Mr. Speaker, I move—

The purpose of the Bill before this House is to ask Parliament to provide for government expenditure after 31 March 1982 until such time as the main Appropriation Act for the 1982-’83 financial year becomes law. As this normally takes place in late June or early July, the amount of R4 900 million provided for in the Bill is required to cover government expenditure for the first few months of the 1982-’83 fiscal year.

The quantum of this provision is based on cash-flow projections made by each department, and as hon. members will realise, individual and therefore aggregate cash-flow patterns do vary from year to year. A suitable safety margin must also be built into this provision, as there is, in the normal course of events, no opportunity to augment it. It should therefore be clear that the amount provided for in the Part Appropriation Bill cannot be related to the anticipated actual level of expenditure for the full 1982-’83 fiscal year.

Having said this, and without commenting in advance of the main Budget on my expenditure proposals for the coming year, I feel I should stress that we cannot, nor do I intend to, deviate from our chosen path of financial discipline which has served us so well in the past. It will also be evident from my later remarks on our present and immediate future financial position that overall expenditure will once again have to be tightly controlled in 1982-’83.

Hon. members have my assurance that everything possible has been done and will continue to be done to keep a proper rein on expenditure and, so far as the public sector is concerned, to spend only what, in the broad economic sense, can reasonably be afforded. The Government not only hopes, but fully expects that the private sector, likewise, will exhibit a due sense of financial responsibility in the year ahead and will forego all unnecessary expenditures.

Economic Situation and Policy

It is my intention to give the House the customary review of the economic situation and prospects in South Africa when I present my Budget next month. Already at this stage, however, there are certain aspects of the situation which call for comment.

The South African economy remains strong. Indeed, it is now clear that our growth performance in 1981 was in a number of ways even better than that of 1980. While the rate of increase of real gross domestic product of about 4½% in 1981 was lower than the 8% registered in 1980, it represented a further upward surge from a record base in an economy already operating at full capacity. Although an upper turning point of the business cycle appears to have been reached in the second half of 1981, earlier predictions that the economy would move into a sharp downturn in 1981 have been proven wrong. Total monetary demand has continued to increase and the economy has in general remained buoyant.

The Government is fully aware, however, that the economic situation and short-term prospects have been adversely affected by a number of overseas economic developments in recent months. First and foremost, the price of gold has declined from an average of $613 per ounce in 1980 to one of $460 per ounce in 1981 and an average so far this year of $383 per ounce. The significance of this weakening of the gold market is underlined by a simple example: If the gold price falls on average over a period of a year by $100 an ounce, it means a reduction in South Africa’s earnings from the sale of gold abroad of approximately R2 100 million, with a consequent loss in revenue to the Exchequer of perhaps R1 100 million—and that, as I say, in the space of 12 months.

Secondly, the marked deterioration in the world economic situation during recent months has had an unfavourable impact on the growth of our exports in general. And, thirdly, the maintenance of tight money policies and high real rates of interest in the main industrial countries has naturally contributed to higher interest rates and a general tightening in our own financial markets.

The South African economy is therefore confronted by certain short-term problems which, although of a transitional nature, require immediate attention.

One symptom of these difficulties is the present balance of payments position. According to preliminary estimates, the current account deficit for 1981 amounted to roughly R4 billion, or 5,7% of gross domestic product. As the economy cools down and imports decline, this deficit should decrease in the months ahead. Indeed, there are already signs that this process of balance of payments adjustments has begun. In recent months, imports have levelled off in value terms and declined in real terms, whereas both the value and volume of merchandise exports have held up well despite the adverse external influences to which I have referred. According to preliminary estimates, the seasonally adjusted deficit on the current account of the balance of payments declined from an annual rate of R5,9 billion in the third quarter of 1981 to one of about R3,6 billion in the fourth quarter. Nevertheless, for 1982 as a whole the current account deficit will probably still remain substantial.

Another problem which has arisen is that considerable pressure has been, and is likely to be, exerted on the Government’s own finances, partly, as I have just explained, as a result of the decline being experienced in revenue from gold mining taxation and leases. I shall deal fully with the Government’s Accounts for the present fiscal year in the Budget next month.

For present purposes I need only draw the attention of this House to two broad developments in this regard. The first is that the actual “deficit before borrowing” for the current fiscal year might approximate reasonably closely the Budget estimate of R2 707 million. The second is that, as a result of changed economic circumstances, the Government has had to make temporary use of money creation by the banking system in financing part of this deficit.

In dealing with the difficulties caused by the adverse external developments, monetary policy has thus far played a major part. The Reserve Bank has obtained substantial foreign credits and entered into new gold swaps. It also permitted the rand to depreciate by 13,9% on average against all other currencies during 1981. In these ways the Bank has shielded the domestic economy from the worst effects of the world recession. However, in order to ensure the required cooling down of the economy and the restoration of equilibrium in the balance of payments, the Bank has exercised stricter control over the money supply and has permitted the financial markets to tighten and interest rates to rise sharply in response to market forces.

This policy has already yielded good results and should increasingly take effect in the coming months. Apart from greatly facilitating the financing of the deficit on the current account of the balance of payments, it contributed to a welcome decline in the seasonally adjusted annual rate of increase of the broad money supply (M2) from 46% in the first quarter of 1981 to 26% in the second quarter and 10% in the third quarter.

During the fourth quarter of 1981, however, monetary policy encountered two new problems. The first was the financing of the record maize crop and other farming activities through bank credit extended to the Land Bank—at present the amount of outstanding bank credit to the Land Bank is about R2 300 million. The second was the temporary increase in the use of bank credit by the government sector to which I have referred. Largely as a result of these developments, the annual rate of increase of the broad money supply rose to 21% in the fourth quarter of 1981. It was mainly in response to these events that the Reserve Bank further increased its Bank rate from 121/2% to 131/2% in December and the Treasury bill rate rose from 11,35% in early October 1981 to 14,91% on 5 February 1982.

In addition, I issued a press release last week concerning Government issues and certain related matters, which the Deputy Minister of Finance brought to the attention of the House in my absence during the debate on the motion of no confidence. This release specifically dealt with the new trial method of issuing government stock by way of tender, the raising of the interest rate on tax-free Treasury Bonds, the issuing of tax bills, and the utilization of part of South Africa’s official foreign reserves at the IMF for foreign bridging finance. These additional monetary steps should assist the Treasury in raising funds in a non-inflationary manner to finance the Government’s accounts for this year as well as the ensuing year, while also ensuring a more even flow of receipts into the Exchequer.

New Fiscal Measures

The time has now arrived to take stronger corrective action, particularly in the field of fiscal policy. The House will, I am sure, agree with me that there should be a close co-ordination of fiscal and monetary policy. The further decline in the gold price during the past two months and the continued recessionary tendencies in the main industrial countries leave us no other option. The new measures I shall announce today could have been held over until the introduction of the Budget in March. However, I had judged it in the national interest to act promptly and decisively, thereby also avoiding uncertainty and speculation.

I furthermore deem it essential from the fiscal point of view to gamer additional revenue at the earliest possible opportunity in order to ensure that the Exchequer’s deficit before borrowing in both the present and the coming financial years is kept to a total which can be financed without undue recourse to bank credit. This discipline has been the hallmark of our State finances since the middle of the last decade and I am determined to continue along this chosen path.

The steps I wish to announce today are the following:

1. Surcharge on Imported Goods

I have decided to impose with immediate effect a 10% surcharge on all imported goods, including imports of goods qualifying for industrial or other rebates.

In view of the Republic’s commitments under the General Agreement on Tariffs and Trade (GATT), however, no surcharge can be imposed on imported goods subject to GATT bindings, and such goods will therefore be excluded from the levy. In terms of certain other agreements and customs conventions a number of further imports will also have to be excluded. As it is accepted practice that imports by central government departments, provincial administrations and similar public institutions are not dutiable, the surcharge will also not apply in respect of goods specifically imported for use by those bodies. In addition, certain petroleum products, including crude oil, petrol, and diesel oil, will again be specifically excluded, as was the case previously.

Detailed information regarding the headings and subheadings of the Customs Tariff to which the surcharge will apply, as well as the exemptions from payment thereof, are reflected in the taxation proposals which I shall lay upon the Table. Copies of these proposals are available at all offices of the Controllers of Customs and Excise for immediate use by importers, clearing agents and other interested bodies.

In order to obtain the maximum revenue from this surcharge the tax base should remain as wide as possible. The exclusions reflected in the taxation proposals already account for an unavoidable yet significant percentage of the Republic’s imports and, apart from exceptional circumstances, no other exemptions of any nature will be considered. For these exceptional cases provision is made in the taxation proposals to exempt specified goods imported in such quantities, at such times, for such purposes and subject to such conditions as the Director-General: Industries, Commerce and Tourism may allow by special permit.

Furthermore, in order not to prejudice our export performance, provision will also be made in Schedule No. 5 to the Customs and Excise Act, 1964, for a drawback of the full surcharge in respect of surcharge goods used in the manufacturing, processing, finishing, equipping and packaging of any goods exported. A Government Notice to this effect will be published in the Government Gazette tomorrow and becomes effective at midnight tonight.

The surcharge will be levied on the value for customs duty purposes and will be effective immediately and payable on all imported goods concerned which have not yet been cleared for home consumption.

It is always difficult to estimate the yield of a new tax, but taking account of the present and expected trends in imports, I estimate that the additional revenue will about to about R550 million in a full year. During the rest of the current financial year somewhat less than R100 million will be collected. This is, of course, not an entirely new levy as an identical type of surcharge was imposed in 1977, albeit at a higher rate at that stage.

I should like to emphasize that this surcharge should in no way be regarded by local producers as effective and lasting protection against foreign competition and consequently a convenient shield to justify raising their domestic prices. On the contrary, it is, like the 1977 levy, a purely temporary measure introduced to cope with a purely temporary situation and will be phased out as soon as circumstances permit.

In terms of section 58(1) of the Customs and Excise Act, 1964, I now lay upon the Table the formal taxation proposals in respect of the new surcharge on imported goods [V.1-’82].

*2. General Sales Tax

The import surcharge will earn much-needed revenue, but this will not suffice for the year ahead. I shall have to look further afield.

A source of revenue that also yields immediate income and is even more broadly based, is the general sales tax. Much as I would have wished to maintain this tax at its present very low level of 4%, I have reluctantly reached the conclusion that in the circumstances forced upon us by the decline in the gold price and the deterioration of the world economy, it is necessary to effect a modest increase in the rate of this tax at this juncture.

I have therefore decided to raise the rate of the general sales tax from 4% to 5% with effect from 1 March 1982. A proposal in this regard is accordingly laid upon the Table. This increase ought to yield some R600 million in the 1982-’83 financial year.

In deciding to announce the increase now, I was also influenced by the fact that, apart from the necessary amending legislation, the Commissioner for Inland Revenue will have to draft and distribute new tax rounding-off tables which will become effective from the beginning of next month. Since the proceeds of the tax collected by vendors are only payable to the Exchequer in the course of the subsequent month, no additional revenue will accrue to the State during the current financial year, i.e. before the end of March 1982.

Furthermore, this earlier announcement will allow traders operating on the inclusive system sufficient opportunity to adjust prices on goods and services, while those on the exclusive system, will in turn, have ample opportunity to reset their cash registers accordingly, whether they calculate the tax mechanically or electronically.

I should like to emphasize once again that this tax is levied at the final point of sale and should under no circumstances be used by the trade as an excuse to increase basic selling prices. Exploitation of the consumer in this respect will be regarded in a most serious light by Government.

I may mention that the effect of the increase in G.S.T. will be ameliorated for certain groups by a decrease in the P.A.Y.E. deductions which will take effect from 1 March 1982.

The decrease in deductions is brought about by the new final deduction system of tax payments—mentioned in my Budget speech last August—in respect of persons whose taxable incomes amount to less than R7 000 per annum and are derived entirely or almost entirely from salaries or wages (including pensions).

For example, a married person without children earning R500 per month will find that his monthly P.A.Y.E. deductions will be reduced from R23,17 to R18,13, a saving of about R5 per month, an amount equivalent to the additional G.S.T. on the purchases of goods amounting to R500 per month, or equal to his total monthly income. He obviously spends less than 100% of his income on the purchase of G.S.T.—taxed consumer goods, and will thus be marginally better off than before. Furthermore, if the person mentioned in the example happens to be over the age of 70, the monthly tax deductions will be reduced by nearly R12, an amount which will more than compensate for any additional sales tax that may be payable.

These and other relevant factors must be taken into account when assessing the true impact of what I submit is, in the circumstances of the case, a very modest tax increase.

In saying this, I am very sensible of the fact that there are people, particularly those senior citizens who have served our country so well in the course of their working lives, who are now finding it increasingly difficult to live on a fixed income. It is never easy nor pleasant to dispense good and effective medicine, especially if one realizes that good medicine is almost always by definition, unpalatable.

Accordingly the Government has given very critical and serious consideration to the dose I have prescribed today. Indeed, we have taken great pains to investigate all possible avenues with a view to cushioning the effect of these proposals on those whose circumstances make it difficult to absorb this increase.

For various reasons, not the least of which is the insurmountable administrative difficulties that would be encountered, it has unfortunately not been possible to vary the incidence of the additional taxation so as to bear more heavily on non-food items. As a first step, I have instructed my Department to look very closely once again at the whole question of food subsidies within the constraints of the Budget with a view to possible alleviation in one form or another as soon as practicable.

Conclusion

I believe that the cohesive package of fiscal and monetary measures I have announced will amply demonstrate the resolve of the Government to do whatever is necessary to ensure that the South African economy makes the adjustments required by the adverse external developments of recent months, and makes them in good time. We have to face up to the economic realities of the day if we are to preserve the fundamental strength and soundness of our economy, and if we are to place ourselves in a position from which to derive the maximum benefit from a recovery in world economic conditions, a recovery which many believe will set in within the next year or so.

In a world beset by recession and decline we have a great deal to be thankful for, not the least of which is the excellent credit rating we enjoy in the capital and money markets of the world. Only a few weeks ago an authoritative American assessment raised South Africa’s credit rating even higher than it was a year ago.

Finally, I wish to place on record my appreciation for the sterling services rendered to my Department by the previous Chief Executive of the Directorate of Public Finance, Prof. S. S. Brand, who left the full-time service of the Government at the end of 1981. Fortunately Prof. Brand’s services have been retained by the Government, albeit in a part-time capacity, as advisor, as a member of various committees, and as Chairman of the Economic Advisory Council. Prof. Brand has been succeeded by Mr. Gerhard P. Croeser, previously Chief Director of Public Finance.

Mr. Speaker, I move—

Agreed to.

Mr. Chairman, during the Second Reading I explained to the hon. the Minister and the House in a fair amount of detail why we are opposing this clause. I pointed out that if this regulation were to be passed, it would shift additional cost onto the farmer and that it would be inflationary to a large extent. For these reasons in particular, but for other reasons too, we on this side of the House are consequently opposed to what is being moved in clause 2. I do not want to discuss the matter in detail once again now, but merely to confirm that we are adhering to our opposition to the clause. I shall elucidate our standpoint further during the Third Reading.

Mr. Chairman, yesterday during the discussion of the Bill the hon. member for Wynberg made the statement that the trust account of certain commission agents would be more risky than those of others. When one talks about a trust account as such, I do not think one can weigh up the element of risk of the one against the other, because then the principle of the trust account would be called into question. I feel that the hon. member’s argument becomes invalid on the basis of this.

The hon. member for Wynberg also alleged that it is inflationary. However, it can be inflationary only when the cost is shifted to the consumer and the total cost structure of the consumer is increased in this way. We have conceded that there would be a cost increase for the producer as such, but the hon. member for Mooi River also argued very clearly, further to what I said yesterday, that the S.A. Agricultural Union has given its permission for such an increase to be granted, in view of the problematical nature of this situation. However, if one looks at this situation as such, one sees that the cost for the commission agents could increase to such an extent that increases may possibly have to be granted in other ways. The hon. member for Mooi River reacted to this by saying that if they were to push up the percentage commission, it would definitely have a much greater effect on the producer, and it would then have to be recovered from him, or on the other hand, it would have a further inflationary effect. This was his argument.

