I wish to sum up our attitude to this clause, to which we are opposed. We believe that it is undesirable that the tribal judge on whom jurisdiction will be conferred in terms of Section 5 should consult the Urban Bantu Council or members of that Council who have not heard the case. As was pointed out, the procedure in the reserves, where this jurisdiction has been conferred. is that the councillors of the chief also hear the case. It is true that the chief may consult them. It was suggested that this was also what was envisaged under Clauses 5 and 6, that the people whom the tribal judge may consult should also hear the case. It is not clear what the hon. the Minister has in mind; whether the person on whom jurisdiction is conferred can consult other members of the urban Bantu council who have not heard the case or whether the people whom he consults should have heard the case. The hon. member for Heilbron (Mr. Froneman) on Saturday evening suggested that the procedure would be exactly the same as that observed in the reserves at present, and he read out certain regulations. I have not seen the regulations but the effect seemed to be that the procedure would be as established by local custom. I think what the hon. member has overlooked is that the regulations in terms of Section 5(b) are made subject to this new principle which has been adopted, and this is the very one that we are arguing about, namely whether they can consult people who were not present. That is the point at issue. It is true that Section 5(b) says that the appropriate provisions of the said Sections 12 and 20 and any regulations made thereunder shall mutatis mutandis apply in connection with any power of jurisdiction conferred on any person in terms of paragraph (a) but the opening sentence of that is ‘subject to the provisions of Section 6’ and Section 6 introduces this new principle that they may consult other people. There is no limitation to the effect that the people with whom they consult should have heard the case and that is what we object to—the question of the judge consulting other people who have not heard the case. I would like the hon. the Minister to tell us whether he envisages that the tribal judge should be limited in his consultation to people who have heard the case. If not, we are opposed to the principle. We are opposed to this whole question of conferring judicial jurisdiction on what will be tribal judges in the urban areas. We feel that the principle contained in Section 6 that they may consult with other people….

Order! That argument has been used over and over again.

I am finishing Sir. It really shows that it is realized that these people may not be competent and therefore there is a safeguard that they can consult with other people, which will have the effect of encouraging them to do so. We are opposed to this. I hope that the hon. the Minister will clear up the point.

I just want to point out that one of the important principles of Bantu law, one of the cornerstones of Bantu law. is contained in this proposal. I can only tell the hon. member that I did it after very thorough consultation with a few of my anthropologists who are really experts in this sphere. This process of consultation by the Bantu is one of the most important elements in their system of administering the law. I just want to tell the hon. member that in general—I think in 99 per cent of cases —only the people hearing the case will be consulted. I myself am opposed in principle to outsiders being consulted, but it often happens in practice, like in the case of our own judges also, but in general the practice I envisage is that it should be people who heard that case. Here I again want to give the example of the Swazis. They perhaps have two or three representatives on that council and it is necessary that they should be called in for consultation. But I want to assure the hon. member that we shall take great care to see that no injustice is done. This is an important principle in Bantu law.

I would like to say to the hon. the Minister that I am not prepared to give a silent vote on this matter. The Minister should realize that the circumstances in which these courts are sitting are quite different from what apply in Bantu law. A large number of the members of these councils—at least half— will be persons elected. They may be the most unsuitable persons to be consulted, even applying the Bantu principle. Living in these areas are many persons who have reached the stage of advanced civilization, so I can conceive of nothing which is more foreign to our system of law than for a judge to have the right to consult with others before deciding a case, other people who have not had the opportunity of hearing the evidence and who do not know the background of the case. I hope that even at this stage the hon. the Minister will realize that he is making a mistake and withdraw this clause.

I just want to tell the hon. member that my difficulty is that we are always enforcing our system on the Bantu. That is not fair. The Bantu have their own system of law of which they are proud, just as proud as we are of our system. They have their own legal system to administer justice. Why must we always enforce our system on them?

Clause put and the Committee divided:

Ayes—66: Badenhorst, F. H.; Bekker, H. T. van G.; Bekker, M. J. H.; Bootha, L. J. C.; Botha, M. C.; Botha, P. W.; Coetzee, P. J.; de Villiers, C. V.; de Villiers, J. D.; du Plessis, P. W.; Erasmus, F. C.; Fouché, J. J. (Jr.); Froneman, G. F. van L.; Greyling, J. C.: Grobler, M. S. F.; Hertzog, A.; Jonker, A. H.; Knobel, G. J.; Kotze, G. P.; Kotzé, S. F.; le Riche, R.; Luttig, H. G.; Malan. W. C.; Marais, J. A.; Maree, W. A.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Mulder, C. P.; Muller, S. L.; Nel, J. A. F.; Nel, M. D. C. de W.; Niemand, F. J.; Otto, J. C.; Pelser, P. C.; Rall, J. J.; Sadie, N. C. van R.; Sauer, P. O.; Schlebusch, J. A.; Schoeman, J. C. B.; Schoonbee, J. F.; Stander, A. H.; Steyn, J. H.; Strydom, G. H. F.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, M. J.; van den Heever, D. J. G.; van der Ahee, H. H.; van der Merwe, J. A.; van der Merwe, P. S.; van der Walt, B. J.; van Eeden, F. J.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; Venter, M. J. de la R.; Venter, W. L. D. M.; Verwoerd, H. F.; Visse, J. H.; Vorster, B. J.; Vosloo, A. H.; Webster, A.

Tellers: W. H. Faurie, J. von S. von Moltke.

Noes—40: Basson. J. A. L.; Basson. J. D. du P.; Bronkhorst, H. J.; Butcher, R. R.; Cope. J. P.; de Beer, Z. J.; Dodds, P. R.; Durrant, R. B.; Eglin, C. W.; Fisher, E. L.; Fourie, I. S.; Gay, L. C.; Graaff, de V.; Higgerty, J. W.; Holland, M. W.; Horak, J. L.; Hughes, T. G.; le Roux, G. S. P.; Lewis, H.; Miller, H.; Mitchell, D. E.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Steenkamp, L. S.; Steyn, S. J. M.; Steytler, J. van A.; Streicher, D. M.; Swart, H. G.; Swart, R. A. F.; Tucker, H.; van Niekerk, S. M.; van Ryneveld, C. B.; Warren, C. M.; Waterson, S. F.; Williams. T. O..

Tellers: H. C. de Kock, A. Hopewell.

Clause, as printed, accordingly agreed to.

On Clause 7,

I want some information from the hon. the Minister before we discuss this clause in detail. We are not opposed to the establishment of home guards, but we want information as to how they will be controlled. I see in sub-section (3) it is stated—

I should like the Minister to tell us whether these guards will come under the control of the Police because I see in Clause 4 (2) (b), a clause which has already been accepted, that the council shall have power to control and manage, subject to the provisions of this Act, community guards in terms of Section 7 which we are now discussing. I want to know what is envisaged. Will the councils themselves control these guards? Will they lay down regulations for these guards or will the Minister himself prescribe the regulations? Will the guard be paid and if so, by whom, and will it be a full-time occupation or will it be more or less on a voluntary basis to do duties when specially called upon by the council? What I want to know mainly is this: Will the Government be responsible for the actions of these guards? Should a guard commit a delict, should he be responsible for some wrongful act against a fellow-citizen, will the Government be responsible in the same way that it is responsible for the action of a policeman? If the Minister will give us some information on these points we can discuss the matter further.

In supporting generally the remarks made by the last speaker, we feel that in the first place this clause should not be in this Bill at all. This is essentially a matter which should be operated by the Police. At the moment in many of the townships we already have two Police Forces; we not only have the South African Police Force operating but there are municipal Police Forces in some of the townships and this is especially the case in Johannesburg. Now it looks as though the Minister is going to introduce a third Police Force, which will be undesirable. Our feeling is that these homeguards should be operated by the South African Police, and if the Minister does not feel that, then at the very least by the Municipal Police, but to our way of thinking the best thing is that they should be operated by the South African Police. To that end I wish to move the following amendment—

In any case those municipalities which have Police Forces in existence are worried about the question of consultation and co-operation between these forces and the municipal forces. I want to ask the hon. the Minister what he visualizes the relationship should be between the municipal force and these new forces. He should make that clear. We feel that it should not merely be left to the Minister to say that he will consult. We feel that machinery for consultation, if these forces are not actually to be run by the municipalities, should be provided for in the clause. We are not opposed in principle to the creation of these home-guards, although we want to see that it is done with the greatest of care. It would be most dangerous to have irresponsible homeguards operating, and it would certainly be very bad indeed to have them operating independently of the existing forces. We should prefer to have them controlled and integrated into the South African Police Force, and for that reason I wish to move this amendment. The other amendment of mine on the Order Paper is not going to be moved.

I think there are several objections to the provisions of this clause. May I point out that one of the practical difficulties —in fact I go further and say that it is a danger which flows from the establishment of such a force—arises from the fact that an Urban Bantu Council, once established, sets up these Native homeguards, in terms of authority given by the Minister, after consultation with the Minister of Justice, and this Native urban council can consist of representatives of separate tribes where the generality of the Bantu in a European area is suçh that they are composed of groups of people from different tribes. Each of those different tribes can have its representative on the Bantu urban council, so now you have a polyglot group of members on the Bantu urban council. The Minister is now to appoint for them, no doubt on their advice and with their concurrence, a group of homeguards. There is between them and the work of the homeguards the judical officer who will be a member of the Bantu race, appointed under the Clause which has just been passed; so you get a Native judical officer with Native guards of whom the boss is a Bantu urban council. There is the set-up —the Bantu urban council, the judicial officer who is a muntu and the Bantu policeman from different tribes. Sir, my point is this: Does the Minister realize what is going to happen that once those policemen start trying to enforce tribal laws amongst the members of the different tribes which comprise the generality of the Bantu people in that White man’s town, because all this applies within the borders of a European urban area; it is not out in the tribal areas; it is not somewhere right away from the White areas. This is all taking place in a European town, and the rivalry between tribes that has already manifested themselves in riots and bloodshed, is the kind of thing in my opinion that is likely to happen. I want to put to the Minister the danger even of dealing with this question of national units. The Minister knows that there is a tendency amongst White folk particularly to talk about the Zulus—the Zulus this, the Zulus that and the Zulus the other thing. But the Zulus themselves fall into two separate categories of people who are from time to time bitterly hostile to each other. You have factions which go right back to the days of Dinizulu and the division which took place at that time, and the civil war that developed. That schism, that division, still exists at the present time, so much so that there is bitter rivalry in many respects. If you have a judical officer and tribesmen of different tribes acting as policemen and if they are going to try to enforce the law, it is simply asking for riots and bloodshed and trouble among the Bantu themselves, because they will refuse to accept control by a member of a different tribe over themselves. If the council itself, the judical officer and the police and the generality of the Bantu do not all come from the same tribe, then I say the Minister is going to be in trouble and he is going to be in very serious trouble indeed.

How does it work in the compounds on the mines?

The hon. member asks how it works in the compounds on the mines. Sir, it works there because there you have White authority superimposed over the whole thing. You have not got a Native judicial officer in the compounds; you have not got a Native council controlling that judicial officer. You have a White compound manager and you have his policemen there and he is the man in control. That is why we say that the South African Police should be in control here. If this is to be a body of police under the South African Police, then the position would be quite different; then we could see much to be said for it. But as it is at the present time I think it is a most dangerous departure from the normal procedure where a Police Force is concerned, because above all, where a body like this which is designed to maintain peace. there must be the strictest and strongest discipline, and, as the hon. member for Transkeian Territories (Mr. Hughes) has said, who is going to be responsible if the thing gets out of hand. You see, Sir, discipline is the answer to a Police Force as it is in an army, and there is going to be not only a lack of discipline but there are going to be hostile rivals fighting each other within the body politic if an establishment in terms of this particular clause takes place in a multi-tribal area where the council itself is composed of the representatives of a number of different tribes.

The hon. member for South Coast (Mr. Mitchell) does not understand clearly what this matter is about. It is not the execution of judgments which is concerned here. This guard is not going to execute the judgments of the various courts. For that provision is made specifically in the regulations in terms of which the judgments of the courts will be executed. I just want to say in passing that I am glad the hon. member for South Coast now accepts ethnic grouping. That has now clearly emerged from his speech. But it is not the execution of judgments which is concerned here. It concerns the maintenance of law and order, and these home guards will stand directly under the police in regard to the maintenance of law and order. It has nothing to do with the execution of judgments.

After listening to the hon. member for Heilbron (Mr. Froneman) I can only see in this bit of legislation the worst form of delegation of powers that has ever come before this House. Until the hon. member spoke I looked at it a little bit more charitably than I have to do now, because his interpretation of the provisions of this clause simply frightens me. Sir, a very important question is who will be responsible for the delicts of members of this guard? To confer powers is one thing, but it is equally important to protect the rights of the individual. The real question therefore turns upon whose servant these guards are to be. You usually determine the question as to whose servant he is by the criteria as to who is going to pay him, who will give him directions and who will ensure that he acts in a disciplined way. Those are the three criteria which usually determine this question of whose servant an individual is. It is very important that this House, before it gives power of this nature, should have that position clarified. I think it is insufficient just to have an explanation from the hon. the Minister as to what the position is. I think it should be provided for in the legislation, because here we are dealing with slip-shod legislation and we are leaving too much to be settled by delegated powers and too little to be written into the legislation itself. The community as well as the general public are entitled to know at this stage whether powers of arrest are going to be given to members of this guard, whether they are going to be regulated by the laws which regulate the administration of criminal procedure in this country or not. Those aspects should really have been written into the legislation itself, and that is why, after hearing the hon. member for Heilbron, I can only say that this is a case where delegated powers are being given in the widest possible terms, because all the questions that I have asked are not covered in the legislation. They may or they may not be dealt with in the regulations which the Minister may prescribe in sub-section (2) of this clause. But essential matters of that nature are dangerous matters to settle by a delegation of powers. They should be in the legislation itself and I hope, therefore, that the hon. the Minister will act wisely in regard to this matter and remove this clause entirely from this Bill

The hon. member for Heilbron (Mr. Froneman) really has said something quite amazing. When the hon. member for Johannesburg (North) (Mr. Plewman) was speaking about the powers of arrest, the hon. member for Heilbron interjected and said “judgments are not enforced by the police”. I suppose technically that is right, but then the question arises immediately who is going to enforce those judgments. What is going to be the function of these guards under these circumstances. Is the whole of our criminal and civil law going to be used for the purpose of enforcing judgments of these courts and are these guards playing no part in that at all? What is going to be the tie-up, the association between these guards and the South African Police in this case? Sub-section (3) does not help us very much. It merely says that nothing shall derogate from the existing powers of the police. In other words the South African Police will have an over-riding authority. But is the position then to be that these guards are there as what I would call an inferior force for certain purposes, but they are not going to assist the courts which have been established in terms of the previous clause which we have already dealt with? They are not going to help in the enforcement of the orders of those courts and the whole of the ramifications of our criminal and civil law in regard to the work of those courts will be foreign to the guards to be appointed under this Clause 7.

The hon. member for Heilbron also, when he started off, said that I had now accepted the principle of ethnic grouping and that he was glad I have done so. I thought we had disposed of that matter at the beginning of this debate. There is no reference to groups in this clause. I never accepted any of these ethnic grouping ideas. If there was any substance in it they would not provide for a council that has got five or six or seven ethnic groups under one council. It has nothing to do with this clause. Ethnic grouping does not come into the picture at all. What I am concerned about here is rivalries between tribes when authority is given to the members of one tribe and they are now to exercise that authority over members of another tribe. I say that that is asking for trouble, unless there is the very clearest possible line laid down for the discipline on these people. There is no line of discipline laid down. The guards proposed here are apparently answerable to a Bantu Urban Council. That is their boss, although they are appointed by the Minister, and presumably the authority that deals with anybody who may be apprehended—they are given powers of arrest—will be a Muntu judicial officer. There is the set-up. It stands there naked in a vacuum, tied on to nothing else, not tied on to nothing of the South African Police, not tied on to our criminal law, or anything of that kind, but with the power of the Minister to make regulations. Whether the hon. the Minister by regulation is going to give powers of arrest, I do not know. But, as I say, it is standing here in the abstract, and I don’t like it because I believe it is going to lead to endless trouble, bloodshed and difficulty amongst the Bantu themselves. So, far from bringing peace and quiet and contentment to the Bantu, it will be trouble and bloodshed, because there is no fixed line of demarcation for discipline, and the only discipline in a White man’s town that is going to count will be the White man’s discipline. Unless you are going to have a White police officer with full authority and full discipline over these Bantu tribal policemen, call them what you will, you are going to have trouble.

I do not want to protract the debate, but I feel compelled to reply to the last speaker because he has again mentioned my name and made a misrepresentation. Mr. Chairman, in the ordinary application of the White man’s law the police never execute any judgment of any court, whether criminal or civil. In the case of criminal proceedings, the Prisons Department executes the sentence and in the case of civil judgments it is the messengers of the court or the sheriff who do so, depending on which court gives the judgment. The same applies to Native law. The execution of Native law is never in the hands of the police. In regard to civil judgments in respect of headmen or chiefs, Regulation 8 prescribes how the judgment or fine imposed by a chief is to be executed by his officials or the sheriff or messengers of the court appointed by him. This section does not concern the execution of judgments at all.

Then there is the second argument advanced by the hon. member. He says that these guards will be under the urban Bantu councils. That is not contained in this clause. That may be the position when the regulations are issued. I will not deny that. It may be prescribed that they will function under the urban Bantu councils. I do not know that, nor does the hon. member, because it will have to be prescribed by the regulations.

We ought to know it.

There is nothing which need cause anxiety in the fact that these functions will be prescribed by way of regulation, because in regard to our own police force, as it is to-day, it functions under the police regulations. The Police Act does not provide it. The Police Act does not provide for much more than is prescribed in sub-section (1). It also merely says what the main functions are, but for the rest, it is prescribed by way of regulation. Therefore, there is nothing extraordinary in this procedure. If we have to embody in legislation everything that is prescribed by regulation we shall need terribly thick books to contain it all. It is simply impossible to demand this. Therefore, I ask hon members to stop this unnecessary opposition.

The hon. member for Heilbron (Mr. Froneman) says that the doubts we have in regard to the control of the guards are unnecessary. We want to place control in the hands of the Department of Justice, we would like them to fall under the Department of Justice, and we are waiting to hear what the hon. the Minister has to say on that point.

I want to raise shortly another point. I feel that there is an omission in the clause in that the hon. the Minister may establish these guards without consultation with the urban local authority. I feel that that is an unfortunate omission and that it should be remedied. At present the local authorities administer the residential areas and will continue to do so, with the co-operation of the urban Bantu councils. Apart from the question of the general administration of these areas, there are also municipal police in the urban residential areas. Therefore clearly there should be the very fullest co-operation between the Minister and the urban local authorities before a community guard is established. In fact we believe he should go further, he should have the approval of the urban local authority before such a community guard is established. I therefore move as an amendment—

I apologize for not having given notice of this amendment in advance.

Hon. members have raised a number of points most of which I can dispose of quickly. It is essential that we ensure that the correct balance is maintained. I have given serious consideration to those points. I wish to repeat right at the outset that we are introducing community guards at the request of the Bantu and in this connection I think the hon. member for Parktown (Mr. Cope) will probably be surprised to hear that this request was made particularly by the advisory boards in Johannesburg. They are very serious about this matter. One of the most important reasons for this request is that in some of those residential areas numbers of tsotsis gather together every now and then and commit all sorts of crimes; they rob people; six or seven of them form a gang and attack a person who gets off a train and they rob him of his money, etc. They enter homes by force and damage the property of the occupier, etc. The result is that those people have asked for the right to form a guard to take action in such cases. This is an earnest request on the part of the Bantu. The question that arises is in what relation they should stand to the police and the urban Bantu councils. In the first instance I should like to co-operate with the Bantu councils in establishing these guards. Naturally there are many places where they will not be necessary, as for example, in the smaller cities and towns. But in the bigger cities where the people have asked for them, I should like to meet them. It is my intention to co-operate with the urban Bantu councils.

The second question is this: What control will be exercised over them? I have already told hon. members that my policy is to work in close co-operation with the Minister of Justice when it comes to drawing up the regulations. I am very serious on this question that they should to a very, very large extent come under the control of the police. I want to give as an example the home guards that we find in the Bantu areas. In the Bantu areas the system is to have a Bantu sergeant in charge of the home guard, directly under the control of the police, therefore, and the members of the home guard fall under him. The homeguards are, therefore, under the direct control of the police and I should like the same system to be followed here to a great extent. I will draw up the regulations in co-operation with the Minister of Justice. The other question was whether they would be employed on a full-time basis. No, the urban Bantu authorities have asked that it should be done on a voluntary basis. I anticipate that this will develop into something very useful. Initially they will receive no remuneration. It may be that they will be paid an allowance at a later stage provided they are willing to cooperate. Hon. members may rest assured that we will see to it that these guards do not abuse their position. The hon. member for South Coast (Mr. Mitchell) in particular expressed certain misgivings on this point at the second reading. I want to assure him that we will be very careful and very strict, but I repeat that they will serve a very useful purpose in so far as the maintenance of law and order in the whole community is concerned. I have also been asked why we did not work in co-operation with the municipal councils themselves. Of course we will consult the municipalities in this matter. It is not necessary to provide for that in the Act, because in the first place this is a function that will be performed by the Bantu themselves, and many big cities have their own police; it will therefore be necessary for us to determine what links to establish and how to establish them. But this is a request which comes from the Bantu themselves and for that reason I cannot accept the amendments of the hon. member for East London (North) (Mr. van Ryneveld) and the hon. member for Parktown (Mr. Cope), namely that they should fall under the Minister of Justice. I want to assure hon. members once again that we will be very careful and that we will ensure that they do not develop into anything dangerous. The hon. member for South Coast advanced another argument. He expressed the fear that they might possibly be used to encourage tribal fights. I have discussed that question with various Bantu but they feel that there is very little danger of that because in the case of mixed Bantu residential areas, each group will be represented. In practice some residential areas already have these guards for their own protection, and hitherto they have not led to any tribal feuds. On the contrary they constitute one of the most important links which binds the law-abiding Bantu, no matter to which tribe he belongs, together in the maintenance of law and order and for the protection of their own interests. We shall immediately counter any tendency that may arise to encourage tribal fights. If that tendency were to manifest itself we will immediately take firm action and nip it in the bud.

Who will be responsible if these guards do not act properly where there are contraventions?

It is obvious that where they operate on a voluntary basis the urban Bantu councils will to a great extent assume responsibility. But where there is liaison with the police it is obvious that we will be responsible.

I just want to say briefly that we cannot accept the hon. Minister’s assurance that he will work closely with the Department of Justice as being sufficient. We feel strongly that this whole question of the guards should be handled by the Department of Justice; so we regret that we cannot accept the hon. Minister’s assurances in that regard. In regard to consultation with the local authorities, we are not satisfied with the hon. Minister’s assurance that the Minister intends to consult them. We feel that it should be written into the Bill. And we have other objections to this clause. We are not against the principle of having this kind of additional police assistance in regard to these guards, as long as they are properly and very carefully controlled. But we do not think that adequate control is contained in this Bill. We will therefore not call divisions on our two amendments, but we will have to call a division on the clause itself to register our disapproval on these points.

I started the discussion of this clause by asking the hon. the Minister to answer certain questions, but the hon. Minister’s replies have been unsatisfactory. Even if the Minister had given us an assurance that the State would be responsible for the deeds of the guards, we would still have hesitated to accept the clause unless that was inserted in the law itself. But in view of the reply given by the hon. the Minister that the Bantu councils may be made responsible to a certain extent for the wrongful acts of the guards, we cannot accept this clause.

Amendments put and negatived.

Clause, as printed, put and the Committee divided:

Ayes—65: Badenhorst, F. H.; Bekker, H. T. van G.; Bekker, M. J. H.; Bootha, L. J. C.; Botha, M. C.; Botha, P. W.; de Villiers, C. V.; de Villiers, J. D.; du Plessis, P. W.; Erasmus, F. C.; Fouché, J. J. (Jr.); Froneman, G. F. van L.; Greyling, J. C.; Grobler, M. S. F.; Hertzog, A.; Jonker, A. H.; Knobel, G. J.; Kotze, G. P.; Kotzé, S. F.; le Riche, R.; Luttig, H. G.; Malan, W. C.; Marais, J. A.; Maree, W. A.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Mulder, C. P.; Muller, S. L.; Nel, J. A. F.; Nel, M. D. C. de W.; Niemand, F. J.; Otto, J. C.; Pelser, P. C.; Potgieter, J. E.; Rall, J. J.; Sadie, N. C. van R.; Sauer, P. O.; Schlebusch, J. A.; Schoeman, J. C. B.; Schoonbee, J. F.; Stander, A. H.; Steyn, J. H.; Strydom, G. H. F.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, M. J.; van den Heever, D. J. G.; van der Ahee, H. H.; van der Merwe, J. A.; van der Merwe, P. S.; van der Walt, B. J.; van Eeden, F. J.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; Venter, M. J. de la R.; Venter, W. L. D. M.; Verwoerd, H. F.; Vorster, B. J.; Vosloo, A. H.; Webster, A.

Tellers: W. H. Faurie and J. von S. von Moltke.

Noes—39: Barnett, C.; Basson, J. A. L.; Bronkhorst, H. J.; Cope, J. P.; de Beer, Z. J.; Dodds, P. R.; Durrant, R. B.; Eglin, C. W.; Fisher, E. L.; Fourie, I. S.; Gay, L. C.; Higgerty, J. W.; Holland, M. W.; Horak, J. L.; Hughes, T. G.; le Roux, G. S. P.; Lewis, H.; Malan, E. G.; Miller; H.; Mitchell, D. E.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Steenkamp, L. S.; Steyn, S. J. M.; Steytler, J. van A.; Streicher, D. M.; Swart, H. G.; Swart, R. A. F.; Tucker, H.; van Niekerk, S. M.; van Ryne-veld, C. B.; Warren, C. M.; Waterson, S. F.; Williams, T. O.

Tellers: H. C. de Kock and A. Hopewell.

Clause, as printed, accordingly agreed to.

On Clause 8,

I wonder whether the hon. the Minister could give an explanation in regard to this clause. This clause allocates financial liability as between the Bantu urban councils and the existing local authorities in the area where such councils are established, and under sub-section (1) lays down the procedure to be adopted by the Bantu council in its responsibility for the paying over of certain revenues it may collect. Under Section (3) it is laid down that the urban local authority shall make certain definite charges on its Native Revenue Account as regards the expenditure incurred in running this particular system of Native government. Between the two of them, the Bantu urban council has to pay over any amount received in levies or fees or fines, or whatever revenue they do receive, and the urban local council will debit all expenditure incurred in connection with carrying this Act out, to its Native Revenue Account, Section (3) (b) in particular lays down that any expenditure incurred with the approval of such urban local authority by such Bantu council or any member thereof in the exercise of any power, shall be charged against its Native Revenue Account. Now those duties and authorities in earlier clauses of the Bill cover a very wide range of activities which can involve very heavy financial expenditure, very heavy capital expenditure, and I wonder if the hon. the Minister could give us some idea as to just how he intends that financial control to function. You see, Sir, under local government operations, of which the new urban Bantu council will now form a part—it will form part of the local authority structure of that particular urban area—works involving capital expenditure are secured in general by a lien or a right over the whole of the assets of the local authority concerned. Now if capital works are undertaken in a Native township as the result of an authority which is carried into effect by the Bantu council, what does the hon. Minister propose regarding the method adopted to raise the capital necessary for the carrying out of those works. Who will ultimately be responsible for the repayment and meeting the financial costs of these schemes? To use just a plain example: The installation of additional housing required in an area, which is one of the authorities given to the new Bantu councils. In raising the capital to provide that housing, it is normal practice to try and cover costs by the rental value of the scheme. But it is rarely runs to the amount required to pay for itself (certain levies have to made up at the moment, partly by the state, and partly by the urban authority). How under the new scheme does the Minister propose to meet that funding situation if additional housing has to be provided? Who is responsible for raising that capital, and who will be saddled with the responsibility of finally liquidating any such expenditure incurred? Will it be the whole of the urban area concerned, or will it be confined purely to the Native Urban Council area and their assets?

Clause 8 is the clause dealing with the finance of the urban Native councils. During the second reading I spoke about the position in the Daveyton Township in my constituency, Benoni, and I said that this clause is one of the most obvious cases I have seen of this Government giving on the one hand and taking away on the other. I gave the facts about Daveyton—and I am sure the position also prevails elsewhere—that we have this council; it meets to deal with ordinary everyday matters of the township, but all finances are controlled by the Benoni Municipal Council. The hon. Minister told me that we acted illegally in the manner we were running Daveyton. He also said that I would go to bed that night saying I was an ass, because he had convinced me that there was a difference between Clause 8 of the Bill and the conditions as they were in Daveyton. But I would like to point out at this stage that what I had said was that “if” there was any difference, I was a Nationalist. I cannot see any difference between …

Order! That is not under discussion now.

Mr. Chairman, this is of the utmost importance, in regard to the finances of urban Native councils.

Order! The hon. member can only discuss the details of this clause.

Yes. Sir, I am dealing with this clause. I say that this clause which is intended to deal with the finances of the urban Bantu council, and I was quoting a council, of which I know quite a bit, to show how we run it, and it is my contention that this clause lays down exactly what we are doing. I would like the Minister to tell me where the difference comes in. I must know in order to report back to my constituency where the irregularity is as far as we are concerned. The hon. the Minister said that it was a model township, and then he said we were acting illegally. Why?

