Mr. Speaker, it is with regret that I have to make the following announcement with the leave of this House:

The frigates S.A.S. President Kruger and S.A.S. President Pretorius, the fleet replenishment vessel S.A.S. Tafelberg and two submarines were engaged in sea training approximately 80 sea miles south-west of Cape Point. This morning at about 04h15 a collision occurred between S.A.S. President Kruger and S.A.S. Tafelberg.

The commanding officer of S.A.S. President Kruger realized approximately 10 to 15 minutes after the collision that the damage sustained by his ship’s hull was such that the ship would not remain afloat. He gave the order for the crew to abandon ship. The damage to S.A.S. Tafelberg was limited to the forward part of the bows. That section of the ship was immediately sealed off and the ship was able to proceed, together with other units of the S.A. Navy in the vicinity, to recover the crew of the doomed ship from the sea. Aircraft and helicopters of the S.A. Air Force were also on the scene at first light to assist in the rescue work. The latest information about the situation is that out of a crew of 190 on board the S.A.S. President Kruger, 13 cannot be accounted for at this stage. However, rescue operations are continuing unabated.

The accident took place in the dark and in very stormy weather conditions. The low death toll attests to professional conduct and good discipline in severe weather conditions, with the wind blowing at a velocity of approximately 30 knots, viz. gale force. The way in which the entire maritime search and rescue organization has dealt with the matter has been praiseworthy. The next-of-kin of those who are still missing are constantly being kept informed by naval headquarters.

A board of inquiry headed by the Inspector-General of the Navy, Rear Admiral Weideman, has been appointed to investigate all aspects of the accident.

I hereby wish to extend the Government’s sincere sympathy to the S. A. Defence Force, and in particular the S.A. Navy and those affected by this unfortunate incident.

Mr. Speaker, I should like to associate myself and other hon. members of the official Opposition with the remarks made by the hon. the Minister and to express our concern at this most unfortunate occurrence. I should also like to express the hope that of those who are missing, if not all, at least as many as possible will still be found. I want to extend our sympathy to those who have been adversely affected by this event, and also to extend to those who were injured our hope for their speedy recovery.

Furthermore, I should like to express our gratitude to all of those who have assisted with the rescue effort whereby so many of our men were ultimately brought to safety.

Finally, I hope that the inquiry which is being conducted will be completed as speedily as possible and that the public will be informed of the reasons for this most unfortunate event. Obviously, the public as a whole are extremely concerned about it. I believe all of us in this House will share with the hon. the Minister the regret that such an occurrence should have struck our Defence Force and our young men.

Mr. Speaker, I should like to associate hon. members of the NRP with the sympathy expressed by the hon. the Minister and by the hon. member for Yeoville in connection with this unhappy event. I do not want to repeat what has been said. We do, however, share the feelings expressed by the hon. the Minister and by the hon. member for Yeoville. We too will wait for the announcement of the findings of the board of inquiry. We associate ourselves with the sympathy expressed to those who are involved in this occurrence, and we also share the appreciation extended towards those who have helped with the rescue.

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

In effect this will mean that the registration of antenuptial contracts will be included under this clause. This has been well motivated during Second Reading, and the hon. the Deputy Minister has already intimated that he would accept this amendment, for which I thank him.

Mr. Chairman, I accept the amendment moved by the hon. member for Hillbrow. I explained to the House yesterday what the problems were and why we could not implement this initially. I also stated that those problems were not insurmountable. Therefore I am happy to confirm that I accept the amendment moved by the hon. member for Hillbrow.

Amendment agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill, as amended, reported.

Third Reading

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

Mr. Speaker, we have had a meaningful discussion on this Bill, which affects most important aspects of the registration of deeds, a matter which in turn affects the lives of all South Africans. I want to thank the hon. the Deputy Minister for accepting our amendment, thereby improving proving the Bill that is before us. This legislation has implications for all those reef towns served by the deeds registry at Johannesburg. I believe that we have now fully implemented the recommendation of the Prins Commission by now allowing the deeds registry to become “fully fledged”, in that it will now be able to deal with the notarial bonds and especially the releasing thereof, as well as antenuptial contracts. I am sure that the citizens of the towns that are involved here and those in the legal profession will be grateful to this House for this inclusion, for the time and money that is being saved and for the service that it renders to the public. One has the feeling that we have had a meaningful debate and that we have in fact achieved something.

I also want to say in passing that with reguard to the fully-fledged deeds registry at Johannesburg that what we have done is indeed an improvement to the deeds registry. However, I should like to ask the hon. the Deputy Minister to bear in mind the initial request that was made to the Prins Commission, viz. to give Johannesburg its fully-fledged title by allowing it to register farm properties and small holdings so that those areas which are situated in the Witwatersrand area would not have to send their deeds to Pretoria. We accept that if we were to transfer 40% of the work from Pretoria to Johannesburg it would entail the transfer of records which in turn would present difficulties to the deeds registry at Pretoria. I therefore ask the hon. the Deputy Minister to bear this in mind so that at a future date, perhaps a not too distant future date, and bearing in mind the electronic age with which we live today with computerization and microfiche of documents in a highly sophisticated way, it might not be so difficult to transfer the 40% of the work, to which I have referred. I hope that that will happen.

Having dealt with the deeds registry at Johannesburg, I once again want to touch on another matter, viz. the conveyance certificate dealt with by clause 6 of the Bill. We have already had a meaningful discussion on this and I again ask the hon. the Deputy Minister to ask his officials who serve on the committee that frames the regulations, especially those regulations which still have to be drawn up in accordance with the provisions of the proposed section 15A, as set out in clause 6 of the Bill, to bear in mind that all we need to do to make everybody happy and to safeguard the situation is to provide that the safeguard—not a guarantee, but a safeguard—in the conveyance certificate is exactly the same as in section 11(4) of the Sectional Titles Act. That is all we ask to be done at a later stage.

Then I should just like to comment on the point made by the hon. member for Newton Park with regard to the endorsement of title deeds as against the transfer of title deeds in cases where the State has expropriated. This matter goes back for some time, to the days when Mr. Uys was the Minister in charge of the development of the Orange River scheme. At that time the property which was expropriated for that purpose was being so transferred. It was regarded at that time as being a temporary measure but there is always the danger when one introduces a practice as a temporary nature it can become a permanent measure and be extended even further. It would only be correct if the normal procedure of transfer was followed at all times and if the mere endorsement of documents would be seen as the exception rather than the rule. If the hon. the Deputy Minister will bear that in mind I think we shall be able to establish a registration system which will be accurate for all time.

Mr. Speaker, we in these benches shall also support this Bill at Third Reading. We believe the effects of the Bill will be to enhance the efficiency of our deeds registries throughout the country and to effect certain economies in a number of directions. Therefore we believe that the Bill is an improvement on the present legislation, and we support it.

Mr. Speaker, I wish to thank hon. members for their support of this Bill. The hon. member for Hillbrow referred to clause 1 and expressed the hope that ultimately the Johannesburg registry would become a fully-fledged registry. I can assure the hon. member that in the fullness of time that will happen. That is also my idea, and we are working towards attaining that. I can tell him further that we are introducing very sophisticated electronic apparatus in our registries and that what he has asked for will be able to be done—that information be transmitted from one registry to another.

I want to thank the hon. member for Umbilo for his support. He is quite correct in saying that these measures will assist in enhancing and improving the registration of documents.

*Mr. Speaker, we have a registration system in this country of which we are justly proud. It is one of the best in the world, and it is not I who say so because I am not qualified to judge. Nor is it my department that says so. That is what I hear from qualified and leading conveyancers who have a specialized knowledge of these matters. This wonderful achievement has been made possible by teamwork, our deeds offices and their very dedicated staff, by the surveyors who maintain a very high standard and also by our conveyancers with their very thorough training. I understand that this is highly specialized training and that a conveyancer must, inter alia, be conversant with 180 laws and ordinances.

†The hon. member for Umbilo expressed the hope yesterday that while we were enhancing efficiency we would not allow accuracy to suffer—that we would not streamline our procedure at the expense of accuracy. I should like to tell the hon. member that in the United Kingdom, for instance, 3% of all property registrations are contested in court while in South Africa this sort of litigation is almost non-existent. We have a unique system in this country of which we are justly proud and which we jealously wish to maintain.

*In introducing measures for making this system more streamlined, we guarded jealously against this being done at the expense of efficiency and accuracy. We are proud of our system and we want to keep it that way.

I thank hon. members for their support for this measure.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

The most important aim of the Bill now before the House is to confer borrowing powers on the National Housing Commission. The National Housing Commission, as an organ established by the State to provide and finance housing for persons whose income is below a specific amount, is dependant on appropriations by Parliament and the flow of repaid capital to supplement the assets of the National Housing Fund, which is used to defray the Commission’s expenses.

†As it is not possible for the State alone to bear the financial burden of providing housing for the low income group, ways and means had to be found to augment the supply of money available for housing. A committee under the chairmanship of the hon. the Deputy Minister of Finance was appointed late last year to give the matter its attention and one of the proposals submitted to this committee for consideration was that the National Housing Commission be empowered to borrow money. The committee has given its support to this proposal and the Bill now under discussion gives the National Housing Commission the necessary powers in this respect.

*I consider the borrowing powers now to be conferred on the Housing Commissions to be essential at the present juncture.

The remaining provisions in the Bill are of a consequential nature and result, inter alia, from the change in designations.

Mr. Speaker, we in these benches shall support the measure. The principle of extending the powers of the National Housing Commission to raise money on the open market rather than it being restricted to money which it receives from the Exchequer or from repayments on buildings which the commission has made available to the public, is one which we have advocated for some time. The hon. the Minister did not mention it this afternoon, but he is aware that during the discussion of his Vote last year, on behalf of the official Opposition I made the proposal that the National Housing Commission should be able to raise Government housing stock.

In a letter from him dated 26 October he very kindly wrote about the suggestion and said it was being referred to the hon. the Minister of Finance. In a subsequent letter from the hon. the Minister of Finance dated 30 November he said that the proposal was being considered by the committee under the chairmanship of the hon. the Deputy Minister of Finance.

We believe that if it is possible to raise more money by this means for the tremendously important function of providing housing for the lower and middle income groups, this avenue of fund-raising, of capital borrowing should be explored.

In my proposal to the hon. the Minister last year I went further than just to say that there should be national housing stock. Part of the proposal was that where banks, building societies or pension funds which are required, by regulation, to have a certain amount of their total investments invested in Government stock, housing stock should qualify as Government stock for this purpose. They would then not only be committed to Escom or water boards and institutions like those. We should like to know whether the second part of the proposal which we put to the hon. the Minister last year has been accepted by the Steyn Committee.

We say this because we believe that it is very important that some added incentive should be given to the investing public to invest in housing. If the hon. the Minister is just going to compete on the open market with no special attractions, he is going to find it an extremely costly business. Indeed, I think it is regrettable that the National Housing Commission is going to enter the borrowing field at this stage with interest rates rising as high as they are and a significant dearth of capital available. In these circumstances we should like to know whether that aspect of the request which we put to the hon. the Minister and which was transmitted to the hon. the Minister of Finance has been acceded to.

The second point that we must make is that this method of raising capital is in fact a costly one, both because interest rates are going to be higher than the interest rates which the National Housing Commission has to pay to the central Government and because they cannot just top up this fund from receipts from revenue. This fund, will have to be one which not only requires the payment of high interest rates to get the money, but because it is loan capital in due course it will have to be repaid, either by raising fresh loans in order to roll over the loans or by finding some other means of repaying the loans. In these circumstances it makes a turn over from letting units to purchased home-ownership units a very important factor in the national housing scheme’s operation, because for as long as the bulk of the properties are units which are let out of capital provided for the Fund, this highly expensive capital will be locked up. However, when more houses which are let are being sold, there will be an increased turnover and it will be possible to recoup some of the capital which has been made available. In the hope that this will also stimulate home ownership as opposed to letting schemes, we are doubly supportive of this measure.

I believe that it is also appropriate at this stage for us to issue a word of warning to the hon. the Minister of Community Development. Adequate funds for housing of both the lower and middle income groups are becoming a matter of desperate importance. All we say to the hon. the Minister, now that he has the legal authority to raise the extra money on the open market, is that under no circumstances must he allow the hon. the Minister of Finance or the Treasury to cut back on the amount of money which the Treasury should be allocating for national housing funds. I say that particularly with the hon. the Deputy Minister of Finance smiling in the background. The fact that additional money is going to be raised from this private capital financing source must in no way be used as an excuse for the State in any way reducing its obligation to provide funds for housing, and we on this side of the House will support the hon. the Minister against his colleagues in any fight that he has with the Treasury or the hon. the Minister of Finance in this particular field.

Private investment of capital in housing for the lower and middle-income groups may not be seen to replace the Government’s overall responsibility. It may only be seen as supplementary to the Government’s responsibility. I mention this in particular against the background of a recent statement made by the Director-General of the hon. the Minister’s department. The Argus of 23 January this year carried a front-page announcement—

In January this year there was a public announcement by the Director-General that owing to the shortage of funds from the Exchequer projects to the value of R500 million were either being shelved or delayed. We will speak further tomorrow under the private member’s motion in the name of the hon. member for Newton Park on further aspects relating to national housing.

The whole question of the financing of lower and middle-income group housing has become one of cardinal importance. The demand for financial assistance in the provision of housing is going to become greater and greater, not because the population is necessarily getting poorer and poorer, but because the lower and middle-income groups are finding it almost impossible to get access to housing, due to the cost of building and to the cost of financing. These will become most material factors.

Now that the hon. the Minister has access to more funds—and we hope the hon. the Minister will in fact have access to more funds—he should announce two immediate steps. Firstly, the income level for qualification for financial assistance from the State should be increased with immediate effect. For almost two years now the figure has been R650 per month for a married couple. This is far too low considering the current value of the rand and considering the value of money which people have to pay on mortgage bonds for new housing. We in these benches recommend that the figure should be increased to R600 for single persons and to at least R1 100 for married persons. I will indicate tomorrow that in money terms these amounts are no more than the original R360 and R650. Tomorrow we will also come with practical suggestions as to what should be done in this regard.

So first of all there should be an immediate increase of income qualifications in order to allow more people to qualify for assistance under the national housing scheme. Secondly, in view of the staggering increases in building costs—building costs last year rose by no less than 32,4%—the limit of loans, the limit of the total cost which pegs the level at which people can get assistance from the National Housing Fund, should be increased. The R18 900 should be increased to R30 000 and the R23 000 should be increased to R35 000. These are practical realities. If one takes the costs of two years ago and translates them into money costs today, one finds this kind of picture. So while we in these benches welcome the additional avenues of finance which are going to be made available to the department and the National Housing Commission, we also believe that there will have to be a realistic reappraisal of the money limits, both in terms of income and the cost of housing.

With these words we hope that with the passage of this Bill the people of South Africa, especially the lower and middle-income group people in cities who are battling against inflation, will be assisted in a better way than before to find accommodation.

Mr. Speaker, the hon. member who has just resumed his seat made a few remarks all of which we have heard before and most of which we would agree with. Although this does not apply to the tenor of his speech, I think that the things he says are things one could hear any day of the week in the discussions that take place between hon. members on this side of the House and the officials of the Ministry. He did say, however, that the State must not reduce its funds for housing in the light of the fact that the National Housing Commission will now be able to borrow money. Obviously one would agree with that, but I think that the inference he draws from that, i.e. that the State is now looking for an alternative source of funding so as to reduce its expenditure is not, to my way of thinking, well-founded at all, and I think that the public’s overall experience of the State over the past five years, and its experience of the way the State ranks housing as a priority, would demonstrate that very clearly. One’s mind goes back for example to the time when we had windfall profits from gold, and the very first expenditure the Government then embarked upon—I am sure the hon. member will remember—was its allocation of an extra R250 million for housing. So we see that from June 1976 to April 1981 approximately half of the 285 000 housing units that were built—actually 136 656 or nearly 50%—were in fact erected by the State. I think that the whole objective of this amendment is to tap an additional source of funds to that which one has had access in the past.

If we look at the benefits accruing from the establishment of the National Housing Commission, we see that something like 80% of Blacks qualifying for assistance are, in fact, receiving housing assistance from the State. For the Indians the figure is between 40% and 50% of the people qualifying for assistance. The figure for the Whites, however, is only 13%. This means that only 13% of the people who qualify for assistance at current income levels do, in fact, take advantage of the assistance that is available. I would agree that we could probably expect the number of people requiring assistance to grow. I also share that hon. member’s concern about income limits. I certainly think we shall have to look at those limits again.

