rate, which is a long-term rate, should be deferred as long as reasonably possible and, when made, should be as moderate as possible. I also stressed that, if and when such an increase was effected, I would expect of them that, unless the bondholder preferred otherwise, they should ease the burden on bondholders by automatically increasing the bond repayment period to such an extent that the monthly instalments were raised as little as possible, if at all.
I hope to receive the Report of the Building Societies Commission, appointed only a few months ago, within the next few weeks. A number of aspects relating to the building society movement will then be thoroughly reviewed. The Report of the Commission of Inquiry into the Monetary System and Monetary Policy in South Africa, which will also deal with certain aspects relating to the building society movement, should reach me before the end of this year and that, too, will give food for thought.
(c) Security for Land Bank Loans
For a number of years the South African Development Trust operated a scheme whereby farmers whose land had been purchased for consolidation purposes were compensated partly in the form of long-term Government stock. This arrangement worked fairly well at the time as interest rates did not tend to fluctuate much and hence the recipients of the stock, who were not all fully aware of the influence of interest rate fluctuations on the market values of such stock, did not lose or gain much in disposing of their stock as and when cash was required prior to the redemption date.
More recently, however, the rapid rise in interest rates has naturally caused these persons to suffer capital losses on the sale of their stock. Obviously no loss will be suffered should the holders of such stock retain them until redemption date. However, just as the value of shares fluctuates depending on yields expected and demanded, in the same way the market value of such stock fluctuates as interest rates move up or down. This is a normal risk borne by the holder of this type of stock. When rates fall he may make a profit by selling, and conversely when they rise, a loss.
My attention has been drawn to instances where farmers wishing to pledge such stock with the Land Bank as security for loans for agricultural purposes have been unable to do so in terms of the Land Bank Act in its present form. To alleviate this problem the Land Bank has consented to accept such “consolidation paper” as security for normal Land Bank credits to farmers, under terms and conditions and at values the Bank will determine. Enabling legislation is necessary before this proposal can be implemented and the House will therefore be approached to pass the necessary amendments later this session.
It is hoped that this measure will bring welcome relief to a number of affected farmers.
I now wish to turn to the 1981-’82 financial year.
The Financial Year 1981-’82.
Expenditure
The printed Estimates of Expenditure tabled today provide for aggregate expenditure of R15 712 million. To this must be added my supplementary proposals with which I shall deal shortly, representing R159 million. Total estimated expenditure will then amount to R15 871 million. This is 16,8% higher than the revised Estimates of Expenditure for 1980-’81.
If our first priority, Defence, is excluded, aggregate expenditure increases by 14,5%, which is almost exactly the latest annual inflation rate.
Bearing in mind the effect of inflation on Government expenditure, considerably higher defence outlays, substantial increased benefits payable to civil servants, the rapidly rising burden of the public debt as a direct result of higher interest rates here and abroad, the liquidity mopping-up operations, as well as cost increases for most services especially in the building and construction industries, hon. members will appreciate that the moderate average real increase of about 2% makes it possible to allow only very modest increases in Government spending on most other services. A strictly controlled increase in Government spending under the prevailing conditions of inflation is consistent with the Government’s declared policy of eliminating unnecessary public sector expenditure wherever possible, and was indeed endorsed by the most recent meeting of the Prime Minister’s Economic Advisory Council.
I wish to direct the attention of the House to certain Votes which deserve special mention.
Defence
The amount to be voted increases from R1 890 million in 1980-’81 to R2 465 million in 1981-’82, that is by more than 30%. It should be perfectly clear from these figures, also to our enemies, that the Government is in earnest with its commitment to the proper protection of our country. In the uncertain and hostile world we live in today, we have unfortunately little option but to do everything in our power to ensure our preparedness against the threats from outside our borders. I am thankful that South Africans of all races and creeds have invested hundreds of millions of rands in Bonus Bonds, thus contributing with marked effect to the financing of our defence effort.
Housing
The aggregate provided for the National Housing Fund this year amounts to R256,7 million, compared with R231,7 million last year.
The Government has always been fully aware of the nearly insatiable demand for housing by the lower income groups. The national housing programme over the past years consistently accorded a high priority to this need within the limitations imposed by fiscal considerations. Despite the allocation of substantially increased amounts each year, bottlenecks still remain. A memorandum on the provision of housing compiled by the Department of Community Development will be tabled today. It will, I believe, well illustrate the magnitude of the problem and the significant extent to which the Government, with the use of public funds, has contributed to its alleviation.
A particular problem that has arisen recently has been the provision of adequate housing for Coloureds at the rapidly expanding growth point of Atlantis. Similarly, the Government has just received the Report of the Viljoen Panel appointed to investigate the strategy for the further provision of housing in Black urban areas, mainly in Soweto. Both these matters may require attention before the end of this financial year, but any reasonable provision that needs to be made could be budgeted for at a later stage.
The country’s housing problems simply cannot be solved by the Government alone. Concerted participation by the private sector, including the building society movement and other financial, industrial and commercial concerns is essential if we are to succeed in achieving our goal of providing adequate and realistic housing accommodation for our rapidly expanding population.
Improved Conditions of Service in the Public Service
As indicated in my Press statement on 5 December 1980, the Cabinet is fully aware of the fact that employees in the public sector—as elsewhere—are being buffeted by the rising cost of living. It realises too that the serious staff position prevailing in most branches of the public sector requires realistic adjustments to rates of remuneration and conditions of service.
This basic point of view resulted in the provision of an amount of no less than R720 million for the improvement of conditions of service this year, as announced in my Second Reading Speech on the Part Appropriation Bill. These funds provide for the following benefits—
- — a general salary adjustment averaging 12%;
- — implementation of further phases of the programme to narrow the wage gap;
- — Job and group-differentiated improvements, at first for teachers, police officials, prison staff and certain medical and nursing staff and then to be extended;
- — a very substantially higher service bonus; and
- — recruiting costs.
In the meantime a further R25 million has been provided for the improvement of the Home Ownership Subsidy Scheme and the implementation of decisions taken after the completion of investigations into the position of certain job and staff categories.
A record amount of R745 million is thus being provided for the improvement of conditions of service. Taking into account possible savings and statutory provisions, an amount of R695 million has been included in the Estimates under this heading.
If one considers that the eventual cost of the improvement of conditions of service in 1980-’81 amounted to R650 million, the Government will have channeled nearly R1 400 million into the improvement of conditions of service of public servants over the last two years alone. So far as I am aware, there has been nothing comparable with this scale of improvement of working conditions in the Public Service in the past.
Two substantial general salary adjustments, meaningful vocational differentiation, the institution of a substantial service bonus and other improvements have been financed out of these funds. The pension scheme has also been improved and pension benefits are now calculated on terminal salaries. One was led to hope for a more positive improvement in the staff situation in the Public Service, but regrettably, due mainly to the very high level of activity in the economy and the shortage of skilled manpower and, as a result, the very high rates of remuneration which have become the order of the day, the situation remains serious.
Excessive competition from the private sector for Public Service staff must by definition result in a drop in the standards of public service, and that situation can hold no advantages for the private sector, or the country as a whole.
It seems to me that the time has come for close consultation and co-ordination by the Commission for Administration, on the one hand, and organized commerce and industry, on the other, in respect of rates of remuneration and conditions of service obtaining in the public and the private sectors. Some kind of procedure or formula must be found to ensure that emoluments in the two sectors are kept in some kind of effective alignment, as any head start of the one on the other inevitably results in an unwarranted scramble for scarce labour resources with deleterious effects both for efficiency and for combating inflation.
Education and Manpower
It is constantly necessary to emphasize the improvement and upgrading of skills and knowledge on as wide a scale as possible. There is, I believe, general agreement that the acceleration of training and educational programmes offers the best prospect for meeting the ever-increasing demand for skilled staff. Education is accordingly given a high priority by the Government, a fact which is reflected, inter alia, in the substantially higher amounts allocated each year to this service at all levels. Aggregate expenditure on education for all population groups has increased, in the last five years, from R1 124 million to R2 902 million in 1981-’82, a rise of no less than 158%. As a percentage of total Government expenditure this repre sents an increase from 14,4 to 18,2 over the same period.
Similarly, the provision for the training and utilization of manpower on the Manpower Vote is also being increased substantially. The approximately R29 million provided for on the Manpower Vote in 1980-’81 increases to more than R51 million in 1981-’82, to be spent both on training as such and on the better use of manpower.
An important document, the Report on Highlevel Manpower in South Africa, submitted by the National Manpower Commission, and an accompanying White Paper, have just been tabled in Parliament. It is confidently expected that a more effective and co-ordinated approach to manpower development on a broad front will henceforth be adopted in the light of this Report.
Apart from the amounts already included in the printed Estimates, I now wish to propose a number of additional expenditure items to be provided for in the Supplementary Estimates.
Supplementary Expenditure
(a) Pension Bonus
I expressed the hope earlier this year that a further round of pension bonuses might be paid to social pensioners, should financial circumstances permit.
Although financial circumstances are not as comfortable this year as they were last year, the Government, in keeping with the very high priority it always accords to improving the lot of our senior citizens, has decided to provide for the payment of a second special pension bonus to social pensioners this year. I wish to propose, therefore, that a further bonus of R30 for Whites, R24 for Coloureds and Asians and R18 for Blacks be paid not later than November 1981. The cost of this proposal will amount to R25 million and will be included in the Supplementary Estimates.
This means that, with the inclusion of bonus payments received in the course of the 1981-’82 financial year and compared with the basic pensions paid the previous year, social pensioners will this year receive on average R17,50 more per month in the case of Whites, R12,50 more in the case of Coloureds and Asians, and R9,25 more in the case of Blacks, in all cases the biggest average monthly increases to date.
(b) Flood Disasters
In the course of my Second Reading Speech on the Part Appropriation Bill earlier this year I indicated that the Government had launched a comprehensive assistance and reconstruction programme for the victims of the Karroo flood disaster. Certain amounts were at that time provided for, although the full extent of the damage had not yet been ascertained. In the meanwhile serious flood disasters also occurred in the Eastern Cape and the Government has decided also to offer assistance to those victims on the same basis.
Although certain aspects of the various types of damage are still being finally evaluated, aid amounting to at least R37 million must be included in the Supplementary Estimates.
(c) Bread
In accordance with its policy of alleviating as much as possible the lot of those more severely affected by the inflation of costs and prices, the Government, in 1980-’81, increased the subsidy on bread from R117 million to R162 million, an increase of no less than R45 million or 38,5% in a single year.
Due to increases in the wheat price in October 1980 and other inevitable cost escalations it is estimated that the subsidy on bread for 1981-’82 would have to amount to at least R233 million if the price of bread were to have been unchanged.
As much as I would have wished to keep the price of this very basic food unchanged, it became quite obvious to me that in view of the constrained financial position of the Exchequer this year a subsidy of that magnitude could not be accommodated, and the Government had no option but to allow the price of bread to rise, although still maintaining the record level of subsidy of the golden year of 1980-’81.
As the printed Estimates provide for a subsidy of R130 million, this amount will have to be augmented by a further R30 million in the Supplementary Estimates.
(d) Maize
Maize farmers had a bumper crop during 1981, the highest ever harvested in South Africa. Approximately half of the crop will have to be exported, although a part will be carried over for export in 1982. At present a loss is sustained on all exports, a loss which will be borne by the farmers themselves. The Government has, however, decided to assist maize farmers by means of a Government-guaranteed bridging loan of R71 million to the Maize Board, the interest of which will be partly subsidized.
Furthermore, apart from subsidizing the cost of handling and storage of maize, the Government has also decided to subsidize directly the price of maize to the consumer in order to ensure that the increase in the consumer price should remain below 10%.
The total of all subsidies on maize and grain sorghum will thus amount to R87 million for the 1981-’82 financial year, compared with R60 million in 1980-’81. Whereas an amount of R50 million has been provided in the printed Estimates, provision for a further R37 million will be made in the Supplementary Estimates.
A total of R250 million is being set aside this year for food subsidies alone—the highest amount ever—compared with the next highest of R226 million in 1980-’81.
(e) Local Authorities
During the previous session in February, I dealt with the subject of local authority finances at some length and disclosed that the Croeser Working Group, consisting of representatives of government departments, provinces and local authorities under the chairmanship of the Chief Director of Finance, was appointed to evaluate the recommendations of the Browne Committee in the light of the prevailing rapidly changing circumstances, and that it had already considered more than two-thirds of the Browne Committee’s recommendations. I also pointed out that its updated recommendations had been submitted to the Government for approval. Those recommendations which do not in the main imply direct financial assistance in one form or another, have already been accepted by the Government and will be dealt with in greater detail in the course of the debate.
In view of the financial dilemma facing a number of local authorities today, the Working Group has also formulated proposals aimed at providing realistic financial relief to all local authorities. These proposals contain certain basic changes in policy, and I am happy to be able to report that the Government has also accepted them in principle. I will refer only to those which bear directly on the Exchequer at this stage.
In the first place, it has been decided that government departments, provincial administrations and government business enterprises will in future accept full responsibility for the payment of assessment or property rates to local authorities. Certain details are still being worked out in the light of a census conducted by the Working Group, but it has already been agreed that all local authorities will allow a 20% rebate on assessment rates to government departments and provincial administrations in view of the social nature of certain of the services which these bodies provide for the benefit of the local residents.
In view of the present extremely tight financial position of the Exchequer, the State cannot accept full responsibility for this arrangement immediately but has agreed to phase in these payments over a short period. Apart from an amount of about R9 million already provided for this year, an additional amount of R20 million will be made available for this purpose and should bring much needed immediate relief to local authorities in general.
The Working Group is still considering the details of a fair basis of taxation for property owned by the South African Railways and Harbours and the Department of Posts and Telecommunications, but as these enterprises have not made provision for any such payments in their current financial year, they will not be able to make assessment payments before the next financial year.
Secondly, it has been agreed that the provincial administrations will, with effect from 1 October 1981, take over from local authorities the financial responsibility for the provision and co-ordination of ambulance services in those provinces where such services have not yet been so transferred. An amount of R10 million—R27 million in a full year—will be made available to the provinces this year for this purpose.
Thirdly, the Government has decided to accept responsibility for the payment of a subsidy on fire protection services provided by local authorities. In view of the numerous problems involved in implementing this pro posal, however, it has been decided that this recommendation will be implemented as from 1 April 1982. Hence no provision for a subsidy need be made for this purpose during the current financial year. The cost of this proposal for a full year is estimated to amount to R14 million, an amount which also will be paid over for the benefit of local authorities.
Finally, the Government has accepted the Working Group’s recommendation that the 20% share of profit on liquor which Administration Boards currently are required to pay over to the Department of Co-operation and Development in respect of bus service subsidies, be retained by the Boards and utilized for the benefit of local residents. The cost of this proposal is estimated to amount to R5 million.
Though it is abundantly clear from the recommendations accepted and the concessions announced that the Working Group has already gone a long way to provide relief for the financial problems of local authorities, it has not completed the task it has set itself and is still studying a number of further possible solutions for the restructuring of the revenue base of local government. Due to possible changes that may still be made in the functions of this tier of government, a great deal of further research and discussion is called for. A final report will thus not be available before the next session of Parliament.
In the meantime I am convinced that the concessions already agreed to will place local authority finances on a much healthier footing than hitherto. The additional cost to the Exchequer this year will amount to R30 million and will be included in the Supplementary Estimates.
Aggregate expenditure for all Government services, including the supplementary proposals to the extent of R159 million for 1981-’82, amounts to R15 871 million.
Let us consider next the revenue side of the Government’s accounts.
Revenue 1981-’82
Estimated total revenue on the current basis of taxation amounts to R13 057 million, which is 1,8% less than the revised figure of R13 302 million for 1980-’81. Both inland revenue and customs and excise receipts are down on the previous year’s figures—inland revenue by R217 million and customs and excise by R28 million.
In the case of inland revenue the decrease is mainly due to the lower gold price being realized by the mines. The average gold price for 1980-’81 was more than US dollars 600 per ounce. This year’s average, with the gold price at present hovering around or just below US dollars 400 per ounce, will almost certainly be a good deal lower. Moreover, the working costs of the mines have risen considerably. The actual decrease in revenue from this source is reflected in the documents I am tabling today.
The main reason for the fall in revenue in the case of customs and excise is to be found in the large increase in the amount to be paid over to the Central Revenue Fund of South West Africa. The reason for this is that, with an eye to the territory’s independence, it was felt prudent to provide for an amount approximately equivalent to the amount South West Africa would have received had it been a full-fledged member of the Customs Union.
In summary, the position is that on the existing basis of taxation a total expenditure of R15 871 million has to be financed from tax revenues amounting to R13 057 million. The “deficit before borrowing” is thus R2 814 million—a very big increase on the previous year but, in relation to the gross domestic product, still reasonably moderate. Clearly there can in these circumstances be no question of significant tax reductions this year, though I shall presently propose what I believe are some significant tax reforms. Ways and means will have to be found to finance this deficit, and to do so in a non-inflationary manner.
But before trying my hand at this holding exercise, there are a number of aspects bearing on our tax structure which I wish to refer to. My approach here will not result in any major fiscal sacrifice or gain this year, but will be of significance in future in easing the adjustment to structural changes. As Thomas Fuller says—
Structural Tax Reforms
(a) Fringe Benefits
As part of the further structural reform of our tax system I wish to refer first of all to the question of fringe benefits. Now I know only too well that no tax is popular. Did not Edmund Burke long ago caution that “to tax and to please, no more than to love and be wise, is not given to men”—and not, certainly, I might add, to the tax gatherer! But I am sure we are on the right course here.
In my reply to the debate on the Appropriation Bill last year, I informed the House that after intensive consultations between the Commissioner of Inland Revenue and the private sector, there was a surprising measure of consensus in regard to the principle that remuneration in kind or by means of allowances should be treated on the same footing as cash remuneration. There were, however, still some differences on detail in the last round of talks which could not be resolved in the last days of the session. The Inland Revenue Directorate has given considerable further thought to the matter and has drawn up revised proposals.
The Government endorses the principle, already enshrined in the Income Tax Act, that fringe benefits be taxed, and on as reasonable and equitable a basis as possible. In consequence, I shall propose that the new basis for the determination of the value of remuneration in kind and the treatment of certain allowances be phased in over the next two tax years, commencing on 1 March 1982 and 1 March 1983, respectively.
The revised proposals, in the form of draft legislation and an explanatory memorandum, will be made available by the Commissioner for Inland Revenue to interested parties with a view to the further elucidation of any problem areas and discussion of the best way to implement the proposals in practice.
It is the intention that the proposals as finally drafted be submitted to Parliament, hopefully during the present session as part of the annual Income Tax Amendment Bill.
I believe that the proposals will be found to be equitable as regards their effects on both the taxpayer and the fiscus and will go a long way to preserve the integrity of the tax system in as much as all taxpayers will receive the same tax treatment in respect of their earnings. Those forms of remuneration which have hitherto not been taxed or only partly taxed due to lack of information or uniformity, will now become taxable on an equitable though concessional basis. No longer will we hear the words of Charles Churchill ringing in our ears—
The moderate taxation of fringe benefits should not be used as a pretext for higher salaries, as not only will the measure be phased in gradually over two fiscal years, but the assessments will in any case invariably be pitched at levels below the value of the benefits. The trouble is, as Upton Sinclair said—
(b) Final PAYE Deduction System
As I announced during the short session earlier this year, the Department is actively engaged in seeking ways and means of reducing the volume of tax returns to allow the available manpower to be more productively employed on higher revenue producing work. Work in this direction is so far advanced that I hope to introduce legislation during the current session or early in 1982 to enable a start to be made with the new scheme as from 1 March 1982.
The proposed measure will have the effect of relieving individual taxpayers with taxable incomes of not more than R7 000 per annum from the necessity of rendering income tax returns where such incomes are derived entirely or almost entirely from salaries or wages. The PAYE deductions from their salaries will be regarded as the full settlement of their tax liability.
One of the consequential adjustments which will be required to bring the new system into operation, is that the deduction allowed from the earnings of married women will have to be increased from the existing R1 200 to R1 600. This is also in line with the recommendations of the Manpower Commission on highlevel manpower in South Africa. It is felt advisable to spread this increased deduction over two years, and to allow R1 400 with effect from 1 March 1981. In a full year the estimated loss of revenue will be R18,9 million, but as the 1982 tax year is already so far advanced and deduction tables will not be amended, the loss for the 1981-’82 financial year is estimated at R2,4 million.
(c) Phasing-out of Separate Taxation of Blacks
After consultation with and subject to the approval of the governments of the various Black National States, it is my intention to effect the final phasing-out of the taxation of Blacks in terms of the Black Tax Act of 1969, as from 1 March 1982, by subjecting the incomes of all individual taxpayers to tax in terms of the Income Tax Act, 1962, under the jurisdiction of one tax authority. When that happens, we shall have completed a process, begun two years ago, of taxing all individuals in the Republic according to a uniform and consistent system of taxation.
Ongoing Tax Reforms
Further examples of the ongoing process of systematic tax reforms that have become a feature of fiscal policy in South Africa in recent years are the following—
(a) Relief to the Aged
The House will recall that tax concessions are currently allowed to persons over 60 years of age. In order to provide differentiated relief to persons over the age of 70 years and in an attempt to afford further tax relief to senior citizens who find it increasingly difficult, if not impossible, to augment their incomes, I propose to go further and to grant all taxpayers who are 70 years and older an additional rebate of R80 with effect from the tax year which commenced on 1 March 1981.
The effect of this concession will be that a person in this age group will, at present rates of tax, not become liable for income tax until his income, after the deduction of medical expenses, exceeds R5 000 per annum, compared with R4 000 per annum at present. The proposed measure will not entail any loss of revenue during the 1981-’82 financial year, but in a full year the loss is estimated to amount to R4,6 million.
(b) Lump Sum Payments by an Employer to an Employee
In the course of my speech earlier this year on the Part Appropriation Bill I announced that it was proposed that the tax-exempt amount of lump sum payments received by an employee from his employer by way of bonus, gratuity or compensation upon retirement due to the attainment of the retiring age or due to old age, ill-health or other infirmity be increased from R15 000 to R20 000 with effect from 1 March 1981. I now lay that proposal before the House.
As a further relief measure I wish to propose that the portion of the lump sum remaining after the deduction of the exempt amount be subjected to tax at the taxpayer’s average rate of tax applicable to his other income and not at the marginal rate which would, but for this measure, have applied.
It is estimated that the revenue which will be sacrificed for the 1981-’82 financial year will amount to R100 000 and in a full year to R2 million.
(c) Relief to Parents who maintain Children suffering from Physical and Mental Disability
Parents who maintain a child or stepchild, who due to physical or mental disability is unable to maintain himself, who is wholly or partially dependent for his maintenance upon the parent, and has not himself become liable for income tax, are at present entitled to a rebate for such child irrespective of his age.
I am sure hon. members will agree with me that it costs much more to maintain such a handicapped child than a normal child and that the parents are, to that extent, at a disadvantage in regard to their ability to pay tax.
I have therefore decided to extend to all such parents the same concession as that which applies in the case where the taxpayer and/or his wife suffers from a physical disability, namely an allowance equal to so much of the expenditure as the Commissioner for Inland Revenue is satisfied was necessarily incurred by the parent in consequence of the child’s physical or mental disability, but subject to a maximum deduction of R1 200 per tax year.
The concession will apply from the 1982 year of assessment and will not result in any loss of revenue during the current financial year.
(d) Farming: Phasing out the Requirements with regard to Purchased Breeding Stock
At present purchased breeding stock are treated differently for tax purposes from other livestock in that they must be brought into account at the end of the tax year at cost price and not at standard values where the cost of such an animal exceeds the minimum amount laid down for that class of livestock in the Income Tax Act. The farmer is then entitled to write off the purchase price over a period of four years.
For practical considerations I have decided to phase out the present requirement over two years with effect from the year of assessment which commenced on 1 March 1981, after which all classes of livestock will be treated similarly for tax purposes. For the 1981-’82 financial year no reduction in tax yield is expected, but for a full year a decreased yield of R3,8 million is expected as a result of this concession.