I would like to support the hon. member for Benoni in regard to the criticism that he has levelled at the contents of this clause which does not seem to provide the necessary opportunity for a council to be able to exercise the functions, which the hon. Minister hopes it will exercise because it is so hidebound by financial control here. The hon. member has merely asked for the Minister to give him more information so that we would be able to appreciate what the Minister has in mind because the clause itself does not make it clear. Every expenditure, it states here, must have the approval of the local authority, and in fact that does not differ from the position as it exists to-day. The local authority before it presents the estimates to the council is obliged to consult with the Native Advisory Boards. The estimates are presented to the Native Advisory Boards for their comments, and those comments are thereafter sent to the Minister. I do not know of any case where the Minister or his Department has at any time intervened in any way to support the viewpoints of the advisory boards. But let us assume here that the hon. the Minister has that intention, then all he can do to make this any different from what the position has been in the past is perhaps to ask the local authority to change the purpose of the estimates or the objectives of the items on the estimates. If he does that the urban local authority is not obliged to conform with the request of the Minister unless that is contained in the alternative in sub-paragraph (4) to the effect that if the Minister is satisfied that the manner so determined does not afford an opportunity for proper consultation the manner may then be determined by the Minister. But that still refers only to consultation. What does the Minister actually mean? I did suggest to the hon. the Minister once before that if we are to do something of any value through these urban Bantu councils, it would probably be wiser at least to give not only a semblance of executive direction but also to provide machinery whereby the council can feel that it is serving a purpose, that it can direct the methods in which the estimates should be framed. It would then be able, for instance, to suggest a change in the use of money from one purpose to another purpose. Then at least the council would feel that it is achieving something. But as the hon. member for Benoni (Mr. Ross) correctly pointed out, on the face of it—and I can see no other interpretation—this clause gives no further power beyond what already exists. In fact it merely, in an additional number of words, which do not convey anything more than is in the existing provision, says exactly what is taking place and is contained in the Act and the regulations. Clause 8 (3), for instance, says that the Native Revenue Account of the urban local authority shall be chargeable with certain things, including expenditure incurred by such local authority in connection with the council; expenditure incurred with the approval of such local authority by that council; expenditure incurred with the approval of such local authority by a person in the exercise of criminal jurisdiction in terms of Section 5. That does not give any further rights or extend any further powers. That merely replaces, with a local authority, the very powers, the very exercise of jurisdiction and the very approvals which presently exist in the Urban Areas Act.

I think the hon. the Minister owes it to the House and he owes it to those who are concerned and would like to see something take place, to give us a much clearer explanation as to how it can work. If he is unable to do so perhaps he may, after discussion with his senior officials, decide, perhaps in the Other Place, to introduce an amendment in order to make the intended change and the intended powers he wishes to place in the hands of the Bantu councils, or the intended opportunity for the development of the council on a very much more satisfactory and effective basis. That is the purpose of the amendment.

I am sorry to learn from the hon. member for Bezuidenhout (Mr. Miller) that I am so inefficient that I cannot give an explanation and that I have to ask my officials to do so on my behalf.

No discourtesy was intended.

We have become accustomed to the hon. member saying things like that. There are other ways of doing it but let me leave it at that. The misgivings of the hon. member for Simonstown (Mr. Gay) have already been dealt with by the hon. member for Bezuidenhout and the hon. member for Benoni (Mr. Ross). I want to assure him that if he reads the principal Act he will find that I have been very careful and that I have hardly effected any change to this Section, because I feel that in this respect we should work in close co-operation with the municipalities. If it is necessary to incur additional expenditure we must not forget that the municipalities will in the first instance be responsible. If this system develops it would have to do so in the closest co-operation with the municipalities. Any capital expenditure that may become necessary will be the responsibility of the municipality and it will not be fair to establish a council and to confer such powers on it. In his second reading speech the hon. member for Bezuidenhout said that we should give these Bantu councils power to force the municipalities to incur certain expenditure. I think that would be unfair. I do not think we should deprive the municipalities of any powers. That was why I was so very careful. This is the first step which I am taking. I think the practice followed in the past where the budget was prepared by the municipality and submitted to the advisory council, more or less merely for them to take note of, was unfair. We are now going a step further and our object is that the municipalities should prepare the budget in co-operation with the Bantu councils. There will therefore be a great measure of consultation. The municipalities will always be free to say: We are prepared to go so far but we are not prepared to go that far. But it gives the urban Bantu councils the right at the same time to submit their difficulties in connection with financial matters, etc., to the municipality. There will, therefore, be very close co-operation and I think this is a forward step. I want to be quite frank and say that it was my intention originally to give the urban Bantu council these financial powers and I hope they will develop in such a way that we will be able to confer greater powers on them and that we will at least be able to allocate an amount of money to them that they can spend as they wish. I hope that position will soon arrive, but I do not want to do that without the co-operation of the municipalities. I owe that to the municipalities and I think that would be a wise step. The hon. member for Simonstown can, therefore, rest assured that we are not taking any power away.

I now want to deal with the hon. member for Benoni. I do not want to deal with the powers of the councils again, but if he reads the Bill again he will realize that we are systematically conferring considerable executive power on them—not financial power. But I repeat that I hope the time will soon arrive when we will be able to do so. The hon. member has referred to the methods employed at Benoni. I welcome what Benoni is doing, but nowhere in the Act or in the regulations is there anything to justify it. What we are doing here is to introduce the system practised by Benoni, which is a wonderful national system, in other parts as well.

At the second reading, one of the legs of the amendment which we moved indicated our objection that the Bill did not give real administrative powers to the Bantu councils. What the hon. the Minister has said underlines the fact that they are to be given no extra financial powers. If one compares the relevant section of the Urban Areas Act with the proposed section in this Bill, one finds that the effect is very similar. It is provided in the Urban Areas Act, that the estimates of expenditure—that is of the moneys in the Native Revenue Account—are to be drawn up by the council and there is a proviso that before such matters are passed by the urban local authority—

And the report of the board must be considered by the urban local authority. This is similar, except that the wording is slightly different, to sub-section (4) which reads—

Clearly, therefore, very much the same procedure is involved. There must be consultation, but the urban Bantu council is not given the ultimate responsibility: that lies with the local authority. Now financial power is absolutely fundamental to any real administrative power, and without further financial power we do not believe that the powers given mean very much.

The other point I want to make briefly is that we are opposed to the separation of the Native residential area from the rest of the local urban authority for financial purposes. We believe it is wrong that the money which is to be spent on the Native residential areas should be raised from that area only. We believe that the finances of the whole city should be administered together. We made that point at the second reading stage. We do not believe that it is correct that the money raised in the Native townships should be all that is available for use in those townships. It is true that certain local authorities do pay into the Native Revenue Account in order to cover expenditure, and we are glad that they do that. That is not the principle on which the financial control of Native townships is based in South Africa. I do not want to go into details, but refer members to the latest report of the Department of Bantu Administration and Development at pages 18 and 19. The whole approach is that the money spent should be raised from the Native township areas, from rents and in other ways. We are opposed to that. In the so-called White areas one does not limit the expenditure on the poorer sections to the amount of revenue which comes from those poor sections, and spend the money which is raised from the richer sections only on those sections; one taxes people according to their ability to pay and spreads the expenditure wherever it is needed in the whole of the municipal area. We feel that that should include the Native areas as well.

The hon. member is under a totally wrong impression if he says that the money which is to be spent in the Bantu residential areas, is money which is derived from taxation, house rent, etc., in that Bantu area. That is not the case.

Mainly.

No, that is not the position and the hon. member would have known that had he consulted the City Council of East London. The normal procedure is that the city council votes money for that purpose. Some of the money that is spent there, therefore, comes from other areas. I merely wanted to clear up this misunderstanding.

Clause put and agreed to.

On Clause 10,

Clause 10 grants the authority for an urban local authority to make regulations which, inter alia, will lay down the qualifications for voting for a Bantu urban council. I would like to suggest to the hon. the Minister that a restriction be placed on the power in regard to the qualifications of the voter. The position at the moment is that an urban local authority may enfranchise, for the purpose of electing these boards, any Bantu resident in the area. There is no limitation. These boards which will now have much greater authority than the advisory boards, including civil and criminal jurisdiction, could now have a greater importance to persons trying to get on the boards. It would be possible for a candidate to pack the voters’ roll to bring in persons … [Interjections.]

The hon. member laughs, but this is now becoming a realistic possibility. A candidate for election to the Bantu urban authorities could quite easily bring in a group of people to vote for him at an election. As the Bill stands at the moment, in Clause 2 any resident can be enfranchised. Clause 2 would make it possible for any resident to be enfranchised without any stipulation beyond that. I suggest that there should be a residential qualification of two months. It can be brought in by a proviso to Clause 10 (2), limiting the right of local authorities to enfranchise people who have not been legitimately resident and permanently resident for a period of two months.

Imagine the situation if there is a group of persons, a minority group of one tribe who would like to exercise, for instance,, the criminal and civil jurisdiction which this board has. The day before an election they could bring in 100 people to support their candidates. I am not moving an amendment at this stage but I am raising that principle with the hon. the Minister in order to get his reaction to it. Either he can move an amendment now or he may consider correcting this matter in the Other Place. I put it to him to consider as to whether this will not leave the way open to abuse. This body is a responsible body exercising certain powers, and I feel that there should be restrictions and limitations which will ensure that there is no abuse of the electoral machinery. I would be grateful to hear the reaction of the Minister to that suggestion.

There are two points I want to mention. Firstly, in Clause 10 (1) (b) where regulations can be made regarding the conditions of service, the powers, functions and duties of this Bantu urban council, I should like to have seen some reference to Clause 4 (2) where the powers, functions and duties of the boards are set out at some considerable length. I do not say that there is anything wrong with it in its present form, but I would have liked to have seen a reference back to what is actually provided in the Bill, because there is no reference to it as this clause stands at the moment. In other words, it should say that the powers, functions and duties of the council shall be as set out in Clause 4 (2).

The second point I want to make is that I want to support the hon. member for Durban (Point) (Mr. Raw) in the plea that he has made for some limitation to be provided in the Bill on the franchise rights of Bantu who will have the power to vote in the election of members of the urban Bantu Councils.

We are now introducing a new principle in that we are providing for the Bantu who have the power of the franchise in freely electing their representatives to one form of local government. This is the first step, and it may easily be a precedent, and the Bantu hereafter may say “I am qualified to vote in such a manner ”…

Order, order! The hon. member must come back to the clause and not discuss the principle.

Mr. Chairman. I am only dealing with it in passing. I merely want to point out that this can establish a precedent. I think, therefore, that the limitation or the circumscribing of the powers of the electorate should be set out in the Bill and not be left entirely to regulation. I think that that is a very important point indeed. Parliament should determine what are to be the basic consideration in authorizing certain Bantu people to exercise such a franchise. I do not think, when we are starting on a new principle like this, that it should be left to the regulations; I think it is a matter which Parliament should determine so that ab initio Parliament determines these basic principles upon which the Bantu are to acquire a franchise in the European urban areas.

In reply to the hon. member for Durban (Point) (Mr. Raw) I just want to tell him that we have a set of regulations to-day in respect of the Bantu advisory councils which work very well indeed. I want to tell the hon. member for South Coast (Mr. Mitchell) that we are not introducing a new system. The members of the urban Bantu councils are already elected to-day and I have tried to adhere as close as possible to the existing Act, because the Bantu advisory councils are very proud of this system. I did not want to do anything without their co-operation. Those regulations which have hitherto operated exceedingly well amount to this that only persons living in a Bantu area can vote. That is their home basis. They only are recognized and only they can vote. I can discuss this idea of introducing a qualification of say, two months residence with them. I will discuss the matter with them when the regulations are drawn up but I do not want to embody that in the Act. I also want to say to the hon. member for South Coast that it is not necessary to refer to any previous clauses because the regulations have to conform with the provisions of those clauses. I hope the matter is clear in this respect. The regulations already exist. They operate very satisfactorily at the moment and I am not anxious to change them unless the Bantu themselves ask for it.

Is there a time limit at the moment?

May I just explain the position arising from the interjection of the hon. member for Transkeian Territories (Mr. Hughes). The existing regulations provide that only those who are not in arrear with their rent may vote, and under the existing system only those people who are the legal holders of permits to live in that area may vote. If they cease to be the legal holders of such a permit they cannot exercise their vote. They must not be in arrear with the rent and there are various other provisions in those regulations. Requirements such as have been referred to here, may be incorporated in the regulations, of which the basis is already laid down in the existing regulations which govern the advisory councils, as the hon. the Minister has explained.

May I inquire whether the White local council has the power to amend those regulations as it wishes? In other words, a White local council may decide to dispense with all qualifications. The hon. the Deputy Minister says that the existing regulations provide that only those who are not in arrear with their rent and who are lawfully there may vote. But a local White council may change that and say that everybody is qualified to vote.

The legal position as far as the advisory committees are concerned is that each city council passes its own regulations to govern the advisory committee in its own area. The department has drafted a set of model regulations and these are mainly followed by the local city councils when they draft their regulations. When they have drafted their regulations they submit them to the Department for ministerial approval. After that they come into operation. It happens that different city councils draft different regulations but in practice we find that they follow the practical suggestions of the Department. They may be amended according to circumstances.

What about the voters in the hostels for unmarried persons?

The regulations also cover them.

Clause put and agreed to.

On Clause 11,

I move the amendment standing in my name on the Order Paper as follows—

This clause relates to the disposal of the profits which accrue to a local authority from the supply and sale of kaffir beer to African or Bantu who are inhabitants of a particular local area under the control of that local authority. Ever since legislation was first introduced to regulate the supply and sale of kaffir beer by local authorities, the law has prescribed—and in my view correctly presented—to what purposes the profits of the beer sales may be applied. Briefly stated, the position is that these must be applied for the benefit of the African inhabitants of the local areas concerned. This clause, if passed in its present form, introduces a new principle in regard to the disposal of profits, and it places added arbitrary powers in the hands of the Minister, because the Minister will now be able to direct not only the purpose to which the profits may be put, but the area to which they may be applied. Everybody knows that the rights granted by law to a local authority to supply and sell kaffir beer is a monopoly right. But it is perhaps not generally recognized that the profits which accrue from a monopoly such as this are, in fact and in practice, accruals from a concealed form of indirect taxation. If the profits are increased by raising the price of beer sold under such a monopoly, then what is really happening is much the same as if there had been an increase in excise duty on the beer itself. The fact that the purchase of beer is optional and not compulsory does not affect that economic truth. Monopoly profits in a case such as this, amount to no other than a form of concealed indirect taxation. It follows, therefore, that any profits which accrue to a local authority from the sales of kaffir beer is tantamount to accruals of a local tax or a local duty on the local community. That is why, in the past, profits have always been used for the benefit of the local community.

As I have said, what is now proposed is that the Minister shall be given additional arbitrary powers to direct what the profits shall be an entirely different area from the one where the profits accrue. The clause says—

What it really amounts to is that Parliament is here being asked—admittedly in very fine sounding words—to grant to the Minister power to expropriate or confiscate a part of the proceeds of a local authority, from a local tax. which the Minister can then direct shall be disposed of in some different place and for a different group of persons.

I would like to ask the hon. the Minister whether he would be prepared to ask Parliament to give him the same powers to expropriate or confiscate part of the Rates Fund of a local authority. Obviously he would never try to do that, and the reason is equally apparent. It is because the bulk of the rate payers are voters and are represented in this House. But in this case the taxpayers are not voters and they are not represented in this House, and that, of course, makes it a very different situation indeed. I say that it is an inequitable position to ask that moneys which are really local taxation, always used for a local community, should now be left to the Minister to determine how much of that should be applied somewhere else. I realize that if my amendment is accepted the clause might simply be a duplication of what already exists in the law. However, I do not think that is important, because only by moving the amendment as I have is it possible to show how inequitable the clause really is if it is to be accepted in its present form. I have called it inequitable, but I think it is equally inquitous to have a provision of this nature merely because an urban Bantu local authority system is now being introduced generally: There can be no justification for taking accruals to a particular local authority and arbitrarily applying them to some other local area. I would therefore earnestly appeal to the hon. the Minister to accept my amendment because it will not in any way depart from the principle of the Bill as he wants to introduce it, but it certainly will get away from this new principle which will be introduced into long-standing legislation dealing with proceeds and how those proceeds of kaffir beer shall be used.

I should like to support the hon. member for Johannesburg (North) (Mr. Plewman) in the amendment which he has placed before the hon. the Minister. In doing so I should like to draw attention to the fact that in the Johannesburg City Council—and I mention this purely as an example—the Johannesburg City Council is obliged to meet its deficit on Native revenue account by virtue of an arrangement arrived at many years back before there was an opportunity to assess the profits on the kaffir beer account. Now the kaffir beer account has traditionally been used and the profits therefrom expended in the interests of the people—as was rightly said—who indirectly form the taxpayers as far as that account is concerned. My fear is that there may be a two-fold objection to the Minister’s proposal. The one objection, as has rightly been pointed out, is that profits earned out of moneys received from persons who are, in a sense, indirect taxpayers, will be devoted to the benefits of other people who have no association with that particular area or that particular local authority. Secondly, if, unfortunately, there should be any diversion of funds from a local authority such as Johannesburg which makes large profits, then the Native revenue account, should it fall short, will have to be met in its deficit from the general rate funds of the council. It is already provided that a deficit of this nature must be met by an urban local authority. And I think that that would be placing an unfair burden on the council or create the danger of a possible burden of that nature on the general rate payers of a town or local authority if, in order to assist another local authority, the profits from these funds are diverted to other authorities. For that reason I think the hon. the Minister should either give us more elucidation or should accept the amendment which, I think, would be the wisest thing for him to do.

It is quite clear that those two hon. gentlemen have not read the principal Act. Had they done so they would have realized that no special powers are being conferred on the Minister here. Every penny that is spent from this fund is recommended by the City Council. All the Minister does is to certify it and then the expenditure is incurred. The only innovation is that whereas in the past a city council was obliged to spend all money in the area where it was raised, it is now empowered, where it deems it desirable, to spend money in another area if it is in the interests of the Bantu concerned. That is all. I want to give an example to illustrate why I am doing this. The budget will in future be prepared in co-operation with the Bantu councils. The City Council submits it to me for certification. Previously they could not spend money in another area. In future they will be able to do so. I gave a few examples during the second reading debate. For example, we have a school for the blind in a certain area. A school for the blind or a school for cripples cannot be established in every Bantu area. The children of one particular area attend the school in another area but the municipality is not in a position to make any contributions to that school, no matter how anxious it is to do so, because that school is in another area. The second example I gave was in connection with sport activities. We have often had this request: We have an excellent soccer team which is anxious to go and play somewhere else but they lack the funds; cannot we make a contribution of say £4 or £5 to pay for the transport of the team? But because they want to go to another area it could not be done. What we are doing here, we are doing on humanitarian grounds. We now give authority that in such cases, the municipality may consider it, but the budget is prepared in consultation with the Bantu council. In other words, they must approve of it. It must also be approved of by the municipality and subsequently I make quite sure that there is nothing unfair about it; and I certify it. This is an earnest request which has come from various city councils. No additional power is being conferred on the Minister.

The explanation given by the Minister is reasonable, but why not put it in the Bill? Why not say it more directly than it is stated here, because as it reads to-day it is the Minister who has the arbitrary power to give the directions and it can be used irrespective of whether or not it relates to a matter in the area. If the Minister’s construction is correct, surely it would have been much easier to have said so in the Bill in a few words.

If the hon. member had taken the trouble to read the principal Act, he would have seen that it is just the same in the Act.

Amendment put and negatived.

Clause, as printed, put and agreed to.

Remaining Clause and Title of the Bill put and agreed to.

House Resumed:

Bill reported without amendment.

Orders Nos. II and III to stand over until Order No. IV of the Day had been disposed of.

I move—

That the Bill be now read a second time. Mr. Speaker, the necessity for measure is so obvious that it hardly is necessary for me to explain it. As hon. members know the Select Committee on the Electoral Laws Amendment Bill which was introduced earlier during this Session, was unable to complete its work. It will therefore be necessary to give further attention to the measure next year, also to the recommendation that mechanization should be introduced. If the recommendation that there should be mechanization is accepted, there will have to be a general registration of voters after which we will be able to introduce a system of mechanization based on the identity card numbers. But Section 8 of the existing Electoral Laws Act provides that there will be a general registration at intervals of not less than three years. That means that there must be a general registration this year but after very thorough consideration it has been decided that it is not desirable to have a general registration unless there is clarity in regard to the introduction of mechanization. Therefore, in order to avoid having to spend all the time and money that usually accompany a general registration, we think it is necessary to make this change. Seeing that the Bill that was referred to a Select Committee cannot be dealt with at this stage, there are a few provisions that we might just as well dispose of now in order to improve the Electoral Act, as for example, the clauses which adapt the Electoral Act to the provisions of our new Constitution Act. I briefly want to deal with the provisions concerned.

Clause 1 provides that it is not necessary to have a general registration this year, but increases the period to five years at the most. Clause 2 is an improvement in respect of the existing provision which makes it imperative that the supplementary voters’ rolls which are prepared between general registrations should always be combined into one list. That is not always desirable or practically possible, and there is a measure of doubt whether we have the right to make that differentiation. Clause 3 amends Section 25 of the principal Act which provides that voters’ rolls should be printed not later than two months prior to any general election, and furthermore at times ordered by the Minister or at such times as the chief electoral officer may deem fit. An election is usually fixed for such a date where the latest supplementary lists may be used in that election and it is usually not possible to have those supplementary lists printed two months prior to such an election. Hence this amendment to reduce the period to one month.

Clauses 4 and 5 are necessary in order to adapt the Act to the provisions laid down in the new Constitution of the Republic. Clause 4 deals with the provision governing the life of Parliament and Clause 5 deals with by-elections. That is the full content of this measure.

In that connection I merely wish to add this. Hon. members have approached me and have said that there is really only one problem, namely the limited number of typed copies of the voters’ rolls that are made available. At the moment we type six copies of the voters’ roll. This position can really only be improved once we introduce a mechanical system which we have found impossible to do hitherto. For example we type one copy for the National Party, one for the United Party, one for the Progressive Party and one for the Government Printer, and one for the Liberal Party, if they ask for it, which they have done in the past. The last copy is kept by the Department for its own purposes. Hon. members have expressed the hope that this position would be improved and that we would be able to make more copies available. I have asked the Department to go into this matter and to see whether we can assist the political parties, even though we have not as yet introduced the mechanical system. I cannot give any definite assurance to-day, but I can assure the House that we shall go out of our way to see whether, with the limited means at our disposal, we can comply with that request.

Let me say at the outset that in regard to the last portion of the hon. the Deputy Minister’s speech, in regard to making available extra copies of the supplementary roll, I do believe that this will be a very good thing indeed, and I trust that the hon. the Minister in the interests not only of the Opposition but of his own party will be able to do something about it. The present practice whereby each party gets a flimsy copy of the supplementary roll makes it very difficult indeed to carry out the necessary organizational work. I shall be grateful if the Minister can go into the matter and do something about it.

Mr. Speaker, this Bill should not really be on the Order Paper at all. It represents patchwork. Towards the middle of this Session of Parliament we debated very fully the Electoral Laws Amendment Bill, which contained 46 clauses. We had a very full debate in the second reading and that Bill was referred to a Select Committee. The report of the Select Committee on that Bill, I see, is Item 15 on the Order Paper, so technically that Bill is still hanging in the air. But now we are dealing with a little Bill of seven clauses which the Minister tells the House must be dealt with because it is urgent. I presume that Item 15 on the Order Paper, the report of the Select Committee on the other Bill, will be dropped because it is not possible to carry on with that long Bill which we debated here very fully. In the first place I want to say that we have this process of legislation by exhaustion. We have hon. members like the Chief Whip of the Government using closures because time is of the essence.

Order!

I am not reflecting on the decisions of the House, but because time is of the essence this closure procedure is being followed, yet here we have spent two or three days debating the Electoral Laws Amendment Bill fully, and it has disappeared, and now we have a Bill with which we have to deal as a matter of emergency on the second or third or fourth last day of the Session—probably the fourth last day, for the information of the Chief Whip—and this is only a patchwork Bill. Now why? Admittedly, in regard to Clause 1 the Minister’s explanation that it will be foolish to hold a general registration in September and then in terms of his other Bill which is hanging in the air, to hold another general registration next year; that it will be a waste of time and effort and of the taxpayers’ money. I agree. That is a good reason. May I say, of course, that another reason which appears to be obvious is that it will be very difficult to hold a general election in October if there is a general registration of voters in September. It is a Government prerogative to hold general elections, but I want to say this in reply to the hon. the Minister of Bantu Education who interjects that it used to be said of certain South American republics …

Order! That is irrelevant.

Clause 1 would make it possible to hold a general election in October, and I do not like that.

Why not?

I do not like the hidden implication of this clause. The Minister has told us that he wants to save the taxpayers’ money by not having a general registration in September and another one next year, but what he has not mentioned is the second reason which I think is much more important than the first one. It used to be said that certain South American Republics had a revolution every six months, but we are having an election every year, and I speak with no personal animus.

Coming to Clause 2, there is no real objection to it. In Clause 3 I see the Minister’s difficulty. I see that it is difficult in certain circumstances to provide a supplementary roll two months before an election, but this provision of two months has been in our electoral laws since 1946 and in all those years it was found possible to maintain the two months’ period in which voters’ rolls must be available before an election. I therefore do not see why it is necessary now to reduce the period, except again to permit the Government to exercise its prerogative to hold an election with the least possible notice to the Opposition.

Order! The hon. member is now discussing elections.

But there can be only one purpose for this Bill being introduced at this stage.

But the Bill does not deal with an election.

But it is an electoral law. The Bill is to make it possible to have an election, and that is why we do not like it. We should not have an election every year. We do not like it, and I do not think Government members like it either. We also object to this reduction in the period of availability of voters rolls from two months to one month. As I said in the beginning, I appreciate that the Minister will attempt to make more copies of the supplementary rolls available, but nevertheless I think that the two months’ period has stood the test of time since 1946. It has not been found impossible and therefore I feel that this clause is not necessary in this little patchwork Bill.

Clauses 4 and 5, as the Deputy Minister said, are aimed at bringing our electoral law into line with our constitution. I think these are sound clauses, but why ask the House to consider them now? Why not leave it until next year?

You know you cannot have a by-election without Clause 5.

Why not? Let me deal with Clause 4 first. It is true that Clause 4 brings it into line with our constitution, but it is not necessary at this juncture. Why must we consider it now? I wish the Minister would tell us. Why does he not leave it until next year, when the House can be asked to deal with the big Bill? The hon. member for Pretoria (Central) (Mr. van den Heever) is not often right, but I admit that he is right in connection with Clause 5. But whilst we are dealing with this patchwork Bill, and if the Government is going to have an election, what about various other things? What about the extension of polling hours? Why did he drop that? If there is going to be a by-election, why not incorporate a clause to extend polling hours to 9 p.m. as we had it in the referendum? The Minister knows that in the big urban constituencies it is very difficult to get your voters through in the existing period. There is a tremendous rush at 8 p.m. and admittedly by 9 o’clock the place is quiet, but still it allows the voters to go through the polling booth and it avoids, or did at the referendum, the terrible rush we had in the urban constituencies between 7.30 and 8 p.m., where people stand in long queues and a tremendous strain is placed on the officials and the parties.

You are now discussing a clause which is not in the Bill

The hon. member must come back to the Bill.

For these reasons, and because we regard this Bill as patchwork and unnecessary at this stage, we on this side will oppose the second reading.

We have witnessed a peculiar incident here this morning. The hon. member wants to know why we are coming forward with this little Bill whereas the main Bill which consists of 46 Clauses has not been disposed of. But he was a member of the Select Committee and he knows that the Select Committee would still have been sitting on that Bill to-day because it is such a lengthy one.

Why did you leave it so late?

I admit it was rather late, but our attitude was that seeing that the Bill contained so many important provisions it was better to wait six months than to submit a half-baked measure to this House. I do not think I will be telling tales out of school if I say that hon. members of the Select Committee adopted the same attitude.

Order! The hon. member is deviating from the Bill.

I have to give the background to this Bill, Sir, and give the reason why it is appearing before us to-day. That was the point raised by the hon. member. When we reached that stage, the Select Committee felt that they could not continue with the Bill unless they omitted to deal with large portions of it, and that was why the Select Committee reported that they could not finish their work. Certain provisions have to be changed, however, because of our new Constitution. The Electoral Act has to be amended to conform with the Constitution as far as the remuneration of members is concerned. As the Electoral Act stands at the moment the remuneration of members is different from that provided in the Constitution and Clause 4 puts that right. The Constitution Act provides that Parliament continues to exist until the day of the election, and for that reason an unopposed candidate cannot be declared an elected member from an earlier date than the date of the election. Clause 5 also applies to by-elections. Clause 5 has been inserted in this Bill to provide that in the case of a by-election a candidate may be declared to have been elected and he actually becomes a member of this House on the date of his nomination, if he is the only candidate. This is, therefore, an essential clause. As far as the remaining clauses are concerned, the first one deals with the postponement of the general registration. I think every member of the Select Committee was convinced that it was necessary to introduce mechanization, but in order to introduce it there were 10 or 15 other clauses in the Bill that we would have had to accept in part or that we would have had to omit in part. The Select Committee simply did not have the time to deal with all those clauses and to delete all the relevant provisions from the Bill and to incorporate all of them in this measure. That is why we have to postpone the general registration until such time as we are ready to introduce mechanization, and the new registration can then take place on the new basis which will be a great improvement. I do not know, therefore, why hon. members are objecting to it. I was convinced that the United Party would support this measure but they are dead scared of an election, although their leader said that he would welcome it. I can quite understand why they are scared of an election.

Order! Which clause is the hon. member discussing?

The hon. member who has just spoken is one of those who will fall victim. I am discussing the measure as a whole, Sir, which deals with elections.

I think this Bill before the House which makes drastic amendments to certain aspects of our Electoral Act is the clearest indication from the Government of the likelihood of an early election.

Business suspended at 12.45 p.m. and resumed at 2.20 p.m.

Afternoon Sitting

When the debate was adjourned I was drawing attention to the fact that the introduction of this Bill at this extremely late stage of the Session, when the major Bill was before the Select Committee, is certainly the clearest indication by the Government of an election being held during the parliamentary recess. I am very glad to see that the Prime Minister is present. I eagerly anticipate his intrusion into the debate to clear up the general state of uncertainty as far as the election is concerned. Clearly this Bill would not be necessary were it not the intention of the Government at least to pave the way for the proclamation of a general election. None of these measures is really necessary were it not for the fact that a general election is pending.

Are you worried?

The hon. the Deputy Minister, in introducing the Bill, gave a number of reasons for the various clauses, but all those reasons would hold good were this Bill to be introduced next year.

