THURSDAY, 9 MARCH 2000 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 14:03.

The Deputy Speaker took the Chair and requested members to observe a moment of silence for prayers or meditation.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.

                          NOTICES OF MOTION

Ms N R BHENGU: Madam Speaker, I give notice that at the next sitting of the House I shall move on behalf of the ANC:

That the House -

(1) notes that the Fifa technical inspection delegation, led by Mr Alan Rothenborg, arrived in South Africa today on an inspection mission to assess the country’s 2006 World Cup Bid and its preparedness to host the prestigious Soccer World Cup competition;

(2) further notes the significance of this occasion for the football community and the people of South Africa, as well as the rest of our continent;

(3) acknowledges that a successful bid for South Africa and Africa would signify an important advance in pursuit of the noble aspirations of the African renaissance;

(4) on behalf of all South Africans, extends a warm welcome to the eminent members of the Fifa delegation …

[Time expired.] [Applause.]

Mr K M ANDREW: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DP:

That the House - (1) notes the important role that Chapman’s Peak Drive plays in the tourism industry in Cape Town, including the popular cycle tour and the Two Oceans marathon;

(2) recognises that the recent fires have dramatically increased the cost of repairing this scenic road; and

(3) calls on the Minister of Transport and the national Government to build a partnership with the provincial and local governments, as well as with the private sector and concerned citizens, to raise the money required to repair Chapman’s Peak Drive and make it safe for daily use.

Mr V B NDLOVU: Madam Speaker, I give notice that on the next sitting day of the House I will move on behalf of the IFP:

That the House -

(1) congratulates the Anticorruption Unit of the SA Police Service for its proper investigation into police corruption;

(2) encourages it to work harder and to probe deeper as the numbers increase, until the corrupt members of the police are eliminated from the SAPS; and

(3) urges the courts to give harsh sentences to those members of the police who are found guilty of such crimes.

Mr T M GONIWE: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) recognising that the latest HSRC survey gives the DP a paltry 6% support among the electorate;

(2) believing that the DP has become a home for right-wing homophobes and reactionaries, unable to adapt to the realities of a transforming society; and

(3) recalling that our Constitution promotes the values of nonracism, gender equality and respect for those of other cultures, religions and sexual orientation, calls on Mr Leon, the DP leader, to clarify whether he will use the new powers conferred on him through his party’s constitutional changes to ensure that in future the candidate lists of his party only include citizens who embody the values of our Constitution.

[Applause.]

Mnr H A SMIT: Mevrou die Speaker, ek gee hiermee kennis dat ek op die volgende sittingsdag sal voorstel:

Dat die Huis -

(1) kennis neem van die teenstrydige antwoorde in die Nasionale Vergadering deur die Minister van Verdediging oor wie finansiële verantwoordelikheid aanvaar vir die inval deur die SANW in Lesotho;

(2) daarvan kennis neem dat Minister Lekota ná hul algemene verkiesing verlede jaar op 1 September 1999 aangedui het dat Lesotho vir die uitgawes gaan betaal toe hy gesê het: ``According to the agreement which exists between the Government of the Republic of South Africa and the Kingdom of Lesotho concerning the Status of Armed Forces in the Kingdom of Lesotho the receiving party is liable for the costs involved.’’;

(3) daarvan kennis neem dat Minister Lekota gister aangedui het dat Suid- Afrika die R57 miljoen vir die inval gaan betaal toe hy gesê het: ``Since the SANDF involvement in Lesotho was under SADC, each country pays their own costs.’’;

(4) daarvan kennis neem dat ons 4 560 huise met daardie swaarverdiende belastingbetalersgeld kon gebou het;

(5) wil weet of die Minister die Huis mislei het en wat die volle waarheid is; en

(6) daarvan kennis neem dat die Nuwe NP nie sal rus voor dié saak nie uitgeklaar is nie.

[Tyd verstreke.] [Applous.] (Translation of Afrikaans notice of motion follows.)

[Mr H A SMIT: Madam Speaker, I hereby give notice that on the next sitting day I shall move: That the House -

(1) notes the contradictory answers furnished in the National Assembly by the Minister of Defence in respect of who will be accepting the financial responsibility for the invasion of Lesotho by the SANDF;

(2) notes that, after their general election on 1 September 1999, Minister Lekota indicated that Lesotho was going to pay for the expenditure when he said:

``According to the agreement which exists between the Government of the Republic of South Africa and the Kingdom of Lesotho concerning the status of armed forces in the Kingdom of Lesotho, the receiving party is liable for the costs involved.’’;

(3) notes that Minister Lekota indicated yesterday that South Africa was going to pay the R57 million for the invasion when he said: ``Since the SANDF involvement in Lesotho was under SADC, each country pays their own costs.’’; (4) notes that we could have built 4 560 houses with that hard-earned taxpayers’ money;

(5) wants to know whether the Minister misled the House and what the whole truth is; and

(6) notes that the New NP will not rest until this matter has been cleared up.

[Time expired.] [Applause.]]

Chief N Z MTIRARA: Madam Speaker, I hereby give notice that at the next sitting of the House I shall move:

That the House -

(1) urges that recognition be given to the existence of traditional structures of governance which have stood the test of time in the rural communities and therefore deserve corresponding budgetary allocations; and

(2) urges the Minister of Finance, having regard for the important functions that traditional leaders must perform in the delivery of services to the rural communities, to allocate the necessary budget for that purpose rather than to emasculate this institution by lumping its budget with the general local authorities.

Mr G SOLOMON: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) congratulates all South African Muslims on their sacred pilgrimage of Hajj to the holy city of Mecca in the Kingdom of Saudi Arabia;

(2) commends the government of Saudi Arabia, under His Majesty King Fahad bin Abdul Aziz, the servant of the two holy mosques, for -

   (a)  facilitating the travel and visa requirements through its
       representative in Pretoria, His Excellency Dr Saud Zaydan; and

   (b)  providing facilities enabling our pilgrims to perform the rites
       of Hajj in comfort, safety and security;

(3) calls on them to spread the principles of peace, co-operation, tolerance, nonracialism and unity of the sisterhood and brotherhood of humankind on this holy journey; and

(4) wishes all our pilgrims a Hajj Maqbool and all our Muslim compatriots Eid Mubarak.

[Applause.]

Mr E K MOORCROFT: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the DP:

That the House -

(1) notes that one of South Africa’s premier tourist attractions, the Kruger National Park, has suffered enormous damage to its infrastructure during the recent floods; and

(2) requests the Government, notwithstanding the heavy and essential demands being made on it for aid to badly affected human communities, to make additional funding available to the National Parks Board in order to repair the damage to the park so that it can continue to bring valuable foreign currency into this country.

Dr K RAJOO: Madam Speaker, I give notice that on the next sitting day of the House I will move:

That the House -

(1) requests the Minister of Education urgently to look at the serious problem of high school fees;

(2) notes that schools are demanding exorbitant school fees from pupils;

(3) notes that pensioners, the unemployed and the indigent are being forced to pay school fees when they absolutely cannot afford to do so;

(4) notes that school principals are sending summonses to these parents, demanding payment by withholding school exam reports, and these poor pupils are being embarrassed and humiliated because their parents and guardians cannot afford to pay school fees; and

(5) calls on the Minister to urge his provincial colleagues to put a stop to this abuse of the poorest of the poor of our country.

Mnu N B FIHLA: Somlomo, apha ndenza isaziso sokuba xa iphinda ihlala le Ndlu ndiza kwenza isiphakamiso egameni le-ANC:

Ukuthi leNdlu -

(1) iqwalasela ngosizi nokuxhalaba okukhulu ukugwintwa ngolunya nangendlela emanyumnyezi kukamnumzana Mbuyiselo Ndayi inqununu yesikolo saseNcura kwilali yaseNdakeni;

(2) umnumzana Ndayi uthe wahlaselwa ngokudutyulwa phambi kwabantwana besikolo eso lahlanza iselwa ngoko nangoko, ngentsimbi yesibhozo kusasa;

(3) yenza isimemelelo nobizo kuye wonke ubani othe wayibona le ntlekele ukuba eze ngaphambili ukuze akwazi ukuncedisana nabakwantsasana ukuze lo mcimbi ukhawuleze ukusombuluka;

(4) iyigxeka kabukhali le ntlondi ithe gqolo, yokugwintwa kwabafundisi imihla nezolo …

[Laphela ixesha.] [Kwaqhwatywa.] (Translation of Xhosa notice of motion follows.)

[Mr N B FIHLA: Madam Speaker, I give notice that on the next sitting day of the House I will move on behalf of the ANC:

That the House -

(1) notes with sorrow and great concern the vile and malicious assassination of Mr Mbuyiselo Ndayi, principal of Ncura School in the village of Ndakeni;

(2) also notes that Mr Ndayi was attacked and shot dead instantly, at eight o’clock in the morning, in the presence of school children; (3) calls on anyone who witnessed the incident to come forward so as to assist the police in solving the matter speedily;

(4) strongly condemns the crime of the killing of teachers on a daily basis …

[Time expired.] [Applause.]]

Dr B L GELDENHUYS: Madam Speaker, I give notice that at the next sitting of the House I will move on behalf of the New NP:

That the House requests the Minister of Safety and Security to redraft the proposed Gun Control Bill in consultation with all relevant role- players, given the fact that the detective branch of the SA Police Service has raised serious objections against the Bill, based on the fact that -

(a) some technical definitions will make some cases impossible to prove in court;

(b) the powers of the Minister are too extreme; and (c) presumptions of guilt written into the Bill are unconstitutional.

Mr S ABRAM: Madam Speaker, I give notice that at the next sitting of the House I shall move:

That the House -

(1) recognises and appreciates all the mothers of our nation for their contribution to the stability and maintenance of family life and values in the face of tremendous odds and in trying circumstances;

(2) pays tribute to all mothers for the role they played, and continue to play, in stabilising life in the rural areas, particularly in the dark days of the migratory labour system and in the face of abject poverty; and

(3) calls upon Government to compensate all homeless mothers with the allocation of an erf each for the purpose of building a shelter for their families.

Mr R P ZONDO: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes that 100 junior investigators of the Scorpions unit will begin their training this month;

(2) recognises that crime is a serious challenge facing our democratic transition;

(3) believes that the tide has turned in the fight against crime as a result of the Government’s commitment to creative and innovative programmes aimed at transforming the criminal justice system; and

(4) wishes the new recruits well in their careers and pledges the support of the House for the challenging task that faces them.

[Applause.]

Ms C DUDLEY: Madam Speaker, I hereby give notice that at the next sitting of the House I shall move: That the House -

(1) acknowledges the devastating results of inadequate measures to stamp out drug dealing;

(2) acknowledges that the youth of this nation are vulnerable as they are hounded and entrapped;

(3) expresses its sincere condolences to all mothers and families who have lost their sons and daughters to this wicked but flourishing enterprise;

(4) expresses its sincere condolences to the mother and family of Jodi Williams, an 18-year-old boy, who was murdered on 3 January in Johannesburg;

(5) notes that the accused, a drug dealer, arrogantly defies the system by taunting police and family with the fact that he is not afraid of jail as he will be out within two years; and

(6) calls on the Government to bring back the death penalty, the only deterrent understood by those who believe they are above and immune to the laws of the land.

[Interjections.]

Ms S B NQODI: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes that this week eight top DJs from United States radio stations are broadcasting from South Africa to millions of listeners in the United States as part of a publicity initiative of Satour aimed at providing US listeners with captivating stories, anecdotes and compelling reasons to visit South Africa;

(2) recognises that this is an innovative and cost-effective approach to marketing South Africa as a tourist destination to the international market; and

(3) commends Satour for this creative approach to tourism marketing.

[Applause.] Mr M A MANGENA: Madam Speaker, I give notice that at the next sitting of the House I shall move on behalf of Azapo:

That the House -

(1) notes the escalation in this country of the incidence of men murdering their partners, children and other relatives;

(2) believes that this is a shameful, distressing, deplorable and alarming development;

(3) notes that this occurrence is made easier by the proliferation of guns in our society; and

(4) resolves to condemn this tendency and to call upon all men in particular to do everything in their power to arrest this ugly and macabre development.

[Applause.]

                  FLOOD DEVASTATION IN EASTERN CAPE

                         (Draft Resolution) The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice:

That the House -

(1) notes that the Eastern Cape has been subjected to devastating floods in recent weeks, and that the situation is worsening daily;

(2) recognises that roads have been totally destroyed, and that communities are without food and medicine; and

(3) pledges the support of the House in assisting the victims of this disaster and bringing to the attention of the Government and the wider community the dire circumstances of the people of the affected areas.

Agreed to.

                   PRECEDENCE TO ORDERS OF THE DAY

                         (Draft Resolution) The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice:

That -

(1) precedence be given to Orders Nos 3 and 4; and

(2) after Order 2 has been disposed of, Order No 1 under Further Business be considered.

Agreed to.

      CONSIDERATION OF DECISION OF JOINT PROGRAMME COMMITTEE ON
              FAST-TRACKING OF LOTTERIES AMENDMENT BILL

Order disposed of without debate.

Decision ratified.

                      HOURS OF SITTING OF HOUSE

                         (Draft Resolution)

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move the draft resolution printed in my name on the Order Paper, as follows:

That, notwithstanding Rule 23, the hours of sitting on Tuesday, 14 March 2000, shall be as follows:

 From 09:30, or such later time as the Speaker determines, to
 adjournment.

Agreed to.

                         APPROPRIATION BILL

                (Resumption of First Reading debate)

Mr A J FEINSTEIN: Madam Speaker, hon Deputy President and hon Minister of Finance, in debating this excellent Budget produced by the ANC-led Government, it has become clear that almost every member of this House desires sustainable, noninflationary growth that will create jobs for all South Africans who desire work. The differences between parties revolve around our assessment of the economy at present and how we achieve this desired goal going forward.

The ANC has a vision of a better life for all. To this end, we believe that it was necessary to stabilise public finances after the havoc wreaked on this economy by the excesses of the NP government. We believe that this stability lays the foundation for sustainable growth that will create jobs and bring services and opportunities to all our citizens.

This Budget continues the remarkable work already done by the country’s first democratic Government. Most in this House have acknowledged that the economic fundamentals point to a high degree of stability, reflected in the views.

The tangible benefits of this stability are clear in this Budget, which releases an additional R8,3 billion for spending on public services, and is able to put almost R10 billion back in the pockets of South African taxpayers. This windfall, a direct consequence of the massive improvement in public finances, will increase both demand and savings in the economy, contributing meaningfully to growth performance. The Minister and Government as a whole are to be applauded for this significant achievement.

We accept, however, that the challenge of stability does not end here, but has to be carefully nurtured on an ongoing basis. I have no doubt that the introduction of inflation targeting will further entrench this stability and contribute to a transparent, predictable economic environment that will facilitate increased investment and growth.

As has been stated repeatedly in the debate, jobful growth is the key to the alleviation of poverty and the improvement of the quality of life of the poorest in our society. Various proposals with respect to accelerating growth to the required levels have been made in the debate. The IFP has made a considered input on certain requirements for accelerated growth, while the leader of the UDM contradicted himself so regularly in his response to the Budget that even his big fan in the financial press will have some difficulty making sense of it.

The DP, on the other hand, did its usual damp squib impersonation. While a euphoric nation exclaimed, We have never had it so good'', and the world's largest rating agency came to the party in a very tangible way, the DP again played the party pooper. While the underwhelmed DP was intoning, This was a budget of missed opportunities, Mr Manuel,’’ most South Africans were saying, ``Thank you, Mr Manuel, for the tax relief. Thank you, Mr Manuel, for the additional social spending. Thank you, Mr Manuel, for the additional spending on safety and security. Thank you, Mr Manuel, for the incentives for small business and infrastructure development.’’ [Interjections.] One day the hon Gibson will learn that when one has nothing to say one should keep quiet. [Interjections.]

As Standard and Poor’s was telling the world that we warrant an investment grade rating, the DP focused on small shards of scepticism and speculated as to why we will struggle to get a further upgrade. This was yet another case of muscular liberalism misreading the mood of the overwhelming majority of South Africans. But what did the DP offer as an alternative?

Mr D H M GIBSON: [Inaudible.]

Mr A J FEINSTEIN: We will come to that in just a moment, Mr Gibson!

Mr D H M GIBSON: [Inaudible.] Mr A J FEINSTEIN: But what did the DP offer as an alternative? Pretty much the same as they have offered for the past three Budgets.

Mr D H M GIBSON: [Inaudible.]

Mr A J FEINSTEIN: It would be a great pleasure if the hon Gibson would allow me to speak on this occasion.

But what did the DP offer as an alternative? Pretty much the same as they have offered for the past three Budgets: decrease personal income tax, increase VAT, privatise every state asset, deregulate the labour market fundamentally, make it easier for skilled immigrants to come into the country, give everyone a training voucher and give the poor a social income. [Interjections.] Some of these ideas in isolation have great merit … [Interjections] [Laughter] … although it is worth pointing out that the most compelling of these ideas, the social income, has been under consideration by Government long before the DP came upon it.

The major weaknesses in the DP vision are its obsession with privatisation as the panacea for all ills, and the unsustainability of the package as a whole. The DP’s attitude to privatisation is a wonderful evocation of what the Minister had in mind when he made reference to Paul Krugman’s notion of ``pop internationalism’’ - that is, an economic doctrine that offers the impression of sophistication without the pain of hard thinking … [Interjections] … or, to put it differently, providing simplistic solutions to complex and difficult issues.

Krugman, described by The Economist magazine as the most celebrated economist of his generation, gives us an example of such pop economics - the British approach to privatisation under Margaret Thatcher and John Major. He suggests that the UK experience of privatisation and particularly the mess created in a number of utilities and the rail network were examples of the worst manifestations of blind ideology.

This is not to say that a continuing, even intensified, programme of sensible restructuring of public assets that generates revenue for the fiscus on the one hand, while improving service levels on the other, is not desirable. It is, however, when privatisation becomes exalted as the all- conquering panacea that danger lurks. However, more fundamental than this criticism is the inescapable fact that the DP sums just do not add up. They propose the laudable social income and training voucher systems while insisting on ever lower personal and corporate taxes. In addition, they state that any receipts from privatisation will be used to reduce the debt burden. [Interjections.] I am coming to that.

So, where exactly does the revenue for these programmes come from? Either the DP supports a massive increase in VAT which would have devastating consequences for the poor, or they are doing a George Bush on us - that is, claiming they could deliver certain things without raising taxes while knowing that they would have to do just that.

When George Bush said to the American people ``Read my lips, taxes will not rise’’, they did not believe him, and they were proved correct. Luckily, for South Africa it will not matter whether we believe the DP’s fantasy figures or not, because, as long as this country is a democracy, they will never have the opportunity to put them into practice. [Applause.]

What makes the DP proposals even more preposterous is the contention by a DP speaker that the ANC has deserted the poor. If that is the view of the hon Ken Andrew, he really needs to go back to school and do some economics. [Laughter.] This, despite the fact that under the ANC we have seen spending on the poor increase by an estimated 34%, with 57% of spending now going to the poorest 40% of our people, while the share going to the wealthiest 20% of our citizens is now down to under 9%. This reflects the massive shift towards the poor that has taken place in every sphere of Government policy since 1994.

While problems admittedly remain with respect to a number of aspects of service delivery, the ANC’s commitment to the poorest in our society remains at least as strong as it was at the Congress of the People in Kliptown in 1955, in the evocation of the RDP in the early 1990s, and now in this the first Budget of the new century.

To add insult to this injury though, this suggestion comes from a party whose voting record in this Parliament has consistently shown that it is interested only in the privileged; whose attitude to this Budget - in their opposition to capital gains tax, their demands for increased VAT and their attempts to further diminish the role of the state - smacks of a continuing focus on the privileged first and foremost, above all others in our society.

The ideal for which we all strive - a sustainable rate of growth between 5% and 6% - requires a series of interlinked interventions and attitudes. [Interjections.]

Mr K M ANDREW: Name them!

Mr A J FEINSTEIN: I will in just a moment, if you keep quiet! Not a smorgasbord of simplistic … [Interjections.] I thought the member just said that he was going to keep quiet. He obviously cannot keep his word, can he? What we require is a series of interlinked interventions and attitudes - not a smorgasbord of simplistic slogans that have no coherence or unity of purpose, but rather a clear and sustainable strategy for success.