The implications of cost rises in the financing of housing are, of course, enormous. It is, in fact, true to say that we do not actually have a housing problem in South Africa. What we have is a financing problem, because we know that the industry can cope with the kind of building programmes that we might undertake. We also know that the material supply industries can cope and we know that the department itself can cope. That is a matter of public record. There has been sufficient indication of this over the past few years when crash programmes were undertaken. If one looks at the rising costs, however, one sees that in 1971 the average house that the National Housing Commission built, a 90 square metre house, cost R4 600, i.e. some R51 per square metre. By 1975 the figure had risen to R89 per square metre or R8 000 per unit. By 1981 the figure was R192 per square metre or R17 300 per unit. I do not expect building costs to rise as steeply this year as they did over the past year or two, but they will nevertheless rise fairly steeply, probably by between 14% and 16%. There is, however, an area of concern. If the State were to slow down its housing programme, the big organizations that have been brought together to do development on a very big scale might find themselves in difficulties, and if we were to break up those big organizations by perhaps not allocating the kind of money we could or should, that might have serious implications for the cost of individual units.

Differently expressed, one can see what cost rises do when one looks at the average building society bond on a housing unit in South Africa. Generally it rose over the past year by 21,4% from a figure of R27 800. There we have another indication of how the price rises made themselves felt and of the impact they will have on the National Housing Commission and its work. I think that every member of the House who represents a constituency will have practical experience of, and great appreciation for, the fantastic work this commission does. It is, however, absolutely vital that private enterprise, the private sector, should become engaged in housing, particularly mass housing. In the article “Housing in Southern Africa” by the Deputy Engineer of Cape Town, Mr. Mabin, he gives some figures—I do not know whether they are his or the department’s—relating to the percentage participation of the private sector and the public sector in housing in general. We see from that that as far as Coloured, Asian and Black housing are concerned, between 1976 and 1981 the private sector has in fact played a very much smaller role than one could expect it to play. As regards Black housing, for example, the private sector provided 8% of the housing whereas the public sector provided 92%. The figures for Coloured and Indian housing are similar.

Finance is in fact the crunch issue in housing at the moment. It is most important for us to help to find ways and means of financing the housing that we all know is required by society generally in South Africa. I should like to quote what Mr. Groom of the Cape Town Chamber of Commerce said at the Assocom Conference in 1981—

I think that here we have an opportunity emerging for the private sector. It can participate and make funds available to the National Housing Commission. One hopes that the private sector will come forward in this way.

We all know what the problems are. I think that if there is one department which has defined the housing problems well it is the Department of Community Development. However, defining the problems is one thing, providing solutions is another. I should like to put forward a suggestion this afternoon on financing and bring it to the hon. the Minister’s attention. I would ask him to consider it. Hon. members will know that, with the advent of sectional title and the conversion of buildings to sectional title, where they were formerly let, there has been a reduction in letting stock which has had enormous financial consequences. What has happened is that existing blocks which were minding their own business, if you like, have now been sectionalized and this has created new demands on the existing pool of money. It has of course drawn a great deal of money from the building society movement.

We also know—it is history—that there was abuse, that people were taken advantage of because of the great profits that could be made on converting blocks. For many developers the temptation was great. We all know that there was abuse. The Government, the department, the Minister stepped in to protect people who deserved protection. I think that that was done quite effectively. However, what happened when the Government stepped in was that the supply of sectional title flats coming on to the market was reduced which in turn created an artificial supply situation which has again tended to drive prices up and which has in fact had the effect of siphoning off even more money than might otherwise have been the case.

I want to say to the hon. the Minister that we know that when a township developer proclaims a township on raw land, he must provide services, such as roads. He also has to provide cash and educational endowments and has all sorts of expenses, for example holding costs, the loss of interest and ultimately there is the risk of whether or not he will sell at a profit that which he wants to develop. That is one thought I should like to leave with hon. members.

Secondly, the developer that converts a block of flats or does a subdivision of 200, 300 or 400 flats, has none of the above mentioned commitments, nor does he run any risks, because if he does not sell the flats, the present tenants remain and continue to pay rent. There might be just one flat to which the public has access so that they can see what they might be buying.

We also know that if the status of land is changed from say residential to industrial land and an enhancement of value takes place by executive action, an enhancement levy of up to 50% of the enhanced value is payable to the local authority.

In the Cape.

In the Cape. I do not know whether the other provinces also impose this levy.

Natal is ahead of the other provinces.

The principle has been established that if by executive action there is an enhancement of value, an enhancement levy has to be paid. The hon. member for Sea Point said in a recent debate that he knew of a block of flats in his constituency which was sold for R1 million to R2½ million. In other words, there was a wind-fall profit, if you like, brought about by executive action, by the fact that there was a change of use that was sanctioned by the State. This profit was not taxable normally. I believe the hon. the Minister should investigate the possibility of introducing an enhancement levy on existing blocks of flats— not on new blocks—when they are converted to and sold under sectional-title.

The departure point would still be what it would be worth as letting units, and the other pole would be what it would be worth if sold as individual units. The benefit of this would be that while in the case of a township the developer may pay certain endowments for example in land—he might pay here with endowment flats. If we have four, five, six or ten protected tenants living in a block of flats, a block in which certain endowments are payable, and those endowments are paid as flats, those tenants who require the protection of the State could continue to occupy the flats they already occupy. Those endowment flats could then simply be taken over by the department and the department could administer them either directly or through the local authority or in whatever other way is the most convenient. This would resolve an enormous social problem, because one of the great problems we have is that people who are displaced by the sale of unity under sectional title often have to move, if they are going to occupy State houses, to areas completely different to those to which they have become accustomed, that is, away from the area in which they have always lived. Now it would be possible for a person who lives in a flat that becomes an endowment flat, to continue living in the same block of flats and to remain in the neighbourhood where he or she has always lived.

The second benefit is that we would increase the housing stock that is in the hands of public authorities. Furthermore, I think it would be fair because the enhancement levy that would be payable would only be payable on windfall profits. I also think there are a great many benefits to be derived from this by the developer. There are many blocks of flats in which protected tenants are living at the moment. Broadly speaking, it may be in the public interest that those flats be allowed to be sold in terms of the sectional titles scheme. But because there are protected tenants living in those flats, people for whom there is no alternative housing available at the moment, development is not allowed to go ahead. If the department, however, should adopt the practice of imposing an enhancement levy on such flats it would mean that many blocks of flats where no development is allowed to take place at the moment could then in fact reap the benefits of development. That would immediately bring about a situation in which more flats will come onto the market resulting in prices becoming more reasonable on stabilizing.

I could discuss this matter more fully with the hon. the Minister should he like me to do so. In my view, however, this enhancement levy is something which should be considered, but only in regard to existing flats. It should not apply to new buildings. I believe that this windfall profit could be taxed because many social benefits flow from such a move.

In conclusion I should like to state that we do of course support this measure before the House. It is the only right attitude we can adopt. One hopes that there will be a positive response to this from capital sources both inside and outside of the country. Over the past few years there has been talk of money which is available from sources that might be interested in becoming involved in the provision of low-cost housing. We do hope it will in fact materialize.

Mr. Speaker, we in these benches will also support this Bill, but not with quite the same enthusiasm with which—so it appears—other speakers have welcomed it. We do support it though, but with certain mild regrets and also with certain reservations.

The regrets we have are because we feel that in housing, money borrowed on the open market is enherently more expensive than State money. We also believe that when it comes to the State participating in housing the money collected by way of tax, or the new money created by Government, is more economical for house building than borrowed money will be. This is one of the regrets that we have.

Because of the priorities determined by the Government, unfortunately, although housing is an important factor, it is apparently not sufficiently important to make the appropriate funds available for building purposes; for homes for our citizens. We believe this is very unfortunate because, as I have mentioned—and other hon. members have in fact also mentioned this in the past—housing is one of the three pillars on which one builds a contented society. It is one of the three pillars, the other two being food and security. I believe that the Government spends adequate sums of money one way or another on security. I believe that in general the various agricultural departments provide food, if not cheaply then at least at reasonable cost. It is therefore important to make sure that the third pillar of a contented society—that of housing—is also given the same sort of priority treatment. Therefore there is, as I have said, a certain degree of regret on our part because we find that the Government is not in a position to provide the sort of money which is required.

Having said that I believe, as I have already indicated in the past, the more one can get private enterprise to participate in home-building, the better, but I cannot help but have certain reservations in respect of the borrowing of capital for low cost or lower category housing. I say this because I believe it is going to have the effect of making housing money more expensive. These are the regrets that one has.

The reservations one has are that when it comes to the borrowing of money we are already in a difficult position in South Africa in that from what one can ascertain the normal financial institutions are already struggling to obtain funds. I have friends and associates in building societies who have indicated to me that they are not attracting the money that they were attracting in the past. It may also well be that going into the public market, money that would be used for normal commercial and industrial expansion may not find itself going in those directions. It is one of the reservations that one has. Similarly, the pressures on loan moneys, which, as I have already mentioned, are already in short supply, may have the effect of increasing interest rates still further. I am afraid that this is something that is going to worry a lot of people because increases interest rates, although they are intended to be anti-inflationary, are going to mean that the man in the street is going to have to suffer nevertheless. So this is another reservation that one has.

The situation is therefore that we support this concept of going into the market because there is insufficient money available from the normal sources for this type of development, and housing is so important that we cannot allow it to run astern of requirements. In fact the serious housing situation that prevails in South Africa today emanated from a long period of neglect in this particular field. We accept the fact that we are going to have to borrow, but I do sincerely hope, having heard odd rumours over the last few months of massive sums of money that are going to be available overseas, that the hon. the Minister will give preference to borrowing money from overseas if he possibly can rather than denuding the local money market, which, as I have already indicated, does present certain problems.

Another aspect that must be borne in mind is that borrowed money is generally expensive money. We therefore have to take care that we borrow at the lowest possible rate, because in the end result the consumer, the person who is going to live in the dwelling either as a lessor or as ultimate owner, is going to have to pay for it. Therefore we hope that the money will be borrowed at as low a rate as possible. Furthermore, even if the Treasury is not in a position to make capital sums available, it may in fact be able to subsidize at least the interest on this money to ensure that that which is passed on to the ultimate user will not beyond his reasonable capacity to pay. It is not a new concept to subsidize interest. It has been done before in other places, and I believe it is worth while considering here too.

As far as the provisions of clause 4 are concerned—the repayment of the value of land into State coffers—is something which we feel we can support. As far as I personally am concerned, however, I have certain reservations as to whether it is really desirable to put that money back into ordinary State funds. I cannot but feel that there would be a certain amount of merit in giving consideration to putting that money back into a State housing fund. I do not say this because I have any particular reservation about the money being paid back into the State Treasury because it amounts to the same thing in the long run. However, there is a great deal of criticism of the fact that the department buys land at a relatively cheap rate, holds on to it for a while and then subsequently sells it at a very high price. Regrettably, the people who are so critical in this regard do not take a number of other aspects into account. All they look at is the figure it was bought for and the figure it was subsequently sold for. They do not consider the fact that the money was tied up for several years, that new planning and infrastructures have had to be undertaken and that in the case of new developments, one has had to make provision for open spaces, provide sites for schools and make provision for all sorts of other facilities. I have heard these complaints expressed ad nauseam in regard to the situation, for example, at Cato Manor. This area is contiguous to my constituency. All these points have to be considered. I am quite sure that while one will not be able to avoid criticism altogether one may be able to minimize or alleviate it somewhat if people know that the money is not going to be paid directly into State funds but is going to be paid into some sort of a revolving fond simply and solely for housing.

One of the points raised by one of the hon. members who spoke before me was the huge increase in costs in the building industry last year which was in excess of 30%. This is regrettably and most sadly true but I believe that this is one of the instances in which excessive profits are being taken. That is why the public are having to pay. I have been associated with the building trade myself for the past 30 odd years and I have seen what has been happening. It is not necessarily the builder himself who is taking these excessive profits. There are strong monopolies in the production of prime products in the building industry and I believe that it is in this direction that a comprehensive enquiry should be instituted. As far as I can see, the average builder, the smaller builder in particular, is not making a particularly high percentage profit on his materials, labour costs and general outlay. It is before he obtains his materials that the huge profits are now being made. I believe that this is an aspect that should be investigated. As I say, I have been in the industry for a very long time and in the section of the industry with which I am associated I have seen massive profits being gained on a relatively small capital investment on the part of certain manufacturers.

The hon. member for Maitland raised the question of betterment tax being used in regard to the conversion of blocks of flats. I know that they have this betterment system in the Cape. In fact, the Cape Provincial Council passed an ordinance some years ago because they were experiencing certain problems in this particular regard. However, betterment and compensation in a free enterprise society is something that one has to treat with extreme caution because if betterment is paid then obviously compensation has to be paid as well.

Your leader proposed that you pay tax.

I am not concerned about what my leader proposed; I know what I am saying in this regard and I happen to know something about this particular subject. [Interjections.] As far as I am concerned, therefore, I believe that one must approach this betterment and compensation matter very carefully because, especially in a time of high inflation, it is very difficult to define what is true betterment and what is in fact inflation.

For the first time you are wrong.

That is the opinion of that hon. member. I shall stick to mine. [Interjections.] The position is that I am not saying that under no circumstances should one look at the question of betterment and compensation, but what I am saying is please do not dive into it without looking at all the possible problems that one can get from it. I did a nearly two years’ study on this, and believe you me, I found a lot of problems. In conclusion I say that we shall support the Second Reading and we wish the hon. the Minister all the luck in the world in getting many houses built quickly.

Mr. Speaker, I want to thank all the hon. members for their support of this very important, I almost want to say historical piece of legislation in terms of which we are granting the National Housing Commission powers that it has not had before.

The hon. member for Sea Point said that he called for this. Well, he did call for it. He called for the matter last year, and then followed it up by letter. However, the hon. member for Bellville also spoke about it last year. It has been discussed in the past as well. The fact of the entire matter is that the Housing Matters Policy Council that exists in our department and which was created for this very purpose, viz. to establish on an ongoing basis what we can do in this sphere to promote housing, made these proposals more than two years ago. We then sent this to the Department of Finance, but thus far they have not yet seen their way clear to approving them.

We paved the way.

Of course, circumstances change, and now I am pleased that we were all thinking in the right direction and that we were eventually able to produce the legislation.

The hon. member for Maitland has a very realistic approach towards this matter, but there was one remark in particular that he made which made a great impression on me and which I feel is a very interesting, logical proposal. I am referring to his remark about the increase in the value of flats that are converted into sectional title units. I have not thought about it in that way before, but one can make the following analogy. We already have this principle in legislation, particularly in the Cape. It seems to me as if Natal does not have it; they are a little behind.

We were there first.

Well, then it is a good thing. We are not fighting; we are agreeing with one another. We have already agreed to the principle. I feel that we have every reason to believe that we can refer this recommendation or proposal by the hon. member for Maitland to the hon. the Deputy Minister of Finance and his committee to good effect, so that they can process it and establish whether it cannot be materialized and transformed into something from which we can obtain revenue, and not only ourselves, but all the authorities in question. Funds can be generated by the local authorities that they do not need to ask me for. I think it is a very positive proposal that deserves to be considered very seriously.

I have respect for the hon. member for Umbilo’s well-considered clear standpoints that he expressed here. His approach to this matter agrees to a large extent with mine, and this is that we can share one another’s concern about what one would have to pay for this money if one were to borrow it. At what rate of interest would one be able to loan it in one’s attempts to provide housing for the very lowest income groups in the country? What would it cost in subsidization? Then there was also his reservation about where we would get the money if we were to enter the present rigid market now. Should we get it here or abroad? The hon. member says that perhaps we should rather borrow it abroad, but I think that we should rather begin locally at first. We shall be testing the domestic market shortly and I am hopeful that we shall succeed in our attempt. We have a very efficient technical officer in the department who is negotiating with financial institutions at the moment, and I feel that we shall succeed in obtaining the first loan in the domestic market.

The hon. member also raised the interesting possibility that we should not plough the retroactive capital and interest earned on funds spent in housing projects, back into the Revolving Fund. This is an aspect that the Steyn Committee also weighed up. An aspect like this one does of course not have one side only, but many. The Steyn Committee, on which representatives of our department are serving, will give thorough attention to this aspect.

