THURSDAY, 25 MAY 2000 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 14:04.

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

The CHIEF WHIP OF THE MAJORITY PARTY: 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 the recent reports in the media that there are divisions in the ANC on its position on Zimbabwe; (2) believes that these inaccurate reports are designed to create confusion and to obscure the central role played by South Africa and President Mbeki in finding a lasting solution to the Zimbabwean crisis;

(3) wishes to state that the ANC’s position on Zimbabwe is unanimous, with the emphasis on -

   (a)  the need for rule of law, political tolerance and respect for
       human rights;

   (b)  an equitable land and wealth distribution programme; and

   (c)  the need for Britain to honour the 1980 Lancaster House
       agreements; and

(4) acknowledges that a parliamentary delegation will be sent to Zimbabwe to observe the elections and to report back to this House and that it is unethical and wrong to prejudge the elections before they take place.

[Applause.] Mr D H M GIBSON: 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 -

   (a)  that it is clear that there are serious contradictions within
       the ANC over President Mbeki's approach to Zimbabwe, as the hon
       Pallo Jordan's motion in Parliament on Tuesday, 23 May 2000,
       reflected a view within the ANC that free and fair elections in
       Zimbabwe are, at best, unlikely to occur; and

   (b)  President Mbeki's repudiation of the National Democratic
       Institute's conclusion that free and fair elections are not
       possible shows up his lack of understanding of what is happening
       in Zimbabwe and that his visits since the referendum have been
       to talk to and show solidarity with President Robert Mugabe;

(2) requests President Mbeki to go and see the truth for himself, which is that free and fair elections cannot take place in an atmosphere of violence, thuggery and land invasion; and

(3) states that the attempts by the ANC to paper over the cracks and fractures within their own organisation on this vital issue and to pretend …

[Interjections.] [Time expired.] [Applause.]

The DEPUTY SPEAKER: Order!

Mr J H VAN DER MERWE: Madam Speaker, I give notice that at the next sitting of the House I shall move:

That the House -

(1) takes note of the media statement by the hon Chief Justice and the hon President of the Constitutional Court, dated 22 May 2000, in which they described the attack on the judiciary by ANC spokesman, Mr Smuts Ngonyama, in relation to the Allan Boesak trial as deplorable'',unjustifiable’’, ``unreasonable’’ and as undermining confidence in the judiciary;

(2) further notes that the Chief Justice and the President of the Constitutional Court stated in relation to the comments by Mr Ngonyama that ``They do not deal at all with the evidence given at the trial or the reasons given by the Supreme Court of Appeal for its decision confirming, in part, the decision of the trial judge. They constitute an attack on the judiciary as an institution, impugning the integrity of six judges, including five judges of the Supreme Court of Appeal …

[Interjections.] [Time expired.]

Mr B A D MARTINS: 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 the Organisation for African Unity celebrates 25 May as Africa Day;

(2) further notes that on this day the African people celebrate the heroic struggles waged against colonialists in pursuit of freedom and national liberation;

(3) acknowledges that despite our achievements, the continent is still plagued with poverty, malnutrition, the HIV/Aids pandemic, wars and internal conflicts which affect a number of countries;

(4) recognises that these conditions affect women and children in an adverse manner;

(5) believes there is a need for the total cancellation of the debt of poor countries and to work for greater economic and social integration across the continent; and

(6) calls on South Africans to observe this historic day and to use this day to pledge support for the continent …

[Time expired.] [Applause.] Mr F J VAN DEVENTER: Madam Speaker, I give notice that on the next sitting day of the House I shall move:

That the House notes -

(1) the current furore surrounding the drafting of the Local Government Property Rates Bill;

(2) that the Leader of the New NP, Marthinus van Schalkwyk, had already warned, on 12 May, of these problems and the secrecy in which the drafting process had been conducted, and had called on the Government to make the drafting process more open and transparent;

(3) that in that speech the New NP leader committed his party to opposing, by all parliamentary means available, any attempts to use this new law to impose ill-considered or punitive new taxes on South African property owners;

(4) that the level of public concern and fear about this draft law continues to rise every day;

(5) that the secretive drafting process continues without Government clarification; and

(6) that other opposition parties have finally woken up to this danger and have begun to add their support to the concerns expressed by the New NP.

[Interjections.]

Dr G W KOORNHOF: Madam Speaker, I give notice that at the next sitting of the House I will move on behalf of the UDM:

That the House -

(1) notes with concern the higher than expected rise in the Producer Price Index following a weakening currency and a lower than expected economic growth rate;

(2) urges the Minister of Finance and the Governor of the Reserve Bank not to stick to inflation targeting at the expense of economic growth;

(3) appeals to the Government to focus on sustainable economic growth that will create more jobs; and

(4) calls on the Minister of Education to continue to transform the education system to create the skills needed for building the 21st century economy.

Mr G P MNGOMEZULU: 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 -

   (a)  with serious concern the continuing war between Eritrea and
       Ethiopia;

   (b)  that this war is causing untold suffering to the ordinary people
       of both countries, especially women and children;

   (c)  that the war is exacerbating the drought situation;

   (d)  that the war is denying ordinary people aid from the sympathetic
       international community; and

   (e)  that this war is a setback to the efforts made by African
       leaders to alleviate the poverty and illiteracy of our people;

(2) calls upon -

   (a)  the leaders of both countries jointly to work for peace by
       ceasing hostilities immediately; and

   (b)  the leaders of both countries to respect the resolution of the
       Organisation of African Unity regarding borders; and

(3) commends the OAU for its efforts to bring peace in that part of the world and other troubled spots on the continent.

[Applause.]

Mr S N SWART: Madam Speaker, I give notice that on the next sitting day of the House I will move on behalf of the ACDP: That the House -

(1) notes that -

   (a)  Judge Heath yesterday stated that 127 proclamations to
       investigate allegations of corruption have not yet been
       published by the Department of Justice; and

   (b)  state assets of great value are at risk pending the publication
       of these proclamations; and

(2) calls on the Department of Justice urgently to publish these outstanding proclamations to enable the Heath Investigating Unit to investigate these matters and, where possible, recover state assets which have allegedly been misappropriated.

[Interjections.] [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 -

   (a)  the continued difficulties around the process of demarcation of
       boundaries in the rural areas for the purposes of local
       government;

   (b)  murmurs of strife in certain parts of the country if these
       difficulties are not resolved; and

   (c)  that at the heart of these difficulties is a contradiction
       between electoral democracy and African traditional democracy;

(2) believes that -

   (a)  it is, in fact, possible and desirable to harmonise these two
       forms of democracy in both theory and practice; and

   (b)  the Constitution of this country puts an obligation on all of us
       to seek such a practical harmonisation of the two systems; and

(3) calls upon all those who are intimately involved in these processes to resolve the issue in a spirit of co-operation and compromise.

Mr J H NASH: 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 -

   (a)  20 shacks burnt down in the Joe Slovo area in Langa; and

   (b)  two people died as a result of the fire;

(2) recognises that this is not the first time this year that such an incident has been reported;

(3) sends its condolences to the families of the deceased and all those affected; and

(4) calls on the public to be cautious when using household utensils that may cause fire and to exercise maximum vigilance during this winter season. [Applause.]

Ms J A SEMPLE: 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 the announcement by the SA National Parks Board that they will grant concessions for private lodges in our national parks;

(2) congratulates the Parks Board on its initiative in promoting privatisation in a manner which will create jobs;

(3) trusts that the Parks Board will concentrate on conservation, while leaving the hospitality industry to do what it does best, thereby advancing the best interests of tourism in South Africa; and

(4) urges the Parks Board to follow the modern trend of developing new lodge sites outside conservation areas in order to preserve the pristine nature of ecologically sensitive areas.

[Applause.]

Ms S C VOS: Madam Speaker, I give notice that on the next sitting day of the House I shall move:

That the House -

(1) recognises the critical role that telecommunications and broadcasting must play in the human and economic development of our nation;

(2) notes that civil society has been asked to nominate suitable persons to serve on the Independent Communications Authority of SA;

(3) urges the Minister of Communications to ensure that this new body will be able to operate independently and will be resourced in such a manner as to ensure its effectiveness and efficiency; and

(4) warns that the previous lack of a competent and respected regulatory regime in South Africa severely damaged our credibility in these sectors, both nationally and internationally, hindered vital technological development, lost jobs and repelled investment.

Rev A D GOOSEN: 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) welcomes the announcement that Eskom has brought under control its bulk municipality debt from a staggering R1,5 billion to about R450 million;

(2) believes that this is indicative of the improved emphasis on effective management systems in parastatals and provincial, national and local government, resulting in more efficient and effective delivery to communities and consumers; and

(3) commends Eskom, Salga and the various Government departments, that made up the bulk debt normalisation committee, for their effective solution of the debt problem.

[Applause.]

Adv A H GAUM: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the New NP:

That the House -

(1) notes -

   (a)  with approval the remarks made by Mr Mluleki George, chairperson
       of the Portfolio Committee on Safety and Security, that the
       amended section 49 of the Criminal Procedure Act will make it
       impossible for the police to do their work, because they will
       have to wait for criminals to threaten their lives before they
       may shoot them, and that it should therefore be revisited;

   (b)  with shock that according to Mr George, the amended version was
       adopted without consulting the SA Police Service or the
       Portfolio Committee on Safety and Security; and

   (c)  that the SAPS is vehemently opposed to the new section 49;

(2) congratulates the New NP because it was the only party that voted against the amended version of section 49, because of its unpractical nature and the fact that it will endanger the lives of our policemen and women; and

(3) calls on -

   (a)  the Ministers of Safety and Security and for Justice and
       Constitutional Development to resolve the uncertainty with
       regard to this matter speedily; and

   (b)  the Cabinet, Parliament and Government departments to do a
       detailed analysis of the practicability of proposed legislation
       before rushing it through Parliament.

[Time expired.] CONGRATULATIONS TO KIRSTENBOSCH BOTANICAL GARDENS ON AWARD

                         (Draft Resolution)

Mrs M E OLCKERS: Madam Speaker, I move without notice:

That the House -

(1) congratulates Kirstenbosch Botanical Gardens on being awarded the 23rd gold medal for the Old Mutual Kirstenbosch Exhibition at the Chelsea Flower Show in London; and

(2) is of the opinion that this is proof of South Africa’s standing as a country that cares for botanical issues, aesthetics and our environment.

Agreed to.

                 AFRICA UNITY DAY - FORMATION OF OAU

                      (Subject for Discussion)

The DEPUTY SPEAKER: Hon members, today on Africa Day we mark the 37th anniversary of the Organisation of African Unity. On this day in 1963, 32 heads of state signed the charter of the organisation in Addis Ababa, Ethiopia. Our continent has come a long way from 32 to today’s 53 independent countries of Africa. Liberation struggles, which freed our peoples from colonial bondage, were waged. Neocolonial challenges of all shapes and degrees have since emerged and still face Africa. African people are yet to fully shake off the effects of four centuries of the slave trade, which preceded the colonial period.

One of the biggest challenges of our times is the attainment of peace on our continent. Articles 1 and 2 of the charter list the objectives and principles of the OAU. They are: To promote the unity and solidarity of the African states; to co-ordinate and intensify the co-operation and efforts to achieve a better life for the people of Africa; to defend their sovereignty, territorial integrity and independence; to eradicate all forms of colonialism from Africa; and to promote international co-operation, having due regard to the charter of the United Nations and the Universal Declaration of Human Rights. Without peace, the realisation of the above noble intentions recedes and it is made so much more difficult. The resources that should go towards improving the conditions in which our people live, get diverted towards wars and conflicts that take millions of innocent lives.

Let us use this occasion to reflect on the African condition in honour of those who went before us, who left us the legacy of daring to care; in honouring every ordinary African who looks up to his or her leaders to improve their lot; in honour of the millions who have died and continue to die senselessly; and in honour of the children of the continent and the future. Let us take the opportunity of today’s debate to recommit ourselves to the ideals that drove our forefathers and mothers, within our own borders, in our relations and interactions with fellow Africans, in the policies that determine the interventions that we make as a country on the continent. Let us uphold the spirit that prevailed 37 years ago - the spirit of hope, the commitment to do what is correct in the interest of our people and, above all, the determination to succeed against all odds.

Mr W J SEREMANE: Madam Speaker, hon members, I find it fitting and proper to make Amilcar Cabral my entry point to the subject under discussion today. Cabral asserts that: Hope is true and well founded only when it grows out of the unity between action that transforms the world and critical reflection regarding the meaning of that action.

Hope, action and reflection run through the very fabric of Africa as a golden thread beckoning and challenging Africa. Dreams and visions may, and should, be there, giving birth to hope; but unless appropriate action and constant reflection are in place, Africa is doomed to see elusive mirages and thus be on a vicious circular journey to nowhere forever.

Africa Unity Day compels us to look at our distant and recent past - not out of nostalgia, but out of the critical reflective need to take stock of how we, that is Africa, have deported ourselves and conducted our affairs on this journey to nationhood on a Pan-African scale. The turbulent 50s and 60s could well be described as Africa’s ``the best of times and the worst of times’’, or the three steps forward and the two steps backwards, to use the clichés. One may profoundly ponder and wonder. In the 1950s, a star was born - Ghana - giving the entire African continent hope of a new dawn of freedom and liberty. Ghana and many African states since then have seen their rise and fall. Some are still reeling punch-drunk or power-drunk to this day.

Amidst all this hope and despair, a vehicle came into being, in the form of the Organisation of African Unity, or the OAU, and hopefully, not the acronym, IOU, spelling out Africa’s perpetual indebtness, cap-in-hand to the benevolent coffers of the world’s nations that are up and doing. 25 May 1963 is indeed an historic beacon that rekindled the flame of hope since the remarkable Pan-African yearnings of the 19th century and the earlier diaspora. In the words of Tom Mboya, the inception of the OAU can be likened to ``the discovery of Africa by Africans, that is Africa’s desire to be understood and to be recognised for her viewpoint and perspectives of her own peoples’’. Thanks go to Emperor Haile Selassie for his generosity in providing the temporary secretariat and donating funds to meet the first year’s expenditure to kickstart the fledgeling OAU.

It is a great pity for Africa that Kwame Nkrumah, Emperor Selassie and many others later went down as ``corrupt despots’’. The bane of Africa seems stubbornly to be corruption, despotism, nepotism and the arrogance of the abuse of power. Tribalism or ethnicity is still our albatross in Africa.

Coming to the sunny side of the African street, so to speak, we reflect on the objectives of the OAU. Overall, these intentions and objectives were undeniably noble. [Time expired.] [Applause.]

The DEPUTY MINISTER OF PUBLIC WORKS: Madam Speaker, hon members, this year’s celebration of Africa Unity Day highlights challenges and opportunities. We need a new vision for our continent to solve its many problems and to capture its many opportunities.

In January 1993, when speaking at the World Economic Forum convened in Cape Town, the hon the Minister of Home Affairs, Prince Mangosuthu Buthelezi, launched a daring and visionary challenge to the representatives of the sub- Saharan continent to pursue the path of international economic integration first, as the precursor to greater political co-ordination and possible African unity in future.

Our continent has the natural and human resources necessary to foster its economic growth and infrastructural development, and yet we are moving on the path towards economic prosperity and social stability at a much slower pace than other parts of the world. New countries are constantly emerging and coming in line with the integrated development which now characterises the global village.

Last week’s issue of the world’s most prestigious financial magazine, The Economist, carried a cover page describing Africa as ``the hopeless continent’’. We must accept, rather than ignore, this challenge which identifies the real mission of a new generation of Africans. If we wish to give substance and credence to the notion of an African century, we can no longer delay, we can no longer hesitate, and we can no longer ponder. If we are to succeed, we must act, and act fast. [Interjections.]

The world is moving at a pace which mercilessly leaves behind those who cannot keep up. This we must accept as a fact of life which can hardly be mitigated by whatever concession we can receive in terms of greater and more effective international aid and assistance. For me, the starting point is where my leader set the route for us follow seven years ago. We must achieve a more rational and effective utilisation of our resources on a subcontinental basis, so that they can be put towards the development of the massive technological and physical infrastructures necessary to accelerate our economic growth.

Like all other national states throughout history, African countries are equally jealous of their political prerogatives and remain unlikely to renounce them in order to foster greater international integration. I hope that my generation can see the completion of the dream of our continent having reached the same level of political unity recently achieved by the European Union. However, this goal can only be achieved through economic integration first, to which end the time has, perhaps, come to conceive new supernational structures which can manage, produce and deliver, acting with a stronger technical rather than political profile.

We need to draw on our African pride, to take charge of our destiny by building our future with our own hands from our own efforts, our own intellect and the vast natural resources with which God has endowed our land. This vision of courage and pride should inspire a new generation of efforts towards African unity.

During its first stage, African unity pursued the cause of independence of the continent from colonialism, racism and oppression. This mission will not be completed until the oppression of new tyrannies and civil wars has been eradicated throughout Africa. In order to complete this task, a new stage should begin to lead us into the new mission of a new generation. This is one which must rely on bricks, mortar and computer chips alike.

The unity of Africa is to be forged on the anvil of hard work leading to the continental technological advancement and accelerated social development. We have a real opportunity to get it right, relying on what society can do for itself under the co-ordination of a pragmatic, but visionary, long-term plan of development. On this day, we must accept that only hard work and goodwill will free our continent from its social plagues giving hope to its people and confidence to the rest of the world in what the President of the country, President Mbeki, has propounded as the African renaissance. [Applause.]

Dr B L GELDENHUYS: Madam Speaker, I saw a very interesting movie last year. [Interjections.] The name of the movie is A Mirror Has Two Faces. Indeed, Africa also has two faces. One resembles despair and the other portrays hope. Despair could be best captured by the popular expression of the eighties: Africa is dying''. Pik Botha frequently used it. A spirit of despair radiates from the front page of The Economist. The headline was referred to by the previous speaker and it readsThe hopeless continent’’.

However, from time to time, Africa also shows a face of hope best illustrated in front page reports such as Emerging Africa'' - The Economist of 14 July 1997,Tanzania is Africa’s latest rising star’’ - Business Day of 14 April 1999. On the 37th anniversary of the OAU we should ask ourselves which face Africa is going to show in the 21st century. If this century is indeed going to belong to Africa, then Africa will have to refute the analysis, which also appeared in The Economist, that the new millenium has brought more disaster than hope to Africa.

The African renaissance will only materialise if Africa gets its act together. What needs to be done is the following. Africa should stop blaming outside forces for its predicament and start accepting responsibility for its own future. [Interjections.] The African Charter on Human and People’s Rights is the only document of its kind that balances enjoyment of rights with performances of duty. It is Africa’s duty to start creating its own future. If Asia, which was also colonised, could do it, there is no reason why Africa cannot follow suit. Africa should furthermore start concretising its own treaties.

The Abuja Treaty envisages the establishment of the African economic community over a period of 40 years of which the establishment of regional economic communities during the first eight years was a prerequisite. After nine years, nothing has materialised. Without investment strong regional economic communities remain a pipe dream. And foreign investment will be hard to come by as long as civil war, interstate conflict and violation of human rights remain on the television screens of the industrialised world. Leaders guilty of the aforesaid atrocities should be unmasked in public as traitors to the cause of the African renaissance and silent diplomacy should be shelved.

By the way, I find it peculiar that the South African Parliament has not yet ratified the Abuja Treaty, especially against the background that President Mbeki criticised other leaders for not enforcing the provisions of the treaty in their own countries. Africa should furthermore utilise the opportunities given to them in terms of the Lomé Convention and the African Growth and Opportunity Act and stop complaining about conditionalities. Conditionalities should be attached to debt relief without which the economic rot will start all over again. Finally, the OAU itself will have to be reformed dramatically.