As I have said, the stabilising of public finances is the foundation stone on which this strategy rests. The focus of the strategy, which has been clearly enunciated by the ANC, is on the role of manufactured exports as one of the keys to unlocking economic growth which will not run into the foreign exchange constraints that has bedevilled this economy for so long.

In addition, the strategy requires massive improvements in education and training; productive co-operation between business and labour; Government support to key industries, including added-value sectors taking advantage of our mineral wealth, and the burgeoning services and technology sectors; the creation of an environment for and an ethos of entrepreneurship that will create small and, particularly, medium-sized businesses; an intensification of trade relations to build on the advantages of the EU agreement, the Mercasur talks that the Minister of Trade and Industry mentioned yesterday, and so many others that this Government has initiated. There is also the question of the continuing quest for a more equitable rules-based global trading system and, as stated before, continuing with a sensible restructuring of state assets and partnerships that generate revenue while improving service levels.

There was no ``Hear, hear!’’ from Mr Andrew on that one. [Interjections.] A just but adaptable labour-market … [Interjections.]

Mr K M ANDREW: Hear, hear!

Mr A J FEINSTEIN: I am very glad to hear that. The fundamentalism dissipates!

An efficient, fair and ever-broadening tax system, including capital gains tax, which adds both equity and efficiency to the tax system, an integrated rural development strategy that ensures improved access to income and services, constant expansion of the physical and service infrastructure, and absolutely critically, the abandoning of our macho, nationalistic approach to the currency and an acceptance that a stable currency at a competitive level, together with a lower interest rate environment, will have an enormously positive impact on growth and job creation.

Given global growth prospects and the likelihood of our being able to import deflation from many of our major trading partners, we are uniquely poised on the cusp of the upward slant of the J-curve. We have a remarkable opportunity to take this country into a new growth and job creating paradigm. [Interjections.]

Mr K M ANDREW: When?

Mr A J FEINSTEIN: What astonishes me is that with all these ``Hear, hears!’’ that I have heard from the hon Andrew, his party is voting against this Budget. Why is he voting against it? He is voting against it because it puts the poor first, and it is for that reason that the ANC and the DP cannot see eye to eye on the Budget. [Interjections.]

Mr K M ANDREW: When is that? When are we going to get the growth?

Mr A J FEINSTEIN: We will get it a lot sooner than we would with their bizarre notions, which are totally unsustainable, and with addition and subtraction that would make a kindergarten child embarrassed. [Interjections.]

Mr K M ANDREW: In your lifetime, we cannot get it!

Mr A J FEINSTEIN: What this Budget makes absolutely clear is that this ongoing quest for significantly increased growth and job creation has required, and will continue to require, a complex strategy reflecting our own complexities in the global economy. There are no simple solutions that roll easily off the tongue, as Mr Andrew wishes. While clearly one Budget, even with a three-year horizon, cannot address all these issues, the Budget presented to this House and the stability it engenders, the innovative tax changes, the incentives for small business and infrastructure development, and its poverty alleviating elements, make a massive contribution to the achievement of our vision.

Many issues remain to be resolved, including the issue of overall savings and especially related to the retirement and pension fund industries. But what is certain is that this Budget takes forward our quest for a prosperous, safe and a just society. What is certain is that we are on course to build a better life for all our people. [Applause.]

Mr R J HEINE: Madam Speaker, hon members, when our President addressed Parliament at the beginning of February, he announced that there would be a review of South Africa’s onerous labour legislation. The DP members of this House applauded his bold move. We all knew that the Government’s trade union alliance partners would not roll over and play dead when it came to protecting their interests and those of their members. We all knew that our President’s decision to push ahead would come at a high price. We all admired his courage.

However, my leader commented at the time that the devil lay in the detail. Never was a truer word spoken. In his briefing to the parliamentary media on 8 February, the hon the Minister of Labour effectively poured cold water on the President’s commitment to labour law reform. He explained that the Government had listened to the unions and that clauses specifically pertaining to dismissals and retrenchment would be tightened up to make firing employees even more difficult.

It is not going to be amended because we have lost one million jobs since 1994, or because the Government wants to create employment opportunities, or because potential foreign investors see our restrictive labour legislation as a major impediment to bringing their business to our shores, it is going to be amended because Cosatu wants it to be amended. When it is amended, do not expect labour market reforms, greater flexibility and more jobs. Instead, we will see the nuts and bolts of the Labour Relations Act tightened, the screws put on the Employment Equity Act and the final nail hammered into the Basic Conditions of Employment Act.

Unemployment has become our most important national priority. The hon the Minister cannot - and should not - bury his head in the sand and pretend otherwise. But he does exactly that when he says that investors are not put off by the fact that 3,8 million work days were lost in 1999 owing to increased levels of industrial action. He buries his head in the sand when he gently chastises Cosatu for threatening to embark on an unprecedented five-week national strike in May. He does the ostrich shuffle when he claims that labour legislation should protect the union first, the workers second, and the employer - the person who actually creates jobs and feeds the family - somewhere further down the line.

Investors are scared off by an unstable, expensive and restrictive labour market. When 3,2 million workers take part in 527 separate strikes at a cost of R48,3 million in lost wages, investors are scared off. When the Minister of Labour brushes off these statistics as insignificant, investors are scared off.

South Africa needs to grow its economy at the rate of at least 6% per year. With all due respect, the current Budget only allows the economy to grow at 3,4% per annum. Unless there is a radical shake-up in the way the Government chooses to do business, we are heading for less investment, more unemployment, less hope and more despair.

In the Budget, the Minister’s department received a massive R748 million from the South African taxpayer. Of that, 19%, or rather R144 million, goes towards policing the businesses, which actually pay the taxes in the first place. It is unbelievable and morally reprehensible that this Government, which is incapable of policing the streets of our country, is somehow able to afford millions of rands for making sure that employers abide by the labour laws. Of course, no money is assigned to ensuring that the unions keep their side of the bargain.

But while the Government interrogates business over its affirmative action quotas, no one dares ask Cosatu why it has invited Cuban President, Fidel Castro, to its Workers’ Day celebrations. This is a wrong message to send out to the world.

Cosatu, and the Government for that matter, obviously prefers to ignore the fact that South Africa needs at least 6% economic growth per year in order to create the massive employment opportunities needed to reverse the cycle of poverty. They obviously prefer to ignore the fact that the only way to realise this level of growth is to attract significant levels of foreign direct investment.

Until such time as the Government and the Labour Ministry, in particular, stop kowtowing to the unions, we are not going to begin curbing unemployment. Until such time as the Government realises that the unions are out to protect themselves and their power bases, we are not going to see a shift in attitudes. Until such time as the Government realises that the unions represent the interests of the minority only, the poorest of the poor will continue to go hungry. We cannot afford this course of action. Members and I both know that it will be disastrous for South Africa. I appeal to the hon the Minister to rein in the unions and to turn the tide against them once and for all. [Applause.]

Ms B P SONJICA: Madam Speaker, hon President, hon Deputy President, I am not going to respond to my poor, but not very poor, hon colleague. [Interjections.] I am going to concentrate on my brief. [Interjections.] He is speaking on behalf of the poor, but he has never experienced it. That is a fact.

May I congratulate the Minister of Finance and the Government for producing a budget that seeks to further advance the socioeconomic transformation agenda as mandated by the majority of South Africans. The ANC-led Government has not failed the people of South Africa. It remains true to its commitment to bring about socioeconomic equality within the South African society. It is doing this within an unfavourable economic environment, characterised by a budget deficit and a burden of servicing that deficit, slow economic growth and the challenges of globalisation. It is doing this within a very unbalanced social situation, with the majority of our people being victims of poverty and affected by underdevelopment, especially in the rural areas.

Keeping the balance in pursuing its agenda is the major challenge that the Government faces. The Minister of Finance, in his speech, alluded to these challenges. As he said:

The fundamental challenge we continue to face as a country is how to grow our economy in a sustainable way so that poverty is eradicated and the prosperity and wellbeing of all our people is increased. How do we construct a vibrant, flexible and competitive economy able to take advantage of the resources of our people and the opportunities of the global economy?

However, for me, a lay person, the specific question and perhaps the greatest challenge, would be: How do we ensure that the 20% to 30% of our people who are unemployed but economically active find employment, especially those who live in the rural areas? Obviously, we have to find creative ways within our budgetary constraints to create opportunities to ensure that they contribute to the economic growth of their country.

A lot of progress has been made to address the backlog in social services and to also promote economic activity in the rural areas. But, given the intensity of the problem of inequality and underdevelopment, there is still more that needs to be done. Let me start by saying that the ANC’s 1994 election manifesto’s key message and emphasis was the improvement of the people’s lives, mainly through the delivery of social services. If I may quote the President: ``None can challenge us as far as carrying out that mandate is concerned.’’

The result is that millions of our people are now enjoying better social services. This has been a good investment for Government, investing in its human resources. We therefore need to build on this solid foundation. But, I think we also have to improve certain ways in which we do things. Hence, my speech will focus on a more integrated approach to rural development.

Of course, this is not a new concept at all. Obviously, there is a policy that has been guiding the process of rural development, but the bigger question is how one can achieve sustainable development that will achieve results and a balance between economic and social development. Perhaps we need to look at how we manage our limited resources to achieve that.

Firstly, there seems to be no clear co-ordination or a shared vision amongst departments and between the tiers of government, on how to approach rural development. This, to me, would be underpinned by the fact that such mentioned departments and tiers of government would bring their resources together and collectively address the problem of underdevelopment and inequality.

This approach would have a greater impact on both delivery and development. The programmes and funds of parastatals and donors should be channelled in such a way that they contribute to the advancement of the Government’s broader rural development strategy. I believe that this approach can be of assistance in achieving more in a much more cost-effective way. Perhaps the hon Minister of Finance will refer to that as fiscal prudence.

It is encouraging to learn that provincial budgets suggest that capital spending will grow to address infrastructural investment and maintenance requirements. According to the report on the Budget Review, several provinces have set aside funds for infrastructure projects from unallocated reserves. In addition, the Department of Finance will administer a supplementary infrastructure grant to provinces, which will lead to a growth of capital spending of approximately R1 billion during the year 2000- 2001, and 5% per year thereafter.

The R90 million increase, to boost the allocation of consolidated municipal infrastructure to approximately R883 million, is also welcome. However, these budgetary commitments may be welcome, but the main challenge is how we utilise these funds in a more focused way, with an aim to complete development in a number of areas, especially where there is greater need.

The completeness of these developments to me would mean that social conditions have been improved, and there are employment opportunities for people in those areas. Such is the case for a village on the outskirts of Shanghai, the commercial capital of China, where there is a factory offering employment to approximately 90% of the residents of that village. They are assured that their jobs are sustainable because it is the only factory in that area that produces such parts. I think this experience is something that we can learn from, and through the public and private sector partnerships, perhaps the private sector can be encouraged to outsource some of its functions to the rural areas.

The other aspect of the integrated rural development is to link it to tourism. The tourism programme involves, among other things, an international marketing programme for South Africa, as a preferred destination for tourism. While this is a noble idea, the challenge is to ensure that the tourists that come to South Africa are attracted to visiting the rural areas. It, therefore, becomes imperative for Public Works, Environmental Affairs and all other related departments to bring together their resources and to plan together to ensure that these areas are developed for tourism.

The main challenges that face the Government, in summary, are as follows: Firstly, to bring the social, economic and structural aspects of development together with the macroeconomic and the financial aspects, so as to establish a much more balanced and effective approach to rural development; secondly, to strengthen the public and private sector partnerships by creating an environment that will encourage or improve their commitment to advance the Rural Development Programme, especially the private sector, and to encourage or facilitate interdepartmental and intergovernmental co-operation, which, of course, is already happening.

I think clustering is trying to address that. However, there is a shortcoming in this particular present arrangement, because local government is excluded. We need to empower local people to participate in the process of designing programmes for development.

In conclusion, there is clearly a relationship between development and economic growth, but both cannot be successful without the involvement of the affected people. I want to echo the President of Tanzania, President Mkapa, who once said about people:

Our people must be encouraged and facilitated to be owners of their development - not just beneficiaries, but doers of development. Development cannot be complete in rural areas if it does not bring new and better opportunities for the rural communities.

James Wolfensohn, after listening to comments sums up by saying:

These are strong voices, voices of dignity. Many represent a new generation seeking control of their lives. These people are assets, not objects of charity. They can build their future if given an opportunity and hope.

The integrated approach to rural development can be but one other means to give that opportunity and hope to the rural communities. [Time expired.] [Applause.]

Dr L LUYT: Madam Speaker, Mr President, hon members, I have no doubt that this House must be reeling under what I would term an economic barrage. Let me at the outset say that the Minister is to be congratulated on a splendid achievement. He certainly can feel proud, together with his very able staff, of what he presented to Parliament. One can very definitely not fault a projected deficit of 2,4%, considering the fact that the first year of the defence spending is included in this figure. This is certainly a manageable percentage.

Whilst I regard this Budget as excellent, I must, however, say that I believe this country is not ready for the capital gains tax. By and large the more sophisticated nations have introduced this tax. In the case of the UK it is a fact that it cost the state money to collect this tax. I also hope that this is not a punitive or revenge tax. If that is the case, I trust that the hon the Minister will reconsider it and, if necessary, rescind it next year.

South Africa has not as yet shrugged off its monetary shackles to be classified as really sophisticated. Once exchange control has been abolished completely, I should think we would be in a better position to elevate ourselves to a more sophisticated status.

And whilst I am on the exchange control I would like again to ask when the blocked rands will be liberated. After all, we claim that there are no restrictions on foreigners as far as exchange control goes, but how many of the owners of blocked rands and other blocked securities have by now not become nationals of other countries, in which instance they qualify to be regarded as foreigners? The quicker this country gets rid of this abomination, the better.

Many people argued that not enough has been done to create investment opportunities. I suggest that the Minister consider certain incentives for investors who undertake labour-intensive projects. People will immediately say that incentives cost money. Of course, but they also create new taxpayers, apart from the fact that the person’s dignity is restored. Nobody wants to be idle or simply beg for things. For many years the railway was the country’s biggest employer. Billions of rands were invested in what are now idle railway lines and other infrastructure. We simply have to recognise the fact that the potentially biggest employer must be revitalised. Just think of the knock-on effect it will have on secondary industries if we can start utilising our trains again. I propose that the hon the Minister of Transport give this suggestion his urgent attention. This will also serve to alleviate the pressure on our overcrowded roads and assist to contain the carnage caused by it.

I liked the idea of inflation targeting, because it gives credibility to the currency. [Time expired.]

Mr L ZITA: Madam Speaker, Mr President, Deputy President, it is not possible to grow up in the Eastern Cape, particularly in Mdantsane, and not know something about the martial art called boxing. It is also not possible to be a boxer from Mdantsane and not be aware of the style called bobbing and weaving that was perfected by the MK guerilla, student leader and South African former bantamweight champion, Mzukisi Wonderboy Skweyiya. Bobbing and weaving is the only metaphor I can think of to describe Budget 2000.

In today’s world, in which young men in stock exchanges across the world can, with the press of a button, affect billions of lives, where mere perception can lead to the strengthening or collapse of currencies, there are great demands on economic planners in developing countries. In one of the most unequal societies on the planet, with genuine popular demands on the one side and the nervous, historically colonial propertied classes on the other, the contradictions cannot be more acute nor the dilemmas more sharply expressed.

The awkwardness is not made easy by the culture and values of solidarity and caring that have shaped the identity of the ANC since 8 January 1912. How does this radical movement pursue its mandate for the people when to care is no longer fashionable; when to care can also be seen as economically inefficient by those who have forgotten how to care; when, to paraphrase Bertolt Brecht, it is no longer the in-thing for man to be friend to man?

The ANC Government has had to muster the tenacity to attend to the people’s demands and to conjure up the wisdom to built a country where entrepreneurs have the conditions to create wealth. It is easier in such a situation to be populist or defeatist and to reduce all our problems, as the DP does, to the labour market or to the slow pace of privatisation, or to find the problems, as the the UDM does, so immense as to be beyond the grasp and solution of human beings, so that one offers only childish jokes as a way out.

The ANC has chosen none of these, but a firm, intelligent and progressive approach to the Budget. To understand the meaning of the Budget, it is important to look at the broader institutional changes we have made since the democratic breakthrough of 1994. The Budget is an important instalment in a process that has recently seen, for the first time in many years, a reduction in interest rates. This move is designed to ease the burden of debt. It makes borrowing easier, so as to afford entrepreneurs and consumers access to cheaper credit. This will have a positive and stimulating effect on small businesses.

Budget 2000 is occurring in the context of successful attempts to improve the capacity for delivery. We have been successful in overhauling our revenue service, which has brought an extra R7 billion to our fiscus over two years. Similarly, we have continued to draw together the key economic stakeholders, through Nedlac nationally and in sectoral forums in industry, to foster the necessary consensus for the progressive reconstruction of the economy. This process of restructuring of the state continues. Weaknesses that have been encountered in some provinces are being attended to with better and more effective and responsible management of public resources.

This perspective has also informed our transformation of parastatals. To the dismay of many, we have not surrendered the family silver nor have we left it to gather dust. Instead, in consultation with the labour movement, we have developed a framework in which new investments can be attracted and efficiency improved, whilst preserving the centrality of the state in addressing public utilities and market failures.

In this context, the Industrial Development Corporation continues to be a flagship initiative for investment in the real economy. This year alone the IDC will put more than R2 billion in investment into the economy. Investment in the actual economy is key and must be consolidated if the gains we are making in revenue collection are to be sustainable.

We are therefore witness to the emergence of a strong, modernised, yet compact, developmental state which is, at the same time, leading a national democratic transformation. Bobbing and weaving on the world stage is necessary, but by no means a sufficient condition for our development.

This Budget is not a panacea for all the economic ills of the country. It is, however, an important step in the right direction that creates a positive environment for constructive societal dialogue. Budget 2000 is a message of hope and reassurance. Like the boxing skills of Wonderboy, it bobs and weaves without losing sight of the strategic objective of a better life for all. On behalf of all South Africans, especially the poorest of them, I thank hon Minister Manuel. [Applause.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Before I call the next speaker, Mr Mpontshane, I would like to announce to the House that yesterday, when I was in the Chair in this House, an unfortunate incident occurred. Now, I would like to give Mr McIntosh this opportunity to make a statement.

Mr G B D McINTOSH: Mr Chairperson, thank you for this opportunity, and I wish to make a statement.

Ngiyabonga ukuthola ithuba lokuxolisa kuNgqongqoshe umhlonishwa uMnu Skosana nakumholi we-IFP iNkosi uButhelezi, ngokusebenzisa amagama angafanele izolo ePhalamende. Ngithi shwele kini nonke bafowethu nodadewethu. Ngiyabonga. [Ihlombe.] (Translation of Zulu paragraph follows.)

[I am very glad to have this opportunity to apologise to the hon the Minister Mr Skosana and to the IFP leader, Chief Buthelezi, for using unparliamentary language yesterday. I want to say I apologise to all of you, ladies and gentlemen. [Applause.]]

Mr A M MPONTSHANE: Mr Chairperson, Your Excellencies, the President and the Deputy President, hon members, everyone has been singing the praises of this Budget - of course, at different keynotes. Everywhere we look, we see long queues of different stakeholders with bowls in their hands, begging for more money from the Minister of Finance. I hear them saying: ``Mr Minister, our children do not have decent schools, give us more. Mr Minister, our hospitals do not have enough medicines, give us more. Mr Minister, our universities are falling apart, and we cannot do research, give us more. Mr Minister, we have no clean water, give us more. Mr Minister, we do not have houses, give us more.’’

These indeed are huge backlogs, but the Minister’s budgetary response gives some hope. What the Minister is saying amounts to this: Let us plan over the medium term, rather than on a year-by-year basis. In other words, unlike Marie Antoinette, the Minister is not offering cake instead of bread. In fact, he is only giving a few slices of bread. In this way our country is not borrowing at a high rate, which means that in future years, as serving of interest falls away, more money will become available for social development. This gives us hope for the future.