The hon. member said it is a pity that there was not enough revenue available for housing from the Government and that the funds for this purpose had to be borrowed. I agree wholeheartedly with the hon. member. We are borrowing money only because it is necessary under the present circumstances. It is the standpoint of the hon. member for Sea Point that the loans that we will negotiate, should not mean that the State is going to spend less on housing from its usual revenue funds and that the loans should be additional. My department cannot use all the money at its disposal willy-nilly. The loans will take place in consultation with the Treasury and in the nature of things we will not be able to spend much more than we usually spend. The Government can spend only a certain amount on housing—whether it be borrowed or obtained from revenue funds. Other funds must come from the private sector. All possible channels are being investigated at the moment in order to involve the private sector in the provision of housing and to involve the private sector on a partnership basis in spending money on low-cost housing as well, so that the burden that has thus far rested on the State, can be better distributed between the two sectors. I therefore agree with the hon. member for Umbilo.

However, there is another aspect on which I agree with the hon. member for Umbilo. The money that we borrow is not going to the National Housing Fund. The capital will have to be paid back, as the hon. member for Sea Point correctly pointed out. I agree with the hon. member for Sea Point that we should transform the houses into money as soon as possible and use the money to pay off the capital. The sooner we can do so, the better for us. In the nature of things, it is the policy of the Government to promote home ownership as far as possible. We shall therefore have to sell the houses as quickly as possible in order to pay off the capital. The point that the hon. member for Umbilo made was a very valid one. The capital does not remain in the National Housing Fund. The National Housing Fund is a national asset, and I wonder how many hon. members realize what a tremendous asset it in fact is for South Africa. At the moment, the National Housing Fund stands at R2 billion. In a year like this one, where we are not receiving enough money from the State revenue fund, we obtain no less than R113 million from the National Housing Fund by means of retroactive capital and interest. Just look at the benefit that we have gained as a result of our far-sighted attitude over the years by strengthening this fund. As far as I am concerned, it will therefore be more serious situations only, like those that are prevailing now, that will oblige us to borrow money. We would rather obtain funds from the ordinary revenue fund and channel it through the National Housing Fund in order to increase the Revolving Fund and not to destroy it.

Now I must give attention to the matters that were raised by the hon. member for Sea Point. Firstly I refer to the second recommendation to which he referred in the letter that he wrote to me. I am referring to his recommendation in regard to prescribed investments. I have brought the matter to the attention of the Steyn Committee. The committee is still involved in processing all these matters and will ultimately give a decision on them.

I furnished him with a reply on the high interest that we will have to pay. I do not expect to obtain cheap money. It is unrealistic to think that we would obtain cheap loans now. Of course we will try to negotiate the best loans and I have already replied to his view that we should promote home-ownership progressively by way of these schemes. I agree with him on that.

He also addressed a warning to me by saying that we should not think that we could borrow money and that the State would then not have to spend any of its revenue funds on housing. I have already explained to him how all this will work.

The hon. member also referred to the fact that the income limits are realistic. Shortly after I became Minister, the limits were reviewed, and we pushed them up quite considerably. However, if I were to follow the hon. member’s advice and to introduce such drastic increases in the income limits—for instance—if I were to push them up to R1 100 for a married person—I would have to spend all the money that I receive from the Treasury on subsidies alone. This merely means that I would have to sink more and more money into a bottomless pit of subsidies. The department already has to pay a high interest rate on the money that the Treasury gives us and which we then loan to local authorities for housing purposes. In many cases we must pay between 13% and 14%, whilst we sometimes loan the money at less than 1%, and in most cases at rates in the region of 3½% and 5%. This means that we already have to pay more than R40 million of our allocation per annum on subsidies. The more one pushes up the limits, the more people look to the State. We are aiming the entire policy in connection with the provision of housing in a different direction. We want people to be less dependent on the State and to look after themselves more. If one wants to wean a calf, one should not give him one extra opportunity to drink each day, one must really wean him. Therefore, if we want to convince our people to become less dependent on the State for their housing, we must not make the State responsible for the housing of a larger number of people. We must try to accept responsibility for an increasingly smaller number. In principle I can agree with the hon. member that it is an unrealistic amount, but if we increase it—and we look at this from time to time— we are simply going to be burdened with more and more obligations for the State.

The final aspect that the hon. member raised, was the rising cost of building and the aid schemes of the State. I must agree with him here. We have various schemes, some linked to building societies as well as out and out Government aid schemes. I agree that the amounts in question are unrealistic to day. We can discuss this again tomorrow. In fact, I will discuss this tomorrow and that is why I shall now leave the subject at that. However, I agree that the amounts are really unrealistic at this stage due to the tremendous increases that there have been in this industry.

I think that I have now replied to all the points that were raised and I think that we can now content ourselves with that.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Third Reading

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

Mr. Speaker, in view of the fact that the Bill was not committed, I should like at this stage to make one or two comments arising out of the Second Reading debate. First of all, the hon. member for Maitland raised some interesting proposals regarding conversion to sectional title. One would like to look at them in some greater detail before committing oneself. I can say that the hon. member for Umbilo immediately pointed to one of the snags and that is that, if one has betterment charges or improvement charges, how does one establish that value. The hon. member said that, if by executive action one improves the capital value of an asset, the concept of a betterment charge is not unrealistic.

It is not in the Bill.

Mr. Speaker, I want to say, in turn, that rent control has depreciated the capital value of assets for some years. Is one then also going to take into account that this executive action, having depreciated the capital value of assets, should result in a depreciation allowance? I raise this because there are practical problems involved in how one determines the real capital value at a given moment in time free of executive action as compared with the new capital value which will result in the circumstances. I believe there are other ways of dealing with the problem. I am perturbed to think that there could be a block of flats which, although it is in the hands of private enterprise, has three, four or five flats owned by the State. Within that block of flats one will immediately have the practical problem of there being two different types of landlords—the State and the Private Sector— owning flats. That is an untidy situation. I believe there are other ways of giving protection to the tenants in order to allow those schemes to proceed. Nevertheless, the hon. member did put his finger on a very real practical problem to which I believe the Government should give its attention.

I share to an extent the qualms the hon. member for Umbilo had about borrowing money. I was brought up in an old-fashioned school when it comes to borrowing money. I certainly would not support the Government if it was borrowing money to meet current expenditure. That would be disastrous. In this particular Bill, however, the aim is not to meet current expenditure but to invest in capital goods. Capital goods such as buildings and land by their very nature increase in value. Just as we do not think it is suggested that local authorities should not raise money—local authorities do raise money in order to proceed with capital works, as do Escom and Iscor—so we believe it is reasonable that the State for purposes of investment in new buildings rather than expenditure should be allowed to borrow money.

In conclusion, may I say that the hon. the Minister almost persuaded me to vote against this Bill. I was perturbed at his suggestion that in fact in the end this will allow the Government to reduce its commitments as far as expenditure from revenue is concerned. We see expenditure from revenue as remaining a formal obligation on the State.

It should continue and increase. We must take into account the serious housing crisis in South Africa. If the hon. the Minister looks at the report of his department of last year, he will see that for Coloured, White and Asian housing the State was only providing something like 40% of what his own department said was required. That is what he was saying. All we suggest is that that 40% should certainly not be reduced. This Bill is in order if it is to be used to bring the 40% up to 100%. On the basis of the realities in regard to the need for housing, the State should not reduce its obligations but increase them and with that in view we continue to support this measure.

Mr. Speaker, I should just like to allude briefly to what the hon. member for Sea Point said, particularly in respect of the proposals I made earlier. May I just say how glad I am that the hon. the Minister has indicated that he will consider the proposal. I think it is well worth looking at, and I am delighted to hear that the hon. the Minister will in fact do so.

I am sorry that the hon. member for Umbilo introduced the phrase “betterment tax”. It is not a tax. The phrase “betterment tax” flows from cases which came before the Supreme Court where, after the Cape Province introduced the enhancement levy; people argued that the provinces did not have the right to levy tax. It was argued that the enhancement levy was a tax and therefore ultra vires. The whole question of enhancement levies has been settled before the courts. Test cases have been fought and the procedures are well established.

In regard to arbitration procedures, there are well-known arbitration procedures that one can employ, and these are laid down in various existing Acts.

The hon. member says that if the State owned 10 or 20 flats in a big block, it would create a problem in regard to the management of the entire body corporate. This, of course, is not so. At the moment there are a number of owners in any body corporate, and whether one of the owners has several flats and therefore appoints a representative to represent his interests or not, I don’t think will make things difficult or more complicated than what they presently are. One is, however, dealing with a bridging situation, because what we are seeing in housing is a structural problem. The hon. member for Sea Point has used the word himself, and he is right. What we are seeing is a structural problem. We are seeing a movement away to a new dispensation, and in the breakdown of the existing order and the movement towards a new housing order there are casualties, are people who get hurt in the process. We have therefore a bridging problem. I think the hon. the member for Sea Point will agree that the concept of sectional titles is good. The whole movement away from letting to home-ownership is a good thing. What creates a problem is when in the process individual people get hurt. What we therefore have is a bridging situation. I have said that I don’t think it would be a good idea to apply this principle to new developments; not at all. But in regard to existing developments I don’t think there is any moral justification …

What is going to happen if there is no letting?

… when—to use the hon. member for Sea Point’s example—a building worth R1 million by stroke of an executive pen becomes worth R2,5 million, for a developer to pocket that profit. I don’t think that is right. In my opinion there should be an enhancement levy. I think it would be a fair levy to impose, and it can easily be done. A precedent exists therefor…

Was the R1 million not a depressed value …

No! The argument that the hon. member in fact raised was that rent control has depressed the value. It is an argument that Sapoa and all these people have used over the years. It is however nonsense. It may be a depressed value, but the person who acquired the property acquired it at the depressed value. He did not pay a premium for it; he paid the depressed price because of the depressed value.

Not necessarily.

The hon. member for Sea Point was right … [Interjections.] How did he buy it? He bought it on the basis of the capitalized value of the rental, at the cost of money. That was the way he bought it, and one could predict exactly what the price was.

It depends on how much income it brings in.

Of course it was based on how much income it brought in. Because he bought it on the basis of the capitalized value of the rentals at the cost of money, it therefore might have been a depressed price, but then he paid a depressed purchase price. So there was never any benefit to anybody.

With these few words I support the Third Reading of the Bill.

Mr. Speaker, we also will support the Third Reading. A couple of points were raised in the debate, for example the question of the State owning flats in a block being sold under sectional title. That would be a most unusual development, because usually in this sort of project there are certain restrictions, and the State usually does not take title of property subjected to that sort of restriction.

In so far as the question of enhancement and my referring to it as betterment is concerned, well, a rose by any other name would stink as badly in my nostrils, because enhancement and betterment are a form of legalized robbery in a capitalistic society. That is my personal view. As far as I am concerned, if one goes in for this sort of legalized robbery, then one also has to go one step further and say that when they put an arterial road somewhere near one’s property and it depreciates the value of it, they have to pay one compensation as well. There are so many problems inherent in this betterment of housing situation.

One has to use zoning rights because one might build things that could not be replaced.

One can perhaps get things that one could not get before. On the other hand, existing rights which one has can in fact be taken away without one being given any betterment. This is what happens in practice.

[Inaudible.]

No, they do not. It happened that I wrote the ordinance in Natal. So at least I do know something about it.

[Inaudible.]

It does not apply in Natal. This is the situation. I am not saying that one should never give consideration to enhancement or betterment, or whatever one should wish to call it. All I am saying is that it is a path strewn with thorns.

Sir, we support the Third Reading of this Bill.

Mr. Speaker, I wish to thank the hon. member for Umbilo and the hon. member for Maitland, as well as the hon. member for Sea Point, for supporting this Bill at Third Reading. I believe we have had a very constructive and positive debate. Some very interesting suggestions have been made.

I do not wish to add anything to the reply I gave to the Second Reading debate except to reiterate that the money that we borrow will only be spent on capital investment.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

In his budget speech last year, the hon. the Minister of Finance announced that legislation would be introduced to take effect on 1 April 1982, so that the annual duty paid by certain companies in terms of the Companies Act, 1973, can be levied at a flat rate on all the companies concerned, irrespective of the capital structure of those companies and irrespective of whether such a company is incorporated in the Republic or abroad. The hon. the Minister of Finance, intimated, inter alia, that he was making the concession with regard to annual duty on companies in the first place because the Standing Commission on Taxation Policy was of the opinion that the annual duty should not be regarded as a revenue-raising measure, but rather as a control measure. This is a very important statement. In the second place, the hon. the Minister of Finance intimated that the loss of revenue to the State for the 1982-’83 financial year, for which he was preparing estimates, was based on the assumption that the annual duty would be fixed at R80.

Legislation to give effect to the announcement made by the hon. the Minister of Finance was introduced last year. Although that legislation would normally have taken effect on 1 April 1982, as has already been mentioned, the Standing Advisory Committee on Company Law made certain recommendations regarding amendments to the Companies Act which the said committee considered desirable. The proposed amendments affect the provisions of the Act relating to the lodging of an annual return, as well as the liability for the payment of annual duty by certain companies. A careful reading of the Bill which is now under discussion will show that with the exception of only two clauses, all the other clauses of the Bill have a direct or indirect bearing on money payable in terms of the Companies Act.

For this reason, before making a few observations concerning the proposed amendments to provisions of the Companies Act relating to the payment of annual duty, I wish to discuss a different matter. It often happens that a client of a banking institution instructs that institution to sell a number of listed shares for a limited price, and then gives the institution concerned a signed securities transfer form with which the shares concerned are to be transferred. However, it is not always possible for the banking institution to sell all the shares concerned at the limited price. In such a case the number of shares concerned are transferred to a nominee, and then the shares that have been sold are transferred to the buyer by the nominee and the remaining unsold shares are transferred back to the client of the banking institution. Representations were received from the Johannesburg Stock Exchange to the effect that banks be allowed to make use of the prescribed broker’s transfer form at approved branches in order to facilitate the transfer of securities under these circumstances. The Advisory Committee on Company Law considered the representations and recommended that the relevant provisions of the Companies Act be amended accordingly. It is now being proposed in the Bill that effect be given to the recommendation of the Advisory Committee in respect of this matter.

†I turn now to those amendments proposed to the Companies Act affecting certain fees payable under that Act.

I have already mentioned that, in accordance with the announcement made by the hon. the Minister of Finance, certain companies and certain external companies will be liable in terms of the Companies Act for payment of an office fee of R80 irrespective of what the equity capital of the company or external company may be. The relevant fee will still be called the annual duty. The fact that the rate at which annual duty is payable will no longer be related to the equity capital of a company, undoubtedly does afford a measure of relief to certain companies which are liable for payment of the annual duty. However, presently annual duty has to be paid not later than one month after the end of the financial year of those companies.

This last-mentioned requirement creates a problem in two ways. Firstly, very many companies prefer to have a financial year which ends on the last day of February. Proof of payment of annual duty must be lodged with the Registrar of Companies upon lodgement of an annual return. The result is that nearly half the annual returns lodged and examined by the Companies Registration Office during a full calendar year are lodged with that office during March each year. It follows that, owing to the large number of returns involved, the staff of the Companies Registration Office have difficulty in coping with those returns during the peak period. Secondly, a company may wish to extend the period of any particular financial year. In order to do that the company has to pay for the additional period, half the annual duty for a full year, even if that additional period is, say, only one month. In particular, the annual financial statements of a subsidiary are required to cover the accounting period of its controlling company. If any group of companies should change the end of the financial year of the companies in the group, the amount payable by way of annual duty could be substantial. Such a change may stem from a merger or take-over, which is a common phenomenon these days.

The Advisory Committee on Company Law has recommended that the liability of a company to pay annual duty should not be related to the financial year of the company. In order to give effect to that recommendation certain amendments to the Companies Act need to be effected. According to the proposed provisions of the Act, proof of payment of annual duty shall be lodged upon lodgement of the memorandum and articles of a company for registration and thereafter upon lodgement of every annual return. Companies which are not exempted from the payment of annual duty will be required to lodge an annual return not later than the end of the month following upon the month within which the anniversary of the date of its incorporation occurs. In the case of an external company, its liability to pay annual duty is related to the registration of a copy of its memorandum and thereafter to the anniversary of that date.

It follows that the drastic departure from the existing provisions of the Act relating to the lodgement of an annual return, necessitates transitional provisions. These transitional provisions are somewhat complicated.

It is expected that 175 000 companies will lodge an annual return during the calendar year 1982. Whereas the proposed provisions relating to the lodgement of the annual return come into operation on 1 April 1982, it is estimated that 118 000 companies which have a financial year ending up to 31 March 1982 will lodge an annual return during 1982 in accordance with the existing provisions of the Act. The remaining estimated 57 000 companies will be required to lodge an annual return not later than 31 August 1982. Any company whose financial year ends or has ended on a date during the four months immediately preceding 1 April 1982, will be required to lodge an annual return after 30 November 1982.