Ons kan maar eers vergeet van die hervorming van die VN. Die OEA behoort bo aan die lys van dié wat hervorming nodig het. Die OEA moet in staat gestel word om die mooi ideale van burgerregte, politieke regte, kulturele regte en maatskaplike rregte af te dwing. Hulle kan nie langer agter artikel 2(7) van die VN-handves skuil wat inmenging in die huishoudelike sake van ‘n lidstaat verbied as dit kom by die flagrante oortreding of vertrapping van menseregte nie. Artikels 55 en 56 van dieselfde handves verplig in elk geval state om menseregte wêreldwyd te bevorder. [Tyd verstreke.] (Translation of Afrikaans paragraph follows.)

[We can forget about reforming the UN for the moment. The OAU ought to be at the top of the list of those in need of reform. The OAU should be placed in a position to enforce the fine ideals of civil rights, political rights, cultural rights and social rights. They can no longer hide behind article 2(7) of the UN’s charter, which prohibits interference in the domestic affairs of a member state when it comes to the flagrant contravention or treading underfoot of human rights. Articles 55 and 56 of the same charter in any case compel states to promote human rights throughout the world. [Time expired.]]

Mr M E MABETA: Madam Deputy Speaker and hon members, we thank the Speaker for calling for this debate.

The OAU developed out a quest for an African self-assertion inspired by shared experiences in the struggle against colonialism, imperialism and the threat posed by the possibility of continued minority racist regimes in Southern Africa. It serves as a framework for mobilising and consolidating continental unity in the struggle against these evils.

Despite the ideological differences between and among OAU members states, this commitment and this orientation of the OAU has not changed. We as the UDM reject the view that the OAU is nothing but a drinking club for African heads of state. [Interjections.] We know that this a well-documented view in literature on this. Our view is that the problems facing the OAU and its slackness in responding to continental conflict derive from the economic, political and institutional constraints posed by the international system of the UN which is dominated by the five Security Council member-states.

We would like, as a party, to recognise the very important and innovative initiatives taken by our Government and President Mbeki in bringing about new approaches, and for demanding a political and adequate institutional base so that African governments can play a primary role in setting the agenda for the reassertion of African interests in the international community. We are well aware that ideological differences should not be seen in isolation. They should be seen against the background of the inability of some of these african states to offset the economic constraints that are placed on them and the blackmail by metropolitan countries or the former colonial countries.

We would like to take the view that we should, as a country, continue to support President Mbeki’s approach in the intended operation of the OAU and, as a people, help the Government in establishing economic policies within the country that give our country more and more credibility in the role it plays regionally and internationally. One of the reasons for the failure of countries like Nigeria to play a leading role in the OAU, whether there is a civilian government or a military regime, has been the inability of governments to secure and receive the continued support of their own people. We will not have a sustainable foreign policy that is able to bring about proper innovations in the working of these international organisations if the domestic policies of the country do not receive or enjoy the firm support of the people. We are not implying that there are doubts or weaknesses in these policies. We are saying that we need to support the initiatives taken by our Government in the innovation and restructuring of the regional international system. [Time expired.]

Ms C DUDLEY: Madam Speaker, African states all belong to the United Nations Organisation. They also belong to the Organisation of African Unity, which may be regarded as a regional collective security arrangement under Chapter 8 of the UN Charter. In addition a number of geographically proximate African states have also entered into collective defence agreements. Despite their diversity, it is safe to say that all subregional organisations in Africa - even the larger ones such as SADC - lack an institutional crisis-prevention and management mechanism. As a result, regional military involvement in conflict resolution has been ad hoc and not in accordance with a specific operating procedure.

The great deficiency within SADC relates to the absence of conflict- management structures and of integrated systems, processes and methods to deal with issues such as human rights and the advancement of democracy and good governance. This is clearly a contentious issue. The OAU seems to have been relegated to a conflict management role as an intermediary between the UN and its higher moral authority for ensuring international peace and security, on the one hand, and the subregional organisations with their perceived political will and the executive power, on the other.

The type of conflict caused by the political breakdown in African countries can really be remedied by short-term military interventions if the urgency of African security challenges precludes the luxury of a drawn-out process of establishing workable conflict-management mechanisms. We do not have the resources for long-term peacekeeping. The prospect of subregional collective security, or even defence regimes developing successfully in Africa, is not considered to be good or even desirable. The process of state formation and state building in Africa on the whole has not produced very strong foundation stones for larger security contracts.

Many African states came to independence through low-intensity conflicts waged by liberation movements against colonial powers. Having taken power in this way, the new state incumbents were left highly exposed and vulnerable to challenges from within, intent on using these very same methods against them.

It is time to place state-building and good governance at the centre of our efforts. The OAU and the African subregional organisations need to be clearer on the moral and political principles which should inform the relationships between and within states in the region. These organisations should uphold minimum standards, the violation of which should be sanctioned equally across the board and not only when the culprit is a relatively less powerful member of the organisation. The ACDP stands unequivocably for freedom, democracy and human rights and these values should underpin our foreign policy in Africa and elsewhere. The ACDP is opposed to an African parliament which is, at the least, premature and possibly irrelevant as the OAU strengthens and functions more effectively. [Time expired.]

Dr P W A MULDER: Madam Speaker, today is Africa Unity Day. Today Africans are also fighting one another all over the continent. The fighting in the Congo has been dubbed Africa’s First World War because of the involvement of neighbouring countries. Tens of thousands of Africans have already been killed in the border war between Ethiopia and Eritrea. A million Africans have died in the Angolan War in the last 25 years. In the Sudan, 2 million Africans died in the civil war. In Burundi there is a seven-year conflict between Hutus and Tutsis, while in Somalia there is a failed state ruled by rival warlords, and so I can continue, and I have not mentioned Zimbabwe yet.

I am proud to be an Afrikaner and my mother tongue is Afrikaans. We named ourselves after this continent and it is not for the PAC, the ANC, or any other party to decide whether I am an African or not. Enemies that hope to get rid of Afrikaners will be disappointed. We are in South Africa to stay. As an Afrikaner, I enjoy the beauty of this continent. As an Afrikaner and as an African I am proud of the potential of this continent, but as an African I am also deeply worried about the future of this continent.

I know the argument that African wars are caused by outside powers, but surely that cannot be true for so many conflicts? I know the argument that there is conflict all over the world, so why the fuss about Africa? But surely if one compares wars and bloodshed between the continents at this moment, Africa is the champion? We must not bluff ourselves. Are there solutions? Yes, there are. As Africans, members of the FF are committed to solutions because we are here and we are going to stay here. As Africans we must be honest with ourselves in admitting our problems, and stop blaming everyone else - as we are hearing here at the moment - but ourselves. As Africans we must stop making talk-shops of all African meetings without taking action.

In Kampala in 1990, at the heads of state conference, it was moved that a conference on security, stability, development and co-operation must be launched in Africa, based on the successful European model. In a paper adopted in Kampala sound principles were adopted and I can agree with them, but few were implemented. A few examples are the following. It says on page six that there must be a limitation on the tenures of political leaders. Namibia and Zimbabwe are examples I can name. The right to property and participation of the citizens in government are referred to on page five. Hon members must look at Zimbabwe at the moment.

In Europe their conference on stability focused on the prevention of conflict. They identified the oppression of minorities and ethnic conflicts as Europe’s biggest threat and are daily busy addressing this. In this whole document on Africa, the equivalent of the European one, no single reference is made to the positive handling of minorities or ethnic conflicts. We lie to ourselves and bluff ourselves if we think that this problem will go away because African heads of state do not mention it.

The new, young African leaders must prove to the world that they are not repeating Africa’s mistakes of the past. Time is running out and we will be watching them - President Mbeki is one of them - as to whether they are going to succeed or not, because we are proud of them. [Time expired.]

Mr P H K DITSHETELO: Madam Speaker, the founder members of the Organisation for African Unity deserve applause for their efforts in shaping the destiny of this wonderful continent.

The 1958 All Africa Peoples Conference paved the way for the launch of the OAU. The conference pledged political, moral and diplomatic support for all liberation movements, and endorsed the principle of freedom by any means necessary, including that of the armed struggle.

The 1960s saw the formal decolonisation of many African states such that, by 1963, there were 32 independent states. In May 1963, both camps - the radical Casablanca group and the moderate Monrovia group - represented by 32 independent states, met in Addis Ababa and formed the Organisation for African Unity whose charter and governing principles were a compromise between the aspirations of the two groups.

Some failures arose from the OAU’s founding document or charter, and some provisions in the agreed charter tied the hands of the OAU and prevented it from offering much-needed solidarity to other Africans and solving some of the problems faced by Africans affected by the diaspora and those on the continent.

In 1994 the secretary-general of the OAU, Salim Ahmed Salim, reminded us of the challenges faced by the OAU, and why it was formed in the first place, by saying:

A desire that our shared historical experience made necessary, a desire that the political and geographical configuration as well as the economic viability of the continent have made necessary, a desire to give Africa the appropriate hearing it deserves in the councils of the world and a desire that had been bequeathed to Africa by the Pan African Movement.

It was without a doubt the liberation of South Africa in 1994, that meant that the OAU programme of action in the decolonisation of Africa in general, was completed. Indeed, this was an achievement for the organisation!

However, the 21st century poses new and complicated challenges for the OAU to grapple with. The OAU cannot remain as it is. It has to be transformed and be capacitated to deal effectively with African problems. The new OAU programme of action should be geared towards addressing the following areas: Firstly, the creation of a well-resourced OAU conflict … [Time expired.]

Dr S E M PHEKO: Madam Speaker, we are a people who never give up! Our struggle is a protracted one! We have struggled for over 500 years!

Having said that, let me say that Africa Liberation Day is the culmination of the Pan African idea which was conceived in 1776 by Africans, who were victims of the slave trade, outside Africa. This was formalised in 1900 into a vision for Africa’s liberation and unity. This vision was translated into action by Pan Africanist leaders at the Fifth Pan African Conference in Manchester in 1945. It is this vision which brought about the decolonisation of Africa.

It was for the Pan African cause that Kwame Nkrumah was overthrown, Patrice Lumumba of Congo and Murtala Muhammad of Nigeria assasinated, and the PAC founding President, Mangaliso Sobukwe, poisoned on Robben Island. Africa Liberation Day was set aside by the Organisation for African Unity in 1963, as a day on which all sons and daughters of Africa and the struggles they waged to regain their humanity would be remembered.

We, in the PAC of Azania, bore the brunt of Pan Africanism in the darkest days in this country, when some leaders were ashamed to call themselves Africans. They considered concepts such as Africanism and Pan Africanism as antiwhite. We are glad that those whom imperialists once instigated to defame the PAC and Pan Africanists as racists, have at last awoken from their colonial slumber, and have discovered that they are Africans after all. [Interjections.]

In the past, they hated any reference by the PAC to a United States of Africa'' or theGiant Monolithic States of Africa’’, as Zephania Mothopeng put it. But now, they not only call themselves Africans, they are compelled to accept Pan African efforts such as the establishment of the Pan African Parliament. They no longer can slander Pan Africanism in the face of the profound distress Africa shall continue to suffer if the Pan African solution is not applied.

It is clear that Pan Africanists were far ahead of those who had no vision for a post-colonial Africa or had been ideologically hijacked. [Time expired.] [Applause.]

Mr N J CLELLAND: Madam Speaker, I am confident that this century can be the African century, that Africa can become a true home for human rights, enterprise and expanding opportunity.

Unfortunately, just five months into this African century, our continent, our region and our country are facing a massive wave of international Afro- pessimism. Last week’s edition of The Economist was nothing short of an orgy of Afro-pessimism. [Interjections.]

The truth is that Zimbabwe’s President, rebels in Sierra Leone and even the weather in Mozambique bear more blame for Africa’s image right now. But the world has, for the past decade, looked to South Africa and its leaders to prove them wrong, and to take up the reins of leadership. That leadership must work tirelessly towards solving the crisp problem of Africa, which is the absence of democracy in many African countries.

Appeasement of tyrants will not turn them into democrats. Now is not the time to rally around tyrants in a misguided show of African solidarity against the world. The focus of all of us and all our efforts and attention must be to move towards democracy in Zimbabwe and everywhere else in Africa. It is only in democratic countries that there is real peace, real hope and real progress. All of these are possible and can be achieved if South Africa and Africa come of age.

This century can be the African century. But this vision is dependent on strong, emboldened leadership and a dedication to the kind of positive change that only solid liberal democratic principles can achieve. On this anniversary of the founding of the OAU, we need to dedicate ourselves, our Parliament and our people to being a positive force for democratic change on this continent where all of us live as Africans. [Time expired.]

Miss S RAJBALLY: Madam Speaker, the Organisation for African Unity is the most significant and comprehensive of all political organisations in Africa. Therefore, the culture of democracy must not be undermined by the OAU’s lack of enthusiasm to participate actively in resolving problems that arise from democratic plurism among African politicians.

South Africa, after many decades of struggle, has successfully emerged from colonisation. So have many other African states. Yet, efforts made to achieve peace is literally in vain. Innocent people in Rwanda, Zimbabwe, Ethiopia, Uganda, Angola and in many other states are suffering due to economic, religious and political disputes.

The OAU must not ignore the historical facts of Africa. The Germans and the English shamelessly divided the African continent into colonies between themselves without consulting with the indigenous people of Africa. This has, unfortunately, indoctrinated a territorial attitude amongst the African people.

Serious respect must be given to the implementation of the OAU Charter for the mere sake of peace and stability in Africa. The ongoing conflict in the African states concerned is a devastating act of reverting to colonisation.

The least developed countries must be prioritised, and attempts must be made by the UN and OAU to facilitate good governance, democracy, debt relief, trade access and poverty reduction. Corruption is destroying the livelihood of the people. The timing can never be more right for regional multilateral approaches to conflict resolution.

Therefore African leaders throughout the continent under the umbrella of the OAU should take the lead in dealing with their own conflicts by striving for the following objects: to promote unity and solidarity; to improve social, economic and political standards; to promote international co-operation; and, finally, to defend the territorial integrity and independence of African states. [Applause.]

Mnr C AUCAMP: Mevrou die Speaker, die OEA is in Mei 1963 in die lewe geroep deur 31 onafhanklike Afrikastate met die volgende vier doelstellings: om eenheid tussen Afrikastate te bewerkstellig, die vasteland van kolonialisme en apartheid te bevry, vrede te bevorder en ekonomiese vooruitgang te verseker. Die blote feit dat 37 jaar gelede daarin geslaag kon word om ‘n eenheidsbeweging te midde van groot verdeeldheid in die lewe te roep was op sigself ‘n prestasie, iets wat Europa eers ná eeue van struweling en oorlog kon regkry. ‘n Verdere sukses van die OEA was die feit dat hy tydens die Koue Oorlog as fisieke vergestalting gedien het van die Afrikablok, en heelwat ekonomiese en ander voordele vir Afrika bekom het deur Amerika en die Sowjet-Unie teen mekaar af te speel.

Die ekonomiese, tegnologiese en ander hulp wat na Afrika gestroom het, het egter weggesink in ‘n moeras van etniese en ander konflikte wat die vasteland ná 37 jaar nog steeds teister. Angola, Mosambiek, die DRK, Brazzaville, Rwanda, Burundi, Soedan, Somalië, Ethiopië, Eritrea, Sierra Leone, Liberië, Algerië, en nou ook Zimbabwe en die moorde op blanke boere in Suid-Afrika vertel ‘n tragiese geskiedenis van Afrika. Waaraan is dit te wyte? Wat is die lesse van die geskiedenis vir ‘n Afrika wat maar net nie na verwagting op dreef kan kom nie?

Ek wil twee daarvan uitwys. Vanuit die staanspoor is die OEA aan bande gelê deur die feit dat dit ‘n kompromis was tussen twee uiteenlopende groepe oor Afrika-eenheid. Kwame Nkrumah van Ghana het die standpunt verteenwoordig dat ‘n mens eers die politieke koninkryk moet soek en die res sal vanself kom. Daarteenoor het die voormalige Franse kolonies onder leiding van Houphouet-Boigny van die Ivoorkus en Senghor van Senegal gesê Afrika moet hom op ekonomiese vooruitgang en eenheid fokus.

Ongelukkig het die OEA hoofsaaklik die Nkrumah-opsie gevolg, en hom so besig gehou met politiek-ideologiese kwessies dat die ekonomiese ontwikkeling van Afrika in die slag gebly het. Ontwikkelingshulp aan Afrika het dikwels in bodemlose putte van geldgierige magselites geval.

‘n Tweede rede vir die gebrek aan sukses - hier verwys ek agb lede na die Duitse staatswetenskaplike Werner Pfeiffenberger - is dat Afrika hom bevry het van die juk van kolonialisme. Hy het alles daaraan verbonde met passie verwerp, maar die onnatuurlike staatsgrense wat deur kolonialisme getrek is as ‘n heilige koei behou. Die gevolg is, Afrika is nie op natuurlike, op volksetniese wyse staatkundig georden nie.

Die onnatuurlike koloniale grense dwing etniese groepe met strydende belange, kulture en lewenswyse in een staatsbestel saam, met die gevolglike oorheersing van meerderhede en vrugtelose, kunsmatige pogings om minderhede te beskerm. Die meetsnoere van kolonialisme, sy grense, het vir Afrika nie op lieflike plekke geval nie. Solank as wat Afrika vasklou aan koloniale staatsgrense wat die natuurlike konsep van die nasiestaat en die selfbeskikking van volkere minag, sal konflik bly voortduur.

Die uitdaging vir die OEA is om verbeeldingryk mee te werk sodat Afrika weer staatkundig op natuurlike volksetniese wyse georden word met selfbeskikking vir al sy volke. (Translation of Afrikaans speech follows.)

[Mr C AUCAMP: Madam Speaker, the OAU was founded in May 1963 by 31 independent African states, with the following four objectives: to bring about unity amongst African states, to free the continent of colonialism and apartheid, to promote peace and to ensure economic progress.

The mere fact that it was possible, 37 years ago, to establish a unitary movement in the midst of great disunity, was in itself an achievement, and something that Europe could only achieve after centuries of quarrelling and war. A further success of the OAU was the fact that, during the Cold War, it served as the physical embodiment of the African bloc, and acquired a considerable number of economic and other privileges for Africa by playing America and the Soviet Union off against each other.

However, the economic, technological and other aid that flowed to Africa, disappeared into a quagmire of ethnic and other conflicts, which are still ravaging the continent after 37 years. Angola, Mozambique, the DRC, Brazzaville, Ruanda, Burundi, Sudan, Somalia, Ethiopia, Eritrea, Sierra Leone, Liberia, Algeria, and now also Zimbabwe and the murder of white farmers in South Africa, tell a tragic tale of the history of Africa. What is the cause of this? What are the lessons of history for an Africa which simply cannot start progressing according to expectations?

I want to point out two of these. The OAU was hampered from the outset by the fact that it was a compromise between two divergent groups as regards African unity. Kwame Nkrumah of Ghana represented the point of view that one should first seek the political kingdom and the rest would follow automatically. In contrast, the former French colonies under the leadership of Houphouet-Boigny of the Ivory Coast and Senghor of Senegal said that Africa should concentrate on economic progress and unity.

Unfortunately the OAU for the most part adopted the Nkrumah option, and concerned itself to such an extent with politico- ideological issues that the economic development of Africa fell by the wayside. Development aid to Africa often landed up in the bottomless pit of the avaricious power élite.

A second reason for the lack of success - here I am referring hon members to the German political scientist Werner Pfeiffenberger - was that Africa freed itself from the yoke of colonialism. It rejected everything connected with this with passion, but the unnatural state boundaries drawn by colonialism were retained as a sacred cow. Consequently Africa was not ordered politically in a natural, ethnic way.

The unnatural colonial boundaries force ethnic groups with conflicting interests, cultures and lifestyles together in one political set-up, with the consequent domination of majorities and fruitless, artificial attempts to protect minorities. For Africa, the lines of colonialism, its boundaries, are not fallen in pleasant places. As long as Africa clings to colonial state boundaries which disregard the natural concept of the nation state and the self-determination of peoples, conflict will continue.