Why do we have this hope? If we have a stable economic environment, the planning of projects becomes easier. For instance, if we look at the higher education sphere, we recognise the merits of taking a three-year forward view. In the medium term, it looks as if our universities and technikons are beginning to show a decline in enrolment. Universities like Fort Hare, for instance, with a decline of almost 20%, and that of North West, with a decline of 40%, necessitate an examination of what is happening at these institutions.

If one looks at the figures presented by the Minister in the National Expenditure Survey, it must worry us that the decline in university numbers is parallel with the decline in the enrolment in technikons. Therefore, the Budget permits an increase of 6,6% for universities, but allocates only a 3% increase to technikons.

One would imagine that South Africa needed an expanding technical skills base to support continuing economic growth. We must not experience a critical shortage in the technical skills pool at a future point. All of us would be at greater ease if an assurance was given in respect of this.

Let me now turn to the redress fund of R30 million. As universities have to compete for these funds, the House would like to be informed how this cake is going to be sliced. The University of Zululand, for instance, received nothing from this fund last year. Finally, as the universities alter their priorities to fit the Budget, some downscaling will take place. At other times major research projects may be stalled. Equipment may not be replaced and libraries will be unable to buy books. We are told, for instance, that the University of Cape Town has bought very few or no books at all on law for at least the past five years.

Strict and scientific budgeting is the foundation for our future success. There is no doubt about that and it is, of course, a bitter medicine to swallow. The rewards would be a healthy nation with a healthy economy. What we need to be careful about is that we do not set our higher education on a path of decline from which it will never recover.

Constant scrutiny of the impact of the Budget on education will be of utmost importance. The IFP supports the trend in the Budget of properly managing our resources, provided that nothing in the Budget compromises our future growth. Having said all this, I am reminded of an Afrikaans saying: ``Jy moet nie ‘n gegewe perd in die bek kyk nie.’’ [Do not look a gift horse in the mouth.]

Mr M K LEKGORO: Chairperson and hon members, President and Deputy President, I must say that I feel honoured to be part of this Budget debate. This is because this Budget debate is one of the most strategic instruments in determining what needs to be done for the people. It is my belief that this Budget takes us to a higher and better qualitative state in our endeavour to improve the quality of life for all our people. It brings about a difference in the lives of many deserving South Africans.

The policy of the ANC is to improve the quality of lives of all South Africans, especially the poor and the poorest of the poor, hence the slogan: ``A better life for all’’ These policies are borne out of our socioeconomic realities. These are the policies on the basis of which we have bonded with the electorate and the broader South African society.

The Budget before the House reinforces and consolidates the movement to a better life for all South Africans, without losing sight of the needs of the poor and the working people. It is a Budget for the people. It improves expenditure on education and health, and maintains good spending levels on welfare and housing. It should be remembered that the bulk of these services are used by the working people and the poor people. At another level, the Budget attempts to contribute to economic growth through the utilisation of different economic policies and instruments aimed at creating sustainable benefits for all our people. This is important because wealth must be created before it is distributed.

The Budget also introduces new ways of raising revenue. In his Budget, the Minister introduces capital gains tax. The introduction of this tax is long overdue. Different commissions have recommended its introduction, but this has been delayed due to certain weaknesses in the SA Revenue Service. The merits and benefits of this tax were never in question. Capital gains tax is a widely used tax throughout the world. It is used by over 130 countries in the world’s developing and developed countries.

Contrary to the concerns of the opposition, our worry should be the continued absence of this tax. The absence of capital gains tax leaves the overall South African tax system with embarrassing inequities and many economic distortions. The Sars observes the sophisticated taxpayers converting otherwise taxable income into tax free capital gains. This loophole in our tax system weakens the tax base and ultimately Government’s ability to provide resources to the different areas of need. The other effect of the absence of this tax is that the wealthy share less in the tax burden compared to the poor and low-income earners.

International and local experience has proved that the absence of capital gains tax is a powerful incentive to taxpayers to consistently manipulate the tax system. Evidence led and the views presented to the finance portfolio committee during the hearings bear testimony to the fact that there is no alternative to capital gains tax. Even those that oppose the introduction of the tax have failed to provide an alternative.

However, it should be noted that some important concerns were raised, and key amongst these is Sars’ capacity to administer such a tax and the possible effect of the tax on capital formation and investment preferences. Our opinion is that the changes that have taken place in the Revenue Services in the past few years have improved the administrative capacity to a remarkable degree. Therefore there is no reason for Sars not to be competent to administer the capital gains tax. This was also led in evidence by those who are leading Sars. This will also be facilitated by the wealth of international experience available on this particular tax.

Some wish to raise eyebrows by quoting the numbers of people needed to administer the tax out of context for cheap political point-scoring. These numbers should not be judged on their own, but should be looked at against what will be achieved and the value of what needs to be achieved. It is important for us to understand that certain functions of the state are by their very nature labour intensive, and nothing could be done about that if the job needs to be done.

Our response on the issue of capital formation and investment preferences is that the fact that capital gains tax is only to be introduced now in South Africa does not mean that it is a new system. It is a commonly used internationally and it is internationally accepted. Most investors have had to deal with capital gains tax in one way or the other in the past two decades in the many different countries that employ this tax. The locally proposed rates of this tax are very low compared to those charged by other countries and should give our country an economic advantage.

The globalisation of economies requires us to introduce changes that will bring South Africa in line with the rest of the world, especially with those countries with which we have agreements. [Time expired.] [Applause.]

Mr A H NEL: Mr Chairperson, Mr President, I think we all agree that poverty is one of our country’s main problems, and that the alleviation thereof should be our highest priority. The reasons for this are obvious, because it will also address cross-cutting issues such as crime and social decline.

The fact that 50% of our people are poor is totally unacceptable. Therefore we welcome the amount of R1,2 billion for poverty relief and infrastructural development in the Budget.

I agree with the hon Barbara Hogan that we all should monitor delivery and the quality thereof. But we as opposition parties have a further watchdog role, ie to see to it that Government fulfil their good intentions and commitments.

Dit is presies die moeilikheid wat ons het met hierdie Regering. As dit kom by die implementering van die goeie bedoelings op die grond, dan weeg partybelang en eiebelang die swaarste. Verlede jaar is R1 miljard wat vir armoedeverligting begroot is, hoofsaaklik gebruik vir verkiesingdoeleindes. Kom ek gee vir agb lede ‘n paar voorbeelde en ‘n paar name.

Op my dorp, Calvinia, is daar heel toevallig, so agt dae voor die verkiesing, R106 000 deur die Noord-Kaapse wetgewer aan ons munisipaliteit gegee vir die verfraaiing van die dorp. Die ANC-burgemeester het gesorg dat die keuring van die mense vir hierdie werk gedoen word deur die advieskantoor op die dorp. Mense moes ANC-lidmaatskapkaarte toon om werk te kry. Ons het beëdigde verklarings van mense wat werkloos is, wat weggejaag is omdat hulle aan ander politieke organisasies behoort het.

Huise is kort voor die verkiesing dwarsdeur die Noord-Kaap gebou, befonds deur die sogenaamde premiersfonds. Weer eens het ANC-lede en hulle families voorkeur gekry. Weet die Minister van Finansies van hierdie premiersfonds? Waar kom die geld vandaan? Het hy hierdie fondse aan die premier beskikbaar gestel en die planne help maak om dit vir ANC-propaganda te gebruik? Het ander provinsies ook `n premiersfonds?

Calvinia se toenmalige burgemeester en ANC-kandidaat en die huidige speaker van die Noord-Kaapse wetgewer, mnr C A T Smith, het die kat uit die sak gelaat. Op ‘n ANC-vergadering op Fraserburg het hy gesê kiesers wat nie vir die ANC stem nie, maar vir die Nuwe NP, is bobbejane, en die ANC sal nie geld of huise vir bobbejane gee nie. Ook hiervan het ons dokumentêre bewys in die vorm van ‘n video-opname.

Hierdie selfde mnr Smith, die huidige Speaker van die Noord-Kaap, het ses dae voor die verkiesing op Calvinia aangekondig dat alle mense wat minder as R4 000 ‘n maand verdien se skuld afgeskryf sou word. Die Minister van Finansies het bygesit die aand toe hy daardie vergadering gehou het, en het beaam hoe goed die ANC na die mense kyk. Nou word hierdie selfde mense deur die ANC-raad gedagvaar omdat hulle nie hul skuld kan betaal nie.

Voor die verkiesing het ‘n ou tante na my toe gekom met trane in haar oë en my ‘n ANC-lidmaatskapkaart gewys en gesê: ``Meneer, ek kan nie anders nie. My kinders moet werk en ek moet ‘n huis hê.’’ My argumente oor haar menseregte en haar stem wat geheim is, het niks gehelp nie. Sy moes swig voor blatante ekonomiese afdreiging. Nou vra ek mnr Manuel en die President: kan ‘n mens ‘n Afrika-herlewing op so ‘n fondament bou?

Ons praat van die euwel van rassisme, maar is dit nie ‘n groter euwel om ou mense en ongeletterde mense te bedrieg nie? Armoedeverligting moet bepaal word deur die behoefte van mense en nie deur ‘n ANC-lidmaatskapkaart nie, anders het ons geen respek vir mense nie, dan handel ons sonder integriteit en dan is die waardes en die regte in ons Grondwet niks werd nie.

Hierdie onreg teenoor arm en ou mense word deur die agb Minister en agb President se partygenote en bestuurslede op grondvlak gepleeg. Die stilswye van die leiers van die ANC oor hierdie aangeleentheid word as goedkeuring hiervan ervaar. Dit is die absolute teenpool van ‘n vrye demokrasie en ek daag die agb Minister, die agb President en ander ANC-leiers uit om op te staan en saam met ons hierdie euwel te veroordeel. [Applous.] (Translation of Afrikaans paragraphs follows.)

[This is precisely the difficulty that we have with this Government. When it comes to implementing the good intentions at grass-roots level, then party interests and individual interests take precedence. Last year R1 billion that had been appropriated for poverty relief was used mainly for election purposes. Let me give hon members a few examples and a few names.

In my town, Calvinia, quite coincidentally, about eight days prior to the election, R106 000 was given to our municipality by the Northern Cape Legislature for the beautification of the town. The ANC mayor ensured that the selection of people for this job was undertaken by the advisory office in the town. People had to show ANC membership cards to get work. We have affidavits from people who are unemployed who were chased away, because they belonged to other political parties.

Houses were built throughout the Northern Cape shortly before the election, funded by the so-called Premier’s Fund. Once again members of the ANC and their families enjoyed priority. Does the Minister of Finance know about this Premier’s Fund? Where does the money come from? Did he make these funds available to the premier and help to plan to use it for purposes of ANC propaganda? Do other provinces also have a Premier’s Fund?

Calvinia’s then mayor and ANC candidate and the present Speaker of the Northern Cape Legislature, Mr C A T Smith, let the cat out of the bag. At an ANC meeting in Fraserburg he said that voters who did not vote for the ANC, but for the New NP, were baboons, and the ANC would not give baboons money or houses. We also have documentary proof of this in the form of a video recording.

This selfsame Mr Smith, the present Speaker of the Northern Cape, announced in Calvinia six days before the election that everyone who earned less than R4 000 a month would have their debts written off. The Minister of Finance was present at the meeting at which he said that, and reaffirmed how well the ANC looks after the people. Now these same people are being summoned by the ANC council because they cannot pay their debts.

Before the election an elderly woman came to me and, with tears in her eyes, showed me an ANC membership card and said: ``Sir, I have no option. My children must work and I must have a house.’’ My arguments concerning her human rights and her vote that was secret were to no avail. She had to yield to blatant economic blackmail. Now I want to ask Mr Manuel and the President: Can one build an African renaissance on such a foundation?

We talk of the evil of racism, but is it not a greater evil to deceive elderly and illiterate people? Poverty relief should be determined by the needs of people, and not by an ANC membership card, otherwise we have no respect for people, we are acting without integrity and the values and rights in our Constitution are worthless.

This injustice to poor and elderly people is being perpetrated at grass- roots level by political associates and management board members of the hon the Minister and the hon the President. The silence of the leaders of the ANC on this matter is seen as approval. This is the absolute antipole of a free democracy and I challenge the hon the Minister, the hon the President and other ANC leaders to stand up and, together with us, condemn this evil. [Applause.]]

Mr P M MATHEBE: Mr Chairperson, Mr President, Mr Deputy President and hon members, I do not think I should waste my time by responding to Mr Nel’s baboon speech, because he really chooses not to see what this Government is doing for millions of South Africans. Maybe I should give him one piece of advice: He should try to teach his mind to think before he says anything, and also try to govern his tongue.

Mr M J ELLIS: Mr Chairperson, on a point of order: It is certainly not for me to protect another party, nevertheless I must ask whether it is parliamentary - in fact I know it is not - for a member to refer to a speech as a baboon speech.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon Piet Mathebe, please withdraw that word.

Mr P MATHEBE: I withdraw it, Mr Chairperson. [Interjections.]

One of Africa’s literary moguls, Ngugi wa Thiong’o, wrote the following in his book, The River Between:

Father the war of shields and spears is now ended. What is left? The battle of wits, the battle of the mind and eye. We all want to learn.

From the many critiques received from the national and international bodies and individual experts on matters of economy, it is clear that many of our people have learned that this Government has their interests at heart. Many of the rural masses of our people have learned to look upon this Government and say: ``Father, we too want to learn and to be incorporated under your arm, for indeed you care for us all.’’ They are now able to proudly say that this Government has gone a step further in striving for a better life for all.

It was a common sight in some of the rural areas of the Northern Province, Mpumalanga and other areas of our country to find people drinking from the same wells and fountains as their cattle, donkeys and goats. It was a common sight in those areas to see toiling rural women and children carrying a few litres of unpurified water fetched many kilometres away from their homes under the scorching African sun. Just seven years ago, the so- called liberals looked on indifferently at many rural women and children carrying wood on their heads, fetched from 20 km or so away from their homes.

Now, six years down the line, through the commendable recent Budget and its predecessors, our people are able proudly to look upon the ANC-led Government, like Ngugi’s children, to proclaim: ``Father, the war of shields and spears is now ended.’’ What is left? Full participation and hope because this ANC-Government has fought, and continues to fight, for a better life for us all.

In a booklet entitled The Highlights 2000, Old Mutual legal counsel asserts: The budget continues the Government's commitment to fiscal discipline and makes a strong contribution to enhancing the growth and development potential of our economy.'' But the DP, in a holier than thou attitude, replete with their philosophical meanderings, said:The rest of the Budget reflects a timidity which will not enable South Africa to realise its potential.’’ They go on to say: ``This Budget fails because, above all, it fails to give hope and opportunity to the millions of unemployed South Africans.’’

Their view is contrary to that of many experts, chartered accountants, the Actuarial Society of SA and, more importantly, Standard and Poor, which put us in an investment category. Before the Budget speech, Standard and Poor rated us at BAA3, which is, of course, the lowest rating. A day after the Budget speech, we were in the investment category. According to Standard and Poor, the investment potential in South Africa is quite good. This is because we are doing well, and we have done well, in the global economy over the past years.

The FF’s Constand Viljoen remarked:

Die ingewikkelde idees van die Minister oor prysstabiliteit in die markte is net ‘n vermomming van sosialistiese maatreels om direkte prysbeheer toe te pas. [The complex ideas of the Minister regarding price stability in the market are nothing but disguised socialistic measures to implement direct price control.]

If the hon General thinks that socialists are people who put R9,9 billion back into people’s pockets, or those who create thousands and thousands of jobs through tax relief, or those who develop rural infrastructure and strive for a better life for all, then I agree with him that, indeed, we are socialists, because we care about the poorest of the poor of our population.

This Government, as it has been clearly stated by the Minister of Finance, pays monthly benefits to more than 3 million beneficiaries at a cost of about R1,4 billion per month.

[Time expired.]

Dr G W KOORNHOF: Chairperson, Mr President, Deputy President, hon members, both the medium-term budget policy statement tabled in October 1999 and the Budget for 2000-2001 are commendable steps that put South Africa in the right direction to become a winning nation in the first decade of the century.

However, it does not make full use of the window of opportunity currently open to the South African economy. If we are fortunate, this opportunity may still be open to us for another year or two, and it for us as a nation to decide whether to make use of this chance. Much will depend on the leadership of the fiscal and monetary authorities and also on the political will of the Government. Allow me to share with this House the steps that we think are vital in utilising this window of opportunity open to the South African economy.

Firstly, we need to make growth and job creation the clear number one priority. During the past decade, we have experienced severe financial and economic pain for the sake of structural adjustment. Tight monetary policy resulted in the annual rate of inflation being halved from 15% to 7,7%. Fiscal policy reduced the budget deficit from 7,5% to 2,5% of GDP. Trade policy slashed import tariffs and abolished import surcharges.

These painful structural adjustments caused major sacrifices in growth and employment. During the period 1990-1999, we experienced an average of 1,5% real GDP growth per annum. It was a decade of the lowest economic growth since the depression of the 1930s. It was the decade with the most jobs lost since the depression of the 1930s - almost one million jobs were lost. There is a saying that says ``no pain, no gain’’. We have experienced all pain and no gain. While consolidating these financial adjustments through discipline, it is now time for the pendulum to swing to focus on economic growth and job creation. Instead of cyclical growth, we need structural growth that will reduce South Africa’s army of unemployed people. When the economy grows and develops, crime and violence fade.

Secondly, we have to know what we are aiming for. We should aim for higher economic growth, maximum job creation and a distribution of the gains that is as equitable as possible. A recent study has shown that the degree of inequality in South Africa has widened, which is the opposite of what Gear envisaged. This study notes that inequality within the African community is almost as great as within the whole country. Growing inequality is bad news for a party that is dedicated to creating a better life for all.

We need a real economic growth rate of 5% to 6% per annum in South Africa to absorb the new entrants to the job market or, put another way, to prevent current unemployment from rising. Realistically, however, economic research has shown that during the next five years, no more than 4% real growth per annum may be possible. We should therefore aim to grow at this rate of 4% during the next five years, while addressing the structural constraints, and, thereafter, aim for economic growth in the range of 5% to 6%.

Thirdly, we need to raise the public profile of growth and job creation. Formal jobs in the nonfarming sectors decreased from 5 million people 10 years ago to 4,4 million people today. No fewer than 600 000 jobs have been destroyed, excluding the farming jobs destroyed over this period. For the first time in our history, the number of unemployed adults is nearing the number of employed adults. We are thus rapidly moving towards a society where we have more unemployed than employed people.

Policy indicators need to focus more on job creation and growth. Growth and labour market data should be emphasised continuously. Markets should focus on GDP growth and joblessness. Perhaps we should start to monitor joblessness figures on a monthly basis instead of on a quarterly basis. It will help to focus minds, and will indicate what is happening with the trend and level of joblessness. It must become common practice for the monetary policy committee at the Reserve Bank, for instance, to look at the unemployment rate on a regular basis. The same goes for the Department of Finance and every other department in all spheres of Government.

Allow me to mention a few actions that we think should be considered and implemented, to make us an employed nation. Firstly, we should fast-track the restructuring of state assets. Currently, there seems to be no urgency in this regard. By accelerating this process, we will attract foreign capital, reduce the fiscal deficit and make infrastructure and services available to the poor.

Privatisation must be structured for the people, for example, when Telkom supplies telephone services on a large scale to the disadvantaged people through its partial privatisation. More importantly, privatisation must be based on job creation to counter the wave of retrenchments and strikes.

Secondly, there should be increased assistance to SMMEs. SMMEs are still being hampered by too many regulations and other obstacles. Should the President not appoint somebody in his office, tasked to streamline, remove, soften - call it what we may - the massive number of regulations and other obstacles applicable to small businesses?

The Minister of Finance announced in his Budget speech that incorporated small and medium sized enterprises would pay a graduated company tax. What about the unincorporated, small and medium enterprises? Many of them are operating in the informal sector and many of them are paying tax at the top marginal rate. Let us offer every South African the opportunity to follow his or her dream and become an entrepreneur.

Thirdly, we should have imaginative infrastructure development. We need to step up innovative public works and infrastructure development programmes. Let us, for example, get our road network system up to standard and well maintained, even in the rural areas of a province like the Eastern Cape, which will attract tourism and support small businesses to take their products to the markets.