Yesterday we argued very clearly on the matter. I think there is a built-in preventive measure, and I am referring to the table that has been drawn up. That table simply has to be handled carefully, and we know that the hon. the Minister will do so, because he is sympathetic towards the producer’s cause. We know that he will not grant an additional, unjustified increase. A further built-in mechanism is the assurance that he gave us yesterday that the S.A. Agricultural Union will also have a share in drawing up that table. Therefore one cannot argue that this matter can be opposed as the hon. member for Mooi River is doing here. On the basis of this, we in the Government benches cannot but grant our approval to this clause as such.

Mr. Chairman, I do not want to take up the time of the House unnecessarily, but I do want to reaffirm some of the points I made yesterday. Let me just say that we accept the justification for this Bill on the basis of it being a preventative measure aimed at counteracting a possible increase in any commission that may be levied at any future date.

We also accept this Bill in the light of the fact that organized agriculture as such as motivated its point very clearly. The only point I want to make here is that the advantage that might be gained by the agents—and which should not be lost sight of—is the fact that their ledger fees would no longer become part of their expenses.

Let me therefore say, without further ado, that our standpoint is quite clear. We support this clause as it stands.

Mr. Chairman, the hon. member for Ventersdorp has replied to conclusively to what the hon. member for Wynberg said, that it is scarcely necessary that I too react to the arguments that the hon. member for Wynberg raised yesterday or today.

But tackle him all the same.

I should like to thank the hon. member for Ventersdorp for the contribution that he made in this regard. I should like to tell the hon. member for Mooi River that he really is au fait with the contents of this legislation and with what is being envisaged with this legislation. I also thank him for his support and that of his party.

I should just tike to elucidate the core principle once again in order to indicate what we have in mind with this piece of legislation. It is quite incorrect to say that it will shift costs onto the farmer once again. That is not true. This entire matter flows from an action on the part of the banks. All that is being envisaged with this measure, is to restore the status quo to what it was prior to May 1981 when the banks introduced their new regulations. This is the crux of the matter.

Yesterday the hon. member also argued that the commission agents make a great deal of money. For the information of hon. members I just want to say that due to changed tariffs of remuneration and other legal restrictions, market agents show a slight nett profit on sales that varies between 0,173% and 1,68%. Since the changed policy of the banks means that ledger fees and commission will be the responsibility of the commission agents only, it will mean, as the hon. member for Mooi River correctly said, that their costs would rise to such an extent that I should be obliged to increase the rate of commission that they levy on the sale of the farmer’s products. If I were not to do so, a number of them would go bankrupt. These are the cold facts of the matter.

That is not correct.

These are the cold facts of the matter and this is the underlying reason why the Commission for Fresh Produce Markets supports the measure, the reason why the Institute of Market Agents has asked for it and it is also the reason why, having discussed this matter carefully and consulted carefully on it, the S.A. Agricultural Union has supported this measure. It was not simply done on a haphazard basis or grasped out of the air. It was carefully weighed up. I can tell the hon. member for Wynberg that during the discussions farmers told me that there are a number of agents who provide valuable service to the farmers and who are in danger of bankruptcy. We must bear in mind that there was an increase in cost amounting to 427%. I can assure the hon. member that this is the factual situation.

I also want to say that this question of commission agents is not a closed shop. Anyone may apply. He has to comply with certain conditions, and if his application is refused, he can appeal to the Minister. I cannot recall when last there was such an appeal. On the contrary, I have not yet dealt with an appeal in this regard. People who comply with the prescribed requirements, are freely allowed to be commission agents.

Then I can also point out that in 1981 our 14 national produce markets had a turnover of R345 million. I am pointing this out simply to give hon. members an idea of the extent of the funds that are involved here. Considerably more than half a million cheques were issued for this. The vast majority of these cheques vary in value between R100 and R2 000 and the bank levy rates here are 3 cents per R20. This brought about an increase of 427% in banking costs for the market agents. Whereas previously the position was that both the market agent and the producer carried this cost, due to the changed policy of the banks, it is being shifted entirely onto the commission agents at present. I shall content myself with that.

Clause agreed to (Official Opposition dissenting).

House Resumed:

Bill reported.

Third Reading

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

Mr. Speaker, now that the Bill has practically been passed through the House, there are a few points that I wish to bring to the attention of the hon. the Minister.

The first point is in regard to the 427% increase in the cost of administering these trust accounts that are held by commission agents. Personally I find it extremely difficult to believe and to understand how, through a single action of a few banks, a cost item to commission agents could be increased by a percentage as high as 427%. The hon. the Minister in his Second Reading speech mentioned that percentage and I understood him to say that commission agents told him that this was the figure. I want to know from the hon. the Minister whether he, through his department, has in fact done an investigation, because if the increase in costs to the commission agents is as high as 427%, I think it is certainly the duty of the Government to investigate the way in which the banks are handling this matter. In my view an increase of 427% seems to be completely out of all proportion. It would appear as if somebody has been misleading somebody else, and I think the hon. the Minister should really have made a thorough investigation. If he has done so, he has not told the House about it.

The second point that the hon. the Minister made is that the South African Agricultural Union sanctioned the amendment which is before us today. I do not want to pick a bone or be at loggerheads with the South African Agricultural Union, but want to ask: How can one make a statement in this House that because a certain body in a certain industry has given its sanction to a Bill, the Bill must of necessity be correct? After the hon. the Minister indicated to the House that the Bill had the sanction of the South African Agricultural Union, I phoned not the Agricultural Union, but a number of farmers who are producers of fresh produce and others who are beef and pork producers, and not one of them was aware of the fact that this Bill was before the House and that an additional cost was going to be levied against them.

They must be Prog farmers.

Maybe, but let us welcome the fact that there are in fact Prog farmers, because they tend to be the most progressive farmers that we have. However, the point I want to make is that when the hon. the Minister says that the Agricultural Union has agreed to this amendment, did he in fact make sure that that body had consulted with all the people concerned and that in their decision or recommendation it is truly representative of what the people in the industry really desire? I am not saying that this is or is not so, but the people to whom I spoke certainly knew nothing about this and were very surprised to hear that they were going to have further costs levied against them.

Speaking about costs, I wonder whether the hon. the Minister and the House know exactly which costs are being levied against the farmers today when they send stock to be slaughtered. Perhaps I should devote a little time to the costs that are involved. Do hon. members realize that when stock is sent in for slaughter today the farmer has to pay slaughter fees, municipal fees, an abattoir commission levy and an administration levy? Perhaps there is also an insurance levy, while transport costs and railage must also be paid.

Why hasn’t somebody in this House spoken about all those costs when we are discussing this Bill which is before us now? [Interjections.] The hon. the Minister will also know that provision is made for the agents to charge the farmer for telephone and for telegrams. Then there is also a fodder cost. If one happens to be marketing from South West Africa there are other costs as well. [Interjections.] Then this hon. Minister has the audacity to stand up here and to say it is only a small amount, that it does not really matter and that in any event those agents are having such a hard time; if they do not get permission to pass on these new costs levied by the banks they will be forced out of business. I submit that this hon. Minister—if he believes what he said earlier—he has in fact been mislead again. I did not only phone the farmers in connection with this Bill; I also phoned some of the market agents.

If it is true what the hon. the Minister says—and I have no reason to believe that he is not speaking the truth—the commission agents apparently had discussions with him in his office in Pretoria. When I phoned certain agents in Cape Town this morning they said they knew nothing about this Bill. They said they had not heard about the Bill. [Interjections.] Hon. members should not tell me now that I phoned only Prog agents.

The ones you phoned were not Broederbonders.

Mr. Speaker, allow me to tell the hon. the Minister that those people to whom I spoke this morning were some of the senior men at the Cape Town abattoir involved in this type of business. One gentleman said to me they knew nothing about this Bill. [Interjections.] They said they knew nothing about the Bill. There was one particular agent…

You are talking utter nonsense.

Is the hon. member for Mossel Bay alleging that I am not telling the truth?

No, but you are simply talking a lot of nonsense.

You should rather be ashamed of yourself.

On the contrary. The hon. the Minister can approach those agents himself and ask them whether they are not ashamed of themselves. Indeed, it seems to me as if the hon. the Minister does not accept my word when I say that I have spoken to those people. [Interjections.]

†They knew nothing about this Bill before us now. I should like to put it to the hon. the Minister that a particular agent to whom I spoke this morning happens to be someone with whom I have had a long association. This particular market agent, like all market agents, is entitled to a 4% commission on the selling price of stock.

Man, you are talking about the GST now.

This particular commission agent is having such a hard time. He is so hard up, so close to the point of bankruptcy, that he does not take 4% commission. He can in fact survive on 2% commission. That is how well these agents are doing. When I spoke to him this morning about this new levy I asked him: “Are you really having such a hard time of it that you need that additional money?”

*His reply to me was: “Mr. Myburgh, thank you for your support; we are doing very well, thank you.”

†That is why I do not believe that the market agents really need this additional income for which farmers will have to pay.

Mr. Speaker, I shall tell hon. members something else that this particular market agent said. He said to me: “Mr. Myburgh, do you realize that those gentlemen in Pretoria often do not know what goes on at the abattoirs?”

Surely that is nothing unusual. [Interjections.]

Then he said: “Mr. Myburgh, do you know that here at the Cape Town abattoir, new sheds have been built for the storage of feeds on which we, the agents, have to pay R2,40 per square meter?” He went on: “Of course you realize, Mr. Myburgh, that we are not involved in the feed industry. However, we have no choice but to incur those additional costs.”

†I should like now to know from the hon. the Minister … [Interjections.] Mr. Speaker, I am trying to speak to the hon. the Minister. [Interjections.] If the hon. the Minister, under the management of his department, should allow extra charges such as this one to be levied on the agents, what right has the hon. the Minister then to come along and to levy additional charges on the farmer while the agent clearly does not need that extra income and while the farmer is certainly not in a position to pay that kind of money? When I spoke during the Second Reading debate and an hon. member of the NP, a person whom I consider to be a sensible man, spoke after me, I gained the impression that if he had the choice he would have taken our line. He supported the Government, but he supported it with so many “ifs”, and “buts”, “maars” and “veronderstellings” that it was quite clear that he would have preferred this Bill never to have been before the House. That is why he appealed to the hon. the Minister to make sure that only a reasonable percentage of the additional costs should be levied upon the farmer. He also appealed to the hon. the Minister to work in consultations with S.A. Agricultural Union and asked “that they too be consulted about the amount of money to be passed on to the farmer.” I simply gained the impression that this was a Bill that the hon. the Minister had not given due consideration to and that, whilst he accused me of not understanding it, he probably did not understand what he was doing himself. Now he finds himself in the position in which the legislation must simply go through and the members of his party must willy-nilly support him, while in their heart of hearts they know that the consequences of this Bill will be another example of where the Government simply allows costs to increase, where the primary producer will have to pay those costs and in the end, if the farmer again fares as badly as he did two to three years ago, they—the Government—will say that the weather or other circumstances were against them. The point is that it is due to maladministration, even in small matters such as this, that the South African farmer is being placed in the position in which he finds himself today.

Mr. Speaker, I find it very interesting to observe the vein in which the hon. member for Wynberg argued here this afternoon. He adopted the standpoint that the PFP as a party states the standpoint of the farmers and is au fait with the opinion of the farmers and that the S. A. Agricultural Union is not essentially representative of the farmers, with regard to this matter, nor does it interpret the wishes of the farmers. It is very interesting if this really is the view of the PFP. The hon. member for Wynberg alleged that he telephoned farmers and they told him that they know nothing about this amendment that is going to be made. On the basis of that, because two, three or say five farmers were not aware of it, the modus operandi of the S. A. Agricultural Union and its representation of the farmers as such, is being placed under suspicion.

Questioned.

Very well then, questioned. Now I should like to know whether the hon. member is satisfied, after having asked two or three farmers only, that he took a representative sample of all the farmers and on the basis of that can allege that this is the opinion of most farmers. Is this his standpoint? Is this the method that is to be followed? [Interjections.] He must now tell me whether it is democratic and correct to phone three, four or five farmers only and then to say that those few farmers reflect the average view of the 90 000 farmers in South Africa. I can understand that they are adopting that standpoint, because after all that is the PFP’s standpoint as well. After all, they do not have voters either and consequently they also take a few voters only and say that those voters reflect the general South African standpoint. I am not holding this against him, because this is the principle that they apply.

However, he went further and as far as the market agents are concerned, he said that they—he mentioned one only and said that that one was representative of all the market agents—are inefficient as such in their organizational consultative power. He placed them as an organization under suspicion. He even went further than that; he also jeopardized the position of confidence of the people by whom they are represented, because he called it into question. The PFP as such did this. Therefore, not only have they given the farmers a slap in the face, by dragging their representative body in here, but they have given the market agents a slap in the face as well. The hon. member said that they were not doing their work well and that they were badly organized. This is what he said.

He also said they cheat the farmers.

Yes, he said that too, because he said they can get by with a commission of 2%, but in actual fact they take 4%. Therefore, according to the hon. member exploitation is taking place. This is what he alleged.

The PFP maintains that they are the party that sees to the interests of the general public, and now the hon. member says these people are exploiting the public. He said that some of them could well fall away, because there are too many of them. On the other hand, however, they advocate the free market mechanism which means that competition keeps the price structure down. On the one hand he is advocating that they should fall away, but on the other hand he is asking that there should be as many of them as possible. What sense is there in such arguments?

The hon. member also called into question the integrity of the hon. the Minister. I want to deal with this now, because the hon. the Minister is in a more difficult position to do so. He called into question the hon. the Minister’s integrity in terms of consultation as far as all the parties involved in the drawing up of the legislation are concerned. By implication he alleged that the hon. the Minister did not do that.

He is therefore alleging that the hon. the Minister lied.

That is true; he said that by implication.

If this is a party that is alleging that they are pleading the cause of the farmer and then at the same time call into question the standpoint and the high-level organization of the farmer—they are in fact dragging it through the mud—I wonder whether this is an organization that is pleading the cause of the farmers.

At the end of his speech the hon. member said that there was an hon. member who spoke after him—he was obviously referring to me—who actually agreed with him. Surely this is not true. What is in fact true, is that I said that there were certain procedures and facts that one should face, that one should look at and accept. This was my argument and I admit it. However, I also said what the consequence of that would be and pointed out that if one had all the facts at one’s disposal, one could reach one conclusion only and this was that one would have to build a proper mechanism into the legislation that would give the market agents the guarantee on the one hand that they would not suffer unnecessary losses or have to employ other methods that would push up the cost structure as a whole. On the other hand, such a mechanism should guarantee the farmers that the cost structure for them would not shoot skywards. This is the mere argument that was put forward. However, on the strength of it, the hon. member came to a conclusion that was either one-sided or ill-considered.

We on this side support the legislation.

Mr. Speaker, I should just like to state briefly once again the attitude of this side of the House in regard to this legislation. We accept the fact that agricultural producers are responsible people. When a decision of this nature has to be taken, it is taken in a responsible manner and it is taken by a responsible organization to which all agricultural producers in the country belong. Any suggestion that the agricultural producers of this country have no confidence in their own organization is an absolute slur on organized agriculture as a whole in South Africa, i wish to make it quite clear, Sir, that we accept the effects that this legislation is going to have on the agricultural producer. We accept the fact that there are other factors in regard to marketing costs. However, we on these benches are not at this stage going to discuss the point with regard to marketing costs apart from the actual question that is before this House at the moment. I am not in disagreement with the hon. member for Wynberg when he talks about the broad spectrum of the cost of marketing agricultural produce and livestock but that is an issue which I think we can discuss on some future occasion.

Mr. Speaker, I have now done my best to act decently in this Parliament, but I must say that hon. members like the hon. member for Wynberg are looking for trouble and that hon. member is going to find it now.