If one looks at Clause 1, while it does not in itself pave the way for a general election, certainly in the absence of Clause 1 it would be quite impossible for the Government administratively to have an election during the next six months. Clause 1 is imperative should the Prime Minister wish to have a general election in the course of the next few months.

When one looks at Clause 4, which amends Section 36 of the principal Act, it only has a bearing on the declaration of members having been elected at the time of a general election, and not at a by-election which may take place during the period in which Parliament normally sits. So Clause 4, as I see it, only becomes effective in the event of there being a general election. If it is not the intention of the Prime Minister to have an election before the House meets again, clearly Clause 4, on the explanation given by the Deputy Minister, should fall away.

When one looks at Clause 3 it can be argued that the fact that if this clause is passed it will no longer be necessary for the Government to have available printed voters’ rolls at least two months before the election, might be taken as an indication of an early election or extremely short notice given of such election. However, if one reads the original Section 25 carefully, one sees that it relates only to “a general election following upon the dissolution of the House of Assembly or a Provincial Council by the effluxion of time”. So I presume, and the Deputy Minister has indicated, that in the event of a general election being proclaimed for reasons other than the effluxion of time, the Government would still be required to give the various political parties printed voters’ rolls two months before the election takes place. There are no major objections in principle to these clauses, but a valid objection is the introduction of this Bill at this late stage of the Session when a Select Committee has been appointed to investigate not only these matters but other cognate matters as well.

I want to confine my comments to Clause 3. the amendment of the original Section 25, which requires that printed voters’ rolls have to be made available to the general public at least two months before a general election. It is suggested that this period should be one month. I listened to the Deputy Minister and in spite of being aware of the fact that he has certain administrative difficulties in this regard, I am sure that there is not a single person in this House or outside it who does not consider it absolutely essential to have printed voters’ rolls available for the public at least two months before a general election. Let us consider the situation which might arise if the Minister does secure the passage of this clause and if he is only required to make printed voters’ rolls available one month before the date of a general election. It would mean that the printed rolls would only be available a week after the candidates have been nominated. During that period, from the date of proclamation, the Minister is fully aware that parties engage themselves in securing postal votes from absent voters. We will find the situation that people will be filing applications for postal votes and submitting them to the electoral officer in advance of the publication of the voters lists, and in advance of receiving the actual numbers which will be applicable to this general election. The argument may be that in the case of by-elections the electoral officer is not compelled to make voters’ rolls available two months before the election, but I think that is an unfortunate omission from the original Act. I think it would have been far better in respect of every election that voters’ rolls should be made available at least two months before the election. If the argument is that it works in a by-election, does it necessarily mean that that is a good precedent for not having the voters’ rolls available in the case of a general election except one month before the election? The Deputy Minister is aware that in a general election it is necessary to have numerous voters’ rolls across the country with a view to cross-referencing and tracing voters and setting up the elaborate machinery for controlling the whole system of postal votes. I contend that it will be virtually impossible to have an intensive campaign for the tracing of voters and to have an effective machine for the registering of postal votes if one has not available in considerable quantities voters’ rolls which are not only correct as far as the names are concerned but also the numbers. Finally. quite apart from the very material problem one has in respect of postal votes and the tracing of voters, I shudder to think of the work which will fall on the party offices in the last month of the campaign if during that last month they are issued with fresh voters’ lists. The hon. gentlemen opposite who have considerable experience in the conduct of election campaigns will realize that it will inevitably involve checking in many cases 16,000 canvass cards against the new voters’ lists in the course of the last four weeks of the campaign. I would ask the Deputy Minister to hold over this clause. He has indicated that it is his intention, if he is still on that side of the House next year, to introduce a Bill which will overhaul the whole machinery for the registration of voters and the mechanization of the voters’ rolls. Let us accept that on the basis of the present machinery the Minister has difficulty in supplying rolls two months before an election. I understand, and most of us on the Select Committee understood, that once the new mechanization process is put into effect we will be able to have voters’ rolls almost at the drop of a hat, and that it will be possible by photographic means to reproduce voters’ rolls whenever they are necessary. Sir, I think of the tremendous amount of inconvenience, the tremendous amount of inaccuracy which will result if voters’ rolls are not made available and I too must support those members who are going to register their protest against this amending Bill.

It is quite clear now that this measure is a general election measure. That is quite clear, particularly from Clause 4 of this Bill which only applies in the case of a general election.

You people want one, don’t you?

I want to deal with the effects of Clause 1 in the case of a general election. Clause 1 says that it is not necessary to have a general registration this year. The result of that will be that certain constituencies in South Africa will have voters’ rolls consisting of 17,000 or 18,000 voters, even though 5,000 or 6,000 of those 17,000/18,000 voters have already left that constituency two years ago. And nobody will be able to do anything to remove those names from the voters’ roll. That can only be done in the case of a general registration. In other words, the hon. the Deputy Minister is preparing for a general election on voters’ rolls which will not contain the names of the voters in that constituency, voters’ rolls that will contain the names of thousands and thousands of absent voters.

Surely there are supplementary registrations, are there not?

The hon. member says there are supplementary registrations. He ought to know. He knows how his party exerts itself and how they try to ensure that voters who leave a border constituency are not registered when they leave that constituency and go to a safe or hopelessly lost constituency. He knows that they do everything in their power to keep as many of their voters as possible on the voters’ roll of those constituencies where it is necessary to have them and in postponing the general registration, a postponement which is provided for in Clause 1, they are ensuring that those people are not removed from the voters’ rolls. It ensures that the names of those people remain on the roll. Furthermore, it has now become clear that in terms of this general election Bill not only will that general election be fought on voters’ rolls that are not up to date, because of Clause 1, but it will be fought on the basis of a delimitation which is completely cut of date, a delimitation which was based on a general registration before the 18-year-olds came on to the voters’ roll. In a constituency such as that of the hon. member for Sunnyside (Mr. Horak), for example, there are more than 2,000 18 and 19-year-old voters. If there is to be a general election that particular constituency will be loaded with thousands more voters than the adjoining constituency.

That has always been the position.

If the election were to take place on the usual date, the Minister will have an opportunity of calling for a delimitation …

Not necessarily.

I said he would have the opportunity; and if he is sincere when he says that he does not want a dirty election, he should do so, because no honest Government will hold an election on the basis of constituencies which are not equally divided. Take the case of Welkom and Odendaalsrus on the goldfields. There were over 35,000 voters in those two constituencies. Take Klerksdorp and Sunnyside, for example, and so I can go on.

I can mention one constituency after the other which is overloaded with voters whereas other constituencies have 8,000 or 9,000 voters. I repeat that if the Government wishes to hold an election on a reasonable and honest basis, they will not force this legislation through in the dying hours of this Session neither will they make it possible for themselves, by means of this legislation, to hold a general election. No, in that case they would carry on in the usual manner and amend the Electoral Act properly next year. After that they will have a delimitation and after that they can call out a general election, an election which will be a true reflection of the wishes of the voters; voters who have been properly divided into proper constituencies. This Bill is a clear attempt on the part of the Government to make it possible for them to have a general election on voters’ rolls that are out of date and on the basis of constituencies that are definitely loaded on an unfair basis. I appeal to the Deputy Minister, who knows what the circumstances are, who knows what the position is, to use his influence and to ensure that South Africa is not again involved in an election year after year and that it will not have to face the consequences that will flow from this Bill before us.

I also want to refer to Clause 3 which provides that the voters’ rolls need not necessarily be available two months prior to an election. The hon. the Deputy Minister said that the main list would be available, but I want to ask him whether, in saying that, he meant that the main list would be printed or whether he merely meant that the main list would be available in typewritten form, because he himself explained that only one copy would be available to each party. In the case of a by-election where all your forces are concentrated on one constituency, it is possible to work with one copy but in the case of a general election you have a central office dealing with postal votes and a local office for the constituency and in that case it is impossible to work with one list at the same time at two different places. That is why I wish to ask the Deputy Minister if the position is that the main list will be available before the time and that this provision only applies to the supplementary lists, whether he will accept an amendment in the Committee Stage to the effect that the main list should be available two months before the time—a printed list—and that only the supplementary list should appear a month before the election. It would be much better to delete this provision completely because we will apparently have mechanization next year, with photographic apparatus which will ensure that every party will receive a sufficient number of voters’ roll before the election. Even though the main voters’ rolls have not yet been printed, the parties will have sufficient copies for their own use. I want to know from the hon. the Minister why he cannot wait for six months or so and why the existing provision of two months cannot remain in force until such time as the Department is in a position to make photographic copies of the voters’ roll available to all parties. I see no reason for any haste as far as this clause is concerned; I see no reason why we should suddenly, towards the end of the Session, pass a temporary measure through this House to reduce that period by half. If there is to be a general election it is even more necessary that we retain this period of two months otherwise the Government will be forcing thousands of people to commit a crime, because according to the application for a postal vote which they have to sign, each voter must certify that he is the person whose name appears on the voters’ roll—his name, number and address. If the voters’ rolls are not yet available, how can that person certify that he is the person who appears on the voters’ list under that number and that name. What will happen, as happens in the case of all parties, is this that those persons will merely sign the form and once the list appears the details will be filled in.

You are giving us ideas.

It is not necessary for me to give that side of the House any ideas as far as that sort of thing is concerned. We are very quick to learn and we are continually learning from them and we have already learnt a great deal from that hon. member. This clause forces a person to commit a crime if he wishes to apply for a postal vote before the voters’ roll are available, because how can he give his number if that list is not as yet in the hands of his party? I want to ask the hon. the Minister to give further consideration to this clause and that he should delete Clause 3 and that this aspect should be raised again next year when we deal with the consolidating measure.

In conclusion I merely wish to say that it is quite clear what the object of this amending Bill is because not a single clause is necessary. Even Clause 5, if the Bill does not go through this Session, will not make a big difference. It will simply mean that a person who is elected unopposed will have to wait three weeks before he can become a Member of Parliament. This clause is not essential, nor is any other provision of this Bill really essential, unless we are to have a general election as against a by-election, and if there is to be such an election before Parliament meets again it will not be an election that has been fought on a fair and just basis because it will have been based on constituencies that do not give a true reflection of the wishes of the people, those people who are divided into 150 constituencies, all more or less equal from a numerical point of view. I hope the Government will not take this step, a step which will do further harm to what remains of their reputation as a democratic. Government; the little reputation that they still have will also be ruined by this legislation.

I am surprised at the Opposition for objecting so strenuously to this little Bill. The Bill practically speaks for itself. We know that a Select Committee was appointed to deal with the legislation that is envisaged and which was to be impossible to introduce this Session. Clause 1 which provides that a general registration is not necessary within three years, is sufficient reason for us to pass this legislation, because if this Bill does not go through it means that there will have to be a general registration before September—just prior to the mechanization of our registration machinery which is envisaged— and that being the position I think to have a general registration this year will simply be to involve the country in tremendous additional expenditure, in view of the fact that we propose introducing legislation next year that will make the position much easier. That is why I regard Clause 1 as sufficient reason for placing this Bill on the Statute Book, apart from all the other reasons that make it necessary that the position should be adapted to our new constitution.

I do not think that the last speaker has made out any improved case at all for the necessity for this Bill. The fact that the new roll, whatever is decided as a result of the findings of the Select Committee, is going to be prepared under mechanized methods, has nothing at all to do with this Bill. When we come to the principle enshrined in the principal Act, the Electoral Act itself, which this Bill seeks to amend, I think it is well to examine that principle as affected by this clause. The main principle underlying the Electoral Act is to ensure that the fairest and the most representative voters’ rolls possible are prepared for use at any election, particularly a general election, in order that all those qualified under the Act have an opportunity of recording their vote in the election.

Giving a true reflection of the will of the people.

Accepting that principle to start with, how can we reconcile a proposal such as that contained in Clause 1 with getting the broadest possible representation of qualified voters in the country, under conditions which must preclude that very thing being done? It has already been said by the hon. member for Durban (Point) (Mr. Raw) that the material changes which have taken place, both in existing delimitation and in the compilation of voters’ rolls on it since the completion of the last general registration and general delimitation is such that in practically every constituency in the Union to-day existing voters’ rolls do not give a true reflection of the qualified voters in. those constituencies, and this Bill won’t help to put it right. The hon. member for Durban (Point) has referred to one big change which has taken place, that is the registration of the 18-year-old and the unbalance that that has caused in the various constituencies with regard to representation. There again it is a break-down of the principle of the original Act. I cannot therefore for the life of me see any justification for the hon. the Minister’s claim that because the Select Committee will not be able to complete its duties, and because we will not be able to carry out a general registration which will lend itself to the mechanized methods to be used in future, that therefore we should postpone what is virtually the compilation of an up-to-date and authentic voters’ roll for the Union, and thus face the possibility of having to use these present rolls in their ineffective state. I think that alone gives us sufficient ground for objection. You see, Sir, there is a necessary time factor which has been laid down and established by the principal Act itself in order to meet these qualifications. The original Act lays down a maximum period of three years. We are now going to get away from that principle altogether in this Bill. Where the principal Act says that the period should not be less than two years nor more than three years, we are now going to alter “three” to “five”. In other words, we are adding two years to the period. Sir, the voters’ rolls are already out of date and I think nobody knows better than the Deputy Minister himself how quickly, under the very best of conditions, a voters’ roll can get out of date and unrepresentative. Now we are going to add a further two years to allow it to become just that much more useless when it comes to be a truly representative voters’ roll of the area.

When we come to Clause 3, which reduces the period from two months to one month, there again I would say with the greatest respect that there is probably no hon. member in this House who knows better than the hon. the Deputy Minister how short the period of two months is to do all that has to be done in order to ensure that everybody has a fair and reasonable chance to exercise his vote. With postal votes and all the other things which have to be dealt with in advance of election week, it is virtually impossible in two months, with the best will in the world, to cover the roll satisfactorily. There has to be a tremendous amount of haste, and as a result of that haste, slipshod methods have to be adopted, as everybody knows, in order to try to get the best we can out of a bad deal. Now we are going to reduce the period still further by one month. By doing so we are getting away from the basic principle underlying the principal Act that we are seeking to amend, and that is another reason why we object to this Bill. The hon. Member for Pinelands (Mr. Eglin) gave a very cogent reason as to why this period of one month won’t do. That is the fact that the new rolls will only become available, as the hon. member for Durban (Point) has already stressed, after the date they would have actually been required in order to start the work connected with postal votes. People will be signing application forms not even knowing if they are going to be on the roll. We all know cases of a person whose name has been on the roll for years and years suddenly finds that his name has disappeared from the roll, and yet they may have signed the form in all good faith. Sir, when the hon. member for Durban (Point) talked about a person signing the form without having filled in the details the hon. member for Karas (Mr. von Moltke) interjected: “Oh, we are learning” Sir, there is nothing they have to learn; they are the teachers. I could quote not one but 50 cases where that practice was indulged in at the referendum. But that is not the sort of thing that we want to encourage by reducing the period from two to one month. The fact that was mentioned by the last speaker, namely that the Select Committee was unable to complete its work and record its decisions in time has nothing at all to do with it. The matter was entirely in the Government’s own hands. They knew that these amendments to the voters’ rolls were wanted. The Government made statements themselves on the need for it immediately after the referendum, and it was therefore the Government’s responsibility to appoint a Select Committee in time to enable it to report this Session, if it was so imperative that the report should be available. I think it is quite wrong now to use that delay as an excuse that the Select Committee has not had time to do its duty and to report. That excuse falls away. As far as mechanization is concerned, I think we all agree in principle that that will be an improvement, but the fact that it is going to be an improvement does not justify us at this stage in doing away with the existing practice and changing the existing law to cope with something which may or may not come about in future. It may not even come about, as was rightly said by one of the hon. members on my left. The Minister may not be in a position, after the election which is foreshadowed here, to implement the Bill. There again we had a very significant interjection from the hon. member for Bloemfontein (East) (Mr. van Rensburg); he said; “You won’t be here to object.” He did not use the word “might” but he made the positive statement …

Order! The hon. member should not take notice of these interjections.

It is very difficult sometimes to ignore them. I feel that there is no justification at all for meeting the claim put forward by the hon. the Deputy Minister in introducing the Bill that it is necessary. There is no reason at all why Parliament should be asked to make the holding of a general election more slip-shod than it was under the old Act by introducing amending legislation at this stage which still further reduces the period of time laid down after years of trial and error and enshrined in the principal Act as the minimum period required for performing these various voting functions. There is only one clause which may be necessary, the clause which gives effect to the slight change which has taken place in the constitution with regard to the tenure of office of members, and even there, what justification have we at this stage for introducing it into this Bill? The only justification for introducing that clause into this Bill is the assumption that the Bill is required, not for the purpose which has been stated here, but because it is intended to cover a general election before the main amendments can take place, and therefore the new constitutional position has to be put right before that election takes place.

I just wish to add one or two comments to what has already been said from this side of the House. I think the main principle behind the Electoral Act, other than those principles outlined by the hon. member for Simonstown (Mr. Gay) is that the principal Act is designed for the purpose of obtaining a true expression of the views of the electorate of South Africa in respect of the Government that they wish to have, and the whole Act hinges on the question of general registrations, because without an effective general registration all the other provisions of the Electoral Act fall away. Sir, what is the hon. the Minister asking for here in effect? In the whole history of our Electoral Act, the position always was, whether under the old system of continuous registration or under the system of a general registration, as exists at present, that before a general election could take place the voters’ rolls had to give a true reflection of the people entitled to express their views as to what form of government they wish to have.

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

I am discussing Clause 1 of this Bill.

The hon. member is discussing it over too wide a field.

I will try to narrow down my argument. The point is that the whole machinery of an election rests on the question of a general registration. I think I am correct in saying that we have never held an election without having had a general registration before that election, even on the old principle of continuous registration. The effect of this amendment as it now reads, if accepted by the House, is that this Government can go to the country even within a period of five years without having a general registration.

Order! That point has been made over and over again.

Sir, I am discussing the period of five years. I am not discussing whether we are going to have an election this year or next year. My contention is that the life of the Government can normally expire in terms of our normal law and the Government will still be able to go to the country without having a general registration, if this provision as it stands at the moment is accepted by the House. Is it right that we should place such an amendment on our Statute Book, because the effect of it may be that we may not get a true expression of the wishes of the electorate, because I am sure the Minister will agree that with the number of registered voters that we have in particular constituencies …

Order! The hon. member is going too far again. He must come back to the provisions of the Bill.

The point I am trying to make is that the purpose of a general registration is to place on the voters’ roll the names of qualified voters in any particular constituency. The Minister is seeking here to extend the period within which a general registration must take place, because in terms of the Act as it now reads, a general registration must take place not less than two years and not more than three years …

Order! That point has been made and made very effectively by every previous speaker.

I am approaching it from quite a different angle, Sir. I am putting it to the Minister that the present rolls in no way indicate the normal balance that will exist from constituency to constituency, if a general registration had to take place in terms of the Act as it reads at the present time, and what we are doing here by agreeing to this provision is to perpetuate a position where the voters’ rolls will not really give a true reflection of public opinion at an election. That is what we are being asked to agree to.

Order! The hon. member is not only repeating his own arguments over and over again, but he is also repeating the arguments advanced by previous speakers.

Well, having made that point I will leave that clause.

I hope the hon. member will come back to the provisions of the Bill.

I am now coming to Clause 2. This is an amendment to Section 15 of the original Act in regard to supplementary lists, and 3 (b) deals with the preparation of supplementary lists, and as it stands at the moment, as I understand the position in terms of the clause as it is now, there is a compulsive power that supplementary lists must be made available before the date of a general election. Now, Sir, there are several supplementary registrations from the time of a general registration and in terms of the second proviso to Section 3,—and I would like the Minister’s correction here, because I am trying to follow the meaning—it would appear to me that there is a discretionary power as to whether a supplementary list must be printed with the original list upon which an election will take place, or whether there should be completely supplementary lists. I really cannot see the reason for the inclusion of the discretionary power here if the permissive power already exists in the second proviso of 3 (b). I may tell the hon. the Minister that I took the opportunity to discuss this with his department, and it would appear from what I was told that that permissive power already exists in regard to the printing of a supplementary roll. Hon. members know that never at any time from the time of a roll becoming available to the time of a general election when there have been three or four supplementary registrations, have we had a combined supplementary list rather than the list in respect of the last supplementary registration that has taken place. The roll has always been a consolidated printed roll, with the one exception that you have the supplementary list for the last supplementary registration preceding the date of the general election. For the life of me, trying to understand the reason for this permissive power that the Minister now seeks, I cannot see the object, because he appears to hold it in the second proviso that exists under the section at the present time. I would be glad if the hon. the Minister could clarify the reasons for the inclusion of this permissive power now.

Finally, I wish to also raise another objection to the provision that is now sought to be included in Clause 3 of the Bill that the voters’ list should be printed at least one month before a general election. It is quite obvious that in terms of normal practice, the normal conduct of an election, this is not to the advantage of the Government’s side or the Opposition side, it is to the disadvantage of every single member of this House who fights an election, to have a printed roll made available just one month before the date of an election, because it is obviously impossible under these conditions to effectively conduct an election, to effectively contact the voters in an area, to effectively bring together those who want to vote by post. All the mechanics of an election becomes virtually impossible under such a short restricted period, and I would join with other hon. members who have pleaded that the Minister should give consideration to the withdrawal of this particular Bill. There is no reason why the last practice should not stand as it is at the present time. Leave the position as it is at the present time that lists is made available two months before the date of a general election.

Just as hon. members have advanced the argument that the effect of this Bill will be that we will be landed with an inaccurate list, a list which has not been brought up to date by way of a general registration, I can similarly argue that by postponing the general registration this year by means of this Bill and introducing mechanization at a later stage, I am seeing to it that the general registration takes place on a date closer to the date on which this Parliament will normally be dissolved, and that I am seeing to it that there is an accurate list as close to the natural and of this Parliament as possible. That was the argument which I used at the outset namely that it was not our intention to have a general election at a time when it was impracticable to have it and that a general registration would be preceded by a system of mechanization. I stated that very clearly when I introduced the measure, and it brings us much closer to the general election in 1963, where we would otherwise have had to work with an obsolete voters’ roll which would be undesirable, as hon. members themselves have said. The hon. member for Durban (Point) (Mr. Raw) raised another point namely this: He said this was a general election measure. But every measure that you introduce concerning the Electoral Act, or any amendment of that Act. is an election measure, because that is the purpose of the Act. What the hon. member forgets is this: He suggests that it is the intention of the Government to avoid a delimitation. Where does he get that idea from? Because the fact of the matter is that it was not the present Government who made it possible to have a re-delimitation after five years, but it was the Government of the hon. member who introduced the Bill which made it possible to have a delimitation every ten years. Providing for that was it the intention of his Government to go to the country where the results in the various constituencies would not be a true reflection of the will of the people?

Do you admit that it is unfair?

That is not the point. The hon. member accused this Government of wanting to fight an election on an unfair basis, but it was his Government who introduced that Bill. I do not know why the hon. member is accusing his own people, because this Bill has nothing whatsoever to do with delimination. If he wants to blame anybody he must blame his own Government. The hon. member raised another point. He said that people who wanted to vote through the post would be committing a serious crime because they would not be sure whether their names appeared on the list. But a printed voters’ list does not legalize the fact that your name appears on the list. When a list comes into force on a specific date, and your name appears on that list, only then does your name appear lawfully on that list. The printed voters’ roll is merely a printed copy of a list which has already become lawful. What happens to his argument now?

If the list is not available?

But naturally when a list comes into force it is available.

One.

Whether it is one or two printed voters’ rolls, does not alter its lawfulness one iota, and that was the point made by the hon. member. Hon. members also asked this question: Why suddenly this provision to print the supplementary lists separately? But this is a repetition of what has been done throughout the years. Nothing further is envisaged in this measure than to legalize something that has been done all the time, because it was doubtful whether we could do what we wanted to do in future and what we have always done in the past. We are not departing from the usual custom. We will be acting exactly the same way as we have been acting in the past. We are only doing this in order to remove any doubt and to make it 100 per cent legal. I sincerely trust that hon. members do not object to that. An objection has also been raised against the provision that it should be one month. We are changing the period from two months to one month. But the fact is that it has never yet happened that the voters’ lists have been available precisely two months prior to an election. The danger has always existed —not only in the case of this Government but in the case of previous Governments as well— that as a result of a court action you may be prevented from continuing with your operations, because it has never been possible for the electoral divisions to comply strictly with the provisions of the law. We maintain that an impossible procedure has been prescribed in the past and all we are doing is to reduce the period. I want to remind the hon. member for Simonstown (Mr. Gay) that the same complaints was raised last year when we dealt with the Referendum Bill where we went much further because in that case that period was left to the discretion of the Minister. And yet not a single member can contend that the lists were not available timeously. All the lists were available timeously. All we are doing here is to place the administrative body, the electoral division, in a position to act within the provisions of the law. The hon. member for Turffontein (Mr. Durrant) quite rightly said that this measure did not affect only one side of this House adversely. If the Government were so stupid as to have the voters’ rolls printed at the very last minute, it would also suffer, because it cannot benefit itself alone as far as this is concerned without notifying all the other parties of what it is doing. So everybody is affected equally, and it would be a stupid Government that placed its own political machinery in a difficult position because of its own legal measures. It is simply to make the machinery operate more smoothly and that is why all these provisions are included in the proposed legislation which is before the Select Committee. Now suddenly we are told that this is an election measure. I do not know whether there will be an election, just as little as hon. members know. But it would be a stupid Department and a stupid electoral division that did not improve its machinery wherever it could. That is why we are doing this. It is a pity that the other legislation could not have gone through but hon. members know what the reasons are. We are now taking these steps which are so obviously necessary that there should not be any opposition to them. Hon. members themselves have even said that as far as two or three clauses were concerned they quite agreed that they were necessary, and that no objection could be raised to them. In that case why do they discuss them?

Delete 1 and 3 and we will be satisfied with the Bill.

If hon. members want to have an accurate voters’ roll, they will agree that there should be a general registration, with subsequent mechanization, as close as possible to the next general election in 1963.

Motion put and the House divided:

Ayes—67: Badenhorst, F. H.; Bekker, H. T. van G.; Bekker, M. J. H.; Bootha, L. J. C.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Coetzee, P. J.; de Villiers, C. V.; de Villiers, J. D.; du Pisanie, J.; du Piessis, P. W.; Fouché, J. J. (Jr.); Froneman, G. F. van L.; Greyling, J. C.; Grobler, M. S. F.; Hertzog, A.; Heystek, J.; Jonker, A. H.; Kotze, G. P.; Kotzé, S. F.; le Riche, R.; Luttig, H. G.; Malan, A. I.; Malan, W. C.; Marais, J. A.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Mulder, C. P.; Muller, S. L.; Nel, J. A. F.; Nel, M. D. C. de W.; Niemand, F. J.; Otto, J. C.; Pelser, P. C.; Potgieter, J. E.; Sadie, N. C. van R.; Sauer, P. O.; Schlebusch, J. A.; Schoeman, J. C. B.; Schoonbee, J. F.; Smit, H. H.; Stander, A. H.; Steyn, J. H.; Strydom, G. H. F.; Treurnicht, N. F.; van den Berg, M. J.; van den Heever, D. J. G.; van der Ahee, H. H.; van der Merwe, J. A.; van der Merwe, P. S.; van der Walt, B. J.; van Eeden, F. J.; van Nierop, P. J.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; Venter, M. J. de la R.; Venter, W. L. D. M.; Verwoerd, H. F.; Visse, J. H.; Vorster, B. J.; Vosloo, A. H.

Tellers: W. H. Faurie and J. von S. von Moltke.

Noes—37: Barnett, C.; Basson, J. A. L.; Cope, J. P.; de Beer, Z. I.; Dodds, P. R.; Durrant, R. B.; Eglin, C. W.; Fisher, E. L.; Fourie, I. S.; Gay, L. C.; Graaff, de V.; Higgerty, J. W.; Holland, M. W.; Horak, J. L.; Hughes, T. G.; Lawrence, H. G.; le Roux, G. S. P.; Lewis, H.; Malan, E. G.; Miller, H.; Mitchell, D. E.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Steyn, S. J. M.; Streicher, D. M.; Swart, H. G.; Swart, R. A. F.; Tucker, H.; van Ryneveld, C. B.; Warren, C. M.; Waterson, S. F.; Williams, T. O.

Tellers: H. C. de Kock and A. Hopewell.

Motion accordingly agreed to.

Bill read a second time.

I move—

That the House do now resolve itself into Committee on the Bill and that Mr. Speaker leave the Chair.

More than two members having objected, House to go into Committee on the Bill on 27 June.

I wish to move the following amendment—

1. (a) by the substitution in the definition of “board” for the words “National Welfare Organizations Board” of the words “ National Welfare Board”;.

I am moving this amendment in order to give effect to a request which I have received from the Welfare Organization after the Bill was drafted, a request to change their name from “National Welfare Organizations Board” to “National Welfare Board”. I undertook to comply with that request.

Amendment put and agreed to.

Clause, as amended, put and agreed to.

On Clause 2,

I wish to move the following amendment—

1. (a) by the substitution in sub-section (1) for the words “National Welfare Organizations Board” of the words “National Welfare Board”;.

Amendment put and agreed to.

Clauses, as amended, put and agreed to.