The challenge for the OAU is to work together in an imaginative way so that Africa can once again be politically ordered in a natural, ethnic way, with self-determination for all its peoples.]

Mr M A MANGENA: Madam Speaker, for many centuries now, Africans and their continent have been the main victims of every system of social and political oppression that ever existed. We were the main victims of slavery and colonialism, and are now victims of neocolonialism. Europeans and all their institutions, including the church, declared an African as something less than human, something without a soul and therefore something deserving of subhuman treatment.

In addition to the economic motive, this is the basis for racism, slavery and colonialism. In the African struggle for emancipation from colonialism and racism, in particular, we asserted the inherent right of all human beings to freedom and dignity. That right to freedom is equal and independent of whether one is a sophisticated bank owner in New York or a peasant in some remote village somewhere in the forests of the Congo.

The formation of the OAU in 1963, by some of the most venerable names on the continent, which included Abdel Nasser, Mwalimu Nyerere and Kwame Nkrumah, was the collective assertion of this belief in the fundamental right, first of ourselves, and then of all of humanity, to be free. The OAU, in pursuance of this belief, exerted itself in the arduous campaign to liberate every corner and every soul on the continent from colonial and racist oppression. That mission was accomplished.

However, the social and economic advancement of the peoples of Africa remains a huge challenge. In fact, in many instances, the advent of political freedom heralded a decline in the living standards of many Africans. That is due to a number of factors, including, firstly, the assumption by many that the design of a new flag, the singing of a new national anthem and the installation of a black ruler marks the end of the struggle. The economy of the country, including landownership in certain instances, remained in the hands of the others. That kind of attitude has cost Africans dearly.

Secondly, the psychological and cultural damage visited upon Africans by centuries of slavery, colonialism and racism remains uncorrected. Economic and social development are also a function of psychology and culture. Thirdly, the accumulation of capital and wealth in the West over many centuries, some of it at the expense of the Africans, is too great an advantage for others to overcome.

There is a sense in which the instability, the cruel wars and social strife we see in Africa reflect, in varying degrees, some of these factors. We must now mobilise to overcome these factors and improve the lives and dignity of all our people on this continent. [Applause.]

Mr M RAMGOBIN: Madam Speaker, hon Deputy President and colleagues, it is not enough for us to deplore the unacceptable state of insecurity and instability in many parts of the continent. It is not enough to only describe the current situation in Africa. What should concern us in South Africa about Africa is the fact that almost all of Africa shared a common fate, from the days of the slave trade through colonialism and up to apartheid. Yet something, somehow, went wrong.

Perhaps it is opportune to reflect on Joseph Conrad’s description of the colonisers, through the character of Mr Kurz, as hollow to the core, reckless without hardihood, greedy without audacity and cruel without courage''. This was a moral judgment - a judgment because of what was done to a people among whom existed an age-long basis of African spirituality meaning,I belong, therefore I am’’.

The several conferences of the heads of state and government of the member states of the OAU since 1991 have been seized with the responsibility to readdress the conflict and instability on the continent. In their own ways, the adoption in 1998 of the African Charter on Human and Peoples’ Rights and the decision at the Algiers summit in 1999 on unconstitutional changes of government were a recognition of the fact that the problems of security and stability in many African countries had impaired their own capacity to develop and to achieve the necessary level of intra-African and inter- African co-operation.

These are necessary to attain the integration of the continent and absolutely necessary for the continent’s socioeconomic development and transformation. These leaders of the OAU were also passing a moral judgment that, linked to the hazards of colonialism and imperialism, some of Africa’s leaders, just like Mr Kurz, had become and remain hollow to the core, reckless, greedy and cruel without courage.

It will not be an exaggeration to note that Mr Mandela’s stature and presence in the Great Lakes region is a constant reminder of a moral call - a reminder that moral urges of people and their sacrifices are used by others for base ends. The rulers exploit the goodness and nobility of men and women for evil purposes. Without a union of co-responsibility, the problems facing all our independent states, without exception, will remain difficult and those responsible for the imminent disintegration of Africa will get a new lease of life. This, for us, is a wake-up call in Africa. A call for co-ordinated efforts, not only by the governments in Africa, but by every sector, is required.

Governments, indeed, have a duty to create the environment in which peace, security, stability, development and co-operation can take place. There must be African solutions to Africa’s problems, with the assistance of other role-players. A concept of security, arising from a common history, culture, geography and destiny, must include economic, social, political dimensions of the individual, family, community, local and national life. The security of all Africans, their land and property and their states as a whole, is indispensable for stability, development and co-operation in Africa. Lastly, but most importantly, without prejudice to the United Nations and OAU Charters, member states of the African Union should not be indifferent to situations of civil strife, humanitarian disasters, gross violations of human rights and acts of wanton repression in Africa. This will be a formidable dedication to the formation and establishment of the Organisation of African Unity.

All these are affirmations in the context of stability, which in turn requires that the states be guided by strict adherence to the rule of law, respect for human rights and fundamental freedoms devoid of religious, ethnic, regional and racial extremism. It is noteworthy that a Pan-African Parliament can serve as a monitoring institution to ensure that all three branches of government in any one state must adhere to the provisions of the laws promulgated by an assembly of freely elected representatives. No one should be exempted from accountabilty.

All rights and freedoms should be promoted and protected so that there will be freedom of speech and ideas. In the knowledge that there can be no sustainable development and growth without security and stability and, therefore, hardly anything to co-operate on, our leaders further declared that a rapid, physical and economic integration of the continent was vital in the face of the globalising world; that popular participation, equal opportunities and equitable access to resources must underlie all development objectives and strategies; that, with a shared vision, partnerships and trust between leaders and citizens will be critical; and that the sovereign rights of African countries to control their natural resources must be respected.

With these as criteria, there must emerge, in organic ways, the fundamentals for co-operation towards the African renaissance. This, in turn, must mean that a closer co-operation and intergration of African countries will need to subordinate certain responsibilities to continental or subregional institutions. A successful example of such a co-operation is the European Union, in which most of our former colonisers, only 50 years ago, after debauching each other, could not feed themselves.

We cannot ignore international developments like globalisation after the Cold War, external pressures and the absence of a common objective. In the end, for the regeneration of Africa, only the absence of a common objective will count. If Africa continues to be disparate, we will continue to have competing civilisations within her, divided and weak, her progress only a dream. Our continent’s progress will be seriously damaged, and this must lead to a weakening effect. But what will be worse is the inner psychological tensions and conflicts between those of us who plan to unite her and those who oppose this.

Our leaders at Sitre in Libya, Abuja and Addis Ababa, in pursuit of the African Union and the strengthening of the OAU, are working towards the unity of the mind and heart, with a deep sense of belonging together in Africa; but never for a moment forgetting where we have come from and never forgetting the deliberate part played by the forces that literally disrupted and scrambled Africa.

Here in South Africa, as a celebration of Africa Unity Day, the launch of the conference on security, stability, development and co-operation this month, is designed to lead to policy measures and the processes for its implementaton, as a fundamental part of the OAU’s programme. However, our celebrations and unity will remain tenuous if we fail to address corruption and crime, with special reference to illicit diamond dealings with the developed world; if we fail to address drug trafficking and the attendent money-laundering in which banks, headquartered in the developed world, are involved; if we fail to successfully address the indebtedness of Africa to the developed world; if we fail to address HIV-Aids, which has the potential of decimating Africa; if we fail to address the subjugating of women in Africa; if we fail to respect the rights of workers, who constitute the vast majority of the population; if we fail to recognise that millions of semi-starved, poverty-stricken people continue to stalk our continent, then our own insensitivity will be an impediment for the realisation of the African renaissance.

In June-July of 1963, I had the privilege to extol the virtues of the formation of the OAU in Johannesburg. Today, I am grateful for the opportunity, in a liberated Parliament, to reflect on our continent. In the spirit of I belong, therefore I am'', I say and pronounce:Nkosi sikelel’iAfrika. Mayibuy’iAfrika’’. [God bless Africa. Let Africa return.] [Applause.]

Debate concluded.

                         APPROPRIATION BILL

Resumption of Debate on Vote No 30 - State Expenditure (Intelligence Services):

Ms N N MAPISA-NQAKULA: Madam Speaker, hon Deputy President and hon members of the National Assembly, the end of the Cold War about a decade ago enabled governments the world over to re-examine international peace, security and development, particularly in the context of a fast-globalising world.

Added to the traditional threats to national security, are the following issues: The need to free people from disease and want; the need to secure our environment; the challenge to beat organised crime, corruption and cyber crime; the need to fight religious and political extremism; the growing gap between rich and poor within states and between them; the internalisation of disputes between states or parties, etc.

The above issues, among others and to varying degrees, constitute the core of debates that take place globally on national and international security. The questions this House and Government have to grapple with are: How should South Africa position itself in the world described above? Conversely, we as a country need to understand how the world in turn positions us. The next question to be asked is: Are we investing enough in our intelligence structures in terms of financial, human and infrastructural resources, in order for them to be competitive?

Undoubtedly, Africa and the whole world have a lot of interest in us, and the huge foreign diplomatic and intelligence representation in our country and region is a clear testimony to this. The foreign intelligence services, we know, are on an aggressive recruitment drive and information-gathering drive, within our country.

South Africa, almost on a daily basis, has to intervene in line with national, regional and international expectations in numerous forums that deal with varied topics, from intra and interstate disputes to the design of a more equitable world trade regime. As an integral part of Africa, our country is one of the role-players who are pursuing the object of Africa’s rebirth, the success of which will bring more stability and development to the whole world.

As a young democracy that has just emerged from the a turbulent past, it is our responsibility to be alert to the fact that we are still prone to internal destabilisation. The new threats to national security, our responsibility to the world and our concerns about internal stability directly imply that our intelligence structures currently have to and do play an expanded role. This requires that our intelligence officers get equipped with new and cross-functional skills on a sustainable basis.

If there ever was a time for intelligence to support policy formulation, that time is now. Similarly, if there ever was a time when accountability had to be dynamic, and characterised by mutual trust between the legislature, the executive and the intelligence community, that time is now.

The above observations are precisely occasioned by this expanded role of our intelligence structures. Through our intelligence structures, acting with their respective legal mandates, our country has to measure up to the challenges discussed above. In the above regard, this House correctly designed a notion of a single intelligence community, for, if we were to act in a decentralised manner, we would certainly be weaker, in part due to our recent history, but also due to the nature of the intelligence function.

It is sad for me to report to this House that our intelligence community still suffers from mistrust, within the intelligence structures on the one hand, and between the intelligence structures on the other. Undoubtedly, this is one of the reasons why intelligence products coming from Nicoc are often of an uneven nature. Consequently, the expectation of the consumers of these intelligence products are not satisfied - a situation that is clearly unacceptable. Concrete and practicable measures need to be implemented to address this malaise of mistrust.

Regarding Africa and the Government’s policy popularly known as the African renaissance, the question has to be asked: Is the intelligence division of the SA National Defence Force and the SA Secret Service successful in forewarning our Government about impending threats to and opportunities for our national security and interests? Whatever the answer is to the above question, we need to resolve it ourselves to enhance the capacities of these two institutions.

In April 1998, a ministerial commission of inquiry into the transformation of the intelligence division of the SANDF was established by the Ministers of Defence and Intelligence, the object of which was to investigate that structure and make recommendations on its transformation. A report of that commission will soon be submitted to the sponsoring Ministers. This House should evaluate any such transformation on the basis of the ability of the intelligence division to qualitatively improve and therefore adequately forewarn Government about impending threats and opportunities, particularly in Africa.

With the establishment of the Scorpions and the very many other formations of the SAPS, whose core mandates are to fight different types of crime, should we not ask ourselves the question: What is unique in the efforts of all these respective structures that gather information and investigate crime? For example, what is the unique feature of the National Intelligence Agency’s collection efforts when compared to what the SAPS intelligence division does? In gathering intelligence on organised crime, what niche does each intelligence-gathering effort serve? Does the sum total of these unique features give us the global strategy of the Government on fighting organised crime? Should we not be exploring the possibility of rationalising some of these many instruments on the one hand and enhancing their effectiveness on the other?

The country has a huge backlog of vetting - a problem that clearly exemplifies the inadequate resources available to the NIA, in respect of personnel, expertise, and finance. This House needs to pursue the right objective in this regard. Give the National Intelligence Agency the resources it needs to discharge this function. Such a step will put to rest discussions within that organisation that some parts of its counter- intelligence mandate be decentralised amongst the state departments - a dangerous step indeed.

As Parliament, as Government and indeed as management within the intelligence structures, we need to adequately address mismanagement, corruption and inefficiency within all our structures. Let us display zero tolerance towards these ills and weed out the culprits from the ranks of the intelligence services. Let us, on the basis of practical steps, promote efficiency and professionalism.

Year after year, the Auditor-General’s report in part reflects the inability of the National Intelligence Agency to account for its assets. In reality, this is an inherited problem, amongst others, from the Bophuthatswana intelligence services. Instead of letting this inherited problem tarnish the image of the National Intelligence Agency, the relevant former BIS officers should be made to account for the missing assets, as a matter of urgency, particularly those who continue to serve as officers within the National Intelligence Agency and the SA Secret Service.

Related to the above matter are the boards of inquiry in respect of some of the NIA’s covert units. This House and the executive should be given timeframes within which these investigations will be completed. The Minister should be commended for setting up these boards. But I say to the Minister that our interest is more in their outcome.

As we debate the budget of the intelligence services, can our decisions be informed by the priority tasks that the Government handed down to these services? Can we be also informed by the respective budgets of some of the foreign intelligence organisations, particularly those that are active within our country? The question we need to ask ourselves is: Will the budget we are about to allocate to the intelligence services enable them to translate their legal mandate into actionable programmes in order for our country to be secure? I am directing that question to the hon the Minister of Finance.

At this point, I would like to recognise the appointment of Dr Faizel Randera, our first Inspector-General for Intelligence. We trust that as he discharges his responsibilities, he will be able to determine if our intelligence structures are adequately resourced, if the policies regulating their activities are appropriate and, very importantly, if our intelligence structures observe the law in the conduct of their duties.

A scrutiny of the prevailing threats to and opportunities for our national security tells us that we need to continually evaluate the legal mandate and policies that regulate the activities of our intelligence structures. As a country, we need to continually evaluate competency and effectiveness of our intelligence structures, particularly in respect of expertise, resources, organisation and acceptability, whose core component part is representivity. We need to ensure that we develop calculated strategic relations with select, but competent, allies in the world. We need to develop an ongoing dialogue between the legislature, the executive and the intelligence structures where issues such the ones raised above can be discussed and resolved.

The challenges facing our country, as discussed above, call for the development of human resources in the intelligence family. Through such a pool of expertise, the Joint Standing Committee on Intelligence, our committee, can be appropriately staffed to carry out its functions efficiently, the inspector-general’s office can have suitably qualified people, the intelligence structures should have officers who can measure up to their responsibilities and the executive can have suitably qualified advisers.

The broad meaning of national security requires that, as this House and as Government, we need to conduct our business in a manner that does not undermine our national security. It is therefore imperative that Cabinet sees to it that all heads of departments speedily appoint security officers as recommended by the National Intelligence Estimate of 1999. This process should advisedly be done in consultation with the National Intelligence Agency, since this structure has the national counter-intelligence responsibility. We are not talking about people who must check whether doors are locked or not.

Year after year, there is talk of a need to regulate the private security industry; yet, to date, there is no draft Bill which has been tabled before our committee. What timeframes inform this task? In this regard, the committee will soon engage the Ministry so that this matter can be resolved.

The Minister also needs to be commended for setting up the National Communication Centre task team, particularly because the whole world is investing more in technological means of gathering intelligence, while not eliminating age-old human means. Again, the committee will engage the Minister in this regard so that the setting up of this National Communication Centre can be speeded up. Perhaps this is a feature of transformation, but it needs to be registered that our intelligence structures are in a near-permanent state of restructuring which seldom gets followed through by implementation of decisions. Gaius Petronius, in AD 66, must have been warning against this potentially paralysing feature of directionless planning when he said:

We trained hard, but it seemed that every time we were beginning to form up teams we would be reorganised. I was to learn that we tend to meet any new situation by reorganising, and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralisation.

Our intelligence structures should heed these wise words and thereby begin to walk the talk.

The committee would like to congratulate Mr Mavimbela and Mr Denis on their appointments as directors-general of the NIA and SASS, respectively. We say the same to Barry Gilder and Ms Pikoli, who were appointed deputy directors- general of the NIA and SASS, respectively. The Joint Standing Committee on Intelligence commends the Minister for appointing a black woman to this demanding responsibility. [Applause.] This, to us, is a further demonstration of our committment to break away from the stereotypes of the past, when intelligence was the domain of white males. I am sure that this team of young managers will inject our services with vibrant leadership. [Applause.]

Prof L B G NDABANDABA: Madam Speaker, hon Deputy President, members, intelligence services in our young democracy are faced with tremendous challenges. It is precisely for this reason that intelligence services should be a multidimensional practice whose focus is on finding and analysing information concerning threats to our country. To this end, intelligence services concern protecting information, people and equipment in South Africa. The services deal with all security measures, both active and passive, designed to safeguard our country.

The technological advances in modern times have turned the world into a small village. This confronts our intelligence services with even greater challenges which need strong financial muscles in order to protect our young democracy, which is competing with world giants on intelligence. Fortunately, the Joint Standing Committee on Intelligence has established good rapport and co-operation with these intelligence giants of the world.

I agree with the hon the Minister that our intelligence services need to have a vision, such as serving our people as a whole impartially. We therefore applaud the fact that our intelligence services have been transformed and are no longer partisan, as was the case during the apartheid regime. The IFP applauds this transformation. According to the 1994 White Paper on Intelligence, intelligence is organised policy on relevant information that may contain secret information.

Meyer confirms this contention when he states that it is this transformation of intelligence away from the concept of secret information that was gathered for use on the battlefields or to merely keep the head of state supplied with relevant information and with a finished, polished and forward-looking document designed to meet the requirements of protecting the state.

For intelligence services to provide useful intelligence in advance of decision-making, it must deliver the right decisions at the right time. Intelligence products have to be relevant to the needs of our young democracy and the times in which we live. The biggest success story of our intelligence services is that it is now possible, as the Minister said, to have a debate on intelligence. The transformation of intelligence was taken a step further a few weeks ago when the Joint Standing Committee on Intelligence organised a public seminar on oversight. This seminar helped to remove misperceptions about the services about which the Minister spoke yesterday.

Intelligence services aim at discovering the truth regarding events and to objectively and timeously communicate that truth. We sincerely hope that our intelligence services will contribute to making the forthcoming local elections free and fair, as was the case with the 1999 elections. The only concern is that the resources currently at our disposal are certainly not sufficient. That is why the Ministry has up to now done more with less. We need more financial and human resources to make our intelligence a success story in fighting organised crime, white-collar crime and other threats in our country. [Applause.]

Mr S P MAKWETLA: Madam Speaker, if the President were to permit me to quote him, as I wish, I would say we are indeed a bad example. What the President meant by this is best articulated by Ray Hartley of the Sunday Times in his column Clause 16 in the issue of Sunday, 14 May this year, in which he wrote, and I quote:

Countries who relate to other nations either as client states or as members of some or other evil empire, appear to be nonplussed by the assertiveness and the sometimes eccentric independence of South Africa, a country with a negligible economy in global terms, perched precariously on the world’s poorest continent.

How, they must be asking themselves, has this upstart pipsqueak of a nation come to play so important a role in world affairs?

Hartley further says, and I quote:

Of course, there are people locally who are sceptical. They are a minority, but an influential one which often dominates the public agenda.

These domestic sceptics question nothing. Lacking the belief that their country could possibly be right and the great unipolar bosses wrong, they feel embarrassed by the questioning of assumptions which has come to reign in Pretoria.

Their expectations that an end to the Cold War would lead to an unquestioning alignment with their idols in the West have been cruelly dashed.