(e) Undistributed Profits Tax
The Standing Commission on Taxation Policy has recommended that the plough-back of 35% allowed to public companies in respect of their dividend income be increased to 50%. I accept the recommendation and, with the approval of the House, will have it implemented. No loss of revenue is expected for the current financial year, though obviously there will be some sacrifice of revenue thereafter.
(f) Estate Duty
In order to compensate partly for the effects of “fiscal drag” occasioned by escalating values of assets making up the taxable value of an estate, it is necessary constantly to adjust the abatements to ensure that a tax of this nature does not become confiscatory.
I wish to propose, therefore, that in respect of estates of persons dying on or after 1 April 1981, the following deductions be applied instead of the amount of R37 500 at present applicable in each case—
A basic deduction in respect of each estate |
R50 000 |
A further deduction where the deceased is survived by a spouse |
R50 000 |
A deduction in respect of each child who survives him |
R40 000 |
A deduction in respect of each child who predeceased the deceased parent leaving a descendant by blood or a wife who had not remarried |
R40 000 |
The effect of this proposal is that an estate of a person dying on or after 1 April 1981 and who is survived by a wife and two children, will only become liable for estate duty if the taxable value of the estate exceeds R180 000 as against R150 000 applying before 1 April 1981. If the taxable value of such estate was, say, R300 000, the tax previously payable would have been R19 500, as against R14 700—or 4,9% of the taxable value of the estate—under the proposals now made. The proceeds of the maximum estate-duty-free investments of R100 000 in Government stock and insurance policies, will be sufficient to cover the estate duty on an estate with a net value of R731 428, including the exempt investments, where there is a surviving spouse and two children, as against a net value of R701 428 at present.
The loss in revenue for a full year is estimated at R9,8 million; for the 1981-’82 financial year it will be negligible, i.e. about R200 000.
Miscellaneous Income Tax Matters
I now wish to turn to a few other tax matters.
(a) Donations to Educational Institutions
In introducing the 1980 Income Tax Bill I announced that machinery would be created by means of which I would be able to extend the current tax concession in regard to donations to universities and colleges, to certain other educational institutions as well.
I am now happy to report that after various discussions with interested bodies the Commissioner for Inland Revenue will shortly be sending draft proposals to the parties concerned for final comment before I submit proposals to Parliament in which the terms and conditions under which the proposed more widely-based donations can qualify for tax deduction, will be set out.
(b) Incentive Allowances
In a speech delivered on 13 November 1980, I announced that it was my intention to obtain Parliament’s approval for the extension for a further two years, i.e. up to 30 June, 1985, of the machinery and building investment allowances provided for in the Income Tax Act, and I also referred to an investigation into the desirability or otherwise of incentive allowances which was being carried out by the Standing Commission on Taxation Policy. I intend to seek the House’s approval, in the current session, to embody these extensions in the Income Tax Act.
I feel constrained, however, to sound a note of warning in regard to certain undesirable practices which have appeared in leasing agreements whereby the cost of the asset is artificially increased in order to allow the lessee to reap the benefit of bigger investment allowances on the inflated cost. Certain proposals will also be made to Parliament in this regard.
(c) Annual Duty on Companies
The Standing Commission on Taxation Policy has recommended that the annual duty on companies be levied at a flat rate on all companies irrespective of the capital structure and irrespective of whether the company is a domestic or foreign company, on the grounds that the duty should not be regarded as a revenue raising measure but rather as a control measure.
I have decided to accept this recommendation and legislation will be introduced to take effect on 1 April 1982. Certain companies will benefit from a reduction of duty, and on the assumption that the present minimum annual duty of R80 will apply accross the board, it is estimated that the annual loss of revenue from this source from the 1982-’83 financial year onwards will amount to R2,5 million.
Cost of Tax Concessions
The total cost of the income tax concessions thus far announced amounts to approximately R3 million this year, but because they embrace important structural adjustments, we should be under no illusion that the loss of revenue next year and the years thereafter will be very substantial.
Financing the Deficit
We now have to consider how to finance the large deficit facing us. In doing so, I feel it prudent to remind the House of the age-old advice of Marcus Tullius Cicero, who addressed the Roman Senate about 50 B.C. in these terms—
When the tax concessions I have just outlined and the additional expenditure, together amounting to R162 million, are taken into account, the deficit before borrowing rises to R2 817 million. To this must be added R2 842 million in loan redemptions and miscellaneous loan expenditure, which brings the total financing requirement to R5 659 million.
I propose that this amount be financed as follows—
R million |
|
Public Debt Commissioners |
850 |
New issues already funded and reinvestment of loan redemptions |
2 510 |
Non-marketable debt |
550 |
Foreign loans |
350 |
Loan levies |
45 |
Surplus from previous year |
40 |
5 345 |
|
Deficit still to be financed |
314 |
5 659 |
This leaves a net amount of R314 million still to be financed. Before dealing with my proposals to find this amount, I should like to mention that two of the existing Treasury issues, Treasury Bonds and National Defence Bonds, are offering yields today which are not competitive with market rates. I propose to close these issues on 30 September 1981 and to offer two new series at market-related rates from 15 October 1981. The terms and conditions of these issues will be announced in due course.
If one takes into account that there are invariably unexpected and unavoidable overruns of expenditure which have to be funded through the Additional Appropriation Act at the end of the year—however firmly the reins are held—and that such expenditure will also have to be financed in a sound way by drawing in money from the private non-bank sector, I have no doubt that the Exchequer should refrain from placing undue pressure on the capital and money markets during the next few months; in other words, the Exchequer should not plan to cover its full net deficit from borrowings alone, but the taxpayer should also make a modest contribution of about one third in the form of additional tax revenues.
There are various options as to the sources from which such contributions might come. In present circumstances it would not be in our best interest to finance the deficit remaining from direct tax sources, nor do I feel it would be appropriate to raise the level of the general sales tax. I have thus decided to impose moderate additional customs and excise duties on a range of goods at present subject to such levies.
Customs and Excise Duties
But, first of all, I wish to refer to a reduction in certain existing duties.
Petroleum Gases and Other Gaseous Hydrocarbons
The revenue from the excise and customs duties on liquid petroleum gas is regularly paid over to the Strategic Oil Fund to finance part of the capital requirements of SASOL 2 and 3. As a result of a growing imbalance between the supply and demand for this industrially and domestically important product, it has been decided to abolish the duties completely. A Government Notice to give effect to this decision will be published this afternoon and will be applicable to all gases which have not been entered for home consumption by 15h00 today. The estimated loss in revenue to the Strategic Oil Fund for 1981-’82 from this source will be R6,3 million.
The abolition of these duties will result in an effective reduction in costs and I firmly expect that this reduction will be passed on for the benefit of domestic and industrial consumers in the form of lower prices.
Next a number of increases in duties—
Beer
The consumption of beer has increased considerably over the past years and I am of the opinion that this product can bear an increased tax. I propose that the duty on all beer, both imported and local, be increased by 4,8 cents per litre or about 1,8 cents per container of 375 millilitres—or per pint according to Imperial measures. The retail price of beer should not rise by more than 2 cents per container of 375 millilitres, and the Government will expect the trade to give due consideration to the interests of the consumer. The estimated additional revenue amounts to R21,6 million this year.
Spirits
I feel that the consumer of brandy, gin, whisky and other spirituous beverages can also make a contribution and propose that the customs and excise duties on spirits be increased by 156,28 cents per litre absolute alcohol or about 1,8 cents per tot. The retail price of local and imported spirits should not rise by more than 2 cents per tot. The additional revenue from this source is estimated at R31,9 million this year.
Wine
It is only reasonable to expect the consumer of wine to make a small contribution along with the consumer of beer and spirits. I propose, therefore, that the customs and excise duties on fortified and sparkling wines be increased by 2,4 cents per litre. No change is being made to the duties on unfortified wines, currently 3 cents per litre. The additional revenue from this source during 1981-’82 is estimated at R800 000.
Other Alcoholic Beverages
In order not to grant the alcoholic apple, pear and orange beverages an undue advantage over the product of the vine, it has been decided that the customs and excise duties on these beverages also be increased, though only a negligible contribution to the State coffers will result. I therefore propose that the customs and excise duties on fortified and sparkling apple, pear and orange beverages also be increased by 2,4 cents per litre.
Non-alcoholic Beverages
The non-alcoholic beverage industry will also have to make a small contribution. I propose that the customs and excise duties on non-alcoholic beverages be increased by 1 cent per litre. The estimated revenue from this source amounts to about R5,2 million in 1981-’82. Natural fruit drinks and squashes will not be affected.
Cigarettes and Cigars
It is certainly also fair to expect the smoker to make his contribution and I propose that the customs and excise duties on cigarettes be increased by 2 cents per 10 cigarettes, on cigarette tobacco by 2 cents per 50 gram, and on cigars by 10 cents per kilogram. The duties on pipe tobacco will remain unchanged. The additional revenue for 1981-’82 is estimated at R32.2 million.
Ad Valorem Excise Duties and Ad Valorem Customs Duties on Imported Goods of the Same Class or Kind
Certain goods have remained taxable since 1978 when the old sales duties were abolished and the general sales tax was introduced. These duties, mainly on less essential items such as jewellery, photographic equipment, furs, and the like, have not been changed since.
I think that in the present circumstances it is fair to expect a contribution also from these sources and therefore propose that the existing ad valorem excise duties and ad valorem customs duties on imported goods of the same class or kind be increased by 5% across the board, i.e. the 15% rate becomes 20% and the 20% rate becomes 25%. The estimated revenue from this source during 1981-’82 amounts to R18,3 million.
All the increases in customs and excise duties which I have announced take effect immediately and apply to all goods that have not yet been cleared for home consumption, i.e. not yet removed from bonded warehouses and premises of manufacturers licensed by the Commissioner for Customs and Excise.
In terms of section 58(1) of the Customs and Excise Act, 1964, I now lay upon the Table for consideration by the House the formal taxation proposals relating to customs and excise duties.
Since all the increased duties are levied at the point of import or manufacture, there is no justification for merchants to increase immediately the prices of goods purchased at the old rates of duty. The Government therefore relies on such merchants to sell at the current ruling prices those stocks on which duty at the old rates was paid, and to adjust their prices only when new stocks are received. I fully expect that the retail prices of all goods affected by these proposals will not be raised by more than is strictly justified by the increased duties.
The increased customs and excise duties to be contributed by the consumer should yield altogether R110 million to the Exchequer, or about one-third of the estimated net deficit. I feel that the balance of R204 million can reasonably be financed by investors through the raising of loans on the domestic market, though I must point out that considerable Government loan redemptions still lie ahead.
Summary
As is customary, a summary of the Government’s accounts is subjoined in the printed version of the Budget Speech.
COMPARATIVE STATEMENT OF THE STATE REVENUE ACCOUNT
Revised figure 1980-’81 |
Budget figure 1981-’82 |
Percent age change |
||
Expenditure: |
Rm |
Rm |
Rm |
% |
Printed Estimates (R. P.2—’81 First print) |
15 712 |
|||
Plus: Supplementary appropriations to be financed from 1981-’82 revenues: |
||||
Pension bonus |
25 |
|||
Flood disaster relief |
37 |
|||
Bread subsidy |
30 |
|||
Maize subsidy |
37 |
|||
Local authorities |
30 |
159 |
||
Total Expenditure |
13 590 |
15 871 |
16,8 |
|
Revenue: Printed for 1981-’82 |
||||
Customs and Excise and Inland Revenue at existing rates (excluding loan levies) |
13 057 |
|||
Plus: Taxation proposals in respect of Customs and Excise: |
||||
Beer |
21,6 |
|||
Spirits |
31,9 |
|||
Wine |
0,8 |
|||
Non-alcoholic beverages |
5,2 |
|||
Cigarettes and cigars |
32,2 |
|||
Ad valorem duties |
18,3 |
110 |
||
13 167 |
||||
Less: Taxation proposals in respect of Inland Revenue: |
||||
Lump sum payments |
0,1 |
|||
Estate duty |
0,2 |
|||
PAYE-deductions |
2,4 |
3 |
||
Total Revenue |
13 302 |
13 164 |
-1,0 |
|
Deficit (before borrowing): |
288 |
2 707 |
839,9 |
|
Loan Redemptions: |
||||
Domestic loans: |
||||
Stock |
1 094 |
2 064 |
||
Bonds |
374 |
571 |
||
Foreign loans |
202 |
74 |
||
Loan levies |
13 |
88 |
||
Other loan expenditures |
100 |
45 |
||
1 783 |
2 842 |
59,4 |
||
Financing Requirement |
2 071 |
5 549 |
167,9 |
|
Financing: |
||||
Domestic loans: |
||||
Public Debt Commissioners |
1 180 |
1 850 |
||
Re-investment of loan redemptions and new issues |
1 658 |
2 714 |
||
Non-marketable debt: |
435 |
550 |
||
National Defence Bonds |
50 |
|||
Bonus Bonds |
300 |
|||
Treasury Bonds |
200 |
|||
Foreign loans |
142 |
350 |
||
Loan levies |
59 |
45 |
||
Surplus carried forward from previous year |
148 |
40 |
||
Less: Transfer to Stabilization Account |
-1 242 |
— |
||
Total Financing |
2 380 |
5 549 |
||
Balance |
309 |
Nil |
||
Less: Disposal of 1980-’81 balance: |
||||
Transfer to Special Defence Account |
172 |
|||
S.W.A. Account |
80 |
|||
Southern African Development Bank |
17 |
|||
269 |
||||
Surplus |
40 |
Nil |
Conclusion
The Budget I have presented today provides for an increase in expenditure of 16,8% in nominal terms. Where, clearly, any additional appropriations at a later stage of the year will have to be kept to an absolute minimum, the rate of increase in Government spending in real terms should therefore once again be moderate, as planned, and less than that of real gross domestic expenditure.
The final deficit before borrowing is estimated at R2 707 million or about 3,5% of gross domestic product. This ratio is higher than the abnormally low 0,5% of last year, but still quite moderate by past standards. Moreover, the deficit is to be financed in a manner which will not add to the money supply and which will, in consequence, be non-inflationary.
Although it is not designed to place the same degree of restraint on the economy as last year’s Budget, the present Budget is still a moderately restrictive one which should help in curbing inflation and in bringing about the balance of payments adjustment necessitated by the decline in the gold price, the high overseas interest rates and other external developments.
I am particularly pleased that in the face of a substantial decline in revenue from gold mining taxation and leases, it was possible to design such a conservative Budget without increasing either income tax or general sales tax or reimposing loan levies. However, in order to avoid placing undue strain on the capital market and unnecessary upward pressure on long-term interest rates, it was considered desirable to impose moderate additional customs and excise duties on beer, spirits, beverages, cigarettes, and certain other, mainly non-essential, goods at present subject to such duties.
In different economic circumstances an even more restrictive Budget might have been desirable. But in deciding against such drastic deflationary action, full account was taken of two facts: The first is that the South African economy is already in the process of “cooling down” owing to natural economic forces. And the second is that the present tight monetary policy being applied by the Reserve Bank, particularly the acceptance of realistic market-related interest rates, should ensure both the net foreign financing needed for balance of payments purposes and the non-inflationary financing of the budgetary deficit before borrowing. In these circumstances a more restrictive Budget, involving even tighter curbs on Government spending and increases in income tax or general sales tax, might well in due course have resulted in a measure of so-called “over-kill”.
As always, the proof of the pudding will lie in the eating. But I do believe that the combination of conservative fiscal and monetary policies I have outlined will provide the financial framework best suited to the South African economy in the challenging period which lies ahead. It was Confucius who said—
In the wake of the recent adverse external economic developments, there will inevitably have to be an element of belt tightening in the South African economy if we are to avoid living beyond our means as a nation. But it is well to remind ourselves that our economic situation is distinctly favourable, both compared to that of other countries and in terms of our own longer-term needs.
Last year’s rapid growth brought about substantial increases in the average real earnings of most workers in the modem sector of the economy. In addition, the strong upswing in fixed investment, which is still continuing, has added appreciably to our production capacity, something which will stand us in good stead when the next upward cyclical phase begins. The South African economy is therefore well placed and well prepared to make the required adjustments in the period ahead.
I am confident that the phase of consolidation and adjustment we are now entering is merely the prelude to the next phase of rapid economic growth, and that the nineteen-eighties as a whole will prove to be a decade of vigorous expansion and development for the South African economy.
Mr. Speaker, I now lay upon the Table—
- (1) Estimate of Expenditure to be defrayed from State Revenue Account during the financial year ending 31 March 1982 [R.P. 2—’81];
- (2) Estimate of Revenue for the financial year ending 31 March 1982 [R.P. 3—’81];
- (3) Statistical/Economic Review [W.P. B.—’81];
- (4) Comparative figures of revenue for 1980-’81 and 1981-’82;
- (5) Taxation proposals [A. 1—’81];
- (6) Memorandum on the provision of housing.
REVENUE 1980-’81 (R1 000) |
||||
Head of Revenue |
Printed Estimate 1980-’81 |
Revised Estimate 1980-’81 |
Increase |
Decrease |
R |
R |
R |
R |
|
Inland Revenue: |
||||
Tax on income |
||||
Normal tax: |
||||
Gold mines |
1 850 000 |
2 794 756 |
944 756 |
|
Diamond mines |
80 000 |
38 626 |
41 374 |
|
Other mines |
160 000 |
172 980 |
12 980 |
|
Individuals |
1 805 800 |
2 090 902 |
285 102 |
|
Companies (other than mining) |
2 088 000 |
2 417 580 |
329 580 |
|
Interest on overdue tax |
7 000 |
7 281 |
281 |
|
5 990 800 |
7 522 125 |
1 572 699 |
41 374 |
|
Loan levy |
58 465 |
58 465 |
||
Other taxes and receipts: |
||||
Gold mining leases |
635 000 |
838 195 |
203 195 |
|
Other mining leases |
16 000 |
23 565 |
7 565 |
|
State ownership revenue on diamond mines |
44 000 |
18 457 |
25 543 |
|
Export duty on diamonds |
31 000 |
24 797 |
6 203 |
|
Non-resident shareholders’ tax |
200 000 |
296 558 |
96 558 |
|
Non-resident’s tax on interest |
16 000 |
12 082 |
3 918 |
|
Undistributed profits tax |
5 000 |
2 435 |
2 565 |
|
Donations tax |
1 500 |
1 961 |
461 |
|
Stamp duties and fees |
150 000 |
137 503 |
12 497 |
|
Transfer duties |
95 400 |
153 918 |
58 518 |
|
Estate duty |
48 800 |
61 345 |
12 545 |
|
Tax on purchase of marketable securities |
20 000 |
33 615 |
13 615 |
|
Licences |
3 000 |
2 576 |
424 |
|
Cinematograph films tax |
1 000 |
851 |
149 |
|
Other |
1 400 |
2 138 |
738 |
|
1 268 100 |
1609 996 |
393 195 |
51 299 |
|
Departmental and miscellaneous receipts: |
||||
S.A. Reserve Bank |
19 154 |
19 375 |
221 |
|
S.A. Mint |
11 869 |
23 964 |
12 095 |
|
State diamond diggings |
13 585 |
5 495 |
8 090 |
|
Forest revenue |
28 000 |
44 630 |
16 630 |
|
Water revenue |
44 000 |
61 255 |
17 255 |
|
Fines and forfeitures |
12 000 |
13 365 |
1 365 |
|
Recoveries of advances |
2 787 |
14 597 |
11 810 |
|
Sale of state land |
2 500 |
2 957 |
457 |
|
Rentals of state property |
13 469 |
15 888 |
2 419 |
|
State Trust Board |
1 630 |
1 630 |
||
General |
160 000 |
182 187 |
22 187 |
|
307 364 |
385 343 |
86 069 |
8 090 |
|
Interest and dividends: |
||||
Interest on state loans and investment of cash balances: |
||||
Border area development |
1 403 |
2 424 |
1 021 |
|
Industries, Commerce and Tourism |
3 600 |
3 778 |
178 |
|
Housing loans |
132 000 |
136 193 |
4 193 |
|
Universities and colleges |
6 200 |
6 921 |
721 |
|
South African Broadcasting Corporation |
906 |
556 |
350 |
|
South African Coal, Oil and Gas Corporation |
1 708 |
1 333 |
375 |
|
Shipbuilding industry |
2 000 |
2 169 |
169 |
|
Advances: Agricultural Credit Board |
6 400 |
7 543 |
1 143 |
|
State land settlements, etc |
245 |
171 |
74 |
|
Cash balances |
2 500 |
2 500 |
||
S.A. Railways and Harbours |
450 000 |
343 265 |
106 735 |
|
Posts and Telecommunications |
28 064 |
29 485 |
1 421 |
|
Land and Agricultural Bank |
13 856 |
8 347 |
5 509 |
|
Local Loans Fund |
8 235 |
8 337 |
102 |
|
Other |
11 203 |
18 657 |
7 454 |
|
Dividends: |
||||
South African Broadcasting Corporation |
2 276 |
2 149 |
127 |
|
Weza Timber Company |
500 |
500 |
||
670 596 |
571 828 |
16 902 |
115 670 |
|
Repayments of loans: |
||||
Advances: Agricultural Credit Board |
14 000 |
27 106 |
13 106 |
|
State land settlements, etc |
400 |
546 |
146 |
|
Shipbuilding industry |
4 152 |
4 662 |
510 |
|
Posts and Telecommunications |
9 821 |
9 658 |
163 |
|
Valuation adjustment (IMF hold-ings) |
21 191 |
21 191 |
||
Redemption Fund Contribution |
20 000 |
16 980 |
3 020 |
|
Miscellaneous |
5 985 |
10 597 |
4 612 |
|
54 358 |
90 740 |
39 565 |
3 183 |
|
General sales tax |
1 550 000 |
1 653 098 |
103 098 |
|
Total for Inland Revenue |
9 841 218 |
11 891 595 |
2 269 993 |
219 616 |
Customs and Excise: |
||||
Customs duty |
480 000 |
735 834 |
255 834 |
|
Surcharge |
1 000 |
1 000 |
||
Sales duty |
500 |
594 |
94 |
|
Excise duty |
1 111 026 |
1 243 200 |
132 174 |
|
Miscellaneous |
19 000 |
43 952 |
24 952 |
|
Gross total for Customs and Excise |
1 611 526 |
2 023 580 |
413 054 |
1 000 |
Less: |
||||
Amount to credit of Central Revenue Fund (sec. 22(1)(d) of Act 25 of 1969) |
41 100 |
49 350 |
8 250 |
|
Payments in terms of Customs Union Agreements (sec. 51(2) of Act 91 of 1964) |
500 200 |
504 919 |
4 719 |
|
Total for Customs and Excise |
1 070 226 |
1 469 311 |
413 054 |
13 969 |
Grand Total |
10 911 444 |
13 360 906 |
2 683 047 |
233 585 |
Net increase: 2 449 462 |
REVENUE 1981-’82 (On existing basis of taxation)
(R1 000)
Head of Revenue |
Printed Estimate 1981-’82 |
Revised Estimate 1980-’81 |
Increase |
Decrease |
R |
R |
R |
R |
|
Inland Revenue: |
||||
Tax on income: |
||||
Normal tax: |
||||
Gold mines |
1 620 000 |
2 794 756 |
1 174 756 |
|
Diamond mines |
2 000 |
38 626 |
36 626 |
|
Other mines |
160 000 |
172 980 |
12 980 |
|
Individuals |
2 710 000 |
2 090 902 |
619 098 |
|
Companies (other than mining) |
2 810 000 |
2 417 580 |
392 420 |
|
Interest on overdue tax |
8 000 |
7 281 |
719 |
|
7 310 000 |
7 522 125 |
1 012 237 |
1 224 362 |
|
Loan levy |
45 000 |
58 465 |
13 465 |
|
Other taxes and receipts: |
||||
Gold mining leases |
540 000 |
838 195 |
298 195 |
|
Other mining leases |
15 000 |
23 565 |
8 565 |
|
State ownership revenue on diamond mines |
2 000 |
18 457 |
16 457 |
|
Export duty on diamonds |
10 000 |
24 797 |
14 797 |
|
Non-resident shareholders’ tax |
350 000 |
296 558 |
53 442 |
|
Non-residents’s tax on interest |
13 000 |
12 082 |
918 |
|
Undistributed profits tax |
2 500 |
2 435 |
65 |
|
Donations tax |
2 000 |
1 961 |
39 |
|
Stamp duties and fees |
130 000 |
137 503 |
7 503 |
|
Transfer duties |
120 000 |
153 918 |
33 918 |
|
Estate duty |
65 000 |
61 345 |
3 655 |
|
Tax on purchase of marketable securities |
25 000 |
33 615 |
8 615 |
|
Licences |
3 000 |
2 576 |
424 |
|
Cinematograph films tax |
1 000 |
851 |
149 |
|
Other |
2 500 |
2 138 |
362 |
|
1 281 000 |
1 609 996 |
59 054 |
388 050 |
|
Departmental and miscellaneous receipts: |
||||
S.A. Reserve Bank |
19 400 |
19 375 |
25 |
|
S.A. Mint |
12 000 |
23 964 |
11 964 |
|
State diamond diggings |
4 900 |
5 495 |
595 |
|
Forest revenue |
40 000 |
44 630 |
4 630 |
|
Water revenue |
60 000 |
61 255 |
1 255 |
|
Fines and forfeitures |
14 000 |
13 365 |
635 |
|
Recoveries of advances |
7 800 |
14 597 |
6 797 |
|
Sale of state land |
2 700 |
2 957 |
257 |
|
Rentals of state property |
15 700 |
15 888 |
188 |
|
State Trust Board |
4 000 |
1 630 |
2 370 |
|
General |
170 000 |
182 187 |
12 187 |
|
350 500 |
385 343 |
3 030 |
37 873 |
|
Interest and dividends: |
||||
Interest on state loans and investment of cash balances: |
||||
Border area development |
2 790 |
2 424 |
366 |
|
Industries, Commerce and Tourism |
3 500 |
3 778 |
278 |
|
Housing loans |
400 |
136 193 |
135 793 |
|
Universities and colleges |
7 000 |
6 921 |
79 |
|
South African Broadcasting Corporation |
910 |
556 |
354 |
|
South African Coal, Oil and Gas Corporation |
1 710 |
1333 |
377 |
|
Shipbuilding industry |
2 000 |
2 169 |
169 |
|
Advances: Agricultural Credit Board |
7 543 |
7 543 |
||
State land settlements, etc |
171 |
171 |
||
Cash balances |
2 500 |
2 500 |
||
S.A. Railways and Harbours |
399 000 |
343 265 |
55 735 |
|
Posts and Telecommunications |
27 040 |
29 485 |
2 445 |
|
Land and Agricultural Bank |
13 860 |
8 347 |
5 513 |
|
Local Loans Fund |
8 400 |
8 337 |
63 |
|
Other |
11 780 |
18 657 |
6 877 |
|
Dividends: |
||||
South African Broadcasting Corporation |
2 280 |
2 149 |
131 |
|
Weza Timber Company |
150 |
500 |
350 |
|
483 320 |
571 828 |
65 118 |
153 626 |
|
Repayment of loans: |
||||
Advances: Agricultural Credit |
||||
Board |
27 106 |
27 106 |
||
State land settlements, etc |
546 |
546 |
||
Shipbuilding industry |
4 150 |
4 662 |
512 |
|
Posts and Telecommunications Valuation adjustment (IMF holdings) |
10 320 |
9 658 21 191 |
662 |
21 191 |
Redemption Fund Contribution |
18 000 |
16 980 |
1 020 |
|
Miscellaneous |
8 710 |
10 597 |
1 887 |
|
41 180 |
90 740 |
1 682 |
51 242 |
|
General sales tax |
2 150 000 |
1 653 098 |
496 902 |
|
Total for Inland Revenue |
11 661 000 |
11 891 595 |
1 638 023 |
1 868 618 |
Customs and Excise: |
||||
Customs duty |
830 000 |
735 834 |
94 166 |
|
Sales duty |
100 |
594 |
494 |
|
Excise duty |
1 299 040 |
1 243 200 |
55 840 |
|
Miscellaneous |
37 000 |
43 952 |
6 952 |
|
Gross total for Customs and Excise |
2 166 140 |
2 023 580 |
150 006 |
7 446 |
Less: |
||||
Amount to the credit of the Central Revenue Fund (sec. 22 (1) (d) of Act 25 of 1969) |
250 000 |
49 350 |
200 650a |
|
Payments in terms of Customs |
||||
Union Agreements (sec. 51 (2) of Act 91 of 1964) |
475 000 |
504 919 |
29 919a |
|
Total for Customs and Excise |
1 441 140 |
1 469 311 |
179 925 |
208 096 |
Grand Total |
13 102 140 |
13 360 906 |
1 817 948 |
2 076 714 |
Net decrease: 258 766 |
||||
a An increase in these directly diverted taxes causes a decrease of Exchequer Revenue whilst a decrease thereof has the opposite effect.