What about new dams? This Parliament showed the political will to approve an arms procurement programme. Should we not also do it to enhance our educational system, by accelerating, for example, the provision of classrooms for our primary schools. Owing to a lack of time, I am only going to refer to the following steps. We need to assist our tertiary education institutions. We need dynamic venture and development capital markets. We need to abolish exchange controls faster within the next year to 18 months. We need tax incentives to stimulate job creation, and labour legislation that stimulates job creation.

With these few remarks, the UDM supports the Budget before us. [Applause.]

Mr L P M NZIMANDE: Chairperson, the Budget before us undoubtedly demonstrates the capacity and ability to stay central to and lead in the direction of the issues facing our country, its citizens and the world around us.

It stays consistent to the vision captured in many of the ANC policies, as an instrument key to the mobilisation and enhancement of resources, both human and otherwise. It provides a clear and strategic plan by which distributions and allocations through reprioritisation are made equitably amongst all sectors of our society. It takes an integrated approach and an inclusive approach throughout, in dealing with social issues that are critically impacting on our poor people, as the broad transformation and restructuring agenda continues successfully.

Without being too complacent about it, I believe, guided by the RDP goals and objectives, that we are surely denting the massive inequalities and poverty created by apartheid through the social policies adopted by our Government, which now account for an estimated 57% of this Budget Estimate before us. We all note that such social policies would require from time to time an ongoing redirection of resources as circumstances dictate.

Ake ngibuyele kolwakithi ngoba ngiyacabanga ukuthi mhlawumbe bangilalele okokuqala namhlanje ngikhuluma ePhalamende. Lokhu kwabiwa kwezimali kwanamhlanje kusho izinto eziningi ezimqoka kubantu esibameleyo nababheke lukhulu kukhona.

Kukhombisa izinguquko enkambisweni ebikade iqhutshwa ngaphambilini yobandlululo, lapho izimali zikaHulumeni beziyimfihlo futhi zihlelwe ngendlela engalingani nengabhekele zidingo zemiphakathi. Bekungekho kudidiyelwa kokusebenza kukaHulumeni nezinhlelo zawo. Bekungenazinhlelo zokubandakanya izinhlaka zemiphakathi ukuze imiphakathi kube iyona eyelekelelayo emizamweni yokwenza ngcono izimpilo zayo. Nalapho obekwethuka kwenzeke khona, imigomo yakhona ibingazithatheli phambili izidingo zabantu njengoba bekwenziwa nje kulahlelwa.

Ngikhumbula esigodini sangakithi esiseMidlands, kude buduze naseRichmond, ukuthi sake sanikezwa imali eyi-R16 000 kuleya minyaka yobandlululo okwakuthiwa asifake ngayo amanzi. Satshala amapayipi eplastiki enela nje imizi emithathu, kwase kuthiwa ngalokho intuthuko ifikile. Kwathiwa asishaye izandla ngalokho-ke ukuthi intuthuko ifikile. [Uhleko.] [Ihlombe.]

Sithi-ke le Sabiwomali sanamhlanje siyasijabulisa. Mhlawumbe nalabo abangilalele emakhaya bayasho ukuthi imigomo esihamba ngaphansi kwayo iyimigomo yokuthi kwenziwe ngcono intuthuko yemiphakathi, kube yintuthuthuko enokuzimela. Le ntuthuko kudingeka ikwazi ukusebenzela imiphakathi ngokudidiyeleyo. Sijabulela ukwazi futhi ukuthi izikhungo lezi zikaHulumeni ezisabubhizinisi ezibizwa ngama-state assets ziyaguqulwa futhi zibhekelelwe kulesi Sabiwomali ukuze zikwazi ukusebenzela abantu ngendlela efanele.

Emakhaya le ebekade sikhona, ngenxa yokuthi intuthuko yakhona ibingahleliwe, uma umuntu enikezwa ugesi ubewukhokhela kusukela edolobheni uhambe uyintambo eyodwa uze uyofika emzini walowo muntu. Umuntu ubeqala ukuwukhokhela kusukela ku-R500 engakakhokheli asewusebenzisile. [Uhleko.] Lesi Sabiwomali kungakho sihlaba umxhwele kithina ngoba sona sisebenzela ukuthi akudidiyelwe ukuhlelwa kwezinhlelo.

Kule Ndlu ngizwe abaningi, ikakhulukazi labo abazibiza ngokuthi bahola amaqembu aphikisayo, bekhuluma kakhulu ngobubha bethi imali enikezwe abakhubazekile nabezimpesheni incane, kwanjani kwanjani. Ngingomunye wabantu abakhubazekile owaphunyuka kule mpesheni eyayingikhiyela ekhaya ukuthi angihlale ngingafuni ukufunda. Ngabe angikho lapha uma kulandelwa le mpesheni ngalolu hlobo ababeka ngalo la phambi kwethu ukuthi yincane. Kube khona ukuvumelana phakathi kwabantu abakhubazekile noHulumeni ukuthi sekuyisikhathi sokuthi kusetshenzwe ngamalungelo nangentuthuko ekulethweni kwezinguquko ezimpilweni zabo bonke abantu.

Siwazi sonke-ke umgomo ka-ANC wempilo engcono kubo bonke abantu. Usho lokho nje, awuhumusheki ngenye indlela. Uma uwusho ngesilungu uchaza khona lokho nje. [Ihlombe.] Lokho kusho ukuthi esikwenzayo sikwenza sikudidiyela senzela ukuthi noma ngabe umuntu ukhubazekile uma kungamfanele ukuthi ahole impesheni, angayiholi, kuthi leyo mpesheni iholwe yilowo oyifanele ngoba kunezimo ezithize abhekene nazo.

Siyakubonga futhi ukuthi izingane ezikhubazekile - ngaphezu kwale child support grant abakhuluma kakhulu ngayo ekubeni kade bengayazi - ngenxa yokuthi zona zikhubazekile zinikezwa ukuthi zithole lowo R540. Ziningi-ke, noma singenazo izibalo. Mhlawumbe bayosisiza-ke bona, ngoba bazikhonzile izibalo namaphepha, basazise ukuthi izingane ezikhubazekile zingakanani eNingizimu Afrika. Kodwa ngolwethu ulwazi nangezinkomba, sibona ukuthi baningi abantwana abakhubazekile futhi bayanda. Imali abayitholayo ingama- R570. Lokho kukhombisa ukuthi izidingo ngezidingo zihamba zihlelwe ngendlela ehlelekile nenikeza amandla ngokwesimo leso labo bantu ababhekene naso.

Enye into engithe uma ngiyilalele ngihleli lapha emabhentshini emuva, ngizwe bekhuluma ngokuthi kunobubha eNingizimu Afrika, ngakho imali yalesi Sabiwomali incane, ayisho lutho. Ububha obukhulu thina emakhaya esibaziyo, ngukuthi ubuthi uma uya komabhalane ufike umabhalane akuthethise. Uye kumlimisi, uthole ukuthi yena uzofika azolimisa uthisha kuphela endaweni ngoba uthisha ezokwazi ukuzikhulumela. Ngamanye amagama ngoba yena enamandla okubhekana nesimo.

Lokhu kwenza ukuthi imiphakathi yanamhlanje, imiphakathi yakithi, kube ayilimile - naleyo mihlaba emincane nalezo zivande zabo abazilimile - ngoba ukusebenza bekungahlelekile njengoba enye into abebengayazi yi-Batho Pele ebhekelekile ngokwalesi Sabiwomali esiphambi kwethu namhlanje mayelana nokuthi abasebenzi bakaHulumeni abaguquke bahloniphe abantu ababasebenzayo. [Kwaphela isikhathi.] [Ihlombe.] (Translation of Zulu paragraphs follows.)

[Let me speak my language, because I think people are listening to me for the first time as I speak here in Parliament. Today’s Budget means a lot of important things to people whom we are representing, as they are expecting a lot from it.

It shows change as compared to the procedure that was used during the apartheid era when the Government’s money was handled secretly and distributed unfairly since the needs of communities were not taken into consideration. There was no joint cooperation between the Government and its structures. There were no procedures to include public structures so as to enable the communities to assist with the improvement of their lives. Even in situations where such co-operation occurred the policies did not prioritise people’s needs, everything was done just to finish the job.

I remember in my area in the Natal Midlands near Richmond, when we were given R16 000 during the apartheid era to install water. We planted three plastic pipes which were sufficient for only three households. About that incident it was claimed that the development had come. We were instructed to applaud and say the development had come. [Laughter.] [Applause.]

What we are saying is that we are happy with today’s Budget. Today, even those who are listening to me in their homes are saying that the policies which we are following stipulate that communities should be developed and this must be independent development. Such development must assist communities inclusively. We are glad to know that state assets are being transformed and that they are taken care of in this Budget so that they will help people in an appropriate manner.

In rural areas, where we come from, since development was not organised, when a person was supplied with electricity, he would pay for that electricity from the city and the cable would stretch from the city until it reached his home. The person starts paying for electricity, from about R500, and this does not include the electricity that he has used. [Laughter.] This Budget is pleasing to us, because it works towards combining the preparation of projects.

In this House I have heard many opposition leaders saying the money that is given to pensioners and disabled people is not enough and so on. I am one of the disabled people who survived on a pension, which locked me up at home so that I just stayed there and did not study. I would not have been here if the pension were allocated in the way these leaders are suggesting here, as they say it is small. There was an agreement between the disabled people and the Government to the effect that it was time to work through rights and development needs in order to bring about changes in the lives of all people.

We all know the ANC’s policy of a better life for all. It only means that, it cannot be interpreted in any other way. If you read it in English you are saying exactly what it means. [Applause.] This means that everything we do, we do by means of combining, so that even if a person is disabled, if he does not qualify for a pension, he should not get it, but it will be given to the person who qualifies for it, because of the circumstances he is faced with. We are also grateful for the fact that disabled children have been given R540, in addition to a child support grant, about which people have spoken loudly while they did not know anything about it before. Of course, disabled children are many in number, although we do not have the exact number. Perhaps the opposers will help us. Since they like statistics and papers, they will tell us how many disabled children we have in South Africa. According to our knowledge and indications, we think that they are many and they are increasing. The money that they get is R570. This shows that each necessity is provided for in an organised way and that empowers according to the situation faced by those affected.

Another thing that I have heard as I was sitting in the back was that there is poverty in South Africa, therefore this Budget is too small, it is almost nothing. The big poverty we know in our areas is that when one goes to a clerk he will scold one. When one goes to agricultural advisers, an adviser would come to advise a teacher, because the teacher can speak for himself, in other words he can handle the situation.

This cause the communities of today, our communities, not to plough fields, or just cultivate a small piece of land. This is all because the way of working was not organised, since people were not aware of Batho Pele, which has been catered for in this Budget that is in front of us today. Batho Pele is about the fact that government employees must change and respect the people they are working for. [Time expired.] [Applause.]]

Miss N B SIGABI: Mr Chairperson and hon President, we congratulate the hon member on his maiden speech. I wish to inform the hon Feinstein that history has proved that no innovative thinking has ever emanated from socialist-driven ideas. [Interjections.] Even Karl Marx had the luxury of pushing a socialist agenda on a capitalist subsidy. This explains why the ANC regulates privatisation and wants to own poverty. [Interjections.]

Past spending on infrastructure was biased towards the interest of big business. Therefore, there is a case for setting the structural disadavantages imposed on small firms with some benefits, if equality and opportunity to compete is to be achieved. Restructuring of the tax system is a good place to begin. In terms of tax relief, this year’s Budget is great news for small business. We welcome the graduated company tax rate for small business, but the DP urges the Minister to increase the qualification of gross income for the year of assessment to R5 million and calculate the spinoffs and multiplier effect that it will have on the very same Government agencies like Khula and Ntsika. The hon Minister Manuel knows that the best way for the Government to help entrepreneurs is to remove the burden of laws and taxes placed on them. A tax break or a labour law exemption will do more to encourage small business than spending on small business promotion.

The problem is that since the National Small Business Act of 1996 set up three institutions, Government has pumped money into these programmes blindly, and often wastefully. Projects have been duplicated, triplicated, set up, torn down and resurrected, but small business has little to show for it. The managing director of Khula himself, Mr Sizwe Tati, admits that the duplication of small business projects is a problem. He is quite right. But then why is Khula launching its own skills training programme, called Thuso, this month? Skills training is Ntsika’s job.

The worst example of the misguided spending on small business development is the National Small Business Council. When the council mismanaged its funds, and had to be liquidated in 1998, the DP said: Do not revive it; it is better off dead. The Department of Trade and Industry said that it would not revive the National Small Business Council. But when I look at the Budget, I see that the R5 million allocated to the council in the 1999 financial year, has been simply replaced this year with R5 million allocated to the Voice of Small Business. So, where is that money going? Who will control it, and how will it be spent? The DP would rather see that R5 million spent on giving 3 000 opportunity vouchers to over 1 000 young unemployed people to buy their own business training, or to start their own businesses; or, at least, give it to Khula for loans, or to Ntsika for training.

There is some R600 million left unspent in the Department of Trade and Industry’s total budget which could have been used to help small and medium enterprises. The department has announced that they are prepared to ask for a roll-over, and to use a sizeable portion to help the recapitalisation of the taxing industry.

The recapitalisation of Khula to guarantee loans to small and medium enterprises would have been a far more productive use of this money. It appears that the Department of Trade and Industry’s forecasting of expenditure leaves a lot to be desired. The small business sector is a critical component of the job creation equation, and we would call on the hon Minister to look into the quality of the financial planning of the Department of Trade and Industry. Financial control systems and innovative thinking will go a long way towards addressing this problem.

Now is the time to break the logjam of unemployment, and to boost the development of small and medium enterprises. [Applause.]

Ms F B MARSHOFF: Mr Chairperson, hon President and Deputy President, Minister of Finance, the Minister of Finance, the department and the whole finance team must be congratulated on this Budget, which addresses the needs of the poor. Through the new and improved methods of revenue collection and administration, Government is now in the more advantageous position to proportionally increase its spending on social service delivery.

It is one of the major roles of the developmental state to ensure that all its citizens receive basic levels of service, irrespective of their level of income, and through this Budget, we aim to achieve just that. It was mentioned here by the hon member Cassie Aucamp that this is a Robin Hood budget. Well, if it is so, there is nothing wrong with the concept of taxing a bigger share of the income of the wealthy, and spending more on the poor in order to achieve equity, to reduce poverty and to provide a minimum level of basic services to all. There is nothing wrong in striving to provide a better quality of life for all. There is nothing wrong with ensuring that we provide shelter, education and health facilities to the poorest of the poor. If one can achieve these objectives and at the same time stimulate economic growth, then, most certainly, it means that we are right on track. Thousands of our people are benefiting from the progressive economic policies developed and implemented by the Minister’s department, under this ANC-led Government.

It is no secret that for the past three to four years, there has been a progressive increase in the social spending patterns of Government, and that during the past financial year the percentage spending has increased to more than 57% of noninterest spending of the total Government expenditure. It is also projected that over the next three years, the expenditure will grow by an average of 5,5%. The main areas of spending have obviously been on education, health and housing. In education and health the increased spending has, to a large extent, managed to bring about equity in the distribution of resources and service provision.

Although there might still be some minor problems in some areas, overall we have changed the lives of hundreds of thousands of the most marginalised people in this country. For the first time ever, many children have been given an opportunity to be educated. Many have been given access to health care facilities. Many of our people will, for the first time ever, experience a better quality of life, thus increasing their life expectancy.

We have also seen a shift in the provision of welfare grants. The child support grant - which was open to abuse and favoured certain racial groups to the exclusion of others - has now been replaced by the state maintenance grant. We have done away with this. We most certainly also cannot deny that we have experienced some problems with the implementation of this programme. But these problems have been identified and the access to the grant has now improved, especially in rural communities, where access up till now has been very difficult.

The process of reregistration for grants and social pensions has led to better administration and service delivery and has, at the same time, rooted out corruption. The same can be said for pension and disability grants. It can never be said that this Government is not a caring government, that it is neglecting the poor or that we have gone back on our promises of improving the quality of life for all our people. Our people are testimony to the fact that we are indeed delivering. We are on track and, with the support of the millions of our people out there, we will remain on track. No one, especially from the DP, can come and sit in judgment on us.

All of a sudden the DP have become the champions of the poor. The hon Ian Davidson yesterday spoke about the small increase in social pensions and benefit grants. This is the very same DP which was propagating that there should be a general increase on VAT. Now I am asking here today: if we were to take the lead of the DP and increase VAT, would we not have had a more detrimental effect on the most marginalised and poorest of our communities? Obviously, the people that would have been affected more are those who are dependent on their pensions. We would have expected them to pay even more for their basic foodstuffs and housing. [Interjections.]

The hon Ken Andrew does not know what he is talking about. He has never been subjected to poverty, so he should just keep quiet. He is in no position to speak on behalf of the poor.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon member, I will chastise the House. Please continue with your speech.

Ms F B MARSHOFF: I am busy with my speech! [Laughter.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Please continue, madam.

Ms F B MARSHOFF: The only reason why the DP wanted to increase VAT is because they wanted to protect the wealthy. The hon the Minister has done a great job by not choosing the easy way out. He has done an honourable job. [Applause.] Our people will for ever be in his debt and we can only … [Interjections.]

Mr K M ANDREW: [Inaudible.]

Ms F B MARSHOFF: No, we are not going to put blame on anyone. We can only praise the ANC for having produced a product such as the hon the Minister.

On the introduction of other tax reforms, such as the unpopular capital gains tax, we know which pockets they are reaching into, that is why they are opposing it. As far as the reduction in the taxation of middle-income earners is concerned, he has effectively raised the disposable income of our people, thus improving their living standards. Through this, he has again stressed that this ANC-led Government is committed to lessening the tax burden on the poor and reducing the gap between the rich and the poor, the haves and the have-nots.

I can go on and on on this, but I am not here to sing the praises of the Minister, although he rightly deserves a praise singer. I would have liked to speak on other issues, especially around health and education, and how through the payment of transfer and conditional grants we have improved service delivery and service provision, especially in the rural areas and the disadvantaged provinces. But we will have a different platform on which to do that.

If this is a supply-side budget, then it is definitely supplying to the poor. To the Minister and to Team Finance I can, but only rightly, say: Remain on track. We are heading in the right direction. [Applause.]

Miss S RAJBALLY: Mr Chairperson, our President, Deputy President, Ministers, hon members, may I take this opportunity to congratulate our hon Minister of Finance and his team on introducing this very healthy Budget for the first time.

The roots of economic structures are historic in nature. Therefore, regional disparities in economic activity exist. This is evident in the uneven distribution of income and opportunities. However, this problem is being addressed. The Government has concentrated on redistributing resources by increasing the spending on programmes that are targeted at he poor, such as housing subsidies, poverty relief, the child support grant and primary health care.

The durability of budget estimates to a certain extent depends on, firstly, the frequency with which fiscal measures are changed. Secondly, interest groups in South Africa are diverse and so is their reaction to fiscal measures. For example, the subsidisation of farming may enjoy the support of farmers, yet this may be opposed by taxpayers who have to bear the brunt of financing the subsidy.

The Government’s contribution to the GDP consists primarily of wages and salaries, which are taxed. Paying tax is another means of transferring income from the individual to the state. Considering the fact that the majority in this country belong to the lowest income group, the personal income tax reduction on ordinary people is a remarkable achievement for a country in which democracy is only seven years old. This truly means that South Africa is on course.

Overspending must be contained to avoid undermining economic growth in the public and private sectors. Therefore, the Government is correct to have restructured state assets by adopting a strategic framework to improve the delivery of some public services through innovative public-private partnerships. To assist in the fight against Aids, between R75 million and R300 million will be allocated by the year 2003. This is remarkable, but the public must understand that no amount of money is going to win the race against Aids. It takes the human will, healthy attitudes and education to ultimately eliminate Aids.

Education determines the character of economic growth in a country. South Africa is faced with the greatest pressures for the enlargement of access to schooling and the demand for educated and vocationally skilled labour, on economic grounds. To combat this problem we need to increase resources and create more opportunities in education. The MF supports the Appropriation Bill. [Time expired.] [Applause.]