And they must be dashed if our nation is to keep its sovereignty and its pride.

I have uncharacteristically quoted generously from Ray Hartley’s article because his patriotic reflections underpin part of the consequential demands which our transformation project and our international agenda are imposing on us. It was to be expected that for our freedom to be meaningful, we would have to enjoy the right to self-determination as a people and as a country.

Since the advent of our democracy, South Africa has been nonconformist on some of the difficult issues around the world. This is not surprising, because steadfastness to principle has been one of the defining characteristics of the ANC. It has shunned shortcuts to the solution of complex social issues to pursue what is considered correct, even when such ideas were not popular. It has consistently sought to win over society to its point of view, thus evolving a genuine advanced detachment at home and abroad.

Political practitioners who have been down this path before have always advised that noble goals such as the ones we are pursuing should not be embarked upon if they cannot be defended. I submit that the budget we are debating this afternoon falls squarely within this ambit of policy decisions.

I concur with the sentiments expressed by the Minister yesterday afternoon that we need to be more candid, as Parliament, in our discussions of issues in and around intelligence, and I wish to start doing so right away. Notwithstanding our national priority to improve the material life of millions of South Africans, our Parliament and the executive must change their mind-sets on our national security expenditure.

Yesterday the Minister illustrated graphically how our intelligence establishment is called upon to do more with a progressively decreasing budget. Similarly, we are told that the broad national concensus on our defence needs, as contained in the Defence Review document, cannot be funded. In practical terms, what this means is that the costly policy plans of both Government and Parliament - plans which are expensive owing to the money and time consumed to produce them - are rendered valueless, because budget allocations bear insignificant relevance to the goals.

To illustrate the crippling effects of this underfunding, within the limited time at my disposal, I will use the signal intelligence division, which is responsible for over 90% of the collection within our services, as a case in point. Whereas R88,1 billion was budgeted for this division in the year 1996-1997, this has rapidly declined to a mere R5,2 million in the 2000-2001 Budget. To amplify this deficiency in our allocation, we are reliably informed that should the third cellular network licence be issued during the course of this financial year, the signal intelligence division will require R5 million - the entire budget of this division - to grow the capacity for interception.

The operational budget of the NIA has declined from R38,9 million in 1997- 1998 to only R14,7 million in the 2000-2001 Budget. Whereas in the 1999- 2000 Budget the Public Service received a 6,3 % salary increase, the intelligence services only received a 5% increase due to its budget constraints. As a result of these steady budget cuts, the salary scales of our intelligence services are level with those of the broader Public Service, when the convention is that they should not be so, due to the perculiar conditions of their occupation.

This brings me to the theme of my plea, namely that this Parliament must take an unequivocal stand. South Africa needs a strong intelligence service, and we must not bicker about it. Indeed, there is nothing democratic about being weak. On the contrary, we need strength to defend our democracy. Mature western democracies are a good examples in this regard.

As for those of us who are in the ANC, we harbour no secret agendas on these matters. I know there will always be a temptation amongst those who sit in the opposition benches to be sceptical of such statements. For the benefit of those who are not avid readers, like myself, allow me to read from a resolution passed by the highest organ of the ANC at the national conference, in this instance, at the Mafikeng conference. The conference confirmed its belief that intelligence work ``has to be informed by the loyalty and commitment of the intelligence services to the Government of the day, in keeping with the broad provision of the Constitution and the relevant statutes’’.

The conference further resolved that:

In order to achieve the above, the ANC must take the lead in ensuring that the peace and stability cluster departments are not subject to narrow party-politics, and this applies especially to the intelligence services. In this regard, the development of a national concensus on intelligence has to be a priority for the ANC and the ANC-led Government. This should also be accompanied by a change of attitude towards this cluster when it comes to the allocation of resources, especially the budget.

The ANC has no interest in dealing with these matters in any other way. [Time expired.] [Applause.]

Mev M E OLCKERS: Mevrou die Speaker, ek wil eerstens die hardwerkende, lojale en eerlike lede van die veiligheidsdienste met groot waardering bedank vir die lewensgevaarlike werk wat hulle in die belang van Suid- Afrika doen. Die Nuwe NP salueer hulle hiervoor.

Maar dan is daar die ander kant van die saak. Die verslag van die Ouditeur- generaal dat die swak manier waarop die SA Polisiediens se geheime dienste en die Nasionale Intelligensie-agentskap die afgelope jaar hulle geldsake gehanteer het hom dwing om ‘n gekwalifiseerde verslag aan die Parlement voor te lê, laat rooi gevaarligte vir die dienste se finansiële bestuursvaardighede flikker.

Daar was nie slegs uiters swak finansiële bestuur nie, maar ook swak beheer of algehele veronagsaming van regulasies. Bestuurders, veral van streekkantore, word van onbevoegdheid en die goedkeuring van ongemagtigde besteding en selfs diefstal beskuldig. By ondersoek van die Polisie se geheime rekening is bevind dat onder meer bedrae van R44,4 miljoen en R48,2 miljoen ongemagtig bestee is, 34 motors gesteel is ensovoorts.

Daar kan geen verskoning vir hierdie swak toedrag van sake meer wees nie. In die afgelope jare het die finansiële en toesighoudende vaardighede jaarliks ‘n afdraande grafiek getoon. Sekere onreëlmatighede staan reeds sedert 1995 oor. Hoe lank gaan hierdie Parlement dit nog goedpraat of ignoreer? Die vorige regering kan ook nie meer hiervoor blameer word nie, want dit is al ses jaar sedert die nuwe bestuur vir sake verantwoordelik is.

Dit is tyd dat die intelligensiedienste baie meer verantwoordelik optree en die agting wat hulle behoort te geniet in werklikheid verdien. Dit is die laaste plek waar bedrog as aanvaarbaar ervaar mag word. Daar sal diepgaande en grootskaalse indiensopleiding in hierdie dienste moet plaasvind. Dit sal as ‘n absolute prioriteit gestel moet word. Miljoene rande word aan konsultante bestee om verskillende take namens die dienste waar te neem, na te vors en raad te gee, maar wanneer dit by die uitvoering daarvan kom, val alles plat.

Geen land kan sulke onbeholpenheid in sy veiligheidsdienste bekostig nie, en die staande komitee sal met ‘n groot vergrootglas na die bestedings van die dienste moet bly kyk. Geen diens of groep mense moet die idee kry dat hulle onaantasbaar is nie en dat hulle aan niemand verantwoording hoef te doen vir hoe hulle met die publiek se geld werk nie.

Wanneer die Ouditeur-generaal skriftelik navraag doen, word dit beantwoord en nie net geïgnoreer nie. As dit dus na die Parlement gebring word omdat die Ouditeur-generaal nie meer weet wat om te doen nie, maak dit die Parlement ook skuldig as ons nie optree nie.

As ‘n mens met geheime fondse en projekte werk, behoort jy uiters versigtig te wees omdat die publiek baie krities oor sulke fondse staan. As die waghond namens die mense wat belasting betaal, naamlik die Ouditeur- generaal, in sulke kras taal ‘n verslag lewer, moet die Minister en die staande komitee ‘n verantwoordelike en sterk standpunt inneem.

Ek kan vandag met absolute oortuiging sê dat hierdie staande komitee sterk optree. Van die voorsitter tot by al die lede van die komitee bestaan daar ‘n dringendheid dat hierdie situasie reggestel moet word. Ek was baie beïndruk deur die openhartige en diepsnydende vrae tydens vergaderings en die ondersoeke wat die komitee ingestel het. In werklikheid wag ons nog steeds op sekere antwoorde. Dit is ‘n voorreg om onder die voorsitter, me Nosiviwe Mapisa-Nqakula, te dien, want sy gee goeie leiding, sy is vasbeslote om dinge uit te sorteer en sy verdra nie nonsies nie. [Applous.]

Die Nuwe NP het met dank kennis geneem van die stappe wat die Minister reeds gedoen het om hierdie probleme aan te pak. Ons sal die vordering fyn dophou, maar weens bogenoemde redes en die feit van ‘n gekwalifiseerde verslag van die Ouditeur-generaal kan die Nuwe NP ongelukkig nie hierdie begrotingspos steun nie. [Tussenwerpsels.] [Applous.] (Translation of Afrikaans speech follows.)

[Mrs M E OLCKERS: Madam Speaker, firstly I wish to thank, with great appreciation, the hardworking, loyal and honest members of the security services for the life-threatening work that they do in the interest of South Africa. The New NP salutes them for that.

But then there is the other side of the coin. The report of the Auditor- General relating to the poor manner in which the secret services of the SA Police Service and the National Intelligence Agency have handled their monetary affairs during the past year, which forced him to submit a qualifying report to Parliament, sends out warning signals in respect of the financial management skills of the services. There was not only extremely poor financial management, but also poor control or complete disregard of regulations. Managers, especially of regional offices, are accused of incompetence, approving unauthorised expediture and even theft. On investigating the secret account of the Police it was found, inter alia, that there were amounts of R44,4 million and R48,2 million in unauthorised expenditure, that 43 motorcars were stolen, etc.

There can no longer be any excuse for this poor state of affairs. During the last few years the financial and supervisory activities have shown an annual downward trend on the graph. Certain irregularities have already been standing over since 1995. How long is this Parliament still going to defend or ignore this? The previous government can no longer be blamed for this either, as the new management has been responsible for matters for six years now.

The time has come for the intelligence services to act much more responsibly and in fact earn the respect that they should enjoy. It is the last place where fraud may be considered acceptable. In-depth and large- scale in-service training will have to take place in these services. These will have to be regarded as absolute priorities. Millions of rands are spent on consultants to undertake various tasks on behalf of the services, to do research and to give advice, but when it comes to putting things into practice, everything falls flat.

No country can afford such ineptness in its security services, and the standing committee will have to continue examining the expenditure of the services very closely. No service or group of people must get the idea that they are untouchable and that they are not accountable to anyone as regards the way they handle the public’s money.

When the Auditor-General issues a written enquiry it must be answered and not just ignored. When it is therefore brought to Parliament, because the Auditor-General no longer knows what to do, Parliament is also implicated if we do not take action.

When one works with secret funds and projects, one should be extremely careful, because the public is very critical about such funds. If the watchdog on behalf of the people who pay taxes, namely the Auditor-General, submits a report written in such strong language, the Minister and the standing committee must take a responsible and strong stand.

I can say with absolute conviction today that this standing committee takes strong action. From the chairperson to all the members of the committee there is an urgency that this situation should be rectified. I was very impressed with the frank and in-depth questions that were raised during meetings arranged and investigations launched by the committee. We are in reality still waiting for certain replies. It is a privilege to serve under the chairperson, Ms Nosiviwe Mapisa-Nqakula, because she provides good guidance, she is determined to sort matters out and she brooks no nonsense. [Applause.]

The New NP notes with appreciation the steps the Minister has already taken in tackling this problem. We will keep a close watch on the progress made, but for the aforementioned reasons and the fact of a qualified report by the Auditor-General, the New NP unfortunately cannot support this Vote. [Interjections.] [Applause.]]

Dr S C CWELE: Madam Speaker, as much as Martha wishes us to forget the past, the unfortunate situation is that the demon of apartheid is still alive and kicking. Last Thursday the Minister of Safety and Security outlined in this House how the National Crime Prevention Strategy is succeeding to make South Africa a better and a safer place to live in. Shame to the prophets of doom, goodbye to negative publicity, and ``Halala’’ to the majority of our compatriots who correctly perceive this victory over criminals as one of the signals clearly demonstrating that we are on course to a better life for all.

Izinswelaboya, imidlwembe nezigelekeqe zishonelwa yilanga futhi azinalo ikusasa kule lizwe. [Criminals, hooligans and robbers are in deep trouble. They have no future in this country.]

Despite these successes, crime remains one of our biggest threats to both human and national security. It remains our public enemy number one. The challenge is compounded by the fact that crime, particularly organised crime, is not just a simple national phenomenon, but often is transnational in nature. It is further complicated by the increasing technological sophistication of these criminals.

The sustainability of our success against crime will largely depend on the way we strengthen and enhance the capacity of our intelligence agencies. We concur with the Minister that he has done so much for so long from so little. Honouring this undertaking does not necessarily qualify the Minister to do everything from nothing. The budget of the services is stretched to the limit.

Within our national Budget constraints, we should also agree that no amount of budget increase will, on its own, result in a sustained victory over criminals. We need to go beyond the mere allocation of more money to other measures which will enhance efficiency, co-ordination and effective utilisation of our limited resources.

The interministerial committee on security, or the Minister for Intelligence, in particular, has the responsibility of promoting joint approaches and co-operation of all services in our efforts to combat crime. We strongly believe that the relationship between agencies should be based on co-operation rather than on competition. This will eliminate the possibility of any contradictions between various agencies or departments.

The strategic intelligence provided by the NIA is crucial to the sustained success of our strategy. The technical intelligence of the South Africa Police Service and the Scorpions is also vital to the succesful investigation and prosecution of our common enemy, the criminals. The co- operation agreements on the memorandum of understanding are of paramount importance as the Minister indicated yesterday.

Our budget must be allocated in a manner that will enhance the capacity at all levels, and more so, at operational levels. The police in particular should go beyond planning and move swiftly in ensuring effective intelligence at the station or area level.

Sources continue to provide vital information to our services. We should on the other hand tighten the mechanism which will eliminate the duplication of payment of sources by different services for the same information to the state. We welcome the efforts for setting up the National Communication Centre announced by the Minister yesterday. It will certainly help us also to be on top of these technologically advanced criminals.

Our intelligence services are operating under stringent confines of our legislation and Constitution. The mushrooming of private security companies, some of which have the unrestricted potential to collect and process information, may pose a threat to our national human security and development. It is our responsibility to tighten or to come up with legislation and regulations which will ensure effective control of the formation and activities of these private security companies.

In conclusion, the role of the public and the community in the fight against crime or criminals can never be more emphasised. We as publicly elected representatives have the obligation to mobilise our communities to adopt a culture of vigilance and to voluntarily provide information on the criminal activities in their localities. We dream of a day when the SAPS adverts for information rewards will be a thing of the past. It is this partnership which will ultimately ensure the safety of all our citizens, deepen our democracy and sustain human development in our country.

We would like to congratulate our Minister on providing political guidance to our services. We thank the management of the services for their leadership through these turbulent times. We are also indebted to thousands of ordinary members of our intelligence community who remain loyal to our cause. It is through their collective efforts that our democracy is deepening. We owe it to them that we can today publicly say: Yes, we are on course for a better life for all. [Applause.]

Mr L T LANDERS: Madam Speaker, we may agree with the hon Martha Olckers that the Auditor-General’s report is cause for concern. And we need to say at the outset that the Joint Standing Committee on Intelligence remains vigilant and determined to root out any signs of corruption or fraud within the intelligence services. However, what we should also focus on in this debate are those steps that had already been put in place prior to the publication of the Auditor-General’s report.

In his introductory address to this debate, the hon the Minister referred to money-laundering as one of the major threats facing this country. I am aware that the Government should have introduced a Bill called the financial intelligence centre Bill, which was supposed to help trace all money-laundering efforts or, at least, certainly to keep tabs on them. We do not know where this Bill is at this moment or what its status is, but we would appreciate either the Minister for Intelligence or the Minister of Finance, who I am informed is supposed to be sponsoring the Bill, to provide this House with an answer in this regard.

It must be noted that the SA Police Service has achieved successes in its operational crackdowns which were conducted in various parts of the country in the recent past. It is hoped that these crackdowns not only continue, but that they become joint operational activities backed by the intelligence community. Corruption, particularly within the Public Service, remains a blight on our society. It must also be noted that the Joint Standing Committee on Intelligence - our chairperson in her address this afternoon made mention of this - is especially concerned that to date protective and preventive security measures and processes that help secure documentation and sensitive information in these departments may not have been adequately implemented in most Government departments.

One of these measures would be to appoint security officers in every state and provincial department whose responsibility it would be to help ensure that these protective measures are put in place and properly implemented. In this regard, we want to take issue with all directors-general, heads of departments and, indeed, even with Ministers whose departments have not appointed security officers in their respective departments. We also take issue with those departments and their heads who as yet do not even have approved security policies.

The security officer whose position would be pegged at the level of a director would preferably be located in the office of the head of that department and would help ensure that an adequate security policy is drawn up and carried out. I am not for a moment suggesting that the appointment of security officers is the panacea to the problems within our departments, including corruption, but this would certainly go a long way towards dealing with the problems in this sector.

In his introduction to this debate the hon the Minister stated, amongst other things, that Intelligence should be treated as a national asset. Further, that Intelligence is a critical policy-making support function and that the national security perspective has shifted to the threat to human security, and finally, that a shortage of essential equipment is being brought about by the diminishing Intelligence budget.

Other hon members have addressed this point and I wish to throw my little bit into the pot. In order to meet and address the threats facing South Africa, current and appropriate technological aids are necessary for our Intelligence Services. Without these, our services face the risk of slipping behind the rest of the world. Indeed, they face the risk of slipping behind the technological capacity of even some African countries. The extent to which information technology is used internationally has become such a dominant feature of modern intelligence services that it cannot be ignored.

If we do so, we ignore the maintenance and development of the technological capacity of our services at our peril. To this end I want to also welcome the hon the Minister’s announcement about the establishment of the National Communication Centre and the task team responsible for this. At this stage I want to add my good wishes and congratulations to the newly appointed Director-General of the SA Secret Service, Mr Tim Denis, and the newly appointed Director-General and Deputy Director-General of the National Intelligence Agency, Mr Vusi Mavimbela and Ms Pikoli respectively.

Notwithstanding the problems raised by the Auditor-General in his report, and notwithstanding the actions by individual members of our Intelligence Services as reported by the media, we are proud of the achievements of our services. Like our hon the Minister, we therefore call on this House and on the people of South Africa - if I am able to do so - to look upon or regard our Intelligence Services as a national asset, as we in the Joint Standing Committee on Intelligence do. [Applause.]

The MINISTER FOR INTELLIGENCE: Madam Speaker, hon members, in our Constitution we say that national security must reflect the resolve of South Africans, as individuals and as a nation, to live as equals, to live in peace and harmony, to be free from fear and want and to seek a better life. National security is subject to the authority of Parliament and the executive, and is conducted in keeping with the law.

This budget debate has steered us closer to this vision. I therefore would like to thank all members for their positive contributions and to assure them that we will neither undermine our commitment towards making Intellingence a national asset nor steer away from our search for a national consensus. I will look closely at hon members’ suggestions and take aboard their concerns. Their contributions have been well received and will be given the necessary attention.

I would like to say that we took into consideration many of the questions that have been raised by colleagues. There are, maybe, only a few that need attention, for example the issue of avoiding coming out in terms of cases and inquiry boards. I think we answered that yesterday too, by saying that we have actually brought in magistrates and prosecutors from outside to ensure that there are no behind-the-scenes activities. It is in this spirit that we look forward to the full participation of the Offical Opposition in the affairs of the Joint Standing Committee on Intelligence. We are definitely poorer without their involvement and participation.

A special word of gratitude goes to the chairperson of the Joint Standing Committee on Intelligence, Nosiviwe Mapisa-Nqakula, and all members of the committee. Their work as the eyes and ears of the legislature in the affairs of Intelligence Services is vital. It is my wish that they soar to greater heights in the oversight of our services. Notwithstanding comments made yesterday about the Intelligence Services budget, I would like to thank the Minister of Finance for this year’s national Budget. This is one of the best budgets we have had as a nation and we would like to congratulate him, and the Deputy Minister of Finance, the director-general and the Department of Finance and its staff as a whole for a job well done. Nangomso. [Applause.]

I would like to touch on three important issues before I resume my seat. These are: the General Intelligence Law Amendment Bill, the transformation of the Intelligence Academy, the audit committee and Africa Unity Day. The General Intelligence Law Amendment Bill was introduced last night. This Bill is part of the legislative changes that we spoke about previously and is aimed at improving the intelligence administrative dispensation.