The hon. member rose to his feet in this House of Assembly as a result of a measure that I introduced and he insinuated in what in my opinion is a very serious way, that the market agents or commission agents that this legislation deals with, are not even aware of the fact that I have come to the House with legislation of this kind. He insinuated in a very subtle way that I came to this House with a measure that affects these people and that I had not consulted those people at all. This is the insinuation that he made. In fact, he said so too. [Interjections.] I just want to tell that hon. member that the Institute for Market Agents submitted representations to the Department of Finance further to the action of the banks. Following that, they submitted personal representations to me at my office in Pretoria. That organization submitted representations to me and now that hon. member is trying to create the impression that I am making arrangements on my own here and that I have not consulted the market agents at all. [Interjections.] Therefore I say I think it was an unsavoury insinuation that the hon. member made and there is something else that I want to tell the hon. member. He is casting a reflection on the Institute for Market Agents and he is smearing the Institute for Market Agents here. He is a real smear politician. [Interjections.]

Order! The hon. the Minister must withdraw that word.

I withdraw it, Sir. I want to go further. I say that the Institute for Market Agents submitted representations to me but there is also the Commission for Fresh Produce Markets. There is an existing Commission for Fresh Produce Markets that is involved in what is happening in our national fresh produce markets. Apparently that hon. member is not aware of that commission. The chairman of that commission is a very esteemed and respected man in market circles. He is continually investigating our markets and continually providing the Ministry and the Government with excellent advice on what is happening in our markets. That hon. member now comes along and insinuates here that I would submit a measure before it had been investigated. It was investigated by the Commission for Fresh Produce Markets and they supported the request. The hon. member remarked that there is an agent in the Cape who is not aware of this. Who is that agent?

I shall give his name as soon as the debate is over.

The hon. member created the impression in the House this afternoon that I was acting without consulting the market agents with regard to the matter. In doing so the hon. member is casting a reflection on me as well as on the Institute for Market Agents. Therefore I challenge the hon. member to reveal the name of that agent here in the House.

I have already said I shall give you the name of the agent concerned later on.

The name is probably Myburgh, Myburgh and Myburgh!

The hon. member does not have the courage to mention the person’s name in the House, because he is engaged in smear tactics. The S.A. Agricultural Union was also consulted on this matter. The Opposition is politically bankrupt and the farmers do not support them. The farmers laugh at them. However, now the hon. member for Wynberg comes along and smears the S.A. Agricultural Union and casts a reflection on their integrity. This is the hon. members way of doing things.

Apart from the fact that the hon. member used suspect methods, he does not understand the legislation either. Why is the hon. member so inconsistent? The Opposition voted against clause 2 of the Bill, the clause that contains the entire principle. But in the case of clause 3—that deals with cases where the Director General has to take over a trust account—which can be applied mutatis mutandis to clause 2, the Opposition does in fact support it.

We had already put our standpoint clearly then.

It is merely a manifestation of the hon. member’s ignorance and inability to understand the legislation.

No one telephoned him about it.

Yes, that is correct; he did not receive a call about it. If someone had rather explained it to the hon. member over the telephone, he might have known what to do. The hon. member tried to conduct an argument on all the levies that farmers have to pay, as well as transport costs, etc. Surely this is not the issue before the House. Surely this is not what this legislation is about, as the hon. member for Mooi River correctly remarked. The hon. member for Mooi River understands the legislation and had a good word to say for the farmers.

The hon. member for Wynberg alleged that his “secret agent” takes only 2% as commission. I shall refer the matter to the Institute for Market Agents and point out to them that the hon. member for Wynberg is alleging that they are making too much money, that their own people are alleging that they are making too much money. This is the only group of people that I am aware of in South Africa that is complaining that they are making too much money. The crucial point the hon. member for Wynberg is overlooking—apparently he does not have the ability to understand it—is the fact that the position is being reinstated to what it was prior to May 1981. I sympathize with the hon. member. It seems to me as if he experienced problems with the various concepts, and therefore I am prepared to second one of my officials to him to explain it to him.

I want to thank the hon. member for Ventersdorp for his support. He replied conclusively to the hon. member for Wynberg, although I doubt whether the hon. member for Wynberg understood his arguments properly. It seems to me that the hon. member for Wynberg has problems in this regard.

Question agreed to (Official Opposition dissenting).

Bill read a Third Time.

Mr. Speaker, before this debate was interrupted yesterday afternoon, I was referring to clause 4(1)(b) of the Bill that provides for the deletion of paragraph (i) of subsection (5) of section 12 of the principal Act. I referred to it as being the only provision in this piece of legislation that is actually of any real importance. This legislation is of a fairly technical nature. There is no real problem with regard to the principle, and we have already indicated that this is the case. However, it is also to be understood, particularly in legislation of this nature, that lawyers would want to justify their views on such an amendment, particularly legislation of this nature. It is also to be understood that even amongst lawyers there may be a considerable difference of opinion with regard to the exact consequences or implications thereof. Since we accept the principle, it may possibly be of academic interest only today, but I nevertheless feel that a type of post mortem on section 12(5)(i) will not be out of place, perhaps something along the lines of an appreciative funeral oration on the provision that we are taking leave of today. Perhaps there is reason for the view that deleting this provision, without having made provision for anything similar elsewhere, could possibly cause a vacuum or shortcoming, even if it is only in the sense that there would be less certainty with regard to the interpretation and application of what is going to remain of section 12 of the Act. Consequently one could ask whether it would not have been desirable or advisable after all to have put something in its place. The reason why I am raising this suggestion in the House, is because paragraph (i) of subsection (5) was the key in more than one respect at least to the interpretation of section 12, more specifically section 12(1). It was the key to determining what the legislator actually had in mind with certain provisions of section 12(1). Section 12(5)(i) deals with provisions relating to the compensation that can be paid with regard to goodwill for business that may be involved in expropriating fixed property.

I want to set the hon. the Deputy Minister’s mind at rest immediately by saying that I do not expect him to do anything about it at this stage. Nor do I even expect him to react to my proposals in depth. I should just like to mention that time may possibly prove that it might indeed be necessary to look at the matter once again later on, if we might find that a vacuum has in fact arisen due to what is being done here.

It is unnecessary to say that the existing Expropriation Act is a complicated piece of legislation and that expropriation is a complicated subject. Since it is a complicated subject, legislation in connection with expropriation will obviously be complicated too, and of a highly technical nature. Practically every aspect thereof is complicated. The history of our expropriation legislation also gives ample evidence of this. Particularly if we look at the drawn-out process that ultimately led to the current Act of 1975 being placed on the Statute Book, we see that it gives ample evidence of this. The most important characteristic of this is—and this is striking—that this matter has never yet been fully debated in the House. It was unnecessary due to the procedure that has always been followed in drawing up legislation of this nature. To a large extent, the existing legislation is the result of a process of gathering expert advice as well as making use of the Select Committee procedure.

I just want to say in passing that expropriation and legislation dealing with it definitely cannot be a politically contentious matter, nor should it be. This has already been recognized by the way in which matters of this nature have been dealt with by the House in the past. I am referring to the question of political contentiousness because of the contribution that we had here from the hon. member for Pietermaritzburg North yesterday. In my opinion, when an hon. member or a party tries to drag politics into a debate on expropriation, it simply shows a pitiful political outlook. It really is rather a suspect phenomenon. I think it is deplorable that this should happen. All one can do is to pity the people involved because it is a suspect performance. These are typical Prog tactics.

You were the ones that abused the legislation, not us.

I have already said that traditional measures for expropriation were dealt with on a basis of consultation by the House. I just want to refer briefly to the background in this regard. Over the past two decades, legislation has always been placed on the Statute Book by means of gathering expert advice and the investigation by Select Committees. In 1965, for instance, there was the investigation by advocate B. C. Mullan that led to the Act of 1965 at that time. Then in 1968 we had the O’Brien Committee and in 1970 an extended interdepartmental committee, the so-called Steyn Committee, that was later transformed into a smaller inter-departmental committee, the so-called Van Blommestein Committee. On 3 February 1975, the draft bill of that committee was tabled in the House and then referred to a Select Committee under the chairmanship of the hon. member for Waterkloof. In May of that year, the Langley Committee submitted its report and on 9 June the relevant Bill was read a Second Time. It is striking that at the time there was little discussion on this and that the proposals of the Select Committee were practically accepted forthwith.

It is being contended that the principle of compensation for goodwill is not being created or stated in section 12(5)(i), but that a ceiling is merely being laid down for the amount that may be paid. In other words, it is being contended that that principle should be sought elsewhere in the legislation. In all probability, it is possible that there will be a difference of opinion amongst lawyers with regard to the expert advice, on which this Bill has been based. I feel that we should take into account the possibility that a deficiency may arise, and that there may be uncertainty regarding the interpretation of the remaining provisions of section 12. Subsection (5)(i) of Section 12 had certain merits. If it served no other purpose, at least it helped us considerably in establishing the intention of the legislator with some reliability, and interpreting it correctly. I want to try to motivate my statement. In the first place, subsection (5)(i) leaves no doubt that it was the intention that there should be compensation for goodwill when a business enterprise is involved in the expropriation of fixed property, although it is not clear whether it should be a component of the concept of “property” or the concept of “right”. Provision is being made there for both concepts in section 12(1). Subsection (5)(i) is also the only authority in the Act itself for the interpretation that there should in fact be compensation for goodwill. Without that subsection there would definitely have been a degree of uncertainty as to the intention of the legislator in this regard.

In the second place, the existing subsection (5)(i) left no doubt about it either that it was intended that compensation for goodwill may be paid to other persons or bodies besides the owner of the fixed property that is being expropriated. In section 12(5)(i) mention is made of a business or profession that is being conducted or pursued on the land that is being expropriated, whereas section 12(1) makes provision for compensation to “an owner” only. Therefore I feel that it could possibly cause uncertainty.

Thirdly I submit that without the guidelines of subsection (5)(i) the value of goodwill would probably have to be determined according to the open market formula which is the formula prescribed in section 12(1). It is quite conceivable that one would experience problems if one were to determine the goodwill on the basis of the open market formula, viz. what a willing buyer would pay a willing seller. The question could then arise whether goodwill should be considered a component of the property that is to be expropriated, i.e. of the immovable property, and whether it should be a component of a right. If it should be a component of a right, the open market formula could probably not be applied.

Furthermore there is also another consideration. For instance, the hon. the Deputy Minister said yesterday (Hansard, 10 February)—

Since subsection (5)(i) is now being deleted, it will no longer be possible to allege that the Act expressly—I emphasize “expressly”— provides for the payment thereof. Of course we know that even this statement by the hon. the Minister, as it stands in Hansard, cannot be used to support the argument that it is indeed payable. It could be alleged that this is the case only by deducing it from what is stated elsewhere in the legislation. Therefore this means that it will be possible only with the aid of the interpretation of provisions elsewhere in the legislation. It is at least conceivable that there would be a degree of uncertainty on this.

When I say that uncertainty could exist, I am thinking in particular of the valuer, whose expert advice is called in; therefore, the man who has to give the advice. It may be difficult for him to know, merely by interpreting the legislation, whether he is entitled in his valuation of the property that is being expropriated, to take credit goodwill into account as well and wether he would be entitled to take into account the goodwill of anyone besides the owner.

Therefore, in actual fact my entire argument simply amounts to the question of whether it would not be advisable for the sake of security of justice, to make specific provision elsewhere in section 12 of the principal Act for the principle that we all accept, viz. that the goodwill is also a component of the compensation payable in the case of expropriation, and furthermore that it is not only the owner of the land, but the interests of a third person—for instance a tenant— who is also involved in the business, to be taken into account. In any event, I am emphasizing the fact that we are not experiencing any problems with the legislation as it is before us at the moment. We accept it and are pleased to support it. But since I have expressed certain reservations about a specific aspect of the legislation, and have testified to a degree of uncertainty in my own mind—and I concede that it possibly flows from an excessive degree of carefulness—I should like to believe and am confident that time will tell whether my concern with regard to this matter was entirely unjustified. Therefore, I am pleased to support the legislation.

Mr. Speaker, we on this side of the House will be supporting this Bill. We see the change of Ministerial responsibility as contained in clauses 1 and 2, as a more common-sense approach to expropriation. We believe that this is now under the correct portfolio.

The removal from the Act of references to the Senate, and also the updating of the name of the S.A. Transport Services, are both essential. With reference to section 12 of the principal Act, we see the amendment contained in clause 4 of the Bill as a fairer method of paying interest; such interest now being payable from the date of taking possession. We agree with this. With regard to the question of goodwill we believe that the open market value is of course a more equitable way of paying compensation. That is, of course, if one believes in a system of free market enterprise. In so far as the amendment to section 16 of the Act is concerned, this is a distinct improvement as it defines the rank of an appointee more precisely. Therefore we have pleasure in supporting this Bill.

Mr. Speaker, I should like to thank the hon. member for South Coast for his support for this legislation. The amendment which is of real importance here, is the one in connection with clause 4(1)(b). This merely entails that full compensation may now be paid for goodwill and that this payment is no longer calculated in accordance with the old formula, a formula which could be used either to the benefit or to the detriment of the expropriated party.

Unfortunately I cannot say the same in connection with the speech made by the hon. member for Pietermaritzburg North. That hon. member, by referring to “group areas land consolidation”, called this expropriation legislation legislation that does not give the expropriated party a fair deal. He does not dare to say in what respects this does not bring about a fair deal. My submission is of course that he cannot, for if he thinks that this legislation does not bring about a fair deal, he should, in the first place, go back to the Provincial Administration of Natal, an administration that saw fit to incorporate this legislation into their road ordinance exactly as it stands. If the hon. member was not simply out to make a political issue of this, he would also have added that it had not been the intention of the Natal Provincial Administration to put a road ordinance into operation as well which would not result in a fair deal.

You should go and read my speech, then you will not talk such nonsense here. [Interjections.]

Oh, you were at SAPOA yesterday, where you heard what a good bit of legislation this was. [Interjections.]

The hon. member for Sundays River explained what led to the introduction of the legislation. I should like to support him in his argument. I think we have a piece of legislation here which one may really be proud of. It compares favourably with the best of its kind in the world. The amendment to the provision in connection with goodwill, the proper way of carrying out legislation, only serves to improve the legislation further, and therefore I should like to support this amending Bill.

Mr. Speaker, I listened with great interest to the hon. member for South Coast, the hon. member for Sundays River and the hon. the Deputy Minister in this regard. The hon. member for Pietermaritzburg North indicated yesterday that we support the Bill in principle. Let me also say at once that I welcome this Bill. In many ways I think it is an improvement on the existing situation, as the hon. member for Sundays River has in fact indicated. I believe that the provision in section 12(5)(i) in connection with the payment of goodwill was unfair in certain respects to people who carried on business undertakings on the land which had to be expropriated. Therefore it is essential that we have clarification in view of the fact that expropriation is a process in which, as the hon. member for Pietermaritzburg North as well as the hon. the Deputy Minister have indicated, the State often acts contrary to the interests of the possessor of land involved, the landowner or the person who is conducting the business. My problem is actually concerned with the question which the hon. member for Sundays River put very clearly to the House, i.e. whether the Bill, after the deletion of section 12(5)(i) and section 12(6), makes adequate provision for the payment of goodwill where a business undertaking is being conducted on the land. The hon. the Deputy Minister indicated yesterday that the legal opinion which he obtained, indicated that it was not necessary for specific or special provision to be made in the Bill for the payment of goodwill, and for that provision for goodwill could be made in the calculation of compensation in terms of section 12(1)(a)(ii). In a way, the hon. the Deputy Minister is right. In the case Jacobs vs. Minister of Agriculture 1972, the Witwatersrand local division of the Supreme Court did in fact find that provision could be made for compensation in terms of section 12(i). This is absolutely correct, but now the problem arises, as the hon. member for Sundays River very clearly indicated, that with the repeal of this provision in section 12(5)(i) and also the reference in the related subsection 4(2), it is possible that because Parliament has specifically removed the reference to goodwill from the Bill, legal doubt might arise. The hon. member for Sundays River also made this very clear. Doubt may arise in view of the explicit repeal of the reference to goodwill in section 5(i), or in terms of section 12 goodwill may in fact be calculated in the determination of compensation. In other words, I do not differ with the hon. the Deputy Minister. As far as I am concerned, I am happy to know that as far as the principle of the Bill is concerned, the hon. the Deputy Minister, the hon. member for Sundays River and I do not differ in essence. All that is at issue here is to find a formula which clearly states that in the payment of compensation in terms of section 12 of the Act, goodwill may in fact be included. What one would like to avoid is unnecessary litigation in this respect. Therefore we must remove any possible obscurity. In view of this I intend proposing an amendment for consideration by the hon. the Deputy Minister during the Committee Stage which I hope will remove this possible doubt. No difference in principle is involved, for the hon. the Deputy Minister indicated in his speech yesterday that he wants payment for the loss of goodwill in the case of a business undertaking which is being conducted on a property. I think that the problem which the hon. member for Sundays River stated, does in fact exist in this regard. I immediately want to say that one of the points which the hon. member for Sundays River raised, and which will not be covered fully by the amendment, is specifically concerned with the situation where there are two different people: On the one hand, the owners of the property, and on the other hand, the person or company which conducts trade or a business on that property. It is, of course, possible that there can be two different companies, one as owner of the land and the other as the person who conducts a business, although it can, of course, be the same person. For the solution of that problem, it seems to me that neither the existing legislation nor the amendment makes adequate provision. I should like to express the hope that the hon. the Deputy Minister will give his attention to these concrete problems during the recess; the problems which will be created concerning the payment and calculation of compensation in terms of section 12 of the Act.