In view of the complexity of the relevant transitional provisions, it is proposed that the Registrar of Companies be empowered, on application, to exempt a company from the payment of additional fees occasioned by failure on the part of the company to pay annual duty in full upon lodgement with the Registrar of an annual return which in terms of those transitional provisions is required to be lodged not later than 31 August 1982. I may add that, under the existing provisions of the Companies Act, the failure by a company to pay annual duty within the appropriate prescribed period, could attract liability for payment by the company of additional fees of up to five times the amount of the annual duty if such failure should subsist for a period in excess of four months.

Provision is now made in the Bill for an amendment to the relevant provisions of the Act so that in the case of failure to pay annual duty within the appropriate prescribed period, the additional fee payable will be an amount of R30.

*I also wish to mention that the Companies Act requires a company to hold an annual general meeting within six months after the end of its financial year. Among other things, the annual financial statements of the company have to be submitted at its annual general meeting. Because auditors give preference to the auditing of the annual financial statements of public companies, private companies are often unable to hold their annual general meeting within the prescribed period. In such a case, the auditor, on behalf of the private company concerned, applies to the Registrar of Companies for an extension of the prescribed period. The fee payable in respect of such an application is R30.

In response to representations made to the Advisory Committee on Company Law by the Accountancy profession, the committee recommended that the prescribed period be extended from six to nine months. It is expected that many of the applications will be eliminated by the proposed amendment, and in this way, payment of the prescribed fee will be avoided.

Mr. Speaker, I have not referred to all the principles included in the Bill which is under consideration. However, I shall answer questions if hon. members wish, and in the Committee Stage of the Bill I shall furnish further explanations if necessary.

As far as the wording of questions is concerned, I just want to say that I think it is very difficult for any person to say that he knows all the answers in connection with the Companies Act. Perhaps the House should take cognizance of who the people are who serve on the standing advisory committee and what organizations are represented on that committee. This is the committee which considers the applications and recommendations and statutory amendments—including the amendments embodied in this Bill which is before us—before such legislation is introduced in this House. I shall only list the organizations. The organizations represented on this advisory committee are the Association of Law Societies of South Africa, the South African Institute of Chartered Accountants, the Institute of Chartered Secretaries and Administrators, the stockbrokers, the Stock Exchange, Seifsa, Assocom, the merchant banks, FCI, the Shareholders’ Association of South Africa, the Bar Council, Unisa, the accountants and the former Registrar of Companies. These are only a few of the organizations represented on the advisory committee which considers all the proposed amendments to the Companies Act before they are introduced in Parliament.

Mr. Speaker, with such a ferocious list of people who serve on the advice committee and whom the hon. the Deputy Minister has just mentioned, how could we in these benches possibly not approve of the legislation in front of us today? In saying that we support the Second Reading of the Bill, I should like to make one or two comments.

The first comment concerns the number of amendments which are constantly made to the Companies Act. Every year we have a Companies Amendment Bill on the Order Paper. The legislation obviously needs updating from time to time, but every time there is an Amendment Bill, it does mean more work for the companies. It does mean they have to bring themselves and their records up to date. I must say that I personally wish that the Companies Act could settle down and remain relatively constant. I am sure there are always many good reasons one can find for amending it, but I just wish it could be amended somewhat less frequently.

In welcoming the provisions relative to the annual duty—as the hon. the Deputy Minister has said, it is to be R80—I do want to point out that in terms of the hon. the Deputy Minister’s speech there are apparently 175 000 companies which will be submitting an annual duty, and if one does the R80 multiplication, then one finds that the State will be collecting in excess of R11 million from this source. In his speech the hon. the Deputy Minister called this an office fee, and it seems to me that R11 million is quite a fee. Perhaps the hon. the Deputy Minister could tell us how much it costs the State to administer the Companies Act and the controls and the regulations which are instituted, because I think it might be interesting for the House to know whether this annual duty which is paid as an office fee actually does pay for the office or whether it does not pay for the office, whether there is some excess or whether there is a shortfall. If the hon. the Deputy Minister could react to this, I should be grateful.

When we get to the Bill itself, we find that there are one or two aspects which I believe should perhaps be mentioned. I think clause 2 contains a very good provision. It allows the registrar to furnish certificates, copies or extracts from minutes free of charge for educational purposes. Obviously we welcome this, and with the greater number of institutions that are offering courses in business management and business education. I think this is going to be utilized more and more. I think it will improve the efficiency of our companies and their productivity generally, and it obviously must be welcomed.

In clause 3 we see one of the effects of inflation on the South African economy in that the fee for the registration of a company is now being increased from R15 to R50. I am aware that there are also registration fees in terms of the capital of the company and we welcome the fact that these fees have not been increased. I think, however, that one should point out that this is yet another of the effects of this inflationary spiral which is such a serious problem in South Africa.

Clause 4 gives me some problems. This clause alters section 73 of the principal Act and changes the period for the lodging of an annual return from two years to six months. This change has some by-products. I admit that a change is necessary, but I think six months is a very short period of time. This particular provision in the Bill could in fact have the result that the number of letters that have to be sent out in terms of the clause is going to escalate dramatically. If the department kept up to date with its workload and if it was to send out “by certified post a letter inquiring whether it is carrying on business or is in operation” I forecast that the number of letters that have to go out are going to escalate dramatically. So this is going to give the department a lot of extra work. I think the period should rather be one year. The clause states that the Registrar “shall” send out a letter—

I am aware that the annual return is to be moved to the starting date of registration so that there will not be a workload on the department, and obviously we approve of that. However, the clause does not state “may”. It is made absolutely imperative. He “shall” send out a letter by certified post.

From the company’s point of view I do not think this is a problem. It is easy to reply to one of these letters. In fact, the company with which I am involved received one only last year. The company replied to it and the question was sorted out in a matter of minutes. However, the letter should not have come in the first place. So I think this is going to increase the workload and I want the hon. the Minister’s reaction to this point.

Clause 5 allows banks to prepare a broker’s transfer and sign for it. This is an extremely good idea, but here again I have a small query. The clause says that it shall bear the signature—

I am not entirely certain whether “a person” should not be spelled out a bit more clearly. The person concerned obviously needs to be an official of some standing and responsibility in the bank. Not any person in the banking institution will be acceptable to me, although I am quite certain that the banks themselves will ensure for their own sake that it is a senior official.

In clause 7 the workload in respect of the annual duty is being spread so that it comes in throughout the year, instead of the bulk of it after 31 March. I can well understand the need to spread the workload, but I hope the companies involved will be sufficiently aware of this change. I do not know what the intentions of the department are in terms of bringing this requirement to the notice of the 175 000 companies that exist and are affected by this change. I do, however, hope that there will be a period of grace while they get used to the idea and that the hon. the Deputy Minister’s department will treat offenders lightly in the initial period. I have an amendment to clause 8 on the Order Paper, because this clause introduces a facet of which we in these benches do not approve. I am referring specifically to the proposed new section 174(1), which reads—

Although I know that the hon. the Deputy Minister has called this duty an office fee, we believe that it is, to a degree, a means of creating funds for government. Admittedly it is to pay for the office of the Registrar of Companies, but it is basically still a taxation because it involves taking funds from companies. We do not believe that this should be done by ministerial regulation. We believe that one of the prime purposes of Parliament, one of the reasons why Parliament exists, is to debate and decide on what fees, taxes or charges should be levied on the public throughout South Africa. We do not believe that it should be left to ministerial regulation. We dislike it. It is not enough, however, for us to oppose the Bill as such, but we shall be dealing with this further during the Committee Stage.

For the rest, it is enough to say that there are some consequential amendments. We welcome the nine months’ AGM clause, though slightly tongue in cheek in that we believe that any relatively efficient company should be able to have its annual general meeting within six months of the end of the financial year. On the whole, however, we believe the Bill to be an improvement and, as such, we shall be supporting it.

Mr. Speaker, we appreciate the fact that the official Opposition is supporting this measure. The hon. member for Port Elizabeth Central did, it is true, append certain question marks in regard to the provision for which he has an amendment on the Order Paper, a matter which will of course be debated in the Committee Stage.

In his introductory speech the hon. the Deputy Minister did point out to us that up to now certain financial measures are introduced by the hon. the Minister of Finance, and afterwards we have to pass subsequent legislation, which means that the money cannot be collected during the year in question. I think I understood the hon. the Deputy Minister to say that on the advice of the Technical Committee it was considered that this should be regarded more as an administrative measure. If one wants to regard it as an administrative measure, obviously the person to administer it would be the Registrar of Companies, and in terms of this amending legislation before us it is indeed the Registrar of Companies who will be administering it.

Whilst dealing with the subject, let me add that the hon. the Deputy Minister knows that there are certain increases involved. There is the registration fee that is going up to R50, plus a minimum of R2,50 for the authorized share capital, giving an amount of R52,50. There is also the annual duty increased to R80, which gives a total of R132,50. In addition to that, of course, a person who owns a company has to pay the auditor’s fees. So in the case of a small company having one small asset—sometimes just one immovable property—the burden is becoming increasingly difficult to bear, and I think one should take that into account. I am sure that that is a matter that the Registrar of Companies should also take into account when fixing the annual duty. One is, of course, presupposing that when the Registrar considers the annual duty, he considers increasing it, but of course he also has the power to decrease the annual duty. We hope that the hon. the Deputy Minister will watch this position very carefully, more especially in regard to the smaller companies.

The hon. member for Port Elizabeth Central also mentioned the fact that he would be happy if the Act remained constant, and I shall have a proposal to make about that a little later on, but there is something I should like to point out to that hon. member. Being in commerce itself, he will appreciate that South Africa has a growing economy, and as an economy grows, certain problems develop. There are experts, of course, who can see these problems and analyse them. What we have heard from the people serving on the technical committee is enough to convince us that they know about the problems confronting companies. They have representations made to them from time to time. That is why as long as one has a Companies Act one will have amendments being introduced to it, if not yearly then every few years, because one finds that the experts serving on the technical committee see where improvements can be made which will be in the interests of all companies concerned. I therefore think one must judge every amendment on its merits. Over the years it seems that the technical committee has come forward with amendments that are acceptable to commerce and industry. I myself can certainly not recall an Amendment Bill being introduced, orginating with the technical committee, that has not proved acceptable.

Then the hon. member for Port Elizabeth Central spoke about the period of the returns. He felt that the period was too short and that there should be a further extension. The problem the Registrar is experiencing, as I understand it, is that at the moment he is dealing with 7 000 cases of deregistration where people have not complied. In many cases for all we know these companies are dormant, but I shall deal with that a little later on. Then we heard from the hon. the Deputy Minister that the Registrar of Companies deals with something like 175 000 companies. One would therefore hope that there would be greater co-operation from people who are actually holding dormant companies which should have deregistered years ago. I think that many of these companies, no matter what the period is, will not comply because for reasons of their own they simply have not applied to be deregistered.

*As we have heard, this amending Bill was drafted on the advice of the technical committee and subsequent to certain tax proposals. Experience has shown that the technical committee performs its task very effectively and that improvements are introduced as soon as they become necessary. I want to convey our thanks to them today for the task they perform. I should very much like to ask the hon. the Deputy Minister— the hon. member for Port Elizabeth Central also made this point—whether the technical committee cannot consolidate this Act on account of all the amendments that are being introduced. When this amending Bill has been passed, certain sections will have been amended six or seven times. I think it would greatly simplify matters in practice if the technical committee could perhaps consider consolidating this Act. In that way, the problem of the hon. member for Port Elizabeth Central would also be solved.

†The furnishing of information by the Registrar free of charge is justified for higher education under the control of institutions because these institutions make the results of their research available to the department and I believe they do so free of charge. So I think that that is a fair provision.

The increase in registration fees for certain companies is justified to bring foreign companies into line with local companies. I think that that increase will not impose any hardship.

What disturbs one—I mentioned this point earlier on—is the fact that there are 7 000 companies that have failed to lodge their annual returns. Now we have the Registrar of Companies busy with deregistration proceedings in regard to those 7 000 companies. When one considers the enormous burden that is placed on the Registrar’s office and its officials, one would like to appeal to the owners of those companies, and also to accountants who can advise their clients, that if they do not want to proceed with the company or it is dormant they themselves should try to expedite the deregistration proceedings because I think it is costing a lot of people a lot of money to administer companies which in fact are not actively operating at all. I think that in the circumstances the shortening of the period in terms of this measure is justified.

Clause 5, which facilitates dealings on the Stock Exchange by authorized banks, is also to be welcomed. On this point the hon. member for Port Elizabeth Central wants to be certain that the person appointed by the bank is a responsible person who would be able to deal with this sort of matter. I must, however, point out to him that in terms of this clause the Registrar does not appoint those people. He merely authorizes the banks, and it is up to the banks to appoint a responsible official. It is beyond the scope of the Minister and the Registrar to appoint the official of the banks. In terms of clause 5 it is up to the banks to appoint a responsible official, and I think one can rely on the banks to look after their own business.

The hon. the Deputy Minister has explained clause 7, but it is interesting to note that some 175 000 companies are expected to lodge returns in 1982. This gives one some idea of the public and private company activity in South Africa. This figure of course excludes private businesses and partnerships. Although not every one of the 175 000 companies is active, the fact is that there are sufficient of those companies active to show what economic activity is taking place in the country. It gives one some idea of the economic development of South Africa and also some idea of the volume of work done in the Registrar’s office, by the accountancy and legal professions and others.

The hon. member for Port Elizabeth Central posed a very interesting question. He asked whether the amount paid into the Registrar’s office covers the expenses. If one takes into account all the expenses, also the expenses involved in administering the 175 000 companies, and the fact that by all standards the charges are very moderate. I would be very surprised if all the expenses are in fact covered. It will be interesting to hear the hon. the Deputy Minister’s reply in that regard. The Bill also deals with companies that are exempt from paying annual duty. These exemptions are I think justified and there are no problems in that regard.

In conclusion, I believe that all these amendments will vastly improve the Companies Act and as such we all welcome them.

Mr. Speaker, the hon. the Deputy Minister indicated in his Second Reading speech that some of the changes that have been brought about in regards to the year-end for companies, were primarily brought about because of staff problems. Talking about a staff shortage, I believe that we have a staff problem in my own party this afternoon. I have now joined the august members of the finance and economics group in my party, and I am delighted to be there. Lucidly we always have alternatives which are viable. But unlike the hon. the Deputy Minister, we do not have the problem that we have to increase charges or pass the burden on to anybody else.

The two hon. members who spoke before me covered the Bill fairly generally, and broadly speaking we in these benches are in total agreement with their sentiments, also with what the hon. the Deputy Minister has said and with the provisions of this amending Bill.

The fact that documents are now to be made available for research purposes on a regular basis, is obviously to be encouraged. No doubt the technological innovation of the development of systems such as microfiche will allow the Registrar to accumulate records over a very lengthy period of time, and this for historical if not for fiscal analysis purposes, will be welcomed as well. But one wonders then why, if in the retention of historical documents the relevant departments can make use of technical innovations such as microfilming, it was not possible—I ask this question in all sincerity and not as criticism—in certain areas covered by these amendments to make use of computerization and modern methods of storing and processing information as far as company returns are concerned. Perhaps that would have been an alternative to having to go through a very cumbersome and perhaps not so effective procedure of having to change, and have a transition period, for the lodging of annual company returns.

Perhaps here very good use could have been made of modern technology in the processing of information. The number of companies mentioned—some 100 000 to 200 000—constitutes a very meagre type of input for the modern computer, and I should be interested to hear from the hon. the Minister whether any attempt was made to investigate the viability of technology improvement as an alternative to the changes recommended in this Bill.

Then we also welcome the provisions which have been made in clause 4 for the six monthly period for deregistration of dormant companies. There are normally, however, specific reasons why individuals wish to retain dormant companies. One of those is of course to carry forward a company—a dormant company—which could perhaps on a rainy day be used as an assessed tax loss. One wonders whether this provision, and the provision for deregistration, may not enhance the value of dormant companies in the open market.

It is not a dormant company.

Yes, it could be a dormant company.

It could be, but not necessarily.

Very much so indeed. It certainly could be a dormant company which has an assessed tax loss. I merely ask the question. I am giving the hon. the Deputy Minister notice in advance that one of the problems could be that the market value of dormant companies may be enhanced in this respect, which is not exactly what the hon. the Deputy Minister has envisaged in this amendment. However, the hon. the Deputy Minister has already intimated that we could discuss this during the Committee Stage.