The Bill will help to put our disciplinary system in line with the latest trends in labour law and to ensure fair labour practice. It will also regulate the activities of former members, and will provide for the Minister to issue regulations. To this end, I intend consulting widely so as to ensure that concerns of the former members and those of the general public can be taken into account before we promulgate these regulations. Furthermore, the Bill will allow the Minister, in the interests of our country, to issue regulations to protect sensitive information in government departments and parastatals in keeping with the Minimum Information Security Standards Guidelines that were adopted by Cabinet in 1997.

As a cluster, we have announced that steps will be taken to ensure that the security services are well-equipped and armed with the necessary skills and expertise. In pursuance of this, I have set up a working group to ensure that the intelligence academy is a national centre of excellence that specialises in intelligence. Its mission will be the production of intelligence officers of international standing, and upgrading the existing personnel to the same international standard in order to ensure that intelligence in our country can meet the challenges of the 21st century. This working group will report to me by the end of the year and a progress report will be presented during the 2001-02 budget.

In preparation for the Public Finance Management Act, I would like to report that an audit committee has been appointed to oversee the internal audit structures of both the National Intelligence Agency and SA Secret Service. Ms Zodwa Manase will chair the committee. The first meeting is scheduled for tomorrow.

It is imposible for me to resume my seat without saying something about the marvellous Africa Unity Day. Today is a special day for all of us on the African continent: Africa Unity Day. As I was thinking about what to say today, the words of Nelson Mandela, our former President, at the 1994 OAU Summit seemed appropriate. I feel that, on this day, it is crucial that we pay tribute to the role played by the continent in our struggle for freedom, and our ultimate success resulting in a South African miracle. He said:

When the history of our struggle is written, it will tell a glorious tale of African solidarity, of Africa’s adherence to principles. It will tell a moving story of the sacrifices that the peoples of our continent made, to ensure that the intolerable insult to human dignity, the apartheid crime against humanity, became a thing of the past. It will speak of the contributions of freedom - whose value is as measureless as the gold beneath the soil of our country - the contribution which all of Africa made, from the shores of the Mediterranean Sea in the north, to the confluence of the Indian and Atlantic oceans in the south.

Africa shed her blood and surrendered the lives of her children so that all her children could be free. She gave of her limited wealth and resources so that all of Africa should be liberated. She opened her heart of hospitality and her head of wise counsel, so that we should emerge victorious. A million times, she put her hand to the plough that has now dug up the encrusted burden of oppression accumulated for centuries.

One epoch with its historic tasks has come to an end. Surely, another must commence with its own challenges. Africa cries out for a new birth …

It needs a new birth directed towards good governance, peace, stability, human rights and democracy within the continent; a new birth in the quest to rebuild African economies, have sustained economic development and a better life for all our peoples; and a new birth that will help us deal with hunger, unemployment and the deteriorating terms of trade and the burden of debt. I pay tribute to the President of the Republic and to the Deputy President for their role in promoting peace and stability, in assisting with the resolution of disputes and conflicts, and in guiding our intelligence services in the quest to renew our continent. It is their visionary leadership and their foresightedness that continues to make us a people proud of being South African. May they continue walking in the footsteps of African giants who, by their deeds and titanic efforts, led us to a liberated Africa.

I am positive that our intelligence services are ready to play their important statutory role and to fulfil their mandate in support of their efforts. May we see the new birth of our continent in our lifetime! Happy day, Africa! [Applause.]

Debate concluded.

                         APPROPRIATION BILL

Debate on Vote No 10 - Finance, Vote No 10 - Finance(SA Revenue Service), Vote No 31 - Statistics South Africa and Vote No 30 - State Expenditure:

The MINISTER OF FINANCE: Madam Speaker, hon members, I move to tell you about the four departments’ Votes we want to discuss here this afternoon.

The morning after the last Budget Speech, I was pleasantly surprised. I opened the papers and saw accolades: Well done, Trev'' said one headline. A cartoon showed people walking on air -Everything seems lighter now’’ said the caption. Why was I surprised? It is because Finance Ministers soon get used to not being popular. When we say think about tomorrow, it is a problem, because tomorrow’s children speak more softly than today’s.

Four years ago, we gritted our teeth and took the pain of tightening our belts - a pain that has allowed us more latitude today. But the problem in our country, crippled as it is by our legacy of inequality and poverty, is that we have constantly to think about today too. We have to think about stilling the hunger of today, yet also vanquishing it from our society tomorrow and of sowing at least some of the seed for tomorrow, while distributing bread to the hungry today.

Our task is to fulfil our mandate to the people of this country, spelt out by the President last June in his state of the nation address:

This society must guarantee the dignity of every citizen on the basis of a good quality of life for every woman, man and child, without regard to race, colour or disability. It must be sustained by a growing economy capable of extending sustainable and equitable benefits to all our people.

We seek to replace a society which, in many instances, has been and continues to be brutal and brutish in the extreme.

The Finance Ministry’s task is to make that vision of creating a better life for all, possible. We have found a new place in the world too, which involves us raising our voice on behalf of the poor, not only in our country, but certainly on the African continent. It is important to call these issues to mind on Africa Unity Day, too.

One of our key tasks, as the Ministry, is to play a constructive part in the world through deepening and broadening relations with international financial institutions and bodies. This is not only to enhance our own image as an attractive country for investors. There is a moral authority and responsibility that rests with us too. In a world where about 1,3 billion people live on less than one dollar a day, where 1,5 billion people do not have access to clean water, where the gap between rich countries and the poor has never been wider, we need to use our voice to move the conscience of the world to put poverty at the top of the agenda.

Our moral authority is closely related to what we can achieve here in this country. In fact, we would argue that there is a dialectical relationship between what we can help achieve in the world and what we achieve at home. Each impacts on the other. We are increasingly being accepted as an influential voice in debates on the issues such as highly indebted poor countries, and the international financial architecture. We are the only African country participating in the G20 and the Financial Stability Forum. As the current chair of the IMF Board of Governors, we are playing a key role in pushing for reform in that body, so that poorer countries should have a greater voice and so that leaders from countries other than those in Europe or North America get a look-in at the leadership of these institutions.

We will continue to use our voice to push for more resources for the poor countries of the world, and particularly, support to alleviate the plight of our neighbours, such as Mozambique. After a vicious war, our neighbour struggled hard to establish a legitimate government. The Mozambican government and people set out an ambitious and an impressive path to growth. Then that country was knocked right off course by the recent floods. There is a sign now that the world’s richer countries are beginning to listen to the voices of those who have asked for the cancellation of Mozambique’s debt. But even this has come after our struggle. At a donor conference earlier this month, the signs looked hopeful that our neighbour will be given a headstart to get back on track.

In our own neighbourhood, we have successfully co-ordinated efforts by SADC Finance Ministers to stop the envisaged IMF gold sales on the open market last year as well as the revision of the Hipc initiative. We will continue working with other governments in the region to develop policies that will make easier the flow of economic goods between our countries. I believe that this is a positive response to the challenge that Africa Day presents us but every day must be Africa Day, every year Africa Year, and indeed the century must be the African century.

At home we are trying to turn our Ministry into a dynamic force for delivery and change. The four distinct departments that fall under the Ministry - Finance, State Expenditure, the SA Revenue Service and Statistics SA may be all about numbers on the surface, but fundamentally they are about much more than numbers. We are driven by the creed of hope that this Government has adopted - Batho Pele, people first. Put the people first. The way this Ministry does that is by better management of our resources; better and more transparent spending that has measurable outputs; a fairer, more efficient tax-collection; and providing better information that helps us plan our future.

It is not about numbers, but I must speak a little about numbers. First of all the number four. Parliament is faced with four Votes this week on each of the departments that fall under the Finance Ministry. But this is the last year in which there will be two separate Votes for Finance and State Expenditure. Earlier this year the President agreed to the formation of a single national Treasury from these two departments. I believe that this presents us all with an opportunity to focus and streamline the work presently undertaken by the two separate departments. But the new Treasury is not only about streamlining. We want the Treasury to put in place the human and institutional capacity to deliver services to our people, to watch over the public purse, to ensure that money is well spent, and to rapidly create an environment that will spur on the growth that will provide each and every citizen with a dignified place in our country.

When the National Treasury is formed, a process that we imagine will take between 18 to 24 months, it will be important to understand that this is not simply a bureaucratic process. Since 1992, when the Treasury was split, we have had the two departments - one focusing on financial management, and the other making fiscal and economic policy. The fact that the two functions are separated has undermined the effectiveness of our delivery. Why? Because there is weak integration of economic and fiscal policy considerations in expenditure management, because there is sometimes duplication in communications with departments, and because, when we need to spend every cent wisely, we need systems of financial regulation and macroeconomic policy-making that draw on both sets of professional skills that reside in the department - accounting and economics.

The new Treasury will expand the challenges facing us. I will outline those later. But before doing that, I would like to reflect on some of the benchmarks that the departments under this Ministry have met in the past year. Firstly, in the MTEF, we have worked hard to ensure that we are now well down the road of Budget reform, which includes the MTEF. The Budget Office will be a key area of the new Treasury. Managing the domestic economy is critical to put in place policies that will stimulate growth, manage our debt, and ensure delivery of services to those who most need them.

The Budget Office with continue to work with all Government departments and the provinces to ensure that the MTEF works to get real value for money in every sphere of Government. We have come a long way since the days when the Budget was like a kind of pie that could be sliced up in very surprising ways. The MTEF has introduced a level of transparency, predictability and certainty. Our key aim now is to produce output-based Budgets. The MTEF allows us greater predictability over revenues, it enhances political oversight of the Budget process, it increases transparency and accountability, it aligns spending with Government’s policy priorities, and it allows parliamentary oversight over a major part of the process. In short, it establishes a tradition of good governance and of good financial management.

I would like to repeat the appeal to Parliament to engage with the MTEF, and for this Parliament to be the receptacle of the ideas of all the people in our country, to advise us on the baseline allocations for the years that lie ahead. The Budget is about prioritising policy. It is about ensuring that we remain focused on shifting our expenditure towards the poorest of the poor in our country.

Turning then to assets and liability management, our assets and liability management has also been enhanced this year. Soon after the Budget, the country’s international investment rating was upgraded by Standard and Poor. This, in part, has improved the successful execution of foreign debt issues in difficult market conditions. We have also introduced new borrowing instruments such as the inflation-linked bond. Because of our upgraded status, the interest we pay now on a bond such as the Global US dollar bond, which was reissued this year, is significantly lower than when it was issued a year ago.

All of this culminated in a further reduction of debt-servicing costs in 1999-2000 to 5,5% of GDP, which has meant further resources available to us for developemnt and reconstruction. For every R1 billion that we do not borrow, we have R150 million more to spend on such things as education, on improving health care, and on infrastructure.

This is a challenge that constantly faces us. We need to borrow less, but we need to borrow. So when we borrow, we need to do so at the best possible rates to ensure that what we need today does not cost us or our children too heavily tomorrow. On the asset side, the exchequer benefited to an amount of R7,7 billion representing the proceeds from the restructuring of state assets. This was some R3,7 billion more than the amount budgeted for.

On financial management, both the departments of State Expenditure and of Finance play a critical role in financial management. In the past year, State Expenditure has focused on improving financial management in the public sector and has continued to provide support to various provincial and national departments.

On the expenditure control side, State Expenditure has developed a more professional approach using business-oriented principles of sound financial analysis. Parliament, through Scopa, as well as the Auditor-General, has added considerable value to Government in this respect. Perhaps our most important milestone this year is the coming into law of the Public Finance Managment Act.

It is absolutely intrinsic to the way in which we manage the public finances. The Act now requires that all departments table their budgets with details of what they expect to spend, and on what, as well as what they have spent during the past financial year. So, in fact, accounting officers are made more accountable to this Parliament for how they have used public resources. It requires departments to develop output-based results. Both Finance and State Expenditure have invested considerable energy into making this Act work, because it is so important to our future.

In respect of staffing, all four departments have shown significant shifts in high levels of representivity and their annual reports spell that out. It is important that transformation is not focused only on race and gender, but also on the upgrading of skills in our departments, so that we can continuously tackle issues of the future much better. Transformation is a process without an end. It is ongoing and will remain the key performance indicator for the management of the department.

The exciting challenges our country presents, the opportunity we have of creating something new, a society premised on humane values that work for its citizens and plays a constructive role in the world, has meant we attracted some of the very best professional skills from the private sector to our department. Some of our officials have come to work for us on contracts, and some have gone back to the private sector. All have left a mark on the Public Service and we, I hope, on them. They have made a valuable contribution to the diligence and vision that has gone into the extensive Budget reform we have undertaken over the past two years.

Turning to some of the challenges facing the new Treasury, firstly, we recognise that in the process of transformation, the only constant is change. The key focal areas in the period ahead are continuing Budget reform, including the integration of the white book and the National Expenditure Survey, the implementation of the Public Finance Management Act, even greater improvements to risk management, the management of state assets, the restructuring of the public investment commissioners, and the Government employees’ pension fund, and to work for the democratization of the Bretton Woods institutions, to ensure more equitable spreading of the benefits of globalisation and much faster progress on debt relief and poverty reduction. Finally, in respect of challenges on the Treasury side, by this time next year, when we report to Parliament, we will be well down the road of creating a single national Treasury.

In respect of the revenue service, I think it is important to recognise that freedom carries responsibilities as well as joys. Democracy is about good citizenship, and the responsibility of a good citizen is to pay taxes. Only then can we move in the direction of a better life for all. The capacity of Government to deliver is crucially dependent on Government’s ability to collect revenue. In this regard, the SA Revenue Service plays a key role.

There are still momentous challenges in South Africa in relation to economic and social transformation. Much more still remains to be done, and one of the central goals of Government policy is to reduce the very high level of income inequality in South Africa. In order to achieve this, Government focuses on redistribution and development.

A transfer of income through tax and state expenditure is our main instrument for redistribution and development. However, such improvement cannot only come from redistribution. It must also flow from sustained economic growth. The Government needs to make investments in human capital and public infrastructure, to support such growth; but for this, it needs money, and lots of it. So, raising revenue is vital for the survival of the nation.

Much change is in evidence in Sars since 1994. It has exceeded revenue collections by a combined R25 billion over the past five years. In the last financial year, Sars surpassed its collection target of R193 billion by over R6 billion. It is exciting to report that, for the first time, we have, in fact, broken through the R200 billion mark for revenue. This has been achieved at the cost of less than 1% of the total revenue collected. However, it is not just about revenue collection, but also about making tax fair. Five years ago, we abolished discrimination against married women.

We have continued on that road to equity. This year, more than 40% of the R10 billion benefit we gave to taxpayers, went to those earning less than R70 000 a year. A further 38% went to those earning between R70 000 and R150 000. We have increased the interest exemption for the elderly, and we have reduced taxes for individuals across the board. We have introduced capital gains tax as a backstop, but also as a means for further equity. We have made tax fairer, but, at the same time, we have tried to gear it towards stimulating economic growth.

One of the problems that does confront us is that South Africa has too many business people, small and large, who demand that Government must deliver on its undertakings, but effectively sabotage good governance and foster the lawlessness they decry, by not paying their taxes and engaging in questionable activities. South Africa has too many professionals in tax matters, who build their fortunes by concocting one scheme or another to reduce flows to the fiscus. We also have too many syndicates whose primary aim is conspiring to steal millions of rands from the fiscus through VAT and customs fraud. We have too many citizens who either do not understand the importance of tax, and yet others who do not care that they are participating in tax evasion by not registering.

All in all, we have too many citizens who chose to ignore the full extent of their tax obligations. Perhaps hon members can apply their minds as to how far that extra R20 billion would have gone to eliminate poverty and financing things like intelligence, and so on. We need to raise the revenue in order to spend it wisely.

Very importantly, the infrastructure that this country needs, and the vast social needs, can only be financed through better tax revenues, and we all have an interest in securing that. The hon President Mbeki has given his full support to this, and he said, in his state of the nation address: ``Tax criminality feeds other forms of criminality, and will not be tolerated.’’ We respond to that challenge he has set for us.

Sars will, within days, launch an intensive investigation into major industries in this country that we suspect of being awash in customs and VAT-related fraud, and I think the House should applaud that. [Applause.] Sars is also in the process of rapid and far-reaching internal change, not only in accounting systems, but also in the skills and technology operational within the organisation.

Overall, it is staffed by honest, dedicated professionals who are committed to change and improvement, but there are still lacunae of inefficiency, of lack of skill, and sometimes they are unhelpful to the public in some offices. This must and will change. Today, I would also like to advise this House that sometimes Government is criticised for being too soft on corruption, but at Sars, this will not be tolerated amongst the officials. Just recently, 20 officials were dismissed for bribery and corruption, and we will continue to embark on a campaign to ensure that we can rid Sars of corrupt staff.

Turning then to Statistics SA, getting it right is the only task. Part of getting it right is to have the right data to work with, and this is the role of Statistics SA. As Dr Orkin says, If we cannot measure it, we cannot manage it.'' Hon members may remember that after the last census, we temporarily lost some three million people from our population. A Zapiro cartoon, at the time, showed two statisticians standing outside the door of the Minister of Finance with a coin. One says to the other:Heads, you tell him we are missing three million people.’’ It did not sound funny at the time. However, in retrospect, it was a salutary lesson in how important, but also how difficult, it is to get things right. We have to count correctly in a country where nearly half of our population do not have formal addresses, where many settlements do not even have roads to them or through them and where the statistics we have inherited from the past government were just hopelessly inadequate.

Now Statistics SA has been overhauled. In the past year, we have become one of the first developing countries to comply with the special data dissemination standard, a factor which contributes greatly to our legitimacy, also in international capital markets. Government’s priority, as we have said before, is to create the conditions under which the formal and informal sectors can provide jobs for people. So, an understanding of how our labour markets are working is very crucial to us, especially given the powerful impact of globalisation. Accordingly, the first new activity which Statistics SA will undertake, at a cost of about R14 million, is a twice-yearly labour force survey. This will allow a dynamic understanding of shifts between formal and informal employment, and the increasing use of subcontracting and outsourcing in the economy.

The new labour force survey involves repeat visits to the sample households. There are enormous difficulties in attempting this in a country such as ours, where, as we have said, so many millions do not even have an address. Statistics SA is also refining our economic statistics to provide us with detailed knowledge of the regions and provinces of our country. We are developing a measure for gross regional product that will quantify and qualify economic activity province by province. This will be of invaluable assistance to economic planners in Government and in the private sector.

Sometimes Statistics SA tells us what we do not want to hear but must hear. It plays a role akin to the messenger in that searing play Antigone by Sophocles. When the messenger goes to King Creon to tell him that, in defiance of his orders, Antigone intends burying her brother, the messenger decries his own fate, and I quote:

And me, poor wretch, the lot condemns to get This piece of luck. I come a post unwilling, I well believe it, to unwilling ears; None love the messenger who brings bad news.

But without the messenger of Statistics SA, our planning would be to no avail.

Already we have discovered new truths in the latest October Household Survey, notably that total employment has remained constant despite some fierce international economic pressures, with jobs lost in the formal sector largely matched by informal sector job creation. But, notably too, that new entrants to the labour market, mainly the youth and women, are not finding the jobs they need.

Statistics SA’s main focus in the next year will be on planning for the 2001 census. Let me just say, because I am running out of time, that Census 2001 is going to be an important challenge. It will be undertaken in 11 official languages, but it needs a mammoth public campaign to maximise awareness and participation across the length and breadth of this country. I must appeal to hon members to use constituency offices to the best effect in spreading the message of Census 2001. Let everyone be counted and let our people know that they count.

In conclusion, I would like to express my sincere appreciation to the professional staff of the four departments, the Director-General of Finance

• and she is also acting Director-General of State Expenditure - Maria Ramos, and her staff; the Commissioner of SA Revenue Service, Pravin Gordhan, and his staff; Dr Mark Orkin, the head of Statistics SA; Barbara Hogan, the chairperson of the portfolio committee, and to all the members; and, of course, also to Deputy Minister Mpahlwa who will be addressing the members in a few minutes.