Mr M F CASSIM: Mr Chairperson, Mr President, Deputy President, Ministers, colleagues, South Africa is indeed two countries. This view can be nuanced in different ways. On behalf of the IFP I see our country, on the one hand, as urban, developed and cosmopolitan. On the other hand, it is rural, undeveloped and largely black. This division is not only physical and spatial; it is also a division in respect of resources. The rural areas are underresourced and underdeveloped.

People there are undereducated, and this segment of our society waits every day for Government to come marching in, with the Minister of Finance beating the drums at the head and the other Ministers following. May this day materialise soon. The day that the impact of the Government begins to be felt in a big way in the rural areas is the day when South Africa will have indeed unshackled itself.

At present, in our country, we have Dr De Bono, who has been encouraging all of us to think laterally. This is the time, when we are looking at our budgets, that we need to do so. In both the urban and rural societies, technology is the broom on which the economy flies. The focus on the urban economy must be matched by a similar focus on the rural economy. If the target for the growth of the urban economy is 3,5%, then the target for the growth of the rural economy should be no less than 20%. This should happen. Starting as we do from a lower, lesser developed base, this cannot be impossible.

Without establishing the fundamentals of growth in the rural economy, policy-makers and Parliament, in particular, lack the benchmark for ascertaining what is actually happening in the rural areas. Not surprisingly, when male participants from Parliament come to this podium, their contribution focuses primarily on the urban economy, while our female colleagues in Parliament come here to this podium pleading for further relief for the rural dwellers. Female contributors know, intuitively, the suffering of our people in the rural areas.

My view, and that of the IFP, is that we can no longer avoid the burning issue of maximum rural development and the need to shift appropriate technologies to the rural areas. The Minister should note that our budget policies must more aggressively address these issues.

Fifty years of research at the ARC has had little or no impact on animal husbandry or grain, fruit and vegetable production in many rural areas. If I am mistaken in my assessment, why do commercial farms look so different from the neglected rural areas when we drive on the N1 or the N2? Likewise, 50 years of research at the CSIR - and let us accept that this has been considerable research - has not made much of a difference in the lives of people in the rural areas. My leader, Dr Buthelezi, the hon the President, Thabo Mbeki, and Madiba himself have grown up in circumstances of great hardship and they understand what it is to live in areas without the use of the technologies we take for granted. [Interjections.] Well, I think this is where we have a fundamental difference in how South Africans see South Africa. Many of us in this Parliament, excluding some of my colleagues from the DP, plead for something else, but I believe that until and unless we can start sorting out the problems in the rural economy, South Africa can never be a free and equal country.

It is not as if knowledge in our country is not there. It is not as if the research is lacking. It is not as if the appropriate technology is not available in our country. All of these things exist. It is now the function of the Budget. The Budget serves as an engine driving economic, social and cultural activities. What can we do? Parliament, I am quite sure, would muster an overwhelming majority in support of shifting technologies swiftly and immediately to rural areas.

A vibrant rural economy would ease the pressures on our urban areas. Our cities are growing faster than they can really cope - Durban being probably one of the fastest growing cities in the whole world. Now people are all in search of a better life for all, and that must also dictate to us as parliamentarians what needs to be done. Information technology, agricultural technology, lighting and heating technology, food-growing and food-processing technologies, house-building technology, arts and craft technologies, and so on, are all available.

In ancient Persia, Cyrus emerged as a leader of a small tribe. But so progressive, so caring and so just was Cyrus that in his lifetime, without picking up a spear or a sword, he created one of the mightiest empires of the ancient times by simply being so caring and so just. The Chinese dynasty which lasted for 5 000 years, did so on a very simple adage: Day by day, make it new. Throughout ancient China, the Chinese emperors and inspectors travelled through the country to ensure that every single part of the country was in sync with the economy of ancient China.

Now, if we allow part of our rural economy to be dysfunctional, to be out of sync with the rest of the country, we will not be able to create a better life for all. Thus, let us unite with all our female colleagues who have pleaded again and again in this House for a better life for all by improving the rural economy. [Time expired.]

Mr F C FANKOMO: Chairperson, President, Deputy President, Ministers and hon members, as a person who is dedicated to equity, justice and transformation, there are certain questions I ask when I look at the tax regime of our economy. Is there fairness in the South African tax system? To what extent does the tax system contribute towards growth, job creation and stability of our economy? Does it help to further strengthen the system of governance? What impact does taxation have on the poor? Does taxation contribute towards individual savings?

These are not just abstract questions about taxation. They touch on key concerns of a society committed to transformation. These are the concerns of all South Africans who wish to see themselves becoming beneficiaries, and not victims, of their tax system. Thus, it is the responsibility of this House and the portfolio committee to set out what this Budget is all about in a simple and understandable way. Taxes are tools for redistribution and development. Let us first look at tax rates. Previously, the lowest income earners who paid income taxes were those who earned R33 000. Now someone who earns less than R35 000 will not pay any tax, but more than this, the lowest group of earners who are taxed will now pay 18%, as opposed to 19%.

Until now, people who earned R120 000 and above per annum paid 45% income tax as earners in the highest category. This amount has been increased to R200 000 per annum as the highest level of earners. This category will now be paying at least 42% income tax. The impact of this tax in the Budget is that it will benefit individuals at all levels, and will encourage savings.

The reduction in personal income tax of R9,9 billion will result in increased personal savings, a reduction in personal debt and an increase in personal spending. The fact that the reduction in tax rates is greater for the low-income and middle-income earners clearly shows that this Government recognises the burden that was placed in the past on the ordinary family, the backbone of our society.

The transformation of Sars into an example of efficient and good management is an inspiration to all of us. For too long, law-abiding, wage-earning citizens paid the price for the tax avoidance of those who were better off. Thanks to efficient management, ordinary families can now feel the benefit of the ANC’s economic management. Our ANC election manifesto says, and I quote:

The ANC will build on our success in broadening the tax base, and cut down on tax evasion. At the same time, we are committed to progressive taxation that lightens the burden on most middle-income and poor families.

This Budget has fulfilled the promise and, should external economic factors allow, we can expect further relief as our economy prospers.

We hear a lot of moaning about the introduction of the capital gains tax. Capital gains tax is a form of tax that is applied all over the First and Third Worlds. The opposition says that it is inefficient and will cost more to impose than it will yield. But, estimates are that it will cost at the most R100 million to implement and it will generate R800 million. One does not need a master’s degree in business accountancy to appreciate that 800% return is a good investment.

There is also a principle involved. The ANC believes in equity, and we do not believe that a profit made on an investment should not be taxed, whatever form the investment takes. If I buy a piece of land at Bushbuckridge in the area called Calcutta and next year I decide to sell that land, am I not expected to be taxed on the profit that I have gained? I believe that I should be taxed, because it is fair and just.

The ANC is committed to a fair tax system that works for the benefit of all, not just a few. This tax is not draconian. Assets will only be taxed on gains that occur after 1 April 2000. Therefore, people who have held assets for 20 or 30 years need not worry that they will be taxed on the appreciation that has accumulated since they acquired the assets.

This, coupled with the introduction of resident-based taxation, will bring us in line with many of our international trading partners. Foreign sources’ dividends will immediately become taxed, adding to our internal revenue, which will result in less borrowing by our Government. This will prevent tax avoidance and will also ease the burden on middle and low- income earners.

Given the past performance of the economy under Minister Manuel, given the unprecedented support that this Government has received from the business community and given the dramatic turnaround in revenue collection, we have seen, under the leadership of Minister Manuel, that we can be confident that capital gains tax will work for development and growth.

The opposition has little experience of hardship and poverty, and the hardships that this will place on the poorest of the poor. Even if we abolish the VAT on basic foodstuffs, what about the other essentials of life, such as clothing and shelter? The poor will pay the price to the benefit of the rich. This is not what this Government is all about.

Further, to show its commitment, the Government gives tax concessions to organisations that provide essential services to the poor. This includes tax deductions on donations to preprimary schools, primary schools, children’s home organisations, organisations that care for the aged and those focusing on HIV/Aids. [Time expired.] [Applause.]

Mnr I J PRETORIUS: Mnr die Voorsitter, vanmiddag wil ek graag ‘n pleidooi lewer vir die mense wat in die Tygerbergse munisipale gebied woon, wat ek verteenwoordig. Baie aspekte van die begroting is alreeds vanmiddag en in die afgelope twee dae bespreek en ontrafel, en daar is baie dinge gesê. Ek wil eintlik ‘n oomblik by daardie gebied en sy mense stilstaan. Die agb Minister van Finansies ken die gebiede: Uitsig, Ravensmead, Parowvallei en Eureka. Ek dink nie dit is nodig dat ek hóm en ander lede in dié Raad moet vertel watter probleme ons in daardie besondere gebiede ervaar nie.

Ek sien my kollega Cobus Dowry kyk na my, want in die afgelope tyd dra ek nie normaalweg ‘n das nie, en hy sê hy kan nou sien ek verteenwoordig daardie gebied. Ek het egter vandag my das aan omdat ek namens hulle ‘n pleidooi lewer.

Dié gebied is, soos ek gesê het, in die Stad Tygerberg geleë, en daar ervaar ‘n mens die volgende. Dit is ook nie alleen die ervaring van die inwoners nie, want ‘n mens sien dit as jy daar kom. Grootskaalse werkloosheid heers in die gebied, misdaad is aan die orde van die dag, en daar is ook ‘n groot behuisingsnood. Daar is natuurlik baie ander sosio- ekonomiese probleme wat ek graag sou wil hanteer, maar ek het nie vandag tyd om dit te doen nie. Ek gaan stilstaan by die kwessie van behuising en by die bekamping van misdaad.

Volgens ‘n onafhanklike ondersoek wat deur die Wes-Kaapse regering gedoen is, is bevind dat daar 230 000 huisgesinne in die Kaapse Metropool is wat nie huisvesting het nie. Dit is ‘n enorme probleem, en as ‘n mens dit moet aanpak, het jy baie geld en baie kundigheid nodig. Volgens die jongste toekenning van die fondse wat aan die Wes-Kaapse regering gegee is vir behuisingsubsidies, kan die regering vanjaar slegs 15 000 subsidies toeken in vergelyking met 22 000 in die vorige boekjaar. Ek wil dus ‘n ernstige beroep doen op die agb Minister om indringend na hierdie saak te kyk, want die behuisingnood bly een van die grootste probleme wat ons het.

Die volgende saak wat ek wil aanroer, gaan oor die probleem van misdaad in daardie besondere gebied. Daar is statistiek oor daardie gebied wat ek aan die agb Minister gaan voorhou wat vir hom ‘n beeld sal gee van die gewelddadigheid in daardie besondere gebied. Daar is natuurlik twee maniere om misdaad aan te pak; ‘n mens moet die sigbaarheid van jou getal polisiebeamptes op die grond verhoog of jy moet meer polisiestasies skep.

Ek wil graag die statistiek aan die Raad voorhou. Dit is die statistiek vir slegs ses maande, en ek moet sê, dit is skrikwekkende statistiek. Dit is die misdade wat aangemeld is by die polisiestasies van Parow, Ravensmead en Elsiesrivier, volgens die amptelike antwoord wat ek verlede jaar van die Minister van Veiligheid en Sekuriteit ontvang het. Wat moord betref, is vier sake by Parow, 26 by Ravensmead en 28 by Elsiesrivier aangemeld. (Translation of Afrikaans paragraphs follows.)

[Mr I J PRETORIUS: Mr Chairperson, today I would like to make a plea for the people who live in the Tygerberg municipal area, which I represent. This afternoon and during the past two days many aspects of the Budget have already been discussed and unravelled, and many things have been said. I actually want to discuss that area and its people for a moment. The hon the Minister of Finance knows the areas: Uitsig, Ravensmead, Parow Valley and Eureka. I do not think it is necessary for me to have to tell him and other members in this House what problems we are experiencing in those particular areas.

I see my colleague Cobus Dowry is looking at me, because recently I have not normally worn a tie, and he says he can now see that I represent that area. However, today I am wearing my tie because I am making a plea on their behalf.

As I said, this area is situated in the City of Tygerberg, and there one experiences the following. This is also not only the experience of the residents, since one notices it when one arrives there. Large-scale unemployment prevails in the area, crime is the order of the day, and there is also a significant housing shortage. Naturally there are many other socioeconomic problems which I would have liked to deal with, but I do not have the time to do so today. I am going to dwell for a moment on the issue of housing and the combating of crime.

According to an independent survey conducted by the Western Cape government, it was found that there are 230 000 families in the Cape Metropole that do not have housing. This is an enormous problem, and one needs a great deal of money and expertise to tackle it. According to the most recent allocation of funds given to the Western Cape government for housing subsidies, the government can only allocate 15 000 subsidies this year, compared to 22 000 in the previous financial year. I therefore want to make a serious appeal to the hon the Minister to look into this issue urgently, because the housing shortage remains one of the biggest problems we have.

The next issue I would like to touch on relates to the problem of crime in that particular area. There are statistics on that area which I am going to present to the hon the Minister which will give him an idea of the violence in that particular area. There are of course two ways to tackle crime; one either has to improve the visibility of the number of police officials on the ground or one has to create more police stations.

I would like to present the statistics to the House. These are the statistics for only six months and, I must say, they are alarming statistics. These are the crimes reported at police stations in Parow, Ravensmead and Elsie’s River, according to the official reply which I received from the Minister of Safety and Security last year. As far as murder is concerned, four cases were reported in Parow, 26 in Ravensmead and 28 in Elsie’s River.]

The statistics with regard to some other crimes are as follows. Regarding rape and attempted rape, 12 cases were reported at the police station in Parow, 51 in Ravensmead and 49 in Elsie’s River. As for the theft of motor vehicles and motorcycles, 216 cases were reported in Parow, 32 in Ravensmead and 71 in Elsie’s River. As regards housebreaking at residential and business premises, 478 cases were reported in Parow, 254 in Ravensmead and 346 in Elsie’s River.

So kan ek voortgaan. My pleidooi aan die agb Minister vanmiddag is dat hy meer fondse beskikbaar stel om hierdie besondere probleme aan te pak, want die nood van die mense moet verlig word, en ek hoop dat hy met groot empatie sal omsien na hierdie kwessie. (Translation of Afrikaans paragraph follows.)

[I could continue in this vein. My appeal to the hon the Minister this afternoon is to make more funding available to address these particular problems, because the plight of the people must be alleviated, and I hope that he will see to this issue with a great deal of empathy.]

Mr N S BRUCE: Mr Chairman, the value of the rand over the past few days does belie that euphoria, if euphoria it be, of investors in this Budget. We are not surprised, for the Budget has some curious logic, both in the measures it proposes implementing and in its philosophical conception. For instance, one does not help the poor by taxing the entrepreneurs who create wealth. It is a basic rule of economics that if one wants to reduce output, one should tax the producer.

According to the hon Bertie Fink-Nottle, who is as round as his economics is flat, a capital gains tax will add efficiency to the tax system. That is absolute cock. This is a tax that is a creation of misguided social democrats, and for years now the industrial world has realised and regretted its folly, and most countries have been trying to get rid of it. It is a notoriously inefficient tax and one that has proved politically difficult to remove as misconception lingers. The high cost of collection of this tax is testimony to its inefficiency, and in our particular case the basis of calculating acquisition cost is going to be a nightmare for taxpayers and tax collectors alike. According to the hon Gavin Woods, it is a tax that is necessary for political balance. Well, the IFP knows a lot about political balance. It has constantly to walk a tightrope to keep its members in the Cabinet. [Interjections.] Balance has been its obsession, but political balance does not compensate for the harm that this tax will do to the savers and investors - those who are critical to investment and adequate and sustainable economic growth.

The DP, on the contrary, does not see privatisation as any sort of panacea. [Interjections.] On the contrary, we are very specific on what we believe privatisation should be used for. Privatisation is, after all, Bertie’s own government’s policy, borrowed, like much of ANC policy, from Margaret Thatcher, but implemented with all the perverted facility that Robert Mugabe can muster. [Laughter.]

What this Budget lacks most significantly is a specific commitment to reduce Government’s consumption expenditure. Throughout the world, countries with the lowest ratio of consumptual spending to GDP are those that have enjoyed the fastest economic growth. We sit with a huge, expensive and inert bureaucracy. It crowds out business because Government has to borrow heavily to sustain it, and the interest rates are too high as a result. It has become a millstone that helps to prevent the growth that is necessary to create jobs. Government policy these past several years has been to reduce this impediment, but nothing happens, except that the queue of the unemployed gets longer and the Public Service is locked in affirmative-action inertia.

In his second Budget, the hon the Minister of Finance said, and I quote: ``This is going to be the year of delivery.’’ Several years have now passed and another one is about to pass, and still there is no delivery. [Interjections.] The unemployment queue gets longer and hundreds of thousands of jobs will again be lost. But what is the greatest disappointment of this Budget? It is a tacit admission of defeat. Government is not even aiming at 6% growth any more - it is aiming at 3%. It has set itself up for failure.

If I can remember correctly, President Mbeki entreated this House a few months ago to lift its eyes to the horizon, allow the vision to soar and the imagination to expand. But what do his comrades give him instead? A Budget of half measures and promises that will not be kept. [Applause.]

Vho M T MASUTHA: Mudzulaphanḓa, Phuresidennde wa shango Vho-Thabo Mbeki, Mufarisa Phuresidennde Vho-Jacob Zuma na miraḓo yoṱhe ya Buthano ḽa Lushaka, Vho-Oliver Tambo vho ri vha sa athu lovha vha ri sia na haya maipfi a vhuṱali:

Vhana vha lushaka luṅwe na luṅwe ndi vhone matshelo vhalwo. Shango ndangulo kana lushaka lune lwa sa dzhiele vhaswa kana vhana vhaḽo nṱha a ḽo ngo tea u vha na vhumatshelo.

Nangoho, u ya nga ha Mulayotewa washu, kha Mulayotibe wa Dzipfanelo, ri tshi vhala kha khethekanyo ya 28, khethekanyo ṱhuku ya vhuvhili, ho ṅwaliwa uri madzangalelo a ṅwana ndi tshone tshithu tsha vhuṱhogwa vhukuma kha zwithu zwoṱhe na zwiṅwe zwi mu kwamaho. Kha khethekanyo ṱhuku ya u thoma, ho ṅwaliwa uri ṅwana muṅwe na muṅwe u na pfanelo ya u wana zwiḽiwa zwa pfushi, vhudzulo, tshumelo ya ndondolo, mutakalo khathihi na ya vhuthu. (Translation of Tshivenḓa paragraphs follows.)

[Mr M T MASUTHA: Mr Chairperson, hon President of the country Mr Thabo Mbeki, hon Deputy President Mr Jacob Zuma and hon members of the National assembly, Mr Oliver Tambo left us with the following words of wisdom before his death:

The children of any nation are the future of that nation. The Administration of a country or nation which does not recognise the youth or its children is not going to have a future.

Indeed, according to our Constitution, in the Bill of Rights, when one reads section 28(2), it states that a child’s best interests are of paramount importance in every matter concerning the child. Section 28(1)(c) states that every child has the right to basic nutrition, shelter, basic health care services and social services.]

Apart from this constitutional obligations, there are other international obligations which our democratic state, under the leadership of the ANC, has assumed as a demonstration of its commitment to the first call for a children’s campaign, launched at the 1990 UN Summit for Children.

On 16 June 1995, hardly a year since the introduction of democratic rule, South Africa became a signatory to the UN Convention on the Rights of the Child. More recently, on 18 November 1999, ahead of the launching of the African century, this House adopted the African Charter on the Rights and Welfare of the African Child, thereby bringing South Africa into the fold of African nations that have committed themselves to ensuring the survival, protection and development of the African child. A question may be asked, and quite legitimately so, as to what concrete action has South Africa taken to fulfil all these commitments, especially towards the poorest of the poor amongst her children. More specifically, it may be asked as to what provision has the Trevor Manuel Budget made for the children of South Africa for the coming financial year.