I should just like to say that I support this Bill in principle. I also appreciate the remarks of the hon. member for Sundays River, for he stated the problem clearly. As far as I am concerned, I hope that the amendments which I intend proposing during the Committee Stage, will be favourably considered by the hon. the Deputy Minister.

Mr. Speaker, as is indicated in the Bill, this legislation deals primarily with the deletion of section 12(5)(i). All the arguments centre around this. As I have already indicated, most of the other amendments are consequential, and we shall not argue much about them.

As we have come to expect of him, the hon. member for Pietermaritzburg North, in his support of this legislation, got in a dig at this side of the House to which I simply must react. The hon. member referred to this measure as the “Compulsory Purchases Act”. He referred here to this so-called Compulsory Expropriation Act, by which he implied that the people were being unlawfully deprived of their property as a result of the policy of this Government. This is what it really boils down to. The hon. member referred in particular to the consolidation and the actions of the Trust. I should like to tell the hon. member that real expropriation in terms of the Act takes place very seldom as far as the purchases of the Trust are concerned. Most of the purchases made by the Trust, take place largely by means of negotiation. We speak to these people, we consult them. It is not a question of simply applying the Expropriation Act and deliberately depriving a person of his property. We treat these matters with the utmost sympathy and the greatest respect in the knowledge that these people have to part with their land as unwilling sellers. Therefore the Trust in itself makes provision to benefit these people as far as possible and to compensate them for all the tears—if I may put it that way—which are shed as a result of this kind of action.

The hon. member for Sundays River made a very good speech in which he was very honest about the problems he has encountered as a result of the deletion of the goodwill provision in section 12(5)(i). He said that he was a very careful person. We know the hon. member to be so. For many years he was involved with the Provincial Council and had to deal with many properties. He was apparently in the same position I am in at present, where one has to obtain properties or land in one way or another. In the process of obtaining that land, one must proceed very carefully in order to prevent creating problems and thus causing court cases. Therefore I do not blame the hon. member for being especially careful when a specific section is being omitted from the Act which might leave a loophole. This is basically the argument put forward by the hon. member Prof. Olivier. Since the hon. member Prof. Olivier intends proposing an amendment in this regard during the Committee Stage, I shall prefer to take the matter further when we are dealing with the Committee Stage.

I should like to thank the hon. members for South Coast and Nelspruit for their contribution and support.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 4:

Mr. Chairman, I move the following amendment—

I am not trying to indicate in my amendment what sum should be paid as goodwill, but I am simply trying to state the principle very clearly that in the case of expropriation the goodwill of a business enterprise or profession that is being conducted on the land, could be taken into account in providing the sum in terms of section 12(1)(a)(ii).

In view of the discussion that took place on the occasion of the Second Reading debate, I want to say that I do not now have anything to add to what I said then. Indeed, I hope that the hon. the Deputy Minister will find the amendment acceptable.

Mr. Chairman, as the hon. member for Sunday’s River said on the occasion of the Second Reading debate, one must necessarily allow oneself to be guided by two things when one submits such an amendment. Firstly one allows oneself to be guided by what happens in practice. On the basis of the problems that one experiences in practice, one must make certain amendments. I now come to the second factor by which one allows oneself to be guided. When one encounters such problems with a highly technical law in practice, in the nature of things one allows oneself to be guided by the lawyers. One allows oneself to be guided inter alia, by certain verdicts in connection with the matter.

What has happened in practice? Basically one is dealing with three types of business enterprises. I must point out that it is actually commercial enterprises that are at issue here. One has the ordinary little farm store that must be expropriated. In actual fact, such a shop forms part of the farming activities carried out on the farm; it is not really a separate enterprise because it is essentially linked to the activities on the farm. If one expropriates such a unit—the farm and the shop—one must necessarily establish what loss will be caused by expropriation. Usually such a business enterprise has a very small turnover. In a case like this it would be very difficult to establish a goodwill. One has to look at the turnover and deduct the administrative costs from it. What is the net profit in such a case? It is important to take note of this, because the existing section 12(5)(i) provides that a net profit must be established. The section does not state very clearly whether this should be before or after tax. In terms of the section, goodwill should be paid to such a person whilst in actual fact there might be no goodwill if one were to test it according to the open market. There is also a second type of business enterprise. I am referring to the one man business, in the rural areas or wherever, that must be investigated. Usually the turnover and the stock are examined in order to try to establish—in terms of the existing section—what the goodwill on the open market would be. In terms of the section one could take any twelve consecutive months within a period of 36 months into account. Consequently, he is in a position to choose any period over the duration of 36 months in order to establish a net profit. Once again the method of calculation creates problems with regard to establishing goodwill.

However, the other problem arose with the third type of business for which compensation had to be paid in expropriation, viz. the larger business undertaking, for instance a supermarket or a large garage with a great deal of stock and a high turnover and which was consequently extremely sensitive to the growth or levelling off of the economy. Therefore, if one establishes the goodwill in terms of the old formula, it is possible to obtain a figure within this specific pattern that is much lower than the value on the open market. According to accountants, it is quite possible to establish from audited statements what the goodwill of an enterprise is. I have several examples of this.

As far as compensation is concerned, there are problems too. What must be compensated for? Section 12(1)(a)(i) and (ii) of the Expropriation Act lay down the principle of compensation, viz., that one should compensate according to market value. Market value is established according to the requirement of the market, viz., a willing buyer and a willing seller. Criteria and norms have to be determined on this basis. But it must also be established what the losses of the enterprise are. Therefore the Government is expropriating fixed property and rights of the owner and after that losses must be established. Therefore, what are the various components involved in expropriation? Firstly, the compensation must be drawn up on the basis of the market value of the land, plus the market value of the improvements, plus any real losses that the owner may sustain due to the purchase thereof. In the case of these commercial enterprises the market value of the enterprise consisting of its stock and assets as well as its goodwill must be established. In a modern enterprise goodwill comprises a considerable aspect of the assets, and consequently it is also important in the process of expropriation because losses can be created by it. In other words, it is not necessary to include a provision of goodwill in the legislation again, because in terms of the principle it must be taken into account. That hon. member now wants us to lay down a rule that says how goodwill must be determined. However, the question is whether there is in fact goodwill in every case of expropriation. In certain cases there is of course no goodwill. Therefore, why should one lay down such a regulation if in principle, in terms of section 12(1), it is required that a business should be compensated for its total losses, including goodwill? Therefore I cannot see why I should accept this amendment at this stage. I think practical experience proves that goodwill will have to be determined in any event when such a loss is sustained.

Mr. Chairman, I should just like to obtain clarity on one matter. I feel it is a good thing that section 12(5)(i) is being deleted, because I think that the basis for the payment of goodwill gives rise to unfairness in some respects. The hon. the Deputy Minister himself pointed this out. However, there is also the case of a business that due to circumstances, either in the industry or in the specific business, has not shown any profit for the previous three years, although the potential of the business may be very great. Consequently, the owner receives no goodwill when the property is expropriated. That is why I welcome the deletion of the reference to goodwill in section 12(5)(i). That is not what is at issue. What is actually at issue, as I have indicated, is the lack of clarity that is being created as a result of the deletion, as well as due to the fact that nowhere in the legislation is there an indication that compensation “may” be paid for goodwill. If the hon. the Deputy Minister were to look at my amendment, he would see that it does not say that goodwill “must” be paid. I merely say it shall be competent to pay compensation for goodwill. If the hon. the Deputy Minister has a better wording for it, I should welcome it, but all I want to achieve here, is to indicate that goodwill “may” be taken into account in the payment of compensation in terms of section 12(1)(a)(ii). This is the essence of what I want to do. Therefore I do not want to introduce an entirely new compulsory legal principle by saying that it “must” be paid. I want to repeat once again that it is the security of justice that is at issue here.

The hon. the Deputy Minister said that one allows oneself to be guided by two things under these circumstances, firstly by the situation in practice and secondly, the question of legal opinion. However, the hon. the Deputy Minister knows—I think the hon. member for Sundays River has confirmed it—that there is some doubt amongst lawyers as to the implications of the repeal of the provision regarding the payment of goodwill. In terms of the old legislation, where there was no question of goodwill, the court did in fact calculate goodwill. This was done in terms of the old section that was the equivalent of section 12(1)(a)(ii). However, in the meantime we have made specific provision for goodwill in the legislation. Due to the fact that we are now repealing the provision in regard to the payment of goodwill, it may possibly be deduced that Parliament intended that goodwill “may” not be taken into account in the legislation in calculating the sum in terms of section 12(1)(a)(ii). Therefore, what I want to propose, is merely that it appears that there is a difference of opinion amongst lawyers—because I too have sought a legal opinion—as to the implications of this with a view to the provision contained in section 12(1)(a)(ii). Therefore, if we were to accept this amendment, we would be eliminating something that is not clear. No one would be bound, but we would in fact be eliminating any uncertainty that could arise in this regard. I nevertheless want to ask the hon. the Deputy Minister to consider this. He would be losing nothing by doing so. The principle has been granted that goodwill must in fact be paid. I cannot see any reason why the hon. the Deputy Minister cannot accept this amendment.

Mr. Chairman, I can see the point of the hon. member Prof. Olivier, and I can also see the point of the hon. the Deputy Minister. The amendment as it stands here is mandatory. It says “it shall be competent”. I do not know whether it might not be acceptable on both sides if the word “shall” were amended to “may”. Then it would no longer be mandatory, as I see it. I do not know how the hon. members feel about this. I should like to hear their opinion on this.

Mr. Chairman, with reference to the standpoint of the hon. member Prof. Olivier I think it is important for us simply to have a look at what section 12(5) says. It simply says: “In determining the amount …”. Therefore, the only thing that is involved here, is the way in which the amount is determined. I do not think we can argue about that. If I am correct in saying that it is simply the way of determining the amount that is at issue here, then the principle of the payment of compensation has apparently not been included here. Let me just repeat that. If it is simply the determination of the amount that is at issue here—and I submit that this is all that it is about—then it is equally clear that it is not the principle of compensation with regard to goodwill that is at issue here. If this is correct—it is also a fact that goodwill has been paid in the past— it means that the basis on which goodwill was paid in the past, is not to be found in section 12(5)(i), but in section 12(1)(a) and (b).

Can be found.

No, must be found. The hon. member will concede that it must be somewhere. If it is not to be found in section 12(5)(i)—I think we agree that it is not there—it must be somewhere else in the legislation. I submit that the only place that it can be, is in section 12(1)(a).

I think it is very clear that when we delete section 12(5)(i) we are not affecting the principle that goodwill must be paid. Therefore, goodwill will continue to be paid. If this is so, the basis on which it is paid, is that of the market value.

Now the hon. member has moved an amendment that singles out goodwill. This means that the question will arise whether goodwill is included in “property” to which section 12(1)(a) refers. Now if we exclude goodwill, the question is then what “property” means. Then uncertainty of justice will definitely arise because tremendous arguments are going to arise and are going to result in court cases because we then have the problem of what “property” means. Goodwill will then no longer be included in “property”. The question is then whether the person’s stock is at stake, or what the situation actually is.

I agree with the hon. member Prof. Olivier that we would very much like goodwill to be paid. I want to assure him that the provision that has to be deleted, has nothing to do with the principle. Therefore the principle is to be found elsewhere. It must therefore be in section 12(1)(a) and (b). Therefore, if we were to accept the hon. member’s amendment, I think that we would be creating many more problems and much more uncertainty than is the case at present. Consequently I cannot support his amendment.

Mr. Chairman, I think I can solve the hon. member Prof. Olivier’s problem by reminding him that we are dealing with onerous legislation here. All the speakers that have dealt with the problem thus far, said that a problem of interpretation could arise. If such a problem were to arise, in terms of the rules of legal interpretation, it would be interpreted in favour of the affected party. For that reason I do not think it would create a problem. The amendment could in fact create a problem in the sense that the Bill refers to land ownership and compensation, but no exception is included. If one wants to introduce goodwill as a component of land ownership in the legislation, it would be contrary to all rules of legal drafting and would in fact result in inferior legislation. Therefore I cannot support the amendment.

Mr. Chairman, I shall try to argue this matter in a reasonable fashion. We paid goodwill because of the fact that a person suffers damages if his property is expropriated. However, goodwill is not the only aspect for which we pay compensation. Other expenses that must be paid for, are relocation expenses, for instance. A series of losses are created for a person as a result of expropriation. Does the hon. member now expect relocation expenses to be covered by the legislation as well, in order to make sure that we are going to compensate for that type of loss? I am just trying to be practical, I am not a lawyer, but it seems to me that if we were to accept this amendment, all similar losses would have to be taken into account. A variety of losses are always arising when properties are valued. There is a whole list of proven losses that the owner of the property could sustain and for which he would have to be compensated in the process. If we were now to accept this amendment, it would mean that a schedule would have to be added to the Act in which all sorts of losses were defined, which is not a practical possibility. Therefore, at this moment in time I cannot accept the amendment.

Mr. Chairman, I am afraid that the hon. the Deputy Minister apparently does not understand the problem. The problem is being created by the lack of legal certainty that is being caused by deleting the reference to goodwill in section 12(5)(i). This does not mean that it is the only thing that can be taken into account in calculating financial losses. What is at issue, is the lack of legal certainty that is being created as a result of the deletion.

I listened attentively to the hon. member for Pretoria West and I just want to tell him that according to the terminology that is used in section 12, goodwill is apparently not “property”. In other words, the hon. member’s argument about the word “property” is therefore not at all relevant here, because as it is defined in section 12, goodwill is not “property”. I am very sorry that the hon. the Deputy Minister does not see his way clear to assist us to create security of justice in this matter.

Amendment negatived (Official Opposition dissenting).

Clause agreed to.

House resumed:

Bill reported.

Bill read a Third Time.

Mr. Speaker, I move—

The Bill which now requires the attention of the House provides for the establishment of a South African Council for Valuers and for the registration of valuers, associated valuers and valuers in training. Before explaining the specific provisions of the Bill in greater detail, I should like to point out briefly why it is considered necessary to regulate this matter by legislation.

The S.A. Institute of Valuers has been campaigning for a considerable time now for the introduction of public legislation to set the valuers’ profession in order. Because it was realized that reliable valuations of immovable property were material to the public as well as the private sector, the Government appointed a committee in 1977 to conduct an inquiry into the valuers’ profession. Representatives of the public sector as well as representatives of interested parties in the private sector served on the committee and the committee’s terms of reference actually involved three specific aspects.

Firstly, an investigation had to be carried out with regard to steps that could be taken to raise the standard of valuations. Secondly, the training of valuers had to be considered, and thirdly, the desirability of granting statutory recognition to the valuers’ profession had to be investigated.

In order to identify the particular problems of the valuers’ profession, the committee carried out a penetrating investigation of the nature and extent of valuations of immovable property in the Republic. Evidence in this regard was gathered by sending questionnaires to individuals and organizations. Interested parties were invited to submit evidence to the committee. The available documentation was studied and a study was even made of relevant matters in overseas countries. I must mention the excellent co-operation that was received from all the organizations involved in the investigation. Without that co-operation it would not have been possible to conclude the investigation successfully.