Our democracy is young, but we believe that it is strong and supple. To grow, it needs roots of accountability, of delivery and of an environment for economic growth. We must take our place in Africa and in the world. We believe that the Finance Ministry, working closely with our colleagues in Government, can become the engine of growth and the instrument for our delivery. [Applause.]

Ms B A HOGAN: Mr Chairperson, yesterday the Director-General of Finance, who is also the acting Director-General of State Expenditure, was commended by the Ministry of the Public Service and Administration for the quality of work which she delivers as a director-general. I would like to congratulate her, not simply because of the commendation, but because we, as the Portfolio Committee on Finance, have watched her, over these past five to six years, run the department with unequalled skill, capacity and professionalism. I think she has, in many ways, driven the changes in that department more than most of us can appreciate. So I would like to congratulate her. [Applause.]

I would also like to congratulate the staff who have given her support. Those of us who have had interaction with the staff have realised the high level of professionalism of this staff. It is a bit difficult when we have the portfolio committee hearings on the Budget, because the staff arrives en masse and presents a highly professional view of what they have achieved over the year.

An interesting fact about what they present is that it is a department that is continually in motion, continually in transformation and continually reaching out for new objectives. Scarcely have they completed one transformation project when they are already moving on to the next transformation project. I think that they are an example of a commendable department who have secured their place in the financial systems of this country in a very commendable way. [Applause.]

I do not merely say this to congratulate a good department. I would like to refer to the comments made by Thomas Friedman in his very interesting book The Lexicon and the Olive Tree, in which he says that if a country is to sustain the brutalities, and often the effects, of globalisation, it has to ensure that its institutions are properly in place. Friedman goes on to say that for instance a country like Russia, which had to do major institutional transformation and deal with the effects of globalisation, could hardly have been expected to survive the ravages of globalisation and the challenges of transformation at the same time.

We, in South Africa, have been singularly lucky. We inherited a very good financial management system, and we have a department that has overseen fundamental changes in financial management which have contributed to the stability of this country. The way this country was able to withstand the 1998 slow down in the world economy is a tribute to the economic and financial management of this country.

What we also need to look at as Parliament, and something that we have not been keeping pace with, is the increasingly important role that the Finance Ministry and this Goverment are playing in international financial developments. We have not had a formal report to our committee yet of the spring meetings of the IMF. But, let us pause a while and look at the role that the Finance Ministry has been playing in international financial issues and realise how seriously and how importantly this country is being taken in terms of its voice in that arena. For instance, our Minister now chairs the board of the World Bank and the IMF and will chair the annual meetings of both these bodies in Prague later this year. He chairs the committee which examines the remuneration of the executives of the World Bank and the IMF. He is the sole representative of the Africa I constituency, that is the English-speaking African countries. He will shortly hold the chair in the international monetary and financial committee of the IMF. He participates in the G20, that is the meetings of emerging and industrialised countries whose job is to promote international financial stability; and South Africa is the only African representative.

Besides the IMF and the World Bank, South Africa co-ordinates the finance and investment sector of the Southern Africa Development Community and participates fully in the work of the African Development Bank, and so and so on. This international role is incredibly important, and I think the important role that South Africa is accorded is in recognition of the reforms that we have been able to achieve.

We have already achieved certain successes. For instance, the very serious lobbying that we undertook regarding the intended gold sales of the IMF, and how we were able to influence them to change their direction to off- market sales, is an indication of that. So, we look forward, as Parliament, to engage in a much more sustained way in the way that we are participating and are being accorded a very important role in these international institutions. I would like to congratulate the Minister and his team for playing such a vital role in these institutions. But the excellence of this Finance Ministry does not relate only to its international financial work. For instance, the Public Investment Commissioners and the Government Employees Pension Fund received unqualified audit reports. In fact, the Government Employees Pension Fund received the Golden Arrow Award from the professional management review for the quality of its management and its transformation.

We are also aware of the massive changes being undertaken by Sars and Statistics SA. As the Minister has pointed out, we are gaining much, much more in terms of our revenue than we have ever received before. This is an indication of increasing professionalism of Sars, and we have seen Statistics SA transforming itself into an agency which is commendable for the kinds of statistics which it is producing that are relevant to our country as a developing country.

Finally, South Africa was one of the four middle-income countries which were investigated by the IMF in terms of financial sustainability. The report of the IMF is very interesting because, in terms of the legal framework, it says that the quality and scope of the financial sector’s legal framework are most impressive. The laws are well drafted and comprehensive in their coverage, they are kept up to date through regular amendments and, periodically, new laws have consolidated the various amendments. The IMF goes on to comment on the soundness of our financial management systems in this country and commends the country for it. Once again, this department needs its due regard.

With that, I would then like to move on to the budget itself. The department’s budget has increased by approximately R915 million. The major increases are R325 million, which goes to Sars, and R300 million which will go towards infrastructural development and which will be used by four provinces to correct the ravages incurred by the disaster management fund. Then there is a very important item which, I think, has been overlooked in a lot of commentaries, and that is the R246 million which goes to increased medical aid payments for those people who have left the civil service and Government’s contribution to continuing medical aid.

Those of us who have looked at the graphs will recognise that Government’s contribution to medical aid for retired civil servants has shot up from R250 million in about 1994 and will hit about R900 million, nearly a R1 billion, in about a year to 18 months. We are decreasing our public debt service costs, but at the same time this is an increasing spiral of growth.

As regards the allocation to Sars, we are concerned that it is still inadequate. Sars has an 18-month programme for restructuring and there is no significant increase in that period to cover those restructuring costs. Last year, we voted for more money in the adjustments estimate. I certainly hope that this year we will be able to do so in the same way.

The infrastructural spending is going to be vital to this country and I would hope, as has happened in the Budget Council, that a lot of discussion takes place as to why we are not able to deliver on infrastructure in an appropriately expedient manner. We certainly have blockages which need to be cleared. An infrastructural investment plays a critical part in Government’s contribution to growth.

The other issue which we would like to raise with the Ministry is procurement reform. We would like to see a paper on procurement reform. A Green Paper is there, but it is not yet completed. On retirement funding, the national consultative forum on retirement funding wound down and it needs to be revitalised, or at least an overall look at what we are doing in retirement funding needs to be instituted because it has major implications for all South Africans.

About the money laundering Bill, we understand that it is going to be coming through shortly, and we look forward to this eagerly awaited Bill, because it is absolutely necessary as one of the last set of Bills to counter economic corruption. The NDA, the National Development Agency, has been slow to take off and its work is critical to NGOs and for civil society. We see that a board has been established, and we look forward to this agency now beginning to operate with the due urgency which is required. We also look forward to reports about the Umsobomvu Trust and the Isibaya Fund to hear what is happening there, and to further reforms of the PIC and the pension fund.

We also look forward to reforms of the Special Pensions Board as they are necessary and the department is going to make submissions to us in about a couple of weeks’ time on this, and we look forward to further debate on the regulation of the microlending industry. The Department of Trade and Industry has already taken tentative steps forward, but we feel that it needs a more fundamental approach than merely what has been put forward at this stage. So, we look forward to a debate on that.

Finally, we look forward to getting rid of this great white book that we get on budget statistics. It is completely incomprehensible and illegible. We welcome the Minister’s promise to us that from next year we will not get it. [Time expired.] [Applause.]

Mr K M ANDREW: Chairperson, during his speech, the hon the Minister referred to the very favourable post-Budget newspaper headlines. Unfortunately, things do not look as rosy today as they did then. But, let us hope that the recent disappointing figures over the last week or two are just temporary hiccups in economic developments. I would like to join the Minister and the chair of the portfolio committee in congratulating the director-general and her staff on the quality of their work and, in particular, on the very high quality of the documentation produced.

The Minister also deserves credit for the good sense and determination which he has displayed in adhering to firm fiscal discipline. One is aware that it is often not easy to do so in the face of numerous pressures, but so far he has been admirably steadfast, which is surely in the interest of all South Africans. The view that service delivery problems have more to do with serious management deficiencies than with a shortage of money has been vindicated time and again by reports of the auditor-general. These reports have demonstrated, sadly but clearly, that we have major management deficiencies in very many of our Government departments at both national and provincial level.

I wish to raise two areas of concern this afternoon. Firstly, the Finance Ministry needs to rid itself of a tendency to allow justified satisfaction with some achievements to translate itself into complacency on other issues. Most of South Africa’s economic fundamentals are good or at least reasonable, yet economic growth is unsatisfactory. Domestic and foreign fixed investment is sluggish, and unemployment continues to rise to dangerous levels. Most of these problems are outside the immediate area of responsibility of the Minister of Finance. However, there is no excuse for reality denial, being rude to one’s opponents when they criticise, or for disparaging foreign investors or noninvestors, to be more precise. It does not help.

The Minister can go off the deep end like he did in question time last week, but it will not help. The Government can call reluctant foreign investors white racists, imperialists, greedy capitalists and/or Afro- pessimists, or whichever derogatory terms take their fancy from time to time. But, this will not shame people into investing in South Africa. We need to be telling South African’s not how unfair the world is or how how hard done by we are, but that the world does not owe us a living. Our destiny is in our own hands and investors and job creators can choose to go anywhere in the world. We have to make our country attractive as an investment destination for locals and foreigners.

Moving in the right direction is not good enough. We have to accelerate to catch up with our competitors for trade and investment if we are to prosper. Good economic fundamentals are necessary, but are not a sufficient condition to attract investment and create jobs. Like all countries, we have our pluses and minuses. The fact is, however, we are not at present succeeding in attracting the foreign direct investment which we need to achieve high economic growth rates and substantial reductions in unemployment.

In these circumstances, we dare not add to the negatives. Let me give members a few examples. The secretary-general of the governing party in South Africa advises his party’s alliance partner to, I quote, intensively hate capitalism'', and, I quote again,to understand the working system of the capitalist in order to defeat it’’. Secondly, we have labour laws that are so onerous and unworkable that Government departments and parastatals themselves apply to be exempted or to have their implementation postponed.

We have a number of Cabinet Ministers in key economic portfolios who chose to be members of the SACP. [Interjections.] We have confused, inept and reluctant privatisation, and we are planning to introduce a capital gains tax, recognised internationally as one of the most complex taxes ever invented. We can mock, brush aside or laugh at foreigners who do not understand our history or our particular circumstances. That may make us feel good, but we will not get the investors here. Every actual or perceived negative is another hassle factor which encourages investors to go elsewhere.

Good economic fundamentals are a major plus for South Africa, but they are not enough. The Government must stop being complacent. We must do what is necessary to create a climate in which we can attract substantial fixed investment, and so achieve economic growth rates of 6% or more, and thereby, provide jobs for the millions of desperate and unemployed people in our country.

My second concern also relates to a justified overconfidence. This time, it is in relation to the SA Revenue Service. In reply to a parliamentary question about capital gains tax, the Minister said: ``Considerable progress has been made to improve the administrative capacity of Sars, providing a stable administrative platform from which to undertake the far- reaching tax reform initiatives announced in this year’s Budget.’’

There is no doubt that Sars has made commendable progress in many areas over the past few years, and deserves to be congratulated. This does not, however, mean that it is already functioning at high levels of efficiency, or that it will have the capacity to handle a complex tax, such the capital gains tax, in just nine or ten months’ time.

Let me illustrate by giving a few recent examples of Sars’ remaining problems. We have been told for the last three or four years that a simplified income tax was in the process of being produced. Sars has not managed to do so; we are still waiting. Early this year, there were massive errors at Sars, resulting in widely inaccurate tax assessments being sent out by their thousands, if not hundreds of thousands, and giving rise to headlines, such as Huge tax bills botch-up'', andTaxman’s thousands of mistakes’’. These errors ranged from massive overassessments to the distribution of refund cheques, sometimes very large, to which the taxpayer was not entitled. One example was the Johannesburg manager, Mr Joy Rabotapi, who was told by Sars that he would receive over R100 000 as a refund, when he was not entitled to a refund at all.

The frequency of errors in assessments seems to vary, but tax consultants and accountants who have been quoted in newspaper reports, or have contacted me personally, indicated that the erroneous assessments amounted to 10% to 50% of returns lodged. And then just last month, the Receiver of Revenue was unable to issue the first monthly return forms for the skills development levy to employers on time. So, even if they were registered, they were unable, in Cape Town at least, to comply with the law.

A further example of the limited capacity of Sars was demonstrated earlier this week when the Portfolio Committee on Finance was informed that, at that stage, it was not possible for Sars to impose a minimum penalty for late VAT returns, because the computer program was no able to handle it, and that it would take some time for it to be feasible to make the necessary adjustments.

I say these things not to belittle the commendable efforts made by Sars and the considerable achievements that have been recorded today. Nevertheless, irrespective of the other merits and demerits of a capital gains tax for South Africa, there is little doubt in my mind that we would be foolish to try to start implementing it in April next year. It also fills me with alarm that it seems quite likely that Parliament will only see the relevant Bill early next year, just weeks, or, at best, a couple of months, before it is due to come into effect. I believe that if the portfolio committee is expected to do its job properly, we must, at the latest, get the proposed law by the end of October this year.

In conclusion, let me say that we need to build on the very real achievements that Finance, State Expenditure, Sars and Statistics SA have made. But we also need to beware of complacency. Every action must be measured against the yardsticks of fixed investment, economic growth, and most of all, job creation. We cannot indulge ourselves by looking at our own history and trying to explain away things that we do that are inexplicable to potential investors.

One need only meet with them, and they are looking at the whole world as to where they put their investments. When one has to start trying to explain the background, why it is not so bad, and why they do not have to worry about this or that factor, we end up not getting the investments; and that has to be our top priority, if we are going to help the desperately poor and the unemployed in this country. [Applause.]

Dr G G WOODS: Chairperson, over the past four years, the Department of Finance has achieved an aura of professionalism and competence, which is very reassuring. Along with this, the department has gained the reputation of being a department which actually does, in most instances, what it sets out to do. In other words, it delivers. With this in mind, it is rather difficult to express any serious misgivings about the department’s Vote, about that money we want to afford them for the current financial year - a Vote which, when ignoring or putting aside the allocations concerning transfers and state pensions, amounts to less than R100 million.

As with most successful organisations, the department has structured itself in a way which optimises its functionality by way of seemingly logical branches and subcomponents thereof. And perhaps more important to its successfulness, are the individuals, the people, that the department has placed in positions across these branches. The department’s ability to secure the services of talented and hard-working officials is a secret they ought to share with certain other departments.

Of all these valuable people in the Department of Finance - and I would agree with the hon Barbara Hogan and Ken Andrew - there is none more so than Maria Ramos. Her all-round ability as a technocrat, and as an administrator, has made her an exceptional director-general. But I suppose it is when we pause to acknowledge her value that we are reminded that she is in the final year of her contract, and that there must be much reason within her to seek out more tranquil pastures at the end of her term.

Certainly, no one is indispensable, and there will always be someone who can do the job, but for many of us who know of the special qualities Maria brings to her position, there is a feeling of anxiety as to what her future plans might be. And I think it is also an anxiety that certain markets will reflect, should she vacate the director-general’s chair at the end of her term.

Turning to the Department of State Expenditure and the decision the Minister referred to to amalgamate this department with the Department of Finance, I think, on the balance of considerations, this change seems to make good sense. This is besides it being an implicit requirement of the new Public Finance Management Act, wherein the responsibilities spelt out for the new Treasury, I think, more or less dictate a coming together of the two departments. So, there will be one department - I suppose known as the Department of Finance - but which some will refer to as the Treasury.

I look forward to seeing the new expanded organogram - its arrangement of the various functions and the locality of officials from the Department of State Expenditure, in particular, and how they will be factored into the bigger department. I think there are some very dedicated individuals in that department who, I believe, will thrive in the new integrated setting.

The Department of State Expenditure’s recent history, however, has been somewhat chequered - strong and reliable in some areas of its work, but particularly weak, almost to a point of being a nonplayer, in key areas of financial management across Government. This has frustrated the Standing Committee on Public Accounts, on occasion, as it has the Auditor-General. We do acknowledge, however, the recently appointed Deputy Director-General of State Expenditure and his indications that he intends to rectify and correct some of these shortcomings. And of course we acknowledge the possibility that the new Treasury, once that comes into being, will also play an active role in introducing these types of corrections.

Remaining with the financial responsibilities of the new Treasury, its regulations - which recently saw the light of day - do give rise to some questions, if not to some concern, this, in the main, being the significant number of regulatory requirements of the very many accounting officers to have to seek rulings and decisions from the Treasury before acting. Some of these decisions even include frequent incidents of unauthorised expenditure.

From my experience - and I am sure that of a number of my colleagues on the public accounts committee - I think the nature and incidence of some decisions will impact very heavily on the Treasury’s capacity. In addition, we might ask, if the extent of this involvement by Treasury is consistent with the Minister’s let-managers-manage approach, I am aware that there is at least some concurrence with my concern within the department.

Looking ahead to the combined department, we can see the established well- functioning branches, most of which concern the broader macroeconomic managenemt responsibilities. We can then see the re-establishing of branches, most of which concern broader financial management responsibilities. Together, these will comprise a formidable range of responsibilities, so formidable, in fact, that one could question its viability. However, I think, knowing the Minister’s established ability to surround himself with the right people with the right skills and attitudes, and his ability to motivate them in the right direction, we can be confident that the new department will gel and will work effectively.

With regard to Sars, there are a number of observations worth making. I think the first and most important is that which has been made by previous speakers, ie its collection performance, where, once again, even in the current year - the one to which this Vote that we are talking about relates

• budget overruns on the revenue side seem very likely.

Without detracting from Sars’ great effort in this regard, I think it would be informative to see an analysis of these overruns, showing both the positive and the negative influences which should cover influences such as the GDP and CPI movements, new taxes, changes in tax rates and, of course, the actual Sars efficiency gain - perhaps even a breakdown of those gains, how they came about. I think such an analysis could well, at the end of the day, show Sars to be deserving of even greater applause.

In his introduction of Nits, the new computerised income tax system - this is a big issue too - the full implementation of which also features in Sars’ current Vote, Nits is clearly the second stage of the revolution, the improved collection revolution. Once the system is fully operational, with its tentacles checking out key areas’ relevant information, Sars will be in a position to circumvent many instances of tax evasion, many of these for the first time.

Then there is a third issue, and this regards the supposed new attitude of Sars - I think it was first alluded to by a senior member of the Katz commission, describing Sars’ over-zealous approach. It is of some concern to note the more recent emergence of a chorus of voices now criticising Sars as becoming arrogant and even thuggish. We see in the latest Accountancy South Africa - which is South Africa’s leading accountancy journal, produced by the chartered accountants’ organisations - similar reservations expressed in that direction. Is this all just the carping of people who resent Sars’ new effectiveness, or is there a growing behaviour or tendency within Sars which is inappropriate?

A final Sars-related observation I wish to make is that which suggests inadequate co-ordination between Sars and the Department of Finance concerning tax policy and practice matters. Much of what Sars does impacts on the economy, specifically investment, job creation and savings, things that Sars does not always consult the department on. The department does, of course, have a tax policy unit. Examples of this include the numerous double taxation agreements which this country signs with other countries, and which are negotiated purely by Sars and then put up for ratification or signature. They are not processed by the Department of Finance. I think there are other examples we saw even this week in the form of the current Taxation Laws Amendment Bill which is before the Portfolio Committee on Finance, where there are clear inconsistencies with the broad tax policy aims made public by the Minister and certain tax modifications that we see in this Bill.

Maybe a small process change could rectify the situation and thereby give us the reassurance that any new legal and other important tax arrangements are always considered in the larger policy context, prior to their introduction. All and all, Sars is making an important progress, but still faces significant challenges. However, knowing the commissioner, as a number of us do, I have no doubt that these challenges will be overcome. The commissioner is one of those people, I think, who never even considers failure. And I suppose with his skills and particular band of resolve he does not have to consider failure.