Before I respond to this critical question, allow me first to deal with some of the criticisms levelled by the DP against this Budget, claiming that it does not reflect a bias in favour of the poor. Let me start by congratulating them for having suddenly woken up to the reality that poor people - the majority of whom are blacks - do exist in this country … [Laughter] … and that their plight … [Interjections.] Just keep quiet and listen! … and that their plight is not a challenge for the ANC-led Government alone. In 1997, the former Minister for Welfare and Population Development, Comrade Geraldine Fraser-Moleketi, boldly introduced the child support grant for children under the age of seven years, as a response to a real problem which the majority of this country’s children found themselves in, namely poverty. Today 5 000 of the approximately three million poorest of the poor children of our country are benefiting from this grant.

A further question may be asked as to why - if indeed we are committed to a first call for children - this grant has not been increased from the original amount of R100 per month, per child, as compared to the other grants which have enjoyed an annual increase? A simple answer to that question - which, of course, the DP conveniently chose to ignore in its criticism for political expediency - is that this is a completely new programme which is hardly two years old, which is still in its pilot phase, and which is anticipated to reach its full maturity by reaching the full targeted group of children over a period of five years, at which stage it will be appropriate to conduct a full review as to its efficacy, outreach, and most importantly, its sustainability - something which the DP is not familiar with.

Of course, the child support grant is not the only form of state intervention in this regard. The care dependency grant for the severely disabled children has been increased to R540 per child, per month, and the foster-care grant has also been increased to R390 - all of which are programmes aimed at children, and especially the more vulnerable ones.

The Budget for the financial year 2000-2001, holistically viewed, is targeted primarily at the poor, and especially the more vulnerable members of our society such as children, the elderly, women and persons with disabilities. This is accounted for by the increase in social spending. Welfare, for example, has received an overall 7,9% increase in its 2000- 2001 budget, and the social security component, which is the primary poverty-alleviation instrument, has received a grand 7% increase. The allocation for poverty relief, which increases to R1,2 billion in 2000- 2001, and to R1,5 billion in 2001-2002 and 2002-2003 financial years respectively, and which is a response to the recommendations of the Presidential Job Summit, will go a long way towards addressing the plight of the poor, including children.

The R75 million allocated for the Departments of Health, Education and Welfare, to finance an integrated response to the HIV/Aids pandemic with the intention of primarily targeting children and the youth, deserves applause. Moreover, tax relief for nonprofit organisations provided for in this Budget, will contribute towards the sustainability of organisations such as those dealing with abused and abandoned children, and those that focus on HIV/Aids. But, most of all, this Budget should not be seen in isolation from the contribution that many loyal citizens of this country continue to make towards addressing the many social and economic challenges facing our nation. [Time expired.] [Applause.]

Mr M A MANGENA: Chairperson, Mr President and hon members, this year’s Budget certainly left almost everyone smiling. Tax cuts for almost all income groups, lower company taxes on qualifying small businesses and the increase in social spending by R8,3 billion, were all good news to the citizens. This is even sweeter, coming as it does in an environment where interest rates and inflation levels are not too bad. Only the sinners might feel badly done by the Budget, but there is no compassion in sin. The price of sin is pain and the more it is inflicted, the more we hope that repentance will occur.

The deeply worrying question of mass poverty is staring this country in the face. Poverty is the greatest enemy threatening this country and its democracy. It is more formidable now and in the foreseeable future than the threat of external military aggression. What is even more disconcerting is that it is growing, despite the good figures and statistics cited by both the Budget and learned economists.

The economy is growing at the rate of 3,4%, and yet that same growing economy is shedding jobs at an alarming rate. That means that the proportion of the unemployed and, therefore, the poor, as a percentage of the population, is growing all the time. That also means that the gap between the rich and the poor is also growing.

The desire by most of us to see a more equal society emerging is frustrated by every announcement of downsizing, rightsizing or retrenchment by one or other employer. It is, indeed, sobering to reflect on the fact that upwards of 35% of the workforce that is unemployed at the moment, is left completely cold by the tax cuts we are all so excited about.

In the face of the growing crisis of unemployment, the allocation of only R1,2 billion - which is about 0,4% of the whole Budget - for poverty relief, job creation and infrastructure investment seems rather small. The greater the number of the poor and the unemployed, the greater will be the demand on Government to spend more and more on social services. Sooner or later the fiscus is bound to be overwhelmed by such an unsustainable development. No state can spend a bigger and bigger percentage of its budget on social services without suffering unbearable strains. Obviously, the more people are employed and therefore able to contribute towards their own social needs, the better.

The fundamentals of the economy may be all right, but unless a solution to the problem of mass poverty is found we are indeed heading for stormy waters. [Time expired.] [Applause.] Mofn M C LOBE: Modulasetulo, a ko re ke nke motsotso ona ho lebohisa Letona la tsa Ditjhelete ka Moralo wa tsamaiso ya ditjhelete o batsi, o bontshang hore re motjheng bakeng sa ho potlakisa diphetoho le kaho ya bophelo bo botle ho bohle. Moralo ona o bontsha karolo e hlokolotsi e tlamehang ho nkwa ke mmuso wa selehae ho potlakisa diphetoho maphelong a bongata ba batho ba rona, haholo-holo bafutsana bao e leng hore bongata ba bona ke maAfrika ebile ke basadi. (Translation of Sesotho paragraph follows.)

[Ms M C LOBE: Mr Chairperson, let me take this opportunity to congratulate the Minister of Finance on the evenly drafted Budget, which shows that we are on the right track for speedy developments and the establishment of good health for everyone. This Budget shows the important role that has to be played by local government to speed up the changing and development of the lives of most of our people, especially the poor people, most of whom are African women.]

We need to acknowledge the fact that apartheid has fundamentally damaged the spatial, social and economic environments in which people live, work, raise families and seek to fulfil their aspirations. Local government has a critical role to play in rebuilding local communities and environments as the base for a democratic, integrated, prosperous and truly nonracial, nonsexist society.

Over the past few years municipalities have been involved in a protracted, difficult and challenging transition in which great strides have been made in democratising local government. We are moving towards the final phase of the transition process which will culminate in the next local government elections. However, the process of transforming municipalities into developmental and financial agencies in line with the vision of a democratic and developmental local government still has a long way to go. Many municipalities face financial constraints as a result of high levels of poverty in our communities, poor management systems, lack of capacity around the budget and financial management in general.

In terms of the Constitution, local government is a sphere of government in its own right, and no longer a function of national and of provincial government. It has been given a distinctive status and role in building democracy and promoting socioeconomic development. It is for this reason that local government can no longer be treated as one of the line function departments, but is a distinctive sphere of government.

It is in this spirit that we welcome the initiative by the Minister of Finance to put aside funds for local government restructuring and the improvement of its financial management. As a result of challenges facing local government, there is a need for us to substantially increase the allocation to local government to enable it to fulfil its constitutional mandate.

Maobane re ne re keteka letsatsi la matjhaba-tjhaba la basadi, mme ho hlakile hore diphetoho tse tliswang ke tlhabollo ya mmuso-selehae di tlameha ho sekamela ntlafatsong ya maphelo a basadi lebitsong la hobane basadi e le bona ba shebaneng le mathata a tshotleho le bofutsana, tlhoko ya mesebetsi mme ba sa ka ba fumana menyetla ya ho bontsha bokgoni ba bona ka hare ho setjhaba sa rona.

Ke ka lebaka lena ke ratang ho nka sebaka sena ho leboha Letona la Ditjhelete ka Moralo wa Ditjhelete o motle o tla thusa ho ntjhafatsa maphelo a basadi naheng ena. Ntho e makatsang ke hore bona basadi bana ba futsanehileng, ke bona ba lefellang ditshebeletso ho bommasepala, ho feta barutehi ba bangata le batho ba kgonang. (Translation of Sesotho paragraphs follows).

[Yesterday, we were celebrating International Women’s Day, and it is clear that the changes brought about by the development of local government should concentrate more on improving women’s lives, because women are the ones facing problems of poverty, the need for jobs and they are the ones who have been deprived of the opportunities to show their skills in our society.

That is why I would like to take this opportunity to thank the Minister of Finance for the beautifully drafted Budget which will help to improve women’s lives in this country. What is surprising is that these very women, who are poverty stricken, are the ones who pay for municipal services better than a lot of educated and well-off people.]

It is indeed disappointing to know that women form less than 20% of elected public representatives at the local government level. Municipalities should be seized with the responsibility of empowering and affirming women in political, social and economic spheres. Sena se nkgopotsa tlaleho e hlahileng ho Sunday Times ya la 27 Tlhakola

1. Pampiri ena e tlaleha ka ngwanana wa sekolo ya dilemo di 16, e leng Irene Kabini wa Boleo Senior Secondary School mane profensing ya Lebowa. Irene o ile a kgethwa ho ba mopresidente wa pele wa mosetsana ka hare ho lekgotla le emetseng baithuti sekolong sena seo ke se boletseng, mme ka mora kgetho ena, lequlwana la bahlankana le ile la etsa mofereferenyana wa ho ipelaetsa kgahlanong le kgetho ena, le bile le bolela hore le keke la etelwa pele ke ngwanana kapa mosadi kae kapa kae bophelong. Ka mantswe a mang, Irene o tlamehile ho tlohela bopresidente.

Ena ha se fela kgethollo ya bong, empa ke ketso ya bowatla e nyenyefatsang demokrasi le Molaotheo. Ketso ena ha e a tlameha ho dumellwa ho tswela pele kae kapa kae naheng ena. Mebuso ya selehae e tlameha ho thusana le mafapha a fapaneng, jwalo ka Lefapha la Thuto, ho ruta setjhaba ho hlompha ditokelo tsa batho ba bang, ho hlompha demokrasi le ho tseba ditshwanelo le ditokelo tsa motho ka mong. (Translation of Sesotho paragraphs follows).

[This reminds me of a report in the Sunday Times, dated 27 February 2000. This is about a 16-year-old girl, Irene Kabini, from Boleo Senior Secondary School in the Northern Province. Irene was the first girl to be elected president of the SRC in the above-mentioned school, and after the election, a group of school boys lodged a complaint against her election, stating that they would never be led by a girl or a woman at any point in their lives. In other words, Irene should resign from her presidency.

This is not just gender discrimination, but a foolish act belittling democracy and the Constitution. Acts such as this should not be allowed to happen anywhere in this country. Local governments should help the different departments, such as the Department of Education, to teach the nation to respect the rights of others, to respect democracy and to know the rights of each person.]

The process of determining outer boundaries and categories of municipalities has been finalised. This process is not only about drawing lines on the map, as other people may perceive. It is a process of transforming local government into rationalised, sustainable, self- sufficient municipalities which have the capacity to ensure effective local government and integrated development, and which have an inclusive tax base.

Municipalities should fulfil their constitutional obligations which include the following: Providing democratic and accountable governance for local communities, ensuring provision of services in an equitable and sustainable manner, promoting a safe and healthy environment, and promoting social and economic development.

However, we must build the capacity of local government around local economic development. Small and large businesses rely on the actions of local government in a number of ways. For example, with regard to regulations, the local Government is responsible for creating an enabling environment for business to operate in. It is in view of this fact that local government should play a role in promoting job creation and boosting the economy of this country. It must invest in the basics by providing good quality, cost-effective services and making available a pleasant place in which people can live and work.

Despite our agreement or disagreement on the final boundaries of municipalities, we need to work together in ensuring the success of the coming local government elections. We must ensure that people exercise their right and duty to choose their representatives in this sphere of government. [Applause.]

The MINISTER OF FINANCE: Chairperson, Mr President, Deputy President and colleagues, on 23 February this year, in presenting the Budget to this House, we used the following words, and I quote again:

Our history teaches us courage and resilience … demands that we lift our sights far into the horizon … that we embrace the challenges, that we be strong, that we be confident, that we be humble, and that we be patient.

In concluding the Budget 2000 debate, I have an overwhelming sense that in this House there are partners in building a stronger economy and that our nation shares this vision. The portfolio committees hearings have been conducted in the spirit of courage and resilience. We have lifted our sights far into the horizon, with strength and confidence and with humility and patience. We have made bold choices that reinforce economic recovery, promote financial stability, confirm our commitment to strengthening Public Service delivery and make the lives of all of us safer, healthier and more productive, particularly those whose incomes are modest and livelihoods vulnerable.

In this constructive engagement, with the difficult choices that sensible policies inevitably involve, we have gone a long way towards putting the Budget beyond the reach of tendentious party-political scoring - a long way, but not all the way. We have, of course, heard some challenging alternative views on some of our more innovative proposals.

The portfolio committee listened to a bewildering array of conflicting economic advice. Some thought our inflation targeting was too tight. Some people thought that it was too soft. We are told that the capital gains statistics will frighten away investors, but we are also told that they have so little effect that it is not worth the trouble. We are told that we should be spending more on economic development. Others think that social services should receive more funds. These are all issues on which debate could, and indeed should, be taken further and deepened.

We have heard several specific concerns about the design of the capital gains tax, on the extension of tax relief to nonprofit organisations and possible ways to encourage savings. In fact, we are taking the savings idea further and on our website we are now inviting South Africans - in fact, everybody - to talk to us and bring their ideas on savings forward. We would like to examine all of these issues further. In the examination thereof we may well see improvements on the details of the legislation when it comes before Parliament later this year.

I am also encouraged by the seriousness with which our spending proposals are being addressed in the responsible parliamentary committees and elsewhere. In keeping with the requirements of the Public Finance Management Act, the Appropriation Bill now sets out allocations by main divisions in each Vote. Later in the year we may well find ourselves considering various shifts in priority between these divisions. These are important choices and I want to urge members to examine carefully the policies and spending plans of departments set out in the National Expenditure Survey, so that we - all of us together, as a national legislature - can contribute more substantially to the process of reviewing the three-year spending Estimates later in the year when we prepare for the 2001 Budget.

Our task is not just to nod and applaud when spending allocations go up, or to join the chorus of complaint when someone’s favourite programme does not get the increase it was hoped for. It would serve little purpose if the outcome of our committee deliberations was simply another appeal for larger departmental allocations.

Members should be assured that accounting officers approach the Budget process each year with formidable energy and enthusiastically embellished motivations. There is no need for Parliament to repeat departmental appeals for funds. But our task does include an examination of the effectiveness and the relative priority of programme allocations within each Vote. And Parliament does hold the executive arms of Government accountable for the funds we appropriate for Public Service delivery.

Yes, the executive understands that when implementation lags way behind allocations or spending is mismanaged, this House has a duty to enquire, to monitor, to examine, to review and to propose corrective action. The changes we have made to the style and scope of the Budget documentation in recent years are intended to assist this House in exercising its duties. Thus, let me say again that I am heartened by the constructive and considered way in which the challenges which the 2000 Budget places before us have been taken up by this House, or should I say, most of this House.

Listening to the leader of the UDM, I can only say: Uvuk’engceni! [What an ignorant comment!] It must also be said that for others in the House, the Budget debate is an opportunity to engage in verbal tomfoolery and fiscal metaphysics for the sake of a piffling political point or two. We have heard some quite ludicrous squeaks of complaint that we are in some sense budgeting for failure because we project 3,4% growth, which, by the way, is the consensus of economists across the length and breadth of the country; and that we do not project for 6,4% growth, as if by some fantastical powers of collective persuasion, we could simply achieve a growth miracle by announcing it; and that we are in some sense failing our people because we acknowledge that there are deep structural challenges in our economy to address, instead of simply waving a glorious transformation wand.

We are told that although we are budgeting to raise spending on public services by over 3% a year in real terms, we are not doing enough for job creation, for the poor, for infrastructure, for savings, for small businesses, for university students, for agriculture; in fact, for every special interest group that the DP thinks might happen to be listening to the hypocritical pleas to be heard.

Let us spend the moment taking seriously the proposals that the DP has put before us. It has proposed that a grant of R400 per family or R100 per individual per month should be paid to anyone who earns less than R7 000 a year. This would in effect extend our child support grant all the way up the age distribution to the elderly, who already receive such a means- tested transfer. The DP’s dole would add over a third of the population to the social security system, costing somewhere between R15 billion and R18 billion a year.

Then, Mr Davidson would also have us raise social security grants by R87,50 a month. Apart from the impracticality of distributing 50 cent coins through pension payout points, which he clearly has never been to, this would add R2,4 billion to the Budget. We are asked to expand the nutrition allocations, public works programmes and employment schemes. School leavers, according to Mr Waters, are to be given vouchers so that, having spent so much on their schooling, we should now spend an equivalent amount on their nonschooling - all in all about R20 billion more in public expenditure.

But the DP would also have us cut taxes. Mr Andrew would like us to give back the R12,4 billion which he estimates has been added through increased personal income tax, relative to GDP since 1993; largely raised, I would add, by broadening the tax base and improved revenue collection. Mr Andrew would have us give back R5,8 billion tax on retirement funds, which he thinks somehow interferes with people’s savings behaviour. He does not like capital gains tax; nor does the Neanderthal Nigel Bruce, and we understand why.

The hon Andrew wants to raise interest exemption to R12 000, which would cost about R1,5 billion in revenue foregone. Then too he wants tax incentives for higher education - all in all, some R20 billion in tax cuts. This is, as development economist Paul Krugman tactfully puts it: ``Rather careless arithmetic.’’ [Laughter.] It adds up to another R40 billion in the Budget deficit, taking it to some 7% of GDP. But that is unfair, because the DP says it would plan for 6% GDP growth, so it might just be 6% of the higher GDP figure. Okay, maybe there were some spending cuts on the poor, of course, or other tax proposals that they did not tell us about, so call it 5% of GDP. [Interjections.]

Mr K M ANDREW: This is Parliament, not Boswell Wilkie Circus!

The MINISTER: Chairperson, but that is what the DP is turning Parliament into. I want hon Ken Andrew to admit, in this House, that he would stand up and face a deficit of 5%, because that is what he is calling for …

An HON MEMBER: That is rubbish! [Interjections.]

The MINISTER: If his extraordinary growth projection turns out to be too optimistic, the deficit might turn out to be 6%, 7% or 8% of GDP. Basically, what we have heard from the DP is the prerogative of the harlot, power without responsibility.

The truth is that the DP’s criticism of our Budget proposal amounts to no more than a clutter of soft-headed populist appeals to the simple-minded. This is how they insult the electorate with their unbelievable, unashamed and unaffordable populism. But, this House has more serious business to attend to.

Let me turn to several matters on which we surely have further work to do. The first of those is the restructuring of public enterprises. There are those like the hon Taljaard who would like to see a wholesale privatisation completed by next week, as if we should simply ignore the responsibilities of our public utilities for extending service delivery to historically marginalised communities, the poor, of course, and ignore the internal transformation processes and our duty to ensure that restructuring transactions return full value to the state. This is not our approach.

My Cabinet colleagues and the Department of Public Enterprises have indeed taken steps to accelerate the restructuring of our major public entities. This will continue to be an important source of financing of the Budget deficit for several years to come. But, it is also an important programme of economic renewal, focused on extending infrastructural networks across our region, investing in forward-looking technologies and building leading enterprises that will take us confidently into the 21st century.

Secondly, I turn to our approach to social and economic development. In major social democracies of the industrialised world and in many developing countries, a quiet rethinking of the leadership role of the state in social and economic development is under way. It goes by several names and it has many variants. We take our cue from those whose vision is focused most clearly on the long-run sustainable growth, and our sympathies are rooted in the needs of the world’s poor.

Armatya Sen, one of the great economic thinkers of our time, writes in a book called Development as Freedom, and I will quote it correctly, unlike the hon Leader of the Opposition did:

The challenge of development includes both the elimination of persistent endemic deprivation and the prevention of sudden severe destitution. However, the respective demands and institutions and policies of the two can be distinct and even dissimilar. We have seen the tragic illustration of this in our region. Mozambique is a country that has made impressive progress in economic growth and broadening economic opportunities in recent years. But, rapid growth is no protection against the cruelty of devastating infrastructural damage. To those who would want us to spend so much more on social safety nets, to those who say that our policies are mean-spirited, Sen would remind us that sustainable development calls for an attack not just on income poverty, but on capability poverty, on the inadequacy of learning and health care opportunities, weak infrastructure networks, social discrimination and restricted labour-market opportunities. We have a substantial and well- established programme of social grants to address income poverty. Our aim is to extend this in ways that promote capabilities while avoiding the perpetuation of dependence.