On Clause 3,

I move—

I do so for the reason that I think that it is too much to expect us to wait five years for a report from the National Board. It virtually means that there is a possibility that even the Minister may not see that report because if the National Board comes into existence at the beginning of a term of Parliament, it is possible that Parliament may dissolve itself before the report reaches the Minister. If we have to wait before the National Board forwards its report to the Minister, it means that there is a possibility that it may go up to six or seven years before the Minister sees that report, because it will take a certain time to prepare the report for the Minister. The Minister after seeing the report will then Table the report for hon. members to see it, and I think we who are interested in welfare work should have an opportunity of perusing the report in case there is a dissolution of Parliament and if we have got to wait the whole five years, it means that the people who are interested in welfare work may not be in Parliament when the report is Tabled. Now I am asking the hon. the Minister for two reports during the period of five years, firstly because then the hon. the Minister will be able to keep his eye on the National Board, and will know what is going on, because otherwise he only sees at the end of that term of office. Secondly the people who are associated with welfare work will be able to see at a glance which organizations are playing a part in welfare work and they will also be able to go through the individual reports each year where they will see the list of welfare organizations. Again those interested in welfare work will have an opportunity of seeing which organizations have been refused permission to work in one category or another of welfare work. I think also hon. members themselves would like to have an opportunity of knowing for what purposes certain organizations have been banned and have not been allowed to carry on welfare work. As we heard from the hon. the Minister himself, he feels that even though the National Board may find it permissable for certain organizations to do work he will be able to stop that. We would like to know why, and the only opportunity we will have of knowing that is when the reports are Tabled. Then we can see what the Minister’s intentions are and what he has done during the years between the establishment of an organization and the report that is Tabled. There is nothing really contentious about it. It will make for smoother working and I do not think it will add a great deal of the work to the National Board. They are only going to be asked to present two reports during their term of office of five years. It virtually means that we will have two reports in seven years instead of one in five.

I support the amendment of the hon. member for Rosettenville (Dr. Fisher). I feel that in spite of the facts that reports are Tabled from time to time in this House in connection with the functions of the National Welfare Organization Board, the additional information that is provided in these reports is of immense value to members of this House. I realize that a number of the statistical returns as shown in this report are published in the Government Gazette. How, ever, I believe that in the field of co-ordination of welfare organization services, it is not an unreasonable request to ask that their reports should be presented at least twice during their term of office during the five years, because some of the important surveys that are being carried out by the Board, are of immense interest to all of those who are interested in welfare work, such as the co-ordination of social welfare services, the shortage of social welfare workers, social welfare work amongst the Bantu, the division between the Department of Social Welfare and the voluntary organizations. We have seen from previous reports investigations in regard to this work and the part played by local authorities in connection with welfare work, and also other interesting information in connection with the effects of the re-organization of the field services, and I feel that it does give members an opportunity to study the entire functions of the Welfare Board and its effect on the important task of the co-ordination of welfare work amongst voluntary organizations in relation to the Department of Social Welfare and the Minister.

As far as I personally am concerned I would very much have liked to accept the amendment of the hon. member for Rosettenville (Dr. Fisher) because I personally think it is very reasonable. Since the hon. member spoke during the second reading debate I have gone to the trouble of specially telephoning Pretoria and speaking with the chairman of the Welfare Organizations Board. I stated the case of the hon. member for Rosettenville and once again the chairman assured me, as he has done on a previous occasion, that it was the unanimous request and desire of the Welfare Organizations Board, the Welfare Board in future, that this provision should not apply to them. They feel that it hampers their work to do so every year. They feel that in terms of the 1947 Act they are an advisory board to the Minister and they want to submit a detailed report and the end of each term of office. We must remember that this is a voluntary organization. Everybody who served on that board gives his time and attention to this work on a voluntary basis. They receive no remuneration for their work. They unanimously request that they should not be required to submit a report. Would it be fair and reasonable to force them to do so seeing they are asking us to be relieved of this provision for reasons which they regard as very good. Notice is given in the Government Gazette, it receives great publicity, not only in respect of their public activities, but in respect of every step they take affecting any organization and any resolution that they pass in that connection. The general information to which the hon. member for Umbilo quite rightly referred is contained in the department’s own annual report. If hon. members feel, for example, that it does not contain sufficient information or if they feel that information which is now omitted should be included, I would be only too willing to meet hon. members and to instruct the department to include such information in the annual report of the department. Hon. members must realize, therefore, that it is not due to unwillingness on my part. Had the matter rested with me, I would have been only too willing to accede to the request of hon. members.

I just want to reply to the final argument advanced by the hon. member. The Minister is and will continue to be fully informed, because the Minister himself attends the meetings of the Welfare Board and if the Minister cannot be present in person, an official of the department attends those meetings. So the Minister is always well informed about everything that transpires because it is the task and function of those people to advise the Minister. For the rest the department is continually in close touch with that board. For these reasons I shall be pleased if hon. members will not insist on this amendment; I hope they will appreciate my difficulty in this connection. I went out of my way to get in touch with the chairman to see whether I could make a change.

Amendment put and negatived.

Clause, as printed, put and agreed to.

On Clause 6,

There is just one small matter here. Authority is given in terms of Clause 6 (1) to collect these contributions. There is a possibility that while collections have to cease either 90 or 180 days after the granting of permission, funds still may be in hand. Sub-section (5) authorizes the board to deal with any surpluses after the object has been achieved. But the object may not have been achieved at the end of 180 days or 90 whatever the case may be. Sub-section (6) gives the Minister authority in terms of Section 22 to deal with these surpluses. But Section 22 deals with contributions unlawfully collected. Is the hon. the Deputy Minister satisfied that from the legal point or view he will be entitled to exercise power under Section 22 in those circumstances. We have been rather rushed recently and I have had two different opinions on this matter, from lawyers in this House, as to whether the hon. the Deputy Minister will have the power under that Section 22 to act as he wants to.

Yes, that will be in order.

Clause 6 is a very important clause as it is an entirely new clause and will replace Section 8 of the principal Act. I appreciate that it was necessary to repeal Section 8 and to introduce this new section. I have, standing in my name on the Order Paper on page 806, an amendment which is very similar to the amendment placed on the Order Paper by the hon. the Deputy Minister in connection with the consultation that the officers should have with the chairman of any regional welfare board before granting a temporary authority. I would be grateful if the hon. the Minister could tell me whether or not he intends moving his amendment?

Mr. Chairman, I have considered the amendment moved by the hon. member and I found that there was substance in his amendment, and I therefore decided to accept it in principle. I discussed the matter with the law advisers who have proposed a different wording to the same amendment in order to make it fit in with the rest of the clause, but the hon. member will appreciate that the substance of my amendment is the same as in his amendment. After hon. members have discussed this clause I shall formally move my amendment. The hon. member need not labour his point because, as I have said, my amendment is the same as his. It was drafted after the hon. member gave notice of his amendment and the wording is slightly different.

In the circumstances I do not propose to move my amendment. I am very grateful to the hon. the Minister for accepting the position and for moving an amendment which will meet my request to him. However, I do wish to move the other portion of my amendment and that is—

Sub-section (7) (a) reads as follows—

The objection to this sub-section is consistent with the argument that we put forward during the second reading debate. I do not wish to repeat that argument, but I should like to say in support of my amendment, that it does appear to be a rather bureaucratic provision because there is a very wide interpretation that can be given to the wording of this sub-section. For instance, it states that the Minister may “at any time on any ground” take certain action. I think there is cause for concern in this because the words “on any ground” can lend themselves to a very wide interpretation. My fear is that it could be possible for a temporary authority to be cancelled on any ground, and that ground could be quite irrelevant to the granting of that temporary authority. I therefore feel that we are permitting a very wide interpretation to be placed on the wording of this clause.

Sub-section (7) (b) reads—

Now by moving the deletion of this portion of sub-section (7) it will mean that the person would be able to be heard should such cancellation be instituted. Provision is made in sub-sections (3) (a) and (3) (b) giving persons who have been granted such temporary authority the right to be heard should that cancellation come about due to the action of the prescribed officer appointed by the Minister to grant such temporary authority. But if the Minister should intervene and cancel that temporary authority the persons concerned will not be entitled to be heard or to put their case. I feel that in the circumstances this is not a wise step. because I believe that these people should be given that right to state their case should such cancellation come about. In terms of the powers that are to be delegated to this officer, one can only assume that it will be a senior officer of the department. He will have considerable powers. He will be allowed to impose his own conditions and, at the same time, this is consistent with the Minister’s attitude that he. the Minister should dictate policy on these matters as they arise. We have no objection to the provision whereby temporary authority will be granted subject to the directions of the Minister, but this side of the House does feel that these very wide terms in sub-section (7) of this clause should be deleted.

I move as an amendment—

(b) Whenever the said officer proposes to cancel an authority granted under this section, he shall by notice in writing inform the person or group of persons or the welfare organization in question of his intention, and he shall give an opportunity for oral and/or written evidence to be presented by the person or group of persons or organization within a period which he shall prescribe, but which shall not be less than 14 days.

I have three observations to make on this clause. In the first place I want to support very strongly the amendment which has been moved by the hon. member for Durban (Umbilo) (Mr. Oldfield) in regard to the proposed sub-section (7). We regard the powers contained herein as being far too wide and as virtually bestowing on the Minister powers which ought to reside in some board or in some organization which is there because it is skilled in welfare work. I know that in the second reading debate the hon. the Deputy Minister contended very modestly that this greatness is being thrust upon him by the board itself, but that does not alter our view, that these powers ought not to be put in the hands of the Minister.

That is a temporary permit.

Yes I realize that. The hon. member for Durban (Umbilo) has described the powers given to the Minister under sub-section (7) was being unduly bureaucratic. I would say that that is putting it mildly, I think we can describe these powers as being highly autocratic, and we shall support the hon. the member’s amendment.

I myself, not being of a particularly optimistic frame of mind, and not having anticipated that the hon. the Minister would accept the amendment moved by the hon. member for Durban (Umbilo), have moved an amendment which goes a very much lesser distance in the same direction on sub-section (3) of this clause. What I have proposed is simply that instead of the existing sub-section (3) (b), which leaves it entirely in the hands of the responsible officer to decide what sort of representations an organization may be allowed to make in its own defence, I have moved an amendment suggesting a certain minimum opportunity that ought to be given to an organization to defend itself.

I accept that principle and I will give effect to it in an amendment.

I am most grateful to learn from the hon. the Deputy Minister that he proposes to accept that, and in that case I shall withdraw my amendment.

My final observation on this clause concerns sub-section (5). It appears that it concerns what the hon. member for Benoni (Mr. Ross) referred to, that is, the question of the Minister’s powers when he is of opinion that the organization concerned has achieved its object. I do not have the sentence in front of me, but it does occur to the effect “when a temporary organization has been judged to have achieved its object”. I am very worried about the application of this in practice. I do not object to it in principle. If for example, you have an organization for flood relief in a particular area which has applied for a temporary permit, how is it possible to know when this organization has achieved its object? Perhaps when the hon. the Deputy Minister replies he will give me an idea as to how he proposes to go to work in this connection. It seems to me that in that sort of charitable work, and indeed in many other sorts that one can think of, you are likely to have all kinds of claims coming in for a long time afterwards, and it is going to be very difficult indeed to know when an organization has raised enough money for a particular purpose.

With leave of the Committee the amendment proposed by Dr. de Beer was withdrawn.

I want to start with the last question put to me by the hon. member. Under the old Act an organization could get a temporary permit to collect for 90 days. We now go further and we say that it may get a temporary permit to collect for 90 days, but that the permit may be extended for a further 90 days, which was not the case under the old Act. That does not mean that the organization must do all its work within the period of 180 days, as the hon. member for Benoni (Mr. Ross) has said. It can take a year or two years, but it only gets a permit to collect for 180 days—90 days under the old Act and 180 days under this Bill. It is only at a later stage, and not after the 180 days, that the board comes into the picture. As hon. members would have noticed, sub-clause (5) deals with the authority of the board to decide what to do with the money and (6) deals with the authority of the Minister. The difference is that the Minister has no authority to decide how the money which has been lawfully collected should be spent. That power vests in the board. The Minister only has power over money which has been unlawfully collected. In that case the board has no say, because it was an illegal transaction. The board only comes into the picture where money has been collected lawfully and the Minister has no say over that money. The board controls that money.

The hon. member has moved an amendment. I have considered it and, as I indicated by way of an interjection, like the hon. member for Umbilo (Mr. Oldfield), I think it is a reasonable amendment. I have submitted it to the law advisers, and they have re-drafted it as it now appears on the Order Paper. I will move it formally within a minute.

As far as the attitude of the hon. member for Umbilo towards (7) is concerned, it is quite right that powers are being conferred on the Minister. But these powers are merely being sought as a result of our past experience. In 99.9 per cent cases these temporary permits are not issued to existing organizations but they are issued either to individuals or to mushroom organizations which have been established for an ad hoc purpose. We had practical experience of this in respect of the Clydesdale disaster and in respect of the floods where a whole area was involved; or something happens that rouses the sympathy of a great number of people. You have the position that a half a dozen or more people in various towns apply to the magistrate for permits, but it appears that the scope of the disaster is such that a national fund has to be established, as happened in the case of Clydesdale, and in the case of the Karoo floods, and also in the case of the Natal floods. But hon. members know how stubborn some people are. We have cases where national funds are established, but you get the odd man who says: No, I am not co-operating with the national fund, I am working on my own. Those are the people that we want to get at. You will realize, Sir. that when a national fund is established and A and B say they are not going to co-operate with that fund but that they are going to work independently, the whole system gets disorganized. You have, for example, a magistrate here at Wellington. He has no control over the person at Worcester; nor can he deal or consult with the man at Loxton. In that case the easiest way out is for the Minister to say to A and B: You either work in co-operation with the national fund or I cancel your permit. That is the sole purpose. We considered these points very thoroughly before we inserted this clause. Hon. members can take it from me that it will only be applied in exceptional cases and that the Minister will only take action as far as that is concerned in cases where speed is essential. The National Board went very thoroughly into this aspect of the matter and they decided that it was necessary to do it this way.

Mr. Chairman, you will notice that I have two amendments to Clause 6. My first amendment embraces those of the hon. member for Umbilo and the hon. member for Maitland (Dr. de Beer). There is a further amendment on the Order Paper as hon. members would have noticed, which refers to page 4 of the Bill. And I therefore move—

As the clause reads at the moment, hon. members will notice that it provides that—

This amendment is merely to delete those words. Hon. members will appreciate why it is necessary to do so. If an official wants to act, and he has to act, it means, in the case of a fund which affects the whole Cape Province, that he has to consult every magistrate from Cape Town to Calvinia, for example. In practice that would be impossible. Or if the fund has a bearing on the whole Union he has to consult every Native Commissioner and that too would defeat the whole purpose. Hence this amendment.

I should like to ask the hon. the Deputy Minister one question before this matter goes forward. I am still worried about the end of the period of 90 and 180 days. I think the hon. the Minister should have the right to demand registration at the end of that period if there is still money in hand. But does he have that right in terms of the Act? I cannot see where the hon. the Minister gets that control, after the 90 days or the 180 days have expired and there are still funds in hand to be utilized for the object for which the funds were collected. I would suggest that the Minister should have the right to demand that this organization becomes registered under the Act if its objects carry on, otherwise it seems to me that there will be a loophole in the Act.

Mr. Chairman, I canvassed this position very fully. There is no loophole. It boils down to this, that the organization concerned is granted a temporary permit. The officer issuing that temporary permit immediately notified the National Council, so that they know all about this organization; they know the objects and the aims of this organization. Now the organization has the authority to collect for 90 days. They can obtain an extension of another 90 days from the relevant officer, giving them a total of 180 days. Then they carry on with the objects of the association. The National Council has the authority to inquire from time to time what the position is and, what is more, under this Act, for the first time, they are authorized to do that. In terms of the old Act they have no authority whatsoever to demand statements of account from these people. The National Council can now—and not the Minister—if it is money lawfully collected in terms of this clause, ask the organization to render accounts, and they can inspect their books in the usual way, just as they do in other cases. It stands to reason that this organization can also ask to be registered if they so wish, if they want to carry on with this work permanently. But I do not think that we should force them to do so.

I did not have that in mind.

I want to thank the hon. the Minister for having accepted most of my amendment. I want to add that I am satisfied with the explanation given in respect of the powers of the board under sub-clause (5). As far as (7) is concerned—the most contentious clause—I realize what the difficulty is, as the hon the Deputy Minister has explained to us, the difficulty where local organizations and a national organization collect money for the same purpose. I think, though, that the hon. the Deputy Minister will admit that the powers which this sub-clause seeks to confer may very well also be exercised in totally different circumstances, as, for example, for political purposes and that sort of thing. I readily accept that the object of the Deputy Minister is as he has explained but it remains the duty of an Opposition to guard against the granting of powers which may perhaps be abused. Had it perhaps been possible to prescribe the circumstances under which the Minister may exercise this power, I may have been persuaded to support the clause. But the width of its scope as it stands at the moment, compels me to oppose it.

I appreciate the attitude of the hon. member. On the other hand the position is as he has stated and I do not want him to have any illusions about that. If, for example, an organization is registered under this clause for a laudable and praiseworthy welfare purpose and it appears at a later stage that this praiseworthy purpose is merely to camouflage an entirely different objective of the organization, I would be neglecting my duty, as I said in my second reading speech, if I did not take action under this clause. In that case I would have to account to hon. members of this House for my actions. But that is not our main reason why we have inserted this provision but because of the practical difficulties which we have encountered in the past. As the clause reads at the moment we can kill two birds with one stone.

Amendments proposed by the Deputy Minister of Social Welfare and Pensions put and agreed to.

Question put: That sub-section (7), proposed to be omitted, stand part of the clause, Upon which the Committee divided:

Ayes—68: Badenhorst, F. H.; Bekker, H. T. van G.; Bekker, M. J. H.; Bootha, L. J. C.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Coetzee, P. J.; de Villiers, C. V.; de Villiers, J. D.; du Pisanie, J.; du Plessis, P. W.; Fouché, J. J. (Jr.); Froneman, G. F. van L.; Greyling, J. C.; Grobler, M. S. F.; Hertzog, A.; Heystek, J.; Jonker, A. H.; Kotze, G. P.; Kotzé, S. F.; Luttig, H. G.; Malan, W. C.; Marais, J. A.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Mulder, C. P.; Muller, S. L.; Nel, J. A. F.; Nel, M. D. C. de W.; Niemand, F. J.; Otto, J. C.; Pelser, P. C.; Potgieter, J. E.; Sadie, N. C. van R.; Sauer, P. O.; Schlebusch, J. A.; Schoeman, J. C. B.; Schoonbee, J. F.; Smit, H. H.; Stander, A. H.; Steyn, J. H.; Strydom, G. H. F.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, G. P.; van den Berg, M. J.; van den Heever, D. J. G.; van der Ahee, H. H.; van der Merwe, J. A.; van der Merwe, P. S.; van der Walt, B. J.; van Eeden, F. J.; van Nierop, P. J.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; Venter, M. J. de la R.; Venter, W. L. D. M.; Verwoerd, H. F.; Visse, J. H.; Vorster, B. J.; Vosloo, A. H.; Webster, A.

Tellers: W. H. Faurie and J. von S. von Moltke.

Noes—31: Basson, J. A. L.; Bowker, T. B.; Bronkhorst, H. J.; Cope, J. P.; de Beer, Z. J.; Dodds, P. R.; Durrant, R. B.; Eaton, N. G.; Eglin, C. W.; Fisher, E. L.; Gay, L. C.; Holland, M. W.; Horak, J. L.; Hughes, T. G.; le Roux, G. S. P.; Lewis, H.; Malan, E. G.; Miller, H.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Steyn, S. J. M.; Streicher, D. M.; van Ryneveld, C. B.; Warren, C. M.; Waterson, S. F.; Williams, T. O.

Tellers: H. C. de Kock and A. Hopewell.

Question accordingly affirmed and the amendment proposed by Mr. Oldfield negatived.

Clause, as amended, put and agreed to.

On Clause 7,

The amendment standing in my name asks for the deletion of the second proviso to paragraph 7 (c) and I wish to move that amendment—

First of all, the clause itself introduces a new thought into the Act, and that is that where an application is made by a welfare organization for registration, notice of such application shall be published in the Gazette and anyone who wishes to lodge an objection has the right to do so. Then the second proviso in (c) is a rather strange one. It states that if any objection to the granting of the application is lodged the board shall not grant the application, except with the consent of the Minister. The way it reads it would appear that any objection would include an objection which is frivolous. There seems to be no limitation to the word “objection”, which would guide the board. Without being particularly critical I would like to ask the Deputy Minister to explain why this proviso has been inserted. What is the objective he wishes to ensure? It seems rather extraordinary to have such a proviso. It would limit the board immediately, even in considering the matter, because, assuming that they were satisfied to grant the application, they could not do so because there was an objection, irrespective of its weightiness or frivolity. It would then have to be submitted to the Minister for his consent. If the Deputy Minister would explain that it might avoid further argument.

The hon. member has raised an important aspect. This is a matter which I discussed very thoroughly with the chairman of the board in the first instance and after the second reading I again discussed it with him over the telephone and the board has good reasons—and I agree with them—for saying that it should be like that.

Hon. members should, in the first place, view this against the background which I sketched during the second reading, namely, that there were 2,000 welfare organizations, and that there was hardly a field of social welfare work that was not completely covered by one or other organization. That was why the board felt at liberty to come to us and to ask us to freeze the position for the time being and that if a new body wished to enter the field, it should conform with the formality of giving notice of its intention to apply for registration so that existing organizations could lodge their objections if they did not want such organization to be registered. Hon. members will realize that if all the members of the National Board agree that the organization should be registered, it gets registered and that is the end of it. But if anybody objects or if an organization who has a representative on the board objects, they do not want to be judge in their own cause and that was why they felt that, in such a case, it should be referred to the Minister.

There is another reason why it should be referred to the Minister, namely, that the principle which applies here is that the Minister, through his Department, is the person who lays down the policy in respect of welfare work. He is, therefore, in a better position to judge how it fits into the whole framework. If an investigation has to be conducted to ascertain where there is any foundation in the objection, the Minister is in a far better position to conduct such an investigation. If it is, as my hon. friend has called it, a “frivolous objection” the board will refer it to the Minister and tell him that they do not think there is any substance in it and in that case it would be stupid on the part of the Minister not to follow their advice. But on the other hand, if there is substance in the objection, it would likewise be stupid on his part if he did not institute a thorough inquiry before coming to a decision, because the responsibility rests with him and he has to give an account of himself to this House if he has acted unlawfully. Subject to further questions that may be put to me, I believe, that that explains why this clause reads as it does.

I either did not fully understand what the Deputy Minister has just said, or he has not as yet given the explanation which I want in respect of these two provisos in (c). In this case I am not objecting to it that where an objection has been lodged to an application the final decision should rest with the Minister. What I find strange is this: An organization applies for registration. An objection is lodged. The objection is considered by the board and the board is fully entitled to refuse the application, but it has no power to grant the application, unless it has been submitted to the Minister. Had the clause provided that if there is no objection the board must inform the Minister of its decision, so that the Minister will immediately come into the picture if there is an objection, I would have understood the position. But the strange thing is that if the board decides in one direction it need not consult the Minister, but if it decides in the other direction it has to refer it to the Minister.

Yes, if there is no objection.

No, even if there is an objection the board may not grant the application, except with the approval of the Minister. It may, therefore, refuse it without the approval of the Minister but it may not grant it, and that, to me. Sir, is somewhat illogical. [Interjections.] Yes, perhaps it should be changed to “grant or refuse”. The law advisers could possibly decide. Where there is an objection the Minister is called in, that I understand, but you may have the position where the Minister knows that a group of people intend applying for registration and the board does not want that organization to be registered. All they need do is to see to it that one person objects and in that case the board cannot grant the application without the consent of the Minister. It would be much better if there were consultation with the Minister in any event, but the position is unbalanced as provided for here. You must also remember that there are people who are interested in welfare work and you find hostility between individuals who are interested in social welfare in the same field and there may often be an objection to the registration of an organization based on purely personal hostility, a frivolous objection. It is now provided that when that happens the matter must be referred to the Minister. I foresee that this will cast a heavy burden on the Minister, a burden which will flow from frivolous objections.

There are very few applications for registration because there is a sufficient number already.

If the Minister cannot accept the amendment of the hon. member for Bezuidenhout (Mr. Miller) I shall be glad if he would give us the assurance that he would consider the wording in the Other Place.

I have a further amendment on the Order Paper, namely, that the proposed sub-paragraph (v) be deleted. This is an important amendment. This is an amendment to Section 9 of the principal Act where the grounds are given on which the board may refuse an application for registration. Three grounds are laid down in Section 8, namely, if the organization is not bona fide, if it operates under the wrong name, if in terms of its constitution it does not comply with all the requirements of the law and various other reasons. It is now suggested to add two further reasons why an application should be refused. I have no objection to (iv), namely, if the objects and area of operation coincide with those of an existing organization. The Minister has already referred to (v) during the second reading, namely, that the application may be refused because the welfare activities of the organization, which in essence is not a welfare organization, are merely ancillary to its ordinary activities, such as a sports club which may have a welfare fund incidental to its activities. [Interjections.] I foresee that cases may arise where it would be unwise to grant an application for registration to such an organization but I also know of many organizations which from time to time perform important social work whereas normally it is concerned with other matters. When we look at all the various grounds on which registration may be refused, I wonder whether we will encounter all the difficulties which the Minister expects. I think it is going too far to provide that registration may be refused because in respect of its constitution or management the organization does not comply with one or other legal provision. It is possible to refuse any application. Or that the organization is not bona fide and does not function for the promotion of its objects. If you have an organization which exists merely for the pleasure of its member but it holds a fete once a year to raise funds for social welfare work, it is possible under that section to refuse its application. If I am right, the proposed sub-paragraph (v) becomes redundant. I should like to see that organizations which perform bona fide welfare work as part of their activities should be registered and I am afraid that this section may be used to refuse applications and that was why I placed this amendment on the Order Paper. I should like to have the Minister’s views before I move it formally.

I cannot accept the suggestion of the hon. member for Maitland (Dr. de Beer) that by adding the provision that if the Board refuses the matter should then be dealt with by the Minister, because I think the proviso itself is an unsound one. It is an extraordinary type of proviso and the fact that the Deputy Minister has given certain practical examples as to why he wishes the proviso to be inserted does not necessarily make it good law. In (c) of 1 bis, the first paragraph of Clause 7, it is stated that objections may be lodged and the grounds to such objections set out. If the Board refuses to grant the application, the aggrieved party can go to appeal. In this case the Minister has an arbitrary right to refuse his consent if the Board should grant the application despite the objection. In fact, whatever the Board wishes to do would really be of academic interest, because the Minister has the right either to give or to withhold his consent as long as there is any objection. It does not say that the decision of the Board shall be communicated to him, although I imagine it will be. It says that if any objection is lodged the Board shall not grant it without the consent of the Minister. There is a further clause which denies the right of appeal against the decision of the Minister should he refuse to grant his consent. So in effect this proviso gives him completely arbitrary powers. For that reason we do not like this clause and I do not think it is in accordance with our normal principles of law. I know the Deputy Minister has said before that it is laughable or childish to contemplate that the decision of the Minister should be appealable.

A decision on policy.

I thought the Minister said an appeal against his decision in terms of this clause. The clause gives the Minister an arbitrary right to make decisions and it is not said in this particular amendment that he will give a decision because of a policy he wishes to follow.

Naturally you cannot put that in.

I want to give the example that in the Companies’ Act, in Sec. 96ter, there is also a provision dealing with a decision of the Minister, and there is a right of appeal to the courts, but here the right of appeal is denied. Can the Minister satisfy us that one can appeal to the court against the Minister’s decision …

Naturally you can.

But you cannot. That is the whole point. This Bill has a subsequent clause which specifically provides that there is no appeal. One can understand the Minister requiring certain power in certain circumstances and the Deputy Minister says he is quite prepared to give the House certain examples which will illustrate the necessity for having this provision in the statute. One could listen to that with interest and accept that in the course of administration certain issues may arise where certain provision must be made in the law to control those circumstances administratively. But where in principle the clause places in the hands of the Executive arbitrary powers and then proceeds specifically to deny any right of appeal to the courts, that places arbitrary power in the hands of the Executive, and that is the point that the Minister has not been able to explain away. His only reasoning was that it was ridiculous that the decision of the Minister should be appealable. I have pointed out at least one statute where it is specifically provided that there shall be an appeal on the Minister’s decision. Now, assuming the Deputy Minister has put forward this point of view, that he will eliminate the clause which denies the appeal, then he might have some basis for his argument that there is nothing in these amendments which prevents a person from going to court in order to test the position of the Executive, but here for the first time—if it is not the only occasion in our legislation it must certainly be one of the rare ones—there is the specific denial of the right of appeal, and failing an explanation this side of the House cannot accept the second proviso and must vote against it.

Mr. Chairman, in supporting the hon. member for Bezuidenhout (Mr. Miller) in his amendment to omit the second proviso, I feel we have to take into account that the Deputy Minister has stated during the debate on the clause and in the second reading that there are a large number of welfare organizations, some 2,000, which to some extent causes duplication of the work of welfare organizations. I believe that in part of this clause we are overcoming that difficulty, under 7 (b) (4). We have no objection to that provision which I believe is a good one, and I cannot see why that is not deemed sufficient to facilitate the registration of these organizations; because we are looking for ways and means to facilitate their registration, and I feel that with the other provisions of this clause we will obstruct it rather than facilitate it. Clause 7 (1)bis (c) states that any person may lodge an objection and immediately the Board is unable to grant the registration without the consent of the Minister. I feel that this will delay matters and the main difficulty, the duplication of organizations, is met by the provision I referred to which says that duplicate organizations will not be registered. That is enough. The fact that there is this additional proviso and that there is no right of appeal to the Minister will obstruct the work. Therefore I feel that this second proviso is not in the interest of welfare organizations and that the Board is giving the Minister a great deal of power, which is not justified.

I want to deal first of all with the question raised by the hon. member for Maitland in connection with the objects. The case we have in mind and which we come up against in practice is that of a private hospital, a hospital which is run for private gain and which has one bed for paupers, and because of that one bed it has the right to register as a welfare organization and to collect money from the public. The hon. member will immediately realize in what a difficult position that places us, and the law advisers say that this is the only way in which we can meet the position. Hon members will admit that where the organization is conducted for private gain, it is not sound policy to allow it to collect money from the public.

Can the board think of no other reason for refusing their application?

My information is that the board has not got the power.