As far as the availability of certain banking institutions to process equity and stock is concerned, the hon. the Deputy Minister has said in his Second Reading speech that certain approved branches of the banks will now be able to participate in the process of conveyancing stock. I should like to ask the hon. the Deputy Minister what exactly he means when he speaks of an approved branch. Is it by prescritpion, by regulation, by definition from the hon. the Deputy Minister’s department, or will that definition be formulated in conjunction with the stock exchange and/or will responsibility be left entirely to the banking institution concerned to determine which is an approved branch? The reason we ask this is the same as the reason also mentioned by the hon. member Mr. Aronson and by the hon. member for Port Elizabeth Central, viz. that a great deal of legal liability will now devolve on the officer or the manager of the bank concerned, and one would of course envisage that in order to approve a bank or a branch of a bank, certain personnel there should be legally trained or legally experienced people. Again I should like to ask the hon. the Deputy Minister precisely what he means when he refers to an approved bank.

With reference to the increase of the amount in clause 8 to R80, and also to regulating duty by prescription, we have two comments to make. The one is purely a practical one. That is that we hope that the various offices of the Receiver of Revenue will have an adequate stock of R80 revenue stamps when this legislation is put into effect. The reason is a very practical one. If they do not have a sufficient stock, proof of payment to the Registrar in Pretoria is going to be very difficult. My second question in relation to that clause is whether there will now possibly be a change in that companies will be allowed to pay to the Registrar in Pretoria by cheque. Can they pay the Registrar in Pretoria by cheque or will it be necessary for them to pay at the local Receiver of Revenue’s office and to obtain a R80 revenue stamp? It is purely a practical question I am asking. I should like the hon. the Deputy Minister to reply to it.

I should also like to add that as far as the annual duty by prescription is concerned we are experiencing some difficulty with it in principle. The NRP does not believe in taxation by regulation, and I should like to tell the hon. member for Port Elizabeth Central that we will have no difficulty in supporting his amendment in that respect. I trust the hon. the Deputy Minister will feel the same about it.

Finally, as far as the stipulation in connection with the year end period is concerned, I should like to state that I welcome the new innovation—if I may describe it in that way—the new approach by the hon. the Deputy Minister’s department and by the Registrar. They are prepared to anticipate difficulties companies may have when the legislation is amended. I think the very magnanimous approach that has been taken here will do marvels for what is already a good relationship between the hon. the Deputy Minister’s department and the business sector of South Africa. There are going to be difficulties, and let us not for a minute believe that during the proposed transition period it is not going to cost companies money. Most of the companies that are affected will hand over their problems to their auditors or to their company secretaries, who may be an outside organization charging consulting fees. Obviously it is going to cost companies a lot of money to try to ensure that they are not caught on the blind side of these regulations. So it is going to cost money. Therefore, we welcome the fact that the fee is to be pegged at R30 and also that the attitude of the hon. the Deputy Minister and his department, the Department of Inland Revenue, will be to meet the companies in their problem areas and not to be punitive.

In that spirit I should like to say that the NRP has only one difficulty and that is in relation to the clause to which the hon. member for Port Elizabeth Central will move an amendment. Otherwise we welcome these measures and shall be supporting the Bill.

Mnr. Speaker, we welcome the support of the hon. member for Durban North and of his party for the Bill, albeit with some reservations. I do not propose to deal with all the aspects raised by him but shall refer to one or two of them in passing. Firstly, I do not think the procedure regarding deregistration is aimed primarily at companies that are dormant for a temporary period. This is an acceptable commercial practice. I think it is aimed more at those companies that do not comply with the provisions of the Act over an extended period. I find the NRP’s support for the proposed amendment of the hon. member for Port Elizabeth Central somewhat interesting. I also find the amendment somewhat interesting in that on the one hand the hon. member complains that we introduce too many amendments into the Companies Act, while on the other hand when we try to amend the Act in such a way that further amendments in order to raise the registration fees, only become unnecessary. He is still not satisfied.

*The amendments contemplated in the legislation are effected, as has already been indicated, on the advice of the Standing Advisory Committee charged in terms of the principal Act with undertaking a continuous revision of the Companies Act. I think that the smooth functioning of the Act in practice is attributable to a great extent to the inputs made by the Standing Advisory Committee, and they deserve our thanks for this.

The companies legislation as such is closely linked to the economic development in the country and is also to a great extent a reflection of the level of that development. Since the economic process is a dynamically changing one, it is also logical that the Companies Act should be adjusted from time to time to meet the requirements made of it and to help the economic process to function smoothly. Although it is probably irritating that the Act, as the two hon. members put it, is amended almost every year, it is unfortunately an unavoidable process that has to be gone through and it is preferable to the situation where one eventually finds oneself saddled with an obsolete Act that causes problems in practice.

The hon. the Deputy Minister and the hon. member Mr. Aronson pointed out at length the most important amendments to the Act and the reasons for them, and I do not intend to deal with them in detail. I want to pause briefly to consider only two of these amendments to the Act. In the first place, the amendment in section 3(1)(b) puts an end to the system of a minimum registration fee for companies, regardless of whether the company’s authorized share capital is less than 4 000 shares or not. In practice this requirement, namely that the registration fee remains the same whether a company has one or 4 000 shares, led to many companies being registered with the minimum number of shares which had to be paid for, namely 4 000, whereas in reality only a portion of those shares are ever required or issued. Then the remaining authorized capital is never issued and never forms part of the capital structure of the company, but remains unutilized. I believe this amendment will put an end to this situation. Particularly in cases where it could lead to a distorted reflection of the company’s financial state, this is to be welcomed.

In the second place, clause 5, as pointed out by the hon. the Deputy Minister, will amend section 135 of the principal Act to such an extent that properly registered and selected banking institutions will be given the right to complete broker’s transfer forms. As commercial banks nowadays are at the centre of share transactions, this will put an end to the existing cumbersome procedure to which the hon. the Deputy Minister referred, particularly in the case where a bank may only dispose of part of the shares entrusted to it to dispose of, and this will make provision for a far more efficient procedure. As this concession will only be in respect of specific designated banks and the assurance has been given that it will not encroach on the existing brokers’ profession, it is also a welcome amendment.

This side of the House gives this amending Bill its wholehearted support.

Mr. Speaker, I wish to thank the hon. member for Durban North and East London City as well as the hon. member Mr. Aronson for supporting the Second Reading of this Bill.

An Eastern Cape debate!

A large number of the questions posed by the hon. member for Port Elizabeth Central were dealt with very effectively by the hon. member Mr. Aronson. For that reason I do not wish to discuss them at great length although I shall be referring to some of them; especially the first point he raised in regard to the large number of amendments that are usually effected to the Companies Act.

I think the point was made by the hon. member Mr. Aronson that these requests do not stem from the department or the Registrar of Companies. These amendments are initiated because of requests from outside bodies that are involved in the operation of the Companies Act. When such requests are received, they are submitted to the advisory committee which then considers them and makes its recommendations accordingly as far as proposed amendments are concerned.

*I think it goes without saying that we should like to make as few amendments as possible and I believe in any case that the representations addressed to the advisory committee that such amendments should be affected are of such an important nature considering the change in our economic conditions and the structures of companies, that it is important that they are effected, as is the case with the amendments before us to day. I think these amendments are all important and essential. As regards the comment by the hon. member Mr. Aronson in respect of a consolidated Act, I think this is an idea which we could refer to the advisory committee for consideration. If they decide in favour of this, we should like to submit such a consolidated Act.

As far as the amount of R80 is concerned, I called it the “office fee”. If the hon. member for Port Elizabeth Central were to accept an invitation to visit the office of the Registrar of Companies, he would see that it is a fairly comprehensive administrative office. If one were to use only this R80 charged for annual registration fees to defray the administrative costs of that office, I believe one would be far short of the required amount. I think this R80 should merely be seen as a contribution to the administrative costs and it also serves basically as a financial control measure, as I indicated in my Second Reading speech.

As far as the period of two years and six months for deregistration is concerned, I just want to say as has already been mentioned, that at present there are already 7 000 companies under deregistration. I do not think this places any additional administrative burden on the office of the Registrar of Companies. In my opinion, what is important is that in some or other way pressure must be exerted on the companies so that they submit their annual statements. If one sets the period at two years, one has the problem that some companies are no longer doing business after two years. I do not think that the six month period will suddenly place a tremendous obligation or burden on companies. Nor is it a threat to the companies that they will be summarily deregistered after six months. The deregistration process cannot be completed within six months in any case. The fact of the matter is that if a company has not discharged its obligations in terms of the legislation after six months, it will be possible to take immediate steps against it to exert pressure on it to do so. In any case, de-registration may not take place before the Registrar of Companies has issued a certificate that this may happen. All we are now doing is to introduce a mechanism so that a little more pressure may be exerted on the companies to discharge their annual obligations. I think that the hon. member Mr. Aronson went into and replied thoroughly to this point as well.

The point was raised that the Registrar of Companies does not appoint the official in the branch of the bank who has to arrange share transfers. The idea here is that the Registrar of Companies will authorize the branch of the bank to undertake transfers of shares on the prescribed stockbroker’s forms. Only the branch will be authorized. The representations addressed to the committee were to the affect that this authorization by the Registrar should only be given to banks with a branch at the Stock Exchange. However, such a provision has not been incorporated in the Bill, because we allowed a slightly wider authority so that banks that do not have a branch at the Stock Exchange may also be authorized to deal with share transactions in the prescribed manner. I do not think it is in the power of the department or the Registrar to prescribe to the bank which people should deal with such transactions. What we are dealing with here is existing practice, because banks deal with share transactions at present. The only reason for the amendment is that we want to make it easier for the banks by alleviating the administrative burden placed on them.

The hon. member’s fear that the company will not have sufficient notification of the transitional stage, is something we have taken cognizance of. I believe that the necessary notification to companies will be made available to enable them to know precisely what the arrangements are. That is why the transitional measures are also being described clearly and comprehensively in the Bill. We want to prevent any confusion arising. The hon. member for Durban North raised the point that problems would crop up during the transitional stage. We accept that problems will be experienced by the companies, and that is why we want to give the assurance that the problems which may be experienced will be dealt with with the greatest sympathy by the Registrar of Companies.

The hon. member Mr. Aronson pointed out that the annual duties and the registration fees could place a financial burden on small companies. This aspect and the fixing of fees were discussed very carefully by the advisory committee. Very careful thought was given to this matter. I also believe that it will receive further attention in the future. It will be remembered that the hon. the Minister of Finance said in his budget speech last year that we are looking into these matters to make things easier for private and smaller companies by placing a smaller burden on them. I believe that this matter will receive constant attention.

†The hon. member for Durban North referred to the use of technological improvements in assisting the Registrar of Companies in handling the volume of business within his office. I think this is a very important point. With modern technology innovations being developed every day it is very important that this point should be made. The Registrar of Companies will be looking at various possibilities with a view to utilizing them wherever possible if the volume of work warrants such an expensive system, if in fact it is expensive.

*As regards payment by cheque, I admit that this causes problems. The idea is that payments should continue to be made by means of revenue stamps. I feel we shall have to go into this aspect in any case. I have already dealt with the difficulties which will arise in the transitional period.

Mr. Speaker, these ideas will suffice and I again want to thank all hon. members for their positive and level-headed contributions. I want to assure them that their ideas will be of value to the department and will be considered.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 8:

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

I am very happy to hear that the hon. member for Durban North says that the NRP supports our amendment. We do not believe the hon. the Minister should have the right to increase by regulation what can be regarded as a tax. It might be the intention of the hon. the Deputy Minister not to impose it as an annual duty. He may consider it purely an office fee. However, the hon. the Deputy Minister cannot commit his successors in terms of this particular aspect. There is nothing to prevent a Minister requiring revenue at some stage in future utilizing this as a measure for collecting cash. This kind of measure has been used for such purposes before and it can be used again. We are legislating not just for today and not only for the present Government, but for future years as well. Therefore we believe that this is not a sound principle which should be carried out. We believe the hon. the Minister must come back to Parliament any time he wants to increase the annual duty and give the Opposition of the day—whoever it may be—the opportunity to debate the issue.

By that time you will be long gone.

We might possibly be the Government then with the hon. member sitting in the Opposition benches. The hon. member Mr. Aronson mentioned, in the course of his Second Reading speech, that apparently some 7 000 returns were sent out last year for companies that had fallen by the wayside. I could not help wondering whether, in fact, all those returns were necessary because, as I mentioned, the return I myself received was an incorrect one. I believe that the Registrar’s office had certain staff problems at that stage and was utilizing temporary staff for getting those letters out to various companies. In my case it was certainly a totally wrong letter, so perhaps the figure of 7 000 was escalated by the fact that there were certain returns sent to companies that should not have had returns. I hope the hon. the Deputy Minister will see fit to accept the amendment I proposed, because I believe that it is a relatively important amendment when seen in the light of Parliament’s right to oversee taxation. The hon. the Deputy Minister must always bear in mind that next time round perhaps his party will be sitting in opposition.

Mr. Chairman, I call that wishful thinking. [Interjections.] I think that is really wishful thinking.

Beware, the HNP is coming.

I cannot accept the amendment of the hon. member for Port Elizabeth Central, and I shall try to explain as clearly as possible why I cannot. If I had my way I would have liked to delete the R80 and only have had that part of the clause stipulating that it should be laid down by regulation, because as I said in my Second Reading speech, there is a Standing Committee looking into all taxation problems in the department. All taxation is looked at only after it has been considered by the Standing Advisory Committee on Taxation Matters. That committee decided—and I mentioned this in my Second Reading speech—that this fee would no longer be a revenue fee, merely being an administrative control measure.

*Perhaps I can agree with the hon. member that in future it will happen that it will change back again, but when that moment arrives, it will again be dealt with by the Standing Advisory Committee on Income Tax Matters, and I assume that the necessary rectification will be effected then. As it is not a tax measure, the only reason why R80 is stipulated in the clause is the fact that the hon. Minister of Finance amended the Income Tax Act last year, and it comes into effect on 1 April 1982. If, therefore, we make it purely a matter of regulation, we may encounter problems due to time scale considerations, because this legislation repeals sections 10, 11 and 12 of the Income Tax Act, which authorize that R80. Therefore, when we reach 1 April 1982, we may find that the regulations have not yet been promulgated. The original Act would then have been repealed, the new Act would not yet have come into effect and then we would really have an administrative and legal problem. That is why we have included the R80, as “belt and braces”, to ensure that when we reach 1 April 1982 the provision may indeed be put into effect. This is the only reason why the amount of R80 is included in the Act. Otherwise it would only be by regulation, and the reason why it is only by regulation is that it will not be an income tax measure in future, but only a financial and administrative control measure.

Mr. Chairman, I think the hon. member for Port Elizabeth Central put his case fairly well in motivating his amendment. I shall therefore not belabour that, except to say that, while we shall listen to what the hon. the Deputy Minister has to say, we would still prefer to have that part of the regulation deleted.

I should like to come back to a question I put to the hon. the Deputy Minister during the Second Reading on a point of clarification. The Bill makes provision for the R80 specified in this clause to be paid to the Registrar. Will it be in order for people living outside Pretoria to pay their levy by cheque? I should just like confirmation of that.

Mr. Chairman, I am sorry: I thought I had dealt with it fully, but I have not. I think this is a case about which the Registrar of Companies himself should decide. I said that we would refer it to him. He can then consider whether it will be possible for companies situated outside Pretoria to pay by cheque. We take note of the point raised by the hon. member and will convey it to the Registrar of Companies.

Amendment negatived (Official Opposition and New Republic Party dissenting).

Clause agreed to.

House Resumed:

Bill reported.

Third Reading

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

Mr. Speaker, at this stage we have to consider the effect this Bill is going to have. In general I think we can say that it is a good amending Bill. That is why we support its second reading. I must say that I am disappointed that the hon. the Deputy Minister has seen fit not to accept the amendment I proposed, because I believe that it would have re-established a principle in a world where there is a lot of extra-parliamentary action and where perhaps some of the parliamentary actions that should be taking place are going by the board. We believe that this particular issue is an important one in terms of parliamentary privilege and therefore we regret that the hon. the Deputy Minister has seen fit not to accept the amendment.