Finally, a few words on Statistics SA: there is very little to comment on here other than to acknowledge that Dr Orkin and his team seem to have silenced the detractors with a growing integrity and reliability of their products. I think especially critical here are the CPI and the GDP areas, and I am aware of a number of economists, both in the public and the private sectors, who are highly appreciative of the factual and useful qualities of the numbers that Statistics SA is producing.

Perhaps I can also use this occasion to express and convey an appreciation to Statistics SA from the Standing Committee on Public Accounts; to Dr Orkin and his staff - in particular his financial management staff - for the much-improved state of financial management in his section. This was clearly evidenced in the recently produced Auditor-General’s report.

With that - and, I think, as must be obvious from the remarks I have made this afternoon - my party is happy to support each of the four Votes before us.

Mr N M NENE: Chairperson, hon members, it is a pleasure to be part of this debate today. I think it would be proper to mention that I am going to focus on the Department of State Expenditure. But it would also be improper not to applaud the hon member from the DP who, in his search to discredit this Vote, was unable to do so within the confines of the Vote before us and chose to look outside of the Vote, quoting the secretary-general of the ANC on issues which are not part of this debate.

With regard to the Department of State Expenditure, Dr Gavin Woods, in fact, captured it very clearly when he said, this is one department where one finds very little misgivings to espouse on this podium. The Department of State Expenditure is charged with a mammoth task. Its aim is to produce controlled, accurate and timely financial results of the highest professional standards by developing norms, standards and consultative capacity systems for monitoring financial performance, as well as professionally qualified financial managers in all spheres of government through integrated financial systems, effective management of information resources and professionally trained personnel.

One of the key performance areas of this department is to manage, account and report on the national revenue and the Reconstruction and Development Programme funds. In the light of these, an increase of 18% is quite fair and appropriate, if not just adequate.

The total budget is R1,3 billion, and 19,1% of this represents personnel expenditure, hence fulfilling its mission of people development and professionalism. The strategic mandate of the department involves, firstly, the promotion of public accountability and economic efficiency in the management of state finances; secondly, advising on the allocation of financial resources, in accordance with Government policies; thirdly, ensuring continuous development of financial administration of Government; fourthly, ensuring that total expenditure remains within approved levels; fifthly, managing procurement and logistics in Government; sixthly, developing appropriate support systems; and, lastly, building financial management capacity in Government.

In order to fulfil its mandate, this department has four branches. The first one is expenditure control, which is responsible for the monitoring of budgetary allocated expenditure to each national department, provincial government and state institution. The second one is the Office of the State Tender Board which is responsible for administering procurement and for monitoring and disposing state-movable assets. The third one is the Office of the Accountant-General which is responsible for the policy and financial management systems within the department, and the last one is planning and corporate services which deal with the matters relating to the budget, research and planning, whilst corporate services deal with internal, departmental, financial and human resource management.

The structure of both the Department of Finance and this department is under revision, as has been mentioned by the Minister and previous speakers, to give effect to the establishment of the national Treasury as required in terms of the Public Finance Management Act of 1999. The ANC-led Government does this in order to improve sector financial management in the public sector and to transform and to modernise public finance management as quickly as possible. As I have indicated that one of the key performance areas of this department is to manage and report on the national revenue and RDP funds, let me turn to the National Development Agency and the Umsobomvu Fund.

The National Development Agency was established through the National Development Agency Act of 1998, with the primary aim of promoting an appropriate and sustainable partnership between the Government and civil society organisations in order to eradicate poverty and its causes. Although having to take over from the Transitional National Development Trust was quite a mammoth task, this task has since been completed. A vision and a mission have been developed and a strategic plan is in place. The NDA has received a R100 million from the Government for the financial year 1999-2000 and awaits an additional contribution of R100 million from the IDT and a further R92 million from the European Union in June 2000.

More than 4 000 projects have already been pre-assessed and, of these, 209 have been approved. About 1 187 have been recommended for rejection, 2 657 have been prioritised and are awaiting assessment, and 212 are also awaiting prioritisation. This is what our President means by the nation at work for a better life for all.

The Umsobomvu Fund was established to invest in the country’s young people to develop their skills and invigorate job creation. This fund is currency financed through a special demutualisation levy, which attracted R855 million, as we all know, from Old Mutual and Sanlam. This money has been deposited with the Corporation for Public Deposits and is currently earning interest. Once the Minister has finalised the guidelines under which the fund should operate, the fund will be operational. The ANC supports this Vote. [Applause.]

Dr P J RABIE: Mr Chairman, hon Minister, hon Deputy Minister, hon members, the Department of Finance produced four key documents, namely the annual Budget Review, the annual Medium-Term Budget Policy Statement, the National Expenditure Survey and the Intergovernmental Fiscal Review. In studying these documents it is possible to view the medium-term expenditure plans of Government for a three-year cycle. It is important that all spheres of government and provinces receive an equitable share of Government expenditure.

The importance of the three-year cycle of expenditure is that economic policy can be formulated and debated regarding matters such as growth strategy, budget reform, taxation, exchange controls, the consolidated national deficit, etc. If the 2000-2001 budget is taken as a point of departure, it is clear that social services, education, housing and welfare are emphasised. A total of R109 billion is earmarked for this category. Protection services received R33 billion, and economic services R21 billion.

The New NP agrees with the inflation targeting approach and agrees that the CPIX 3% to 6% range to be achieved by 2001, measured as an annual average, is necessary and should be taken seriously into account. It is of the utmost importance that inflation targeting be recognised to provide stability in the value of money which, in turn, improves economic growth, and that capital markets become more predictable which, in turn, makes asset prices less volatile.

The past year has seen an improvement in Government debt. The securities market showed growth and the bond market matured. Our credit rating improved, and the fact that Moody’s gave us a positive rating and Standard and Poor’s an investment rating shows the importance of fiscal discipline. Allow me to give credit to the Director-General, Ms Maria Ramos. I think the manner in which the present debt portfolio is managed must be mentioned.

Allow me to congratulate the hon the Minister on the constructive role he is playing within international monetary circles. His articulation of the plight of Third World countries regarding foreign debt, the World Bank, the Commonwealth Ministry and the G20 is to the benefit of SADC and the Southern African Customs Union.

The process of globalisation is a phenomenon which is affecting universal economic trends. A number of South African companies have applied for foreign listings. We welcome this, and it is important that South African companies participate in the global economy. The New NP is of the opinion that the present regulating monetary framework implemented by the Department of Finance is adequate. The rand has recently weekened substantially against the US dollar. The New NP disagrees with the hon the Minister of Finance in the sense that the gross violations of human rights by supporters of the Zanu-PF government in Zimbabwe has had a negative effect on the perception of business sentiment in South Africa.

Dit het beslis ‘n invloed gehad op die persepsie van buite- en binnelandse beleggers in Suid-Afrika, wat op sy beurt die sterkte van die rand beïnvloed het. Vergun my die geleentheid om te meld dat die Goewerneur van die Reserwebank, mnr Tito Mboweni, se erkenning voor die Portefeuljekomitee oor Finansies dat die negatiewe gebeure in Zimbabwe die sterkte van die rand kan beïnvloed, en President Mbeki se veroordeling van die besetting van landbougrond in die Nasionale Vergadering wel veroorsaak het dat die rand met ‘n aantal persentasiepunte verstewig het.

As Suid-Afrika sy posisie as ‘n opkomende nywerheidsland wil verbeter, sal die bestaande valutamaatreëls verder verslap moet word. ‘n Verdere verslapping sal die vertroue in die rand verstewig en die huidige onsekere houding van afwagting rakende buitelandse belegging in Suid-Afrika laat verbeter. (Translation of Afrikaans paragraphs follows.)

[This has definitely had an effect on the perception of foreign and domestic investors in South Africa, which in turn affected the strength of the rand. Allow me to say that the admission by the President of the Reserve Bank, Mr Tito Mboweni, before the Portfolio Committee on Finance that the negative events in Zimbabwe can influence the strength of the rand, and President Mbeki’s condemnation of the occupation of agricultural land in the National Assembly, have in fact resulted in the rand strengthening by a few percentage points.

If South Africa wishes to improve its position as an emerging industrial country, the existing currency measures will have to be relaxed further. A further relaxation will strengthen confidence in the rand and bring about an improvement in the present uncertain attitude of expectation concerning foreign investment in South Africa.]

The New NP welcomes the investigation, in conjuction with the Department of Trade and Industry, into the microlending industry. This sector accommodates the needs of the materially poor, and it is important that the rights of all respective participants within this sector be protected.

Dit is gebiedend noodsaaklik dat daar opgetree word teen individue wat buite voorgeskrewe aanbevole leenpraktyke figureer. [It is absolutely essential that action be taken against individuals who figure outside the prescribed recommended loan practices.]

The New NP is of the opinion that the present overall tax burden must be further reduced. We take note and we commend Sars for collecting a total additional R9 billion more than was budgeted for, for the period 1995-96 to

1. This figure is again commendable and showed a marked improvement in revenue collected in taxes and customs duties.

The New NP deplores the alarmingly low tax morality regarding tax fraud and criminality. It was mentioned in the Portfolio Committee on Finance that there was an estimated R20 billion annual loss of revenue in the country. This state of affairs is untenable. It was also mentioned that out of a total population of 42,5 million, only 6,5 million could be categorised as taxpayers. It is estimated that this can be doubled, and we feel that we must really try to look into this. It is a very serious matter. We call upon Sars and the hon the Minister really to rectify this deplorable situation.

The New NP is aware of and deplores the illegal mixing of petroleum products. The figure of revenue loss is estimated to be something like R400 to R500 million. The New NP welcomes the fuel rebate for the fishing and shipping industries. I know that the Minister is aware of the plight of the commercial and emerging farming sectors. The recent floods in parts of the country have caused extensive damage.

Die landbousektor versoek, indien moontlik, dat hulle gelykwaardige behandeling aan dié van die vis- en verskepingsektore kry en dat die leweransiers van petrol moontlik reëlings kan tref om hierdie verskille moontlik te maak. Brandstof vir landboudoeleindes is besig om baie duur te word, en ek vra dat daar met groot deernis na hierdie mense se behoeftes gekyk word.

Die Nuwe NP het die beoogde wetgewing oor kapitaalwinsbelasting, soos deur die agb Minister van Finansies gedurende sy Begrotingsrede aangekondig en van krag op 1 April 2000, aanvanklik met versigtigheid bejeën. Nadat ‘n deeglike studie van die belasting gedoen is, is ons oortuig dat die kool die sous nie werd is nie. Dit skyn asof internasionale tendense vandag die neiging openbaar om van hierdie uiters gesofistikeerde belasting weg te beweeg.

Die vraag ontstaan ook of die SA Inkomstediens oor die kapasiteit beskik om kapitaalwinsbelasting sinvol toe te pas. Of hierdie kapitaalwinsbelasting moontlik buitelandse beleggers kan ontmoedig, is ‘n ope vraag wat nie genegeer kan word nie. (Translation of Afrikaans paragraphs follows.)

[The agricultural sector requests, if possible, that they be treated the same as the fishing and shipping sectors and that the suppliers of petroleum could possibly make arrangements to make these differences possible. Fuel for agricultural purposes is becoming very expensive, and I want to ask that the needs of these people should be considered with great empathy.

The New NP initially regarded with caution the envisaged legislation in respect of capital gains tax as announced during the Budget speech of the hon the Minister of Finance, which came into effect on 1 April 2000. After studying the tax thoroughly, we are convinced that the game is not worth the candle. It would seem that international trends today are to move away from this extremely sophisticated tax.

The question also arises whether the SA Revenue Service has the capacity to apply the capital gains tax in a meaningful way. Whether this capital gains tax may discourage foreign investors is an open question that cannot be negated.]

The SA Revenue Service operates in an economy which is characterised by rising unemployment, e-commerce trade, a relatively sophisticated financial market, liberalized trade policies that favour a reduction of tariff barriers with an erosion of our tax base by HIV/Aids, and an increasing demand on Government expenditure arising from Aids.

Statistics SA is of key importance as a reliable source of empirical data for Government, business and society. It is indispensable for planning, decision-making and assessing policies.

Dit is waarom Statistieke SA so ‘n sleutelrol speel. Die voorgenome sensus waarvoor begroot is, is bitter belangrik en die Nuwe NP neem kennis dat daar voldoende fondse hiervoor begroot is. Vergun my ook die geleentheid om vir dr Orkin baie dankie te sê. Ek dink dat daardie departement voortreflike werk lewer. (Translation of Afrikaans paragraph follows.)

[That is why Statistics SA plays such a key role. The envisaged census, which has been budgeted for, is vitally important and the New NP takes note that adequate funds have been appropriated for this. Afford me the opportunity also to say thank you very much to Dr Orkin. I think that department renders excellent work.]

I do not want to conclude on a negative note. However, I read an article written by Jessica Spratt in Fastfacts SA Race Relations May 2000, which shows that HIV/Aids will lead to a substantial decline in productivity, skills and available expertise in the immediate future. It is, in fact, a very serious threat to the South African economy, and to all South Africans.

Of all African countries, South Africa is expected to have the highest number of deaths attributed to HIV/Aids between 1995 and 2015. The estimated number of Aids-related deaths during this period ranges between 7,3 million and 10,6 million. Life expectancy in South Africa is expected to decline from 60 to 40 years by 2008 because of HIV/Aids. Owing to the HIV/Aids, only 50% of South Africans currently alive are likely to reach the age of 60. Around half of all people who acquire HIV in South Africa before they turn 25, die of Aids before their 35th birthday. For every ten men infected with HIV, between 12 and 13 women are infected in South Africa.

South Africa currently has an estimated 200 000 Aids orphans. According to the hon Minister of Welfare and Population Development, Dr Zola Skweyiya, some 1,5 million children will have lost their mothers by 2005 because of HIV/Aids. This portrays a particular situation of extreme concern, and I call upon all respective role-players to give their undivided attention to this.

Mrs R R JOEMAT: Mr Chairperson, hon members, information is power. That is why so much emphasis is placed on education. As the Minister of Finance has said: ``If you cannot measure it, we cannot manage it.’’ We wish to congratulate the new management, under Dr Mark Orkin and his team, for its visionary management that has transformed Statistics SA.

The role of Statistics SA is to provide our country with indicators that inform us where we are at, how we are progressing, how we are distributed as a nation, what our priorities should be, and how we should distribute our resources when formulating policies to ensure a better life for all.

Statistics is information of a static period of time that reflects specific moments of a condition. Although it indicates trends, it does not take into account some of the factors like rapid development in rural and urban areas or migration of people. People move constantly. Development is an ongoing process, especially in developing countries like South Africa, but it does give one the indicators of trends in a specific period.

With a democratic government in place, Statistics SA also had to rapidly transform the organisation, including the creation of several new components and representivity in terms of population groups, gender and disability.

The mission statement of Statistics SA, which is referred to as the four Rs

• relevant, reliable, responsive and representative - includes: Relevant to policy making for growth and development, reliable in producing timely and accurate statistics, responsive to the statistical needs of users and representative in staffing and advisory committees; and they would aim to achieve the vision by better statistics, better access and better management.

The total budget for the financial year 2000-2001 for Statistics SA is R239,155 million. This is a 69,1% increase in the budget. The increase is due to the accelerated planning and preparation involved in Census 2001. A full census of the country will be taken in 2001.

An amount of R96,897 million is included in the budget and is essential for the 2001 population census. These funds are allocated mainly to labour force surveys, local government census, a survey to establish gross geographical product in the provinces, a rural survey, an income and expenditure survey and an informal sector survey. In addition, provision has been made to acquire a management information system.

The population census process is a very labour-intensive process. The question is: If we spend so much money on producing the statistics for South Africa, what relevance is this to the taxpayer? The importance of the census is not a new phenomenon. We read in the Bible, in Luke 1:2, at the birth of Jesus:

At that time, the Emperor Augustus ordered a census to be taken throughout the Roman Empire. Everyone then went to register himself, each to his own town.

If the Roman Empire saw the importance of the need of having population census, even if it was only for tax purposes, how much more must this information not mean to us in the 21st century?

Today we do not just count our population, but we have a broader statistics base available. Any country needs to have fairly accurate records and data on the fundamental aspects of its society, such as education, health and social security, etc. Therefore, this budget can be justified.

During the 1994 elections, we noted that the population data was not so accurate because the majority of our people in our townships were not recognised as citizens of our country. To establish the information for area boundaries, a helicopter took aerial photographs and estimated the population in our townships. A thumb-suck figure was used.

The majority of our people were not regarded as being part of the country’s statistics. We were allocated homelands. To add to the problem, in the past, to give any personal information to anyone who knocked on one’s door, was perceived as suspicious. There was all kinds of disinformation given, with justification.

The ANC supports the Vote. [Time expired.] [Applause.]

Mr M M S LEKGORO: Mr Chairperson, Ministers and hon members, I rise here on behalf of the ANC to support this Appropriation Bill. This Appropriation Bill is designed to add strength and value to the institutions that lay the foundation for development. This is so because there cannot be development without money. This, for me, sounds like a very happy story for the poor.

The Minister, in his Budget speech, introduced a new taxation policy aimed at closing the loopholes in our tax system, and at putting our tax system in line with international best practice. These changes are of a profound nature and can only be implemented to the fullest by an effective and efficient tax-collecting agency.

It is for this reason that we need to allocate adequate resources to Sars. This is also necessary because Sars is going through a major transformation process to tailor-make itself to its legislative mandate. To date, Sars has made enormous progress. It has exceeded its revenue targets and has also improved on the previous financial years’ revenue collection. Sars spent only R1,8 billion to collect R184 billion. Put differently, the amount spent in collecting the R184 billion was only less than 1%. These figures compare favourably with international standards of revenue collection.

For Sars to continue with the good work, its more than 600 staff members must be fully skilled for the task at hand, and its offices throughout the country must be fully equipped with modern information technology. Sars should be adequately financed to be in a position to improve the working conditions and the remuneration packages of its employees. This will help it to retain and to attract quality skills to the organisation. This is particularly important because a significant number of highly skilled people must still be recruited into the organisation to work on the newly introduced taxes.

The Auditor-General has raised certain concerns with Sars. It is important that these concerns should not be read out of context. In actual fact, Sars has started to address some of these concerns. A process of changing from a cash-based method of accounting to the accrual method of accounting has been initiated and Sars has also made an undertaking to accelerate the process of replacing the old systems and procedures. It should be noted, however, that this is a demanding and complex task which might take a few years.

Tax systems are very complex things. They are forever riddled with loopholes and administrative inefficiencies. These weaknesses are exploited and, as a result, the tax base becomes weaker. The implications of a weak tax base is that there will be less revenue at hand to address the needs of society. It is therefore urgent for Government to close all the loopholes in the tax system. An example of such loopholes are when some individuals establish companies to render personal services to their employers with the intention to use the company rate for tax purposes.

Such practices make the state forego serious revenue. There is no alternative other than to levy personal income tax rates to persons who rendered such services. If this is not done,, the low tax rates of companies will continue to be an incentive in the hands of taxpayers to restructure their incomes which could otherwise have been taxed as personal income.

All efforts by Sars to broaden the tax base should be supported by all parties and role-players in our society. Small businesses and individuals who have not paid their share of tax must be encouraged to comply with the tax system. This is important because, if this is not done, the tax burden on the other taxpayers increases.

Our tax system is currently a source-based system. This system of taxation is open to abuse. Sophisticated taxpayers find ways to route their income through zero-to-low tax income countries. The source-based system of taxation is very ineffective and must be changed as a matter of urgency. The ANC supports the change to a residence-based system of taxation and its phased way of being introduced.