As far as the argument of the hon. member for Umbilo (Mr. Oldfield) is concerned, the reason why it says that people may object, is that the 24 members who serve on the Welfare Board, as the hon. member knows, do not serve on it by virtue of the fact that they represent an organization. They are nominated and a panel of names is submitted to the Minister in terms of the 1947 Act and the Minister selects those individuals but he is not there because organization A has sent him there; he is there in his personal capacity and cannot make an objection, because he serves on the board in his personal capacity, not on behalf of an organization, he is there as an individual. I want to assure hon. members that I will give careful consideration to everything they have said during the second reading. During the second reading debate the hon. member for Bezuidenhout raised the matter of disposing of the money. If he looks at my amendment to Clause 13 he will notice that I have incorporated his suggestion in my amendment. I merely mention this to show hon. members that I have no ulterior motive as far as these discussions are concerned. I listen to all their arguments and I also listened in this case. I have again discussed the matter with the welfare organizations board. The board cannot meet again; the board has adjourned and I can only consult the chairman and he assured me afresh that they have discussed the principles of this Bill, that they have discussed the principles—not the Bill but the principles which they wish to see incorporated in the law—with the regional boards. There has therefore been consultation from all angles with those people and if I cannot accept this amendment affecting the principle, hon. members must not regard that as unwillingness on my part or as proof that I do not wish to co-operate, but it is because I am dealing with a board which is not sitting at the moment, a board which I cannot consult and which has assured me that they have considered all the practical consequences of these provisions and that they were satisfied that what we were doing here was the right thing to do. I quite understand that hon. members differ from me on the question of principle. I quite understand that and I do not blame hon. members for adopting the attitude which they have but I am sorry I cannot make any concessions in regard to those aspects.

Just before I deal with the reply of the hon. the Deputy Minister, I would like to say that I did understand from the hon. member for Maitland (Dr. de Beer) that he made the suggestion that perhaps some change in that proviso might possibly be an improvement to the proviso as it stands. I do appreciate that, but I would like to say to the hon. the Deputy Minister with regard to his reply now, that whilst we appreciate the difficulty in which he finds himself and that he is endeavouring to ensure that the Act will be administratively successful and that he is endeavouring to meet all the problems and difficulties with which the board is faced from time to time, we unfortunately cannot, because of those difficulties, admit a principle of the kind that is incorporated in this second proviso. I assume that there are difficulties in the administration of all laws, but if there is an amendment to a law to overcome a difficulty and that amendment denies any citizen fundamental rights, then I am afraid that much as we would like to help the Deputy Minister we on this side of the House cannot vote for it.

Question put: That all the words after “organization” in line 54, to the end of the clause, proposed to be omitted, stand part of the clause,

Upon which the Committee divided:

Ayes—67: Badenhorst, F. H.; Bekker, H. T. van G.; Bekker, M. J. H.; Bootha, L. J. C.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Coetzee, P. J.; de Villiers, C. V.; de Villiers, J. D.; du Pisanie, J.; du Plessis, P. W.; Fouché, J. J. (Jr.); Froneman, G. F. van L.; Greyling, J. C.; Grobler, M. S. F.; Hertzog, A.; Heystek, J.; Jonker, A. H.; Kotze, G. P.; Kotzé, S. F.; Luttig, H. G.; Malan, W. C.; Marais, J. A.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Mulder, C. P.; Muller, S. L.; Nel, J. A. F.; Nel, M. D. C. de W.; Niemand, F. J.; Otto, J. C.; Pelser, P. C.; Potgieter, J. E.; Sadie, N. C. van R.; Sauer, P. O.; Schlebusch, J. A.; Schoeman, J. C. B.; Schoonbee, J. F.; Smit, H. H.; Stander, A. H.; Steyn, J. H.; Strydom, G. H. F.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, G. P.; van den Heever, D. J. G.; van der Ahee, H. H.; van der Merwe, J. A.; van der Merwe P. S.; van der Walt, B. J.; van Eeden, F. J.; van Nierop, P. J.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; Venter, M. J. de la R.; Venter, W. L. D. M.; Verwoerd, H. F.; Visse, J. H.; Vorster, B. J.; Vosloo, A. H.; Webster, A.

Tellers: W. H. Faurie and J. von S. von Moltke.

Noes—34: Basson, J. A. L.; Bowker, T. B.; Bronkhorst, H. J.;Cope, J. P.; de Beer, Z. J.; Dodds, P. R.; Durrant, R. B.; Eaton, N. G.; Eglin, C. W.; Fisher, E. L.; Gay, L. C; Graaff, de V.; Higgerty, J. W.; Holland, M. W.; Horak, J. L.; Hughes, T. G.; Lewis, H.; Malan, E. G.; Miller, H.; Mitchell, D. E.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Steyn, S. J. M.; Streicher, D. M.; Swart, H. G.; van Ryneveld, C. B.; Warren, C. M.; Waterson, S. F.; Williams, T. O.

Tellers: H. C. de Kock and A. Hopewell.

Question accordingly affirmed and the amendment proposed by Mr. Miller negatived.

Clause, as printed, put and agreed to.

On Clause 8,

I have an amendment on the Order Paper, an amendment which is not dissimilar in its purpose to the amendment which I had on Clause 6 and which the Deputy Minister indicated he would be willing to accept. My amendment which occurs in line 11 on page 8, simply has the effect that the Minister under sub-section (2)bis(a) will have the power to cancel the certificate of registration issued by the board to a welfare organization after certain consultation. I am not objecting to his having that power but I am trying to ensure that the organization concerned will have the opportunity to be heard in its own defence. I do not think I need say much in support of my amendment which I now wish to move—

I move this amendment in accordance with the general line I have taken on this measure of trying to limit or to disperse the arbitrary power which this measure gives to the Minister.

I have given very careful consideration to the amendment of the hon. member. As far as the officials are concerned I agree that there is substance in the hon. member’s amendment and that was why I have accepted his amendment but as far as the Minister is concerned I am sorry I cannot agree that there is substance in his argument for two very good reasons. The first is that as the clause reads at the moment the Minister can only act—and that will also happen in practice—after he has consulted the board or, if the board is not sitting, the executive committee of the board. That is the first guarantee. The second guarantee, as I have already said, is that the Minister has to account to this House and the third reason is that this is ministerial policy. I want to repeat that it will only be in unusual circumstances that the Minister will not consult the organization. Under normal circumstances it would be a stupid Minister who would not say to the organization: “I feel we should consult with one another for this or that reason before I cancel your registration”, but the Minister must be given a free hand to act if circumstances are abnormal. For those very good reasons, in spite of the argument advanced by the hon. member, I have decided, after careful consideration, that I cannot accept this amendment.

I cannot support the amendment of the hon. member for Maitland (Dr. de Beer) because we on this side do not think that it goes far enough, and I wish to propose the amendment standing in my name—

In this Act particularly it is most important, working as we are with voluntary workers who give their time freely and who very often give their heart and soul into the work, that they should as far as possible feel that justice is done to them. I do not wish to imply for one moment—far from it—that the hon. the Minister would not do justice to them, but in paragraph (c) there is such authoritarian power given to the Minister that it seems that anybody looking into the matter would say immediately “this man is a dictator in this particular line”. Previously the Minister had no powers whatever; the power lay with the board and it was possible for aggrieved people to get in touch with the board. The Minister will now be completely free to do exactly what he wishes as regards cancelling or amending the cancelling or amending the constitution of an organization. I think the hon. the Minister himself will realize how dangerous it is to let the impression go abroad that he is head chief and able to do exactly what he wishes in regard to what will be permitted and what will not be permitted. I feel that this power should go back to the board and that even the board’s powers should to some extent be limited. As pointed out by the hon. member for Bezuidenhout (Mr. Miller) there is no right of appeal. The right of appeal is deliberately taken away in a subsequent clause, so for practical purposes the Minister has completely authoritarian powers under this clause.

The Minister in supporting his plea for these additional powers when he introduced the Bill, gave us one instance where he had to apply to court in connection with an amount of 16s. 6d. that was left in hand. He gave that as a reason for asking for these powers under Section 8.

No, under Section 13.

After this side had pointed out how far these powers went, he said in his reply that he wanted these powers because there had been a lot of communistic activity in the various organizations. Sir, we have been told many times of the vast sums that have been provided by communists worming their way into our social welfare work in this country, but the Deputy Minister did not give us one single example to show where this communistic danger lay. The position is this: Section 11 of the 1947 Act lays down the grounds, which have since been amended, on which the board can cancel registration. Those grounds are reasonable grounds. This Bill before us now provides that the Minister may cancel registration on any grounds other than those on which the board has the power to cancel, and the following clause goes on to provide that there will be no appeal whatever against his decision. I agree with the hon. member for Bezuidenhout that those powers are, to say the least of it, inordinate. Sir, let me tell you what he can do under them. He can decide under this Bill that the Red Cross is redundant and that all its work is carried out by the Noodhulpliga. He can cancel their authority to collect money, under these powers of his under Section 8 and nobody can do anything about it. He could tell the Boy Scouts that they were treading on the preserves of the Voortrekkers and withdraw their authority. There is no end to what he could do. It is no use the Deputy Minister saying to me: “Do you think I will do it?” He has no right to have such powers in regard to social welfare matters. These funds are provided by the public for certain social welfare reasons and no Minister in any Government should have powers as wide as that in dealing with these matters. I regard these powers, without the right of appeal, as nothing less than sinister, and I cannot be persuaded that there is not something sinister behind it. I do hope the Deputy Minister will see reason and agree that these powers are definitely not required, that they are completely unnecessary and totally unfair in the social welfare set-up in our country.

I do not wish to prolong the debate on this clause unnecessarily, but I feel that there is just one point that should be made to show that this amendment moved by the hon. member for Durban (Central) (Dr. Radford) should be accepted. This clause provides that the Minister may cancel a registration on any ground. I believe that that is not a wise course to take because in the principal Act it is clearly stated on what grounds the cancellation of a registration may take place. In this instance I should be grateful if the hon. the Deputy Minister could give some indication as to the type of ground on which such a cancellation could take place which is not provided for in Section 11 of the principal Act. The principal Act clearly states on what grounds such cancellation may take place, and here we are being asked to pass a clause which will give the Minister the power to cancel a registration on any grounds. I think the public is entitled to know on what grounds such an organization may lose its registration. No one wants to transgress the law unnecessarily, and as this clause reads the public could transgress the law without being aware of it because it is not stated on what grounds such an organization could have its registration cancelled and regarded as not a suitable organization.

In supporting the mover of the amendment I would like to say that the hon. the Deputy Minister who is a barrister, a member of the Bar in this country, could, I am sure, decide in conference on what additional grounds the board should be able to consider the cancellation of a registration. The amendment does provide that the Minister “may after consultation with the board or the executive committee …”. I assume therefore that the Deputy Minister’s reply will be that in any event he does consult with the board. We concede that according to the wording of the clause he does consult with the board. I take it that he will consult with the board where the board communicated with him or where he, for policy or other reasons, communicated with the board and discussed the question of cancellation with them. Under Section 11 the board could cancel the certificate of registration on any ground upon which it could have rejected the application for registration by the organization concerned or on the ground that a remuneration or reward which is excessive in relation to the total value of the contributions received by the organization, has been retained or received by that person, or that the organization has failed to comply with any condition of registration. Sir, what would be simpler than for the hon. the Deputy Minister to add another couple of reasons on which the board can consider the cancellation of a registration. One would not have to seek terribly far in this type of work to find additional grounds for cancellation. The law would then state specifically on what grounds a registration may be cancelled, and the organization would then realize within what limits it may operate under the law. Firstly then the law would be perfectly clear and secondly it would be clear to the organization and the public on what grounds such cancellation could take place. We would then not be left in the dilemma in which we now find ourselves, namely that this clause places completely arbitrary power in the hands of the executive to cancel registration on any grounds. We have been given no explanation as to why there is this very wide field within which the executive has the power to cancel registration, and unless we are given a reasonable explanation, we are unable to accept an amendment of this nature. Coupled with the fact that there is a denial of the right of appeal, the clause itself becomes completely inexplicable unless the hon. the Deputy Minister has some sound reasons to offer this House as to why he has found it essential to place such tremendous powers in the hands of the executive.

It is very clear that in terms of this provision the board may cancel a registration on certain grounds specified in the old Act and on certain grounds which are now added in this Bill. Those then will be the normal grounds on which the board may cancel registrations. This amendment clearly provides that alongside the action taken by the board, the Minister may alto act under given circumstances, but the Minister cannot cancel a registration on the grounds on which the board may cancel it. The Minister’s powers are, therefore, obviously limited. The Minister can act on grounds different from those on which the board may act. As I said in the second reading debate that was the underlying motive of the discussion which the national board had, a board on which all sections and all language groups were represented. They discussed this specific question on the Minister’s power under this clause. The chairman tells me that all the representatives of all groups were unanimous on this point that when it came to such matters as Communism, for example, as I mentioned in my second reading speech, it was no concern of the board but that the Minister should shoulder the responsibility. It would be exceedingly unwise to drag the board into the political field as it were. The board feels that the Minister should take the responsibility. I am prepared to take that responsibility and to give an account of my actions to this House. Why is this power necessary? If hon. members read the reports of the F.B.I. from America they will know that the communists make use of such organizations. Hon. members know that that is the position. Assume for a moment that a communist organization wants to carry out its activities under the cloak of being a welfare organization. It gets a certificate from the Government to the effect that it is an organization which has the right to exist. That certificate gives it the right to visit private homes and to collect money from individuals.

I should like to know from the Minister whether he has considered the possibility of providing by law that a welfare organization will not be registered or that its registration will be cancelled, if it appears that it is under communistic influence.

I have discussed that very question with the Department and the legal draftsmen, but as the hon. member will realize the difficulty there is to find a formula which a is water-tight. If the hon. member can provide me with a formula which is water-tight, I shall be only too pleased and I shall immediately incorporate it in this measure. But here we are not dealing with people who work above ground or who act in a decent manner; you are dealing with people who go underground and you cannot erect a fence for those people. That is the very reason why this clause is as wide as it is. Hon. members have discussed this matter with the national board, as I take it they may probably have, they will know that that was the motivating factor which counted with the board.

Even if we accepted that argument, is it necessary to refuse such an organization the right of appeal?

I am pleased that the hon. member has raised that point; I shall deal with it in a moment. I just want to reply to the hon. member for Benoni (Mr. Ross). I am really very sorry that the hon. member has used the example of the Red Cross and the Noodhulpliga and the Voortrekkers and the Boy Scouts in this debate. I do not want to say anything further about that but I again want to appeal to hon. members that we should not even, by implications, introduce racialism into this matter. The hon. member for Bezuidenhout (Mr. Miller) may rest assured that I am as concerned as he is about the question of the right of appeal, but if the hon. member reads the clause in its right context he will notice that the Minister appoints an ad hoc committee, and an appeal to this ad hoc committee does not preclude the courts. It does not mean that an aggrieved organization may only turn to this ad hoc committee. It is still free to go to any court if anything transpires which is not within the framework of the law. This ad hoc committee to which it may appeal is simply a fact-finding committee, but there is nothing in the provisions of the old Act under which this ad hoc committee was established which prevents you from going to the Supreme Court.

But the amendment of the hon. the Minister precludes it.

No, the decision of the Minister is not subject to appeal to the ad hoc committee (that is the committee which the Minister himself appoints), but there is nothing in the provisions which prevents you from taking the Minister to the Supreme Court. It does not say that the jurisdiction of the Supreme Court is excluded, not at all. The hon. member should read this in conjunction with the old Act. The appeal to which reference is made here is an appeal to the ad hoc committee, not an appeal to the Supreme Court, if the Minister acts beyond his powers. If the Minister commits an offence under the provisions of the Act he can be taken to court anytime. I want to go further. The hon. member for Bezuidenhout still owes me the other half of his reply to this: This Section under which I am now acting is the same section which gives the legal profession the same right. As the hon. member knows, under the 1947 Act the legal profession may veto a welfare organization which is concerned with the legal costs or with the defence of anybody, it can veto the existence of such an organization and in that case there is no appeal to the ad hoc committee. I make bold to say that the Minister should have the same authority and right as that given to the legal profession. I agree that they should have it. I have no objection to that, but why should the legal profession have greater power than the Minister? It is not necessary for the legal profession to account to this House or to anybody. Once it has exercised its veto that is the end of the matter, but apart from that the Minister has to account to this House and if it was considered a good thing in 1947 and is still considered good to-day to give those powers to the legal profession, I do think, considering the circumstances which I have detailed, that it is fair and reasonable not to give those powers to the Minister as well. I readily admit that we are pershaps going further than we would have liked to go, but we are dealing here with exceptional circumstances, circumstances which we cannot meet by acting normally: the position warrants extraordinary measures.

I am sorry I cannot accept all the explanations of the hon. Deputy Minister. I feel that these welfare organizations are hardly the right place for Communism to be combated. We have many Acts in this country for the suppression of Communism and in respect of the calling of meetings, or house to house visits, or for purposes which are regarded as illegal and unsatisfactory, and it ill goes with the thought of social welfare that it should be used for this purpose. I would suggest to the hon. the Minister that he accepts this amendment of ours and suggests to some of his colleagues to keep their eyes open and to relieve him of this particularly anti-communist duty.

Question put: That all the words from the commencement of paragraph (c) up to and including “committee” in line 11, proposed to be omitted, stand part of the clause, Upon which the Committee divided:

Ayes—68: Badenhorst, F. H.; Bekker, H. T. van G.; Bekker, M. J. H.; Bootha, L. J. C.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Coetzee, P. J.; de Villiers, C. V.; de Villiers, J. D.; du Pisanie, J.; du Piessis, P. W.; Fouché, J. J. (Jr.); Froneman, G. F. van L.; Greyling, J. C.; Grobler, M. S. F.; Hertzog, A.; Heystek, J.; Jonker, A. H.; Kotze, G. P.; Kotzé, S. F.; Luttig, H. G.; Malan, W. C.; Marais, J. A.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Mulder, C. P.; Muller, S. L.; Nel, J. A. F.; Nel, M. D. C. de W.; Niemand, F. J.; Otto, J. C.; Pelser, P. C.; Potgieter, J. E.; Sadie, N. C. van R.; Sauer, P. O.; Schlebusch, J. A.; Schoeman, J. C. B.; Schoonbee, J. F.; Smit, H. H.; Stander, A. H.; Steyn, J. H.; Strydom, G. H. F.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, G. P.; van den Berg, M. J.; van den Heever, D. J. G.; van der Ahee, H. H.; van der Merwe, J. A.; van der Merwe, P. S.; van der Walt, B. J.; van Eeden, F. J.; van Nierop, P. J.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; Venter, M. J. de la R.; Venter, W. L. D. M.; Verwoerd, H. F.; Visse, J. H.; Vorster, B. J.; Vosloo, A. H.; Webster, A.

Tellers: W. H. Faurie and J. von S. von Moltke.

Noes—34: Barnett, C.; Basson, J. A. L.; Bowker, T. B.; Bronkhorst, H. J.; Cope, J. P.; de Beer, Z. J.; Dodds, P. R.; Durrant, R. B.; Eaton, N. G.; Fisher, E. L.; Gay, L. C.; Graaff, de V.; Higgerty, J. W.; Holland, M. W.; Horak, J. L.; Hughes, T. G.; Lewis, H.; Malan, E. G.; Miller, H.; Mitchell, D. E.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Steyn, S. J. M.; Streicher, D. M.; Swart, H. G.; van Ryneveld, C. B.; Warren, C. M.; Waterson, S. F.; Williams, T. O.

Tellers: H. C. de Kock and A. Hopewell.

Question accordingly affirmed and the amendment proposed by Dr. Radford dropped.

Amendment proposed by Dr. de Beer put and negatived.

Clause, as printed, put and agreed to.

On Clause 9,

I move—

We have heard during the discussion on the previous clause, reference made to the fact that there will be no right of appeal against certain decisions of the Minister, and therefore it is obvious that we wish to move the deletion of sub-sections (b) and (c), because it is consistent with the attitude we have adopted right throughout on this particular Bill. This provision which will have the effect that a right of appeal is denied to persons against certain decisions should be deleted as far as paragraphs (b) and (c) are concerned, leaving merely paragraph (a) which is in connection with an objection that could be raised by the law societies. If you refer to the principle Act, Sir, you will find under Section 13 that this is a provision that has been taken over from the principal Act and incorporated in this particular clause. Our main objection is to the provision whereby the Minister may cancel registration on any ground whatsoever and that the person concerned and the organization concerned will not have the right to appeal as provided for in Section 13 of the Act. Likewise the hon. Minister can also consent to registration in terms of a previous provision of the Bill and where the Minister grants that consent and registration is granted, the person concerned will also be denied the right of appeal as provided for in the principal Act under Section 13. We believe that the principle of maintaining the right of appeal to the ad hoc committee is of fundamental importance, because it is a committee which consists in terms of the principal Act, of a magistrate of not less than ten years’ experience as a magistrate, who shall be chairman and two persons with experience in or knowledge of welfare organizations who are not members of the board or members of the appellant welfare organization, or members of the Public Service. Therefore it is a completely impartial ad hoc committee that is established by the Minister, and we believe that it is of paramount importance that the organizations and the persons concerned, should at all times have access to that appeal committee. It is all very well for the hon. Deputy Minister to say: Well, these organizations will still be entitled to appeal to an ordinary court. However, we must appreciate the fact that here we are dealing with welfare organizations who are endeavouring to raise funds for their own object and therefore they are organizations that can least afford legal costs that could be involved if they were to take the matters to court. So it is an important factor that these organizations will be most loath to take a decision to court for fear of involving themselves in substantial legal expenses and cost. We must bear that in mind. The clause here provides for the Minister to have complete arbitrary powers in regard to the cancellation and registration of certificates. I do not wish to go into it in any further detail, because as I said earlier, this clause has been discussed or referred to in previous discussions on other clauses. But it is of cardinal importance to us that this provision should not be proceeded with and for that reason I have moved my amendment.

I merely wish to deal with one or two aspects of the matter to which the hon. Deputy Minister has already referred. The first one is that the clause reads—

It does not say “no right of appeal as provided in Section 13 of the Act”. For that reason we must accept literally the words “no right of appeal to any court”.

Then in regard to the suggestion that the Minister should have the same powers as the law societies. Sir, the law societies only come into the picture when the board is required to deal with an application which includes an object reading as follows—it is Item (b) “Welfare Organization” in the Act. It reads—

The objects set out in the section I have just read fall specifically and absolutely under the control of the law societies as constituted by statute with this particular aspect as one of its main objectives, namely to guard and rule over the profession and its practice and operations in the interest of the public, just as the Medical Council has been established for the same purpose, and just as the Chapter of Quantity Surveyors have been established to protect the public and the profession. This particular section was contained in the 1947 Act which said that if the Law Society was not satisfied with the registration of an organization for this particular purpose, in other words if it was not satisfied with the manner in which the philanthropic work would be carried out (that is a very important aspect of the Law Society’s activities), then the Law Society could object and that objection was not appealable. The hon. Deputy Minister says: Why should I not have the same powers? But what is happening is that new powers are being introduced in the hands of the Minister irrespective of what the object is, of what the objects may be of the organization with which he has to deal, irrespective of what the objects are of an organization in respect of which he wants to cancel registration or refuse to consent to a registration, whereas the Law Society has a specific sphere of activities accepted and acknowledged in the original Act, and repeated in this Bill. In other words, the hon. the Minister has not found it necessary to eliminate that particular section. The hon. member for Benoni (Mr. Ross) only tried to give examples of what could happen.

Order! That is not under discussion.

I only want the hon. Deputy Minister to realize that certain new powers are placed in his hands which are not appealable in the courts of the land.

I should like to cross swords with the hon. member for Bezuidenhout (Mr. Miller) and I challenge any other attorney to study this clause and to tell me whether he agrees with me or with the hon. member for Bezuidenhout. Let me read it in its context as it stands here. I shall be glad if the hon. member for Transkeian Territories (Mr. Hughes) in particular would listen—

They, therefore, have the right to appeal against it if they wish to do so—

That is the old Act. Nowhere does it say that you cannot take the Law Society to court if you can prove mala fide or if it has acted beyond the scope of its authority. It says here that an organization may note an appeal to an ad hoc committee, but it will not have the right to appeal where the Law Society was the body who had objected to its registration. Is the hon. member suggesting that the Law Society would have gone so far as to exclude any appeal to an ordinary court? Surely the Law Society would not have gone as far as all that. All I am doing is to add “the Minister” to the Law Society.

In this case it only says “on certain grounds”.

The hon. member’s argument was that there would be no appeal to the court whatsoever. The hon. member realizes that he was wrong. If the principle is right in respect of the Law Society, it must also be right in respect of the Minister. The hon. member agrees that the Law Society does not wish to exclude the courts. Is that correct? It cannot be conceived of that the Law Society would say that the courts should be excluded. As I know them they will never do anything like that, and that provision has been in existence ever since 1947 and nobody has ever told the Law Society that they were excluding the courts. Just as the Law Society is not subordinate to the Minister. I do not want to make the Minister subordinate to the ad hoc committee. But just as the Law Society is subject to the ordinary courts, the Minister is also subject to the ordinary courts. Here it says clearly “may appeal against that decision to an appeal committee constituted by the Minister”. It is in order to avoid costs. They may go to this committee if they wish to do so; but there is nothing to prevent them from saying: We do not recognize this committee, we do not want to appeal to it, we are going to the ordinary courts. If that is the position I suggest with all respect that the Minister is entitled to the same rights and privileges. For that reason and for the reasons which I have advanced previously, I regret that I cannot accept the amendment.

Question put: That paragraphs (b) and (c), proposed to be omitted, stand part of the clause, Upon which the Committee divided:

Ayes—67: Badenhorst, F. H.; Bekker, H. T. van G.; Bekker, M. J. H.; Bootha, L. J. C.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Coetzee, P. J.; de Villiers, C. V.; de Villiers, J. D.; du Pisanie, J.; du Plessis, P. W.; Fouché, J. J. (Jr.); Froneman, G. F. van L.; Greyling, J. C.; Grobler, M. S. F.; Hertzog, A.; Heystek, J.; Jonker, A. H.; Kotze, G. P.; Kotzé, S. F.; Luttig, H. G.; Malan, W. C.; Marais, J. A.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Mulder, C. P.; Muller, S. L.; Nel, J. A. F.; Nel, M. D. C. de W.; Niemand, F. J.; Otto, J. C.; Pelser, P. G; Potgieter, J. E.; Sadie, N. C. van R.; Sauer, P. O.; Schlebusch, J. A.; Schoeman, J. C. B.; Schoonbee, J. F.; Smit, H. H.; Stander, A. H.; Steyn, J. H.; Strydom, G. H. F.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, G. P.; van den Berg, M. J.; van den Heever, D. J. G.; van der Ahee, H. H.; van der Merwe, J. A.; van der Merwe, P. S.; van Eeden, F. I.; van Nierop, P. J.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; Venter, M. J. de Ia R.; Venter, W. L. D. M.; Verwoerd, H. F.; Visse, J. H.; Vorster, B. J.; Vosloo, A. H.; Webster, A.

Tellers: W. H. Faurie and J. von S. von Moltke.

Noes—33: Barnett, C.; Basson, J. A. L.; Bowker, T. B.; Cope, J. P.; Dodds, P. R.; Durrant, R. B.; Eaton, N. G.; Fisher, E. L.; Fourie, I. S.; Gay, L. C.; Graaff, de V.; Higgerty, J. W.; Holland, M. W.; Horak, J. L.; Hughes, T. G.; Lewis, H.; Malan, E. G.; Miller, H.; Mitchell, D. E.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Steyn, S. J. M.; Streicher, D. M.; Swart, H. G.; van Ryneveld, C. B.; Warren, C. M.; Waterson, S. F.; Williams, T. O.

Tellers: H. C. de Kock and A. Hopewell.

Question accordingly affirmed and the amendment negatived.

Clause, as printed, put and agreed to.

Clause 13 of the Bill put and negatived.

On new clause to follow Clause 12,

I move—

That the following be a new clause to follow Clause 12:

1. (a) by the substitution for paragraph (b) of the following paragraph:
   “(b) direct any person holding or having control of any money, securities or property mentioned in paragraph (a)—
   1. (i) to return to every contributor who is known, the money, securities or property contributed by him and to transfer or deliver the balance thereof (if any) to the Minister; or
   2. (ii) to transfer or deliver such money, securities or property to him, and thereupon the Minister shall return to every contributor who is known, the money, securities or pro-property contributed by him.”; and
2. (b) by the addition of the following sub section, the existing section becoming sub-section (1):
   “(2) Any money, securities or property which cannot be returned to the contributor concerned in accordance with sub-section (1) may be disposed of as the Minister may deem fit.”

Agreed to.

On Clause 17,

I move—

Agreed to.

Clause, as amended, put and agreed to.

Title of the Bill put and agreed to.

House Resumed:

Bill reported with amendments.

Amendments in Clauses 1, 2 and 6, the omission of Clause 13, the new Clause 13 and the amendment in Clause 17, put and agreed to and the Bill, as amended, adopted.

I move, as an unopposed motion—

I second.

I regret that members on this side of the House are unable to support the third reading of this Bill. We stated quite clearly during the second reading debate that we acknowledge and appreciate the fact that certain amendments were necessary to the principal Act of 1947. However, a principle has been included in this amending Bill which we find repugnant, and that is that arbitrary powers will be extended to the Minister and, in some instances, there will be no right of appeal. The arbitrary powers to be extended to the Minister will vitally affect the administration of the Welfare Organizations Act, particularly in regard to registration and cancellation. During the various stages of this Bill the hon. the Deputy Minister has said that this was an agreed measure as far as Welfare Boards were concerned. However, I was disappointed to find that some members of these boards do not agree with the recommendations incorporated in this Bill and that certain doubts have been expressed by some influential members of welfare organizations and of welfare boards who have expressed concern at the extension of arbitrary powers as provided in this Bill.

It is unfortunate that we have to oppose the third reading of this Bill because certain amendments have been moved during the Committee Stage, which do improve the Bill to a certain extent. Certain provisions of this Bill will facilitate the administration of the principal Act. However, we are unable to agree to the sacrifice of an important fundamental principle by extending these arbitrary powers to the Minister. With these words, therefore, I wish to say that hon. members on this side of the House intend voting against the third reading.