Mr. Speaker, once again I want to extend my hearty thanks to hon. members for their support. If I had known that the hon. member for Port Elizabeth Central was so serious about the matter that he raised, I could possibly have considered accepting his amendment.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

The South African Bureau of Standards, or the SABS or “Bureau” as we know it, is a national institution in South Africa and is virtually known to everyone. It was established in 1945 by the Standards Act, Act 24 of 1945, which was substituted by Act 33 of 1962. Since then it was necessary to amend the Act on seven occasions, and instead of introducing further amendments, the Bill which is now before the House is basically a re-enactment of the 1962 Act.

As the Bill mainly embodies former provisions which have merely been consolidated in an improved form, I do not consider it necessary to discuss each clause in full, but will only elucidate the more important changes contained in the Bill.

I trust hon. members will accept that the details of the legislation can more fruitfully be discussed—if they in fact call for discussion—in the course of the debate and in the Committee Stage. However, before I discuss these changes, I consider it appropriate to refer briefly to the growth of the SABS and the great respect it enjoys both inside and outside the Republic.

Since the adoption of the previous consolidation Act in 1962, the number of persons employed by the SABS has nearly doubled. Although a considerable increase in working expenses accompanied this growth, Treasury contributions to the Bureau’s operating funds, which includes the cost of services to Government departments, decreased from 60% in 1962 to 40% in 1980, which is an indication of the economic value of the bureau’s service to local industry.

The first permit granting authority to place a SABS standardization mark on commercial goods was issued in 1948. To date some 2 200 permits flowing from more than 500 different specifications have been issued to manufacturers. These specifications cover many different commodities, such as building construction material, electrical appliances, circuit-breakers, petrol and lubricants, oil-spill disperse mediums, television receivers, solar heating equipment and even items like colouring crayons for children.

During the past decade the SABS has, since the opening of its new headquarters and laboratory complex in Groenkloof, Pretoria, expanded considerably and for many years now the bureau is also internationally acknowledged as a leader in its field. The laboratories in Pretoria are amongst the best equipped in the world, and have repeatedly been visited and used as a model by representatives of foreign institutions. In fact, it can justly be stated that the SABS is an ambassador for the Republic through the technical assistance it renders to neighbouring and other countries. In addition the SABS identifies needs in many fields of industry and of the consumer and renders assistance or provides guidance in various forms.

In this regard I may mention, for example, the bureau’s involvement in the establishment of the low voltage high current test laboratory at the Apollo distribution station of Escom; the modern pump testing facilities in Pretoria; the conclusion of a foreign contract for the design and manufacture of a power calibration machine; the research and progress made in the field of acoustics; the accrediting of test laboratories, etc.

All these forms of assistance by the SABS are being rendered on a highly competitive technical level and bear testimony to the bureau’s involvement in providing services and performing functions which are expected of it by the State, industry and consumers against the background of changing circumstances.

It is quite obvious therefore that it is necessary to amend and modernize the Standards Act from time to time in order to enable the bureau to maintain its high standard of work and to keep pace with changing requirements.

Thus, in addition to minor changes and language improvements, the Bill now before the House contains certain important amendments to which I would like to refer.

*I refer hon. members, inter alia, to the extension of section 23A of the existing Act, which is now embodied in clause 33. The principle of incorporation of the provisions of codes of practice, standard specifications, compulsory specifications and standard methods in legislation by reference is being retained as inserted in the Standards Act by the Standards Amendment Act in 1978.

However, the regular publication in the Gazette of the full text of a relatively large number of standard specifications, codes of practice and standard methods—all known as SABS standards—places heavy demands on the SABS in both funds and scarce manpower.

Since the full text of these standards has already been printed and made available by the SABS, a full repetition in the Gazette is unnecessary and wasteful.

Accordingly, it is now being provided that only an abbreviated notice, comprising a summary of the scope and purport of an SABS standard and amendments thereof, need be published in the Gazette and that reference to such abbreviated notice will be sufficient for the incorporation thereof in Acts.

In order to ensure that the full text—as printed by the SABS—of the SABS standard and amendments thereof are accessible not only to the public but also to the judiciary, provision is being made for such full text and amendments to be made available for inspection without charge at its offices by the Government department or local authority implementing the incorporating Act, and also that it be made available to the Attorney-General or public prosecutor before a charge may be brought due to an infringement of the incorporating Act relating to the provision incorporated, and will prima facie be accepted as correct by the court which must take judicial cognizance thereof.

This principle of publication in the Gazette of an abbreviated notice giving the scope and purport of an SABS standard and the principle of incorporation of such a standard in a National Building Regulation by reference to the abbreviated notice has already been accepted in section 17(6) of the National Building Regulations and Building Standards Act, 1977, Act No. 103 of 1977.

However, the provision in the Bill under discussion is more comprehensive, since it also makes provision for the availability and use of the full text of the incorporated SABS standard, as already mentioned, and accords it legal status. A further new provision of the Bill—in clause 7—is the establishment of an executive committee of the council of the SABS. This is a practical arrangement and the committee will comprise the chairman, vice-chairman and two other members of the council. The committee only performs those activities of the council which the council authorizes it to perform.

Clause 15 is a reformulation of the provisions of the existing Standards Act, but two additional provisions are being made. A trader may, in the first place, advertise or otherwise make known the fact that a standardization mark has been applied to a commodity sold by him. This is an exception to the prohibition in terms of which a person may not refer, in connection with the sale of a commodity, to a specification, the council or the SABS unless he has a permit authorizing him to apply a standardization mark to the commodity.

In the second place, the council may grant permission for only a code mark, instead of the appropriate standardization mark, to be applied to a commodity. This is of importance in cases where, due to the nature, size or form of the commodity or the purpose for which it is used, it is impossible or inappropriate to apply the standardization mark thereto.

Clause 17 is another re-enactment and contains the following new measures: The council is authorized to cause a distinctive mark to be applied to a commodity which in its opinion complies with or has been manufactured in accordance with a compulsory specification. This is chiefly of importance in the case of imported commodities. If the council suspects that a consignment or batch of a commodity for which, or for the manufacture of which, a compulsory specification is in force, does not comply with or has not been manufactured in accordance with such a specification, it can take steps to have it kept back in order to have it examined, tested or analysed. The council may in writing order any person in the Republic in whose possession or under whose control such a consignment or batch is, to keep it in his possession or under his control until the order has been withdrawn. In the case of an imported consignment of a commodity, the Commissioner of Customs and Excise may cause it to be secured in any State warehouse until he has been notified that it may be released or until other arrangements have been made in that regard. Accordingly this amendment is very important. Only a week ago we had the case of poisoned fish which entered South Africa. Therefore this measure is aimed at preventing a commodity which does not comply with or has not been manufactured in accordance with a compulsory specification, from reaching the retail trade, where it is difficult or even impossible to trace it before it is distributed among the consumers. This is of major importance, particularly as far as food products are concerned.

There are other new or more extensive provisions in the Bill, for example that in clause 5 relating to the appointment of the Director-General as an ex officio member of the council, the rights relating to inventions by members of the SABS, as contained in clause 30, and the extension of the regulations which the Minister can make, as contained in clause 36. However, these clauses are self-explanatory and I do not deem it necessary to elucidate them here.

Mr. Speaker, this Bill is a consolidation of all previous Acts and is couched in much clearer legal terms. This side of the House strongly supports the Bill. We do so because we recognize the great work done by the SABS. One has only to visit the building in Pretoria to meet the scientists and administrators of the highest calibre and to see the excellent work that is being done there. As the hon. the Deputy Minister has said, the Bureau covers a wide range of subjects, from specifications for mine-shaft materials to the analysis of cigarette smoke, oil specifications and even the introduction of the standard national building regulations, which they hope will become mandatory in time. The Bureau has also helped various State departments, for instance the Post Office, to replace timber cross-arms with steel cross-arms. Probably the greatest triumph of the Bureau was the efficient introduction of metrication into South Africa. The fact that the Bureau enjoys international status throughout the world and is represented on numerous international bodies, bears testimony to the quality of those who run the Bureau.

I am even intrigued by the way certain carpeting is being tested within the Bureau of Standards building, where the staff are actually testing the carpet by having to walk up and down in the main passage as they go to and from the cafeteria. The public can also commission the bureau to carry out tests and inspections on their products. These have included things like leather, footwear, timber, clothing, paper and pharmaceuticals.

During my years in business I have served on various Standards Committees in respect of certain specifications. I have also made use of the Bureau of Standards to work on certain products that I have had to produce. They have, inter alia, provided me with specifications for packaging for bottled foodstuffs that have had to withstand handling by the S.A. Railways to and from various stations. I am very sorry that the hon. the Minister of Transport Affairs is not in this House at the moment because I should like to tell him that the specifications which the Bureau of Standards laid down have stood the test of time and that breakages have been almost minimal, despite the very strong efforts on the part of various members of his department who have convincingly tried to disprove the Bureau!

The work of the Bureau covers an incredible range and its efficiency is outstanding. We on this side of the House trust that in supporting this Bill we will be giving the Bureau of Standards a clear indication of our appreciation of their work. It is not necessary to repeat the remarks made by the hon. the Minister but simply to agree with what he has said.

Mr. Speaker, it is a pleasure for me to support this Bill and to speak after the hon. member for Bezuidenhout.

The principle of standardization has already been fully discussed in the House on previous occasions and I do not want to go into it today. The hon. member for Bezuidenhout also made a number of technical remarks and I want to say a few more general things in connection with standardization.

The general aim of standardization is the promotion of the manufacture, use of trade in commodities both internally and for import and export purposes. I should just like to offer a brief definition of standardization that is in general use. It may be said that standardization has two legs. Firstly, it entails drawing up specifications and codes of practice that determine or describe the requirements for and the characteristics of commodities that are manufactured or used, in such a way that an unnecessary variety is eliminated and so that the commodity or service will answer to the purpose for which it is manufactured or rendered. The second leg of standardization entails confirming that commodities or services that are manufactured or rendered according to the requirements of specifications of codes of practice, do in fact comply with those requirements, by way of applying tests and selection methods or by introducing and auditing quality management systems and certification mark schemes.

A very important statement that one can make about standardization, is that standardization must be lucrative in order to be acceptable. If one looks at the operating account of the SABS as set out in its most recent available annual report, 1980, then we see that 60% of the working revenue of the SABS is obtained from fees for investigations, tests and services as well as fees for standard marks; in other words, 60% of the working revenue is earned by the SABS itself. This illustrates the fact that standardization is lucrative. On the other hand, of course, the working account also shows that 40% of the revenue is voted by Parliament. The principle here is that the State must carry the cost of standard specifications, i.e. those specifications that are in the national interest.

The benefits that these specifications contain for a country, can possibly be well illustrated by a single example and this is the example of specifications for television sets and television antennae. When television was introduced, the SABS drew up standards for television sets and for antenna sets and those standards are also being used elsewhere in the world today as a guideline for the manufacture of such equipment. As a result of the frequency of maintenance that was experienced in Britain, for instance, a number of small firms arose at the time in order to deal with the maintenance of such equipment but most of those firms here have already disappeared because the frequency of maintenance is so low as a result of the good products.

A second statement in connection with standardization that is probably true in general, is that it is in fact the strong consumers that exert a considerable influence on standardization. Standardization in our country arose due to the requirements of the mining industry. Another big consumer to which I can refer is ESCOM. If ESCOM accepts specifications for certain commodities, one finds that those specifications are generally accepted by municipalities as well. I refer to the example of transformers with regard to which ESCOM’s specifications are so widely accepted that this has led to the real price of transformers in this country decreasing as a result of the smaller variety of the product.

I want to mention two examples with regard to which there are in fact problems with regard to standardization in this country. In this regard the hon. the Deputy Minister could possibly give attention to rationalization. It is general knowledge that all food and food products that are imported, have to comply with SABS specifications. However, this is not a requirement for all commodities.

If they are manufactured locally, certain commodities have to comply with SABS specifications, but if they are imported, they do not have to comply with those specifications. Of course, in such cases this means that our local products that are of a higher quality, have to compete with products of an inferior quality from abroad. I believe that the hon. the Deputy Minister who is both the Deputy Minister of Finance and of Industries, Commerce and Tourism, should be able to have this matter investigated properly. One wonders whether in this case one should not rather change to a concept of quality protection instead of a concept of tariff protection.

There is a second problem that has been put to me by responsible bodies and persons outside. It has a bearing on raw materials. The example that I was given is that if a local manufacturer makes use of rubber or PVC, for instance, in the manufacturer of a commodity, that raw material must comply with SABS specifications. Therefore, the local manufacturer cannot search throughout the entire world and purchase the cheapest raw material for his commodity, but a foreign manufacturer can purchase that raw material anywhere in the world, include it in a commodity and export that commodity to South Africa. Of course this means that we are in fact importing the raw material. I ask the hon. the Deputy Minister to look into this problem.

As I said, I support the principle of standardization. I also support the Second Reading of the Bill. There are some amendments in my name on the Order Paper and I shall move them during the Committee Stage.

Mr. Speaker, the hon. member for Pretoria East advanced effective arguments in support of the legislation, so much so that he has persuaded us to support his amendments.

I want to point out to the hon. the Deputy Minister and other hon. members that the original legislation was introduced in 1945. It was, of course, during the golden age of the forefathers of this party when they constituted the Government of South Africa. [Interjections.] The legislation was introduced under the authority of the late Genl. Smuts when he was Prime Minister. I believe hon. members will agree with me that that Government, that Cabinet, set high standards for South Africa, because it is only now, after 37 years, necessary to consolidate that legislation. I also wish to point out that during that time South Africa was a world leader as regards the establishment of a Bureau of this nature. We are of the opinion that South Africa is still one of the foremost countries in the world as far as the determining and application of standards is concerned. We on this side of the House especially welcome the proposed amendment in clause 17. The hon. the Deputy Minister has also indicated how important it is that the bureau be granted the authority to examine the quality and standard of products, especially imported products, on its own initiative. We have again recently had the case of the tinned fish, something which the hon. the Deputy Minister also raised. One wonders what harm people in our country would have suffered if it had not been for the provision that the bureau may itself investigate the quality of imported goods, especially foodstuffs.

†The Bureau of Standards has created its own good image and is recognized through the length and breadth of South Africa as well as internationally. If a register were drawn up of international visitors to South Africa, particularly to the SABS, it will be seen that the quality of life, not only in South Africa but also overseas, is enhanced by the activities of the SABS.

We have very little difficulty with this consolidating Bill and will support it through all three stages.

Mr. Speaker, the hon. member for Durban North raised an important point when he said that the Bureau of Standards was established at the time of Gen. Smuts. I agree with the hon. member that something good was brought into being then. However, I think that the hon. member will agree with us on this side of the House that during the years that the NP has been in power, standardization has been raised to a high pitch of quality. One notes that since that time a number of splinter parties are left on that side of the House, and that the quality on this side of the House has increased enormously. Only that which is of high quality has stood the test of time.

On behalf of this side of the House—an hon. colleague also said this—I wish to convey our wholehearted support of the legislation to the hon. the Minister. I wish to thank the hon. the Minister and the Bureau of Standards for the visit which the study group of the NP was able to pay to the Bureau of Standards during the recess. Unfortunately I was unable to participate, but my colleagues said that they were filled with pride once more to see the contribution made by the SABS to progress in South Africa.

The principal Act has already been amended on a number of previous occasions. I think it is time for it to be amended again.

There are a number of reasons why the Bill must he passed. The Bill still enables the SABS to furnish assistance to those of our neighbouring States that seek to promote standardization. I believe this is in accordance with the policy of the Government with regard to a constellation of States. Co-operation on a regional basis in Southern Africa in the field of standardization is in my opinion imperative and must be encouraged in all possible ways. [Interjections.] In this Bill we see that the SABS is still a member of the International Standards Organization and of other international organizations. It is a good thing that this legislation continues to make provision for the retention and even the extension of that membership. I do not doubt—and I am sure hon. members of this House will agree with me—that it must continue to be one of the objectives of the SABS that it should establish and strengthen international links, because if a developing country is trapped in an underdeveloped region, it is vital to keep in touch with the field of standardization in the rest of the world.

The measure enabling the Bureau to assess and control quality management systems and to accredit and control laboratories, is to be found in the schedule to this legislation. We believe that this furthers co-operation between State institutions and the private sector, and it is still a step in the right direction. Such encouragement of the private sector will ensure greater participation in the standardization campaign, and by so doing will certainly promote the SABS’s aim of increased quality. Although the SABS has been framing and prescribing standard methods since 1958, the existing legislation does not make provision for their separate publication, as the hon. the Deputy Minister put it. Because legal status is now being accorded these methods, they can be included in separate publications. I agree with the hon. the Deputy Minister that this will entail a tremendous saving of time, expense and manpower and this is of course something that we wholeheartedly support.