Mr. Speaker, I am sure hon. members of the House saw quite a different hon. Minister of Finance today from the one we saw in February this year. We then saw a Minister of Finance handing out largesse in a cheerful mood and with great jollification. We saw a Minister of Finance who was going to the country in an election and who was therefore handing out the goodies wherever he could. On this occasion, however, we had a different Minister of Finance. If one looks for a term to describe the budget today, one would say that this is the budget of the morning after the night before, “the night before” being the election period. Immediately before the election the hon. the Minister of Finance was making concessions, for example on champagne. Today, however, he comes and taxes the poor man’s drink, beer. [Interjections.] Why did the hon. the Minister not tell the country before the election that this is what he was going to do? Why were all the goodies handed out before the election and why is the day of reckoning now? That is the reality of it.
I looked up what “Minister of Finance” is in a fascinating book called Dictionary of Phrase and Fable. “Phrase” is what I use; “fable” is what the hon. the Minister uses periodically. “Minister” is defined literally as “an inferior person in opposition to magister, a superior. The one is connected with the Latin minus and the other with magus. ‘Whosoever will be great among you, let him be your minister’, where the antithesis is well preserved”. In Gibbons’s The Decline and Fall of the Roman Empire he speaks of “a multitude of cooks and inferior ministers employed in the service of the kitchens”. When it comes to finance, we have an even more fascinating definition: “By devious routes this word comes from the Latin finis: A settlement of a debt or the winding up of a dispute by the payment of a ransom.” We are now paying that ransom today, Sir, and we are paying today because the hon. the Minister of Finance decided to have a pre-election part appropriation and to hold his taxation proposals over to this session as we have heard them today. The test that we have to apply to this budget, the acid test that we have to apply to it, is: What does this budget do to solve the real problems of South Africa? What does it do to combat inflation? What does it do to provide the housing that is so urgently required? What does it do to provide the education that is so urgently needed? What does it do to create the jobs that we so urgently need in South Africa?
When we look at the real crux of the matter, we ask ourselves: How are we going to deal with the real problem of inflation? This is a budget that ignores the true plight of the consumer. It ignores the problems that he is experiencing in regard to his food, his housing and his general cost of living. That is why I call this the budget of the morning after the night before. All the jollification has now been forgotten and we are now faced with the reality of the situation where the price has to be paid.
The hon. the Minister has told us that his expenditure has been increased by 16,8%. The hon. the Minister also told us that in actual fact this means in real terms an increase of only about 2%. In other words, what the hon. the Minister means in reality is that he expects the rate of inflation as it exists at present to continue for the rest of the financial year otherwise his figures would have been quite different.
You are quite wrong.
In other words, Sir, this hon. Minister is already conceding defeat in the fight against inflation.
You missed the first point.
He is conceding defeat because, as he knows, the fact of the matter is that the past 12 months have seen a situation of a failure to control the money supply adequately, of a failure to take timeous action in the face of the necessity to take more urgent action where that action was not taken when it should have been taken. That, Sir, is the price that we are going to have to pay. That is the reality of the position as it is at the present moment.
Let us take food as an example. The hon. the Minister has talked grandiosely of the fact that this amount that he has allocated is the highest amount that has in fact ever been allocated. However, it is actually only R24 million more than the figure was last year, it is less than the average increase in this budget and it is less than the inflation rate. I say that in the presentation of this budget the hon. the Minister has shown that he is uncaring in respect of the ordinary working people of South Africa who are being ignored in this budget.
What rubbish!
The benefits in respect of the building society movement which is in dire straits and in which sphere there is a crying need for finance, are minimal. The housing increase from R231 million to R256 million is not adequate to deal with the real housing problem. In regard to the Public Service, the reality of the situation is that the measures that the hon. the Minister and his colleagues have taken are inadequate to deal with the real problems of South Africa. We are still faced with a shortage of policemen, we are still faced with the fear of escalating violence and crime in South Africa and the problems of the Public Service have not been solved. That is why I say today that this is not a budget for the ordinary man in the street. This is not a budget that will bring relief to those who need it most and we shall in due course show in detail how this Government has lost touch with the people of South Africa. This is no longer a Government of the people; this is a Government that now enjoys power for the sake of exercising power and has forgotten the ordinary people of South Africa.
Fat cats!
We shall outline this for the House, Sir, in due course but at this stage I wish to move—
Agreed to.
Mr. Speaker, I move—
The aim of the Bill before the House is purely to consolidate existing legislation in respect of the control of unit trusts and incidental matters. It forms part of the rationalization programme which is now being carried out in respect of all legislation, and naturally there are no matters of principle involved. The required certificate has been submitted by the Government law adviser.
On this occasion I should like to congratulate the officials who worked for many hours in order to consolidate this legislation and thank them very much for doing so.
I request the support of the House for this Bill.
Mr. Speaker, as this is a consolidation measure, I have nothing further to add.
Question agreed to.
Bill read a Second Time.
Bill not committed.
Bill read a Third Time.
Mr. Speaker, I move—
In conformity with Government policy to rationalize existing legislation the purpose of the Bill before the House is to consolidate the existing enactments relating to participation bond schemes.
The Bill is merely a re-enactment of the existing Act, as amended. The only new provisions are clause 17(1) which repeals the Acts and provisions set forth in the Schedule to the Bill, and clause 17(2) which provides for the continued validity of acts performed in terms of the legislation which is being repealed. The necessary certificate has been submitted by the State Law Adviser.
Mr. Speaker, we on this side of the House accept this consolidating measure.
Question agreed to.
Bill read a Second Time.
Bill not committed.
Bill read a Third Time.
Mr. Speaker, we are now back to the debate on the Manpower Training Bill which was under discussion when we adjourned yesterday afternoon. The last speaker in that debate was the hon. member for Johannesburg West and I hope he will forgive me for not touching on the points he made during his address, as this is my maiden speech in this House.
The Bill which is before this House, is being debated at a time when there is, as we know, a serious and critical shortage of skilled labour in our country. The promotion and regulation of proper training schemes, as envisaged in this Bill, is therefore a positive step towards alleviating this problem and, generally, towards increasing the rate of growth of employment. In order to maximize the rate of growth of employment it is, however, not sufficient to only provide for the training of labour. These people have also to be placed and one has to do more than merely to rely on the growth of the economy to absorb the growing number of work-seekers.
I would like very briefly to look at the production techniques which are being employed in South Africa in order to establish whether those techniques maximize job creation. The rate of growth of employment can only be maximized if commerce and the manufacturing sector employ techniques which assist in creating jobs. I believe that the manufacturing industry should take a critical look at itself in order to establish whether it is perhaps not moving ahead too fast in substituting machinery for labour. It is quite normal for developing economies to become more capital intensive and to invest in capital in order to substitute labour. However, it appears that there has been a tendency in South Africa for the rate at which this is taking place to accelerate, particularly during the last two decades. The amount of fixed capital per economically active person in the manufacturing sector increased by 2,6% between 1950 and 1970—a 20-year period—and by 4,45% between 1970 and 1980. At 1970 prices this represents an increase from R1 608 in 1950 to R4 419 in 1980. The temptation to become even more capital intensive and more capital orientated in our present climate of labour cost increases and fear of labour unrest is therefore very real. This tendency is dangerous for a developing economy with a large supply of labour such as ours because of its effect on unemployment.
*Mr. Speaker, there are many reasons for the growing tendency to substitute machinery for labour. However, an import ant factor is the fact that companies in the manufacturing sector are to a large extent dependent upon foreign technology which is in the main capital intensive. The methods applied overseas are connected with capital, while we in South Africa have an abundance of labour. In a country-wide survey conducted by the University of Natal, 74% of the companies consulted indicated that at least 90% of the technology applied by them was of overseas origin. Therefore only a very small portion of our technology has been developed locally to fit in with the particular circumstances prevailing in South Africa. We must take into account the serious negative result which this could have on the rate of growth of employment in the long run. More attention should be given to production methods which suit our circumstances. A policy which encourages investment, research and development at all levels can be of assistance in this regard. The necessity and the social urgency of doing this should therefore be made very clear. It has been suggested that consideration should be given to the introduction of a pay sheet subsidy based on the number of employees and financed from the proceeds on the tax on profits, so as to encourage companies to develop and to identify efficient, but relatively labour intensive methods of production.
A prerequisite for all these ideas, however, is the availability of skilled manpower. Therefore, the Bill before this House tries to come to grips with a basic shortcoming in our economy and in the long run it will have positive results. That is why this side of the House supports the Second Reading of the Bill.
Mr. Speaker, for one who is in the same boat as the hon. member for Durban Central today, it is a great pleasure for me to congratulate him on his first contribution in this House. I was struck by the fact that he is fully bilingual and that he took a great deal of trouble preparing his speech. You will agree, Sir, that the hon. member made a praiseworthy contribution in this debate this afternoon. We take pleasure in wishing him all of the best for his career in Parliament.
A man who has a job of work to complete and knows how to do the job but does not have the necessary tools is in the same boat as the man who has the tools to do the job but does not know how to use the tools. Accordingly I should like to exchange a few ideas this afternoon about clause 35 of the Bill before the House. By means of this clause, trade unions and employers’ organizations are encouraged to train their officials in the use of the machinery created by the Labour Relations Act.
At present there are 194 different trade unions in South Africa. Of these 194 trade unions, 78 are White trade unions, 54 are Coloured trade unions—viz. trade unions comprising Asians and Coloureds—and 17 are exclusively Black trade unions. These are Black trade unions which have registered as such in recent times. Then there are 39 multi-national trade unions, viz. trade unions in which Black employees have not been included, three trade unions including White, Coloureds and Blacks and five trade unions comprising Coloured and Black employees.
It is clear that the members of the trade unions which have registered recently, particularly the members of the 17 Black trade unions, are unacquainted with the machinery created by the Labour Relations Act. They do not have sufficient knowledge of the machinery created to bring about better labour relations. To prove this we need only consider the recent strikes in South Africa, which have not concerned conditions of service, but other matters, such as housing, transport and other grievances of trade union members.
This alone makes clause 35 of the Bill and the grant-in-aid created in terms of that clause to furnish financial assistance to employers’ organizations and trade unions so as to enable them to train their employees to utilize the machinery created by labour relations legislation—an exceptional contribution to the labour legislation of South Africa. Moreover, there are at present approximately 25 unregistered trade unions in South Africa, trade unions that have not yet applied for registration. Then, too, there are a further six applications from Black trade unions that are still being considered.
I believe that the facilities that are to be established under clause 35 of the Bill under discussion will serve as encouragement for the 25 trade unions that have not yet applied for registration, to apply as soon as possible.
If they do not do so, they will not only be deprived of the privilege of training in the machinery created by the Labour Relations Act, they will also forfeit the allowance for the redemption of the cost of such training.
I think clause 35 of the Bill is one of the finest provisions we have dealt with in our labour legislation over the past few days. I believe that it is going to make a major contribution towards acquainting the worker of South Africa, the trade union member, with the wonderful equipment he has at his disposal to improve his own situation—outstanding machinery which has already been provided.
Good speeches have been made on this Bill in this House. There is absolute unanimity concerning the fine legislation before us at the moment.
Accordingly, when I congratulate the hon. the Minister on this legislation, I want to say to the workers of South Africa at the same time that if they use the facilities created for them in terms of the Labour Relations Act and the Manpower Training Act, if they approach these two Acts with the same enthusiasm as do the hon. the Minister and the staff of the Department of Manpower, then South Africa is heading for an exceptionally productive period.
Mr. Speaker, I am delighted that I did not follow the hon. member for Durban Central as was originally planned because I can hardly indulge in any further backslapping owing to the fact that he was instrumental in causing me to stand for election. It is therefore my pleasure, as another new member of this House, to congratulate the hon. member for Hercules on his becoming of age here this afternoon.
* After last week’s—to say the very least—contentious debate in this House and the predictions in the newspapers of continued confrontation, I was really afraid that I would never have the opportunity to deliver my maiden speech here, because the point is that this is a speech which is not supposed to be of a controversial nature. Therefore I am extremely relieved (“verlig”)—and that is not “verlig” as the opposite of “verkramp” —that the first two pieces of legislation before this House have met with general approval, so much so that I may feel at liberty to join the debate.
Before turning to the legislation as such, I wish to draw attention to this historical occasion, since this is the first time in history that the member for Greytown has spoken in this House—and I am not speaking of myself now; I mention it because this is a new constituency. For the information of hon. members I wish to point out that the Greytown constituency consists of parts of four constituencies, viz. Pinetown, Umhlatu zana, part of the NRP homeland of Mooi River and part of the old Vryheid constituency as well. Hon. members who followed the election results will know that it was a four-cornered contest and that consequently I have the seemingly difficult task of representing the members of four political parties here. To be able to carry out this task, one has to realize that there is more to government than merely constitutional aspects. I see my task here as an endeavour, in the first place, to solve those problems of all the voters in my constituency that relate to the Public Service, and, secondly, submit the aspirations and community problems of all those people to this House so that we may have the full picture in order to enable us to structure solutions in such a way that the country, and not just my constituency may best be served. In any case, I am not in the right party to make any election promises.
Of course, as far as the constitutional aspects of the work of this House are concerned I represent those of my voters who endorsed the principles of the PFP by electing me.
To come back to the legislation I should like to point out a few important factors concerning the training of manpower and even the training of supermen.
Firstly I want to point out that training and education cannot be seen in isolation from each other; secondly, that the educational system as we now know it must be changed drastically in order that it may be better adapted to the modem way of life; thirdly, that restructuring has to take place within the classical trades and, fourthly, that we shall have to look further than the classical trades so that all manpower may be trained.
In the previous Bill we saw that labour relations cannot be isolated from the sociopolitical milieu in which the worker finds himself. Likewise, the training of manpower cannot be seen in isolation from the total educational system. One of the most important functions of the educational system is to prepare a person for the circumstances of life in which he will find himself, and much of this is aimed at ensuring that a person will be able to contribute his share in the work situation.
In this regard I contend that the established educational paradigm as we know it is not appropriate to the modem, rapidly-changing technological age in which we are living. We know that for development one needs the application of technology and managerial know-how. Because modern technology is based on science, the logical answer seemed to be that everybody had first to master science and that the mastering of the application of technology would then follow automatically. This approach has brought us where we are today, for in earlier days there was much science which found little practical application in technology and in which innovation followed basic principles. However, as science has come to be increasingly embodied in technology it is now possible, even for those who have undergone absolutely no academic scientific training, to use highly technological instruments and aids, to be able, for example, to install, repair and even comprehend them. The wooden blocks or “dolosse” of the children of the past are now transistors and TV tubes, and Roy Rogers’ horse has been exchanged for Buck Rogers’ landing module. Young boys whose fathers want to thrash them because they cannot solve mathematical problems will, without much difficulty, take a lot of electronical components and conjure up a high fidelity system, or manufacture an automatic door opener for their fathers’ garage door. To put it in another way: To make the bell ring one does not need to know where Alexander Graham Bell is.
Therefore we should move away from the idea of wanting to provide everyone with an expensive academic training, since few will make any use of it. We should concentrate more on technological work-orientated tuition for a greater proportion of the children of the population.
In other words, the educational paradigm should change from one of technology following science to one of beginning with an introduction to technology, and afterwards the student can acquaint himself with the scientific basis underlying that technology; so that from the mathematics or the science further abstration then follows in ever-ascending cycles of complexity.
The concept of a red brick building where one spends 12 years in solitary confinement from the outer world must change and become one of education or training as a dynamic part of one’s existence, extending across one’s whole working life.
A further point with regard to manpower and training is that within the classical trades one should provide for various levels or structuring, and then remove all nonsensical regulations prohibiting people from doing what they are suited to. I am referring here to the difference between artisans, operators, assistants and others. Artisans are the better qualified persons within a branch of industry and one usually recognizes them as the people sitting on the bonnet of the bakkie reading a newspaper. The operators are the men standing on the ladder connecting wires, laying drainpipes or painting undercoats on walls.
This last group makes a very major contribution to our manpower and to my mind are not accorded adequate recognition. More short courses of a few weeks should be introduced for these people, who have usually learnt from practical experience, generally as an assistant, and for whom the electrical installation of a house, for example, is just as logical as leading water, so that they could supplement their knowledge or formalize it, but particularly, too, to give them recognition for what they are in fact able to do, and then they must be given the opportunity to do it.
I think any of the hon. members who have visited a large construction site will know what I am talking about. 600 workers are toiling and sweating, planing and doing various jobs, but when the official from the industrial council appears, suddenly all the brushes, trowels and saws are concealed and substituted by brooms and shovels. It is my contention that building costs, for example, could be cut substantially if these classes of workman received recognition for what they are in fact capable of doing.
In this regard, in-service training centres are of great value, particularly as regards the training method short modules succeeding one another in degrees of difficulty, so that a person can engage and disengage in the training programme in accordance with his personal ability. As a result he will not lose time at the start or recognition at the end if he joins in the middle. We should do well to establish many more of these centres, of which there are eight at the moment, so that not only the employed, but also those who are seeking employment, may make use of these effective methods. Another aspect for which the legislation makes provision is that training opportunities can be created for the non-classical trades as well. Creative thinking within this framework could serve as a major additional source, on the one hand to supplement the manpower shortage, and on the other hand to ease the unemployment problem. In this way, for example, cookery, domestic science or classes in dietetics in short modules might not only turn a domestic servant into a housekeeper, which could in turn afford a qualified housewife greater freedom to do productive work, but would also enable her to assist in her own community with the problem of malnutrition which undermines a man’s strength.
It is with pride that I should also like to refer to the work done by the Valley Trust in Botha’s Hill. It is in my constituency that this voluntary welfare organization, in cooperation with the community, has managed without any Government aid to render the community of the area known as the Valley of a Thousand Hills, just over the border in kwaZulu, almost self-supporting by training people and teaching them specially adapted methods of gardening, fish-breeding, etc.; and this is an area very poorly endowed with top-soil. Apart from this there are also classes in dietetics and cookery classes, which are for the most part taught at or near the houses of the inhabitants, and as a result the general health in the valley has improved wonderfully and the occurrence of kwashiorkor and malnutrition has become quite rare, as compared to what the situation used to be, when they were almost endemic. This valley, which is virtually adjacent to the outskirts of Durban, is extremely densely populated and could therefore hardly be regarded as a rural area. There are about 65 000 people living in a small valley of about 50 km. This method could be put to good use as a model for what could be achieved in the non-traditional trades if one just put a little more thought into it. I think that with only slightly greater technological inputs one could, for example, produce even small surpluses which could be sold, and at the same time increase the production capacity of the rural areas without destroying them irrevocably, and in this way the people there could be made a little more independent.
Finally, I should like to support this legislation. It achieves its aim of achieving order without regulating, and leading without prescribing.
Mr. Speaker, I should like to digress a little by saying that the big guns have now finished firing, and I am sure that at the moment we newcomers are feeling like boys with peashooters. I should like to congratulate the hon. member for Greytown sincerely on his first speech in this House. It was interesting to listen to him. We on this side of the House are already beginning to wonder on which side of the House those people should really be sitting. I am sure that for him it was also an experience to raise here and speak against the background of the admonitions to be brief and to the point and not to say anything controversial, because there are a couple of old bulls on the opposite side of the House, and if one says anything wrong one had better know that they will have one’s guts for garters the next morning. I am sure that the hon. member will continue to make a constructive contribution here in future.