I appreciate the attitude of the hon. member. We have our basic differences in this respect. Those differences still exist but I thank hon. members for the manner in which the discussion has been conducted, with a few exceptions, in spite of those differences. I merely rise to straighten out one point where I really think the hon. member for Umbilo (Mr. Oldfield) is doing me an injustice. I am referring to the fact that he has again said that “there would be no right of appeal”. That is not the position. What the hon. member should have said, had he wished to state the position correctly, is this: “There will be no right of appeal to an ad hoc committee appointed by the Minister.” As the hon. member put it it must create the impression that there is no appeal to the court, and the hon. member will agree that that is not the position. The courts are as wide open to anybody as ever before. It is only in respect of this Committee which the Minister himself appoints to which the Minister cannot be taken on appeal.

I also want to put the position right in respect of the objections. I just want to tell the hon. member that I have not received a single objection in regard to this Bill from any member of the National Board. On the contrary I will tell the hon. member what I have received from the National Board. On 10 May 1961 I received the following letter from the National Board—

Was that unanimous?

The letter says: “On the instructions of the National Welfare Organizations Board it is my privilege …” I asked the chairman about this and I was informed that that was a unanimous decision by the National Board. On 5 June I had another letter from the chairman of the National Board in which he asked me to effect further amendments in respect of the name of the organization. After the second reading—I merely wish to have this on record—I did in fact receive objections. The one was from the Johannesburg Co-ordinating Council of Social Welfare Oragnizations, not from the local board, neither from an individual, but from this organization which has no status in this whole legal set-up, as hon. members know. I had an objection from them. Who they are, I do not know. I also had an objection from The Catholic Federation of the Diocese of Johannesburg. I had two telegraphic objections in this connection. I am sorry to say, but their objection was to the Committee Stage and the third reading; they wanted those stages to stand over. Obviously, of course, I could not heed their objections. I merely rose to put this question right in respect of the right of appeal and to state very clearly that I have received no objections from the members of the National Board. The only communication I did receive from them was this letter thanking me for having introduced this Bill and they sent that letter after they had studied the Bill. In conclusion I wish to thank hon. members for the discussion and for the fact that we have been able to pilot the Bill through all its stages.

Motion put and the House divided:

Ayes—70: Badenhorst, F. H.; Bekker, H. T. van G.; Bekker, M. J. H.; Bootha, L. J. C.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Coetzee, P. J.; de Villiers, C. V.; de Vil-liers, J. D.; Donges, T. E.; du Pisanie, J.; du Piessis, P. W.; Erasmus, F. C.; Fouché, J. J. (Jr.); Froneman, G. F. van L.; Grey-ling, J. C.; Grobler, M. S. F.; Heystek, J.; Jonker, A. H.; Kotze, G. P.; Kotzé, S. F.; Luttig, H. G.; Malan, A. I.; Malan, W. C.; Marais, J. A.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Mulder, C. P.; Muller, S. L.; Nel, J. A. F.; Nel, M. D. C. de W.; Niemand, F. J.; Otto, J. C.; Pelser, P. C.; Potgieter, J. E.; Sadie, N. C. van R.; Sauer, P. O.; Schlebusch, J. A.; Schoeman, J. C. B.; Schoonbee, J. F.; Smit, H. H.; Stander, A. H.; Steyn, J. H.; Strydom, G. H. F.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, G. P.; van den Berg, M. J.; van den Heever, D. J. G.; van der Ahee, H. H.; van der Merwe, J. A.; van der Merwe, P. S.; van der Walt, B. J.; van Eeeden, F. J.; van Nierop, P. J.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H.; van Wyk, H. J.; Venter, M. J. de la R.; Venter, W. L. D. M.; Verwoerd, H. F.; Visse, J. H.; Vorster, B. J.; Vosloo, A. H.; Webster, A.

Tellers: W. H. Faurie and J. von S. von Moltke.

Noes—33: Basson, J. A. L.; Bowker, T. B.; Cope, J. P.; Dodds, P. R.; Durrant, R. B.; Eaton, N. G.; Fisher, E. L.; Gay, L. C.; Graaff, de V.; Higgerty, J. W.; Holland, M. W.; Horak, J. L.; Hughes, T. G.; Lawrence, H. G.; Lewis, H.; Malan, E. G.; Miller, H.; Mitchell, D. E.; Oldfield, G. N. Plewman, R. P.; Radford, A.; Raw, W. V. Ross, D. G.; Steyn, S. J. M.; Steytler, J van A.; Streicher, D. M.; Swart, H. G. van Ryneveld, C. B.; Warren, C. M. Waterson, S. F.; Williams, T. O.

Tellers: H. C. de Kock and A. Hopewell.

Motion accordingly agreed to.

Bill read a third time.

The United Party supports this Bill in general. We have always pleaded for increased social benefits within the country’s economic capacity. However, we are not satisfied that social pensions are adequate by this standard, but we do accept that this Bill is a genuine and honest step in the right direction. In this Bill the hon. the Deputy Minister has given effect to the concessions to pensioners of which we were told in the Budget speech. There are a number of provisions facilitating administration generally, and certain amendments to the provisions of the Government Servants Pension Act which, we understand, will be acceptable to the persons concerned.

One important matter in which the hon. the Minister has effected a big improvement is the question of residential qualifications. I am sure there will be many people who will be grateful to him for his action in this connection. The same applies in regard to the increase in the attendant’s allowance. The provisions in regard to the date of commencement and cessation of pensions are also wise and will, I think help the Department quite considerably. There is also the rectification of the provisions bringing the Coloureds and the Asiatics into line with the present proportion of 12, six and five. These are all improvements and we on this side of the House welcome them and will support the Bill in the second reading.

In introducing this Bill the hon. the Deputy Minister referred to the administration of these laws by different Ministers in terms of Clauses 10, 25 and 28 of the Bill. He referred to the administration of certain pensions of Africans by the Secretary for Native Affairs, and he said—

I am sorry that I must disappoint the hon. the Deputy Minister. I must discuss these clauses because we do not agree with them. These clauses enable the State President, by proclamation in the Gazette, to delegate the administration of the provisions of this Act to various Ministers. This will mean that the administration of all Coloured pensions will go to the Minister dealing with Coloured Affairs, and those affecting Asiatics will in due course go to the Minister administering Asiatic Affairs in the projected Department of Asiatic Affairs. This provision ties up with the dream of a state within a state to which, as everybody knows, we are totally opposed.

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

The United Party did agree, in 1936, 1944 and 1946 to the transfer of Native pensions to the Department of Native Affairs, as was mentioned by the hon. the Deputy Minister. But that was a different matter altogether. It is not comparable to the question of Coloured or Asiatic pensions. It was very difficult in those days for the persons in charge of the Department to get the pension vouchers out to the Africans in the rural areas. I know that at one stage, as far as war pensions vouchers were concerned, there were piles of vouchers in the magistrates’ offices and the Native Commissioners’ offices that could not be got to the pensioners because they lived in such inaccessible places. Finally an arrangement was made by the B.E.S.L. to seek these pensioners out. A big staff was employed who went out to the Native areas and so the pensioners got their pension vouchers. I understand that to-day the Department of Native Affairs does send people out to see that the people who are entitled to pensions do get them. But that, as I said before, is a very different position from that of the Coloureds and the Asiatics. Their conditions are entirely different. There is no difficulty, in the main, in finding the vast majority of those who are entitled to pensions. They live in towns or in easily accessible areas.

Social welfare is social welfare and remains such. Good administration brings out the peoples’ needs which modern thought makes a Government responsibility. This administration must, in general, remain under one hand if it is to produce the best results. We disagree fundamentally and totally with these provisions in the Bill empowering the State President to delegate functions to different Ministers. Division is always less efficient, more cumbersome and obviously more costly. From our point of view we must in every way try to keep the Coloureds with us. In the view of this party, cutting the Coloureds off is a bad mistake.

Having stressed our objections to these particular clauses in the Bill, I again say we welcome the provisions that have been brought in giving increased benefits, and I know that all these matters will be dealt with by the Department on the normal humanitarian basis, which makes dealing with this Department as a rule so pleasant. We will support the Bill now but in the Committee Stage we will expand on our argument against the fragmentation of administration.

We are prepared to support this Bill in spite of the clause which assigns the administration of pensions for different groups to different departments. The hon. the Deputy Minister knows that we object strongly to that principle and that we have opposed similar provisions in different “Bills in the past. We are still very strongly opposed to it and I shall have something more about it at a later stage. However in this Bill there are a number of concessions of which we approve and we are going to take the step of supporting the Bill in spite of the clauses to which we object. There is, for instance, the welcome reduction of residential qualifications, both for old age pensioners and war veterans. There is the increase in the attendant’s allowance, and from now on pensions are to be granted from the beginning of the month on which the right accrues, and cancelled only on the last day of the month on which the right ceases. That, I am sure, will be appreciated by the Department as well as by the pensioners concerned, even if it is not appreciated by the Treasury.

There is then the increase in the allowances made to Coloured and Indian pensioners. I want to say a few words about this provision. Obviously we approve of the increase in the allowance. It will bring the proportion of the pension which the Coloured person gets, as opposed to that of a White man, to the ratio of 6:12, and for the Indians it will be 5:12. We approve of the increase but we can find little justification for the fact that the pensions for Coloured persons are only half the pensions for White persons. Progressively we shall attempt to abolish this discrimination. From a practical point of view we appreciate that this cannot be done at once, particularly in relation to the Africans. The hon. the Minister has dealt with the proportion of 12:6:5 for White, Coloured and Indian. However he has not mentioned that if one includes the Africans in this table the proportion is 12:6:5:2, so that the African’s pension is very small indeed. It would be unrealistic at this stage, I think, to say that these pensions should be equated at once. We are prepared to accept that. Nevertheless we give notice that it is our policy to abolish the discrimination as soon as it can in practice be done. At this level, where a very small amount is paid, to be devoted to the bare essentials for living, the costs for the different races are very similar. For that reason particularly we see very little justification for the discrimination.

In regard to the way in which this has been done, the method is a bonus for the Coloured pensioners. Last year I made the point to the Deputy Minister that when there is an increase in pensions it has been customary during recent years to do it by way of increasing the allowance and not by way of increasing the basic pension. I am not sure of the exact date on which the basic pension was laid down: I think it was laid down about 1948. Since then every increase has been by way of bonus or by way of an allowance, so that to-day one has a basic pension and a further amount by way of additional pension, and a still further amount by way of bonus. This has one effect which I think is undesirable. To-day if a White old age pensioner earns below £162 a year he is entitled to a pension. I think the exact figure is £156. He gets a pension which makes his income up to £162 and above that he gets an allowance and a bonus. So if he earns £156 he gets a total amount of £72 as a pension whereas the person who earns £6 more—that is £162—gets nothing at all. That was justifiable when the basic figure was laid down in 1948 because one had to draw the line somewhere, but since then the increases made by way of allowance or bonus have been brought into effect. The person who is just below that limit of £156 has gone up quite substantially. Instead of getting £6 he now gets £72 while the person who earns a few pounds more than £156 still gets nothing at all. From the administrative point of view I can see the advantage of raising the allowances and the bonuses. The Department is able to assess what the increase will involve in total expense. Further, it is not flooded by a fresh large number of applications for pensions. If one raises the limit of £156, obviously one would get more applications coming in, so I concede that for a limited period there is an advantage in raising the allowances, but I think the time has come now for the system to be revised. It is unfair that a person who earns £156 should get a pension of £72 a year, whereas if one gets a little more than that, £162, one gets nothing. If a person earns £15 a month to-day, it would pay him far better to ask his employer to pay him only £10 a month. That is clearly an anomaly in the Act and I hope the Minister will give serious attention to it. Naturally it will mean a good deal of extra work for the Department before the new system could be adopted, but I think that after 13 years the system should be revised.

As regards the assigning of old age pensions for different races to different Departments, as I have indicated we have been opposed to this in the past. We had the principle in the Blind Persons Act, the Children’s Act and the Vocational Education Act, and in each case we were opposed to it. Now we get a further extension of it in regard to old age pensions, veterans’ pensions and disability grants. Up to now the administration of pensions for Africans has fallen under the Department of Bantu Administration, since 1946, but now we get an extension of the system in relation to Coloureds and Indians. From now on the State President will be able to assign the administration of old age pensions for Coloureds to the Coloured Affairs Department, and of Indians to the proposed Department of Asiatic Affairs, and similarly with war veterans’ pensions and disability grants. We believe the principles of social welfare are the same for all races and should not be split up, and in the Committee Stage we shall vote against this clause. We do not intend to vote against the Bill, because there are a number of good provisions in the Bill which we welcome.

The anomaly referred to by the hon. member for East London (North) (Mr. van Ryneveld) has been with us for a long time and it has caused considerable hardship over the years. I hope the Minister will go into the matter in due course. What I want to know from him is in relation to the very much improved position that has now developed in regard to the actual payments of old age pensions, being effective from the beginning of the month and not from the date of application. That principle is good and sound and I think it will make the administration much easier. But what I want to ask the Minister is whether he has had time to consider what effect that will have on the payment of unemployment insurance benefits to those who are in receipt of old age or other social pensions. Is it going to revert to the old system in respect of payment of unemployment insurance benefits, and will the old age pensions cease the day the unemployment insurance benefit is paid? I asked the Minister earlier in the Session whether it was not possible for his Department to take a bigger part in the co-ordination of these two benefits, the old age and the unemployment insurance benefit, to avoid the lengthy time-lag there is before the adjustment takes place every six months in regard to those who qualify for an old age pension and also for unemployment benefits. At present there is still this long time-lag and it is a considerable burden upon those who are qualified for both. The time-lag creates a considerable problem. They do not have any income from either source because of the adjustment which must take place. The Minister will remember that I raised the matter with him earlier and I wonder whether the position has been reviewed in the light of these amendments.

In this Bill we see the perpetuation of what I described a few days ago as the curse of South Africa, where we as White people …

I hope the hon. member is not going to cover too wide a field but will speak to the Bill.

I will do so, but I want to say that I would have expected that in the light of the economic position of the Coloured people in particular, and the Indians, the Government should have become aware of the necessity to equalize the pensions payable to old people and to blind people, irrespective of their race or colour. They have the same standard of life, which we must try to preserve. If we persist in paying the Coloured people less, we will never succeed in uplifting them to the economic position to which they are entitled.

Do you appreciate what they get more in terms of this Bill than they had before?

Yes, but hon. members opposite must not push out their chests and say they have given them more, because they have given the White people more, too, and to persist in the old ratio of 12 to 6 to 5 and that is my objection. You are restoring the ratio but my point is that we should have done away with that ratio.

Order! That is not under consideration now. That is the principle. The hon. member must discuss the content of the Bill only.

The contents of the Bill show that by virtue of certain increased payment to the White people, the ratio of 12 to 6 to 5 was disturbed, and the purpose of this Bill, as given in the memorandum at page 12, is to restore that ratio. My point is that instead of restoring the ratio there should be no distinction and I oppose the amendment which restores the ratio. With respect, there is no principle that has been established that it should be 12 to 6 to 5. There is nothing to say that is the principle of the Bill. It is merely a ratio which we have accepted in the past, and not only this Government. There is differentiation between Whites and Coloureds. I would like to elaborate it and to ask the Minister to reconsider the question and to see whether equal payments cannot be made to the same type of pensioner. The rent of the old Coloured man is the same as that of the White man. I have tried to show in previous speeches in this House that the rent is the same and the cost of living is the same. Why do we persist in this differentiation on the ground of colour? Unlike the hon. member for East London (North), who stated that they would progressively do away with this discrimination, we want it done away with immediately, because the demand by the old age Coloured pensioner is urgent and it should receive immediate attention, and because of that I was hoping that in the Committee Stage we would be able to move an amendment.

That is the proper time to discuss it, not now.

I am attacking the principle of the Bill, this differentiation. Because of the fact that we refuse to pay the Coloured old-age pensioners sufficient to live decently, they are forced to live under slum conditions, which has a bad effect on their health. We all know what it is to live under slum conditions, which brings with it illness, and indirectly the Government pays doubly, and it would be much cheaper to give them a better pension on the same lines as the Whites and save the additional costs which we have to-day as the indirect result of paying them less.

As far as the hon. member for Boland (Mr. Barnett) is concerned it is very clear, as he himself has admitted, that this ratio of 12:6:5 is the old ratio which all previous Governments have observed. I do not think I am doing the hon. member an injustice when I say that if he had sat where I am sitting the ratio would have remained exactly the same. Just to refer to one argument, the hon. member made a loose statement in respect of rentals but he knows that the rental paid by the White man is not the same as that paid by the Coloured person and that the White man usually pays a much higher rental.

I wish to reply to the hon. member for Umhlatuzana (Mr. Eaton). The matter which he raised is still under consideration and I am sorry that I cannot at this stage give him a final answer. As regards the lapse of time, the hon. member may rest assured that there will be a very big improvement as a result of the fact that such a large amount of redundant work will be eliminated because we will be paying at the beginning of the month. These matters will now be attended to much sooner than previously. As far as the means tests is concerned, to which the hon. member for East London (City) has referred, it is £156 and if I increased it to £180 or to £200 the person who received £206 will again be excluded. As long as we have the means test, we will have these difficult cases. [Interjections.] Had it been as easy as the hon. member says it is, I would very much have liked to do it. but the department who knows more about the matter than I or the hon. member, tells me that the method which we are following is the only practical method that can be followed in the circumstances. But the hon. member may rest assured that the department is always endeavouring to effect improvements wherever possible and that it will also do so in this case, if possible.

The hon. member for Benoni (Mr. Ross), has raised a matter in respect of which we differ basically, as to what powers may be entrusted to various Ministers under the Act. The responsibility of implementing some of our welfare Acts has been entrusted to various Ministers in terms of Acts previously passed by this House and I challenge any hon. member to show me where in practice there has been any differentiation There is absolutely no difference and I, therefore, feel that we are not justified in adopting this attitude towards the principle, and that as far as the implementation is concerned, hon. members may rest assured that anybody who receives assistance, no matter from which department, receives the best we can give.

Motion put and agreed to.

Bill read a second time.

House in Committee:

On Clause 10,

We object to Clause 10, as stated by the hon. member for Benoni, in that this clause brings into this Bill the principle of separate administration of pensions for the separate racial groups and makes it possible for the State President to allocate the administration of pensions to different departments, either to different Ministers or to different departments under the same Minister. To our mind, this is contrary to sound principles and good administration and it is not something to be encouraged in our legislation. We are satisfied that when it comes to dealing with an issue like pensions we should have a department whose whole existence and background is geared to deal with pensions. We believe that they are the people who should do that work and that you should not take away something which is a specialist subject, and the Minister must acknowledge that he has officials who are trained in the work of dealing with pensions, people whose whole background is one of dealing with the subject, people who have learned the need for sympathetic handling of the tragic cases they have to deal with. Particularly when dealing with pensions we are dealing with something which almost always is associated with hardship. If it were not so. people would not get pensions. In 99 cases out of 100 where a person applies for a pension, it is because he suffers hardship. The Minister’s Department is accustomed to dealing with that sort of work. It is not merely a question of administration or bookkeeping, but a question of human problems and sympathies and relations. We object to this work being taken away from a department trained and qualified to deal with it and scattered out amongst three or four other departments. We will have Bantu Administration dealing with the Natives, and Coloured Affairs dealing with the Coloured, and Asiatic Affairs dealing with the Indians, and goodness knows where that can lead to.

Order! That is not under discussion in this clause. The hon. member is attacking the principle, which was agreed to at the second reading.

With respect, I am opposing Clause 10. because it enables the State President to allocate the administration of pensions to different departments. The principle of this Bill is to amend the Old Age Pensions Act. This was not dealt with as a principle in the original Act. We did not vote against it in the second reading.

That should have been discussed at the second reading.

We specifically made the point that we did not regard it as the principle, and we did not oppose the second reading. We regarded the principle as being the various technical amendments and improvements to the Pensions Act.

In those circumstances I will allow the hon. member a very brief discussion, but he cannot discuss the principle.

I will not take it further. I have made the point that we are opposed to the principle of separating the administration, and we intend to vote against this clause.

Clause put and the Committee divided:

Ayes—67: Badenhorst, F. H.; Bekker, H. T. van G.; Bekker, M. J. H.; Bootha, L. J. C.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Coetzee, P. J.; de Villiers, C. V.; de Villiers, J. D.; Donges, T. E.; du Pisanie, J.; du Piessis, P. W.; Fouché, J. J. (Jnr.); Froneman, G. F. van L.; Greyling, J. C.; Grobler, M. S. F.; Hertzog, A.; Heystek, J.; Kotze, G. P.; Kotzé, S. F.; Luttig, H. G.; Malan, W. C.; Marais, J. A.; Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Mulder, C. P.; Muller, S. L.; Nel, J. A. F.; Nel, M. D. C. de W.; Niemand, F. J.; Otto, J. C; Pelser, P. C.; Potgieter, J. E.; Sadie, N. C. van R.; Sauer, P. O.; Schlebusch, J. A.; Schoeman, J. C. B.; Schoonbee, J. F.; Smit, H. H.; Stander, A. H.; Steyn, J. H.; Strydom, G. H. F.; Treurnicht, N. F.; Uys, D. C. H.; van den Berg, G. P.; van den Heever, D. J. G.; van der Ahee, H. H.; van der Merwe, J. A.; van der Merwe, P. S.; van der Walt, B. J.; van Eeden, F. J.; van Nierop, P. J.; van Rensburg, M. C. G. J.; van Staden, J. W.; van Wyk, G. H. van Wyk, H. J.; Venter, M. J. de la R.; Venter, W. L. D. M.; Verwoerd, H. F.; Visse, J. H.; Vorster, B. J.; Vosloo, A. H.; Webster, A.

Tellers: W. H. Faurie and J. von S. von Moltke.

Noes—31: Barnett, C.; Basson, J. A. L. Bowker, T. B.; Cope, J. P.; Dodds, P. R. Durrant, R. B.; Eaton, N. G.; Gay, L. C. Graaff, de V.; Higgerty, J. W.; Holland M. W.; Horak, J. L.; Hughes, T. G. Lawrence, H. G.; Lewis, H.; Malan, E. G. Mitchell, D. E.; Oldfield, G. N.; Plewman R. P.; Raw, W. V.; Ross, D. G.; Steytler J. van A.; Streicher, D. M.; Swart, H. G.; Swart, R. A. F.; van Ryneveld, C. B.; Warren, C. M.; Waterson, S. F.; Williams, T. O.

Tellers: H. C. de Kock and A. Hopewell.

Clause accordingly agreed to.

House Resumed:

Progress reported and leave asked to sit again.

Business suspended at 6.30 p.m. and resumed at 8.5 p.m.

Evening Sitting

I move—

This is the Bill which is customarily introduced to give effect to certain proposals in the Main Budget and the Railway Budget. It also deals with a variety of matters affecting the Consolidated Revenue Fund and the Railway Administration. The various provisions are explained in the White Paper which hon. members have before them and I will therefore confine myself to a few supplementary remarks in regard to certain of the clauses.

Clause 3 deals with the withdrawal of surplus sterling bronze coins, and the position here is that by 1 June a total weight of about 500 tons of these coins, representing in the vicinity of 55,000,000 coins contained in 40,000 bags, had become surplus to requirements. To relieve the pressure on storage space at the banks the Director of the Mint had therefore to start taking over these coins from that date. For that reason the provisions of this clause are being made retrospective to 1 June.

In regard to Clause 7, the fact that the wording of Section 9 of the Farmers’ Assistance Act left some doubt as to whether loans for farm improvements could be granted was not considered of much importance in the past, as it was felt that the assistance which could be granted under the Act to farmers in financial difficulties was adequate to enable them subsequently to restore their positions out of their own means. Where, as in the case of the recent floods, those means have themselves been destroyed or severely damaged and their restoration must of necessity precede rehabilitation, the matter assumes a new importance and the Act has therefore to be amended to remove any doubt regarding the granting of loans for improvements. As indicated in the White Paper, Clauses 8 to 12 are necessary to give effect to the change in the investment policy in regard to Government and provincial pension moneys which was announced in my Budget Speech. All these clauses provide for the discontinuation of the issue of special 4 per cent Pension Stock with effect from 1 April 1961, and Clause 10, in addition, provides for the gradual conversion and re-investment at current rates of all such stock issued up to and including 31 March 1961. The total amount of stock involved is in the vicinity of R360,000,000 and the conversion programme will, therefore, take about 18 years to complete.

Clauses 9 and 11 also provide for a guaranteed minimum rate of interest of 4 per cent per annum in respect of the investments on behalf of the pension and provident funds administered by the Central Government. This is merely to perpetuate a right which these funds have always enjoyed, but which it was obviously no longer necessary to embody in legislation after the issue of Special 4 per cent Pension Stock commenced in 1936. Now that the issue of such stock is being discontinued, the existence of that right must be formally recognized and this is done in the proposed Section 13 (3) of Act 48 of 1947 (Clause 9) and the proposed Section 52 (3) of Act 58 of 1955 (Clause 11 (1) (b)).

Clause 14 deals with an amendment of the Pneumoconiosis Act. After it was drafted, the Select Committee on Public Accounts, in Resolution No. 1 of its Third Report for 1961, recommended that early steps be taken to obtain legislative sanction for charging the Controlled Mines Compensation Fund with expenditure of the sort referred to in Sections 80, 81 and 82 of the Pneumoconiosis Act, 1956, which is the object of this clause. Expenditure referred to in those sections is of the following sorts:

Section 80: Contributions towards medical and funeral expenses of a deceased miner;

Section 81: Assistance to miners and their families to enable them to learn a trade and to find work;

Section 82: Special grants to miners or their dependants, in those cases where the benefit awarded under the Act is not a pension and the capacity for work of the miner or dependant is seriously impaired by ill-health, old age, etc.

As far as Clause 15 is concerned, the proposed amendment is required to bring the legal position into conformity with the actual practice which has been followed ever since the Post Office Savings Bank was established. The payments which the Postmaster-General is required to make in terms of Section 69 of the Post Office Act are refunds of Post Office Saving Bank balances which, because the accounts in question have been dormant for over seven years, have been paid in to Revenue. On a strict interpretation of the Act as it now reads, such refunds should be paid out of voted moneys which is incorrect, because despite the original payment into Revenue, ownership of these unclaimed balances remains vested in the depositor or his estate, and does not automatically pass to the State. The correct method, and the one which has always been followed, is to treat these refunds as drawbacks from current revenues. This clause will permit of this method being continued. Those are the most important of the clauses. This Bill is really a conglomeration of all kinds of articles dealing with finance and which do not really warrant a separate Act.

I agree with the Minister that the right thing to do is to go into Committee on this Bill as soon as we can because it is a conglomeration affecting a large number of Acts. I must say that things have improved very much in recent years in regard to what used to be known as the Omnibus Bill which really was a most formidable thing to consider. I think almost all the clauses in this Bill are almost self-explanatory and we have no objection to going into Committee immediately after the second reading.

Motion put and agreed to.

Bill read a second time.

House in Committee:

On Clause 3,

The hon. the Minister told us that there are some 500 ton of copper coins surplus to requirement. The only thing I am not clear about is that according to the White Paper the cost of withdrawal and recoining is to form a charge against the coinage fund. I understood—and the Minister will correct me if I am wrong—that the one cent was a bronze coin and the penny is a copper coin. Could the hon. the Minister perhaps enlighten us on this aspect: In re-coining these coppers into one cent pieces how do they fit into the bronze coins which are being issued now because I do not see how you can turn a copper coin into a bronze coin simply by melting it down. It would seem to me that unless the copper is almost identical to bronze, the 500 tons of copper coins would have to be sold as copper in the copper market. I wonder if the hon. the Minister could advise us on this technical point?

I should like to ask the hon. the Minister with reference to this clause whether it is proposed to re-issue the new coins in their present form. The unfortunate position is this that to-day the brass coins are distinguishable from the old copper coins but to-day the new brass coins, the cent and half cent pieces, under some of the fluorescent lighting we have to-day, look extraordinarily like silver coins. There is frequently confusion particularly where cashiers have to give change rapidly. They confuse the new brass coins, the cent and half cent pieces, with 10 cent pieces.

Order! I must draw the hon. member’s attention to the fact that this clause deals only with the withdrawal of the coins.

I appreciate that Sir. I merely wanted some information from the Minister as to how he proposed to implement this conversion.

In reply to the hon. member for Constantia (Mr.Waterson) I am instructed that there is a certain amount of copper in both the coins but the proportion of copper in the sterling coin is higher than in the bronze coin.

Clause put and agreed to.

On Clause 7,

I am not quite clear on this clause either. The hon. Minister said that there was some doubt as to whether Section 9 of the Farmers’ Assistance Act permitted the granting of loans in respect of improvements. That seems peculiar to me Sir. How do you differentiate between what is an improvement and what is not? Surely what we are doing now is to provide that damage to improvements as a result of floods should be included. The hon. the Minister said that there was doubt whether loans to farmers under the Farmers’ Assistance Act could cover improvements. As I say it is very difficult to say what is an improvement and what is not. Here is a case where damage has been done to a farm including damage to improvements which the farmer may have made. What we are being asked to do now is that in granting assistance to farmers for flood damage, we are agreeing that that assistance should be payable to repair improvements that have been made and not simply in respect of the damage. In other words, it refers to damage to improvements.

I think the idea is that the Land Bank want to advance money in terms of the Farmers’ Assistance Act to enable a farmer to start his farming operations again on his farm. He may require certain implements which he may already acquire under the existing Act. But if some of the damage is of such a nature that he really cannot carry on his operations as a farmer, that damage is repaired and it is in order to help him to get that damage repaired so as to enable him to carry on his farming operations. Therefore it is strictly circumscribed: it is not any kind of damage that he has suffered, but only such damage as is necessary to be repaired in order to enable him to carry on with his farming operations and if there is a reasonable prospect that he will be able to do so successfully if he is furnished with the purchases and implements and so forth and if such improvements are made. In other words if there is damage which it is not necessary to repair— damage to improvements that were made in the past, improvements which were not strictly necessary but which were done in order to escape income tax—such damage is not included. We are confining it to repairs which are necessary to enable the farmer to carry on his farming operations economically.

Clause put and agreed to.

On Clause 13.