We do not have the opportunity now to discuss the recommendations of the committee in detail, but the thrust of the findings was that there was a lack of efficiency in the field of property valuation and that steps should be taken to improve matters. Insufficient training was identified as the primary cause of unsatisfactory valuations, and the committee’s recommendations in this respect are already receiving attention. As the Bill indicates, the proposed Council for Valuers will also play a leading role in the training of valuers.

The committee was also of the opinion that a watchful eye had to be kept at all times on people who evaluate immovable property. A body to promote the training of valuers and to provide guidance and exercise discipline in the profession was regarded as essential. Consequently the committee recommended that legislation be introduced which would provide for the registration of valuers and the establishment of a body to look after the interest of valuers.

†The Government has accepted the recommendations of the committee, and the Bill now before the House provides for the establishment of a South African Council for Valuers consisting of seven members. Members of the council will be appointed by the Minister of Community Development from among people nominated by the S.A. Institute of Valuers.

One of the findings of the committee of enquiry was that property valuation could not be regarded as a substantive profession as very few valuers practised on a full-time basis. This kind of work is usually combined with occupations related to real estate, such as the real estate agent or the property consultant, or it is performed by persons in professional positions such as attorneys or accountants. To accommodate these part-time valuers and also those who, academically, are not fully qualified for registration as valuers, a separate category, namely that of “associated valuer” has been created. It has also been made possible for the older valuer who has extensive practical knowledge of and experience in the valuation of property but who lacks the required academic qualifications, to register as a fully-fledged valuer. His registration will, however, be subject to the condition that he must be at least 45 years of age and have at least 15 years practical experience of property valuation.

New entrants to the field of property valuation will be able to register as valuers-in-training with a view to eventually becoming fully-fledged valuers.

The council is empowered to prescribe the tariff of fees to which a valuer, associated valuer or valuer-in-training shall be entitled for services rendered by him in that capacity. The tariff will, however, be subject to the approval of the Minister of Community Development.

An important principle is that the council will be financially self-sufficient. As the council will no doubt, especially during the initial years of its existence, be pressed for funds, provision has been made for moneys appropriated by Parliament to be advanced to the council. These advances, however, shall be repayable.

The Bill naturally also provides for various other matters which are normally provided for in legislation of this nature and I need not deal with each provision separately. The main object was to prepare a Bill which would enhance property valuation in this country and put it on a sound footing.

*I am satisfied that this legislation is essential and since it has the firm support of the South African Institute of Valuers, I believe that it will be welcomed in all quarters.

Mr. Speaker, as the hon. the Deputy Minister has correctly pointed out, this is not a political matter. This is a Bill which we welcome because we believe it is a step forward in building a better society in South Africa. It is appropriate that this Bill is introduced immediately after a Bill which amends the Expropriation Act, because if ever the activities and shortcomings of valuers have been exposed in any way, it has been in court cases resulting from the application of the Expropriation Act. It is also quite clear that there is a great need for more discipline and better training for valuers. Value is indeed a vital factor in decision-making in business in order to determine what things are worth, what compensation should be paid and what estate duty has to be levied. One can easily list the many areas of our society, particularly our economy, where the valuer has a very important function to fulfil. In relation to fixed property, which is what this Bill is dealing with in particular—it is not necessarily dealing with jewellery or machinery, but fixed properties—the valuer has a very, very important function to fulfil. In regard to litigation, a valuer’s evidence can be of great assistance to a court. Unfortunately, what often happens is that a court ends up making the valuation. One can mention two recent cases that have been a source of embarrassment to the valuation profession. In this regard let me declare my personal interest, Sir. I am a member of the S.A. Institute of Valuers and clearly share the embarrassment of my colleagues in the profession. The two cases I am referring to are firstly, the Agliotti case where valuations of astonishing variation were presented as evidence and secondly, more recently in the Cape, the Mitchells Plain case where again extremely wide variations in valuation were arrived at.

I think that hon. members of this House who ponder the question of value will know that it is not always so easy to assess values. A child who can choose between an ice cream and a yellowwood table will choose the ice cream every time because the ice cream is of more value to him than the yellowwood table. In the same way, fashions can change. Those old clothes and high-heeled shoes that were discarded 15 or 20 years ago have now suddenly again come into fashion. Suits, clothing and shoes that had no value a few years ago suddenly have great value once again because of changing circumstances. Of course, value also depends largely upon the time of the valuation. All we need do is see how the prices of agricultural land have escalated over the past two years—or even of urban land—for us to realize that values of two or three years ago are totally different to the values of today. In fact, these values can change appreciably even within weeks. Therefore, Sir, I feel that hon. members of this House who are not familiar with the question of making valuations must appreciate the fact that it is not always easy to arrive at the same value where different valuers are involved. However, I think that the hon. the Deputy Minister and his department have realized through bitter experience that there are valuers and valuers. Unfortunately, we in South Africa talk about sworn appraisers, a term, which of course does not even exist. These are appraisers appointed in terms of the Administration of Estates Act and people regard a sworn appraiser as a kind of guru who can immediately resolve all their problems in relation to value. Unfortunately, too, of course, such appraisers are paid peanuts and, as we know, peanuts sometimes attract monkeys!

There is also another large group of valuers who are not always necessarily so well trained or equipped and these are the Land Bank valuers. There are also many other kinds of valuers. There are valuers in the building society movement, valuers are increasingly being used by the Department and there are, of course, many valuers who are employed by municipalities. In terms of clause 9(3) there is the intention to exclude people who are doing specific valuations from having to comply with the provisions of the Act. I want to say immediately, Sir, that the object of this legislation is to improve the standard and quality of valuations in this country. To that effect, I believe that the more the provisions of this legislation are applied to all valuers whether they be Land Bank valuers, sworn appraisers, building society valuers or other valuers, the better. All these people must be expected to comply with the conditions that are laid down in this Bill. For example, in relation to Land Bank valuers, it is recognized that Land Bank valuations or valuations done by Land Bank valuers are much lower than market values. That is why, for estate duty purposes, when a rich farmer dies there is a rush to obtain a Land Bank valuation of his property. I do not believe that it is in the interests of South Africa’s economy to have valuations which differ widely from market value land valuations in this country. I believe what we must reflect is market value. It is important that we should not be bluffed by wrong valuations. Of course, many of the Land Bank valuers do a good job, but I do not believe it is of any assistance to us.

Clearly there are the three categories of valuers mentioned in the Bill as the hon. the Deputy Minister has set out. The object is to get rid of what the Americans call “windshield valuations”. Such a valuation is done by somebody who drives along in his motorcar, looks out of the windscreen and comes to a conclusion on the value of a property. Sometimes we call it valuing by the seat of one’s pants. This, surely, is not the way to do it. We clearly need people with proper educational qualifications, and this Bill will enforce that.

The question of associate valuers is a real problem. We recognize the fact that people may often, despite the fact that they do not necessarily have the full valuation qualifications, have a very good insight into the value, particularly in a certain area, of certain types of property. One may, for example, find somebody who is an expert on the valuation of sectional title flats and one may find somebody who is an expert on the valuation of agricultural land. This is an attempt to accommodate such people. In my view, however, the sooner we can get away from the concept of associate valuers and reach the stage that all valuers have to register as proper valuers the better. Such proper valuers may, of course, specialize for instance in forestry, agriculture, commercial properties or industrial properties.

There are two amendments in my name on the Order Paper, but I shall deal with them during the Committee Stage. I believe that the Bill constitutes a great step forward. I think South Africa and certainly the Department of Land Affairs as well as the provincial administrations can only look forward to an improvement in the standard of valuations.

Mr. Speaker, we on this side of the House would like to convey our appreciation to spokesmen of the Official Opposition for the support they have pledged for this Bill. Like the hon. member for Pietermaritzburg North, I am also a member of the Valuers’ Institute. As he explained here in the House it is quite true that the valuation of every asset eventually remains a subjective action based on the valuation of someone looking at it subjectively.

The committee of inquiry to which the hon. the Deputy Minister referred gave a wonderful example of how subjectively a particular valuer can look at a particular asset. In evidence given before the committee, someone cited an example of what had actually happened to him in the market. The person concerned went to look at a farm property, became interested in it and took out an option to buy on the farm. To make the figures easy, one may reduce the option price to R100. Three valuers were asked to submit valuations for the property. The first valuer’s valuation was R228 as against the option price of R100. The Land Bank valuer who was asked to look at the property gave a valuation of R109. The really expert valuer—let us call him that—gave a valuation of R69. This illustrates the subjectivity and also the shortcomings in the valuation profession.

Before I take my leave of the hon. member for Pietermaritzburg North I must react to his remarks on the valuers of the Land Bank. A Land Bank valuer is directed by the Land Bank Act not to consider the market value of the property but its agricultural production value. If the hon. member and his party object to this, I suggest that the hon. member for Wynberg requests this House to change the Land Bank Act in this regard. One cannot treat a Land Bank valuer in the same way as the persons we are dealing with in this Bill. I want to tell the hon. the Deputy Minister that this side of the House supports and welcomes this measure, and at the same time I want to express the great appreciation of this House for the committee of inquiry that recommended the legislation in this connection. The finding of the committee was that the unpleasantness in the valuation profession revolves around the inefficiency of the work done in the past by a large variety of people in this field. The hon. member for Pietermaritzburg North also referred to this. This aspect has serious implications for everyone involved in the valuation of property. It has implications for the Government sector—the State, provincial, municipal and other authorities—but also for people in the private sector, whose land is usually expropriated. All these bodies have to take very important decisions, decisions which could frequently cause or prevent the expenditure of millions of rand. These are decisions which have to be taken on the basis of information submitted by a valuer to the decision-maker. It is therefore in the interests of everyone that the valuation profession should be put in order.

This Bill before the House is trying to do this in three ways: In the first place, by bringing about the registration of valuers so that people who want to enter the profession can be screened; in the second place, there must be a council, a professional body, which can supervise and control the profession; and, in the third place, this council must also have the necessary power and potency to enable it to maintain discipline in the profession. These, in general terms, are the three main principles dealt with in this Bill.

In my opinion the crux of the Bill lies in the provision in clause 8(1)(h) which deals with the powers of the council. It reads—

What this measure is primarily concerned with, therefore, is training and improved standards in the profession so that the profession can be of better service to the various sectors it serves. This legislation is therefore to be welcomed by everyone and this side of the House supports it gladly.

Mr. Speaker, we on this side of the House support the Bill. However, I want to comment on the remarks made by the hon. member for Pietermaritzburg North when he degenerated the sworn appraisers. I do not believe that what he says is true, because the sworn appraiser has played a very important role in our community. It may well be that the hon. member does not like a sworn appraiser, because the sworn appraiser does jobs which a valuer would like to do. [Interjections.]

I want to refer to clause 3(1)(a) where to the first constituted body a member who is not a member of the Institute of Valuers may be appointed. Is this wise? I accept the Government must have a representative on the body, but I refer specifically to this because if one looks at clause 4 it is emphatic that the appointee shall be a member of the S. A. Institute of Valuers. I want the hon. the Deputy Minister to reply to this in due course. Clause 13(3)(a) reads—

I want to query the word “may”, because I believe it should be “shall”. I also have a problem with clause 13(3)(a)(ii), and here I specifically refer to “a person who is not less than 45 years of age.”

As the Bill now stands, provision is made for that person to be given five years in which to pass an examination, with a possible further extension of two years, which gives him a period of seven years altogether to pass the required examination. Could the hon. the Deputy Minister tell me, however, what the position would be in the case of the example I am now going to give him. Say a person has been doing valuations for 20 or 30 years and therefore has the necessary practical experience. He may therefore be 55 years of age when he applies for membership. He has seven years in which to pass the examination given him the necessary academic qualifications. At the end of seven years he may not yet have obtained that academic qualification, and at the age of 62 he finds himself automatically disqualified from earning a living in the profession he has been engaged in all his life. There is no provision made for that, so perhaps the hon. the Deputy Minister could care to comment on it. It is something I believe should be given serious attention. I think this is unjust as far as older people are concerned and I therefore respectfully ask the hon. the Deputy Minister to give a little thought to this aspect and to try to accommodate the older people who do, I believe, need to be accommodated.

This brings me to clause 14(3)(a) which relates to an associate member. In this clause it is mandatory for him to be registered, something which is not the case in the previous clause. That is the first point. The second point is that if he is not less than 35 years of age he only needs five years’ experience to be registered. What is more, he is not required to write any examination. What I want to ask is whether the associate member is not being given preferential treatment, because it would seem so, on the face of it.

I now just want to recapitulate. If a person is 45 years of age or over, the board “may”, not “shall”, register him if he has 15 years’ experience or more. He is, however, required to write an examination. I must therefore ask whether the more senior citizens are not being victimized because of their age.

In closing let me just point out that there does not seem to be any clause in this Bill providing for the removal of a valuer who is proven to be incompetent. Let us just look at doctors as one example. If a doctor is proved to be incompetent, he can be struck from the roll.

No, negligent, not incompetent.

Yes, incompetent too.

No.

There appears to be no provision for removing valuers who are proven to be incompetent. The point is, of course, that valuers can be involved in litigation, because they hold highly responsible positions. I therefore wonder whether any thought has been given to this aspect. We shall nevertheless be supporting the Bill.

Mr. Speaker, I am merely rising to support this Bill.

Surprise, surprise!

If one looks back over the history of the valuation profession, one sometimes wonders why such legislation was not introduced long ago. I am not referring to rule-of-thumb or telescope valuers now; I am talking about valuers who are worth their salt, and I do not think this profession has ever received the recognition or prominence in the community that it actually deserves. When we take a close look at this profession and analyse it we find that the person engaged in this profession must have knowledge that covers a very wide field. If we consider the actual work that he does, we see that he must also be a quantity surveyor in his own right, for he is quite frequently expected to determine the displacement value of a property. He must also be an architect in his own right and he must also know about the various trends in the building industry. He must also have a knowledge of minerals. He must have a knowledge of goodwill. He must have a knowledge of the carrying capacity of land. He must have a knowledge of the market value of all types of property. He must also be able to say at all times what a willing buyer will pay a willing seller on the open market. So we are dealing here with a highly qualified person.

Hear, hear!

In the past this knowledge was acquired through years of practical experience with perhaps a little academic training here and there.

What does this Bill seek to do? It seeks to focus attention on this profession and to give it the professional status it deserves. In this process the council will play a very important role. The council will actually serve as the guide for existing and future valuers. It will now be possible for a young man interested in this profession to register with an experienced valuer and, together with the academic training prescribed by the council, work out a secure future for himself. We in South Africa need these young trained men because whether it is the State, a province, municipalities, semi-State institutions or the private sector that are involved, we are a growing land and we are constantly engaged either purchasing or expropriating land. Therefore we need the advice of these people.

The hon. member for South Coast referred here to the old valuer. I am very grateful that provision is being made in the Bill enabling old valuers with 15 years’ practical experience to be registered as valuers. Now I want to tell the hon. member that I do not think we should anticipate the activities of the council. The council can make regulations and I am certain that if a valuer has not passed his exam after five years— and he gets two additional years—one of two things can happen: Either the council can tell him that he may continue as an associate valuer or the council may decide—we do not know what the future holds—that that man’s years of practical experience of such are value to the industry that he may remain a valuer. We do not know.

In general I think this is a very good piece of legislation.

Mr. Speaker, may I ask the hon. member if he is prepared to guarantee that that will be written into the regulations?

I cannot guarantee anything. I am not a Deputy Minister. I cannot see into the future either. All I said was that the council might decide to keep this man on as a valuer or appoint him as an associate member of the Council for Valuers.

*We on this side of the House welcome this Bill. I want to take this opportunity to congratulate the hon. the Deputy Minister and his department on this piece of legislation and I want to wish the proposed council every success because I believe it will make an important contribution to the training of our manpower in South Africa.