In addition, the measure now for the first time provides that patent rights in discoveries will be vested in the bureau, and that they may be made available for use in the public interest. This, too, we wholeheartedly support. I, too, think it was high time the penalty for infringement of the Standards Act was adjusted. Although it has now been increased fivefold, I still think it was essential that an adjustment should have been effected. To the extent that the measure is a combination of existing amendments, it includes provisions which in my opinion constitute a considerable improvement on the existing legislation and which will allow the SABS to play a greater role in the progress of our country.

In the light of the development taking place in our Black residential areas I wish to express the hope that the SABS will make greater use of television as a medium to inform the population of the benefits of standardization and the mark of the Bureau of Standards. In this way the products carrying the SABS mark will be promoted as a quality product and more people will be inclined to purchase such a product rather than a product which does not bear the mark. If more people buy such products there will be an increase in the revenue earned by the SABS from the fees it levies. This will make the SABS less dependant on the Treasury. This ought to be an on-going campaign on the part of the SABS, because that consumer, and thus the market for goods bearing the mark of the Bureau of Standards, is growing annually. At present, imported products are being marketed in South Africa in competition with the products manufactured in South Africa. If the South African product bears the mark and the foreign product does not bear it, this means that the Bureau will only derive revenue from the local product. However, if the SABS mark can become a sought-after sales criterion in respect of imported goods as well, then mark-bearing imported products can contribute towards the maintenance of the SABS.

Just as SATV promotes the “Keep South Africa clean” campaign, it can also promote the SABS mark, because to a large extent the SABS concentrates on products manufactured in South Africa. I therefore feel that the bureau can make greater use of this medium to promote its cause.

An explosion is taking place in the electric accessories market, due to the electrification of Black residential areas, and accordingly I predict that with a view to energy consumption, the SABS will also have to concentrate on more effective use of power by markbearing electrical equipment and consumer goods. It will be necessary to concentrate on energy conservation in drawing up new as well as existing specifications for this type of equipment and apparatus. In my opinion the bureau will have to take a closer look at some of its codes of practice relating to energy consumption. They will have to determine whether they are still appropriate to the changed circumstances caused by the energy crisis. Here I have in mind specifically the code of practice for street lighting, and I should like to hear the view of the hon. the Minister on its suitability in the changed circumstances in which South Africa finds itself due to the energy crisis. I am concerned that in its present form this and similar codes might be too expensive to implement in the residential areas that we wish to electrify. Codes of this nature are usually drawn up with a view to the maintenance of a sound balance between quality and cost. The code to which I refer was drawn up in 1967, and was made up from codes dating back as far as 1953. Since then, costs have increased enormously. I believe that specifications and codes should be drawn up with a view to optimum consumption at acceptable cost. I therefore wish to draw the attention of the hon. the Minister to the fact that this specific code of practice, for example, is not accepted as a guide by ESCOM when they design street lighting, for example for the northern suburbs of Cape Town, where they are responsible for street lighting. The street lighting of collector roads is however designed by ESCOM in accordance with the code. This is as well, because road accidents occur more often on collector roads than on suburban roads. 70% of the roads in suburbs are of the latter type. I therefore agree with the Escom engineers that cost should be the most important consideration in designing the illumination of such roads. I therefore believe that specific SABS code of practice is perhaps somewhat too expensive.

It is of cardinal importance that the codes of practice published as a guide by the SABS should at all times be in line with what the country can afford. I venture to hope that the SABS will revise such codes of practice on an on-going basis. Optimum energy consumption, in my opinion, is something to which we in South Africa devote too little attention. If South African manufacturers concentrated on this aspect and tried to include them in their specifications, they would be doing our country a great favour. This is a field in which the Americans are far ahead of us. It is to our own benefit that we should not fall behind, particularly in view of the increased use of electrical apparatus which South Africa can expect. If freezers, refrigerators, air conditioners and similar apparatus use more power than is necessary, it will affect South Africa’s power generating capacity.

We want to assure the hon. the Minister of our support of this Bill, which concerns one of the showpieces of his department. I agree with him that, as he said at the start of his speech, we who have been helping the SABS draw up their specifications for many years have seen the bureau grow from a small building near the Central Prison in Pretoria to the large complex they now have in Groenkloof. It is a showpiece for our country. The way in which they have revised and updated this legislation bears testimony to the fact that they are geared to achieve quality. We take pleasure in supporting the Bill.

Mr. Speaker, I thank the hon. member for Bezuidenhout and also the hon. member for Durban North for supporting this measure.

*I should also like to thank them for the fine tribute they paid to the SABS. In my opinion it is one of the finest institutions in South Africa and one of which we are justified in being proud, and I believe that it will be gratifying for the SABS to know that this House is unanimous in its assessment of the outstanding work they do in not only the national, but also the international sphere. The congress of the International Standards Organization, of which the SABS is a member, was held in South Africa last year, and the tributes paid to the SABS by other countries were most gratifying.

I also thank the hon. member for Pretoria East for a very interesting speech. He, and also the hon. member for Durban North, raised a point which I believe is covered by clause 17, in terms of which sampling and lot-tesing will be carried out on imported products. The products can even be kept in store at the Customs and Excise offices until the SABS is satisfied that they satisfy the standards and may therefore be released.

The hon. member for Boksburg also made a very interesting speech. I believe it is possible that the services of SATV may be used more often, with the co-operation of the SABS, to promote the standardization mark better and more effectively in South Africa.

The hon. member also made some interesting remarks in connection with energy conservation, and I think that the SABS is already engaged in various projects in that regard. As far as domestic specifications for commodities is concerned, the SABS is giving specific attention to this. As far as street lighting is concerned, there are just two aspects we must consider. The first is the illumination of the surface itself. Here I do not want to take up the time of the House unnecessarily, but I think that section 3 of the code on street lighting lays down the aims, viz. to bring about better visibility of the street surface, obstructions, curbstones, etc. Energy conservation, on the other hand, has to do with improved design and utilization of armatures as such and here I may just mention for the sake of information that there is a lot of scope for improvement in this regard. The performance of a fluorescent lamp, for example, is 49 lumens per watt for a 40-watt lamp, while a low pressure sodium lamp gives 122 lumens per watt for a 35-watt lamp. The hon. member raised a very interesting point there. I shall conclude by merely saying that in special circumstances there is a possibility that 680 lumens per watt may be obtained from a light. At the moment, only 25% of the potential is being achieved and I am of the opinion that manufacturers of this type of equipment should give specific attention to this matter.

I thank hon. members once again for their support.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 3:

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

The metric system of measurement has already been introduced. The body that introduced it under the protection of the SABS, was the Metrication Board. That Board has already been disbanded. Therefore, it would not be correct to talk about introducing the system at this stage. What I therefore want to achieve with this amendment, is merely an improvement of the text.

The word “practical” does not really take one much further either. In this regard there is no difference between “application” and “practical application”.

Mr. Chairman, the amendment was discussed with me by the hon. member for Pretoria East, and I therefore accept it as moved.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 16:

Mr. Chairman, there is a subtle and nevertheless a very important difference between a compulsory specification for a commodity, as it is put in the Bill, and a compulsory specification for the manufacture of a commodity. The amendment that I want to move, simply aims at eliminating any confusion that could exist in the wording of the clause. I have read the clause myself, and I have not been able to find anyone who could explain the clause to me, in its present form. I was therefore obliged to go to the SABS itself and consult with their legal adviser. This gentleman was able to explain it to me very easily. Some of my hon. colleagues experienced problems with the clause too. Therefore, my amendment is merely to explain the text of the Bill itself. I therefore move the amendment printed in my name on the Order Paper, as follows—

Mr. Chairman, the hon. member for Pretoria East was so kind as to discuss his amendment with me, and I am prepared to accept it.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 17:

Mr. Chairman, when one exports foodstuffs to the USA one has to get approval of one’s product before payment is made. One of the stipulations which appears in every letter of credit that one gets when one exports foodstuffs to the USA is that no payment will be made until Food and Drug Administration release has been obtained. In other words, the USA has control over any foodstuffs that are imported into the country by enforcing this stipulation.

In addition to that the importer is given about 60 days additional time to pay for the imported foodstuffs. With reference to clause 17, I should like the hon. the Deputy Minister to consider whether it is not possible for a similar system to be introduced here in South Africa, specifically in regard to certain products which might give rise to concern. In this regard I think of certain fish products, for instance. It may be wise to restrict the import of such foodstuffs until such time as they have been approved of by the SABS.

Mr. Chairman, the hon. member for Bezuidenhout did not move an amendment. What the hon. member was referring to—this seems to be the case to me—is a contractual matter, that is included in the contract of supply. I do not think that this is applicable here. Clause 17 does in fact provide for some control. However, to include something of this kind in a contract, depends on the parties negotiating the contract.

Mr. Chairman, the situation is that the Food and Drug Administration of the USA has adopted this system in terms of its rules. One can only import any foodstuffs into the USA after Food and Drug Administration approval. That is why, in the case of products such as fish in particular, I believe the same should be done in South Africa.

Clause agreed to.

House Resumed:

Bill, as amended, reported.

Bill read a Third Time.

Mr. Speaker, I move—

Hon. members are aware of the fact that the National Supplies Procurement Act, 1976, provides that the Minister of Industries, Commerce and Tourism exercises certain powers with regard to national supplies and concomitant services in order to ensure the safeguarding of the country’s requirements in this regard. These powers include the authority, for instance, to import, manufacture, stockpile, transport and apportion supplies that are required in the national interest when necessary, to undertake the supply of strategic goods and to gather information.

The objectives of the proposed Bill are, by agreement between the above mentioned Minister and another Minister, to grant these powers to the latter as well.

This has become necessary because control of certain supplies, as well as concomitant services, is also being exercised by other departments in terms of the current Government set up. For instance, the Minister of Agriculture and Fisheries is empowered to see to the country’s food production and distribution, and the Minister of Mineral and Energy Affairs, to the fuel requirements of the country, and so on. Therefore, it is considered essential for provision to be made for other Ministers as well to make use of the powers in terms of the National Supplies Procurement Act. In this regard I should like to mention that serious thought was given to granting powers of this nature to the other Ministers in question by means of separate legislation, but I feel hon. members will agree with me at once that such a regulation would be unreasonable and impracticable and would promote the danger of unco-ordinated action. We are aware of the fact that action in this regard should take place with the greatest degree of circumspection and with the greatest degree of co-ordination in order to ensure that all the resources of the country are utilized to the full with a view to the security of the country, and that on the other hand, the economy of the country as a whole should continue to function as efficiently as possible without unnecessary hindrances.

†Provision has already been made for co-ordination on departmental level by using an interdepartmental committee, and co-ordination on ministerial level will, of course, take place between the Ministers concerned. In addition, co-ordination of policy will also be carried out on the highest level through the State Security Council.

I wish to assure hon. members that the proposed measure of granting the powers and functions of this Act to other Ministers is merely aimed at the promotion of improved administration.

Mr. Speaker, I understand why the hon. the Minister is looking so happy today. He has succeeded by means of this amending Bill in getting rid of a lot of his responsibilities to other Cabinet Ministers. In view of the fact that a lot of the powers that have had to be exercised were not actually his responsibility and should never have been his responsibility I quite approve of his looking happy about this.

We in these benches will approve this legislation. What I found interesting was the fact that the principal Act that we are amending, namely the National Supplies Procurement Act, 1970, was debated on 21 August of that year and that apparently that legislation replaced the War Measures Act of 1942. Therefore the history of this Bill goes back an awful long time. What I found particularly interesting to note was that when the original War Measures Act, the forerunner of this Bill, was passed, it was in fact voted against and denigrated by the NP of the day. So it would appear that patriotism is something of a variable emotion. Having a total strategy against a total onslaught appears to depend upon from where that onslaught comes. If the danger is from the left, then we must have a total strategy but if the total onslaught is from fascism then the NP viewpoint is that we do not need a total strategy. The original legislation was passed to try to ensure adequate supplies for South Africa in the event of such supplies being unobtainable from normal sources. This has obvious merit and the legislation was approved by the official Opposition at the time and, of course, by organized industry as well. As I have said, we approve this amending measure but we would like to ask the hon. the Minister whether he has received comment in this regard, in respect of these amendments, from organized industry and whether they have approved this particular legislation. We see no reason why they should not have approved it but we simply pose the question as to whether this is in fact the case.

As far as the Bill itself is concerned, I should like to ask this one question: Will it always be clear to the Opposition and to the public, should there be any problems arising in connection with the implementation of the provisions of his Bill, as to who was actually responsible? I ask this question because I believe it is correct that any Opposition party should be able to pin down any Minister who is responsible in respect of any action taken in terms of any particular piece of legislation. Obviously, when this amending Bill has been passed these functions are going to be spread over a large number of Ministers and we want to be able to ensure that we can establish ministerial responsibility in this regard. We approve the legislation.

Mr. Speaker, these amendments deal chiefly with the security of South Africa. We can no longer rely on regularly receiving imported goods that we require for the security of our country. Consequently we are obliged to take these measures to ensure stockpiling and also so that the various Ministers can be assured that their departments have adequate supplies in the event of a sanction or boycott campaign being launched at us.

Whereas the Minister of Economic Affairs was previously responsible for this stockpiling and for sufficient supplies, these powers are now being extended and various Ministers are being granted the powers to assist their own departments in this regard. Therefore, the Minister of Transport Affairs, for instance, accordingly has the power to make regulations together with his department for what is required by that department in the event of sanctions or a boycott. The same applies to the Minister of Mineral and Energy Affairs, the Minister of Defence, and the Minister of Agriculture and Fisheries. Therefore, since this Bill has now been in existence for the past 40 years and has been amended only in 1942 and then in 1970, these amendments are also deemed necessary in order to adapt to the changed circumstances.

The Minister of Industries, Commerce and Tourism still remains responsible and with his auxiliary committee he can regularly investigate supplies that are being stockpiled in order to ensure that they are adequate and to establish whether they comply with the requirements of the given circumstances. We are therefore supporting this legislation because as I said, it deals with the security of South Africa.

With reference to the hon. member for Port Elizabeth Central, I just want to tell the hon. the Minister that should there be a boycott against windmills at any stage, we have already enough of them in stock.

Mr. Speaker, this Bill before us certainly widens the departure from the normal tender procedure for reasons which I think every hon. member and many people outside of this House will appreciate. As both the hon. the Minister and the hon. member for Alberton have indicated, there are certain strategic materials that are so important to South Africa that we should in fact divest ourselves of the normal controlling mechanism of public tender. I think that we are all in support of this. I do not believe that there is any doubt in this regard at all. In his Second Reading speech the hon. the Minister mentioned materials such as fuel and certain food products. One can envisage a wide range of products which, if it was open to public scrutiny, would make it extremely difficult, if not impossible, for South Africa to negotiate their procurement. I should like to mention, though, that the provisions of the legislation do not necessarily ensure that South Africa will have access to certain strategic materials. Although one circumvents the tender procedure here, one does not ensure total confidentiality. I think in international trade there are ways and means of ascertaining the movement and origin of goods even although there is no tender procedure. So this will not be something of a magic wand which is suddenly going to ensure that South Africa has access to certain strategic commodities. The range of those strategic commodities can be very wide—from components for computers to nuclear fuel and certain vehicles; in fact, a whole range of things which other countries may not want to supply to us under normal circumstances. We appreciate, however, that the situation in the world has changed to such an extent, and if we look at the East West confrontation or the doings in the United Nations, I am sure we shall all appreciate that this measure is absolutely essential.

The fact that to date certain Ministers have had these powers and that there apparently had been no abuse, is very encouraging indeed. We have total confidence that that will continue in future. As the hon. member for Alberton has pointed out, this hon. Minister still has accountability and joint accountability with the other Ministers.

The difficulty which we have, not with the legislation, but as far as the procedure is concerned, is that price competitiveness in this product range would, of course, have to be sacrificed in the interest of obtaining the commodity, and fuel prices are a classic example here of the additional price which one has to pay for international conspiracy, ill-founded international conspiracy, I may add. That, however, is the price one has to pay in South Africa and in other countries for peace and stability. Therefore we in these benches shall support the legislation through all three stages.

Mr. Speaker, the hon. member for Port Elizabeth Central asked me whether I received any comments from organized trade. Yes, I received an inquiry from the Federated Chamber of Industries regarding the co-ordination that will stem from the legislation. I believe I have been able to reassure the FCI that co-ordination will be guaranteed through the fact that the Supplies Procurement Fund Committee will be the focal point of co-ordination since they will control the Fund. The Minister of Industries, Commerce and Tourism will still be the Minister responsible for the Fund through which procurements will eventually be effected.