This clause gives the Auditor-General powers to investigate the Commissioner for Inland Revenue’s assessments. I should like to know whether under this clause how far the Auditor-General can go. Is the Auditor-General confined to the investigation of the documents in the office of the Commissioner for Inland Revenue or can he start an investigation of the original information? As the Minister knows the Commissioner for Inland Revenue, through his inspectors, has the right to go into the assessment de novo and can ask for original documents submitted by the taxpayer. Is it proposed under this clause that the Auditor-General can undertake to do the work that is done by the inspector? Can the Auditor-General go so far that he can check the inspector’s work? There are cases where in an income tax assessment an assessor has made an assessment on the information given to him. Subsequently an inspector verifies the information and asks for additional information from the taxpayer and in many cases, as a result of the inspection by the officers of the Commissioner for Inland Revenue, further tax is collected by way of additional tax and by way of penalties. Is it proposed that the Auditor-General will also perform that function and check the work done by the original assessing staff and the income tax inspectors, or whether the whole purpose of an investigation of this kind is just to verify the accuracy or otherwise of the work done by the Inland Revenue Department. In any case, how far back will the Auditor-General go?

The hon. member will remember that the Select Committee on Public Accounts suggested that what was previously an arrangement between the Auditor-General and the Commissioner for Inland Revenue should be a legal right on the part of the Auditor-General. This clause is intended to give effect to that resolution. The reply to the further question that the hon. member has asked is that the powers of the Controller and Auditor-General will be unlimited, but all investigations will have to be carried out by the Department. In other words, he will not actually do the investigation: if he finds a mistake, it will be referred to the Department and they will have to make any further investigations that may be necessary. But he is not there as a kind of super Commissioner for Inland Revenue to make his enquiries through any other body than through the Department itself.

Clause put and agreed to.

On Clause 17.

I should like to ask the hon. the Minister whether, in view of the change in the name of our Union Loan Certificates in keeping with our republican form of government, whether he anticipates increasing the rate of interest in keeping with that of building societies increasing their rates of interest of the subscribers. That would be in keeping with our change-over to a Republic.

I think there will probably be a new series. When the new series is issued, the interest on that will be realistic, what it will be I cannot say at this stage! It is considered a very appropriate moment, in introducing a new series, to change the name.

Clause put and agreed to.

Remaining clauses and Title of the Bill put and agreed to.

House Resumed:

Bill reported without amendment.

Bill read a third time.

I move—

Clause 1 of the Income Tax Bill gives effect to the adoption of the motion to go into Committee of Ways and Means and provides for the rates of tax and rebates which will apply to the year of assessment ending on 30 June 1961. As is customary, Clause 2 makes provision for the ancilliary matters, namely the assessment of Provincial Income Tax and the apportionment amongst the provinces of a portion of the normal tax payable by companies, with the exception of mining companies. As a result of experience which we have gained of the operation of the legal provisions relatting to the taxation of lump sum benefits derived from provident funds, it has been decided to revise the provisions relating to pension funds, provident funds, benefit funds and retirement annuity funds, in order to lay down more realistic methods for the assessment of what portion of any lump sum benefit will be exempted from tax. It is also our desire as far as possible to encourage the payment of annuities rather than the granting of large lump sums which are provided to a large extent by the employers’ tax-free contributions to the fund. The result of discussions with interested bodies and the advice given by a group of actuaries who offered their services, is embodied in the Fourth Schedule which is inserted by Clause 30, in the revised definitions which are found in Clause 3 and in the amendment of Section 7 (b)ter which is embodied in paragraph (a) of Clause 5. The scope of the new provisions is indicated fully in the memorandum and covers the three main objects. It is hoped that it will not be necessary for many years to come to amend further the revised provisions relating to the taxation of lump sum benefits by pension, provident and retirement annuity funds. I hope that we have now found a stable basis.

Paragraph (g) of Clause 9 gives effect to my proposal that the deduction in respect of contributions to an approved retirement annuity fund should be increased from R600 to R800. Paragraph (c) and (d) of sub-section (1) of Clause (3) insert definitions of “executor” and “person” respectively which has become necessary because the estates of deceased persons are not statutory persons, and without such definitions it is not possible to bring the income which may accrue to such an estate within the provisions of the Income Tax Act. For a number of years it has been the practice to tax such an estate in respect of all income which may accrue to it from the date on which the deceased person died until the date on which the final liquidation and distribution account is prepared by the executor. It is now proposed that this practice should be amended to the extent that such amounts as the Commissioner is satisfied have been derived for the immediate or future benefit of any heir, legatee or beneficiary shall be excluded from the taxable income of the estate. The taxable income thus excluded will be deemed to be the taxable income of such heir, legatee or beneficiary and will be taxed in his hands and not in the hands of the estate. The new provisions will be applied in respect of all income which accrues to the estate of a deceased person on or after 15 March 1961. As regards income which accrues to or on behalf of beneficiaries under the estates of deceased persons, every beneficiary will be required to include in his taxable income so much of such income as he has received, provided the amount thus received has not previously been taxed in the hands of the estate. Besides the definitions contained in Clause 3, the main amendment which is being introduced to give effect to these proposals is the insertion by Clause 9 of the new Section 9bis into the principal Act. Certain other amendments are being made for administrative purposes. As a result of the decision to abolish the apportionment system which is still applicable in respect of the liability for taxation of foreign shareholders in private companies which have been exempted from the undistributed profits tax in terms of paragraph (d), (e) or (i) of Section 51 of the principal Act and to base the liability for tax on the dividends declared by the private company in favour of any company which is not registered or carrying on business in the Republic, it is necessary to repeal Section 37bis and to amend Sections 42 and 44 to 48 of the principal Act. The opportunity has been taken to delete from these sections such of the existing provisions as are no longer in operation. The necessary amendments are effected by Clauses 16 to 20 of the Bill. Just as was the position last year when the apportionment system was partially abolished, Clause 16 provides that in the case of any private companies which are now being exempted from liability for the payment of tax in respect of their apportionable incomes, any dividend which they may declare not later than 15 March 1961 will be exempted from the non-resident shareholders tax. Furthermore and with a view to the retention in the Republic of the profits of this particular type of private company, it is also being laid down that any award of bonus shares made on or after 16 March 1961 by the private company to the company which is not registered or carrying on business in the Republic, will be exempted from the non-resident shareholders tax provided the Commissioner is satisfied that the award was made out of income derived by the company during any year of assessment which ended not later than 30 June 1960. In conclusion the clause provides that all dividends declared by private companies on or after 16 March 1961, or in the case of the particular companies, 30 June 1961 will be deemed to have been derived in the first place from profits earned by the company after the close of the 1960 assessment year and will therefore be subject to the non-resident shareholders’ tax. After all the post-1960-profits have been paid out in the form of dividends, any additional amount paid out during any year in the form of dividends will be exempted from the non-resident shareholders’ tax. These provisions are reasonable and obviate any possibility of dual taxation of foreign shareholders.

As I mentioned in my Budget speech, the abolition of the apportionment system will result in the definition of a public company only being of importance for two purposes. The one is the exemption from taxation of undistributed profits which is being granted to public companies and the other is the exemption from normal tax or the non-resident shareholders’ tax in respect of awards of bonus shares made by public companies. Under the present definition of “public company” practically any private company, 20 per cent of the shares of which are held by the general public can qualify as a public company. In my opinion a more limited definition is justified and we consequently propose that the special definition of “public company” which is contained in the definition of “dividend” contained in Section 1 of the principal Act, should be deleted and that the definition contained in Section 33 of that Act should be amended and applied for both purposes.

The definition which in terms of my proposal must be deleted lays down as the main requirement for recognition of a public company, that the general public should have had throughout the year of assessment a substantial interest as shareholders in all categories of the company’s equity share capital.

The revised definition embodies the test relating to interest throughout the year but provides as a further limitation that substantial interest will be an interest on the part of the general public in more than 50 per cent of the equity share capital issued by the company. As a measure of relief it is laid down that the interest of the public can be a direct interest or an indirect interest which is exercised through capital invested in equity shares held by the general public in a public company which holds some or all the equity shares of the company which wishes to be recognized as a public company. The object of the new definition is to encourage the far wider holding of equity shares in companies by the general public and it is hoped that this object will be achieved by withholding recognition as public companies and the consequent income tax benefits from companies more than 50 per cent of the equity shares of which are not controlled directly or indirectly by the general public. The necessary amendments are contained in paragraph (b) of sub-section (1) of Clause 3 and Clause 14 of this Bill.

Paragraph (b) of Clause 5, paragraph (a) of Clause 6, paragraph (f) of Clause 9 and Clause 11 contain the provisions relating to the taxation of income derived or deemed to be derived from the granting of the right of use of patents, etc., in the Republic or from the imparting of knowledge in connection with the use of such patents. It is now being laid down that when the recipient of the income is a person who is not resident in the Republic or is not carrying on business in the Republic, the taxable income from this source will be equal to 30 per cent of the income thus derived (whereas previously it was 100 per cent) and it is also being laid dawn that any person in the Republic who has incurred a liability to pay any amount to any person outside the Republic for the use of a patent, etc., or for the imparting of technical knowledge (know-how), will deduct the tax leviable on such amount from that amount and pay it to the Commissioner. For the purposes of deducting this tax, the tax scale will be the scale of normal tax payable by companies with the exception of mining companies. Provision is being made for a repayment if this tax scale should be reduced and also for the repayment to a person, except a company, who receives such income, if he proves that the amount of tax deducted is more than the tax for which he is legally liable.

Paragraph (j) of Clause 9 provides that the premiums paid by a company under policies of insurance on the lives of directors or employees of such company, or by a person, other than a company, on the lives of his employees, will be allowed as a deduction in determining the taxable income of the person paying the premiums. Conversely paragraph (c) of Clause 5 provides that the return from any such policy will be included in the income of such a person.

The amendments to Section 11 of the principal Act contained in Clause 9 comprise all the amendments which are necessary in connection with the granting of allowances in respect of expenditure incurred in removing machinery and to give effect to proposals which I announced in my Budget speech and which are aimed at encouraging industrial development by increasing the investment allowances and the extension of the building allowances so that they will also be granted to the lessors of buildings who make suitable premises available for industrial hotel purposes.

Special provisions have been inserted to give effect to my proposals aimed at encouraging industrialists who decide to undertake manufacturing processes in the Bantu area or areas bordering on a Bantu area. In the case of machinery and equipment which is to be used in a Bantu area or in an area bordering on a Bantu area, it is the intention as a further encouragement to remove the requirement that the machinery must be new. This amendment will mean that the initial allowance and the investment allowance will be permitted in appropriate cases where used machinery is removed to a Bantu area or an area bordering on a Bantu area if neither the initial allowance nor the investment allowance were granted to the industrialist when the machinery was taken into use for the first time.

In terms of the existing legal provisions, every industrialist whose machinery or equipment has been damaged by fire or water and who receives compensation in respect of such damage is required to include in his taxable income the amount by which the compensation exceeds the value of the equipment or machinery as depreciated for income tax purposes. In order to alleviate the tax burden on those industrialists who wish to purchase new machinery and resume their businesses, paragraph (k) of Clause 9 provides that, subject to certain precautionary measures, the amount of the recoupment will not have to be included in the taxable income and will not be subject to tax in the year during which it accrues.

To encourage the development of markets outside the Republic, provision is made for the deduction of expenditure which any taxpayer incurs in connection with the appointment of agents outside the Republic for the sale of goods manufactured by him in the Republic.

It is also the intention to allow any person who mines for copper in the district of Letaba to write off all capital expenditure in the year in which it is incurred. This concession is regarded as very essential because although the copper deposits in the district of Letaba are vast in scope, they are of a low grade. The opportunity presented by this proposal has been taken to repeal the Namaqualand Copper Mines Income Tax Relief Act, 1937, and to embody the provisions of that Act in the Income Tax Act. These provisions will be found in Clauses 13 and 31.

In order to encourage the refining (beneficiating) of base minerals in the Republic, the Bill contains provisions under which the Minister of Finance on the joint recommendation of the Secretary for Mines and the Secretary for Commerce and Industry in respect of any base mineral mine, can authorize an increase in the percentage of current capital expenditure which may be written off against income. A basic allowance of 25 per cent of such expenditure will be allowed to each base mineral mine under the provisions of this Bill and this allowance may be increased to 100 per cent of such current capital expenditure.

Clause 12 provides that two-thirds of any dividends received in the course of any long-term insurance business, must be included in the investment income which forms the basis for determining the taxable income derived from this type of business.

As regards short-term insurance the clause makes provision for the building up of a reserve against claims which have been submitted but not yet disposed of and paid.

Clause 21 inserts specific provisions dealing with the determination of the amount of accumulated deficits which a company which is liable to the undisturbed profits tax will be entitled to deduct in determining its distributable profits. The rule which is being inserted by the clause has become necessary to ensure that any trading loss which such a company may have suffered is reduced by the amount of any dividends which it has received.

Clause 22 which also relates to the undistributed profits tax corrects an omission which arose when paragraph (i) of Section 51 of the principle Act was amended last year. The new paragraph extends the scope of the exemption and introduces the concept of equity shares.

The Third Schedule to the principal Act which deals with the assessment of taxable income derived from farming activities, is being amended by Clause 28 in view of the abolition of super tax and the new provisions relating to the determination of the taxable incomes of the estates of deceased persons. In addition sub-item (i) of item (b) of sub-paragraph (1) of paragraph 8 is being substituted to make it clear that, on the commencement of recommencement of farming activities, a farmer is not entitled to include the value of any livestock which he acquired on that date in the value of the livestock which he had on hand at the date of such commencement or recommencement, and which he had not disposed of.

Paragraph (a) of Clause 8 provides for the exemption from income tax of interest which does not exceed R1,000 per annum, received on 5 per cent 7-year Treasury bonds, which I mentioned in my Budget speech. This exemption is over and above the exemption in respect of 5 per cent 5-year Treasury bonds issued previously and will enable any taxpayer to invest up to R20,000 in the new bonds without being liable for tax on the interest.

Clause 33 gives effect to my proposal that the provision which requires that 25 per cent of any donation made for the purpose of technological training must be deposited in a special account for the purpose of assisting universities in general, should be repealed. I trust that the removal of this provision will result in a considerable increase in the amounts donated by companies to universities for the purposes of technological training.

The explanatory memorandum of this Bill deals with all the matters I have mentioned, as well as other less important or consequential amendments which are being made to the Income Tax Act.

I intend consolidating the income tax laws during the next session of Parliament.

We propose possibly to take the unusual step of opposing the second reading of this Bill because it goes further than the proposals under Ways and means. First of all, I want to say that the Bill was tabled very late indeed. I submit that we have to consider the alteration of our procedure, or alternatively the hon. the Minister should consider the organization of his Department so that when we reach the Ways and Means stage, immediately after we have voted on that, the Minister should Table the Bill in this House. That should be possible. We have a responsibility as legislators not only to consider the Bill in all its implications, but where we think necessary to consult the public who are affected by this Bill. The Bill has been tabled so late that we had the unusual experience of having the explanatory memorandum on our tables before the Bill was tabled in the House, so that while some of us may have had the opportunity of knowing the implications of the Bill before the general public, fully appreciated the significance of the measure, the outside public—members of the Chambers of Commerce and the Chamber of Industries and various other bodies who are interested in this Bill—did not have the opportunity of considering it carefully, nor did we have the opportunity of consulting with them with a view of putting before the hon. the Minister any counter proposals, or considering the matter adequately so that we could ensure that this Bill was the best fiscal Bill which could be passed by this House. That is one of the principal reasons why we intend to oppose this Bill.

We regard it as essential to have consultation on matters such as this. I think there are very few hon. members in this House to-night who would be prepared to stand up and argue the various clauses of this Bill. Taxation is always complicated. There is always a perpetual war between the Minister of Finance and his officials and the members of the public. Naturally the members of the public want to pay the minimum, and the Minister and his officials want to collect the maximum, and for that reason taxation proposals must be certain; it is one of the criticisms of the Bill and we will show that in greater detail when we come to the Committee Stage, that certain of the proposals are not certain, but are in our opinion vague. I refer by way of illustration to the proposals in the Bill dealing with Bantu areas. There is a proposal that certain additional allowances shall be made to industries established in Bantu areas and it shall be necessary before those additional deductions are enjoyed in terms of Section 11 of the principal Act, that the taxpayer must submit a certificate from the Secretary for Bantu Affairs, and the Secretary for Commerce and Industries which will satisfy the Commissioner that such an industry is entitled to that deduction. There are other objections to this Bill in that certain of these proposals are retrospective. I think most people will agree that it is the duty of a businessman, of an industrialist, or the duty of any person who is engaged in commerce and industry to ensure that their capital is used to the best advantage, and if they are prudent in their business affairs, they will so order their financial arrangements that they make provision for the ordinary expenditure of business, they make provision for reserves and they make provision for that proportion which will accrue to the Department of Inland Revenue, and I think it is fundamentally unsound that a fiscal Bill should have a retrospective provision. A businessman never contemplates having to go back and provide funds for the state where he has already made provision for his ordinary obligations.

What clause is that?

I had in mind the new proposal in the Bill in regard to the taxing of annuities. I suggest that we should deal with that in greater detail in the Committee Stage. I am pleased to hear the Minister say in the concluding portion of his address that he proposes to have a consolidating Bill next year, and I can only add that it is about time. It was in 1941 we had the principal Act and even if one is most meticulous about annotating statutes from year to year, it is very difficult to keep pace with the alterations made over a period of 20 years, and the position has become so difficult that printers of legal books have found it essential to print for the benefit of legal men and accountants and businessmen a Bill in consolidated form because it was so difficult to keep in touch with the various amendments made over the past 20 years that they found there was a market for a Bill reprinted with all the amendments. I am very pleased to hear the Minister promise, as he promised last year, and as his predecessor promised the year before, that next year we will have a consolidating Bill.

I come to one other matter before I go into the other sections of the Bill and that is that I hope that the Minister in future when he deals with taxation proposals will carefully consider the effect of mechanization. The Minister has introduced into his Department modern methods of mechanical aids, and I think it is unfortunate that when he introduces tax proposals he does not take into account the advisability of having regard to mechanical aids, because I see no purpose in introducing mechanical aids when no cognisance is taken of the main objective of mechanical aids, namely, to save time and work. I would draw the attention of the hon. the Minister to Clause 1 of the Bill. Sub-section (1) (a) (ii) says—

Here the Minister proposes a deduction of 10 per cent and yet the provinces assess their taxation as a percentage of Union tax. The Minister in the agreement which he has made with the provinces has provided that their calculations will be based upon the total tax and not on the tax less 10 per cent. The result is this that in the Minister’s own Department an additional task has to be undertaken in the programming department. I fail to see the purpose of introducing mechanical aids in a department such as this—I grant mechanical aids in the department are necessary—when the Minister in drafting his legislation and in making arrangements with the provinces introduces an additional task in his programming department. I submit that when drafting legislation of this kind, and if he wants to be effective in making his collecting department as efficient as possible, he should consult the technical people in his Department so that he can streamline the various processes as efficiently as possible and thereby save this additional calculation which will have to be made by every assessor in the country, and in due time when his computor is in full operation, it will involve an additional step in his computing department. I hope that the hon. the Minister will bear this in mind next year when framing his tax proposals and when entering into negotiations with the provinces with regard to their taxation. Because as a result of his decision this year he will have to introduce an additional step in his Department and he has created unnecessary work, work which could have been avoided had he consulted his Department and considered the effect of the proposals which have been made for the various provinces.

The Minister fails further in his taxation proposals in that he fails to encourage development by overseas investors. I would refer to an article which appeared recently in the Taxpayer. I think the hon. the Minister will concede that it is his objective to encourage investment in this country. Despite of what has happened recently with regard to the blocking of exchanges, I think the long-term objective of the Minister is to encourage overseas concerns and overseas investors to invest in this country, and I draw his attention to an article which appeared in the Taxpayer in May 1961, which shows beyond doubt that in spite of the various agreements which have been reached between the Commissioner for Inland Revenue and countries overseas, double taxation still obtains in this country. The Taxpayer says this—

The position is this that, from 1955 to 1959, persons resident in the Union whose income included dividends from the United Kingdom were entitled to a supertax rebate equal to their taxable income (that is surtax in the United Kingdom paid to the United Kingdom tax authorities) in terms of Section 29 (1) (c) of the Act. Supertax has now fallen away and dividends are included in the normal tax payable by individuals, subject to percentage rebates ranging from 100 per cent to 33⅓per cent, but no deduction is allowable in respect of United Kingdom surtax paid on dividends received from the United Kingdom, in spite of the fact that there is an agreement between the Union and the United Kingdom the purpose of which is to avoid double tax. That agreement was reached during recent years.

I was saying that, in spite of the fact that there is an agreement between the Union and the United Kingdom, the purpose of which is to avoid double taxation, the new method of taxation that was introduced in 1960 differs from the 1959 position in that no deduction in respect of taxes paid in foreign countries is now applicable. From 1955 to 1959 there was recognition of the reciprocity agreement between the United Kingdom and South Africa, but from 1960 the position is that no deduction for taxes paid to foreign authorities is now applicable and, in effect, double taxation has now been reintroduced. This is a bad thing for this country because it does not encourage people to invest in this country if there is going to be double taxation, and I would like to know from the hon. the Minister whether it was an intentional omission or whether it was an oversight, because this matter appeared in the 1960 legislation and no attempt has been made to adjust the position this year, and the result is that this double taxation burden still applies and there is no relief in this Act.

It was not introduced in the last Budget.

No, in 1960, and my point is that there is no relief in this Act. In 1960 we made a similar complaint that the Bill came at the end of the session and that there was not the opportunity to examine the position, and to the best of my recollection this possibility was raised in 1960. This matter was raised in 1960, but here in 1961, there is still this double taxation. The hon. the Minister has accepted the principle that wherever possible double taxation should be avoided and, in fact, he has sent his Commissioner overseas from time to time to enter into taxation agreements with overseas countries to avoid double taxation. The whole object of entering into these agreements to avoid double taxation is to ensure that there shall be an encouragement for investors to come to this country and invest without having to pay a burden of taxation both in this country and in the country of their domicile. Here is a matter to the best of my recollection was raised in 1960, and it still obtains to-day. It is a matter which flowed from the alteration in the whole framework of taxation which was introduced last year when we dropped the supertax and introduced the new block system, and following that this anomaly arose. My question to the Minister is: Was this anomaly intentionally introduced or was it an oversight? If it was intentional, why has the Minister introduced double taxation?

In 1958 was it intentional?

From 1955 to 1959 there was no double taxation. The Minister made it perfectly clear; if he refers to the speeches he made in 1959 and the speeches of his predecessor, he will find in the Hansard references that mention was made of the completion of such agreements …

When did we start this double taxation?

In 1960, last year, and I think this is an anomaly in the Act. I referred the hon. the Minister just now to the article appearing in the Taxpayer in May 1961, and I could go on quoting what the Taxpayer said—

My question to the hon. the Minister is: Was the omission deliberate or was it an oversight? If it was deliberate, why is it the policy of the Minister to re-introduce the principle of double taxation in respect of this particular class of taxpayers. If it was not deliberate, what proposals has the Minister in mind to correct the omission? It is a clearcut case. If it was deliberate, the Minister should justify the omission, because I see no purpose in entering into taxation agreements with other countries which have as their objective the avoidance of double taxation and yet this particular class of taxpayer having double taxation. If it is the principle of the Minister’s Department to avoid double taxation, why make an exception of this particular class of taxpayer? On the other hand, if it is the Minister’s policy to have double taxation then I suggest that this is an anomoly in the Act and should be remedied, and I would like to know whether the Minister intends to do so and, if so, whether he will remedy it here or in the Other Place? The hon. the Minister cannot have it both ways. If it is deliberate then the Minister must justify it. If, on the other hand it was an oversight, I would like to know what the Minister’s proposals are. The effect of this is to discourage investment by this type of investor in South African equities. The Bill also fails to encourage development by the country’s own citizens. I think I can do no better than to read from a document sent to me when I asked for comments on this Bill. This was sent to me by an accountant who has long experience in public practice …

What clause does it refer to?

It refers to the Bill in general, and particularly to the clause dealing with the new definition of “public companies”. He says this—

Mr. Speaker, this was followed up with a wire which we had from an entirely different source, from another part of the country and this wire said this—

One of the objections I made in the course of my earlier remarks was about the retrospective effect of this legislation.

When we come to a detailed examination of the Bill, another matter we want to take up with the hon. the Minister is the definition of Bantu areas in terms of Clause 5 of the Bill. Under that clause there is provision for allowance for depreciation of certain assets in terms of Section 11 of the principle Act, whereby a deductible allowance is made for taxation purposes. But in order to enjoy that special deduction for taxation purposes, the taxpayer must obtain a certificate to the effect that that particular area is regarded as a Bantu area, which certificate must be issued by the Secretary for Bantu Administration and Development and by the Secretary for Economic Affairs. The Act goes on to say that it must be in or near a Bantu area. My submission is that it is fundamental in tax matters that one should be definite. Taxation should be certain. One of the matters we will have to clear up in the Committee Stage is this, what is the position when one gets a conflicting certificate as between the Secretary for Economic Affairs and the Secretary for Bantu Administration and Development? Who is to be the arbiter? And why the Secretary of the Department and not the Minister responsible? Where is the opportunity to criticize the matter? How is one to know whether one particular taxpayer gets such a certificate and another does not? For example, what is regarded as being “near” a Bantu area? I have in mind one very big city that is very near a Bantu area, in fact the Bantu area is contiguous to the borough boundary. I refer to the city of Durban. Yet that will not be called a Bantu area. Industries situated near the borders of the Bantu area in Durban will not be called industries in these areas in terms of this Act, so far as I am aware.

Why not?

Because we have had two conflicting decisions as to what is or what is not a Bantu area. I have on record speeches made by the hon. the Minister of Economic Affairs and by the hon. the Minister of Bantu Administration and Development as to what is and what is not a suitable area for the development of Bantu industries. Here we are dealing with taxation where we must have certainty.

What clause is that?

I think it is Clause 9 (d)bis, as far as I can recollect. That is where it defines the conditions which must be applied before a taxpayer can claim a deduction in terms of Section 11 of the principal Act.

Here we have a taxation proposal in this Bill where a taxpayer can claim an allowable deduction in terms of the principal Act, yet the definition for the allowable deduction lacks certainty. We are concerned not only with the interests of the taxpayer, but also with the interests of taxpayers who may be prejudiced as a result of differing applications to different taxpayers. For example, I have in mind a taxpayer, shall we say, in a country district such as Estcourt. There may be established in Estcourt for many years an industry which has enjoyed taxable deductions in terms of the Act as it exists to-day for machinery or other assets, which are subject to an allowable deduction in terms of the principal Act. Now a new industry being set up would apply, in terms of this Act, for special allowances in terms of the new provision of the Act, and would ask that they be granted deductions in terms of Section 11 of the principal Act. They would apply to the Minister of Economic Affairs and the Minister of Bantu Administration and Development for the necessary certificate to qualify them for these deductions. Being new industries established on the borders of a reserve, they would be entitled to that certificate from the respective Ministers. Once the taxpayer could satisfy the Commissioner for Inland Revenue that these certificates had been granted, they could get the deduction. But what would be the position of an existing industry which had been operating for many years and did not enjoy these deductions in the past? When we come to the Committee Stage we will have an opportunity of examining that more closely. It appears to us that the Government, in its haste to give the benefits of this special legislation to these people who are to be encouraged to establish industries on the borders or in the reserves, have not taken into consideration existing industries on the borders of the reserves which have been established for many years.

Laws are usually prospective.

Yes, when it comes to the collection of taxation. And even in this Act the Minister has erred on the side of being retrospective. That is our quarrel with the hon. the Minister.

What you are claiming now is that certain benefits which are now being given to new companies in certain areas should be given to other companies which may have started in that area many years ago.

I suggest that the hon. the Minister should not try to give an answer to that question by way of interjection across the floor of the House, because he should properly deal with that matter in Committee. If I were to go into this matter in detail, in his reply the hon. the Minister would say: “Why do we not deal with this matter in Committee?” And I say that the time to deal with the matter in detail is in the Committee Stage. But in the second reading debate one should deal with matters of a general nature.

The hon. the Minister’s proposals fail in another respect, and that is in connection with the non-resident shareholders tax. Until the 1959 tax year income of private companies in which shares were held by a foreign company was apportioned, and non-resident shareholder tax was levied on so much of the income as was apportioned to the foreign company. In 1960, that is last year, a change was enacted whereby companies which were not exempt from the undistributed profits tax in terms of Section 51 (d), (e) or (i) of the Act; that is companies in which foreign investors held a minority interest, were no longer subject to the tax on the income apportioned to foreign companies; instead the tax was levied on dividends paid. In order to allow for the fact that some private companies might have declared dividends after 30 June 1959 out of income earned prior to that date, only dividends declared after 1 April 1960 were subjected to the tax.

According to the 1961 Income Tax Bill—the Bill we are now dealing with—the apportionment system is to be done away with completely and companies which were exempt from undistributed profits tax in terms of Section 51 (d), (e) or (i) are now to be put on a similar basis to those whose basis of taxation was changed in the 1960 tax year. The Bill, however, contains additional provisions which enable these companies, that is, those controlled by foreign investors, to escape the tax on dividends declared at any time in the future and shown to the satisfaction of the Commissioner to have been paid out of income previously apportioned. This provision has not, however, been extended to those companies whose basis of taxation was changed in the 1960 tax year. The only reason for the distinction between the two classes of companies appears to be that companies controlled by foreign investors should enjoy a greater benefit than those in which overseas investors hold only a minority interest. On the grounds of equity, however, this distinction hardly seems to be justifiable.

Mr. Speaker, the position is that after 1960 the whole approach for non-resident shareholders tax has been that now the foreign investor has the benefit and not the South African taxpayer. I think that the hon. the Minister should give some explanation as to why, in this particular case, the foreign investor gets the benefit which was formerly enjoyed by the South African taxpayer, even as a minority shareholder.

We submit that having regard to involved and complicated matters of taxation, it is not fair to the country nor to this House to come at this time of the Session at such short notice and produce a long and involved Bill of this nature when we do not have the opportunity either to consult with the public or the various interests concerned, nor to examine in detail the effect of the many amendments which this Bill includes. We are thus prevented from making a more objective contribution to the debate, and we are prevented from doing our best to put before the country sound fiscal legislation. For the reason that there has not been the opportunity to consult, and having regard to the fact that there are certain anomalies in the Act, and that there is not equity for all classes of taxpayers; that there is uncertainty in the Bill, and particularly having regard to the definition of Bantu areas, we propose to oppose the second reading of this Bill, even though this may be an unprecedented action to take with regard to a Bill of this nature.