Mr. Speaker, as the hon. member for Algoa said, we are at present discussing a very important piece of legislation in respect of property in South Africa. It is concerned with the possessions and assets, movable and immovable, of people in South Africa. Perhaps for this reason it is advisable for me at this stage to mention certain aspects in connection with the scope of this legislation to the House. We know that land is one of man’s most valuable possessions. As a matter of fact, all facets of man’s activities can be traced back, through his dwelling place, his work or his recreation, to land, or to it on the basis of his interest and exploitation of certain elements the land makes available. In other words we are dealing with a fundamental asset of man. The scope and the role this asset plays in our entire national economy is reflected very clearly in the fact that immovable property is the commodity that serves as security for debts, as the hon. member for Ermelo mentioned in respect of the Land Bank. It is security for the financing of agriculture by the Land Bank, and this also applies in other fields. At the end of 1978 transactions against immovable property by the Land Bank, building societies, pension funds and other financial institutions amounted to R8 819 million. The assets of the National Housing Fund totalled R1 817 million in March 1981. This clearly indicates the scope of this legislation. Its tremendous scope can to a certain extent be indicated by comparing it with the total internal public debt. During the period 1971 to 1978 the amount of these mortgage loans was equivalent to 75% of the total internal public debt. In 1978-’79 the assets of the National Housing Fund alone were equivalent to about 10% of the internal public debt. I can continue in this vein, Sir. However, these figures become more significant if it is taken into consideration that during the five years ended on 31 March 1981, 802 000 land titles in respect of immovable property, together with a further 35 000 transfers in terms of the Sectional Titles Act were registered in the Deeds Office.

I am mentioning these figures to give hon. members an idea of the impact of the Bill on the possessions and properties of people in this country. I am therefore extremely glad that the hon. member for Algoa mentioned that the property market in South Africa is unique because we are a developing country. I am also glad that he pointed out that this is a profession in which young people can be trained and that there ought to be a great future for them in this regard.

As the hon. member for Ermelo rightly said, the Bill contains two basic principles, namely training and the raising of standards in the valuation profession. I have no doubt that if this Bill is passed, the council that will be appointed shortly afterwards to take care of this industry and determine its needs, will be put in a position, through regulations in terms of the legislation, to make something worthwhile of his profession.

I am pleased to hear that the hon. member for Pietermaritzburg North is a registered valuer and a member of the Institute of Valuers’. I therefore trust that he has good insight into the problems of valuers. This is something we will be able to ascertain later in the debate. I thank the hon. member and his party for their support for the Bill.

The hon. member for South Coast has certain problems in connection with the legislation. Perhaps we could discuss the problems during the Committee Stage, but at this stage I want to refer to an important aspect. We have had many discussions with the Institute of Valuers’, a body which was of course instrumental in the final formulation of this legislation. It goes without saying that we discussed various aspects with them. They wanted to know inter alia what was going to happen to the people in the profession if this legislation were implemented, in other words if we were going to eliminate a whole lot of people at present engaged in the profession through clauses 13 and 14. I honestly say that the Bill was initially drafted in such a way that a great many people would have been eliminated. However, we then introduced the so-called “grandpa clause,” in terms of which a man who has 15 or 20 years’ experience can also be recognized as a valuer. This is a person who knows the profession, and who has the necessary experience. Because the object of the legislation is to improve the eventual standard, it is provided in the specific clause that after five years he has to write the prescribed examination in order to become fully qualified as a valuer. What will happen now? I assume that when one is getting on in years—say one is 52 years old—one no longer feels like studying. This is a bit of a problem. What will happen in practice? In practice that man will simply join the ranks of associated valuers. He then becomes an associated valuer himself. According to the discussions we had with the institute, associated valuers are going to form the bulk of the valuers in South Africa. The valuer will eventually be the person who will be able to do specialized work, as the hon. member for South Coast put it. For this reason the institute suggested—and the required provision was accordingly effected in the Bill—that the council should make a register of valuers serving on its panel available. One will then be able to ascertain from this who are valuers, who are associated valuers, and who are still valuers in training. By means of the standards which can be determined, it can be ascertained with the aid of the register of the council which people are able to undertake a specific specialized valuation. After all, valuation is becoming a speciality.

There is also a diversity of instructions for valuation. One man for example valuates premises for security purposes. The estate valuer does a valuation with a view to estate duty. In this way every valuation undertaken has a specific purpose. However, the vast majority of valuations in South Africa are concerned with market value. The highest demands are made on that aspect. The hon. member also asked a question in connection with the so-called “incompetent value.” In this regard I should like to draw the attention of the hon. member to clause 22(1)(b) which involves the aspect of the compiling of prescriptions by the council itself, prescriptions in the form of rules. In the aforementioned clause it is provided in what way a person can be eliminated if he does not meet the requirements set. Now we must realize that the requirements that are going to be laid down by the council, will also be requirements that will develop in time as the profession become more sophisticated. There is however a special provision in the Bill by means of which the hon. member’s problem is solved.

In conclusion I wish to express the hope that the council to be established soon in terms of clause 13—and it will of course be a provisional council—whose function will be to get that great undertaking going, will succeed in ensuring once it has been established, that we will have a council in South Africa that will meet these exacting requirements, as I have now tried to explain to the hon. members.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 13:

Mr. Chairman, the hon. member for South Coast referred to this aspect during the Second Reading debate. This is something which in my opinion is rather unreasonable. I therefore hope that the hon. the Deputy Minister will react positively to my plea. As I see the matter—in terms of the wording of clause 13(1)(c)—the council may, after consideration, approve of an application if the applicant—

We find the same aspect in the “grandpa clause”, as the hon. the Deputy Minister called it. This clause 13(3), and I quote—

This brings us to that part of the clause which, if my amendment is accepted, will be deleted. As I see the matter—and of course it is not our task to prescribe to the council which is to be established—that council, if it does its work thoroughly, will tell a person who is, say, 47 years old and has been working as a valuer for 15 years, that they want to review his work. The council will then ask that person to submit a portfolio of the valuations he has made over the years to the council for assessment. The council will take note of what that person has done as regards the valuation of industrial premises, sectional title flats, farms, and so on. In this way the council will immediately be able to ascertain whether that person is competent to perform the work of a valuer. I think such a practice could almost be termed unfair. I myself have written all the relevant examinations of the Witwatersrand Technicon and have qualified as a valuer. That was of course when I was previously a member of the House of Assembly. During my available free time I studied. I must say it was not always that easy. It was sometimes a real struggle. I was then in my early thirties and already had a university degree. For a man who is over 40 …

Yes, you will always struggle to succeed.

It was a struggle to find the time to study. However, it was not a struggle to get through. The problem of course lies in the fact that for an older man, who has many other commitments as well, it is very difficult to study for and write an examination of that kind. However, if the council carries out its task properly, I think it will be able to ascertain whether a person is a good valuer and whether he can do his job properly. What is also important is the fact that there is no proviso to the clause regarding associated valuers. The hon. member for South Coast also mentioned this. Therefore an associated valuer need not write any examinations. I am of course referring to the “grandpa”—as the hon. the Deputy Minister called him— who wants to become an associated valuer. If such a so-called old man—perhaps 52 years old—has not yet written the required examination, he could merely make use of some or other loophole and become an associated valuer. In this way he need never try to pass the required examination. If the words I therefore want deleted do not appear in the legislation under discussion, it will not in any way detract from the hon. the Deputy Minister’s intention concerning the legislation, for if the council to be established does its job properly, it will be able to find out whether a person is acceptable as a valuer. For that reason I request the hon. the Deputy Minister to consider the following amendment positively, and I therefore move—

Mr. Chairman, I should like to ask the hon. the Deputy Minister if he does not think there is justification for reconsidering the provisions of clause 13(1)(c). I am asking this because it seems to me that an important principle accepted by the Van Blommestein Committee has got lost somewhere along the way. I consider the finding of that committee in this connection to be one of the key paragraphs of Chapter VI of the report of that committee, namely “Samevatting van Bevindings en Aanbevelings”. I think it is important that we take cognizance of the committee’s finding and recommendation in this connection. It is concerned with the question of practical experience which is thought to be very important. Paragraph 7 of this chapter reads as follows—

Then the committee emphasizes the following—

In the draft legislation the committee submitted, this principle is also recognized. Clause 12(2) of that draft legislation reads as follows—

This is one of the requirements, and then follows this requirement—

In my opinion insufficient recognition is given to this principle in clause 13(2)(c) of this Bill before us. I do not want to move it as an amendment, yet I do want to ask the hon. the Deputy Minister whether he would not consider including the principle there. In this connection paragraph (c) could then read as follows—

It is significant that the Bill before us does in fact recognize this principle in respect of associated valuers, i.e. in clause 14, but not in respect of the valuer himself. I want to ask the hon. the Deputy Minister to investigate this matter further and to consider the proposal I have made.

Mr. Chairman, I should like to support the amendment moved by the hon. member for Pietermaritzburg North. I am basically interested in the older person who has been involved in valuations all his life. One can ask: How long have the examinations been available? Here we have a man who is much more competent than possibly some of the people with academic qualifications in this regard for the simple reason that he has the practical experience. We are now saying that if such a man does not pass his examinations he can become an associated valuer. Such a step will in fact result in a lowering of such a person’s professional status and professional status is precisely what these people are wanting. What is more, if one lowers such a person’s professional status, this is also going to affect his earning capacity. This is a fact whether we like it or not. I believe, therefore, that this is being completely unjust to the older person who does not have the required academic qualification. Such a person is being prejudiced here and for this reason I believe that the amendment moved by the hon. member for Pietermaritzburg North merits serious consideration.

Mr. Chairman, I have a great deal of sympathy with the arguments of the hon. members for South Coast and Pietermaritzburg North. My problem is nevertheless that one must be very careful with the main category, namely the valuer who has to be a specialized man. One must be very careful not to affect his standard in any way.

In terms of the provisions of clause 13(2)(b) he must be a person who “has passed the prescribed examinations”. He must therefore write an academic test to qualify as a valuer. This is important because we must remember that one starts at the bottom with the valuer in training. Valuers in training must, of course, be examined by the Technikons and probably in other fields as well. One must be able to test these people by means of an examination. Now one has the problem of the provision which is concerned with the people already engaged in the profession. How must one qualify such a person so that he has basically the same standards as the person who has written the examination? They ought to be examined.

I say I have sympathy with the hon. member but I want to issue a word of caution against trying to do the council’s work for it. The council may prescribe various methods of examining. Quite possibly the council will tell the young person—“You must write an exam”. To the man who has 15 years’ experience, the council may say: “If you can submit a portfolio of valuations, we will be prepared to consider this to be a test on the basis of which you can qualify as a valuer”. We must therefore leave it to the council.

I really want to appeal to the hon. member for us to be very careful so that his amendment is not considered to be a lowering of standards. I think we should be very careful not to lower the standard and the requirements by writing into the legislation that the man who has practised as a valuer for 15 years shall not be examined. I do not believe we can accept such an amendment. As I have said, I have sympathy with the hon. member and I think we should bring it to the attention of the council that they should not penalize these people.

Mr. Chairman, I thank the hon. the Deputy Minister for his friendly approach. As I understand it, the legislation, as it now reads, gives the council no discretion when it comes to the older valuer. I understand what the hon. the Deputy Minister has in mind here. There will in fact be three ranks for valuers. There will be the top notch valuers who will be described as “valuers”. Then there will be the man who operates in a limited sphere as far as valuations are concerned and who is described as an “associated valuer”. Of course such a person could be very competent, but he is only allowed to move in a limited field. In the third place there is the man who could be considered to be an apprentice.

What will happen to the man who is 45 years old or even older? The man who is now 55 and has not yet written his examination by the time he is 62 may perhaps say: “Very well, I shall now retire”. If the council really wants to act in the interests of the valuation profession, it will ensure that it is not just anyone who can be admitted to the valuation profession and will go into the situation carefully. If the hon. the Deputy Minister does not delete the proviso, the council remains bound. I think it would be a pity if the proviso were retained.

Surely there is no pressing need for us to dispose of the Third Reading of the Bill today, and I think it would be a good thing if this clause were allowed to stand over until tomorrow so that the hon. the Deputy Minister could have an opportunity to discuss the matter with his department. What we are dealing with here is not a political matter, yet it remains an important matter because we must not forget that people in other professions may at the same time be competent valuers. Here I am thinking in particular of quantity surveyors. In some cases they are better valuers than those who have written the prescribed examination. Why should such competent people be expected to write an examination? As the legislation now stands, the council has no choice.

Mr. Chairman, the hon. member’s problem concerns the method of examining. If one wants to improve standards, one has to contrive a test, even if a person has 15 years’ experience. Some or other test will have to be contrived. How is one to test these people to ascertain whether they comply with certain standards? Many people are going to apply to be registered as valuers on the strength of their experience alone. No one is in a position at this stage to ascertain exactly what their standard is. All that the legislation provides is that a person shall have 15 years’ experience in order to apply to be registered as a valuer. How does one test such a person? At some or other stage he must be tested, now or in five years’ time, and if he does not comply with the requirements then, two years after that. We are going to receive a vast number of applications from people without knowing exactly what their standard is. One accepts him purely on the basis of the fact that he has 15 years’ experience, but after five years there has to be a way of ascertaining his standard. Consequently there must be a way of testing or examining. I do not think that we can eliminate this problem. So I cannot accept the hon. member’s amendment as it stands. Yet, under the circumstances, I shall move that this clause stand over so that I can give further attention to the matter.

Mr. Chairman, I therefore move—

Agreed to.

Clause 19:

Mr. Chairman, I have suggested the omission of certain words from this clause.

The present wording is possibly due to an oversight while drafting the Bill, because it seems to me wrong that somebody who believes that he was wrongly convicted should be able to lead evidence before the South African Council for Valuers that he was wrongly convicted. The correct procedure for such a person to seek redress is to appeal against his sentence. If he is convicted and he is convinced that he has been convicted wrongly, it seems to me wrong that he can come before the Council for Valuers to give evidence that a court of law has wrongly convicted him. In my view this should not be part of the Bill, and accordingly I move as an amendment—

Mr. Chairman, this Bill was compiled by borrowing from other Acts. Many of the clauses were borrowed from other Acts dealing with the business world, inter alia, the Architects’ Act, the Quantity Surveyors’ Act, the Engineers’ Act, etc. This particular provision appears in these Acts as well. One could have the situation where a person is found guilty on technical points by the court, and that the council then calls for the evidence and is able to question that person. Under such circumstances the Council for Valuers may then ascertain whether the person can still qualify to serve as a valuer or an associated valuer. This is a provision which also exists in other legislation. It is not a provision we are specifically inserting here. It also occurs in other legislation and it is therefore nothing new. It is not a new principle. That is all I can say about it. Consequently I do not think the hon. member need be concerned about it.

Mr. Chairman, I should like to support the viewpoint of the hon. the Deputy Minister, for the simple reason that I believe that if we take cognizance of this amendment we are going to deny those persons the right of appeal to the Council for Valuers if they happen to have been convicted of a technical offence. I do not think that we in this House should be party to denying someone the right of appeal to a council that controls his livelihood. So we on this side of the House are inclined to agree with the sentiments of the hon. the Deputy Minister.

Mr. Chairman, there is no sense in which one would wish to jeopardize anyone’s position. Certainly one does not want to support any suggestion that one wants anybody punished twice for having done something. The point is, however, that a person who has a problem with the council basically only has a problem in terms of court proceedings if he has been sentenced without the option of a fine. So the offence involved must be a relatively serious offence. If the hon. the Deputy Minister is happy about it, however, and in view of the precedent he has mentioned, I am quite happy to allow the clause to go through as it stands. With the permission of the House, I therefore withdraw my amendment.

Amendment, with leave, withdrawn.

Clause agreed to.

Clause 26 agreed to.

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

House Resumed:

Progress reported and leave granted to sit again.

Mr. Speaker, I move—

I should like to provide the necessary explanations concerning this Bill. Hon. members will notice that in the first place, provision is being made for the amendment of certain definitions. These adjustments have become necessary as a result of the rationalization of the Public Service and the changes in designation and rank which this has entailed.

The most important provision contained in the Bill is the provision which is now being made for a pre-emptive right—in favour of the Community Development Board—to immovable property which is being developed and made available for residential purposes with the aid of Development Board funds.