At this stage I should also like to avail myself of this opportunity to speak of someone who, I am sure, in his time, became an institution in this House. Although all the old men will know him, the new men will probably not know him. I am referring to Mr. W. J. C. Rossouw or, as we knew him, Koeks Rossouw. In my opinion he served this House in the most excellent way possible for 15 years, and I should like to praise him today for what he did for his constituency in this House over that period. As I said, he was virtually an institution here, and from him I learned that politics was like a mulberry tree—one picks nine sour mulberries and they taste awful, but the tenth one is a ripe mulberry and that one tastes very sweet indeed. It is that one ripe mulberry which makes politics so delightful.
It is a tradition that in one’s maiden speech one has to say something about one’s constituency. Much can be said about Stilfontein, and there are many things there of which we are proud, for example the fact that nowhere is dust as dry as in the Western Transvaal. However, I think that what we are proudest of is the fact that this constituency was the very first one to bestow an honorary citizenship, that of the town of Stilfontein, on the hon. the Prime Minister. This is something we are proud of and of which we shall remain proud.
I should like to come back to the Bill under discussion. This Bill will go a long way towards removing bottlenecks in the private sector. However, this can only happen if the private sector applies and develops the Bill in the same spirit in which the Government presented it. In some quarters objections will certainly be raised against and fault will be found with certain parts of it. We accept that all Bills may initially create problems, but I am certain that, should the need arise in future, we shall have another look at them.
As the Bill reads at present it may rightly be described as a pioneer in the field of manpower training. With this Bill we can only lead our country and all its inhabitants further along the road of prosperity.
How essential this legislation has become can clearly be seen from the present shortage of skilled manpower. Our mining industry is a good example. In only one sector of the industry the shortage of artisans has increased as follows: In March 1978 the shortage was 116; in 1979, 269; in 1980, 603; and in March 1981, 1 008, and we foresee that this shortage will increase with the establishment of large mining complexes. These shortages are currently being supplemented by contractors, but all that we are actually doing is to draw men from other sectors, which then creates deficiencies there.
At this stage I also wish to address a few words to the employers. There are large organizations which co-operate beautifully and which already have a lion’s share in the training of manpower. However, there is also a large number of them who are sitting there like ravens, waiting for the moment when people have finished their training. Then they pounce and recruit those people for their own selfish ends. Some of those employers have told me that they are not so stupid as to spend a lot of money on training while they could use that money to increase their wages artificially in order to buy people. They say they do not waste money like that. Just think of that, Sir, they do not “waste” money like that! They are not remotely interested in any facets of training.
It is here where we can express our displeasure in future by means of the responsible use of training levies. This machinery of ours could be of incalculable value. I am sure that our commissions can learn from certain organizations from which we shall receive support.
Nothing motivates a business man as quickly as when one dips into his purse.
At the same time I hope that no impulsive action, disruptive of industrial peace and order, will be taken by the large organizations in their over-eagerness to introduce training programmes. The development of what this Bill offers us will have to take place in a mature, orderly and well-planned manner, strictly according to the future needs of our country and the economical growth which lies ahead. We cannot afford the development of disequilibrium in the provision of certain categories of labour. If we do not go about this in an orderly way we could very easily experience an oversupply in certain categories in future. This could be as dangerous to us as the present shortage in certain categories.
I also wish to refer, with the greatest degree of caution, to training in labour relations. The Bill is very clear on what should be understood by this. However, I do think that we should make it clear at the very outset that we shall not, under the cloak of labour relationships, allow certain elements to become skilled in the manipulation of our labour resources to bring about in that way the subversion of industrial peace, law and order.
†Mr. Speaker, may I also, with respect, make some very gentle noises to the hon. the Minister of Manpower to give very sympathetic consideration to allowing the mining industry, which is one of the major backbones of our economy, some measure of financial dispensation in respect of their training expenses. This industry has some of the most advanced and best equipped training facilities available in the country and it would indeed be sad if they were to decide, as managements, to shelve a large proportion of their training programmes at times when their financial resources were stretched and they thus have to revert to relying on non-mining sources for their skilled labour requirements. All that will then, in effect, happen, Sir, is that we shall be allowing financial dispensations to private industry for training people required by the mines, and also, at the same time, be leaving valuable training resources standing idle on those mines. We can only increase the pool of skilled labour and ensure the fullest utilization of our training resources by allowing the mining industry some dispensation.
Mr. Speaker, I have scrutinized this legislation on labour relations and manpower training very, very carefully indeed, and I say, without fear of contradiction, that the hon. the Minister of Manpower has introduced legislation that can only be described as “a small step for man, a giant step for all workers”.
Mr. Speaker, it is my first and most pleasant duty in this House to congratulate the hon. member for Stilfontein on his maiden speech. The hon. member has shown himself to be a man with a sense of humour, to be fully bilingual and to be of a constructive frame of mind. These three attributes will go far towards making his future in this House a very successful one, and I congratulate him.
*Mr. Speaker, before I begin my maiden speech, I should like to thank my predecessor, Mr. Jaap Olckers, for what he did for the Albany constituency during his term of office as a member of this House. Mr. Olckers also went out of his way to make sure that the change in the political representation of Albany took place in a spirit of friendship and co-operation and for that, too, I want to thank him.
†As the member for Albany, I represent one of the most beautiful, one of the most historic and also one of the most complex of all South African constituencies. It would be inappropriate for me to dwell on the traditions and scenic beauty of my constituency in a debate on manpower training and so I wish rather to concentrate on some of the complexities of our situation.
When it comes to manpower and, in particular, to manpower training and utilization, we in Albany have a problem. Our problem is not one of too little manpower but of too much. In Grahamstown alone some 7 000 Whites find themselves in a position where they have to provide employment to some 50 000 Blacks. In a sense then we are a microcosm of the greater South African whole, but with one important difference. Because of circumstances beyond our control—I am thinking here particularly of geographical isolation and lack of natural resources—industrial development has largely passed us by. As a consequence we have too many people chasing too few jobs. Unemployment and under-employment are endemic as are the associated problems of poverty, crime and disease. The magnitude of the problem is demonstrated by the fact that in this one city alone there are 54 registered charitable organizations, and just one of them, Gadra—the Grahamstown and District Relief Association—is responsible for feeding no less than 10 000 Black school children every day of the school week. Today there are some 50 000 Blacks in Grahamstown. By the turn of the century there will be in excess of 100 000. This is a demographic fact and it has nothing to do with political ideology. It simply means that we in Albany have a problem with a capital “P”, and we have to face up to it.
Unless we start planning now and unless we are able to lay down some kind of industrial and educational infrastructure to provide training and jobs for all these people, we shall find ourselves in an impossible situation. By this I do not wish to imply that the authorities are oblivious to our needs, for example we have of late been much heartened by reports of plans for fairly massive housing projects in Grahamstown. We are also grateful for what has been promised us in the way of Black educational facilities. I should like to pay tribute here to one person in particular, our dynamic Director General of Black Education in the Eastern Cape, Mr. G. W. Merboldt. Thanks to him and also to many other people in the Eastern Cape, a prestige Black school is already off the drawing boards in Grahamstown and plans for a technical training school are at an advanced stage.
However, what about industrial growth and the provision of job opportunities? Schools and houses are all very well, but they do not fill hungry bellies. It would be unreasonable, I believe, to expect the State to accept full responsibility, not only for educating and training our manpower reserves, but for providing jobs as well. The private sector will have to play an ever-increasing role in this regard. If entrepreneurs, however, are to be expected to take Albany seriously as a place for future expansion—here I should like to include some of the smaller centres as well, such as Port Alfred and Alicedale—two fundamental steps will have to be taken.
The first of these is that Grahamstown and the smaller centres will have to be included in the Government’s decentralization or deconcentration plans. We are well suited to labour intensive light industries. Here I am thinking in particular of those industries associated with the motor assembly plants of the Port Elizabeth-Uitenhage complex. This development in turn, will offer much scope for manpower training. I think of advanced technical training institutes, and such institutes or colleges will certainly have no shortage of students even if we consider only the present number of pupils in the Grahamstown township.
The second point is that the industrial infrastructure of Grahamstown-Albany would have to be greatly improved and expanded. We cannot expect impoverished municipalities to carry the full burden of improving road, rail and air links, neither can these municipalities be expected to undertake expensive yet essential schemes in order to augment water and power resources. These municipalities are at present caught up in a vicious circle. They are not in a position to offer these facilities but at the same time they do not have the finances to provide those facilities and thus attract industrialists. Without these facilities industrialists will refuse to be attracted.
This is the plea that I want to send out from Albany today both to the Government and to the private sector: Help us to help ourselves. We are not asking for charity but for support. When it comes to queuing up for slices of the decentralization cake we will have to elbow our way to the front of the queue. This will not be out of greed or selfishness but out of dire necessity. This is why it gives me pleasure to support this and any other legislation which will foster and encourage the productive use of manpower in South Africa.
Mr. Speaker, it is not often that a member on this side of the House is able to follow one of his colleagues and on top of that to compliment his own colleague on the contribution he has made. I find this very easy to do today. I am sure the appeal that he has made for his own constituency will be most welcome there.
I should also like to pay tribute to the former member for Pietermaritzburg South, Mr. Gerrie de Jong, who is no longer in the House but is farming at present. I should like to pay tribute to the work he did in Pietermaritzburg South. I hope that I will be able to carry on in the same way.
It is not often that we have legislation of this nature before us that enjoys such uniform support throughout the House. I wish that it could always be like this.
Today I should like to address myself to the question of new job-seekers coming on to the South African labour market between now and the year 2000. In 1980 there were 285 000 new job-seekers of all groups who came on to the South African labour market. It is estimated that in the year 2000 we are going to have of the order of 430 000 new job-seekers coming on to the South African labour market every year. This is an increase of nearly 70%. It will require a considerable effort to provide the necessary training and education facilities for them. It is also estimated that the current level of unemployment in South Africa is roughly of the order of 1 million persons. If this situation is not to deteriorate by the year 2000 we will have to have a growth rate of the order of 5% per annum in this country. It is also estimated that in order to attain this growth rate we will need to increase our trained manpower resources at a rate of 3,2% per annum. Between the years 1970 and 1978 we only managed to increase these resources at the rate of 1,8% per annum. This again underlines the fact that we will have to put considerable effort into providing training facilities over the next 20 years. It is also estimated that the White population group can only, at the very best, provide 40% of this particular input. Therefore these training facilities will in fact have to be across the board.
I should now like to turn to the constituency and the area I represent. It is estimated that unemployment in this area is currently of the order of 40 000 people. It is estimated that by the year 2000 there will be 650 000 Black inhabitants in the Pietermaritzburg area. This will be a threefold increase over our current population level. We are already experiencing problems in this area associated with the rapid population growth, problems such as an increased crime rate, and unless steps are taken right now to provide more job opportunities and more training facilities to enable people to be assimilated into jobs, we are in fact going to be faced with very serious social problems in this particular area.
This problem has not gone unnoticed. Indeed, a body has been formed in the Pietermaritzburg area, comprising members of the City Council, the Chamber of Commerce, the Chamber of Industries, the Afrikaanse Sakekamer and also the Drakensberg Administration Board, to look into this problem. I must also pay tribute here to the hon. member Mr. Schutte, who was previously the MP for Pietermaritzburg North, who in fact was instrumental in getting this whole body going. I mention this here because this matter is one which is, I believe, entirely out of the political sphere and which is of pressing importance for the whole Pietermaritzburg area. This body was instrumental in getting various people to visit the area, amongst them the hon. the Minister of Manpower who visited us in February 1980, the hon. the Minister of Co-operation and Development who visited us in June 1980, and the hon. the Minister of Industries, Commerce and Tourism who visited us in February 1981. On other occasions senior members of various departments visited us. I have no doubt that they approached the matter very sympathetically and are aware of the serious problems which in fact face this area.
There is one point I should like to emphasize—and this ties in with what the hon. the Prime Minister had to say to us last week during the censure debate. He referred to deconcentration areas. Pietermaritzburg is ideally situated from this point of view in that it lies very close to the so-called Durban-Pinetown metropolitan complex. It also fits in very well with the idea of a co-operation area in that the area borders on kwaZulu. In addition, we already possess the necessary infrastructure. There is a lot of controversy about the cost of creating jobs, but we already have the necessary infrastructure and job creation right now is cheaper in Pietermaritzburg than elsewhere. I understand that the final details regarding deconcentration areas and co-operation areas are to be announced later this year and I hope that they will be such that they will encourage and stimulate growth in the Pietermaritzburg area.
Finally I should like to have a quick look at the scenario beyond the year 2000. I should particularly like to address myself to the question of population growth. In speaking about population growth, I do not intend indulging in numbers games and that type of thing but rather I do so to stress that if we can get population growth under some kind of control it will be easier to provide the training and educational facilities everyone needs. In addition, it will then be easier to improve the standard of living for all South Africans.
The three factors I should like to mention under this heading do not operate independently, but rather operate together and complement one another. These three factors are urbanization, education and training. There is plenty of evidence throughout the world that these three factors, in combination, have led to lower population growth rates. We have seen this in Europe in recent times. We have also seen this among the White population group of South Africa. There is evidence that this is also taking place among the Indian and Coloured groups, and there is also evidence that population growth rates in Soweto are lower than in the rural areas. For this reason I believe that the process of urbanization should perhaps be encouraged. In saying this I am not necessarily referring now to currently existing urban areas; I am talking about urbanization in all its forms.
There are a number of reasons put forward as to why urbanization does have this effect. The most generally accepted one is that in an urban situation the cost of having children first becomes apparent in terms of job opportunities forgone, consumption opportunities forgone, and in terms of extra school facilities and the like.
Finally, I should like to turn to education. In this respect I should like in parting to express one idea on education and training. The wealth of a nation depends on the quality of its people which is enhanced by training and education and not necessarily what it can mine from the ground. We only have to look at examples of countries such as Japan in order to appreciate this. Therefore I must state that I have no hesitation in recommending the legislation which we have here before us today.
Mr. Speaker, permit me, after an absence of several years, to enjoy once again the special privileges and the pleasant experience of taking my seat in this hon. House.
You sort of have half a …
Mr. Speaker, the hon. member for Bryanston must be patient. We will get to him in due course. He must refrain from just making too much noise now.
It is also my privilege to pay my respects today to my predecessor, the legendary Mr. Marais Steyn, a man with whom I fared through deep waters and also a man whom I have stood in an election battle. I must say this is almost like a nice story with a happy ending.
†We have had a series of maiden speeches this afternoon. I should like to add my congratulations to those already expressed to the hon. members concerned, especially to the hon. member for Pietermaritzburg South, as he has not yet been congratulated officially. Allow me to congratulate these hon. gentlemen on their début in this House, on their election to Parliament and on their well prepared and well delivered maiden speeches.
I was told that in terms of tradition and in terms of the rules of this House it was not expected of me to make a second maiden speech on my return to Parliament. I am therefore very grateful for the quiet and peaceful atmosphere in this House today, an atmosphere of consensus between the Government and the Opposition in relation to the Bill now before the House. I should, however, like to add one thing. I should like to say to all the new hon. members of this House that from my brief experience in this House previously, I can testify to the fact that every speech—to me at least—is like a maiden speech. It is not the easiest of platforms from which to speak and to make a contribution.
When I first came to this House in 1970 I was confronted by the then hon. member for South Coast, who asked me one day: “So, my boy, how do you find this place?” I was obviously quite embarrassed and did not know what to say to that venerable old gentleman, Mr. Douglas Mitchell. The advice he gave me that day is perhaps good advice to give to new hon. members of this House. Mr. Mitchell said to me: “If you have nothing to say do not try to say it in this House.” [Interjections.] Allow me to wish all those hon. members who have made their maiden speeches here today a happy and a fruitful stay in Parliament.
*It is not every day that legislation is discussed so thoroughly and supported so wholeheartedly, or that it takes so long for hon. members to express their unanimity as is the case with this legislation. Let us be honest; It is a milestone of what I would call evolutionary development, of responsible adaptation to changed conditions, culminating in this legislation. This Bill did not drop out of the air; this Bill, together with other Bills offered as a package, is the result of intensive discussions in almost every field concerned with manpower and its utilization. Over the years grave concern has been voiced regarding South Africa’s manpower position. There has been intensive discussion, reasoning, thinking and serious deliberation. From time to time the Government has been reproached, as it was in this debate by the hon. member for Pinelands, for not having done what it should have in the field of training but instead neglecting it, to a certain extent and for the fact that people of colour have been excluded from working where they are needed at the moment. For this reason in particular the hon. the Minister, the Department of Manpower and men such as prof. Nic Wiehahn and prof. Hennie Reynders and everyone who assisted them deserve the highest praise and appreciation from South Africa for this legislation. Not only is this a thorough piece of legislation; it also creates new opportunities to combat the problem areas in the field of manpower and overcome the shortage of trained manpower positively and with enthusiasm. Not only has legislation been rationalized, the racial connotations removed and new mechanisms created but clear guidelines and standpoints have been spelt out.
Hon. members, including the hon. member for Durban North, mentioned the fact that the entire labour situation must be seen against the historic, socio-economic and political background. And this is very true, but with order and stability in mind, today we see the development of a solid base on which we can continue to build.
By its nature, this legislation concerns training, in the first place, training in respect of labour relations in South Africa and, in the second place, training in respect of improved acquisition of proficiency in a specific category of work. I would like to make a few comments in this regard. The Bill clearly spells out what is meant by labour relations. In the first place, it comprises all aspects of the relations between employer and employee. In other words the hon. the Minister has told us very clearly that he is particularly insistent on a sound, orderly, happy and stable relationship in the labour field which will ensure social, economic and political peace and stability in South Africa. In the second place as far as labour relations are concerned, this Bill deals with all aspects of negotiation in respect of remuneration, conditions of service and opportunities of the worker. What is important and what I would like to emphasize is in the first place the prevention of problems before one begins to consider the settling of differences. As the saying goes: Prevention is better than cure. This ought to be the watchword of every employers’ organization and every worker in South Africa. In this regard I want to voice my concern and ask whether employers’ organizations have the necessary expertise to handle labour relations in such a way as to avoid crisis situations. In the first place, employers’ organizations must therefore at all times have the expertise and be geared to apply preventive measures so that possible disputes do not lead to confrontation.
It is just too late.
The hon. member had better read the Bill. If he wants to come here and say that I am out of order he need only read the Bill. In the second place, if differences were to arise—and crisis situations do arise—employers’ organizations must have the expertise to be able to handle the situation.
I raise these two points because evolutionary change in the labour field must not catch the employer unawares. Order and stability remain the most important components and a very heavy responsibility rests upon the private sector to adapt to this new developing situation. Possibly the hon. the Minister could give us further guidance in this connection.
This brings me to the second aspect of training, namely training aimed at improving peoples’ qualifications for their specific work. This legislation creates the opportunity for South Africa to incorporate people of colour, namely the Coloureds, Asians and Blacks, in an orderly and responsible way into that small reservoir in South Africa, that small group of people who create welfare, who constitute top management, indeed all management, who supply technical expertise and who must develop and civilize South Africa. South Africa has become an industrial giant and has also shown revolutionary development in the commercial and financial fields. Therefore, in view of the size of the White population, which at present comprises only 17% and by the year 2000 will comprise a mere 12% of the total population, training is of cardinal importance.
This brings me back to training. What does the legislation spell out in respect of training? The legislation contemplates improving the qualifications of every employee for his specific work. In order to realize how serious the Government is in respect of training, one need only look at the tax concessions and financial assistance granted to employers in terms of this legislation. Who must accept the responsibility for training? The State must undoubtedly play its part, but basically it is, and will continue to be, the responsibility of the private sector. I believe the private sector can take cognizance of these measures with great interest and gratitude, if they have not yet done so. When the tax concessions in respect of the training of Blacks were also made applicable to Whites, Coloureds and Indians in 1979, there was increased interest from employers’ organizations, but—I must emphasize this—this has not yet penetrated to the private sector as a whole. In this regard one can perhaps make an appeal to the various institutes in trade and industry to play a role and to inform their members of these possibilities.
I have already said that it is easy to reproach the government for having neglected the field of training in South Africa, but as we know, the State has its specific responsibility as regards primary and secondary education, technikons and universities. However, when it comes to in-service training, the retraining of workers in South Africa, the State can only create a framework, provide incentives and offer supplementary training. Training, however, is a matter for the employer and the employee.
There is one aspect which must be singled out and emphasized, and it is an aspect which is cause for concern. The hon. member for Stilfontein referred to it briefly. I refer to the old slogan one comes across so frequently in trade and industry: “It is cheaper to buy than to train them.” We must try to put a stop to this sort of standpoint in the economy of South Africa. None the less there are companies in South Africa which are really involved in the training of their staff. They go out of their way to create opportunities for their staff. But there are also companies that adopt the standpoint that it is cheaper to buy a man on the market than to train him.
There are still too many employers’ organizations that evade this cardinal responsibility. When certain companies need expertise—and I am not speaking of specialized expertise—they merely go and buy the services of the necessary people on the labour market. If the matter has not yet been put clearly enough, this legislation now spells it out to every employer in South Africa. One can create management, but this also means that one creates leadership. In other words, the more management and leadership one creates in South Africa, the more job opportunities there will be in South Africa. The hon. member for Pine-lands referred to the unhealthy ratio of trained manpower on the one hand to the workers’ corps on the other hand, the ratio of persons with matric or higher education to those who are labourers. I concede to the hon. member that this figure is alarming, against the background—which has been repeatedly sketched in this House—of the historical and economic backward position of the Black people in South Africa. The figures at my disposal indicate that the ratio of people with matric or higher education to labourers in South Africa is 1:42. In the USA it is as low as 1:6 and in Japan, 1:15. After all, we know as a fact that to a very large extent the economic development of South Africa in the commercial and industrial fields, the agricultural and mining fields and the fields of health and technology rested in the past—and still does today—on the shoulders of the very small reservoir of the White community. It has been White expertise, capital and initiative which made this country the most progressive, here on the southern tip of Africa. Now people of colour in South Africa must be involved in increasing numbers in this situation and must help bear this responsibility resting on our shoulders. There is an increase of approximately half a million in the number of people entering the labour market annually. The hon. member who has just resumed his seat mentioned this and voiced his concern in this regard. I must say it certainly gives cause for concern.
I should like to raise two further points in connection with inflation and the gross national product and specifically as regards the training of labour in South Africa. It is surely a recognized economic fact that productivity, and the quality of that productivity, play a major role in inflation. South Africa’s low productivity index contributes largely to inflation. If, therefore, the private sector, trade and industry, join forces with the Government as regards training, retraining and in-service training, they can in the first place meet their own needs and shortages, and in the second place, help combat the problem of inflation. In the course of the Budget this afternoon the hon. the Minister of Finance again said that optimum utilization of available labour in South Africa is anti-inflationary. Only with better training can we thus help combat inflation. A very interesting fact was brought to my attention recently. The improvement in the gross national product in the USA, as a result of intensive labour programmes is really remarkable. The mere fact that in the USA more was spent on training between 1925 and 1956 than on anything else, resulted in their gross national product improving by 42% per capita. Between 1960 and 1980 they again gave specific attention to training and their gross national product rose accordingly by a further 40% per capita. One probably cannot ascribe this solely to training. The USA is a developed country, whereas South Africa is still only a developing country. Moreover, the USA does not have our non-White population, which constitutes 83% of the total population of South Africa. They have a more homogeneous community which they cannot in any way consider a problem. We in South Africa need only look at these figures to see of what use training can be to South Africa.
I wish to conclude by quoting a profound truth spelt out in the Wiehahn Commission—
That is why we have this legislation. It is the result of years of discussion. It is therefore also a pleasure for me to support the Second Reading of this Bill.
Mr. Speaker, I want to remind the hon. the Minister—he is at present engaged in a discussion with the hon. the Prime Minister —of a speech he made during the election campaign in the Roodepoort constituency.
There were about 60 persons present that night and the hon. the Minister made an interesting and good speech. He is one of the few Ministers who is prepared to talk openly with the public from a public platform and put the realities to them, even if those realities are not so acceptable to his own supporters. That evening the hon. the Minister spoke about the realities in the field of labour in South Africa. He made a plea for the public to accept those realities, to accept the fact that in future the economy in South Africa will have to rely to a much greater extent on the contributions of the other population groups. I thought it was one of the very best speeches from the Government side during the election campaign.
[Inaudible.]