Thirdly, we should also turn to improved revenue capacity. One of the foundations on which our democracy rests is a robust and efficient tax system. Four years ago, we set out to reduce the tax burden on all South Africans, with specific emphasis on the lower-income and middle-income families. To the hon Bruce I say there is no mistake in that. This year’s tax cuts are the most significant step towards achieving these aims. The transition to a residence-based tax system acknowledges the position we find ourselves in in the world.

Last year’s reduction in company tax and this year’s introduction of a graduated tax system for small business are designed to encourage investment and job creation. The introduction of a capital gains tax will make income tax fairer and provide protection against abuse.

Of course, we have had some carping about whether these reforms are administratively sustainable. The facts speak for themselves. The establishment of the revenue service as an autonomous body has yielded significant success in improving tax collection, steadily building on the culture of tax compliance and integrity.

As efficiency measures continue to yield greater revenues, we will continue to reduce the tax burden. This House, I am sure, will join me in congratulating the Revenue Service on the considerable thought and careful planning that has already gone into this year’s tax reform programme. There should be no doubt that these initiatives will be successfully implemented and our tax collection capacity will continue to grow from strength to strength. [Applause.]

Let me conclude by reminding this House of three central themes in the 2000 Budget. We have adopted, firstly, a macroeconomic framework within which our Reconstruction and Development Programme can flourish and strengthen. The drive to increase prosperity, improve the lives of the poor, reduce unemployment and narrow the gap between the rich and poor, is strengthened by this Budget. The economic environment that will deliver on these goals is one of sound fiscal discipline, prudent financial management, clear and consistent monetary policy, a tax structure that contributes to savings and investment, and a steady reduction in the future burden of South Africans, by reducing our debt.

Secondly, we have the ongoing reprioritisation of public spending and reform of the tax structure. The debates and hearings on the Budget have affirmed that we are heading in the right direction. We have given further impetus to the transformation of our economy and to meeting the needs of all South Africans, but have put special emphasis on the vulnerable, the most needy and the downtrodden. Thirdly, this Budget makes further improvement on the budget process, the documentation and the information provided. I share, with the Portfolio Committee on Finance, profound respect for the Budget as a project of this entire Assembly. These spending and revenue plans give practical effect to the laws that we have passed and the policies and programmes of Government that we oversee.

Next year we will review these plans, and I would like this House to contribute actively and substantially to the preparation of the 2001 Budget. How can this be done? The Budget documentation and, in particular, the National Expenditure Survey, are designed for three specific purposes: Firstly, to provide the public with the tools to hold their representatives accountable for the resources we use and the policies we implement; secondly, to provide public representatives with the tools required to hold the executive accountable for the way in which our policies and laws are implemented; and, thirdly, to set out the contractual obligations of departments, agencies and the executive office bearers of Government. We now have before us, a medium term expenditure estimate for the next three years, and revenue projections of the national Government. These are base line plans for the 2001 Budget. Our invitation to Parliament is to interrogate and review these proposals, and to provide the executive with firm recommendations to be taken forward in preparing the next Budget.

These will need to be prepared by the end of August for consideration by Cabinet, and in time for the October Medium-Term Budget Policy Statement. Perhaps we will need to review the parliamentary work programme and how the Finance committee might engage with other portfolio committees in order to conduct a considered review of budget options.

I know that this will contribute greatly to the depth and quality of our Budget discussions, and I am sure that I also speak for my colleagues on the Ministers’ committee on the Budget in saying that we would welcome Parliament’s energetic considerations of the priorities, the programme objectives, the service delivery targets and the revenue plans that will make up the Budget to be tabled in this House in February 2001.

I have the pleasure of placing the Appropriation Bill before this House for adoption. Debate concluded.

Question put: That the Bill be read a first time.

Division demanded.

The House divided:

AYES - 219: Abrahams, L A; Abram, S; Ainslie, A R; Arendse, J D; Asmal, A K; Bakker, D M; Baloyi, M R; Belot, S T; Benjamin, J; Beukman, F; Bhengu, F; Bhengu, N R; Blaas, A; Bloem, D V; Bogopane, H I; Botha, N G W; Buthelezi, M N; Camerer, S M; Capa, R Z N; Carrim, Y I; Cassim, M F; Chalmers, J; Chauke, H P; Chiba, L; Chikane, M M; Chohan-Kota, F I; Cindi, N V; Coetzee-Kasper, M P; Cronin, J P; Davies, R H; De Beer, S J; De Lange, J H; Dlamini, B O; Doidge, G Q M; Douglas, B M; Dowry, J J; Duma, N M; Durand, J; Du Toit, D C; Dyani, M M Z; Ebrahim, E I; Fankomo, F C; Feinstein, A J; Ferreira, E T; Fihla, N B; Fraser-Moleketi, G J; Frolick, C T; Gandhi, E; Gaum, A H; Geldenhuys, B L; Gillwald, C E; Gogotya, N J; Goniwe, T M; Goosen, A D; Gous, S J; Green, L M; Greyling, C H F; Gumede, D M; Hanekom, D A; Hangana, N E; Hlengwa, M W; Hogan, B A; Holomisa, S P; Kalako, M U; Kasienyane, O R; Kgarimetsa, J J; Kgauwe, Q J; Kgwele, L M; Koornhof, G W; Kota, Z A; Kotwal, Z; Leeuw, S J; Lekgoro, M K; Lekgoro, M M S; Lishivha, T E; Lobe, M C; Lockey, D; Louw, J T; Louw, S K; Lucas, E J; Lyle, A G; Mabandla, B S; Mabeta, M E; Madasa, Z L; Maduna, P M; Magazi, M N; Mahlangu, G L; Mahomed, F; Maimane, D S; Maine, M S; Makasi, X C; Makwetla, S P; Malebana, H F; Maloney, L; Manuel, T A; Maphalala, M A; Maphoto, L I; Mapisa-Nqakwula, N N; Martins, B A D; Masala, M M; Masithela, N H; Masutha, M T; Mathebe, P M; Maunye, M M; Mayatula, S M; Maziya, A M; Mbadi, L M; Mbongo, P F; Mbuyazi, L R; Mdladlana, M M S; Middleton, N S; Mkhatshwa, S; Mkhize, B R; Mndende, O N; Modise, T R; Modisenyane, L J; Moeketse, K M; Mofokeng, T R; Mogale, E P; Mogoba, M S; Mohai, S J; Mohamed, I J; Mokoena, D A; Molebatsi, M A; Molewa, B G; Mongwaketse, S J; Montsitsi, S D; Moonsamy, K; Morkel, C M; Morobi, D M; Morwamoche, K W; Moss, M I; Mothoagae, P K; Mpahlwa, M; Mpaka, H M; Mpontshane, A M; Mshudulu, S A; Mtsweni, N S; Mzizi, M A; Mzondeki, M J G; Naidoo, S; Nair, B; Nash, J H; Ncube, B; Ndabandaba, L B G; Ndlovu, V B; Nel, A C; Nel, A H; Nene, N M; Newhoudt-Druchen, W S; Ngcengwane, N D; Ngculu, L V J; Ngwane, L B; Nhlanhla, J M; Nhleko, N P; Nhlengethwa, D G; Njobe, M A A; Nqakula, C; Ntshangase, I B; Ntuli, B M; Ntuli, M B; Ntuli, S B; Nzimande, B M; Nzimande, L P M; Olifant, D A A; Oliphant, G G; Phala, M J; Phantsi, N E; Pheko, S E M; Phohlela, S; Pieterse, R D; Pretorius, I J; Rabie, P J; Radebe, B A; Rajbally, S; Rajoo, K; Ramakaba-Lesiea, M M; Ramotsamai, C M P; Rasmeni, S M; Ripinga, S S; Saloojee, E; Schneemann, G D; Scott, M I; September, C C; Shilubana, T P; Shope, N R; Sikakane, M R; Sisulu, L N; Sithole, D J; Skhosana, W M; Skweyiya, Z S T; Smit, H A; Smith, V G; Solo, B M; Solomon, G; Sonjica, B P; Sosibo, J E; Sotyu, M M; Thabethe, E; Tinto, B; Tolo, L J; Turok, B; Vadi, I; Van den Heever, R P Z; Van der Merwe, S C; Van Deventer, F J; Van Schalkwyk, M C J; Van Wyk, A (Anna); Van Wyk, A (Annelizé); Van Wyk, J F; Van Wyk, N; Verwoerd, M; Vilakazi, B H; Woods, G G; Xingwana, L M T; Yengeni, T S; Zita, L; Zondo, R P; Zuma, J G.

NOES - 24: Andrew, K M; Aucamp, C; Borman, G M; Bruce, N S; Cupido, P W; Da Camara, M L; Davidson, I O; De Vos, P J; Ellis, M J; Gore, V C; Grobler, G A J; Heine, R J; Kalyan, S V; Lee, T D; McIntosh, G B D; Mulder, C P; Ntuli, R S; Schmidt, H C; Selfe, J; Sigabi, N B; Smuts, M; Taljaard, R; Viljoen, C L; Waters, M.

Question agreed to.

Mr M J ELLIS: Mr Chairperson, in view of the closeness of the count, the DP calls for a recount. [Interjections.]

The CHAIRPERSON OF COMMITTEES: Order! No, I do not think that is necessary.

Mr N J GOGOTYA: Mr Chairperson, on a point of order: I would like to ask whether it is appropriate for the DP, who are opposing the Bill, to have one third of their people not here, including their leader.

The CHAIRPERSON OF COMMITTEES: Order! That is not a point of order. Please sit down. [Laughter.]

Bill accordingly read a first time.

                      DIVISION OF REVENUE BILL

The MINISTER OF FINANCE: Chairperson, I propose the adoption of this Bill.

Ms B A HOGAN: Mr Chairperson, I am honoured to follow on such a stimulating debate!

The Division of Revenue Bill appears before us every year. Basically it deals with the division of the national revenue between the spheres of government.

I would like to point out to this House that despite all the criticisms of this Parliament for not being able to amend Bills, this is a Bill which, because it is not a money Bill, we could have quite happily amended; and this being the National Assembly, we could have grabbed the money for ourselves, if we wanted to. But we will not be that destructive.

I have been asked by the parliamentary advisers here just to note two amendments which were passed in our committee. These are just technical amendments which were omitted in the final draft of the Bill. They deal with the first line on page 8, where it talks about Schedules 3A and 3B, and instead of saying to 3C'', it should reador 3C’’; and then in clause 18, lines 49 and 50, instead of saying which assume the responsibilities'', it should readwhich assumed the relevant responsibilities’’.

These were technical amendments which were brought to our committee, but somehow escaped the state law advisers when they finally drafted this Bill. I just want to make mention of this, so that it cannot be said that this came unknown to our National Assembly here.

I want to endorse what the Minister said about engagement in the Budget process. In this particular Bill, we have some very, very significant grants. In the Schedule that is attached to this Bill, that goes to the different spheres of government - and they are ring-fenced for particular kinds of activities - they deal with, for instance, the Finance Vote. There is a grant going to improve financial management in local government, and there are funds for the rehabilitation of academic hospitals. There are a whole number of conditional grants.

In recent weeks we have become aware that some of these grants are not being spent, and it is a failure of this House not to have picked up this problem. In a sense, we need to understand what the problems were, and why grants are always a difficult disbursement process. Grants are traditionally one of the most difficult sources of revenue. It is very difficult for grants to be disbursed, because they do not go through the normal disbursement system, as with the normal Government Budget. The problem is that our committees are not picking up when there are problems with the disbursement of these grants, and when the Minister invites us here to actually engage in the year prior to the developing of a budget, we need to take that very seriously. He has given us a date - the mid- to end of August - for our committees to come up with considered views of what is right, what is wrong, and what needs to be thought around our particular budgets.

Our committee has already met, and looking at our previous budget, we have selected certain items that we would like to engage on with the Minister on an ongoing basis. I think all portfolio committees need to recognise that a Budget is not an event; it is an ongoing process, and that it will be very useful for Ministers, who are engaged at the moment in drawing up their budgets for the future three years - particularly for the next year - to know what Parliament’s views are on the Budget. Has Parliament, for instance, picked up that there has not been a disbursement of funds and that there were problems with funding mechanisms somewhere along the line? That is where we, as Parliament, need to rise to the challenge. We need to understand why disbursement is not happening, and we need to give indications to our Ministers about how we feel about the budgets that are being presented.

In the light of the problems that are accompanying the disbursements of conditional grants, the Division of Revenue Bill has inserted new clauses which provide for onerous reporting procedures on departments. For instance, by 1 April 2000 all accounting officers have to submit notification to the directors-general of their provinces, stating the purposes and conditions of the grants, the managing and reporting mechanisms for such grants, as well as the agreements, where there has been agreement. Once those grants have been given, by the 10th working day of each month a report has to go to the head official of the provincial Treasury on the outline of revenue and expenditure on the grants for that month, the reasons for projected underspending and overspending, the project rollover into the next financial year, information on how the province or municipality received their grant compliant with conditions, and so on.

So, what has been put into this Bill is far more onerous reporting procedures, so that a Minister or a director-general will be able to pick up very early on in the year if there are problems with the disbursement of conditional grants. This will allow timeous response to the problems that are arising. In addition, we are not foreseeing that in the future conditional grants are going to be given late in the year. One will get a huge lump sum later in the year which one will have to disburse. One will then have egg on one’s face if one cannot disburse an amount which should have been disbursed over a period of time but can now only be disbursed in a short amount of time.

So, in short, I would say that the amendments to the Division of Revenue Bill coming to this House, are very welcome. I believe that this is a very good Bill. It is an effective division, and a fair and equitable division of revenue between the three spheres of government. I commend this Bill to the House for its approval. [Applause.]

Mr K M ANDREW: Chairperson, I am sure the hon the Minister will be pleased to know that the DP takes no exception whatsoever to anything he said in his speech in proposing this Bill. May I say to the Minister that we looked hard but could not find anything. [Interjections.]

When the Portfolio Committee on Finance looked at this Bill, we took the view that the details would best be examined by the select committee in the NCOP. As a portfolio committee of the National Assembly, we looked at the Bill in a broader context and examined it in that way.

One of the problems one does face in trying to analyse a Bill such as this is that there are no objective measures available to determine whether the equitable division of revenue raised nationally among the three spheres of government is being adhered to. In other words, what exactly are the appropriate divisions, as opposed to simply using an historic basis?

The Financial and Fiscal Commission did not make specific recommendations for this particular Budget, and we look forward to the results of the FFC’s comprehensive review of the intergovernmental fiscal system, which is focusing on the year 2001 and beyond. Parliament will need to give detailed attention to the FFC recommendations - for the 2001 Budget - due to be tabled by May this year. I hope it will help us in our understanding and analysis of the Division of Revenue Bill. The FFC has an important role to play and we must ensure that their proposals enjoy the time and attention that they deserve.

I would like to refer to clause 11(4), which says that the Minister may, by notice in the Gazette, approve that funds or a portion of funds withheld in terms of subsection 1 - these are funds paid to municipalities - be used to address a municipality’s outstanding statutory commitments. This is an important amendment brought about by the portfolio committee in our discussions, with at least one of its objectives being to resolve the very serious problem of local authorities which are not paying the Office of the Auditor-General money that is owed to it.

This is causing enormous problems for the Auditor-General’s Office in its budgeting, because it amounts to tens of millions of rands and, clearly, in terms of the Auditor-General’s Office’s statutory obligations, the Auditor- General’s Office cannot simply stop auditing local authorities that are not paying for their audits. We welcome this provision that has been made and we hope that the Minister will use the powers granted to him to address that problem, as soon as the other element, which is a municipal public finance management Act, is adopted by Parliament. This Division of Revenue Bill provides for approximately similar shares as last year’s between the spheres of Government. It reduces, rather than increases, the proportion of the transfers which are conditional and it is going to be more closely examined in detail by the NCOP. The DP therefore has pleasure in supporting this Bill, and we look forward to the Financial and Fiscal Commission report in May, which will facilitate a more detailed and objective analysis of next year’s Bill and those that follow.

Dr G G WOODS: Mr Chairperson, the system that is used to share out the nationally collective revenues appears to be working very well, with no major disagreements surfacing over the equitability of the vertical and horizontal divisions. It is noteworthy that only minor improvements to the formula and the overall system have been necessary over the past three years.

The stability of the process is a situation to be pleased about, but one now begins to wonder about what this means for the future role of the Financial and Fiscal Commission. There is, of course, the review that has been referred to, but notwithstanding that, and after that review, it would seem that their role is going to be gradually diminished, and somewhat drastically, over time.

Regarding the provinces’ large share of revenue, it is with a sense of relief that we register their newfound success with expenditure discipline, and the number of provinces which have begun reducing their debt burdens. The first step towards good financial management has been achieved. The next step is for the provinces, and national Government as well, significantly to increase the value gained from that spending. This will come with the implementation of the Public Finance Management Act, bringing with it improved levels of social service delivery based on terms of quality and quantity.

Returning to the revenue sharing arrangements, there are a few province- related problems that I wish to refer to. The first of these concerns those conditional grants - where national departments frequently insist on only paying these grants over to provinces against invoices. In effect therefore provinces must first pay for the activities in question, and be refunded later, and, as experience has shown - often much later. This is unfair, as it imposes serious cash flow strains on provincial treasuries, and could, one foresees, at times lead to provinces having to decline such grants.

A second issue concerns the established equitable share of each province. Members will recall that when these shares were worked out a few years ago, it was revealed that certain provinces were receiving more than their share and others less than their share. It was decided to phase in the necessary corrections over a few years.

We would argue that in times of high revenue overruns, such as we have had the past few years, it would be right and it would be fair to make up the short payments in provinces where these short payments exist. In the case of KwaZulu-Natal, the province is currently receiving R500 million per annum less than its agreed to share.

The final issue concerns the criteria of the horizontal formula used, in particular the socioeconomic considerations of population demography. A comparative study covering both Gauteng and KwaZulu-Natal indicates the serious extent to which the latter province is disadvantaged by that part of the formula. This is due to a population mix which has considerably more welfare beneficiaries and less income earners, and is partly caused by many KwaZulu-Natal men working in Gauteng, which sees KwaZulu-Natal paying 5,5% more of its total budget to social welfare than Gauteng does - a flaw in the formula.

In order to improve the credibility of the division of revenue used even further, we had hoped that the Minister would visit these issues.

Dr P J RABIE: Mr Chairman, hon President, hon Deputy President, hon Minister and hon members, the Division of Revenue Bill divides the national revenue raised among the national, provincial and local spheres of government. These spheres receive an equitable share of the nationally collected revenue to meet their expenditure responsibilities.

A significant fact is that our nine provinces are highly dependent upon transfers and that the provinces only raise 4% of revenues from their own sources. Provinces spend something like 85% of their budget on delivering social services. Local government is largely independent and provides basic services such as water and electricity to households. The formula which is used in this Bill must be seen in conjunction with a three-year allocation, which creates more certainty in provincial revenue flow.

An equitable share formula is used to calculate the amount of revenue due to each province. Allow me to refer to the share formula, which contains six components mainly based on an education share of 41%, which is again based on the average school-age population between the ages of six and 17; a health share of 19%, based on the population without access to funding; social security of 17%, which is based on the number of people entitled to social grants - the elderly, the disabled and so forth; a basic share of 7% derived from each province and a share of the total population of the country; a backlog component of 3%, which is based on the distribution of capital needs; an economic output share of 8%; and an institutional component of 5% divided equally among the provinces, to reflect the costs of running a provincial government.

The Division of Revenue Bill of 2000 differs from the the Division of Revenue Act of 1999.

Van die nege provinsies voel dat die geweegde formule nie altyd reg laat geskied aan die demografiese behoeftes van elke provinsie nie. ‘n Aantal klousules is in die nuwe wetsontwerp ingevoeg wat na my oordeel verdere toeligting benodig. (Translation of Afrikaans paragraph follows.)

[Some of the nine provinces feel that the share formula does not always do justice to the demographic needs of each province. A number of clauses have been inserted in the new Bill which in my opinion need further explanation.]