I should like to ask the hon. the Minister of Finance that before drawing up his consolidating Bill for the next session of Parliament he will give consideration to bringing about more uniformity in the general taxation of this country, especially in regard to that applied by the Provincial Councils. In the Cape Province we have a property tax …

Order, order! I am sorry to interrupt the hon. member but this Bill does not deal with provincial taxation.

But, Mr. Speaker, does this not affect the rate of normal tax for the year of assessment ending 30 June 1961, to provide for the payment of a portion of the normal tax payable by certain companies into the Provincial Revenue Fund?

To which clause is the hon. member referring?

I am referring to the introduction of the Bill on the first page. Clause 2 refers to certain levies to be paid by the Provincial Councils. I thought that I would ask the hon. the Minister, very briefly, that when the consolidating Bill is introduced next year, he would give consideration to more uniformity of taxation levied by the various provinces …

Order, order! I am afraid I have to interrupt the hon. member. This Bill deals with State taxation to be paid into Provincial Funds. I am afraid the hon. member may not proceed along those lines.

Thank you. I will not proceed any further along those lines, but perhaps the hon. the Minister may give consideration to what I have said.

We have discussed quite frequently the problem of having the Income Tax Bill available in time for a thorough examination by hon. members who are interested in it and by interested parties outside the House. The difficulty has always been the question of time. As I have said previously, I have gone to the extent of giving the hon. members, and others who are interested, an advance draft of the Bill before it was put into its final form by the law advisers. I did this before 26 May. We had the Bill itself printed as soon as we possibly could, and the advance draft that I gave to the hon. member did not differ from the present Bill in any material respect.

Was he allowed to publish the draft?

No.

It was just for his information?

He was allowed to consult with any expert about it. I gave him that permission.

May I ask the Minister a question? Did the hon. the Minister not make only five copies available to this side of the House, and did he not ask that we should not raise the matter of private copies in the House? I am sorry that the hon. the Minister has raised this matter, but we will deal with it later.

As I have said before, I made it available in the best way I could, and I gave the hon. member the right to consult with his experts about it. He asked for the draft for that purpose and it was granted for that purpose. The point I want to make is that it only differs from what he received more than a month ago in the way in which the final Bill was phrased by the law advisers. Materially there is no difference. It is not even as it was last year; this year there is no material difference at all. I had hoped that it would be realized that I had met the hon. member as far as I possibly could—and that applies to hon. members on both sides of the House. However I do realize the difficulty.

The hon. member has now raised a number of matters which, I assume, have been in his possession for some time. I am going to reply to them as best I can, but it is very difficult, and naturally had I been acquainted with the nature of his inquires—which are of a very technical nature—I would have been in a much better position to deal with those points. I was wondering if the hon. member, in future, would not put us in possession of those points and allow us to get a considered opinion which we could then give to him when he raises these points in the House? I shall, however, deal with them as best I can but, as I say, it is an involved matter and I cannot presume to deal with these points as well and as fully as I could have done had I known what the points were to be. In regard to some of these points, my instructions are that the hon. member is not correct in the facts he has put forward.

For once the shoe is on the other foot. This time you want some notice, and not us.

In what facts am I not correct?

I am going to deal with some of them. The opinions the hon. member has expressed are not entirely correct. The point I want to make is that if there is discussion on technical matters between the hon. member who raises them and the Commissioner for Inland Revenue, one is much more likely to get a considered and intelligent discussion of the subject matter when these points are raised in the House.

One of the hon. member’s first points was that he referred to the question of mechanical aids and he said that it was rather inconvenient, from the point of view of the computor, because instead of getting ten per cent of the 100 per cent that the taxpayers pay to the provinces, the percentage is now less. The hon. member will realize that two years ago the provinces’ taxed on 100 per cent of what the taxpayer had to pay. Last year, in terms of the discount that was given to the ordinary taxpayer, it was 95 per cent. Then the provinces had to base their percentage on 95 and not 100, and there were serious complaints on their part because they said they were now getting less than they had provided for in their Budgets. They were expecting the full 100 per cent and were anticipating that there would be no relief from taxation. But every relief from taxation by the Central Government, as far as the provincial tax on income is concerned. means that their income is also reduced. They complained to me about that. This year the discount was extended to ten per cent. But instead of the percentage now being on the 90. we allowed it to remain on the same basis last year. namely, on the 95 per cent. In other words, we allowed it to remain at the position to which they had become accustomed the year before. However I agree with the hon. member that it would be much more convenient if it were left as it had been. The Commissioner for Inland Revenue also informs me that it is a little difficult, and when the computor comes I suppose the difficulties will be greater. But I hope that by that time we will have the report of the commission enquiring into the financial relations between the Government and the provinces. That is the reason, however, why we have done this, because the provinces were complaining so bitterly. We did the same with the company tax. They get their full one shilling, and the three per cent reduction is borne entirely by the Central Government.

Then the hon. member referred to the annuities provisions which are retrospective. I can tell the hon. member that the new provisions will not apply in respect of accruals prior to the 1961 tax year. The new provisions also safeguard the vested interests as at 14 March of this year, of the member of any pension or provident fund as determined by reference to the law which is being superceded. That is the position there. It will not apply in respect of accruals prior to the 1961 tax year.

A further point raised by the hon. member was in regard to double taxation. He referred to the fact that last year the new basis of block taxation was introduced and he wanted to know whether it was deliberately omitted or whether it was an oversight. I want to give the hon. member this information: his point is that South African shareholders of United Kingdom companies would no longer receive the United Kingdom tax as a deduction. That is correct. The new method introduced in 1960 made it impossible to continue the previous arrangement. The present position is that South African shareholders are taxed only on the net amount of dividends received from the United Kingdom. There is nothing in the double taxation agreement which compels the deduction of the United Kingdom taxation from United Kingdom dividends, but that procedure is nevertheless followed. I understand there are two ways of avoiding double taxation, one is by deducting the foreign tax from the South African tax, and the other method of doing it is by deducting the foreign tax from the amount of the income in South Africa. In the case of United Kingdom dividends, the first method was followed up to 1960, when the block system of taxation was introduced. Until then the first method of avoiding double taxation was followed, and the second method has been followed since 1960. However in both cases of methods of avoiding double tax, there have been difficulties. The one way proved to be difficult of application and therefore last year we had to resort to the other way of avoiding double taxation …

May I ask the hon. the Minister a question? Does the hon. the Minister agree that double taxation still obtains?

It depends upon what is called double taxation. As I have said, if they are allowed to deduct the United Kingdom tax from the income here then, in that sense, double taxation is avoided.

The further point that the hon. member has made is in regard to the non-resident shareholders’ tax. He has said that the new position is more advantageous to the foreign investor than the old position. Private companies which are now being relieved of apportionment enjoy a greater benefit than did the companies which were relieved in 1960—and that is the hon. member’s argument. That is so, but the main reason why we have done this is not to force the non-resident shareholder to take his dividends out of the country. We feel that even if it means the sacrifice of a little revenue, from a policy point of view we think that if we can keep that money within South Africa it is better than forcing them to declare dividends and sending the money out of the country. That is the sole reason for that.

The hon. member also dealt with the question of the public company and the change in the definition of a public company. He has read to the House a telegram that he has received in this connection.

On a point of explanation the hon. the Minister has misunderstood the position. That telegram had nothing to do with the definition of public companies.

I also received a telegram and I thought it was probably the same.

No, my telegram was to do with annuities.

This has also been commented on in certain newspapers. For instance it has been said, I think in regard to the same point, that the Minister has departed from Queensbury Rules by making this definition retrospective. That is the point the hon. member also made. They say—

That is the argument, but the point is that the people who argue in this way—and, as I say, I have had telegrams in this regard—have failed to take notice of Section 34 of the Income Tax Act. In terms of Section 34 it is provided that if the status of a public company requires change, the Commissioner may notify the company that it will, as from the next succeeding specified date, be recognized as a private company.

It may?

The Commissioner may notify the company that it will as from the next succeeding specified date be recognized as a private company.

Will the Commissioner make that decision in every case?

It will be done in this case. Except in very rare cases, the effect of Section 34 is to give public companies ample warning of the change in their status. The effect will then be that a company which was a public company for the 1960 tax year will continue to be recognized as a public company for the 1961 tax year, but if its return for that year discloses that it must, in terms of the new definition, be recognized as a private company it will be advised during the course of the 1962 tax year, with effect from its specified date, that for the 1962 tax year it will be recognized as a private company. By applying the definition to its circumstances, the company will now know what the definition is and whether it falls within that definition or not, and immediately the new definition becomes law the company will be in a position to decide whether it will be a private company for the 1962 tax year.

There is one further point that the hon. member has raised, in regard to Clause 9. The provision is uncertain. It has to be determined. It is not clear to whom it will be applicable. That is so, but it is unavoidable. The ultimate decision lies with the Minister of Finance, but he has to have regard to the circumstances of the case and to the recommendations of the Secretary for Bantu Administration and the Secretary for Commerce and Industries. That is the position at present and it cannot be any more specific than that. At this stage to say what type of companies were qualified for it in Bantu areas or in border areas is impossible. That has to be determined and it will be determined by the Department of Commerce and Industries. I have to take into consideration what they say and the decision will be finally left with me. That is the furthest we can go at this stage unless we were to have a long definition of the various industries in respect of which this will apply and the various areas in respect of which it will apply. But at the moment this is the furthest we can go. We give the benefits of these concessions in order to encourage companies to go to the border areas. I have tried my best to deal with the technical points raised here and I would really suggest to the hon. member that it would be a very good procedure if one could discuss these technical points, and then I would know exactly what point the hon. member is making. I have done my best under the circumstances, but it is a difficult matter with a highly technical Bill of this nature.

Motion put and agreed to.

Bill read a second time.

House in Committee:

Clauses 1 and 2 put and agreed to.

On Clause 3,

In the definition on page 12, in (c), the Minister refers to estates and includes a person authorized to administer an estate. It is not clear whether the estate includes the estate of a person married in community of property, whether the widow’s estate is included or not.

Only the deceased’s estate, if they are married in community of property. It is not the survivor’s estate, because that is not an estate yet.

A doubt has been raised as to whether in future the widow’s estate will be taxed, together with the estate of the deceased, or whether it will be separate.

The reason for this amendment to make an estate become a person is because there has been a judgment that an estate is not a person. The hon. member will remember that it was a question of what to do with the income of an estate between the death of the testator and the liquidation account being confirmed passing the bequest to the heir or legatee. We had a certain procedure in the past. We said the legatee had to pay, but that was upset by a decision of the Income Tax Court or some other court. Then we said we would make the estate pay for whatever income was earned during that period. Then unfortunately the matter was raised, but for another purpose, and the court found that an estate was not a “person” and therefore could not be taxed in terms of the Income Tax Act. So now we are simply providing that a “person” shall include the estate of a deceased person and now we have reverted to the procedure that the legatee is responsible for the payment of any income tax during that period, except in certain cases where the income has not actually accrued to him. Then it is paid by the estate. Last year the question was raised whether we would not go back to the old procedure of taxing the legatee. We have done that as far as we possibly could, but because we cannot make him liable for the whole tax, because certain income during that period does not really come to him but belongs to the estate, we have now provided in the definition of “person” that it shall include the estate of the deceased person.

I want to draw the Minister’s attention to Clause 3 (1) (f) on page 12. It provides that the rules of a fund must provide that where a member dies before becoming entitled to payment of the annuity … [Inaudible.] It is felt that this is an unfair clause as it stands. It cuts across one of the alternatives in one fund that I know of where one can receive a guaranteed lump sum as opposed to a return of contributions plus interest. It appears possible for such a fund not to be recognized as such for 1961, whereas formerly it was recognized. I suggest that if the clause stand as it is it should be made applicable only to the tax year after 30 June 1962, which will enable contributors for this year to take the necessary action in the coming year. I suggest that it will be extremely unlikely that this Act will be published before the end of this month and I ask the Minister whether, in view of the observations I have made in regard to the inequity of the application of this clause, he will see whether some relief can be given.

I will look into it.

Clause 4 put and agreed to.

On Clause 5,

I wish to raise a point under sub-section 5 (d), which introduces a new paragraph to Section 7 of the principal Act, having the effect of including in the definition of “gross income” any amount which is received by or accrued to a taxpayer under a policy of insurance on the life of an employee, or in the case of a company, on the life of an employee or of a director of that company. I can understand that in cases where the object of the insurance policy is to insure against loss of income. For instance, if one assures the life of an employee who is responsible for earning valuable income for a firm, it is reasonable that the amount received should be taxable, but on the other hand if one were to assure the life of a director who has lent the company money in order to be able to repay it to his estate on death, the amount received under the insurance policy would seem to be in the nature of capital and in that case it should not be taxable. I wonder whether the Minister cannot find a way of distinguishing between the two? In terms of this clause, the amount received by way of a policy will be taxable. Secondly, if nothing can be done, surely the premiums which have been paid in past years should be allowed as a reduction. As the clause reads at present, it would seem that the only reduction allowed would be the premium paid in the year of assessment, in the year when the proceeds of the policy are received. Surely in that case, if the firm or the taxpayer is to be taxed on the proceeds of the policy, the premiums paid in the past should be deducted.

The present provisions are designed to cover premiums payable from now and before the policy matures. In all cases, and not only in insurance policies where a lump sum becomes taxable it is the established practice to allow all expenditure against the lump sum. In these circumstances I do not consider that the special provision which the hon. member asks for is necessary.

Clause 5 (g)quat on page 16, line 50, says “by the insertion after paragraph (g)ter of the said definition of the following paragraph: Any amount received or accrued on the surrender or disposal of any policy of insurance on the life of an employee …”. Does that include an accident policy? Because on first reading the clause, one would assume that it deals with ordinary life insurance, but as many employees are covered by accident policies I would like to know whether the Minister will clarify the position and tell us whether it includes an accident policy.

I understand it is included when there is any obligation to the employee.

I do not regard that as a satisfactory answer. Frequently an employee, particularly in these days, in connection with his business may be sent to various parts of the Union, or overseas by air, and it is becoming common practice for firms to cover the employee by an accident policy, particularly for air travel. Many companies as a matter of routine cover their commercial travellers against road accidents. It is not an obligation on the firm. There is no contractual obligation whereby the company is obliged to cover the employee, but because the company considers it advisable to do so it takes out a policy. My reason for raising this matter is that the Minister said it only applies when the company is obliged to do so. In many cases the company is not obliged to do so but it does so, and I want to know whether this section includes accident policies and I think the position should be put beyond all doubt. If it includes all accident policies, the Minister should say so now.

If the accident happens to the employee in the course of his business, his employer is obliged to recompense him for any damages he has suffered. In that case I say there is an obligation, but if he goes on a joy-ride, usually the insurance policy only covers any accident happening while he is engaged in the course of his employment. I know of cases where the lives of directors are insured, but it is only in connection with the business of a company and if they want further cover they have to pay the extra premium on that, and that would not fall under this clause because it would not be for the benefit of the company.

It is unfortunate that the Minister uses the wording “obliged to do so”. I do not think the Minister means that. The company is obliged to cover an employee under the workmen’s compensation policy, but a company is not obliged to insure its directors or against accidents to senior employees, but it does so as a matter of policy and what I want to get quite clear is that if a company insures its employees against accidents while engaged on the company’s business, does it fall under the section?

If he is engaged on the company’s business.

The Minister has unfortunately used the word “obliged”, and my submission is that he should not have used that word. I admit that the Minister is under difficulties at this time of the Session and we are also in difficulties, but here is a case where the employer is not obliged to take out such a policy but he takes out a policy insuring his employee against accident where such accident occurs during the course of the employee’s business and whilst occupied with the company’s affairs, and the company pays the premium, not because it is obliged to do so but as good business policy. If the employee has an accident and funds accrue under that policy, I want to ask the Minister whether it is quite clear that it falls under this section.

I do not want to quarrel with the hon. member in regard to the word “obliged”. There may be a statutory obligation, but any employer is liable to a civil claim if during the course of his employment the employee has an accident. If he takes out a policy to cover himself against that liability, it is not a statutory liability like under the Workmen’s Compensation Act, but it may expose the employer to a claim for damages if any employee of his is hurt during the course of his business, and if the employer under such circumstances pays the premium we will allow the deduction.

Clause put and agreed to.

On Clause 9,

I want to deal with subsection (a). I want to know from the Minister whether, in determining the amounts for depreciation, it applies to hotels also. I want to draw attention to a memorandum submitted by the Hotel Association. I am referring to sub-section (a), the allowance in connection with buildings, and I want to know whether it applies to hotel buildings, and also whether the depreciation applies to buildings on leasehold land. I want to deal with two matters. The one is in connection with hotels and the other is in connection with leasehold land. In regard to hotels, certain research was done on behalf of the hotel industry and they recommend that the taxation authorities be requested to encourage depreciation on buildings to an amount not less than 2½ per cent of the book value of buildings, which should be written off annually. It is suggested that this be calculated not on the book value in the case of old pre-war hotels, but on current replacement costs, and they suggest that the reserves should not be written back to the profit and loss account and that the passing of property from one owner to another be accompanied by a reserve which will be available for expansion and remodelling and modernization. My objection to the clause is that so far it applies only to industries, and even to industries it is of limited effect. There is provision for depreciation of this kind in industries where they are built on freehold land, but there are exceptions where it is on leasehold land. In Cape Town and Johannesburg practically all factories are built on freehold land and the allowance is claimed on the buildings erected on freehold land. But for many years it has been the practice in Natal for both the Government and the municipalities to lease land on long-term lease. There are many 99-year leases in Durban. The whole of the Maydon Wharf area is on a 99-year basis and there are other parts of the town where there are 20-year leases with permanent rights of renewal at rents to be agreed between the parties concerned. An industrialist will build a building on a site he holds under a 20-year lease and he has the right to continue in occupation at the end of 20 years by entering into a new agreement for the rental of that land with the municipal authority. That is in the case of a 20-year lease, whereas in a 99-year lease he has no right of renewal. It appears to me from my examination of this clause that there is no provision for depreciation in these cases. They cannot enjoy the benefit of the depreciation allowance, which they are entitled to claim in terms of Section 11 of the principal Act. I would like to ask the Minister whether there is any particular reason why those classes of people were excluded from the benefit, or whether it was an oversight.

Firstly, the clause does not apply to the tenant of the hotel. It applies to the owner of the freehold land on which the hotel is built. Then the hon. member wants to know what the position is in the case where it is not freehold but leasehold and it is built by the owner? I do not know whether special provision is made, but the building belongs to the owner even on leasehold. The Standard Bank here have a long lease and it is clear that the building belongs to them, even though the land on which it is built is leasehold. I do not think that ought to make any difference. I have not gone into the matter, but it seems to me that in those circumstances the owner of a building on land held by long lease of 99 years is in the same position as the owner of a building on freehold land.

I accept that that would appear to be the equitable application of this reduction, but from my examination of the law as it is before us that is not the position. I will give the Minister an example. The whole of the Marine Parade in Durban is occupied by some of the finest hotels in the country, and the whole of that land is held under 20-year lease. The Minister gives the example of the Standard Bank, which holds the land on long lease, and he says it belongs to the Standard Bank and therefore they are entitled to the reduction. My reading of the law is this, that the Standard Bank will not enjoy this advantage, and similarly the hotels on the beach at Durban will not enjoy it. It is unfortunate that while this is the intention of the fiscus, to allow a reduction of this kind to encourage capital development and to recognize the spending of sums of money of this magnitude, in effect it discriminates between two classes of people. Certain people get the benefit, those who are on freehold land, but those who are unfortunate enough to be on leasehold land get no benefit whatever. I would suggest to the Minister that in giving me his reply which indicated that it was his personal intention to deal with all classes of people equally, the hard law as it is before us to-day makes it quite clear that the person who is fortunate enough to have freehold property gets the benefit, but the person who has a long lease does not get the benefit. I refer particularly to Durban, because there are more examples of it there than in most of the other towns in the Union. There the properties concerned are owned either by the Union Government, as at Maydon Wharf, or by the Municipality of Durban. Here the fiscus gives the special advantage of recognizing the necessity for some allowance being given to hotel-owners or industrialists who are on leasehold land, but those who are not on leasehold get no benefit.

The position is that if a person spends money on putting up a building which falls within the four walls of this exemption, even if the building is put up on leasehold land, he, as the owner who spends the money in putting up the building, is entitled to the investment allowance. But if the tenant puts up a building for an hotel he is only entitled to the normal allowance spread over the life of his lease. If it is a 30 years’ lease it is spread over 30 years. But if there is a long lease and the owner of that long lease puts up the building for his own purposes, he is entitled to it, but not if it is the tenant.

Do I understand the position to be that where the taxpayer is the tenant and the taxpayer enjoys the advantage of writing off the building over the period of the lease and under that contract gets the allowable deduction in terms of Section 11 of the Act, viz. the pro rata portion of the cost of the building spread over the duration of the lease, then he is not entitled to a depreciation allowance, but on the other hand, where he is not entitled, where he is on leasehold land and where he is not entitled to spread the value of the property over the whole period of the lease, then the Minister will recognize his claim for the 2 per cent amortization allowance spread over the period of the lease?

Yes.

Clause put and agreed to.

On Clause 13,

I wish to move the following amendment to the Afrikaans version of this clause—

Agreed to.

Clause, as amended, put and agreed to.

On Clause 16,

I move—

Agreed to.

Clause, as amended, put and agreed to.

On Clause 21,

I want to propose that sub-section (2) of this clause be deleted. This sub-section might in some respects be regarded as being retrospective. To some people it will be in favour of the fiscus, and in other cases against the fiscus. I think, therefore, that on the whole it is better to remove the sub-section. I move—

Agreed to.

Clause, as amended, put and agreed to.

On Clause 22,

I would like to propose the following amendment to this clause—

Clause, as amended, put and agreed to.

On Clause 31,

This clause repeals the Namaqualand Copper Mines Income Tax Relief Act, 1937. Can the hon. Minister tell us why this is being done by means of this Bill?

This Bill was the opportunity for bringing in the special provision in regard to the Letaba Copper Mines. The same provision applies to the Namaqualand Copper Mines Income Tax Relief Act and it was, therefore, considered unnecessary to have a separate Bill.

Clause put and agreed to.

On Clause 32,

This clause substitutes Section 101 of the Insolvency Act with another section. I would like to know from the hon. Minister whether it would not have been better to have amended the Insolvency Act itself rather than doing it by means of this Bill? The whole object of this clause is to define the question of inland revenue’s preference in an insolvency and also in regard to provincial tax. I submit that to bring in this amendment by means of this Bill, is not a good way of dealing with the matter and that it would have been preferable to have amended the Insolvency Act by a separate Bill. After all, the Bill we are now considering deals with income tax only.

I understand that as there was no possibility of the Insolvency Act being amended just in this one respect, and as this amendment is related to income tax, the amendment was brought in by this Bill. If, however, the Insolvency Act is consolidated, the amendment will be incorporated therein.

Clause put and agreed to.

On the Schedule,

I would like the hon. Minister to explain how formula A will be applied to income derived by way of lump sum benefits. Under the Act, as amended, there is provision for the calculation of lump sum benefits as deductions where the Minister is taxing accruals under policies, policies known as “top hat” policies. Can the hon. Minister explain to us how this amount is calculated?

The first object is to limit the tax free portion of lump sum benefits in the case of benefits from all funds on retirement to an amount which will not exceed R20,000 in total, and which in the case of pension and provident funds is determined by multiplying one-fifteenth of the average salary over a period of five years by the number of years of service with the employer or the number of years of membership of the fund which must be taken into account under the rules of the fund. In order to prevent abuse, the average salary may not exceed R10,000. The effect of this provision will be that a tax free lump sum benefit of up to R6,400 will be paid in the case of an employee with 40 years of service and an average salary of R2,400, or if the average salary totals the maximum amount of R10,000, a tax free benefit of up to a maximum of R20,000 is permitted. Special provision is made to ensure that the maximum tax free benefit may be increased in the case of an employee who on 14 March had an established right to a lump sum exceeding R20,000.

Schedule put and agreed to.

Title of the Bill put and agreed to.

House Resumed:

Bill reported with amendments.

Amendments in Clauses 13 (Afrikaans), 16 (Afrikaans), 21 (Afrikaans) and 22 (Afrikaans) put and agreed to, and the Bill, as amended, adopted.

I move—

More than two members having objected, Bill to be read a third time on 27 June.

I move—

Since the coming into operation of the Building Societies Act of 1935, the present Bill is the tenth of its type; in other words this is the tenth amending Bill which has been introduced since that time. The amendments which have been adopted from time to time have been necessary not only to keep pace with changing circumstances, but also to introduce more efficient administrative control over the activities of building societies. Since 1943 Ministers of Finance have been promising that the laws relating to building societies will be consolidated, but as a result of circumstances it has not been possible to do so. I do not know whether I have made the same promise, but in any case I do intend consolidating these laws. This Bill is being introduced in order to clear the way for consolidation. The amending Bills which have been introduced over the years have made it very difficult to follow the existing statutes and an attempt is therefore being made to overhaul the Act finally so that we can consolidate this legislation.

The proposed amendments which have been discussed fully with the interested parties and which also enjoy their support, are for the most part of a drafting nature and bring the legislation to a large extent into line with similar provisions contained in the laws relating to pension funds, friendly societies, insurance and banking. Apart from the proposed overhauling to which I have referred, it has also become necessary to amend certain provisions of the Act in order to bring them into line with modern changed circumstances. I want to discuss the gist of these amendments briefly. As I have said, these are all amendments which have already been discussed with the Association of Building Societies and which enjoy its approval.

In Clause 2 the cases which in the past were merely of an exceptional nature in respect of which building societies have the right to appeal to the Minister against decisions of the Registrar are now being extended by providing that in all cases where the Registrar has and exercises discretionary powers, his decision will be subject to an appeal to the Minister. In Clause 4 a radical change in the procedure laid down for the registration of a new building society is proposed. As the law stands at present, any seven or more persons may establish a building society provided they comply with certain legal requirements. These requirements are however not of a particularly severe nature when we take into account the confidence which the public has in building societies. To prevent this confidence being misplaced, it is now proposed that an association should first undergo a probationary period of a maximum period of seven years in order to show that it is viable. The registrar must furthermore ensure that the establishment of a new society will serve the interests of the public. In Clause 14 a radical change is proposed in respect of the adoption of a decision by shareholders regarding matters of an unusual nature. The basic requirements of the existing legislation are not only excessively cumbersome, but are also very much out of date. Experience has shown that although the provisions were completely effective when building societies were small local institutions, as a result of the phenomenal development of most of these institutions over the past 20 years, it is practically impossible to-day to comply with these requirements. In the main the effect of the amendment is that the voting on such an occasion must take place on the basis of a special resolution which must be approved of by three-quarters of the voting shareholders. The proposed amendment assures, however, that every shareholder will be fully informed of the terms of this special resolution. Similar changes in the method by which resolutions of a special nature are taken, appear in Clauses 41, 43 and 46. In Clause 18 it is proposed that the Minister can prescribe a set of rules which can serve as a model for existing societies as well as for those which may be established in future. Similar provisions are also found in the Co-operative Societies Act and the Companies Act. In Clause 31 which deals inter alia with the issuing of shares by a building society, provisions are inserted aimed at removing certain malpractices or possible malpractices and at preventing discrimination between groups of shareholders. In Clause 32 proposals are made relating to the minimum amount which a society may set aside annually from its profits for the building up of reserves to protect both depositors and shareholders. It has been found that the existing provisions of the law discriminate unnecessarily against certain building societies, and in consultation with the Association of Building Societies a suitable formula has been devised which will remove this discrimination to a large extent. An alternative is also being laid down and in accordance with it a building society, particularly during its initial years, will be able by means of a guarantee deposit, whether by the founders or any other person, to supplement its statutory reserves. Clause 34 provides for matters affecting the directors of building societies and to a large extent follows similar provisions contained in the Companies Act. Clause 43 deals with the amalgamation of building societies and the transfer of the assets and liabilities of one building society to another, and simplifies the procedure which must be followed in connection with the required special resolution which must be taken by shareholders. I have already covered this aspect in discussing Clause 14. Apart from these proposed provisions, further protective measures are inserted in the interests of the shareholders.

This Bill is recommended because it has not only been preceded by a great deal of work in consultation with interested parties, but also because it rounds off the existing legislation before we proceed to consolidate it, something which has really become a necessity.

We do not propose to oppose the second reading of this Bill, although we want to make the same objection as we did in regard to other legislation, namely that it has been introduced at the end of the Session when debate is very much circumscribed and that it is very difficult for us to deal with the measure adequately. We know, however, that this Bill has been dealt with by the Association of Building Societies and we understand that it is an agreed measure. It introduces innovations into some aspects of the activities of building societies, for instance in respect of the establishment of new building societies where a period of probation is now being prescribed. The position in this respect would have to be watched very carefully because we want to avoid any suggestion that the building society organization as such shall be a monopoly in that field. We should ensure that while enjoying that privileged position, no monopoly practices are resorted to. There are provisions in respect of advertisements and for protection where certain building societies may offend in regard to certain Press and cinema advertisements. There is also a provision for a grade scale of penalties.

As far as we can see, the whole object of this legislation is to apply on general lines the procedure applicable to banks and companies to building societies where such procedure is applicable to them. In view of the fact that the Society of Building Societies have agreed to the measure, we do not propose to hold up the passage of the Bill. I am glad to hear that there is going to be a consolidating Bill and then we shall have an opportunity of discussing the matter further.

Motion put and agreed to.

Bill read a second time.

House in Committee:

On Clause 32,

I move—

Agreed to.

Clause, as amended, put and agreed to.

Remaining Clauses, Schedule and Title of the Bill put and agreed to.

House Resumed:

Bill reported with an amendment.

Amendment in Clause 32 (Afrikaans), put and agreed to and the Bill, as amended, adopted.

Bill read a third time.