It is a great shame that the whole of South Africa was not there to hear it, because then we would have fared far better in the election. One of the things the hon. the Minister mentioned—I think it was the very first time a Government spokesman mentioned this figure in public—was that by the year 2000 the White population will probably be no more than 4½ million. I wonder if the hon. the Minister still remembers this.
I know exactly what I said.
In any case the hon. the Minister will still remember that he made an appeal to all the young men in the audience and told them they were in fact the only people who could do anything to salvage the situation. If there is one thing the official Opposition has tried to achieve during the past few decades in its relations with the Government, it has been to try to persuade the Government to accept the realities of South Africa, however unacceptable they may be to the ideologists of our country and our Government. The acceptance of this legislation is a direct result of the acceptance of the realities of South Africa and those that apply to the economy of our country.
In his budget speech this afternoon, the hon. the Minister of Finance mentioned that over the past year or so South Africa has experienced considerable growth. We are all very grateful for this, of course. However, it is a great pity—and this is a fact—that that growth could have been much more substantial, and there is only one reason why it was not, and that is that when the country and its economy needed skilled labour, that skilled labour was unavailable. When economic conditions were such that South Africa had the opportunity to grow rapidly, while we had all the mineral resources at our disposal, while we had all the know-how, while we had sufficient labour and could obtain capital, one industrialist after another will tell you that the one reason why we could not develop any faster and were unable to exploit these favourable circumstances further was the shortage of skilled labour. This is, unfortunately, a fact.
I want to say in all friendliness that this is an indication of the failure of our country and of the Government to ensure that in those circumstances there was sufficient skilled labour in South Africa. I hope that when such an opportunity occurs again we will not have the same experience, viz. that our own failure to supply skilled labour will again put a spoke in the wheel of growth in our country.
An appeal has rightly been made by the hon. the Minister in the White Paper, and by speakers on the other side of this House, to the private sector to contribute their share towards the supply of skilled labour in South Africa. I agree wholeheartedly with this appeal and associate myself with it. However, there is something I want to say to the Government, and in this connection the hon. the Minister would do well to speak to the hon. the Minister of Education and Training. I wish to make an appeal to the Government, and point out that South Africa’s best efforts to provide skilled labour now will fail, unless it is seen to that with regard to the training of the Black children of South Africa, their further training is going to rest on sound foundations. What I mean by that is the following—and this is what one will find if one makes inquiries at the various training centres and the industries. If you talk to those people they will say that one of their biggest problems is the literacy level of the workers they must train further. It is very difficult to train a man technically if his literacy is not adequate to the situation. If the man cannot read, if he cannot write, it is difficult for him to study further on his own. This is a problem, and this problem results from the fact that as far as the Black population in South Africa is concerned we have neglected to give them effective education over the years. I just wish to state this standpoint very clearly and very forcefully to the hon. the Minister: The hon. the Minister must bring to the attention of the Cabinet that if he is expected to supply about five million skilled Black workers in South Africa over the next 20 years, he will not be able to do so unless the Government plays its part and ensures that the Black children of South Africa enjoy a sound school education. We cannot continue to spend R700 per annum on the education of a White child and R70 per annum on the education of a Black child. It will have to be seen to without delay that a much better school education is given to the Black child too, to give this hon. Minister the opportunity to prepare those people better for their work in the industries of our country. This is an absolute fact. If this requirement is not met, all the efforts being made by this hon. Minister now will be for nothing.
Then, too, I just want to mention this. Whereas we are now eliminating discrimination from the field of labour and whereas equal opportunities for training and employment are being created, I wish to say at this early stage that productivity must be the criterion by which a worker is measured, and not necessarily the mere fact that he has the qualifications for the job; not merely the fact that he occupies a certain position, but his productivity. In other words, I am now speaking of his direct contribution to the economy of the country, which must be the main criterion against which he must be measured and in accordance with which he must be remunerated. If we apply that criterion, if that becomes the criterion, we will find that many of the other problems which could be encountered in the elimination of discrimination will be solved with ease. We are saddled with a tremendous task, an enormous task. In less than 20 years South Africa will have to have in the region of six million skilled and trained workers, and fewer than one in 10 of those workers will be White. Approximately eight in 10 of those workers will be Black workers. For this reason I say to the Government that they have an enormous task. The Government and the private sector in South Africa have an enormous task ahead of them, and if they are to carry out that task successfully, they cannot still, at this late stage apply an apartheid process in the training of workers in South Africa.
I wish to make this appeal to the Government. If they are to achieve that goal, if they are to carry out that task, then they must get rid of apartheid; then they cannot think of separate training centres, training institutions for the different racial groups in South Africa. There are various reasons for this. The mere fact that you train different races together entails certain advantages.
The contact between these people while they are being trained, is valuable because it creates understanding, because it creates a spirit of co-operation and because the people learn to understand each other and to help each other. When they come to their place of work and there is a Black man and a White man who have done their training together, studied together and qualified together one will find that there is much better understanding between those people, that they will not be suspicious of one another and that they will work together to achieve their mutual goal. I want to make this very strong appeal to the hon. the Minister.
The legislation would be perfect if it stated clearly and unambiguously that in future all training will take place on a basis which will lead to there being no racial discrimination. Unfortunately the legislation still does not stipulate this. There is something the Government must ensure will not happen in the future. I refer to the case where Blacks, Coloureds, Indians and Whites are trained for a specific task.
Let us take as an example the technicians of the Department of Posts and Telecommunications. That department was one of the first bodies, and definitely the first Government department, which set the good example of training different races for the same posts. The technicians trained by the department are among the best qualified people in our country. The training is excellent; they are given outstanding training.
There one finds that Blacks, Coloureds, Indians and Whites undergo exactly the same training. They must comply with exactly the same standard, write exactly the same examination and gain exactly the same qualifications. When they eventually qualify they do exactly the same work but they are paid at different levels. The Coloured and Indian technicians are paid considerably less than the White technicians, while the Black technicians are paid considerably less than their Coloured and Indian colleagues. I wish to point out to the hon. the Minister that this state of affairs has a very unfortunate effect on the relationships between those technicians when they realize that although they received the same training, have the same qualifications and do the same work, the White technicians earn considerably more than the Indian, Coloured or Black technicians. I think the hon. the Minister must take steps by means of discussions in the Cabinet and pressure which he can bring to bear on members of the Cabinet to ensure that this does not happen again.
We now have the most recent case—that of the air-hostesses. The hon. the Minister of Transport Affairs says that this is a very positive step in the right direction, and I agree with him. Very probably he had a hard time convincing the hon. the Minister of State Administration. [Interjections.] The point is that he succeeded in convincing the Cabinet that in future, airhostesses may also be appointed from the other race groups. Now, however, they are spoiling the whole thing. Those people are also going to do exactly the same work, but the White air-hostesses will earn more than the Coloured, Indian and Black air-hostesses. In my opinion this ruins a very positive step.
In spite of those few aspects of the legislation which unfortunately do not come up to our expectations, we would like in the first place to congratulate the hon. the Minister on the legislation and wish him success in its implementation. I hope that, as may be the case with the other piece of legislation, it will usher in a totally new era for South Africa, an era of progress, prosperity and better relations between the races in our country.
Mr. Speaker, I want to convey my sincere thanks to the hon. members who have taken part in this debate and also associate myself with the congratulations addressed to those new hon. members on both sides of the House who have spoken for the first time. I want to say to them that they made a good impression and I think that the House can regard itself as being richer due to their presence and their arrival here. We wish them all of the best for the future, a pleasant stay here and sound contributions in the future.
The discussions today have been of a very positive nature and for the most part have concerned the legislation. A number of questions have been asked and I should like to reply to them. A great deal of advice has been given, and I shall take cognizance of that which is worthwhile. The rest we can leave aside for the moment and come back to it at a later occasion.
To begin with I wish to say that there are great expectations, not only in this House but throughout the country, as regards this legislation. It is true that South Africa is entering a situation in which it has in fact been caught off-side by the rapid growth of the country. This is not due to a lack of vision on the part of the private sector or the Government. I agree with the hon. member for Bryanston who said the Government would not allow itself to be caught out another time by such a thing as the consequences of a lack of trained manpower.
I just wish to provide some perspective as regards what is in fact happening in South Africa and what we are doing. What makes this country so different to the other comparable countries of modern times? Industrial countries in Europe have had years of development, something we have lacked. Their industrial development extends over periods of 100, 150 and 200 years; ours is a question of 25 years. These are the facts of this country’s position. Overnight we have been faced with a situation in which we have entered certain fields, not because the economy demanded it, but due to other circumstances, and I shall mention a few examples. Other countries have not been threatened, as we have, with boycotts and sanctions, and they have not had to take decisions overnight as we have, e.g. concerning the electronics industry. It has not been necessary for them to decide overnight to manufacture unobtainable goods themselves or to build a Sasol 2 and a Sasol 3 overnight. Since the necessary trained people did not exist, in contrast to other countries, we had to do two things. On the one hand we had to develop economically, and immediately begin in-service training of people. This meant that the economic development of the country progressed so rapidly that we were unable to keep pace with it. These are circumstances which no one can be blamed for. Indeed, thanks are due to the Government for the fact that under those circumstances we have to some extent made up the backlog. We have developed to such an extent that few countries can equal us, and we deserve appreciation for that. What are we doing now by means of this legislation? With this legislation we are saying that this process has not ceased, and if we continue to move ahead in the future, we must even now begin to foresee where the red lights will be flashing, and that is indeed going to happen in the future; it is just around the corner. If we say to ourselves that like other countries in the past we are going to try to keep abreast of development, we shall have to make a special effort. This special effort involves, inter alia, the legislation before this House today. It creates the machinery for this purpose. That is why we have come forward with legislation by means of which the State seeks to introduce incentives, furnish guidance, co-ordinate and combine all three sectors: The private sector, the employers and employees, and the State itself. In this sense I want to say to the hon. member that he was right when he said that there was a wide gap. But I also want to tell him that with the best will in the world there are few other countries that could emulate us. I also wish to agree with what the hon. member had to say about the issue of relations, particularly as far as numbers are concerned. It is true that I spoke in that constituency, and I now wish to repeat what I said there and in this House.
We have reached a stage at which the contributions of the developed section of the population, the ones who are in the leadership positions and who have spearheaded the development, in other words the White section of the population, are now being limited by their numbers. The Whites number approximately 4½ million. Our statistics indicate that that section of the population does not grow at the same rate as other sections of the population. For that reason—and I have said this in the past—we now simply must train more rapidly those sections of the population which in the past we did not train rapidly enough. It is obvious that we must do so. That is why we have this Bill before us.
The hon. member made two further points. He said that we should understand that when the people have been trained there cannot be two or three levels of remuneration in the private sector. I want to point out that we are dealing with industrial training. We are therefore concerned with the industries. In terms of the Industrial Conciliation Act there is no such thing as two or three levels of remuneration for the same kind of work. Accordingly this process is already in progress there. I do not wish to say anything at this point as regards what is being done in the State sector in an effort to narrow the gap. That is not at issue now. However, we are dealing here with the Industrial Conciliation Act, and that is already built into this Act. The target for the future is also, secondly, to link skills to productivity and to link productivity to remuneration. I think that in the past we in South Africa made the mistake of demanding too little from the workers and employers and in this regard have lagged behind and been too generous. When I say this it may sound ugly and dangerous, but we must follow the example of the successful countries overseas which have not simply added on to salaries but have also demanded a quid pro quo. I do not think there is anyone in this country who would disagree with that.
I now want to deal with certain other questions that have been put to me. The hon. member for Pinelands asked whether employers who pay levies in terms of industrial conciliation agreements are also required to pay levies in terms of clause 39. What is the aim of our legislation? The aim is to obtain contributions from those sections of the employer community who do not themselves contribute towards the training of people. [Interjections.] That can happen, but the Bill enables me to impose levies for only certain categories of employer. For example, I could impose such levies on those employers who do not already pay levies. Clause 39(2)(e) also enables me to exempt certain categories of employer from payment of levies. We shall therefore try to implement this in such a way as to obtain a contribution from those who do not try to make a contribution of their own accord. I think that this is the golden rule which will be applied in future.
The hon. member also put a question to me with regard to clause 33 of the Bill. He asked whether clause 33 prohibited training in labour relations by unregistered trade unions. As it reads at present, it provides that any group of people may undergo or conduct training by way of training schemes. There is only one requirement, viz. that if anyone undertakes to train people—this shows how important we regard training to be—he may not do so unless he registers. There is a good reason for this. What sort of chaos would one create in a country if one simply had people providing training left, right and centre, or maintaining that they were providing training, and of course collecting training fees, setting standards of training and issuing certificates of training without anyone anywhere ensuring that there was order in the situation? Now, it may be maintained that it is not set as a requirement that it should be a registered trade union, that it is set as a requirement that it must be a registered training scheme in order that control over it may be exercised. I do not think that ought to be a problem. However, we cannot depart from that either because we should then end up in a chaotic situation. We would create chaos if we simply let things take their course so that everyone who wanted to provide training could do as he wished.
The third question the hon. member asked was whether the provision of clause 31 of the Bill would have the effect that the existing tax concession with regard to training expenses would be 42%. The aim is really that there should be tax concessions so that people can at least recover their training costs. That is the incentive which the State provides. Hon. members will also be aware that this incentive goes further than that, that in fact double the training costs be recovered. In principle this is so. The answer is, then, that this will in fact be so. However, the reply to the question as to whether it will only be 42%, is in the negative. The fourth question which the hon. member asked was whether all technical education should not be conducted by the Department of Manpower and whether the National Manpower Commission could not investigate the matter. In this regard I wish to associate myself with the hon. member for Virginia. I want to thank that hon. member for the very good speech he made yesterday in this regard. I believe he adopted a valuable and illuminating approach to the matter. Hon. members would do well to read what he had to say, including what he had to say about the question of education in this context. I just wish to state clearly that this department is concerned with training. Education is the major and important action and task of the State, a task to provide education from the primary to the ultimate stage. We do not interfere in that regard. It has never been the intention to take that function over from the State.
The hon. the Minister of National Education is not in this House at present. However, I wish to state clearly that I know that if he had been here now and he were to air his opinion, he could tell us how concerned he is about the situation and how he is going out of his way, how the Department of National Education is going out of its way, to review the whole field of education. In fact, an extremely important commission has been appointed—the De Lange Commission. The documents are already being processed and I hope that everyone will enjoy the benefit thereof shortly. Therefore, what the hon. the Minister of National Education is doing covers just as wide a field, if not a wider field, than that which we are trying to cover here. Therefore this task is being attended to, and I also wish to assure hon. members that not only the two Ministers concerned and their departments, but all bodies, will in the future correlate and co-operate fully with one another so that each can supplement the others. After all, it is true that the Department of Manpower must base what it does on what is provided, viz. the foundations laid by education. This is very important. Those foundations laid by education are vital. The hon. member who spoke just before I did also referred to this. Other hon. members, too, referred to this. The important thing is that we in South Africa cannot make progress in the field of training if that training is not based on a very sound educational structure. This is of the utmost importance, and that, too, is why we are trying to include it.
I should also like to refer to the hon. member for Turffontein, an hon. member who is now coming back to this House for the second time. I wish to congratulate him on his speech, in which he also referred to this matter. He quoted figures. It is very true that if one wants leadership there must be a relationship between top level manpower, viz. leadership, and the lower levels. The hon. member also quoted figures relating to the situation in other countries. It is very interesting to consider them. If we want to achieve real industrial development it must be our aim to increase that leadership cadre at the highest level and train as many people as possible to fit into that group. Therefore I want to point out that the debate conducted here about this matter was a very fruitful one. I want to give hon. members the assurance that there is very good cooperation. I do not believe, therefore, that we should argue about whether the two departments in question should amalgamate or whether one should take over one of the other’s functions. All functions are extremely well handled by the department involved. All that is necessary is the cooperation of everyone in this country.
Just remember, co-operation does not only mean that this House should discuss it; co-operation means that the people out there must also grant their co-operation. Sometimes our own people leave us in the lurch. And what do our own people do? Our own people do not help our children to press on to the end and develop skills. They are taken out of their places of training too soon because there is too much money in circulation in the country. They get too much money at an early stage. We cannot keep them and take them to certain points. I also want to agree with the sentiments expressed to the effect that we should look at our universities too. There is also a kind of snobbery developing in South Africa in that people have to go to university. That is why our universities are full of people taking certain courses which the country does not need. At the same time there are so many fields which the country vitally needs and which are not offered. Therefore everyone has a contribution to make. The public at large also has a contribution to make. I think that we must say to them from these benches, the parents and also the public, that they themselves should for once take a look at their own positions and make a contribution, and I wish to do so here and now. I say this in reply to the questions put by the hon. member.
The hon. member for Durban North also asked a few interesting questions. Firstly, he asked whether consideration would be given to making concessions or incentives available for literacy training. As far as the concessions are concerned, in the spirit of what I have just said, the hon. member will understand that this is of course a matter which the Minister in question will have to clear with the hon. the Minister of Finance. I do not wish to speak on his behalf, but the sentiments of that other education and training leg concerning this type of contribution are precisely those of this side of the House. In any event, the hon. member can rest assured that the training function is indeed being carried out effectively and that that hon. Minister will go out of his way to do anything that is necessary.
The second question asked by the hon. member was whether the National Training Board would not be control-oriented. No, we cannot do that. That board is an advisory board. It is going to have its hands full advising, laying down guidelines and getting the private sector and the public sector together in order to do the things that must be done on the road ahead. Therefore it may not begin to exercise control functions. That is what the department is there for, and it can do that effectively. We should rather berate the Minister or the department if they do not do their share. However, we must not allow that board to attempt to perform a control function. That is not its task. The way in which the advisory body will be able to perform a control function is when it gives approval to the establishment of schemes and approves their courses—that kind of control. That it can indeed do. However, it must not try to exercise a further control function. Nor do I think that was the intention, and no one who has been concerned with the matter nor with the drafting of the legislation nor the drafting of the commission had any such idea in mind.
This is a subject which this House will have to come back to. We can discuss the matter again this year, next year or the following year. I therefore do not think that the last word has been said because suggestions are constantly being made. However, that will remain the standpoint of this side of the House unless we have to change our standpoints for good reasons. I cannot, however, see us being wrong and having to change our standpoint.
The hon. member also asked that levies be imposed on employers who do not train. It is true that there are far too many employers who, as the hon. member for Turffontein mentioned, say: “It is cheaper to buy them than to train them.” We must get that out of our system. However I must add—and I say this in all fairness—that over the past year a phenomenal change of heart and change of attitude have been visible in this sphere. Due to the influence of the “Manpower 2000” promotion project, employers are now themselves coming forward with plans for training and they are also shaking off those things of which we accused them in the past. I have only the highest praise and appreciation for the way in which employers are now coming forward to do their share. However, there is still much to be desired. There are still too many people who are shirking, and it is they whom we are really speaking about, viz. those who are not yet doing their share. It has been asked what provision will be made for the selection of unemployed who may undergo training. The Professional Services Division of the department will itself carry out that selection. We intend training unemployed people with the necessary talent, because if we do not do so we shall get nowhere. As hon. members have heard, the hon. the Minister of Finance announced today that he was going to vote a substantial additional amount. We shall therefore be able to undertake a few things. However, unemployed people will have to be trained, and it is understandable that they will have to be selected. Their aptitudes, interests and background will have to be noted, and the department will see to that.
The hon. member also asked when the sixth report of the Wiehahn Commission would be released. I hope that this will be done before the end of the session. It is being processed at the moment. I think that those are the most important questions asked by the hon. member.
I believe that I have now replied to the most important questions asked. Of the newcomers who made speeches, the hon. member for Stilfontein asked an important question. He made representations in connection with the mines. What he asked for today has also been asked for on previous occasions by the mines, and I am pleased that he touched on the matter again. In my Second Reading speech I indicated that our attitude towards the existing situation has changed. To begin with, the mines were totally excluded, for a good reason. The reason was that they were able to obtain concessions in a different way which ordinary companies could not obtain. However, we can proclaim by way of regulation that the mines can also obtain concessions and the Minister, if he is a sensible Minister, will only do so after consultation with the Minister of Finance and the Minister of Mineral and Energy Affairs. I can give the hon. member the undertaking that I shall discuss the matter in the immediate future with the Minister of Finance and the Minister of Mineral and Energy Affairs, and will consider how we can begin to move in this direction. I thank him for the question he asked.
Question agreed to.
Bill read a Second Time.
Committee Stage taken without debate.
Third Reading
Mr. Speaker, I move, subject to Standing Order No. 56—
Mr. Speaker, I do not want to let this opportunity pass without making just a few brief comments at this Third Reading stage of the debate because I believe that this is a most important piece of legislation. This Bill, which is now entering upon its final phase in this House, seeks to co-ordinate—and obviously there are enormous benefits flowing from this—and rationalize, something which I think we all accept is long overdue. The fact that we dealt with the Committee Stage of a Bill of so many clauses without any comment whatsoever is, I think, a tribute to the hon. the Minister and his department. I feel therefore that there is a great deal of encouragement to be had from this Bill and I believe too that the work we have done over the past few days and that the department has done over many months is going to make a tremendous contribution to labour relations and the economy as a whole in South Africa. I want to wish the hon. the Minister and the department well with this new development and I also want to direct a special word to those who will serve on the National Training Board and assure them that we give them our full support and look forward to the work they are going to be doing. I want to issue only one small warning. With all the development that is taking place in the Department of Manpower and with all the various commissions that are being set up, we very much hope that we are not going to be hit by Parkinson’s Law in that with so many chairmen, so many commissions and so many divisions all we are going to be doing is talking and not actually getting down to anything. I am not saying this in a spirit of disagreement. We are all very much in favour of this measure but a bureaucracy can bring about its own problems, so I hope very much that the hon. the Minister will ensure that that does not happen and that matters do not go from one board to another instead of moving right out into the field where they belong.
I should like to draw attention to one aspect that did not have much discussion devoted to it during the Second Reading debate and, of course, not at all at the Committee Stage. I am referring to clause 30 which deals with the training of trainees. Here I believe the Bill provides a very useful service. The intermediate technology offers tremendous scope for South Africa in the future. Furthermore, the training of trainees as defined in the Bill before us, with specific reference to the first part of clause 30, is a very important part of the new legislation. It can make a contribution to offsetting unemployment. For too long we in this country—and this has also been the case in many other parts of the world—have been so concerned with the training of the experts that we have forgotten about a large number of people who may not be able to reach the very top of the ladder but who can perform a most useful and indispensable function in between. This intermediate technology and the opportunity to use people who may not have the necessary qualifications but who certainly have the common sense—which is in very short supply everywhere at any time—is a very important development indeed.
Finally, I should like to say one last word about the proposal I made during the Second Reading debate. I should like to explain why I made that proposal in the first place. It is clear to all of us that technical training, technicians and the world of technology is coming more and more to the fore. We are going to need so many hundreds of thousands of workers in this field and so much depends on whether or not we have the actual supply. Unfortunately, we are in a state of flux at the moment, not only in regard to labour relations and training but also in regard to education itself. What disturbs me is that whilst our intentions may be very good and we may have it all on paper and have all the necessary legislation, if we do not have the raw materials in abundance and if we do not have it trained from the very start—educated, if you like—to such a level that it can benefit from training, we are going to be in very severe trouble indeed. We will have all the sophisticated machinery but we will not have the people we can train to those various levels. While of course there must be different departments that are all doing their different jobs and there must be co-operation, I am convinced that there must be a far greater emphasis on technical education at our technical schools. There are some technical colleges which are half full. They are not being used as much as they ought to be or could be used. That is an area where there must be the closest co-operation between the hon. the Minister’s department and the Departments of National Education and of Education and Training. If we do not have that co-operation there will be an enormous gap.
I should like to congratulate the hon. the Minister and his department once again on this excellent piece of legislation. We in the official Opposition will support the Third Reading without reservation.
Mr. Speaker, on behalf of the NRP, I should like to say that we are delighted to have reached the Third Reading stage with no amendment of this legislation. I would, however, like to return to a very important aspect which I have already raised with the hon. the Minister. I thank him for replying to it at the end of the Second Reading debate. This was the matter regarding the literacy training and the question of fiscal incentives, tax concessions and reimbursive allowances for companies or training centres which are prepared to provide literacy training. We are very disappointed that the hon. the Minister did not see his way clear to motivate the case for fiscal incentives for literacy training in industry to the hon. the Minister of Finance. I should like to illustrate why this is so important.