Clause 7 - dealing with conditional grants - clarifies the division of responsibilities between the transferring and receiving accounting officers and introduces reporting mechanisms for various stakeholders. Clause 8 of the Bill - dealing with agency payments - clarifies the responsibilities of national accounting officers and the mechanisms for accounting such payments.

Another important clause is clause 17, which deals with the transfer of allocations from local governments with a weak administrative capacity. The significance of this clause is that it provides for the transfer of allocations or part thereof to the province or a district council if a municipality is not able to manage its allocation. This is a serious flaw, and I hope that this particular clause will rectify this anomaly.

Die finansiële bestuur van etlike derdevlakowerhede is kommerwekkend, en hierdie wending behoort die druk op hierdie owerhede te verlig. Dit is vir my party aangenaam om hierdie wetsontwerp te steun. (Translation of Afrikaans paragraph follows.)

[The financial management of several third tier authorities is alarming, and this change should alleviate the pressure on these authorities. My party takes pleasure in supporting this Bill.]

Dr G W KOORNHOF: Mr Chairperson, hon President, Deputy President, the Minister of Finance and colleagues, the Division of Revenue Bill is a most important Bill for the three spheres of government from a revenue point of view. However, it also brings about the major responsibility of sound financial management and oversight. It places a huge obligation on accounting officers to ensure that allocations are productively spent on earmarked programmes, and that services are being delivered effectively. Of particular importance is the timeous allocation and effective monitoring by national Government of revenue allocated to provinces. In this regard I can align myself with the remarks made by the hon member Barbara Hogan.

The Budget Review states that the Department of Finance is undertaking research towards a national framework for provincial taxation to be in place by 2001-02. We appeal to the Minister that this process be conducted in a transparent way, and that, in particular, the parliamentary committees on finance be involved in discussions.

Regarding contingency grants for debt relief to provinces, no provision has been made for the years 2000 and 2001, which is to be welcomed. I trust that we will not be surprised by a transfer to provinces for debt relief later this year as part of the adjustments estimate.

In conclusion, the equitable division of revenue among the three spheres of government should have an inbuilt mechanism to ensure that a large part of the allocation must result directly in creating jobs. The UDM and the FA support the Bill. [Applause.]

Mr L M GREEN: Chairperson, Mr President, Deputy President, hon Ministers and members, the Division of Revenue Bill ought rightfully to be seen as dealing with the hierarchy of needs, and not with the needs of the hierarchy.

Unauthorised expenditure and mismanagement in provincial government departments remain a critical problem. A recent report by the Auditor- General on the expenditure procedures in the Northern Province tells us that certain of our provinces still need reconstruction surgery or an image overhaul. An even more embarrassing demonstration of foolishness is that which has recently emerged from the Welfare department. To have sat for three years on R500 million earmarked for poverty relief, and not knowing how to dispense of this resource, is morally frightening. The department, through its ineptitude, must be held responsible for stultifying the growth of our poorer communities over the past three years. To quantify the effects of three years of unprovided care for the poor must rank as being close to forced starvation and the rise in death-related diseases.

The Minister of Finance has stated rightfully that the country’s nine provinces have, however, showed improvement in the management of their finances. We welcome the fact that the provinces have turned the past deficits into surpluses. In other words, this must translate into provinces being held more accountable and showing, henceforth, greater improvements in the delivery of services.

We welcome the principle of conditional grants to provinces which will ensure that provinces comply with national norms and standards in areas of social spending. The ACDP supports this Bill, and with these few concerns raised, we want to thank both the Minister and the department for a job well done.

Mr G E BALOI: Chairperson, President of South Africa, Deputy President, let us think twice and think of those who voted us to be here today and do what they want us to do. I say that because this Bill will enable the hon the Minister of Finance to divide the revenue raised nationally amongst the provincial and local spheres of government for the 2000-01 financial year, and to provide for matters connected therewith.

The Constitution of the Republic of South Africa requires an Act of Parliament to provide for the determination of each province’s equitable share. The provincial government is the vehicle to deliver goods to the people of South Africa. We are a nation at work, and we hope that the delivery vehicle will reach the poorest of the poor, more especially those in the rural areas.

The 2000-01 budgets for some provinces have been increased while some have decreased. But we hope that provinces will, after receiving their budget, speed up delivery, create jobs, repair roads, build bridges, open hospitals and clinics, and build more houses. All this is expected from the provinces with hope by all South Africans. The UCDP supports the Bill.

Dr S E M PHEKO: Mr Chairman, the PAC supports this Bill. We find it straightforward and complying with the provisions of the Constitution. Problems that this country faces can only be resolved by the principle of sharing the resources of this country equitably. It is to be hoped, however, that special poverty cases of provinces such as the Northern Province and Eastern Cape will receive special attention.

The Division of Revenue Bill must also aim at distributing resources equitably between urban and rural areas and between townships and suburban areas. The Bill, we believe, also has the implications of seeing that the African institutions of learning receive a just share of resources. At present, African institutions of learning are receiving less money and enrolling fewer students. African universities are owing millions of rands. The consequences are that a number of students are now enrolling in traditionally white universities and technikons.

Miss S RAJBALLY: Chairperson, the Government is committed to sound public finance, and this is reaffirmed by the Division of Revenue Bill, which sets out the principles governing financial accountability to Parliament and the annual budget process. The Bill aims to provide an improved, transparent and well-managed revenue distribution to the three levels of the Government. This is to ensure equitable service delivery to the public.

The regulations set out for the administration of finance improve operational efficiency, encourage revenue morality and increase the level of compliance between national, provincial and local government. The flexible management procedures in the Bill ensure that misuse of funds is avoided and that revenue resources are used productively to the advantage of the public. The MF supports the Bill. Mr C AUCAMP: Chairperson, according to section 214(2)(d) of the Constitution, a criterion for the allocation and distribution of funds is ``the need to ensure that the provinces and municipalities are able to provide basic services and perform the functions allocated to them’’. The Bill under discussion allows R1,8 billion for municipalities, conditional grants excluded. I want to convince this House that this amount is totally inadequate.

Die uitstaande debiete van plaaslike owerhede beloop meer as R13 miljard. Slegs R300 miljoen is in hierdie wetsontwerp geoormerk vir plaaslike owerhede wat ‘n fiskale krisis beleef. Daar is R883 miljoen aan die gekonsolideerde munisipale infrastruktuurprogramfondse toegewys. Dit beteken maar R1 miljoen per huidige plaaslike owerheid. Hieruit moet pa gestaan word vir water, riool, elektrisiteit, paaie, noem maar op. Dit is totaal ontoereikend.

Laat ek ‘n voorbeeld noem. Aan plaaslike owerhede in die Noordwes-provinsie word R70 miljoen toegeken vir die verbetering van infrastruktuur. Die 17 munisipaliteite in die suidelike distriksraad van die provinsie het tans R400 miljoen nodig net vir die opgradering van rioolsuiweringswerke.

Uit hierdie wetsontwerp word geen interowerheidstoekennings gedoen wat plaaslike owerhede in staat sal stel om tekorte in betalingsverdienste goed te maak nie. Glo die owerheid werklik dat die Robin Hood-effek wat die groter munisipale grense gaan hê in totaal hiervoor sal instaan?

Ons moenie derdevlakregering afskeep of onderskat nie, want dit raak ons mense op die mees direkte wyse, daar waar hulle daagliks leef en werk. As ons wil praat van lewering, dan moet dit grondvat. Die eerste linie daarvan is plaaslike bestuur. Plaaslike owerhede wat in duie stort, kan die eerste ongevalle wees van ‘n totale samelewingsverval. Dink net watter effek swak infrastruktuur plaaslik - geen elektrisiteit, byvoorbeeld - op misdaad sal hê. (Translation of Afrikaans paragraphs follows.)

[The outstanding debts of local authorities total more than R13 billion. Only R300 million has been earmarked in this Bill for local authorities that are experiencing a fiscal crisis. An amount of R883 million has been allocated to the consolidated municipal infrastructure programme. This translates into no more than R1 million per current local authority. This has to be used for water, sewerage, electricity, roads, etc. This is totally inadequate.

Let me give an example. An amount of R70 million has been allocated to local authorities in the North West Province to improve infrastructure. The 17 municipalities in the southern regional council of the province currently need R400 million for the upgrading of sewerage purification works.

No inter-authority allocations have been made in this Bill which would enable local authorities to make up deficits in service earnings. Does the Government really believe that the Robin Hood effect which the larger municipal boundaries will have, will guarantee this in total?

We should not neglect or underestimate third tier government, because it affects our people in the most direct manner, that is where they live and work. When we talk about delivery, then it should take place. The first line of this is local government. Local authorities which are falling apart, could be the first casualties of a total societal decline. Just think what effect poor infrastructure at local level - for example no electricity - will have on crime.]

The hon Ben Turok used the example of his constituency, Muizenberg, to make a plea for more Government intervention in the economic sphere. After the speech, he deserves a new name, ``Die Muis van Muizenberg’’! I can assure him that the problems of Muizenberg can only be solved by Muizenberg, but with more financial help from the state.

The CHAIRPERSON OF COMMITTEES: Order! Hon member, your time for speaking has expired.

Mr C AUCAMP: I rest my case.

Mr S J LEEUW: Chairperson, unfortunately I am going to repeat what I said last year.

Mookamedi wa naha le Motlatsa Mookamedi, Seka-Molao sa Kabo ya Ditjhelete ke e meng ya Melao e tla thusang hore mahlakore a mararo a Mmuso a fumane ditekanyetso tsa selemo, tse amohelehang. Molaotheong wa naha, karolo 214(1), ho hlokahala hore Lekgotla la Ketsa-Molao le fetise molao o tla etsa bonnete ba hore matlole a arolelanwa ka mokgwa o leka-lekanang.

Karolo ena e tswela pele ka hore ho tlameha ho ba le karolelano ya ho leka- lekana mabatoweng. Molao ona o laela hore ho be le ho nehelana ka karolo e itseng Mmusong wa naha, wa mabatowa le wa mahaeng, ha mmoho le ditekanyetso le maemo a tshwanetseng. Ho latela Karolo 10 ya Molao wa Dikamano tsa matlole a Mebuso, wa 1997, Motsamaisi wa Matlole o tlameha ho teka tafoleng Molao o bontshang hore matlole a setjhaba a arolelanwa jwang. Ke ona Molao oo re bontshanang ka ona kajeno.

Karolo ya Mmuso wa naha e kenyeletsa dintlha tse latelang: Ditaba-tabelo tsa naha, maano le mananeo a tla ntshetsang setjhaba pele. Mohlala: Kgolo ya moruo, maemo a tsitsitseng a maruo ka kakaretso, ho thibela bokebekwa le bobodu le tsamaiso e tjhabileng ya ditshebeletso ntlafatsong ya maphelo a maAfrika Borwa ohle. Hobane dintlha tsena di ama dikarolo tse tharo tsa Mmuso, di tlameha ho tsamaiswa ka pokellano le ho tshehetswa ka matlotlo ke Mmuso o bohareng.

Mmuso o itlamme ka tsamaiso e ntlafetseng, e hlwekileng ya setjhaba le phetoho-kakaretso, mme ka lebaka lena, o tla nehelana ka tjhelete ho ntshetsa-pele ntlafatso ya maemo a botsitso le a ditsebiso, le ho bopa tsamaiso ya setjhaba le ho ntlafatsa kapa ho ntjhafatsa tsamaiso ya matlole. Ka lebaka la maemo a botjhaba ao Afrika Borwa e iphumanang e le ho ona, selemong sena sa ditjhelete karolo ya theko ya thepa ya sesole e ikgethileng e fumanwe.   Karolelano ya selemo sena e ka mokgwa ona o latelang: Mekitlane le tswala ke karolo ya pele ho motshelo wa naha ka lebaka la ho itlama ha Mmuso hore o tla tshwara matlotlo ka mokgwa o nang le boikarabelo. Ho tswela pele ho theola kgaello tshebedisong ya matlole ho tla theola sekgahla se hodimo sa mekitlane. Mmuso o bohareng o na le boikarabelo ntshetsong-pele ya maano le tekolong ya tshebetso ya Mmuso wa mabatowa mesebetsing e kopanetsweng.

Ke ka hoo karolo e itseng, e ka bang 13%, ya karolo ya Mmuso o bohareng e nehelwang mebuso ya mabatowa. Sena se thusa mebuso ya mabatowa matloleng a yona. Karolo e kana ka 1% e nehelwa makgotleng a metse, mme dinehelo tsena di na le dipehelo tse tshwanetseng ho latela. Mebuso ya mabatowa le makgotla a motse a na le boikemelo ba bohlokwa hodima karolelano ya matlole ka hare ho mabatowa le mahaeng, ho latela ditlhoko tsa ona tsa mantlha.

Ho a bonahala hore mebuso ena e tla theha ditekanyetso ho latela ka moo ditlhoko tsa yona di leng ka teng, ba ntse ba sa kgelohe haholo ditabatabelong tsa naha. Phepetso e kgolo e bonahalang e beha kgatello e kgolo tshebedisong ya ditjhelete ka mokgwa o matlafetseng wa ho ntshetsa ditulo tsa mahaeng le mapolasing pele, mme kgatello ena e etsa hore ditekanyetso tsa bolemi mabatoweng di phahame.

Dipehelong ho marangrang mahaeng le diphetoho tsa mobu ho ntshetsa-pele tse ding tsa tsona, ho na le dinehelo tse tshehetsang boikitlaetso mabatoweng le makgotleng a motse, le ho sebedisa matlole ao ba a fumanang.

Ho ditekanyetso tsena tse tekilweng, molawaneng ona oo re buang ka ona, ho na le mokgwa o sebediswang ho nehela mebuso ya mabatowa le mahae karolo e itseng ya ho ntlafatsa maemo a bufuma jwalo ka ha re tseba hore dibaka di a feta-fetana ntlheng ya bofutsana. Kabong ya tjhelete ho thusa mebuso ya mabatowa le makgotla a motse ho ntshetsa pele ditlhoko tsa mantlha, Mmuso o bohareng o tla nehelana ka matlole ho ntshetsa pele mananeo a hlwahilweng jwalo ka a bophelo, phumantsho ya matlo, ho thusa maqheku, ho thusa bana le ho ntshetsa pele marang-rang a ditshebeletso le tsamaiso ya dikgwere- kgwere. Molao ona o thusa ka botsitso ho tsa matlole, o thusa hore ho be le mokgwa o nepahetseng wa ho rala maano le mananeo a tla ntshetsa pele baahi ka kakaretso. Ke kgothaletsa maloko a hlomphehang hore Molao ona oo re buang ka ona, e leng wa Karolelano ya Matlole ke molao o bohlokwa haholo oo ke kopang hore leloko le leng le le leng ka hare ho Ntlo ena le tsebe hore na ke matlole a fe ao Mmuso o bohareng o tla a nka ho a fetisetsa dibakeng tsa mabatowa le mebusong ya mahaeng. Ka mantswe ao ANC e tshehetsa Setshwantsho sena sa Molao. (Translation of Sesotho paragraphs follows).

[President and Deputy President, the Division of Revenue Bill is one of the laws that will help the three spheres of Government to receive their acceptable annual budgetary allocations. Section 214 (1) of the Constitution requires that the Legislature pass a law that will ensure that funds are divided equitably.

This section continues by requiring that there should be equitable division of funds between provinces. This Bill states that a certain amount should be allocated to the central, provincial and local governments, which is in accordance with correct budgetary estimates. According to section 10 of the Revenue Laws Amendment Act of 1997, the Minister of Finance must table a Bill which states how public funds are to be divided. That is the Bill we are discussing today.

The national government budgetary allocation includes the following items: National interests, policies and programmes aimed at advancing the people. For example: Economic growth, a stable economic climate in general, the prevention of crime and corruption and an effective administration which will improve the quality of life of all South Africans. Because these issues concern the three spheres of Government, they must be collectively controlled and supported with funds from central government.

The Government has committed itself to a public administration that is strong and aimed at the overall transformation of the people’s lives. Because of this, it will make funds available for the development of public administration and a renewal of the ways of managing public funds. Because of the international roles that South Africa finds itself involved in, funds have been secured for the procurement of special military equipment.

The division of revenue for this year is as follows: Debt and interest accrued on it is of prime importance to the national revenue fund because of the commitment the Government has made to handle funds in a responsible manner. A further reduction in expenditure will continue to reduce the interest on national debt. Central government has the responsibility to develop policies and review the work of provincial governments in areas of concurrent competence.

For this reason, about 13% of the national budget has been allocated to provincial government. This helps to supplement provincial coffers. About 1% of the national budget goes to local government, and this allocation has conditions attached to it. Provincial and local governments play an important role in the division of revenue within the provinces and in rural areas, according to their budgetary priorities.

It appears that these governments will allocate the funds according to their needs, but without deviating too much from national guidelines. The main apparent challenge in the spending of funds concerns the development of rural areas and farms, which contributes to the increase in agricultural costs. There are funds allocated for the provision of infrastructure and land acquisition matters. There are funds available for assisting provinces to implement their programmes and ensuring that they spend the funds allocated to them.

Concerning the allocations tabled here, according to the Bill we are discussing, there is a provision that allows for varying allocations of funds for poverty relief programmes in provinces, because we know that levels of poverty differ between provinces. In the allocation of funds to assist provinces and local councils to carry out their primary tasks, central government will make funds available for the development of selected programmes such as health, housing, assisting the aged, assisting children and the provision of infrastructure and sanitation.

This Bill helps by providing stability in the budget, it provides proper guidelines for us in drawing up policies and programmes which will advance all citizens. I suggest to hon members that they should regard this Bill we are discussing, the Division of Revenue Bill, as a very important Bill, and that every member of this House must know which funds must be transferred by central government to provincial and local governments. With these words, the ANC supports this Bill.]

Die MINISTER VAN FINANSIES: Mnr die Voorsitter, agb lede, ek wil graag aan alle partye dankie sê vir hul bydrae tot hierdie debat. Ons moet almal aanvaar dat die verdeling van inkomste ‘n leerproses vir ons almal is. Daar sal van tyd tot tyd verbeterings aangebring word, soos met die instelling van voorwaardelike toekennings. Dit is belangrik dat ons die provinsies bedank vir hul bydrae tot beter finansiële bestuur. Die bates hiervan sal weerspieël word in die beter besteding aan infrastruktuur deur die provinsies.

Die toewysing aan plaaslike bestuur beloop om en by R6,5 miljard, want daar is allerlei toekennings bo en behalwe die bedrae wat ingevolge die gelyke- aandeelformule toegewys is. Die skuld van R13 miljard moet ingevorder word. Dit kan nie as ‘n verskoning vir nog geld gebruik word nie. Dit moet eers ingevorder word. Weer eens dankie vir agb lede se steun.

Siyabulela kakhulu! [Ons bedank u hartlik!] [Applous.] (Translation of Afrikaans paragraphs follows.) [The MINISTER OF FINANCE: Mr Chairperson, hon members, I would like to thank all parties for their contribution to this debate. We should all accept that the division of revenue is a learning process for all of us. Improvements will be effected from time to time, such as the implementation of conditional allocations. It is important that we thank the provinces for their contribution to better financial management. The benefits of this will be reflected in the better expenditure on infrastructure by the provinces.

The allocation to local government amounts to approximately R6,5 billion, because there are various allocations over and above the amounts which have been allocated in accordance with the equitable share formula. The debt of R13 billion should be recovered. It cannot be used as an excuse for more money. It should first be recovered. Once again I thank all the hon members for their support.]

Siyabulela kakhulu! [I sincerely thank you!] [Applause.]]

Debate concluded.

Bill read a second time. CONSIDERATION OF REPORTS OF PORTFOLIO COMMITTEE ON PROVINCIAL AND LOCAL GOVERNMENT ON REMUNERATION OF PUBLIC OFFICE BEARERS AMENDMENT BILL

(Consideration of Reports of Portfolio Committee on Provincial and Local Government on Bill)

Order disposed of without debate.

Reports adopted.

        REMUNERATION OF PUBLIC OFFICE BEARERS AMENDMENT BILL

                       (Second Reading debate)

Order disposed of without debate.

Bill read a second time.

                      LOTTERIES AMENDMENT BILL

                       (Second Reading debate)

Order disposed of without debate. Bill read a second time (ACDP dissenting).

The House adjourned at 17:55.