I should like to explain briefly why it has become necessary to introduce such a measure. The promotion of community development is probably the most important function of the Community Development Board. In new townships, this development often takes the form of the provision of separate, surveyed residential plots, while in other cases, dwellings are built by the board on plots provided in this way. In addition, advances from the Community Development Fund are made available by the board to local authorities for the purposes of community development.

When the board or a local authority buys residential plots with the aid of funds provided by the board, for sale to needy individuals, an income limit is of course laid down with which prospective buyers must comply. After all, it is not the duty of the board or of a local authority to make residential plots available to persons who are actually able to buy on the open market. However, there is a strong need for assistance among those in the middle income group whose incomes exceed the limits laid down for aid in terms of the Housing Act, 1966, but who are financially not strong enough to buy on the open market.

†Unfortunately a tendency developed during recent years for persons who bought building lots from the board or a local authority at a very reasonable price to dispose of the property within a short period of time at a handsome profit. The escalation in the price of property during the past year or two is largely to blame for this position. It cannot, however, be allowed that individuals who have acquired property at prices well below the market value enrich themselves at the cost of the taxpayer. A considerable number of erven which have been developed with advances made available by the Community Development Board will be allocated to suitable purchasers during 1982 and it is therefore necessary to act now to prevent possible speculation.

The provisions of clause 2 of this Bill are based on a similar pre-emptive right in favour of the National Housing Commission, which is contained in the Housing Act, 1966. The proposed measures will in short amount to the following: The Community Development will have a pre-emptive right for a period of five years as from the date of sale on all property sold for dwelling purposes by the board or a local authority, a statutory body or other body corporate in terms of a delegation under the Act. Should the owner wish to dispose of the property within that period, he shall be obliged to offer it to the board. The procedures to be followed thereafter are set out clearly in the Bill, but it is perhaps necessary to refer to some of the more important aspects.

In the first instance, provision is made for the appointment of arbitrators or a referee in the event of an owner and the board failing to reach agreement on the price at which the property is to be sold to the board. Secondly, the arbitrators and the referee will be bound by principles prescribed by regulation when the purchase price of a property is to be determined by them. It is intended that these regulations will be based on the existing corresponding regulation made under the Housing Act and that they will, inter alia, provide that the owner will only be entitled to be compensated for real expenses incurred by him in acquiring the property as well as in improving it. It is realized that bona fide cases may come forward where the board may prefer not to exercise its preemptive right and provision has therefore also been made for the board to grant exemptions.

I trust that the proposed measure will discourage owners from speculating with property which was acquired by them at prices well below the market value.

*The amendments proposed in clause 3 are actually intended to clear up an ambiguity. Section 12(5)(f) of the Expropriation Act, 1975, provides that any enhancement or depreciation, before or after an expropriation, in the value of the expropriated property, which may be due to the purpose for which or in connection with which the property is being expropriated, or is to be used, or which is a consequence of any work or act which the State may carry out or perform, should not be taken into account in determining the amount of compensation. This provision, like several other provisions of the Expropriation Act, 1975, is mutatis mutandis applicable to expropriations in terms of the Community Development Act, 1966, but uncertainty has now arisen about whether the reference to the State in the section I have just dealt with can be construed as a reference to the Community Development Board, in cases where this board is doing the expropriation. It is in fact the intention that this should be so, because it cannot possibly be accepted that a person whose property is being expropriated for a particular purpose should either gain or lose as a result of a change in value due to the purpose for which the board is going to use the property. The proposed amendment puts the matter beyond all doubt.

Mr. Speaker, we in these benches will support the Second Reading of this Bill. We believe that the principle that individuals should not enrich themselves by the funds which have been provided by the State for housing purposes is an unexceptionable one. As the hon. the Deputy Minister has indicated, it is not a novel provision. A provision of a similar nature is already to be found in the Housing Act of 1966. Indeed, I can recall that in the case of the village of Pinelands after the war when funds were made available for ex-servicemen to purchase property at low interest rates a similar provision was included. In respect of certain public utility companies which deal with housing and which make these facilities available to people a similar pre-emptive right is provided in favour of the public utility company or the State depending on the circumstances.

We believe that it is appropriate that speculators should be prevented from exploiting a situation. This was never the intention of the State or of Parliament.

Problems could arise as far as the bona fide purchaser is concerned because while the hon. the Minister indicated that the board can forgo its rights to purchase from a bona fide owner of property, that therefore is a discretionary right of the board, but it is not a right of the owner of the property. He still has to rely on the discretion of the board and cannot assert a right to retain that property because he will now be bound by law to offer it back to the board. I think there are a large number of people, more than we might realize, who may be genuine buyers and who in a very short space of time, within those five years, may be transferred or for some other reason have to dispose of their property.

*In view of this, we feel some concern about the determination of the purchase price as provided for in subsections (3) and (4), and not so much about the procedure. In subsection (3), it is proposed that the purchase price can be determined by agreement, or by two arbitrators, or by a referee appointed by the arbitrators, or even by a referee appointed by the Minister. In terms of subsection (4), the purchase price of the property has to be determined by a referee in terms of the principles prescribed by regulation. The Deputy Minister indicated that such regulations would quite possibly resemble the regulations in terms of the Housing Act, but that is not being stipulated here. There is some vagueness in this Bill, because the principles are not being laid down here. The principles have not yet been laid down in legislation, and at the moment it is up to the Minister or any future Minister to decide what they should be. Is it fair or equitable, therefore, that the purchase price of a man’s property should be determined, not in terms of principles laid down in legislation, but in terms of regulations of which the principles have not yet been made known or are not yet known to Parliament? I do not want to say any more about this. However, it is a problem, and one of my colleagues will discuss it at greater length. In fact, I hope the hon. the Minister will also deal with this problem, if not now, then in the Committee Stage. With that reservation, Sir, we support the Second Reading of the Bill.

A very good speech!

Mr. Speaker, when I come to the particular clause with which the hon. member for Sea Point had some problems, I shall react to his remarks. I appreciate the fact that the official Opposition is supporting the legislation before this House with certain reservations.

Perhaps one should try to ascertain what the legislature had in mind with Act No. 3 of 1966, the Community Development Act. In the first place, it was the intention of the legislature to develop certain areas, and that is an important objective. I certainly do not intend to make political capital out of the Bill which is before us this afternoon. However, since we are discussing an amendment to the principal Act this afternoon, I believe it is essential that we examine the degree of success with which that Act has been implemented.

Act No. 3 of 1966 has as its primary objective the development of certain areas. A few months ago I was privileged to go on a tour with the Minister concerned as well as officials and representatives of the various Opposition parties in this House. I think one should take cognizance with great appreciation of the success that has been achieved and the progress that has been made in the development of certain areas. I think we should take cognizance of areas that have been declared slum areas, but which have no direct bearing on the legislation which is before the House. The result of the declaration of those areas as slum areas has been that other areas now have to be developed. To take Durban as only one example, I may point out that in that region alone, 1 300 such areas have been declared slum areas. In the case of Cape Town, almost 600 areas have been declared slum areas. The same applies to Johannesburg. I mention these facts only to indicate that the development which is being undertaken by the Community Development Board with a view to replacing those areas has really been effective.

A further aim of the Act concerned was the development of the community. If we take cognizance of what has been achieved in recent years, not only in providing housing, not only in giving people a roof over their heads, but also in developing a community, the achievements are truly remarkable. Allow me to read only one quotation with regard to this aspect from the department’s report. In this respect I want to refer only to the Cape. Let us see what has been achieved there with regard to community development and the creation of facilities for a healthy community. For this purpose, I want to draw attention to the area at Mitchells Plain. There are three multi-purpose civic centres, two community halls, two parks, three libraries, two sport complexes with the necessary facilities, and two further sport complexes and a swimming pool, which is nearing completion. All this has been achieved by the department concerned. In the light of this, one is surprised that a city council such as the Cape Town City Council has been agitating lately for the opening of facilities. The question may be asked, therefore, whether a proud community, which has been developed with the aid of funds provided by the Community Development Board, a community with all the facilities such as those at Mitchells Plain, would be prepared to open their facilities. However, I shall leave it at that.

Next I want to refer to the rendering of assistance. This is very important to me. I am talking now about assistance to people to enable them to buy or rent immovable property. I want to point out today that the NP Government can be accused of many things. The living monument that has been built in the sphere of community development through the provision of housing in South Africa can never be underestimated. In this respect the NP Government cannot be blamed. [Interjections.] I hear someone growling on the other side of the House. I want to allege that the hon. member for Parktown is the biggest political joke in this House. [Interjections.] I want to make it clear to that hon. member that the NP Government places a very high premium on housing people in happy communities in the Republic of South Africa. [Interjections.]

Community development in South Africa has placed people in a position where they are able to acquire immovable property, which they would otherwise never have been able to do. This is something for which one ought to be grateful. [Interjections.] The purpose of this is to ensure that a man will feel that he has a property of his own. In this respect I could mention many examples. I want to put it to hon. members that properties have been bought with funds provided by the Department of Community Development, properties comprising a house and sufficient land. These are properties which cost less than R5 000 years ago, but which are being sold for up to R38 000 today.

Even more than that.

However, to me this is not the most important consideration. To me the most important consideration is that in the whole process, people have been uplifted. People have been uplifted into a community. [Interjections.] I can hear that growling noise again on the other side of the House. There are some hon. members on the other side of the House who have been sitting there since the time when the UP was still governing the country. Consider the fact that between 1939 and 1948, the Government of the day spent a mere R60 million on housing in the country as a whole. Surely one has to take cognizance of this.

We were busy with a total onslaught.

The hon. member for Port Elizabeth Central reminds me very much of a gelded goat: He wants to, but he cannot. We must take cognizance of what is being done by expressing our thanks and appreciation. However, it is also important to note that this legislation led to the creation of the Community Development Board, and I want to convey my thanks and appreciation to that board this afternoon for what it is doing to promote community development in the Republic of South Africa, irrespective of race or colour.

I do not wish to discuss clause 1 of the Bill, which concerns definitions and designations, because these are only consequential amendments resulting from the rationalization of the Public Service. However, I want to welcome the proposed section 18D, which is contained in clause 2. One must always bear in mind the fact that the funds used by the Community Development Board are actually funds provided by the taxpayer. Therefore it is important that one should keep an eye on those funds. It is true that in the standard contract of sale which is signed by the purchaser, that provision is in fact included, i.e. that the pre-emptive right is reserved by the seller. However, the problem arose, as the hon. the Deputy Minister indicated, when it came to enforcing this, because there was no legislation in existence. Therefore it is now being proposed that this subsection be inserted to bring the legislation into line with the Housing Act of 1966. I have no problem with that, because I think it is important.

The purpose of the legislation is to eliminate speculation. I think that is important. However, there is one problem which I have, and I should like the hon. the Deputy Minister to take cognizance of it this afternoon, and that is that when it comes to the discretion of the Community Development Board, in cases where property is offered to the board, the board may then decide not to exercise its pre-emptive right, and then the whole purpose of this clause may be frustrated. I understand that it may vary from one case to another, but I am simply asking the hon. the Deputy Minister to take cognizance of this.

The hon. member for Sea Point also referred to the proposed subsection 18D(4), and when one looks at that clause, one sees that it reads as follows—

I think it is important that he should take this into consideration. I am also grateful for the fact that provision is being made for an arbitrator, even for a referee, i.e. everything possible is being done by the legislature to ensure that that man can negotiate a price in terms of the legislation. So I have no problem with that. The problem of the hon. member for Sea Point is that the conditions for negotiating the price, as contained in the regulations, will be enforced. I have looked up the regulations in terms of the Housing Act, and if these regulations are in line with those—and that is the undertaking which the hon. the Deputy Minister has given—I have no problem with them. I want the hon. member for Sea Point to rise in this House and to give us examples of problems which have already arisen, because we must remember that that provision already exists in respect of the National Housing Fund itself and that it is regulated by way of regulation. I cannot foresee any problems in that connection. However, if the hon. member would give us some examples of where problems have occurred, we could investigate the extent of those problems. I am convinced that the hon. the Deputy Minister will in fact investigate this matter.

In conclusion, I want to refer to the final provision which is being amended. I think it is quite clear that any doubt which may exist with regard to the determination of the value of the property on the day of expropriation in respect of the compensation which is payable can be eliminated. That is the value of the property; in other words, it is determined by the zoning of that property and the purpose for which it is being used on that day. It has nothing to do with its potential value. This is merely to bring it into line with the provisions of the Expropriation Act of 1975.

With these few remarks I have said all I wanted to say in connection with the legislation which is before us.

Mr. Speaker, we on this side of the House have no problems in regard to this legislation. We agree with the principle of the pre-emptive right and therefore we shall be supporting this legislation.

Mr. Speaker, we on this side of the House should like to thank the hon. member for South Coast for his support of this legislation on behalf of his party. It was a very good speech because he had little opportunity to make mistakes!

I just wish to place in perspective, for the purposes of the debate, the central principle of the Bill. As the hon. the Deputy Minister told us, this Bill seeks to bring the provisions of section 18 of the principal Act into line with similar provisions contained in the Housing Act of 1966. The main reason why these amendments are being effected is to prevent speculation in properties obtained by means of funds from the Community Development Fund. I just wish to make two basic statements in this connection. The first is that to me, this is a very significant provision. It is significant in the sense that if this amendment is put into effect and given the force of law, it will promote the aims of the Community Development Act and give it more instrinsic value. The basic principle of the Community Development Act is the geophysical regulation of communities and the balanced development of the various communities. If there is improper speculation in a property made available by way of funds provided by the Community Development Board, then the essential aim of the Community Development Fund is frustrated. That is the first point I want to make.

The second point I want to make relates to the pre-emptive provision. Who will be affected by the pre-emptive provision? Basically, there are only three categories of person or owner who will be affected thereby. In the first place it is the persons to whom assistance has been granted with the aid of the Community Development Fund with regard to their disqualification in terms of the Group Areas Act; secondly, persons affected due to slum clearance and urban renewal; and, thirdly, persons who do not qualify for housing in terms of the Housing Act. All these people are affected by the pre-emptive provision and because, as I have said, there is a similar provision in the Housing Act, 1966, and the Community Development Act and the Housing Act together constitute the total housing strategy of the Government, parity is now being brought about between the various Acts. We take pleasure in supporting the amending Bill before the House.

Mr. Speaker, I shall not reply directly to the speeches by the hon. members for Bellville and Witbank. They asked us on this side to indicate what some of the problems we perceived consisted of, and I shall come back to that later, with particular reference to the frustration of the aim of the board and the prevention of speculation.

Clearly the aim of the legislation is the combating of speculation by individuals with regard to the schemes of the Community Development Board. This has already been pointed out and we agree with it. Instances such as that which the hon. the Deputy Minister referred to do indeed occur. People obtain plots with the aim of building on them and then selling them within a short time in order to make a quick profit before the real development is proceeded with.

In implementing the pre-emptive provision the regulations relating to the determining of price are of course of great importance. I should like to touch on a few points in regard to which I believe other steps, can also be taken in order to combat effectively the question of speculation, without discriminating against individuals. I say this because there are cases where bona fide developers are in fact permitted to obtain and develop premises with the exclusive aim of making a profit. In this instance, therefore, the developer does not intend occupying the premises himself. Cases of this nature occur, for example, after certain slum clearance operations, and where the demand from individual needy persons is insufficient to account for the available plots. It is therefore not necessarily undesirable, or even unheard-of, that speculation does take place and that profits are made even by private organizations on schemes launched by the Community Development Board. Perhaps that can serve as a reply to the question by the hon. member for Bellville.

I am afraid that is not a reply.

Of course, one’s instinct tells one that if there is any question of subsidization of the original purchase price this would not be fair to the tax-paying public. If the original purchase price was calculated on an economic basis, for example, when a floor price is paid on an economic basis and it is then put out on open tender, one can say that the interests of the State, and therefore of the tax-paying public as well, have not been prejudiced and at the same time the target is being achieved in that the provision of housing has been improved. This is a very important point to which I shall come back later when I discuss the price-determining aspects. I repeat that it is not necessarily wrong that speculation or profiteering takes place, as long as the public at large does not suffer prejudice.