Business suspended at 18h30 and resumed at 20h00.
Evening Sitting
Mr. Speaker, I was saying just before the adjournment for supper that I believed that it was unfortunate that the hon. the Minister of Manpower had not seen fit to change his attitude towards the question of literacy training. I should like to tell the hon. the Minister why we believe that it is absolutely imperative and very important that his department should be concerned with the question of literacy training by industry, and that there should be tax incentives, fiscal incentives for industry to undertake literacy training.
Ask the Minister of Education and Training how many people he is training in industry.
I should also like to say to the hon. the Minister that we fully appreciate the fact that it is the Department of National Education and the other department that have to see to the literacy training of people under the age of 18 years. However, there is a massive volume of adults, particularly Black adults, in industry above the age of 25 years. These people will never go back to school and they are going to be prohibited from undertaking further technical training because of an inadequacy in their formal training. If there is no motivation on the part of the hon. the Minister for literacy training to qualify on an equal basis with technical training in terms of the provisions of this Bill then I am afraid that we are going to suffer three severe consequences of that decision.
In the first instance, Sir, we are going to be creating a pool of unemployment which will be considerably greater than the Black unemployment we have in South Africa at the moment. The reason for this is very simple: The new young men leaving school who have had the benefit of a Std. 6, 7 or 8 education are going to displace these workers within a very short period of time. The reason for this is very simple: It is because a man who leaves school in a new generation of education is going to be a man with a Std. 6, 7 or 8 education who will be admirably trainable for a highly skilled position. He is not going to be an unskilled worker and the industrialist will take advantage of this training and this potential to mechanize his production line. The opportunities for unskilled labour will therefore decrease geometrically every year. This means that there are at least three million to four million Black workers who at the moment have only a six year formal education, namely Std. 4, who will be displaced within 10 years from now from their present position. This will happen unless we are able to give them a modicum of formal literacy training which will enable them to become qualified for further skilled training.
Secondly, Mr. Speaker, I believe that the objective of this Bill, the primary objective, which is to provide industry with the infrastructure for the training of unskilled workers to enable them to perform semi-skilled and skilled work will not in fact be attained to the maximum potential inherent in this Bill. Therefore, we shall probably continue to suffer a chronic shortage of skilled workers in South Africa with tremendous economic, political and social consequences.
Thirdly, I believe that it would be most unfortunate if we ignored this demand for literacy training in industry because it is going to facilitate and expedite the process of job reconstruction. If we take a man who has had only six years’ formal education and wish to enable him to fulfil his aspirations, in terms of the quality of his life, which is a consequence of the remuneration he receives for the job that he does, then we have to use these people or otherwise we shall once again be creating massive unemployment. Unless we do this, and we restructure the jobs, we would in fact be preventing the man who does not have higher education from actually remaining in employment.
I wish to make an appeal to the hon. the Minister to seriously reconsider his attitude towards literacy training for adults because I believe that the potential in this Bill will not be achieved unless we cater for the literacy training of those adults who are in industry at the moment and, in particular, the Black adults. These are the men who are unlikely to go back to school.
Ask the Minister of Education and Training what he is doing about it.
When his Vote comes up for consideration we shall ask the hon. the Minister of Education and Training what he is doing about this. However, he can only do something about the next generation. There is nothing he can do about the three million to four million Black workers who are presently employed in industry.
I should like to say to the hon. the Minister of Manpower that I believe it is imperative that we solve this problem and maximize the potential that is inherent in this Bill.
Mr. Speaker, since we are now approaching the end of an interesting and good debate, a debate which is actually a milestone, I want to say here—you yourself have seen the extent of the legislation and how much work has been put into it—that my appreciation also applies to the officials who were responsible for drawing up this as well as the previous Bill. I wish to express my sincere thanks to them for all the work they have done in preparing this legislation. The credit should really go to them.
Since we have now come to the end of this debate, we now want to examine the effect of the legislation and state what our ultimate goal is. In the first place I want to say that we have now come to the point where we have created an instrument, viz. the National Training Board. When this Bill has been passed I shall go out of my way to have this training board established as soon as possible. We shall establish it just as quickly as is technically possible. I also want to say in advance that in the constitution of the board we shall look for expertise and that we shall lean very heavily on the expertise which is also available in the private sector. I shall ensure that the important sectors which in our opinion could make an input, will be involved in it. I shall also ensure that the necessary machinery is created for the board so that it may commence with its activities as soon as possible.
Having said that I want to come back to the argument of the hon. member for Durban North. I can understand why he feels so strongly about literacy training. I used the argument myself a moment ago that one cannot build a strong structure on a foundation of poorly trained people. That is why it is essential to provide training. But it is not the task of this department to take over the activities of another department while that department is performing those activities competently and is aware of their importance.
That Minister cannot provide them.
I said a moment ago that there was a comprehensive investigation in which education matters were examined on a very wide basis and of which we shall shortly have the benefit. What must we do if we are to do as the hon. member says? Must he and I do the work of the board we are creating? After all that is what we are creating the board for and in that way we are achieving the ideal which has been envisaged for this country for so many years. One of the first things the board will have to consider is the scope of its actions and where the weak spots are. If anyone has to examine these matters, it is that board. If it has to negotiate on the backlog, it will have to do so as quickly as possible. To tell the truth—and I want to say this here now—the National Training Board would not be complete if it did not also include academics who could make a contribution from that side. Consequently we shall include in the board these people who have to examine that aspect. We are going to include the correct people to undertake that task to which the hon. member referred when we set up the instrument we are creating here. When we meet here again next year we shall probably be in a very good position to be able to judge whether we may expect early results. I want to ask the hon. member that we should express our confidence in the board which is going to be established in advance. It will, of course, take cognizance of what has been said about it in this debate and see what the desires of this House are. Let us leave the matter at that now. I do not think we can get a better instrument with which to entrust the task to do the things which the hon. member wants than this particular board which he and I have helped to create here.
Question agreed to.
Bill read a Third Time.
Clause 1:
Mr. Chairman, I should like to refer to paragraph (p) of clause 1 which contains the definition of “trade union”. In part it reads—
I want to ask the hon. the Minister whether, if we take the definition as it stands, it could not well apply to organizations and associations other than trade unions. A teachers’ association, for example, consists of a number of employees in a teaching undertaking, and so on. Other examples are public servants and the Nursing Association. I do not have any amendment I wish to move but it does seem to me that this definition is very wide. I should be perfectly happy if the hon. the Minister would undertake to have a look at this with a view to amending it, if necessary, at some other time. This definition does seem extraordinarily wide to us and could consequently be interpreted along the lines I have suggested.
Mr. Chairman, I can see that one could interpret it in that way. I just want to tell the hon. member that we who examined this matter had no problems with it. But if it does cause problems in future we shall, of course, rectify it.
Clause agreed to.
Clause 5:
Mr. Chairman, during the Second Reading debate I tried to draw the hon. the Minister’s attention to the fact that, although there is now no mention of race in this Bill and while there is no longer any prohibition against the formation of multiracial unions without Ministerial permission, it nevertheless seemed to me that, despite the explanation given in the White Paper of the connotation of the words used in this clause, it was possible that this was a sort of back door through which exclusive racial interests could be served by virtue of the fact that a union could excise from a big body of workers that section of workers who in fact belonged to one particular race or, perhaps, practised one particular occupation in an industry which happened to be made up exclusively of White workers. I wonder if the hon. the Minister is not at all worried that this may be a way of encouraging multi-unionism and that it may be, as I have said, a back entrance whereby one will once again have uniracial unions, which I believe would lead to a great deal of racial conflict in South Africa.
Mr. Chairman, after the hon. member had made the remark the previous time, I looked up this Act again. What is more, we discussed the matter. I want to put it to the hon. member that I do not see the matter as she does. There are a variety of interest groups. I think that I have referred here before to an example of this which we came across in Paarl. There are, for example, people who have been manufacturing the barrels for the wine industry for 13 generations now. It is a family business, and they do nothing else. These are Coloured people who have to be protected.
The fact is that we have trade unions, some of which are 60 or 70 years old, trade unions with White and Coloured members, who on their part can provide protection without even seeing the racial difference. They do not see themselves as Whites or Coloureds. They are all one group together. Consequently we do not interpret the wording of the provision in that way at all. Nor was that the original intention. We merely refer to “interest groups”. An interest group could be a clerical group. It could also be a group consisting of all the short people. [Interjections.] It could even be one of women. [Interjections.] Yes, even little women. But we are now trying to allow the emphasis to be placed on “an interest group”. That is why I said in my Second Reading speech that, since in this legislation as well, which deals with industrial councils, we find no reference to race, we should not at this stage adopt this approach to the matter particularly since the absence of the reference to race is being extended to this area. We must not do it in this way. If I were to do it in such a way I am after all being dishonest towards this House, and the first people who are going to trip me up are hon. members of this House. This is correct. Is this not correct? I am sure that the first people who are going to trip me up, people who are going to quote my own speeches in Hansard to me, are going to be certain hon. members in this House.
In other words, I am wrong.
Yes, you are always wrong in any case. [Interjections.]
Mr. Chairman, I think that we all appreciate the problems which the hon. the Minister put to us here. However, this matter is not only of importance as far as race or colour are concerned, but also as far as sex is concerned. We could easily have the situation in which a particular trade union excludes women. Consequently I merely wish to request the hon. the Minister to be aware that a possible abuse of these powers may occur in the further development of this situation.
Mr. Chairman, hon. members will recall that when we discussed this legislation some time ago in this same House—it was last year—I said that this was the reason why we were going to establish the National Manpower Commission. Before we introduced this legislation they gave us the undertaking that they would examine every problem which arose from this legislation and which would, with the approval of this House, be referred to that commission and would in return report back to this House. We consulted the commission in this regard. Hon. members, too, may approach the commission with this matter, for we established the commission as a permanent body which has to examine legislation as well. Consequently, since we are now creating an instrument of this nature I do not believe that we need argue the matter here. Hon. members may bypass me and go to the commission if they are dissatisfied. Hon. members can tell the commission that they are not satisfied with what I am saying and that they want the commission to investigate whether what I have said is correct. That is why I cannot see any danger in this.
As far as the question of sex is concerned, it is, of course, true that in some circles there is a strong feeling among women in this country …
[Inaudible.]
Yes, some of them even think that in all fairness and for the sake of justice they have to take over everything. [Interjections.] But the fact of the matter is that it is possible that it is not only the question of sex which could be of importance, but that even such matters as religion could enter the picture. But I maintain that the intention is that if things do not work out we now have an instrument to help us. I am not only saying this now; I said this here as long ago as June last year.
Clause agreed to.
Clause 10:
Mr. Chairman, clause 10 deals with the question of political involvement on the part of a trade union. The proposed new section 8(8) bars such a union or organization from granting financial or other assistance to political parties. We have no problem with this, except that if one looks at the principal Act, one finds the following definition in section 8(7). It is quite brief, and reads as follows—
- (i) the nomination of candidates for election to any legislative body established by any law or;
and now we come to the important part—
- (ii) the influencing of public opinion to support or to oppose any such association or group.
Where the hon. the Minister now introduces a new section, as the Bill does in clause 10, which deals with section 8, it could mean that for example Tucsa, the Confederation of Labour, Fisatu or any other group of that kind, could not be supported by its own member associations. That is the interpretation that we have of that, and that is why I should like to have some clarification from the hon. the Minister. Otherwise it will be very difficult to accept this clause as it stands.
Mr. Chairman, I see what the hon. member for Pinelands is aiming at, but a political party is specifically that party which appoints candidates for a legislative body or which wishes to influence people in the community to support it or oppose another party, in the representative context of political activity and not in the context of trade unionism. I think it would be rather far-fetched to want to read the provision in this way. I do not know whether the hon. the Minister wishes to have the definition scrutinized again, but I really think that the hon. member need not be concerned about it.
Mr. Chairman, the problem is a technical one. We on this side of the House will probably support the principle that trade unions shall not be permitted to give their support to political parties. But what we are concerned with here is not that principle. We are concerned with the principle of the definition of a political party in the original Act. Despite what the hon. member for Randburg has said, the second part of the definition in section 8(7) does not deal with the ordinary definition of a political party. That is a problem and I know that the hon. the Minister cannot rectify it at this stage, but it seems to me that the problem is situated in the definition of “political party” in the Act itself and not in the Bill. I am stating the problem as we see it, viz. that that definition covers aspects in the second part which in essence, despite the use of the designation “political party”, really has nothing to do with a political party.
Mr. Chairman, I want to concede at once that the consideration of this definition gave us a great deal of trouble. We had long arguments about it. What do we actually want to achieve? The goal we want to achieve is that trade unions must occupy themselves with the type of activity for which they were established, viz. the interests of their members. It could happen that in pursuing that goal they could do things which made it appear as though they were moving in a political sphere, for they are dealing with a Minister, with a policy, and with conflicts. This is the way things are, and for that very reason it is very difficult. We wrote the definition as it reads at present, intending to interpret it in this way. If it were to happen that it would appear, to the one side or the other, that this definition was either too wide or too narrow, it is the duty of this House to re-examine it.
To tell the truth, I have, in the meanwhile, personally requested the chairman of the National Manpower Commission to have a look at this definition again, specifically to ascertain whether the definition as it reads at present is going to have the effect we should like it to have. After all, we know the trade unions. If we were to write the definition in such a way that trade unions feel that they are completely restricted, then it would really cause trouble, and this we do not want. We are sensitive to this matter, but I do not think that we should tamper with it now. Let us leave it as it is. We can look at it again in future. I do not think we should go further than we are going with it now, but we must try to set reasonable bounds to it according to the way we see it now. We can no longer say that we shall rectify it in the Other Place. That is why I say that we shall come back to this House with it if necessary. We can then argue this matter again in future, but for the moment the department and I are satisfied with the wording as it stands.
Mr. Chairman, I am absolutely sure that our point is getting across. Clearly we are unable to move an amendment to the principal Act, and we appreciate that. The second part of the definition of a political party in section 8(7) of the principal Act reads—
We should like the hon. the Minister to look at that definition in relation to clause 10(c) and, of course, the consequential paragraph (d).
Mr. Chairman, I shall do so, but let us leave it at that. In order to avoid misunderstanding I want to tell the hon. member that we cannot phrase a definition in such a way that we allow those people who specifically want to use trade unions for political purposes to do so. I am telling the hon. member in advance that I shall not be in favour of that kind of thing.
Clause agreed to.
Clause 12:
Mr. Chairman, in my Second Reading speech I raised this matter under clause 12(c) which provides for the substitution of section 11(4). It reads, inter alia—
When I was referring to this the hon. the Minister interjected. I think there was a misunderstanding between himself and myself and I want to make it quite clear what our argument is. We are not for a moment suggesting that the head office of any employers’ organization or trade union should be in a foreign country, for example, in Maseru, in Maputo or any other capital or country from which we are drawing substantial labour, or indeed Transkei. I am however arguing that it seems to us unreasonable to suggest that the head office should not be—it may never happen; we are talking in terms of principle—in any of the homelands. Therefore I should like to move the following amendment—
This will have the effect of making it possible for a head office of such a trade union or employers’ organization to be in one of these areas if so desired.
Mr. Chairman, if the hon. member for Pinelands were to look at the circumstances with regard to the administration of labour legislation in the self-governing States he would find that, inter alia, there is a provision in the 1971 national States constitutional legislation, viz. that our legislation applies only up to the date of the establishment of the Legislative Assemblies of the self-governing States. Any amendment which we were to adopt here after that date would be invalid and unenforceable in the self-governing State. Apart from that they have the power to make their own legislation and we cannot legislate on their behalf. In the sense that we cannot make such legislation, we cannot administer it either. If the hon. member examines the first schedule of the Constitution Act of the Black States he will observe that labour legislation, with the exception of the Workmens’ Compensation Act and the Unemployment Insurance Act, has also been placed in their hands and taken out of ours. If the hon. member were to examine the matter in that light he would understand that we do not in the first place have the authority to legislate for them in their country and that, in the second place, we cannot in any event make our administration applicable there. We are not free to administer our laws in their territories. Under those circumstances I cannot support the amendment.
Mr. Chairman, the hon. member for Randburg actually helps my amendment quite considerably by looking at the matter in this way. If it is as he says—and I accept his interpretation—that we have no jurisdiction over labour legislation in a homeland, what on earth will happen if a homeland decides that it wishes to introduce legislation which is at variance with our own? For example, what if it decides, in consultation with a trade union which draws a great deal of its membership from that particular homeland—let us assume a trade union for the moment, because I think that is more likely—to place its head office in its own territory? Are we then suggesting that we have the incredible situation that we say the head office cannot be there, whilst they say it must be there? Surely it strengthens my argument that we should allow for the possibility of that head office being in that particular homeland, should it be desired by both the trade union and the homeland concerned. It seems to me this involves a basic principle. Either a homeland remains part of South Africa until it takes up independence, if indeed it does, or it is outside our jurisdiction entirely, and then we really are in a chaotic situation.
Mr. Chairman, the hon. must take cognizance of the fact that there are such things as self-governing States and that no two bodies can have the same jurisdiction. They have the power to make laws there. In terms of legislation of this House we do not have the power to make laws on any aspect we have transferred to them. Nor would we be able to enter the territory of such a self-governing State to administer those laws. We have laid down certain requirements in this legislation before us in connection with matters which the department must administer at the head office. If we cannot enter the self-governing State and administer it there, there is no sense in the head offices being situated there. For the purposes of this legislation one would, therefore, have to argue that a trade union is a trade union in South Africa and when a trade union as such functions here, it must accordingly be registered here.
Say that you are referring to South Africa.
I am referring to South Africa, excluding the existing self-governing States. Consequently we argue that while it is functioning here, where this Parliament has jurisdiction, it must also establish the necessary head office where it can comply with all the requirements of the law with which it has to comply.
Mr. Chairman, I believe that at least our amendment eliminates any misunderstanding the Minister may have had in respect of our argument that it would be possible to establish a head office in an independent territory. It is very clear to us that the head office must be established in the Republic. At the moment there is logically no reason whatsoever not to regard a so-called national State as part of the Republic. To do so, in my opinion, would be an injustice to those national States. [Interjections.] They are part of the Republic until they become independent. Quite apart from that, this provision is not concerned with the administration of the legislation. It is merely concerned with the location of the head office. Perhaps I could remind the hon. member for Randburg that if we had to take his argument to its logical conclusion the national States, in terms of the power they have, may in fact make their own laws applicable to their citizens outside the national States. Now hon. members can realize the degree of chaos we would find ourselves in if any of those national States were to adopt legislation, in terms of their statutory powers, to regulate labour affairs within the Republic and outside the national States on behalf of their citizens. [Interjections.] Hon. members must examine that Act, for it specifically provides that legislation which is passed by the Legislative Assemblies of the national States, may be made applicable extra-territorially to the citizens of those national States. There is no doubt about that. If this were to happen—if I had to take the argument of the hon. member for Randburg to its logical conclusion—we would have complete chaos. But this is not the intention. This is only concerned with the head office. We are not prepared to exclude the national States from the Republic in this way as long as they form part of the Republic. This is what is at issue here.
Mr. Chairman, as far as the arguments which have been advanced are concerned, I agree with the hon. member for Randburg. We must also be practical. The fact of the matter is that the legislation must be administered from South Africa. As has been said, we enter into bilateral agreements on the movement of labour. We shall try to maintain the very best relations in future between ourselves and the Governments in question. However, all the national States are on the way to independence. We must administer an Act and be able to issue an instruction in connection with a trade union. Surely it would therefore be foolish to aggravate the position for the administration of the legislation by having the head office in a place other than in South Africa where one can exercize full control.
It is inside South Africa.
That is why I cannot accept that argument, for it is not in the interests of good administration and, quite apart from that, it is wrong to have the head office of a trade union outside an area over which we have full jurisdiction. We do not have jurisdiction over a neighbouring State which can become independent. Hon. members are saying that the head office cannot be in Bophuthatswana in terms of their motion, but it could be in the neighbouring kwaNdbele. But suppose kwaNdbele were also to become independent like Bophuthatswana. We shall then be faced with a position which will have to be reconsidered by South Africa and by the trade union. That is why we believe that if we want to make a sound Act, we have to make a sound and correct one from the outset.
Mr. Chairman, it is clear that we have here a basic difference in interpretation and approach which goes far wider than this particular clause. The hon. the Minister states that we must be able to control and have access to the head office of a trade union or, for that matter, an employers’ organization. When, however, the hon. the Minister suggests that, for example, kwaZulu is not part of South Africa, we part company. The fact of the matter is that we have officials in other fields working in all of these States, for example in education, even though this State has jurisdiction over its educational policy and the education department. We have a very, very close link with them. We do not say that in such a case it is impossible for our officials to go there; they are there. Our labour officials can make the same approach as well. I think this is a fundamental fact from which we cannot move away lightly. I do not want to get involved in a major political debate on this issue because this is not the time and place to do so but the fact of the matter is that this clause, as it stands, is in contradiction to our basic political philosophy. Therefore it is impossible for us to accept the clause as it stands and that is why we must amend it, not because we want to be difficult but because the fact of the matter is that we are talking about South Africa. We cannot anticipate that every single homeland is going to take independence and therefore have a nice little provision for it.
They can [Interjections.]
But the point is that there are certain homelands which have stated categorically that they will not. [Interjections.] At this stage one cannot anticipate that, but we can always amend legislation. I assume that this Parliament will be meeting from time to time …
I am not so sure.
Neither am I. The fact of the matter is, however, that this is part of South Africa. I can only visualize an enormous conflict growing because more and more workers are going to be involved and more and more people are going to join the trade union movement. If there is a decision taken in one area to the effect that they want their head office in their own state, does it always mean that the legislation in this Parliament takes precedence over the legislation in that particular homeland?
Of course.
That hon. member says “of course”. If that is the case, it is nothing else than a form of “baasskap”. [Interjections.] One cannot give with the one hand and take with the other. We will therefore proceed with our amendment because this is a very serious situation.
Mr. Chairman, I should like to give the hon. the Minister a practical example. Let us suppose that the legislation provides that trade unions may have an ethnic basis. Now if one takes the national State kwaZulu as an example, one may assume that the workers of kwaZulu work in various areas of this country—there are workers of kwaZulu in Johannesburg, on the East Rand, in Pretoria, Pietermaritzburg, Durban etc. Let us also assume that the Zulus of kwaZulu say that in terms of the provisions of the legislation they want to create an ethnic trade union for their workers. They then establish branches in Johannesburg, Pietermaritzburg, Durban, Pretoria, Bloemfontein and in Excelsior. [Interjections.] Where is it logical to have the head office of such a trade union where all the workers can come together? Must it be in the national State kwaZulu or in one of the areas mentioned where only a percentage of the workers can come together? [Interjections.]
Here we now have a practical example of a problem which could be caused when provision is made for ethnic trade unions.
When those problems arise the Government could say that it is not going to accommodate them. They may not have their head office there where the workers of kwaZulu, the Zulus are concentrated, where they live and where their base is; they must have it in one of the places where they have a branch of their trade union.
You are dense.
Order!
To say the least, I think this is quite illogical. It is not only illogical, but workers of a national State will in any event regard something of this nature as something which is to their detriment. As a result of this a problem is now being created where it is not at all necessary to have one.
Mr. Chairman, I accept the word of the hon. member for Pinelands that they are not merely being difficult; I accept that they do not understand what this is all about! The hon. member must, however, please try to understand that with the National States Constitution Act of 1971 we said to the national states that we no longer had any jurisdiction or power to legislate on certain aspects, and that it was now in their power to legislate upon these matters. That is what we have done. As a matter of fact, some of the amendments that we adopted in this House last year and the year before are not applicable in the homelands where they took over our legislation. Some of them are probably still working according to the original Act of 1956, with the minor amendments which were effected up to the time they achieved self-government. The hon. member must try to understand that we do not have jurisdiction when it comes to the application of our laws there. Secondly, because we cannot legislate for those areas where they have self-government, we cannot try to administer any of our Acts there; they do not apply there.