*The co-ordination between the Ministers, as the legislation itself indicates, is carried out by way of a regulation, a regulation that simply makes it possible for the various Ministers to take responsibility in their various fields in so far as the Supplies Procurement Fund deems necessary. Therefore, there is a central committee that falls under the Department of Industries, Commerce and Tourism. The accountability then remains with that department as well. In that way the coordination between the various Ministers can be regulated, as the legislation points out, by mutual arrangement.

As I pointed out in my introductory speech, however, it cannot be expected of the Minister of this department to take responsibility for actions falling within the ambit of other Ministers. With a view to good administration, it is necessary for the various Ministers to take responsibility in their spheres as well, for the procurement of supplies and natural resources or for the services that accompany them or for the control of these when they fall under their various departments. Therefore, in so far as the activities of the various Ministers in the sphere of their own departments is concerned, the responsibility will rest with those Ministers as is the case at present, viz. that Ministers take responsibility for those things that fall within the sphere of their departments. The Fund falls under the department and therefore accountability rests with one department.

Other hon. members have pointed out the necessity of the measure. We are living in a time where a possible war situation has to be dealt with. The modern world has changed to such an extent—the hon. member for Durban Point pointed this out too—that a responsible Government must take precautions for alternatives in order to provide for the strategic requirements of a country. Terrorism and the threat of boycotts must be taken into account. We are in a situation where many of these commodities are considered as being of the greatest strategic importance. Consequently, provision must be made in advance for any possible emergency situation that may arise. In order to make proper provision for the situation in which South Africa finds itself so that the country will be prepared, it is necessary to extend the powers so that other hon. Ministers too can be put in a position to accept responsibility in their various spheres for the procurement of supplies.

The legislation embodies little more than this, and I thank hon. members for their contributions and support.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr. Speaker, I move—

The Hotels Act, 1965, does not provide that the Hotel Board may delegate any of its powers to a member or employee of the Board. This means that the entire board has to decide on matters of a routine or administrative nature, while they could just as well have been disposed of by way of delegation. The lack of delegation also entails that work is unnecessarily delayed. In view of the increase in the volume of the activities of the board during the past year, provision is, inter alia, being made in this Bill for the delegation of certain powers and the assignment of certain duties by the Hotel Board to members and employees of the board. In this connection it is being stipulated that delegation shall take place with the approval of the Minister, while the Bill already contains the accepted principle that the board will remain liable for decisions taken under delegation and that such decisions may also, if necessary, be amended by it.

A good example of why this delegation is deemed necessary, is the exceptionally long list of changes in the number of beds in hotels which has to be submitted to the board for its approval in terms of regulation 22.3. In 1980 there were 615 such changes, and although the total figures for 1981 are not yet available, the latest figures show that there was a sharp increase in the number of changes in 1981. Since the board intends to double the existing number of inspections of hotels, it will mean that the changes in the number of beds will increase further, and the need for delegation is further emphasized.

The second object of the Bill is to amend the existing Act in such a way that the person who conducts the business of the hotel, i.e. the owner of the hotel, shall be responsible for the payment of levies, instead of the hotelier who, in most cases, is merely the manager and an employee of the hotel.

At present section 28 of the Act imposes a statutory liability on the hotelier to pay the prescribed levies to the board. With the expansion of the hotel industry it has, however, become the practice for hotel groups to pay the levy on their respective hotels from their head office. This means that with a few exceptions it is no longer hoteliers who are involved, but the owner, or as the Bill states; “the person who conducts the business of any hotel”. Some hoteliers, in their organization, do not even have access to the hotel’s books, although the legal onus still rests on them to pay the levies.

The proposed amendments therefore merely seek to bring the provisions of the Act into line with what happens in practice. This proposal is strongly supported by the Federated Hotel Associations of South Africa (Fedhasa).

†The third and final aim of this Bill is to empower the hon. the Minister to make regulations relating to the payment of fees to the Hotel Board.

At present section 14(2) and 22(1) of the Act are the only two provisions enabling the Hotel Board to determine levies for services rendered. There are, however, various other areas where the levying of fees by the Hotel Board is appropriate or necessary, such as the hiring fee for the plaque, the application fee for the regrading of an hotel, etc.

Instead of effecting a series of amendments to provide for the levying of fees in various sections of the Act, it is proposed in the Bill that the existing provisions in this regard, as contained in sections 14 and 22 of the Act, be withdrawn and that a general provision be made in section 34 which will empower the Minister, by way of regulation, to prescribe the payment of money in respect of actions performed or aspects involved, where it is considered necessary or desirable.

It will be clear that the proposed amendments contained in this Bill are designed to simplify and expedite the flow of the Hotel Board’s business.

Mr. Speaker, we shall be supporting this Bill. As the hon. the Deputy Minister has said, it consists of three parts, the first relating to the practical matter of delegation, which obviously makes good sense, the second relating to certain technical amendments and the third involving certain responsibilities resting with the owners of hotels rather than managers.

The last aspect the hon. the Deputy Minister mentioned was that of fees. I can understand the reason for moving it out of the two relevant sections of the legislation, because there are other areas in which fees need to be charged. I would, however, like him to comment upon one aspect when he replies to the Second Reading debate. The two areas from which the power to levy fees has been removed were both areas in which the Hotel Board itself had the discretion to determine what the fee would be. I can understand why one does not want to limit it to those things, but I should like to know why it has become necessary for it to be done by the Minister by way of regulation and why the Hotel Board itself is not empowered to prescribe fees for various services it may render?

Mr. Speaker, it has been a day of peace and I think it is quite fitting that it should be concluded with this Bill on hotels. A hotel has many rooms, enough for every member of the House.

*I should very much like to thank the hon. member for Cape Town Gardens and the official Opposition for pledging their support for this Bill. We are living in a time of change and adaptation and if there is one area in which there have been tremendous adaptations and improvements, it is without doubt the hotel industry in South Africa. I think that this House and everyone in South Africa is greatly indebted to the Hotel Board for the excellent work which it has done in this regard. Since the Bill seeks to extend the delegation of powers of the Hotel Board and to make its activities more flexible, I should consequently like to pledge our full support for the Bill from this side.

The Hotel Board was established in 1965 as an outcome of a commission of inquiry into the hotel industry in 1963. The task of the Hotel Board, which is now receiving greater powers of delegation, is specifically concerned with the question of assistance and advice to hotels, the registration and grading of hotels, the training of employees and financial aid to hotels. I should like to refer briefly to three of these aspects.

In the first place, in connection with the question of training, I want to say that there is great appreciation for the valuable work which is being done with regard to the training of employees in the hotel industry. This is being done at the hotel schools in Johannesburg and Durban, where special diploma courses are offered. There are also full-time schools in Cape Town and Ga-Rankuwa. What I find very interesting is that four courses of the Hotel Board have already been registered with the Department of Manpower and that when hotels send people to these schools to attend the courses, they are in reality receiving a reimbursement of 84c in the rand in the form of a tax concession for the training of those people. Although there is very good co-operation between the hotels and the Hotel Board, it is the experience of the Hotel Board that the hotels lean too heavily on it to find people to train, while the Hotel Board would rather that the hotels themselves should screen their people and send them for training. The Hotel Board is at present registering five additional courses. Although we in South Africa are perhaps dealing with a different kind of human material than is the case in Europe, for example, what is being achieved in practice is most commendable, and we have people in the industry today who are second to none.

In the second place, I want to say that as regards tourism, which is probably the largest single industry in the world today, South Africa has the potential to channel a large number of these tourists to South Africa. In this regard, the Hotel Board, with its grading system, in which it lays down 76 minimum requirements for hotels and carries out regular inspections of the 1 500 registered hotels, has made an important contribution in attracting tourists to South Africa. I think it deserves our gratitude and praise for this, too. Since our hotels, and especially the higher grade hotels compare extremely well with their counterparts in Europe, and do so at at least half the cost of similar hotels abroad our hotel industry has done a very good job. In this regard, though, I want to ask the Hotel Board through the Minister whether it does not wish to investigate whether we in South Africa cannot also provide the type of cheap, clean hotel and accommodation which one finds in Germany and Switzerland, i.e. the “pensions”. I think the hon. members who have already stayed in a Swiss or German “pension”, would agree that this is indeed something which could be looked into.

In the third place, the Hotel Board has to assist the national States, and it also has an important part to play in this regard in both the independent States and in those which are not yet independent, to help create an infrastructure by building smaller hotels there with the co-operation of the development corporations. The same type of inspections are also being carried out there, and we are very grateful for this.

The Hotel Board is not subsidized by the Government at all, but is dependent on the levies to which the hon. member for Cape Town Gardens referred. This Bill now creates further machinery to facilitate this procedure.

Just one last point, Sir. Perhaps this is a shot in the dark, but I should be very pleased if the hon. the Deputy Minister would give his attention to this aspect. Since the Department of Industries, Commerce and Tourism is now responsible for the Hotel Board as well as the Liquor Board, I see in this a very good opportunity for the rationalization of certain activities. The Liquor Board, just as does the Hotel Board, lays down certain minimum requirements with regard to the registration of hotels, and inspections in this regard are carried out regularly. Inspections are now being carried out by two boards, which in fact fall under the same Ministry and sometimes there is duplication and subjectiveness, which causes a great deal of discord in the industry. My information is that if these double inspections could be eliminated, much unnecessary labour would be saved and an awkward problem in the industry would be solved. We on this side of the House gladly support the Bill.

Mr. Speaker, the hon. member for Paarl raised interesting points, and elaborated on them for a while. We, of course, agree with him that where a possibility for rationalization exists and these functions can be combined, it will be a considerable improvement.

The hon. member also referred to the hotel schools in Johannesburg and Durban, and I just want to tell him that since the M. L. Sultan Technical College started rendering students that service of training them for the hotel industry, there has been a marked improvement in the service which is being offered to the public, especially in our higher-graded hotels. This is very important, of course for hotel service and the quality of accommodation is closely related to the impressions gained of South Africa by overseas as well as local tourists. Overseas tourists will return to Germany, or wherever they come from, with a specific impression of the standards which we maintain in South Africa, and I believe that the hotel schools have made an important contribution to the improvement of those standards.

I also want to tell the hon. the Deputy Minister that we have very few problems with the legislation, except that, in our opinion, a power is being created in clause 6 whereby thé Minister may introduce certain levies by means of regulation. It may perhaps be asked why we have accepted it in this case, and not in previous legislation. I must just point out that in previous legislation it was a kind of tax, while in this case it is a fee for a service rendered. One must of course, be able to make one’s price, and we think it is reasonable that the Minister should have that kind of power. We have no other problems with the legislation, and in the interests of the hotel industry in South Africa we shall support it.

Mr. Speaker, I rise to thank the hon. members most sincerely for their support. What the hon. member for Cape Town Gardens referred to is, I believe, a statutory body, and because the previous tariffs which were levied by the Hotel Board are of a very limited nature and are now being expanded, it is necessary to bring them into line with those of all the other statutory bodies. The Minister will now be able to determine, by way of regulation, what the tariffs for the various subdivisions will be. I think that Fedhasa also agreed to this, and is perfectly happy to accept it as such. I shall therefore let that suffice.

As far as the hon. member for Paarl is concerned, I must say that he made a few very interesting observations. As the hon. member was right in saying, the Hotel Board does not obtain its funds from the Treasury. We are already investigating the possibility of allowing the Hotel Board a greater measure of freedom as far as its general activities and its determination of salary structures are concerned; or at least a greater degree of flexibility than it enjoys at the moment. The hon. member also referred to the question of the duplication of inspections. Since these two boards are now centred in one department, this problem will to a large extent of course be solved. Attention has already been given to this whole matter, and I should like to give the hon. member the assurance that that duplication will be completely eliminated within the next few months.

The hon. the Minister of Police is also involved in this matter. His department is just as keen to be rid of those inspection requirements. As far as the question of additional, lower accommodation charges is concerned, it is, I believe, a question of supply and demand. We have already discussed the matter with the Hotel Board and have intimated that we shall have to give attention to the lower categories of accommodation. The matter is thus under consideration.

This brings me to the hon. member for Durban North. I thank him, too, for his support of the Bill. The hotel industry in South Africa is of a high standard. The Hotel Board renders an extremely important service, and I believe that we may be proud of the hotel industry in South Africa.

Question agreed to.

Bill read a Second Time

Bill not committed.

Bill read a Third Time.

Mr. Speaker, I move—

Since the inception of the Share Blocks Control Act, 1980 (Act 59 of 1980), on 1 January 1981, it has become apparent that malpractices may indeed occur in regard to the collection of funds from prospective participants in share block schemes under circumstances in which no protection at present exists for these prospective participants in connection with such fees. The Share Blocks Control Act, 1980, only applies to a situation which arises after such a share block company has formally come into being, and as regards the collection of fees it provides that all funds collected by such a company in respect of a share block scheme must, after the date of its inception, be paid into a trust account which must be opened and held at a bank or building society by these companies themselves.

Since the inception of the Share Blocks Control Act, however, it has come to light that at present there are people who do intend establishing a share block company and operating a share block scheme in the future, but they have sold in advance—i.e. before the establishment of the share block company—the right to shares in such a company to prospective participants and by so doing, collect funds in this regard. Since the Act is not applicable to these prior transactions, there is now a real danger of misuse of funds collected in this way and initially, therefore, the situation still entails risk for the participants in a share block scheme.

†In order to safeguard the money of potential participants in a shareblock scheme in the abovementioned circumstances the Shareblocks Control Act is being amended by the insertion of a new section 5A after section 5. In terms of subsection (1) thereof, no person may collect any consideration in respect of any right to a share in a share-block company yet to be formed. Exceptions to this general prohibition are contained in subsection (2) in which provision is made for such consideration to be paid by the intending purchaser, not to the person entitled thereto, but into the trust accounts of either an attorney or an estate agent. As an alternative to the above, such consideration may be paid to the person actually entitled thereto, on condition that the person receiving such money furnishes the purchaser with an irrevocable and unconditional guarantee by a bank, building society or a registered insurer and in terms of which guarantee the guarantor undertakes to repay the relevant amount if the shareblock company to be formed has not been incorporated within a period specified in such guarantee.

Provision has also been made for the protection of a consumer in the event of the insolvency of that person entitled to the money paid by such consumer. Subsection (3), therefore, stipulates that in the event of such insolvency all moneys held in a relevant trust account, or in respect of which a guarantee has been issued, must be refunded to the person who made such payment immediately on the insolvency of the person who would otherwise have been entitled thereto.

Clause 2 of the Bill is a consequential amendment and provides for the inclusion of section 5A in section 21 of the Act, in order to make any contravention of the said section 5A subject to the penalties provided for in section 21.

The acceptance of these measures does not constitute the introduction of a new concept in consumer protection as similar provisions are incorporated in the Alienation of Land Act, 1981.

Mr. Speaker, we on this side of the House welcome this amending Bill as introduced by the hon. the Deputy Minister. We welcome it because it is a measure to prevent the exploitation of purchasers of flats. A similar provision was in fact introduced into the Sectional Titles Act when an amendment was introduced in this House to that effect. It ensures that a person who paid a deposit in order to purchase a flat under sectional title would be protected. In addition, in terms of the provisions of the Sale of Land by Instalments Act and in accordance with the proposals of the commission of inquiry, on which hon. members of this House sat as well, it was endeavoured to close this loophole so that in cases where a purchaser had paid a deposit he could be sure that the seller would not decamp with that money, or, for example, default by going insolvent resulting in the purchaser losing his deposit. That contingency was therefore provided for in the Sale of Land by Instalments Act and in the Sectional Titles Act and now we are very happy to see that this same contingency is provided for in this Bill as well.

To begin with, there are two points arising from this matter. Firstly, the amount is now to be made payable to the person entitled thereto, in other words, the hon. the Minister is now closing a loophole. For example, in cases where the estate agent happened to be the owner of the flat and the money was paid directly to him, the loophole existed that he did not have to pay that money into a trust account because he was the owner as well as an agent. His argument was that the money was being paid to him as the owner and not as an agent. This in turn led to people being confused and misled, because he was also an agent, into thinking that the money would be covered by the trust account of the agent. I believe that the provisions of the proposed new section 5A(1) and (2) will meet that situation.

The second welcome point is the one with regard to insolvency. The purchaser will now be given protection in cases of insolvency in that if the person entitled to the amount as consideration becomes an insolvent before the company has been incorporated, the purchaser will have his money refunded to him for the trust account. For these reasons we are happy to support the Bill.