At present, housing is one of the most acute problems in South Africa, and any legislation relating to housing must therefore be tested against the targets that need to be achieved as far as housing is concerned. Apart from the general goal of having roofs over peoples’ heads, there are two very important subsidiary goals which should be achieved by way of the national housing strategy, and concerning which I believe there is unanimity. The first is home ownership, and the second is involvement by the private sector or, put differently, that individuals become independent of State aid as far as housing is concerned.

†With regard to home-ownership we have, apart from the primary objective of shelter, the secondary objectives which are very important from the socio-economic point of view.

In the capitalist economy home ownership has been the primary mode of access of the individual into that system. Firstly, it provides the mobility from the dependent worker class to the independent middle class or entrepreneural class. Secondly, it provides and promotes a very useful form of saving. Thirdly, it creates a willingness to put sweat equity into housing. Fourthly, it is a hedge against inflation. Lastly, it also serves as security and capital formation for the budding entrepreneur. However, more important, from the point of view of the public and the application of public funds, is the fact that the burden of maintenance and improvement is transferred from the authority to the individual home owner. Anyone with experience of council housing schemes will know that the bill for maintenance on letting schemes can be quite staggering. Even in a situation where repayments on a selling scheme are fixed in its early life at no more than the payments on a letting scheme, the authority will at any time after the sale be in a better position financially with regard to that specific housing unit. This is also a very important factor and one of which cognizance should be taken when determining the price if the pre-emptive clause is exercised.

The last consideration with regard to placing a time restriction on the selling of property is that in South Africa, which is a developing society, the average period between moves is very short, especially in a person’s early life. I believe that in the White community the average period of occupation of a house in South Africa is under seven years. It is therefore quite conceivable that a young man may be required to make say three moves in the first ten to twelve years of his working life. Should the pre-emptive clause then be applied against him on each occasion he would end up with none of the benefits of home ownership such as capital formation or building a hedge against inflation, but with all the burdens and risks such as maintenance, rates and taxes etc. Family sizes also increase with time and this factor, together with a transfer, makes a bona fide reason for selling. I trust that where the facts are verifiable, for instance, in cases of an increase in the family or a transfer, and where it is not possible to make additions to the house, the clause will only be applied in exceptional circumstances.

The second main objective of the national housing strategy is private sector involvement. One must recognize that this will only be achieved if allowance is made for the profit motive through development of new stock by developers, or even speculative buying of the existing stock under State control. Again, there must be the proviso that the selling price is pegged at economic rates.

*Accordingly we must not be afraid that someone may make a profit, just as long as the State or the public at large does not lose because of having to subsidize. This applies in particular if the end result is to increase the involvement of the private sector.

†Individual owners can purchase land and/ or houses either by owing the money to the board or its agents directly, in which case public sector finance is locked into a particular housing unit or property for a very long period of time, or by raising a bond in the private sector, and again the purchase price could either be subsidized or not, as the case may be.

Let us now consider the application of the pre-emptive clause. Firstly let us consider the case of a home-owner purchasing a property through private funds and at economic rates. I would suggest that the major objectives have then been achieved in the sense that private sector funds are locked into those specific housing units for their whole future life, money flows back into the State coffers, making it available for further application to new projects and one more new home-owner is taken off the hands of the State. I would again suggest that under these circumstances exemption should be given in terms of subsection (6).

The hon. the Deputy Minister must listen to his namesake.

There can also be a situation in which the original purchase price has been subsidized, but with the owner still raising private sector money for the purchase of the property. In such circumstances I would suggest that a formula could be found to levy the amount by which he was subsidized as a kind of “afkoopsom” or “buying-out sum”, if the owner wants to sell before the specified time, say the five year period, bringing this case in line with the first case that I mentioned. Again this is to achieve the objectives of home-ownership and private-sector involvement, and again the clause should only be applied in very exceptional circumstances if, for instance, the owner cannot repay the “afkoopsom” from a private sale.

The third situation is that of an owner having bought at either subsidized or economic rates, but using a State loan. In this case I would again suggest that the owner be able to sell on the open market, provided the buyer can raise the purchase price through the private sector. Again the option must be left to the owner to pay the settlement figure to make up the subsidized portion of his investment at that stage. In determining both the settlement figure or the “afkoopsom”, or the price determination, I think it is very important for the maintenance aspect to be taken into account to compensate the owner for his investment in this regard. This is however, something that is not considered in the regulations in terms of the Housing Act. I should like to hear what the hon. the Deputy Minister has to say on this specific matter.

One of the other problems in these regulations is the interest rate which is, in fact, very low indeed. So if a person had to buy again on the open market, he would still be “hulpbehoewend” after having been made an offer pegged at 6%.

*Against the background of the fact that there is indeed a scarcity of housing, that escalation in the building industry is high and that in our opinion, home ownership plays a very important role in the socio-economic growth process of the individual, I believe that the vast majority of people will only sell for very good reasons, even if the reason may be that the person is perhaps a budding young speculator or entrepreneur. I hope that the pre-emptive clause will therefore only be applied when it is absolutely necessary, for example, when no improvements whatsoever have been effected on plots. I hope, too, that where it is implemented, aspects of maintenance, home ownership, mobility and involvement of the private sector will be duly taken into account.

Mr. Speaker, I rise merely to thank hon. members for their contributions. I was most impressed by the speech of the hon. member for South Coast. He resisted the temptation to be over-garrulous about the obvious and followed the precept of the bard who said that brevity was the soul of wit. I very much want my namesake, the hon. member for Greytown, to follow that precept in future. [Interjections.]

*I wish to thank the hon. member for Sea Point for his contribution. He had a problem. He wants us to insert in the legislation what I want to insert in the regulations, namely the determining of the purchase price. I think that is a very fair request. He did not move an amendment, but because he raised this problem, I am not going to ask that the other stages be taken today, because I should like to consider that recommendation of his. I do just want to say to him that this clause is based on section 21 of the Housing Act. The wording is virtually exactly the same. In that Act it is not part of the Act; but it is provided by regulation how the purchase price is to be paid. I imagine that this will have to be done in this regard as well. In fact, I think that this is a matter for regulations and that it would be very difficult to make provision for anything of this nature in an Act. However, I shall give sympathetic consideration to the recommendation made by that hon. member.

The hon. member for Witbank made a very fiery speech, and he had reason to do so. One can become excited when one discusses the achievements of the department, because this is certainly something to write home about. I thank him for his contribution. Many thanks, too, for the contribution by the hon. member for Bellville. It was an exceptional contribution. I have already referred to the hon. member for South Coast.

I now come to the hon. member for Greytown. I want to tell him that he has a very noble name and he must not dishonour it.

Yesterday I received a telephone call from my wife and when she, as befits a good, loving wife, wanted to whisper sweet nothings in my ear, it was the hon. member for Greytown who was on the other end of the line.

That is nothing compared to what the bank manager had to say.

I can tell you, Sir, that she took offence. She thought it was me.

The hon. member raised a number of problems. If he had read the Bill he would have seen that provision is most definitely made in the clause in question for exemption for developers and other bodies.

I want to thank hon. members once again for their contributions. As I have said, I am not going to insist on the other stages being taken today. I am going to consider the recommendation by the hon. member for Sea Point.

Question agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

The registration of deeds in the Republic of South Africa is controlled by the provisions of the Deeds Registries Act, 1937. Since this Act came into effect on 1 September 1937 it has been necessary to amend it from time to time, as circumstances and needs have changed. It has now again become necessary to amend the Act further in order to make good certain deficiencies and delete obsolete provisions relating to deeds office practice and procedure.

In 1976 a committee of inquiry into the seats of and areas served by certain deeds offices, recommended that the powers of the Rand Townships Registry in Johannesburg be extended to include inter alia the registration of notarial deeds. The function of that office is limited to the registration of documents relating to immovable property in its service area. The Bill at present before the House gives effect to the recommendation of the committee.

†It is a well-known fact that transactions requiring registration in the deeds office have increased considerably during the recent years. Before a deed can be registered, however, it has to be examined in order to verify the accuracy of the facts mentioned in such deed, and it is in this respect that deeds office examiners find it increasingly difficult to cope with the volume of work involved. In order to alleviate the position it has been decided to introduce a new procedure by virtue of which conveyancers will accept greater responsibility for the accuracy of some of the facts mentioned in deeds and other documents submitted by them for registration or filing in a deeds office. Provision is accordingly now being made that a conveyancer by signing a prescribed certificate on a deed or document, accepts responsibility for the accuracy of certain of the facts mentioned in the deed or document. The Association of Law Societies has been consulted in this matter and has indicated its wholehearted support of the proposed amendment.

I also wish to refer to the amendment proposed in clause 7, an amendment of section 16 of the Act. The Deeds Registries Act, 1937, provides that where the State acquires all the land held under a title deed, it may take transfer by means of an endorsement by the Registrar of Deeds on the title deed. It is however not possible to make use of this method in cases where land is expropriated, as section 31 of the principal Act makes provision for a specific procedure for the transfer of expropriated land. There is really no reason why this distinction should be made, and provision is now being made to allow the State to take transfer of expropriated land by means of an endorsement. Transfer by endorsement can naturally only take place if all the land mentioned in the relevant deed is expropriated by the State.

*Hon. members will note that various provisions of the Deeds Registries Act of 1937 are now being either deleted in toto or replaced. The reason for this is that these provisions serve no further practical purpose, or simply stand in the way of simpler registration procedures. The Association of Law Societies is closely involved with the proposed amendment of the law. In fact, I might mention that some of the amendments have been effected at the request of this association.

Mr. Speaker, we on this side of the House will support the Second Reading of the Bill before us. This is a very important Bill in that it affects everybody who owns property and whose personal information is registered at a deeds registry. It not only affects the conveyancing section of the legal fraternity but the whole of the legal profession. The hon. the Deputy Minister referred to only two main aspects. He referred to clause 1 in regard to the deeds registry in Johannesburg, and to clause 6, which relates to the onus placed upon conveyancers when signing certificates relating to a deed or other document to be registered in the deeds registry. Most of the others are consequential, except for one or two to which I shall refer later.

When referring to the deeds registry in Johannesburg, the hon. the Deputy Minister rightly reminded us of the Prins commission of inquiry that reported on 10 May 1976. Among other things the Prins Commission, sitting under the chairmanship of Mr. Prins, Chief Magistrate of Pretoria at the time, had to give consideration to the question of whether the deeds registry in Johannesburg should become a fully-fledged deeds registry. Today the hon. the Deputy Minister has said that this legislation is giving expression to the recommendations made by the Prins Commission in their report, that is, as far as the Rand Townships Registrar is concerned. With great respect, however, I submit that the hon. the Deputy Minister is not going far enough in embodying, in the legislation now before us, the recommendations made by the commission, as I shall presently indicate. I believe the time has come and we have the opportunity now to make the Rand Townships Registration Office a fully-fledged deeds registry. We all know that the Rand Townships Registration Office was originally founded as a registration office for mining titles. That was as long ago as 1902. It subsequently became a deeds registry in 1908, and was later also allowed to register, as it still does today, deeds pertaining to townships in the Witwatersrand area falling under the jurisdiction of the Rand Townships Registrar, with the exception of deeds relating to farms and small holdings, notarial bonds, deeds of donation and antenuptial contracts.

In their submissions to the Prins Commission the Johannesburg Association of Attorneys and the Johannesburg Registrar of Deeds asked for a much wider scope of operation. They even went so far as to include in their submissions the areas of Kempton Park and Sandton, and requested that they should be allowed to register the deeds of farms in those areas. The commission felt at that stage that this would entail some 40% of the work already being done by the deeds registry in Pretoria. The Registrar of Deeds in Pretoria then rightly pointed out that to transfer all the original documents relating to servitudes, hypothecations, original farm titles etc., would be an enormous task, and that it would therefore not be practical to do so. In this respect I should like to quote from the Prins Commission report. On page 20, in paragraph 1.5 it states—

The hon. the Deputy Minister will remember that a few years ago a Select Committee of this House was appointed to go into the whole question of microfilming in our modern electronic age. The Select Committee went into the whole question of storing information on microfiche, and in fact the whole system of the retention of documents such as original title deeds in the deeds registry. There is no doubt that we are living now in an age in which this sort of practice has become a feasibility. I do not intend to move an amendment during the Committee Stage seeking to accomplish all these things at this stage. I shall also not try to convince the hon. the Deputy Minister now that effect should be given to the recommendations contained in the report in connection with the 40% of farms, small-holdings and other townships to which I referred earlier in my speech. I am, however, going to ask the hon. the Deputy Minister to consider an amendment to allow the Johannesburg deeds registry at least to have the full powers which the Prins Commission recommended it should have.

In this context I think it is appropriate that I should refer the hon. the Deputy Minister to paragraph 60, on page 22 of the report, and I quote—

I should also refer to the next paragraph, paragraph 61, in which the following is stated—

The final recommendation is contained in paragraph 66 where it states—

What the hon. the Deputy Minister has presented in this Bill is to be found in Clause 1 at the top of page 5 where it states—

If one looks at section 3 of the Deeds Registries Act one sees that the registrar shall in terms of subsection (1)(f)—

And that in terms of subsection (1)(j)6w he may—

Furthermore, in terms of subsection (1)(k) he may—

Why, therefore, are antenuptial contracts not included? In his Second Reading speech the hon. the Deputy Minister stated that there is a shortage of personnel in the deeds registry. That is perfectly correct, but the fact that there is a shortage of personnel in the deeds registry in Johannesburg applies equally in the Pretoria deeds registry, as indeed it does in any registry in South Africa today because of the particular circumstances under which State Administration is being conducted at the moment. That is no excuse. In fact it would be far easier and more convenient for the public, practising notaries, practising conveyancers and attorneys to register antenuptial contracts in this important area of the Witwatersrand which actually has one of the greatest concentrations of population in South Africa today. I have made enquiries as to whether the deeds registry in Johannesburg can cope with antenuptial contracts and I can tell the hon. the Deputy Minister, and he can verify this if he wants to, that they can cope and they would be happy to take on antenuptial contracts. I believe that the attorneys and all those who are involved in this matter would want to do so as well. I am basing my argument purely on an administrative level. It is no secret, of course, that there could be a conflict of interests between those practising in Johannesburg and those practising in Pretoria, but this would really not affect the situation at all. I do not believe that Pretoria attorneys, for example, would begrudge the Rand townships registrar the right to have the registration of antenuptial contracts effected there. Therefore I shall be moving an amendment in the Committee Stage with regard to this particular aspect. I trust it will find favour with the hon. the Deputy Minister.

I now wish to deal with a second aspect of the Bill and this is to be found in clause 6. This is a very important provision as well. Hon. members will know that section 10 of the General Law Amendment Act, No. 57 of 1975, made provision for a new section 15A to be inserted in the Deeds Registries Act. That brought about considerable difficulties and tremendous objections were raised by every law society and the Association of Law Societies. The hon. the Deputy Minister will know that his predecessor, the hon. the Minister of Justice at that stage, received representations, and countless memoranda some of which are still in my possession, were also submitted. That provision placed the onus on conveyancers to certify that the documents that they had signed were correct in all respects. They were made totally responsible for them. It involved matters relating to status, the Group Areas Act, deceased estates and the Master and insolvency, and the conveyancer was held responsible. I think it is a well-known fact that attorneys practising in all the different towns and villages of South Africa, have to send their deeds to a conveyancer at the seat of the registration office. Those attorneys then are not responsible for any error in any deed which they may have instructed such conveyancer to lodge. The conveyancer signs the conveyancer’s certificate in good faith, and having signed it in good faith, he then finds that there is something wrong with it. The attorney has given the wrong status, he has given the wrong date, he has given the wrong purchase price and there is a claim for damages against the conveyancer. He is liable and his partners in turn are liable. It was this fact that resulted in the objections that were raised by the society and representations were then made with regard to the wording of and the onus that was placed upon conveyancers in terms of section 15A(1). This matter has been held over until now. What has now been placed before us is not the wording as is contained in the General Law Amendment Act of 1975, but we now have a modified form of amendment in so far as clause 6 is concerned.