*Mr. Chairman, the hon. member for Bryanston mentioned the example of a kwaZulu trade union which decides to establish branches throughout the Republic and then registers them in terms of the kwaZulu legislation.
No, under our legislation.
If a trade union registers under our legislation it then registers as a trade union in terms of legislation of this Parliament. Such a trade union must comply with the requirements of this Parliament and then it may have branches throughout this country, but it must have a head office outside the self-governing States and inside the Republic.
Why?
Why? Hon. members must listen and not ask such questions. It is because we do not have the power to administer there. There are also certain things which we have to do which must in terms of this legislation be done by the head office. I just want to make one thing very clear: Neither the hon. the Minister nor I said that the self-governing States were not part of South Africa. At this stage they are part of South Africa. We have admitted this all along, and if the hon. member for Bryanston wishes to make political capital out of this, he must think again.
Mr. Chairman, the hon. the Minister said that the legislation was principally aimed at promoting sound administration. I can understand that principle, but I do not think that sound administration necessarily goes hand in hand with sound relations. What we on this side are saying is basically that sound relations could be damaged by saying that kwaZulu, for example, is not part of South Africa. I know those people well. They consider themselves to be good South Africans and because this legislation is apparently the first of this nature and they do not have legislation of this nature, we should rather adopt it in conjunction with them by means of a bilateral agreement. In that case it may indeed apply. The fact remains that it may in that case be there with a view to sound relations as well as sound administration.
Question put: That the words stand part of the Clause,
Upon which the Committee divided:
Ayes—103: Alant, T. G.; Aronson, T.; Ballot, G. C.; Bartlett, G. S.; Blanché, J. P. I.; Botha, S. P.; Breytenbach, W. N.; Coetsee, H. J.; Conradie, F. D.; Cunningham, J. H.; Cuyler, W. J.; De Beer, S. J.; De Jager, A. M. v. A.; De Klerk, F. W.; Delport, W. H.; Du Plessis, B. J.; Du Plessis, G. C; Fouché, A. F.; Fourie, A.; Geldenhuys, A.; Geldenhuys, B. L.; Golden, S. G. A.; Greeff, J. W.; Grobler, J. P.; Hardingham, R. W.; Hartzenberg, F.; Heine, W. J.; Heyns, J. H.; Hugo, P. B. B.; Kleynhans, J. W.; Kotzé, G. J.; Kritzinger, W. T.; Landman, W. J.; Lemmer, W. A.; Le Roux, D. E. T.; Le Roux, F. J.; Ligthelm, C. J.; Ligt-helm, N. W.; Lloyd, J. J.; Louw, E. v. d. M.; Malan, W. C.; Malherbe, G. J.; Marais, G.; Maré, P. L.; Meiring, J. W. H.; Mentz, J. H. W.; Meyer, R. P.; Meyer, W. D.; Miller, R. B.; Niemann. J. J.; Nothnagel, A. E.; Odendaal, W. A.; Olivier, P. J. S.; Page, B. W. B.; Pretorius, P. H.; Rabie, J.; Raw, W. V.; Rencken, C. R. E.; Rogers, P. R. C.; Schoeman, W. J.; Scholtz, E. M.; Scott, D. B.; Simkin, C. H. W.; Sny-man, W. J.; Streicher, D. M.; Swanepoel, K. D.; Tempel, H. J.; Terblanche, A. J. W. P. S.; Theunissen, L. M.; Thompson, A. G.; Uys, C.; Van Breda, A.; Van den Berg, J. C.; Van der Linde, G. J.; Van der Merwe, G. J.; Van der Merwe, J. H.; Van der Walt, A. T.; Van der Watt, L.; Van Eeden, D. S.; Van Niekerk, A. I.; Van Rensburg, H. M. J. (Mossel Bay); Van Rensburg, H. M. J. (Rosettenville); Van Staden, F. A. H.; Van Vuuren, L. M. J.; Van Wyk, J. A.; Van Zyl, J. G.; Veldman, M. H.; Vermeulen, J. A. J.; Visagie, J. H.; Volker, V. A.; Watterson, D. W.; Weeber, A.; Welgemoed, P. J.; Wessels, L.; Wiley, J. W. E.; Wilkens, B. H.; Wright, A. P.
Tellers: P. J. Clase, W. J. Hefer, N. J. Pretorius, W. L. van der Merwe, A. A. Venter and A. J. Vlok.
Noes—19: Andrew, K. M.; Boraine, A. L.; Cronjé, P. C.; Gastrow, P. H. P.; Hulley, R. R.; Malcomess, D. J. N.; Marais, J. F.; Moorcroft, E. K.; Myburgh, P. A.; Olivier, N. J. J.; Savage, A.; Schwarz, H. H.; Sive, R.; Suzman, H.; Swart, R. A. F.; Tarr, M. A.; Van Rensburg, H. E. J.
Tellers: G. B. D. McIntosh and A. B. Widman.
Question affirmed and amendment dropped.
Clause agreed to (Official Opposition dissenting).
Clause 21:
Mr. Chairman, this is the first clause in which removal of sex discrimination comes into this Bill. I shall not talk again on the subsequent clauses which also mention the removal of sex discrimination—clause 32 and clause 62—because what I say here will apply to those two clauses as well. I just want to welcome this provision. I want to welcome the exclusion of discrimination on the grounds of sex as provided for in clause 21, which amends section 24 of the principal Act. This is, I believe, a very important landmark in the history of labour relations in South Africa. It is the partner, of course, of the earlier Bill which we passed in this House during the first session of this year, when sex discrimination in wage determinations was removed by way of the Wage Board Amendment Act. The hon. the Minister is today carrying out here the promise he made then to introduce the same change in the Industrial Conciliation Act.
I am very pleased about this. It affects thousands of women; just as there were many thousands of wage board determinations in which there was considerable differentiation between the wages laid down for female workers and those laid down for male workers, so too, in industrial conciliation agreements, at least 100 000 women, I think, are affected by industrial council agreements and have lower wage rates which range between 15% and 25% of male wages in terms of the agreements. I do not believe anybody can justify the principle of differentiated pay on the grounds of sex. Therefore we are very glad to welcome this principle. I should like, however, to utter the same warning which I uttered when we debated the Wage Board Amendment Bill. That is, that we should watch out for unfair practices and that we should see to it that this equalization of wage rates does not result in the dismissal of female workers in cases where there are more workers than there are jobs, such as in the unskilled occupations. I know this cannot happen in skilled occupations. Also, it is unlikely to happen in semi-skilled occupations because the workers are just not there who can replace women who are dismissed. There is, however, a considerable danger in the unskilled occupations, and I hope the hon. the Minister will see to it that the unfair practices stipulation, which is contained in the Industrial Conciliation Act, will in fact serve to protect women against dismissal simply because their wages are now raised to the same level as those of male workers.
Clause agreed to.
Clause 30:
Mr. Chairman, I want to refer now to lines 14 and 15 of clause 30 on page 32 of the Bill. If we accept the amendment which I intend moving in a moment, I believe it will be an improvement of the wording. The wording now reads—
I should like to substitute those words and I accordingly now move—
- (1) On page 32, in line 15, to omit “from time to time fix” and to substitute “determine”;
I wish to move a further amendment in line 23, as follows—
- (2) On page 32, in line 23, to omit “from time to time fix” and to substitute “determine”.
I believe this will be an improvement.
Mr. Chairman, these amendments are of a technical nature, and I shall accept them.
Amendments agreed to.
Clause, as amended, agreed to.
Clause 35:
Mr. Chairman, clause 35 provides for the proposed insertion in the principal Act of section 51A. The proposed new section 51A states—
The application of the conditions of employment are as set out in the Bill before us. It seems to us that this is very reasonable but that it does not go far enough. We should therefore like to move an amendment the effect of which would be to include the words “federation or trade union” that could also make such recommendations to the Minister; in other words, we do not want it confined to a “group or association of employers engaged in any undertaking”, where there is no industrial council. All that this provision does is to allow for submissions or recommendations to be made to the Minister. We would think, particularly if we take the lead from the legislation as it has flowed in this whole process, that the private sector includes not only employers but also employees. That is why we should like to insert the words “federation or trade union”. I should like some comment from the hon. the Minister in this regard before I actually move the amendment.
Mr. Chairman, I consulted the experts of the department and it appears that the trade unions could achieve the same object by applying for a conciliation board. Actually the hon. member wants to afford a trade union an opportunity to be able to request a dispensation of this kind. This could be done. A trade union could apply for a conciliation board and, therefore, could achieve the same object with it. This is no problem.
Mr. Chairman, can we just make sure that we understand each other? Looking at line 6 on page 44, would the hon. the Minister not agree that it would be better if we were to insert the following after “1957”—
In subsection (2), line 4, we have the phrase “consultation with the wage board” but it seems to us that it would be better to consult not only with the wage board, but also with other employers, employers’ organizations, federations or trade unions as the Minister may deem fit. It gives the Minister the opportunity to do that, and I should therefore like to move the following amendment—
Mr. Chairman, the clause concerned makes it possible to accommodate the existing orders (“bevele”), which we used to call an order (Afr: “bevele”) and which the hon. the Minister could in the past make. It also provides for similar orders which may be made in future. If we should now include a trade union as well as federations or confederations here, it would in reality mean that we would be removing from the Bill the recognition of organized labour envisaged in the legislation and placing it in the hands of the Minister. However, we believe in domestic control between trade unions and employers’ organizations. This is just a case where employers or a group of employers approach the Minister and there is as yet no organization on the other side. However, if there is a trade union and even if there is not an employers’ organization, but only a single employer, such a union can apply to the Minister for a conciliation board or can even form an industrial council with its employer. This is in fact an exceptional clause and it is unnecessary to include an employees’
organization, viz. a trade union, because for that there is a different dispensation.
Mr. Chairman, I should just like to react to what the hon. the Minister has said. In a certain sense it is, of course, a pity that because of the strenuous programme of activities we lacked the opportunity to present the hon. the Minister with the proposed amendments in advance so that he could give them due consideration. We are sorry, but it is really due to the strenuous programme and not out of ill-will that we have not done so.
As regards the first point we raised, the hon. the Minister says that trade unions can make use of a conciliation board. Normally conciliation boards only act when a dispute arises. However, here it is not a matter of dispute, but merely of representations addressed to the Minister by a particular industry or undertaking to give attention to or to consider proposals for an improvement of working conditions, wages, conditions, etc. According to the Bill, only employers can approach the hon. the Minister and ask that he consider taking steps to bring about certain changes in conditions of service, working conditions or whatever. What we wish to propose, constitutes no deviation from the principle. All we are saying is: Give trade unions, too, the opportunity of making similar representations to the hon. the Minister. This does not bind the hon. the Minister. All we are really seeking to do is to put the trade unions and federations on an equal footing with employers and employers’ organizations. That is the aim.
Mr. Chairman, I shall give attention to that. The legislation will probably be before the House again next session.
Mr. Chairman, I wish the hon. the Minister would only adopt the same attitude towards the amendment that is now before us. The first one I did not move at all. I am now referring to the second one which deals with the hon. the Minister’s only consulting the Wage Board. We are suggesting that he should also consult such other employers, employers’ organizations, federations or trade unions as he may deem fit. If he is prepared to have a look at that as well …
[Inaudible.]
… then, with the permission of the Committee, I shall withdraw my amendment.
Amendment, with leave, withdrawn.
Clause agreed to.
Clause 46:
Mr. Chairman, I wish to move as an amendment—
I should like to motivate this amendment. In terms of the proposed new section 62(1) inserted by paragraph (a) the Minister may appoint—
We have no quarrel with that at all. However, this brings me to the proposed new section 62(5)(a) inserted by paragraph (b). Here, without any consultation—
dispense with the services of the person who has been appointed. All we are asking is that, in the same way as the hon. the Minister makes the appointment after consultation with the industrial council, he should also dismiss the person after consultation with the industrial council concerned.
Mr. Chairman, this amendment is only aimed at alleviating the administrative burden of the Minister and facilitating administration. It is only a measure adopted to enable the Minister to delegate his power to appoint agents for industrial councils, to an official.
Mr. Chairman, I see that the aim of the amendment is to broaden the scope of the measure somewhat and also to bring about consultation. This cannot make a very great difference and I shall therefore accept the amendment.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 48:
Mr. Chairman, I should like to refer the committee to sub-paragraph (d). We have already referred to this subparagraph during the Second Reading debate and the hon. the Minister replied to the comments made by my hon. colleagues and myself during that debate. We are, however, still very unhappy about the breadth of this new provision. In certain actions which are taken, for example in an illegal or wild-cat strike, hundreds of people may be involved. During such a strike, until such time as it is resolved by using the machinery concerned or because people of goodwill come together and try to rectify the situation, a great deal of hardship can be suffered by the families of the people concerned. They receive no pay and they have to pay rent, they have to eat and they have to send their children to school. In order that there may be no misunderstanding as to what we are trying to achieve here, I should like to move the following amendment—
: Provided that any financial assistance granted bona fide to a member of the family of such person shall not be regarded as constituting an offence in terms of this subsection
Mr. Chairman, the hon. member for Pinelands as well as the hon. member for Houghton continually referred to this clause during the Second Reading debate. On more than one occasion it was submitted that many of the illegal strikes which occurred did not arise caused from major matters of principle. I think the hon. member for Houghton said “They are mostly minor disputes.”
Arising on the shop floor.
Yes, arising on the shop floor. I believe the hon. member is correct on that score, because many of the strikes which we have had recently, were not sophisticated strikes as one would have expected from people who have had years of experience of strikes. For that reason one has a little sympathy for the family of these people in particular. However, we shall have to look at this very closely before we water down the provision of this clause. The hon. member for Pinelands knows my feelings on this matter. However, suppose a man, a father of a family goes on strike illegally, he has a wife and five children and while he is on strike, the employers’ organization provides his wife and children with food. Do hon. members think that he himself will not also get’ food or if they were given money, that he would not also get some of it? If they were to get clothes, would he not be getting clothes as well? We need not drag emotion into the matter; we should merely try to be practical. Let us be calm and practical. This is the problem which I have with a clause like this: If one were to water it down, why have it at all? We are not saying that individuals may not offer assistance for humanitarian reasons; we are merely saying that the trade union, the employers’ organization and the federation are institutions which have been legally established according to the provisions of the Act. But they are now adopting an illegal course and are instigating an illegal strike. For that reason it is very difficult to talk about bona fide assistance having been given to family members. In the first place, on whom do we place the onus to decide whether it was done in good faith? Secondly it has to be decided whether it has been given to a family member or perhaps to the father of the house—in other words the striker.
I want to put this to the hon. the Minister for consideration that he will have to give it a great deal of reflection before acceding to a request for the watering down of this provision could be considered.
Mr. Chairman, I hope the hon. the Minister will heed the words of the hon. member for Pinelands rather than the words of the hon. member who has just sat down.
Many of these strikes may be illegal but they are illegal because the negotiating machinery is too sophisticated for the type of dispute which has arisen. As I pointed out to the hon. the Minister during the Second Reading debate, he is looking to the symptoms rather than the causes. What he should be doing, is trying to simplify the whole negotiating machinery so that the huge mass of workers can negotiate and so find it easy to come to terms with their employers rather than make use of very complicated negotiating machinery to which they have difficulty in gaining access and of which many of them have very little experience. That really should be the objective.
The idea is to cut down on the number of strikes. We have a large number of strikes these days. The way to cut down is not to use the big fist, not to be heavy-handed about it, not to make the workers feel that the Government is always against them and never sympathizes with their problems and with the fact that wages are very often very low and do not catch up with inflation. The fact that the wages have risen X% does not mean a thing because the base was too low originally. Often wage determinations are very, very slow in being made and often they are made long after inflation has already absorbed whatever increase the determinations in fact represent.
If the hon. the Minister wants industrial peace in this country I ask him to take cognizance of this. I talk in great earnestness about this because he will have read all the reports in the newspapers and he will have seen that this is the clause to which the big Black unions object most strongly as they feel that this is the heavy hand of the law and that no sympathy is being shown by the Government in their dilemma. Therefore I can simply say that if one was able to read the signs in the protests which took place at the big meeting of all the trade unions at the end of last week, one would be very careful about introducing a provision which I think is going to increase the suspicions of the workers. The hon. the Minister must remember that we have a long history, in labour legislation in this country, of protection only being given to one race group. The Black race group, until as recently as 1979, was excluded by law from certain occupations and found it extremely difficult to become apprenticed and to get any sort of training in skilled occupations and, indeed, was actually excluded by law from belonging to registered trade unions because of the definition of the word “employee”. One cannot dismiss this overnight. One cannot expect Black trade unionists to accept overnight the bona fides of a government which, for years, has gone in the opposite direction. I certainly do not believe that this constitutes any threat to the White workers. I believe the whole situation arose simply out of a sheer demand for skilled work which the White population group is unable to provide. It is as simple as that. I have enough confidence in White workers to know that they can protect themselves by their own skills. Therefore, what the hon. the Minister must be aiming at now is to gain the confidence of the vast mass of Black workers. I believe that this clause is going to frustrate that aim which, I am prepared to accept, is one of the aims that the hon. the Minister has in the legislation that he has presented to the House.
Mr. Chairman, I do not think we should conduct a long debate about this, and when I am finished saying what I wish to say now, I am going to sit down and not react further. If it were really as innocent as the hon. member for Houghton would have it, I would really have been accommodating in this regard this evening. However, I now wish to put it to her that, firstly, it has nothing to do with an action against White workers and, secondly, that it has to do with illegal strikes. Nor is it so that some of these people who go on strike do not understand the machinery and that because they do not understand the whole affair, they strike due to a sense of despondency. There was a strike in the country which followed this course: The first thing that was heard about the strike, was when people did not turn up for work at all. The employer was not at all aware that a strike was in the offing. When the reasons for it were sought, the ringleaders could not even be traced. The number of people involved was 15 000. They simply had no idea why they were striking. Apparently they were simply informed that an instruction had been given that they should not go to work. Despite all the effort expended on all sides, to this day nobody has been able to ascertain why they stayed away. It was as if they were possessed. However, one thing we do know. Those poor people who went on strike had no intention of landing themselves in such a predicament. However, their actions were instigated by other people behind the scenes. Therefore, these things simply do not happen that easily. I now wish to tell the hon. member that there is no better type of laboratory for this sort of thing than the present South Africa of 1981, and perhaps the South Africa of 1982 as well. I think hon. members know me well enough to know that I try to be reasonable enough. When I see that something does not work, I try another plan so that it does work. If in the future it is proved in practice that we must do something about this provision, the hon. member need not tell me. I shall be the first to confirm it. However, as the matter stands now—with all the facts at my disposal and in the light of the circumstances we have had now, and the threats we have had now—we need not argue further. I want to ask hon. members that we rather terminate the debate. I am unable to accept the amendment.
Mr. Chairman, I can understand the hon. the Minister saying that he is not prepared to debate this any further but he must appreciate that we should like to make our own points as well. If this Committee accepts this amendment, it will mean that the clause will be improved because it would give an indication to everybody that if assistance were given to families, this would not be regarded as the force of the particular clause we are discussing now. I do not want to anticipate the study that is being made of the causes of all the various strikes that have taken place. I am certainly not in support of illegal strikes. All I am saying is that I think we all are genuinely seeking to find industrial peace. One has to take into account the situation of an organization that does not have a great deal of money, and most of these organizations do not have a great deal of money because they are very new and very inexperienced. It may be that in some instances there are “opstokers wat agter hulle sit”.
There are, however, many instances—and I have experienced some of them from an employer’s point of view—where in an organization in which a great deal of work has been done the situation has suddenly arisen where, after someone has been dismissed or some action has been taken, in solidarity everybody has downed tools. Strikes do not always last for a long time but sometimes they do. What on earth can the people involved, then do for the next week or two days—sometimes, thank goodness, it is only for one day—with their meagre resources? I want to bring this to the attention of the hon. member opposite who spoke earlier on about this clause. What on earth are they to do in a tiny room when suddenly a large number of women come to ask for help because of the strike? Once the strike has occurred, it is not so easy for them simply to go back. Immediately one finds that negotiations have to take place and that people try to intervene. All sorts of delays occur. What happens to those people in the meantime?
All I am asking for in my amendment is that the action or prohibition contemplated in paragraph (d) should not be directed towards the families of the people concerned. We thought for a very long time about this. We did not simply write these few words down. We thought about them and tried our very best to get the best possible amendment so that we could do the best for everyone concerned and, most of all, so that we would not have yet another stick with which to beat the Government or the country in the future. I want to ask the hon. the Minister to think again. I think it would help enormously if he would accept the amendment.
Mr. Chairman, the way the hon. member puts it, it sounds terribly fine and pious. However, I wish to put a practical consideration to the hon. member. Recently I was involved with three illegal strikes in and around Pretoria. What does one see in such a case? One does not see a little room with a row of women begging for food. One sees rows of workers, Black workers, who want to come to work, and a small group of ringleaders at the gate keeping them away. That is the problem. A number of ringleaders stand at the gate and some of them are White; some of them are White advisers. They stand at the gate and keep employees away. They pelt the workers with stones so that they will not come to work. The workers want to come to work. The employer tells them that those who want to work, may do so. He tells them that they do not even have to clock in, because he will record their presence on the factory floor as he does not want production to come to a standstill or a picture to be painted such as that which the hon. member for Pinelands has just painted. Who likes that? The Government does not like that.
Let me say what it is that we want to prevent. The employer perhaps does not know it, but his organization will know that the families will suffer harm and that because of certain people’s malicious actions they harm the next of kin of the people whom they order to strike. Then they go and stand at the gate and try to intimidate the workers who still want to come to work. Thus we must think very carefully about this clause.
Mr. Chairman, I understand the problem of the hon. the Minister. Let me repeat immediately what the hon. member for Pinelands said: Nobody can condone the irresponsibility of people who abuse the situation and incite labour unrest. For that reason we too do not argue about that.
There has been talk about Blacks in illegal strikes. However, it is not just Blacks. Let me remind hon. members of the strikes we had the year before last in the North-Western Cape. They were illegal strikes. Moreover, we all condemned them. We know what factors applied then and also what the reaction was of those people, and therefore I wish to emphasize again that to us it is not a matter of condoning the illegality of the strike in question. We are concerned purely with the humanitarian things. I myself am not only concerned with the Blacks. I must honestly say that if there should also be White women and children who have suffered equally as a result of that strike, I would ask equally seriously why funds could not be employed in a bona fide fashion to assist those women and children too. That is all we ask.
Mr. Chairman, as I have already said, I am not going to argue about the principle now. However, I want to give hon. members the assurance that we shall not implement this provision in a callous way. We shall take another look at this. Earlier I talked about a laboratory. Once again I wish to say that we should be very careful. We must do one thing and not neglect the other. That is why I say that I am satisfied with the wording as it stands at the moment. In present circumstances I feel that it is safer as it is. However, we shall not apply it callously. We ourselves fully understand the type of case referred to by the hon. the member Prof. Olivier. Indeed, the department does not intend to implement the provision in question in a callous way.
However, when it is purely a question of illegality, we really must take a stand. Then we must know what we have to do.
Amendment put and the Committee divided:
Ayes—19: Andrew, K. M.; Boraine, A. L.; Cronjé, P. C.; Gastrow, P. H. P.; Hulley, R. R.; Malcomess, D. J. N.; Marais, J. F.; Moorcroft, E. K.; Myburgh, P. A.; Olivier, N. J. J.; Savage, A.; Schwarz, H. H.; Sive, R.; Suzman, H.; Swart, R. A. F.; Tarr, M. A.; Van Rensburg, H. E. J.
Tellers: G. B. D. McIntosh and A. B. Widman.
Noes—102: Alant, T. G.; Aronson, T.; Ballot, G. C.; Bartlett, G. S.; Blanché, J. P. I.; Botha, S. P.; Breytenbach, W. N.; Coetsee, H. J.; Conradie, F. D.; Cunningham, J. H.; Cuyler, W. J.; De Beer, S. J.; De Jager, A. M. v. A.; De Klerk, F. W.; Delport, W. H.; Du Plessis, B. J.; Du Plessis, G. C.; Fouché, A. F.; Fourie, A.; Geldenhuys, A.; Geldenhuys, B. L.; Golden, S. G. A.; Greeff, J. W.; Grobler, J. P.; Hardingham, R. W.; Hartzenberg, F.; Heine, W. J.; Heyns, J. H.; Hugo, P. B. B.; Kleynhans, J. W.; Kotzé, G. J.; Kritzinger, W. T.; Landman, W. J.; Langley, T.; Lemmer, W. A.; Le Roux, D. E. T.; Ligthelm, C. J.; Ligthelm, N. W.; Lloyd, J. J.; Louw, E. v. d. M.; Malan, W. C.; Malherbe, G. J.; Marais, G.; Maré, P. L.; Meiring, J. W. H.; Mentz, J. H. W.; Meyer, R. P.; Meyer, W. D.; Miller, R. B.; Niemann, J. J.; Nothnagel, A. E.; Odendaal, W. A.; Olivier, P. J. S.; Page, B. W. B.; Pretorius, P. H.; Rabie, J.; Rencken, C. R. E.; Rogers, P. R. C.; Schoeman, W. J.; Scholtz, E. M.; Scott, D. B.; Simkin, C. H. W.; Snyman, W. J.; Streicher, D. M.; Swanepoel, K. D.; Tempel, H. J.; Terblanche, A. J. W. P. S.; Theunissen, L. M.; Ungerer, J. H. B.; Uys, C.; Van Breda, A.; Van den Berg, J. C.; Van der Linde, G. J.; Van der Merwe, G. J.; Van der Merwe, J. H.; Van der Walt, A. T.; Van der Watt, L.; Van Eeden, D. S.; Van Niekerk, A. L; Van Rensburg, H. M. J. (Mossel Bay); Van Rensburg, H. M. J. (Rosettenville); Van Staden, F. A. H.; Van Vuuren, L. M. J.; Van Wyk, J. A.; Van Zyl, J. G.; Veldman, M. H.; Vermeulen, J. A. J.; Visagie, J. H.; Volker, V. A.; Watterson, D. W.; Weeber, A.; Welgemoed, P. J.; Wessels, L.; Wiley, J. W. E.; Wilkens, B. H.; Wright, A. P.
Tellers: P. J. Clase, W. J. Hefer, W. J. Pretorius, W. L. van der Merwe, A. A. Venter and A. J. Vlok.
Amendment negatived.
Clause agreed to (Official Opposition dissenting).
Clause 54:
Mr. Chairman, I have tried to see the Government’s labour reforms against the background of three broad philosophies. Firstly there is the abolition of discrimination, and we have said enough about that. The second two points I should like to take together as part of a philosophy in terms of which we should approach labour reforms. The first is the promotion of self-government in industry and, secondly, the promotion of the free-enterprise economic philosophy. I believe that as paragraphs (b) and (d) of clause 54 now stand, they contradict both these philosophies. Firstly, it seems to me that it is interference by the State rather than the State’s facilitating matters. Secondly, it does not promote the free-enterprise system and I would motivate this along these lines. The proposed new subsection (lC)(a) reads—
No employer in his right mind would want to do this unless he believed it was right and unless he believed that this would maintain productivity and maintain labour peace in his own enterprise, and there is no way in which it can do that.
Secondly, when the draft Bill was submitted for comment, a great number of reputable and respectable organizations made a great number of comments, some of approval, some not, on the various clauses. By no stretch of the imagination can one suggest that Assocom is in favour of chaos in the market place. No one will suggest for a moment that the FCI wants to encourage people to stay out of the organized labour system. However, both these organizations and many others with which I have consulted —and I have consulted with some of the major employers in South Africa—have without exception maintained that we must not allow this to go through and, I believe, for a very good reason. We on this side, and also the hon. the Minister, have said that South African labour relations and industry is at this moment in a state of flux. People who for years were excluded or debarred from registered trade unions, have now been given this opportunity, and we should not be surprised if a number of them are still not immediately happy about registration. It is all very well for us in this House, or even a department to say: “Well, that is just too bad; they can rectify the situation. All they have to do is to register”. However, this clause is not directed towards the union, it is pointed against the employer. The employer has made a decision and says: “I believe that those people can be represented and therefore I will recognize them because I am concerned about the situation continuing and I want to keep my workers at work.”
Finally, it is our conviction—and we have tested this—that if one actually wants stability, as much stability as one can get in a state of flux, one should actually encourage this. Because what is the alternative? If the hon. the Minister, for example, says: “Well, that is an unregistered trade union, I am not going to allow this”, then the trade union could quite easily collect membership fees from its members without any control whatsoever. If, however, an employer is involved, he knows how many people are involved; he knows how much is involved and he has seen the form that is signed by the employee. It is a far more stable situation than would otherwise be the case. I would therefore appeal to the hon. the Minister to accept the amendments which I now move—
- (1) On page 60, in lines 20 to 34, to omit paragraph (b);
- (2) on page 60, in lines 38 to 42, to omit paragraph (d).
Mr. Chairman, the hon. member for Pinelands indicated during the Second Reading debate, when the principle of this Bill was under discussion, that his party was not happy about this provision. We therefore realized that the hon. member would probably come back to it. On that occasion, I believe, the hon. the Minister replied in embryo to the objection raised by the hon. member and other members of his party.
To begin with, I just want to say that the Department of Manpower, the legislature and the hon. the Minister are not looking for someone to penalize. They are not trying to get at anyone specifically. That is not what it is about. This measure applies to groups which profess to be trade unions, i.e. groups which interfere with relations on the shop-floor. When such groups are not registered, the hon. the Minister’s approval must be obtained for check-off facilities. I should like to quote an example to illustrate why this is so essential. I know the hon. member for Pinelands has connections with quite a number of big employers, but even we ordinary folk have a few small employers who have a number of people working for them. We talk to them, too, and do hon. members know what they say their problem is? There may be a registered trade union working among their people, but then there is a group calling itself the “Blue Jays”, perhaps, which is also working among their people. There may be yet another group, and each group has its adherents and each one vies for the support of the employees. The monthly fee of the registered trade union may be R5. This is its membership fee. It also has a constitution, all its affairs are in order and it has check-off facilities. Its people know that there are certain things which it does for them. It is also able to negotiate with the employer’s top management or perhaps with the personnel manager. However, it has its smaller rivals, who allege that the registered trade union is not doing enough for its people. They asked the employees to join their organizations, because their monthly fee is only R3. So they entice people away from the registered trade union, and eventually the employer no longer knows with whom he is negotiating. He has no idea who is the representative organization or mouthpiece for his people. Our attitude is that if a group of people were to register there would be no problem, because they would not have to apply to the hon. the Minister. Such unregistered organizations could easily disappear overnight. I mentioned an example here yesterday—and it was not a fictitious example—of the R3 200 which was collected over two months and then disappeared. Of course, such things can happen anywhere, but this is one of the main reasons why we find it necessary to take such a measure. When such a group requests check-off facilities, we can put certain question to it. We can ask where its head office is and who is in control, i.e. who the leaders are. We can also ask what the organization’s constitution looks like and what action they are going to take on behalf of their members. They can also be asked where their financial statements are. Before the hon. the Minister approves check-off facilities, he can immediately ascertain whether all the requirements have been complied with. I am therefore afraid that we shall not be able to support the hon. member’s amendments.
Mr. Chairman, the hon. member for Roodeplaat seems to make registration the yardstick but he ought to know that in practice this is not the yardstick at all and that it in no way indicates whether a union is representative of the workers or not. I can give an example of an industry in which there is a registered union and an unregistered union and where the employer has accepted the unregistered union as being representative of the workers concerned. I think Colgate in Port Elizabeth is a case in point. Although the employers did not accept the fact, there is no doubt whatever that in the case of the Johannesburg municipal workers, the unregistered union had far more workers attached to it than did the registered union which had only a tiny number of members. The fact of registration is therefore not really the yardstick. It is really no indication of whether a union is representative or not. The hon. member for Pinelands is quite right when he says that many of the unions fight shy of registration. They are worried about the sort of control that will be exercised over them. They happen to have an unpleasant historical association with the Department of Manpower. I believe it should be left to the employer, because he is probably in the best position to decide which group of workers is indeed representative. If he has any doubts, is there any reason why he should not have a secret ballot among the workers to determine which of these groups—registered or unregistered unions or it might also be a struggle between two unregistered unions—represent the majority of the people? That is the democratic way of doing things. It is done in this way in America and I do not think it causes any real problems there. There are people who say it causes divisions among the workers, divisions which are then carried to the homes of the workers, but if there is a scrap over which union is going to be considered as representative, that fight is on anyway. Holding a ballot, for instance, will not make it any worse. Therefore I cannot see why the hon. the Minister cannot accept the amendment moved by the hon. member for Pinelands and leave it to the employer to decide, instead of imposing a heavy penalty on the employer who decides to give check-off facilities to an unregistered union. It is wrong; it is not good labour practice.
Mr. Chairman, the argument of the hon. member for Roodeplaat was mainly about the need to prevent unregistered trade unions from enticing away members of registered trade unions by saying, for example, that their fee is R3 instead of R5.
Give an example.
This is an example. One can make it even easier to win over such people, because one can tell a member of a registered trade union: “I charge you R3, but you need not even pay it every month. Pay when you have money again.”
Do not say it out loud; they may do that tomorrow.
This is not basically concerned with people being enticed away; it is only intended to prevent trouble for the employer. However, one does get the employer into trouble when a large representative, but unregistered—not illegal—trade union comes to him and says: “Forty per cent or 60% of my members are prepared to pay by means of check-offs, and we accept that.”
And if it is the other way round?
Mr. Chairman, I am afraid I cannot accept the amendments. I am not the one who has to accommodate the hon. member for Pine-lands; he has to accommodate me. What are we concerned with here? What are check-off facilities? They are the most important facilities which a trade union has, because it means that its total income is paid over to it automatically, because it is deducted by the employer every month and paid over to the union in a lump sum. So it is a very important privilege. Everyone wants it. However, in what situation do we find ourselves? Hon. members will recall the arguments across the floor of this House. We argued that there was one thing we had to prevent in South Africa, and that was dualism. We must make sure that we do not have two systems—on the one hand a large number of trade unions that wish to cooperate and work within the dispensation we have created over the years, and on the other hand, a group which does not want to co-operate. Of the large number of Black trade unions, many have registered. Seventeen trade unions have registered up to now, and they represent hundreds of thousands of people. There are also a large number of trade unions which have applied for registration and those applications are presently being processed. What is happening in South Africa, therefore? A process is going on here in terms of which a large number of trade unions which formerly stood outside and played a waiting game are now coming forward. If we gave the privilege to those who are still standing outside, we would in the first place be confusing the employers to such an extent that they would have no idea of what they should do. If we want chaos, we must confuse the employers with this kind of system. In the second place, we would be completely discouraging those who have come forward, with the result that the rest would not come. In the third place, we would be adding grist to the mill of those trade unions that want trade union benefits, but wish to give very little in return.
Therefore, I want to point out that to sit on this side of the table and to be the Minister who is trying to maintain order, together with his department, becomes a matter of impossibility if this House does not help to remove the divisions which exist in the trade union world, so that we may all come under the same umbrella. If I accepted these amendments, I would be drawing a line through all the hours, days and months of lengthy and really patient discussions. I really cannot undo my work in such a way. Therefore I do not accept the amendments.
Amendments negatived (Official Opposition dissenting).
Clause agreed to (Official Opposition dissenting).
Clause 62:
Mr. Chairman, I wonder if the hon. the Minister could give us any idea of how long he thinks the phasing in of the removal of discrimination on the grounds of sex in industrial council agreements is going to take. I understand that the usual duration of an industrial council agreement is about two years, and that of a wage determination about three years. Does the hon. the Minister envisage that over a period of say the next three years the phasing-in period will have been completed? Could he just give me some idea?
Mr. Chairman, there are practical problems which initially we did not foresee. I do not wish to conduct an argument about this, but I do want to say that we are going to do it as rapidly as possible. I foresee that we shall overcome the problems within the next few months.
How long?
Within the next few months, I would say. However, we do have problems about it, problems which, I say, we never foresaw initially. Nevertheless, I can give the hon. member the assurance that we are trying to expedite matters. It should not take us long to have these provisions implemented.
Clause agreed to.
House Resumed:
Bill reported with amendments.
Third Reading
Mr. Speaker, I move, subject to Standing Order No. 56—
Mr. Speaker, I will be very brief. We have spent a great deal of time on this legislation but I think it was all very worthwhile. It is another milestone. I am grateful that a few of the amendments that we have moved have been accepted. I am obviously disappointed that some of the key amendments that we moved during the Committee Stage were not accepted. I believe this legislation will have to come back to the House and I look forward to debating it again. Meanwhile, I believe that the improvements and reforms that are introduced by this legislation are going to be a significant step forward. We wish the hon. the Minister and his department well in the execution of this legislation. We believe that the elimination of discrimination on the grounds of race, colour and sex is a tremendous step forward and it will be enormous encouragement to the work-force throughout South Africa; in fact, not only to the work-force but also to the employers and to all those involved in labour. We are trying to promote the principle of free enterprise in this country although we are a long way away from it yet. We still have to move on the principle of State facilitation rather than State interference but, nevertheless, I believe that we have made significant progress and we have pleasure in supporting the Third Reading.
Mr. Speaker, since we have come to the end of the debate, I wish to express my sincere thanks for the pleasant way in which the debate has been conducted. I think that in this we have really reached a milestone.
I think there is one aspect which we on this side of the House must emphasize, specifically to the employers of our country. During the past year or two, as far as labour legislation is concerned, we have not only been changing legislation; there has also been a process of participation and cooperation between the State, i.e. the department responsible for the implementation of the legislation, and the employers of the country. However, I have noticed something. Because of the years of labour peace we have experienced and the fact that things have gone so well—exceptionally well, compared with other countries of the world—our employers in South Africa are very ill-informed about what goes on in the labour sphere. They do not know and they are totally uninformed. Employers seem to take it for granted that they will always have labour peace. I have also noticed that employers give no attention to their employees at the highest level. Furthermore, I have noticed that the employers of South Africa do not normally have labour relations on the agendas of their board meetings. In our country—and here we differ from other parts of the world—the necessary attention is not being given to the employee’s situation and his needs as may be expected in the modern world. This is not done by most of our large companies.
But recently we have seen a special interest developing. In fact, it has developed to such an extent that everyone—and especially the big companies in South Africa—is now appointing knowledgeable people to handle the situation for them. For example, they are appointing personnel managers and they are also spending money in this connection. They are also coming forward and spending a considerable amount on training, which is another good sign. We also notice that the universities have started to give attention to this particular need and there are universities today which are offering graduate courses and combining disciplines which are leading to degrees in this field. So we are getting a new sort of scientist, a person who is going to be the expert leader in the field of human relations. When we consider that there are almost 32 000 large factories today and that 5,5 million people are employed in the labour field, we can understand what an important sector this is becoming for South Africa, not only from a political point of view, but also from the point of view of the administration and economy of this country.
For this reason I wish to make an appeal to the employers of this country. The sooner they give all the necessary attention to the labour situation at the highest level, ensuring, in their own interests, that it is properly handled and that there is proper management of their people, the better. If it is ever necessary in the future to request assistance from myself, the department, the National Manpower Commission, or any other body, we shall all be only too willing to help. Since this legislation has been worded in this way, I wish to appeal to the employers of South Africa to take cognizance of the fact that they will be able to play a decisive role in this sphere in the future.
Question agreed to.
Bill read a Third Time.
Mr. Speaker, I move—
This is the third Bill I am introducing here today, and as in the case of the other two, I do so with pleasure. As hon. members of the House know, the Government has repeatedly committed itself to the maintenance and development of a free enterprise system in order to raise the general level of prosperity of all inhabitants of this country. To achieve this purpose, active attempts must be made by the Government to ensure the effective functioning of the labour market.
What is of particular importance in this connection is that workers and workseekers should be informed about supply and demand conditions on the labour market and that they should be helped to make sensible choices in connection with occupations. Only in this way can we ensure that the manpower which is and becomes available, especially the scarce kinds of manpower, is used as effectively as possible in the interests of the country and its people.
The Guidance and Placement Bill, which is to replace the Registration for Employment Act of 1945, is intended to create a framework for the effective provision of vocational guidance and information to the present and future work force of South Africa.
The legislation will help to relieve the shortage of skilled manpower, to increase productivity and to maintain labour peace, because it enables the worker to make his rightful contribution to the country’s economy and to receive his rightful share.
In order to explain the Bill I have already tabled a full explanatory memorandum. I should now like to furnish some particulars about the objectives of the Bill.
The Bill provides in clauses 2 and 3 for the establishment of guidance and placement centres where prospective workers and workers wishing to improve their vocational potential will be able to obtain vocational guidance and information, and where workseekers will be able to report for placement in suitable occupations.
Of course, the services provided at the centres will also be available to employers who wish to make use of them for the recruitment and vetting of available candidates with a view to employing them.
The guidance and placement centres will all be controlled by the Department of Manpower, and will also as far as possible be staffed by suitable officials from the department. Even more than in the past, these centres will be located where workseekers and employers can reach them with the minimum of inconvenience. In this connection I may just mention for general information that attention is continually being given to the creation of decentralized employment agencies. At the moment, for example, there are already 38 full-time and 16 part-time employment agencies controlled and run by the department. At smaller towns, where the creation of such employment agencies is not practicable, these services are rendered by magistrate’s offices.
However, where it is necessary and may prove useful, the department also plans to make use of the expertise and experience of administration board officials for the provision of vocational guidance and information to Black people at points conveniently situated for them, near their own residential areas, for example. In this respect, the boards will be acting as agents for the department, just as magistrate’s offices will be used for a similar purpose.
A professional guidance service, such as already exists in the case of Whites, Coloureds and Asians, is to be developed for Blacks as well, and initially we intend to create 20 professional posts for this purpose. The occupants of these posts will have to have university qualifications in psychology, and will also receive in-service training for the provision of vocational guidance. They will form the nucleus of the group of officials which will in future have to provide guidance services to Blacks all over the country. It is hoped that we shall be able to recruit a sufficient number of Black candidates for these posts, where they may render services to their own people and in their own language.
Clauses 4, 5, 6, 7 and 8 provide that workseekers may voluntarily report for work at the centres, and that certain information must be furnished by workseekers, employers and schools. This information is not only necessary for keeping reliable statistics regarding the labour market, but also for acquiring more knowledge and information about the labour market and for rendering an efficient service to the public.
The particulars to be provided by employers in terms of clause 7 are required for the purposes of manpower planning, and will, inter alia, reflect information in connection with occupational movement, changes in supply and demand conditions and shortages of specific categories of workers.
Clause 8 provides for information which is of great value in providing vocational guidance. This is the information which has to be kept on cumulative report cards with regard to every pupil and which may be requested by the Department of Manpower when the pupil leaves school.
Clauses 9, 10, 11, 12, 13 and 14 provide for the establishment, constitution, maintenance and functioning of advisory employment boards. The juvenile affairs boards which existed in the past, first under the Juveniles Act, 1922, and later under the Registration for Employment Act, 1945, did excellent work for many years in providing employment to young people. In 1933, for example, the Witwatersrand Central Juvenile Affairs Board began publishing the old Career Guide, which was taken over by the then Department of Labour in 1950 and incorporated into My Career, which has since been distributed free of charge to schools and other interested parties as a publication providing vocational information.
In 1972, it was decided to dissolve the juvenile affairs boards because it was generally believed at the time that they had served their purpose.
At first I strongly doubted whether provision should again be made in this Bill for the establishment of juvenile affairs boards. However, since strong indications had been received from several quarters that such boards could serve a useful purpose, especially in combating unemployment among young people, I decided to provide for boards which could act in an advisory capacity in connection with the employment and welfare of work-seekers. Naturally, boards will only be established in those areas where circumstances justify it, and employers’ and employees’ organizations, as well as other interested official and unofficial bodies, will be involved in the activities of the boards.
Clauses 15, 16 and 17 provide for the registration and regulation of private employment offices for all population groups. Clause 15 requires all firms which are operated for gain and which procure employment for people or recruit workers for employers to register as private employment offices. Registration will be subject to specific conditions in order to protect the interests of workers and workseekers.
It is in the interests of South Africa that the available manpower be utilized as effectively as possible. This Bill provides the framework for effective guidance and placement services and should undoubtedly make an important contribution to the realization of this ideal.
I trust that the Bill will meet with the approval of this House.
Mr. Speaker, we are really coming along. I wonder whether the Government would not have done better to have listened to the Opposition 20 years ago and to have done all these things then. It is a fact that every time the Government takes a step forward, it is necessary to repudiate its own policy of the past and to accept something which the Opposition has been trying to bring home to it for decades.
As in the case of the other legislation, the official Opposition will support this measure as well. We just have certain specific questions we should very much like to put to the hon. the Minister.
The first question is in connection with the guidance and placement centres, and now that the hon. the Minister has delivered his Second Reading speech in this House, it is quite clear that those guidance and placement centres will serve a very good purpose. I believe that they will really provide a service to workseekers. This will be very important for the development of their careers. I believe it is an excellent service which will be provided in that regard. In this connection we should very much like to ask the hon. the Minister one or two questions.
The first question is in connection with the wording of clause 2(1), which reads as follows—
Then we also read in the explanatory memorandum provided to us, on page 4, clause 2, paragraph 2—
I wonder why it was necessary to specify that the word “category” could also refer to population groups. The moment the hon. the Minister does this, he is creating the opportunity for race groups, ethnic groups, and so on to be involved in this arrangement. We would agree with the creation of guidance and placement centres for workers in specific categories—i.e. when it is based on the work itself or on the area—but when it is based on a population group or ethnic group, it unfortunately acquires a racist connotation, which may arouse the suspicions of the people involved. I am really sorry that such a possibility should exist here. I think it would have been much better if there had been no reference to such a possibility. In this connection I think that if he agrees with me, the hon. the Minister can now remove that possibility simply by giving the assurance that categories will not refer to population groups, ethnic groups, race groups or anything of that nature.
We should also like to ask the hon. the Minister a question concerning the information which schools will have to furnish to the designated officer of a guidance and placement centre under the provisions of clause 8. According to our information, it would appear to be quite acceptable, but the possibility does exist that abuses may occur. I should therefore like the hon. the Minister to give a definite assurance that the information which school principals are required to furnish will be for the purpose of keeping the relevant statistics and will not relate, for example, to a pupil’s school record in terms of his conduct and so on. I believe that this is the intention of the Bill, but I should nevertheless like the hon. the Minister to give a definite assurance that this is the case.
The third aspect of this legislation is explained in the provisions of clause 15. This clause provides that all employment offices will henceforth be required to register. This is a step which we very strongly support, for in the past, anyone could establish so-called employment agencies. Anyone could open an office and offer such a service, without any qualifications or without being subject to any control. Because of this, and specifically in respect of the population groups in our country which include many unsophisticated workers, i.e. people who have no understanding of all these matters, abuses have arisen where people have been exploited by such organizations. There have been cases where workers have had to pay large contributions to such agencies. Even months after they had started work, they still had to pay large percentages of their salaries to agencies of this nature. Collusion between employers’ officials and such agencies leads to corruption and exploitation of employees. We therefore believe it is a good thing that employment agencies should be subject to control. However, we also want to ask the hon. the Minister whether it would not be better if the industry itself were required in terms of the legislation to create an organization to which all employment agencies would have to belong. In other words, they must be members of such an organization; they must be required to draw up their own code of conduct for the performance of the services they render, and to discipline their own members. In other words, it should not be a bureaucratic organization controlled by the Government, but one which is established in terms of legislation. It should also be obligatory for all employment offices to be members of such an organization. Such an organization would have to draw up its own standards and codes of conduct and would have to discipline its own members. This may be a much better way of achieving the desired object, i.e. by making the industry responsible for it.
These are the only questions we want to ask the hon. the Minister. Once again I wish to convey to him our heartfelt congratulations on this legislation as part of the series of measures which is before the House at this stage. We hope that this specific legislation, too, will do much to bring about improvements in the labour field in South Africa.
Mr. Speaker, in view of the lateness of the hour I should like to suggest that the debate be adjourned.
In accordance with Standing Order No. 22, the House adjourned at