Equity and justice are the key principles of a good tax system. A tax system that lacks equity is not sustainable. It will easily lead to noncompliance and tax avoidance. The taxation of hard-earned income on the one hand and failure to tax capital gains says a lot about the absence of equity in our system. This situation cannot be intelligently justified, as capital gains are equivalent to income and are used in the same way.

The introduction of capital gains tax will help to minimise tax avoidance and also bring about equity in our system. Once more, on behalf of the ANC, we support the Vote.

Dr G W KOORNHOF: Mr Chairperson and hon members, the UDM will support the Votes before us in this debate. We would, however, like to address an extremely important aspect, namely a new economic vision for our country, based on structural economic growth and the creation of appropriate skills for our economy. The South African economy finds itself in a very peculiar situation. There is general agreement that all the economic fundamentals are sound and in place, as confirmed by our favourable international ratings, but yet jobs continue to be shed, long-term foreign investors stay away, and the gap between the haves'' and thehave-nots’’ widens.

Clearly, something is wrong, and therefore we must ask ourselves: What do we need to do? Few people would disagree that we need sustainable, real economic growth that would create new employment opportunities. The question is: How do we achieve it, and where do we start?

Nearly a decade ago people from different backgrounds and groupings in South Africa started negotiations about a vision for our political future. In 1994, that vision materialised with our first democratic elections and, two years later, the adoption of our Constitution.

What we need now is to start developing a vision for our economic future, which Government, labour, the private sector and ordinary citizens commit themselves to attain. This commitment must then be communicated with passion and sincerity on every possible occasion. It will mean that stakeholders should not keep blinkers on and stick at all cost to their own line of thinking or argument.

We are in desperate need to develop such a vision for our economic future. Some people ask for it in the form of a national accord or consensus. The Financial Mail calls for a new deal on the economic front. Such a unifying vision must be the starting point for the economic dilemma that we face currently.

In the South African situation, it is simply no longer possible to provide sufficient jobs through conventional policies involving Government and big business. It is furthermore clear that we need an integrated approach, which means that if people live in a crime-ridden society, have no access to capital, have no basic education or skills training, live with the constant threat of HIV/Aids infection, and do not own land or other productive resources, then they will have very little chance to become economically active.

To address the chronic unemployment problem, we need a sound database on the labour force, preferably on a monthly basis. Such labour market information should direct and support policy decisions to create the circumstances within which jobs can be created.

Similarly, it is important that we should create the skills for the 21st century economy. Our education system must provide the skills needed to build the South African economy. The previous government destroyed the wider skills base in our country and turned many schools into battlefields, while the present Government encouraged highly qualified teachers to take generous retrenchment packages and replaced them with unqualified teachers. We simply cannot afford any compromises between political and economic priorities. We need to improve the country’s skills.

Flowing from the above remarks, such a vision for our economic future can possibly be initiated and formulated by the Minister of Finance, Mr Manuel, and the Minister of Education, Prof Asmal. The time for a new deal for our economic future is now.

With reference to the Budget Vote in front of us, we would like to encourage Statistics SA to further develop the proposed bi-annual labour force survey. Secondly, we want to commend Sars, under the able leadership of Mr Pravin Gordhan, for the additional collection of R25 billion during the past five years. We have full confidence in Sars that they will utilise their capacity and budget to implement all the Budget proposals.

We agree with the proposed merger of the departments of Finance and of State Expenditure. In a way, it is funny that the Minister of Finance, who has become the champion of financial transparency and openness, will now become the Minister responsible financially for the SA Secret Service. He is indeed becoming a very powerful Minister. We will support the Votes. [Time expired.]

The DEPUTY MINISTER OF FINANCE: Mr Chairperson and hon members, any one of us who looks back over the past six years, and any one of us who has examined and examines the very documents that are placed before this House from time to time, would acknowledge that this Ministry and the cluster of departments that it has responsibility for, have come a long way and have made very substantial progress, be it on macroeconomic management, tax policy and revenue collection, intergovernmental fiscal relations and division of revenue issues, expenditure control, monitoring and financial management or improved data on which critical decisions regarding the allocation of resources are based.

What may not be so obvious, however, is the extent to which we will continue to be challenged by some important policy and other issues. It seems opportune to share with this House, some of those issues. Members will be aware that the question of procurement reform has been the subject of many debates and at some point a Green Paper was published which, it would have been reasonably expected, would lead to a White paper. Indeed, this is a matter that we continue to be seized with, and on which a lot of work is being done.

What must be understood, however, is that this is work that was being done in the context of changing Budget reform processes and evolving intergovernmental fiscal relations and structures. Furthermore, over the past two years, a process of creating a new financial management framework in Government was in progress and has, as of 1 April 2000, come into legal force. It is important to make these points because procurement is central to budgets and expenditures of Government departments and agencies, thus making alignment with the Budget and financial management processes important.

We are, therefore, grappling with some very fundamental questions about the model for a procurement system, in the light of the more mature provincial government structures and systems and in the light of the existence of the Public Finance Management Act, which devolves and gives more managerial flexibility to heads of departments. Do we, then, still retain a highly centralised and process-driven system as our model for procurement? In doing so, we also have to take stock of the past few years, to examine whether the current system has assisted Government to meet some of its important socioeconomic objectives, such as the promotion of small, medium and microenterprises and the participation of historically disadvantaged individuals and groups in the economy.

We are also examining the procurement system in the context of the need for accelerated service delivery. A related and equally important matter, as we undertake procurement reform, is that of asset management and stock control, because there has to be a link between these processes. So, as we undertake the work referred to by the Minister, regarding the Departments of Finance and of State Expenditure, we need to make a decision as to how best to position and manage procurement. Do we manage it within the Treasury, on a decentralised basis or on an agency basis? These are all questions that we are grappling with.

We hope to come to Parliament in the not too distant future, with a progress report or even a product of these processes. In similar vein, as we undertake the work of creating a single Treasury, we have to review and determine how best to position the Government Employees Pension Fund and the Public Investment Commissioners. As we speak, the Government Employees Pension Fund has grown into a huge fund, while the Public Investment Commissioners have become a huge player in the financial markets, with just under R200 billion under management on behalf of the Government Employees Pension Fund.

This results in the activities and decisions of the Public Investment Commissioners having a significant weight in the financial markets, with the potential to influence them positively or negatively. Against this background, questions of capacity, competence and the skills base of the Public Investment Commissioners and the Government Employees Pension Fund assume great importance, given the level of participation in the financial markets.

However, as we do so, we continue to grapple, as well, with how best we can meet the provisions introduced last year as amendments to the Public Investment Commissioners Act, which, for the first time, allow the Public Investment Commissioners to invest in social responsibility programmes and infrastructure. Again, we shall, in due course, come to Parliament in this regard.

In the financial sector, as the chairperson of the committee said, South Africa subjected itself to a joint IMF and World Bank financial sector assessment programme, through which our financial sector was rigorously tested for soundness and standards. I must say that we did this of our own volition, not for the sake of it, but because it had the potential to highlight areas and gaps which need attention from a policy point of view.

As it turned out, our financial sector was given a clean bill of health, as the director-general would say, with some pointers to certain gaps and deficiencies. In general we, however, continue to be challenged by the need to streamline and consolidate financial regulation in South Africa. This arises because, historically, our regulatory environment has tended to be disjointed and located in different institutions, with some aspects in the Department of Trade and Industry, some in the Financial Services Board and yet others in the SA Reserve Bank.

In the context of globalisation and our integration into the global environment, there are huge attendant risks which require more rigorous regulation in some respects. In this environment, there is a trend towards mergers of huge corporate entities that result in massive corporations. In the South African context, however, you also have cross holdings and ownerships that straddle banks, insurance and other companies. It is in this sense that consolidation of financial regulation becomes important in South Africa.

On a matter that is related to the fight against crime, but has a bearing on the country’s financial system in part, the Department of Finance is piloting legislation to create capacity to monitor and to detect money- laundering in our country, so as to enable law-enforcement agencies to take the necessary steps towards investigating, apprehending and prosecuting those involved. This process was initiated when the Minister established a task team which, over an 18-month period, consulted widely with various stakeholders and presented a report to us in July last year. Upon giving a progress report to Cabinet, we then initiated more detailed interaction with the law-enforcement agencies, intelligence and the SA Reserve Bank. We are on the point of finalising the draft Bill for presentation to Cabinet, and Parliament will, in the course of this year, have an opportunity to process that Bill.

One of the matters that we are dealing with is the question of surplus funds that are generated in pension funds. Such surplus funds would, depending on the approach used, either be excess funds after liabilities of the pension fund have been catered for, or excess funds after liabilities and a reserve for risk management have been taken into account.

We are faced with the position, on the one hand, that pension funds are created separately from companies to cater for the retirement needs of employees. From this position, the interpretation has been that such funds belong to employees. Over time, however, companies have been able to take contribution holidays when excess funds have been found to have built up in the pension funds.

Recently, employers have sought directly to access such surplus funds and to draw cash from them. In this situation, workers’ organisations have raised the matter of principle as to whether employers have a right to access such funds. On the other hand, the Financial Services Board, which is responsible for pension funds on behalf of Government, resisted the attempts by employers directly to access surplus cash and had the courts rule against it, thus refusing employers access to such funds.

In that scenario, there is the real danger that pension funds may be raided by employers, especially in the absence of a legal framework that can deal with this problem. This is a risk. We are therefore challenged to work through these issues, that is the principle of whether employers should access surplus funds and the reality that some court rulings have gone in favour of employers. We shall therefore come back to Parliament on this matter which is currently at Nedlac.

While it may not be obvious, we also have a responsibility regarding the accountancy profession. In this connection, there has been a long, drawn- out process, which started in 1994, to rewrite the accountancy profession Act which is latterly driven by the National Accountancy Forum which is co- chaired by Justice Corbett and the Public Protector, Adv Selby Baqwa. This has been a rigorous process with participation by a number of accountancy associations and organisations, which has also seen a number of public forums to solicit views also from those who are outside the profession.

While this process has taken long to reach finalisation, it should be testimony to both the centrality of the accountancy profession in the life of the institutions and the organisations of society and the many challenges facing it, such as the question of access to and mobility within the profession and the question of regulation and its coverage. In other words, who is regulated? Is it the accountant, the auditor or both? There is also the question of the liability of auditors and fraud that involves members of the profession, but, more importantly, the representivity of the profession. Perhaps, members will realise this when they look at figures, because out of 18 000 chartered accountants in South Africa today only 178 are Africans, 138 are coloured people and 734 are of Indian origin.

But there are a host of other challenges that face the accounting profession. We shall, in the period ahead, try to ensure that the process of rewriting the accountancy profession Act is speeded up, but we will also ensure that it addresses the transformation of the profession given the challenges in this field. Perhaps it is opportune at this point to congratulate the first-ever black executive president of the SA Institute of Chartered Accountants, Mr Ignatius Sehoole, who, we are sure, is alive to and will tackle these challenges. To that extent, he will need the support of all of us and, on our side, he will get it.

The hon Nhlanhla Nene did make reference to the National Development Agency and to the Umsobomvu Fund. I would not want to add to what he said, except to say that there will be an opportunity for both of these organisations to come to Parliament with progress reports.

These are just some of the areas for which we have responsibility. There is a host of others, some of which it is probably not wise to speak about in any detail. For example, companies that want to list in foreign stock exchanges approached the Ministry, while there is also the question of bank mergers as is the case currently with the Nedcor-Stanbic case. What we would like to assure this House of is that we will apply rigour and come up with the best policies in dealing with these issues, because South Africa is not and shall not be a second-rate country.

Lastly, we are not armchair critics in this Ministry and in these departments, but we are doers who are dealing with real situations, unlike some members of this House. To the hon Koornof of the UDM, I think it is important to point out that, while all of the things he pointed out are desirable and perhaps right, what we must realise is that they will not come from our wishes but from hard work. All of the things that he mentioned - human resource development, labour market issues and criminal justice issues - are being attended to. But the lessons from history are, that for all successful economies, it takes time, hard work and consistency. [Time expired.] [Applause.]

Mr K A MOLOTO: Chairperson, hon members and boNgqongqoshe [Ministers], recent developments in the international financial system with particular attention to the dominance of rapid capital flows that plagued the Asian and other emerging markets, demand of us to evaluate critically the funding instruments we employ to address the Budget deficits and the general orientation of debt management. Therefore, it is imperative that we adopt robust risk-management techniques, as empirical evidence flowing from the experiences of emerging markets indicates.

The Departments of Finance and of State Expenditure need to be commended for the sterling work done in introducing new, efficient funding instruments or bonds to finance the Budget deficit. The department has introduced two types of bonds in the domestic bond market, a market which has matured quite tremendously, proving once more the robustness of our domestic financial system. These bonds have also been introduced in the international markets.

The inflation-linked bonds protect investors or bondholders from the negative impact of inflation on the principal amount invested. The department is quite confident that inflation will go down in the medium term, as reflected in the inflation targets set, thus reducing our debt- servicing costs. The inflation-linked bond will be adjusted every six months based on the consumer price index. The floating-rate bond is adjusted every three months and a valid assumption is made that interest made will continue to be favourable. Internationally, the seven-year bond issued in the European market was a success. This bond was declared the emerging Europe, Middle East and Africa bond deal of the year for 1999 by the international Finance Review. This view is further confirmed by the latest upgrading of South Africa’s credit rating to an investment grade by Standard and Poor and other credit-rating agencies. Participants in the South African bond market have indicated greater confidence in our bond auction system. They find the new auction system inspiring confidence, because of the new predetermined weekly auctions, with the amounts and instruments to be issued publicised in the week before.

The building of confidence plays a pivotal role to ensure stability when dealing with the institutional investors. Our economic fundamentals are sound and there is no reason for panic. The inflation targets have been debated openly. The monetary policy is known. So there are no secrets. Obviously, there are inherent risks in these funding instruments or bonds and prudent risk-management techniques need to be employed to limit our exposure. The department has diversified by issuing these bonds across Europe to hedge against foreign exchange risks. This diversification is quite necessary, owing to the common occurrence of volatility in foreign exchange across the globe. The department has performed quite well in this regard.

In my introduction I alluded to financial turmoil that once engulfed the Asian tigers and other emerging markets and the need to evaluate the correctness of the funding instrument we use to finance the deficit. We are not immune to these attacks. Even though we have taken reasonable measures to protect ourselves, we have to look at the heart of the problem and address it.

The Minister recently made a firm statement on the need to reform the International Monetary Fund. The current international finance system or architecture is not adequate to deal with some of these crises. It is important to continually remind ourselves that the founders of the Bretton Woods institutions wanted order in the financial system, given the aftermath of the Second World War and the Great Depression. It is important to note that the flow of capital assisted the reconstruction of Europe and in no way ushered in a destabilisation of their financial system.

The developing countries equally need this capital inflow into national economies to speed up economic growth and development. Therefore, it is important to inquire unceasingly whether the original intentions of the founders of this institution are carried out and why, then, every time there are capital inflows and outflows into developing countries, we experience this awesome financial destabilisation. The central question remains: Is the current international financial architecture or system adequate and relevant to the new conditions? For us to begin to understand this question, it is important to make an exposition of the revolution of this architecture, throughout time, to support the need for the reform of this institution. This might sound like tedious and boring economic history, but it serves to eliminate the source of the crisis.

This is very important, especially if one takes very seriously the statement made by Gavaljit Singh in his book The Globalisation of Finance, in which he stated, and I quote:

The volume and mobility of global finance capital has surprised many observers. In 1986, about $188 billion passed through the hands of currency traders in New York, London and Tokyo every day. By 1995, the daily turnover reached almost $1,2 trillion. Historically, most trading in foreign exchange was a result of international trade as buyers and sellers of foreign goods needed another currency to settle their transactions. But, now, the trading currency has very little to do with international trade which accounts for just 2% of the global movements.

In the current phase, financial flows are rarely associated with the flows of real resources and long-term productive investments. These flows are largely liquid and are attracted by short-term speculative gains and can leave the country in the same way as they came.

Prior to the Bretton Woods institutions, gold was a store of value and a means of payments. This was the error of merchants and chartered companies commissioned by kings and queens to conduct trade. This system proved to be a fetter to efficient trade and had to be abandoned. The post-World War II era, termed the gold standard era, required money in circulation to be backed by gold. The system was rendered obsolete by further complex developments in international trade.

In the 1970s, the United States of America withdrew from the gold standard and the dollar became the main organising currency, and various currencies were pegged against the dollar. This presented major problems because the devaluation of the dollar at certain stages meant the devaluation of these emerging markets.

In recent times, various convertible currencies emerged as key trading currencies: the yen, the pound and the American dollar. The sophistication of capital markets with their wide international coverage further deepened the process of globalisation of finance. The role of information technology, in particular, the Internet, facilitates the quick transfer of money across the globe in search of good returns. These are capital flows that are the subject of much debate and the cause of fireworks.

In conclusion, I have no doubt that, given the recent pronouncement by the Minister and the need for the reform of the Bretton Woods institutions, the department is on top of these issues and that the financing of our deficits will continue on favourable terms. [Interjections.] [Applause.]

Ms R TALJAARD: Chairperson … [Interjections.] That is an interesting comment! [Laughter.] Chairperson, hon members, the Minister outdid me in antiquity terms by quoting from Sophocles. But, Junius aptly said in the 18th century: ``To be acquainted with the merit of a Ministry, we need only observe the condition of the people’’. Today, we debate what is arguably the most important of all the Votes we will debate in this Assembly. We must remember that public finance and the rules and institutions that govern, underpin and chart the direction thereof remain centre stage in any assessment of the condition of the people of South Africa.

I say to the Minister that it is in this respect that the key challenge before his department will continue to be the reconciliation of market- driven economic growth with equal opportunity as the touchstone of the condition of our people. South Africa’s own homegrown third way must replace ideological zero-sum games that end in a dead-end street. Our public finance institutions need to underpin a healthy mix of balanced budgets, steady growth, welfare reform and job creation. Only then will an assessment of our performance hail an improvement in the living conditions of our people.

This policy mix must be our third way - a third way that has community as its core value and yet retains its global outlook; a third way that embraces the fostering of private sector economic growth as the modern means and prerequisite for opportunity for all; a third way that puts Government in a position where it is able to equip its citizens with the tools they need to get ahead in the new economy - the knowledge economy; and a third way that pragmatically marries economic economic entrepreneurship with social justice in the context of the rules of the globalisation game.

We must be willing to make the political concessions and ideological sacrifices such a third way will require of us. We must move away from staid and stifling positions on the left and the right with an equal measure of intellectual vigour and rigour. Only then will we alter our economic reality. South Africa desperately needs this pragmatism if we are to move away from the ideological zero-sum games that simmer under the surface of utterances such as those by the ANC secretary-general.

The same Economist, an interlocutor of the investment sentiment which the Minister berated last week for its Afro-pessimism, reported the cold hard facts in its focus on Africa. According to Paul Collier of the World Bank, only 15% of Africans today live in an environment considered minimally adequate for sustainable growth and development. The harsh reality is that at least 45% of Africans live in poverty, and African countries need growth rates of 7% or more to cut that figure in half in 15 years.

In South Africa, according to Southern African Statistics 2000, close to 57% of our people live in the vice-grip of the poverty trap. But, tragically, our Ministry of Finance does not project growth rates of 6% or more. Instead, we muddle in the middle with projections nipping over 3%, faced with an immense task of job creation and poverty alleviation which are dual challenges.

Indeed, the GDP figures for the first quarter of 2000 released by Statistics SA just this week were met with a degree of disbelief and dismay when questions arose about whether we would be revising our growth projections for 2000 downward. This is a heartwrenching prospect for the millions of unemployed. We cannot expect our people to chase phantoms of hope when they need the real prospect of accelerated economic growth.

Statistics SA and the invaluable work done by this agency came under the spotlight in recent days, not only because of the GDP and PPI figures, but also because of the latest employment statistics it released. The DP welcomes the budgetary increase for Statistics SA as a sound investment that is bound to have an attractive return in policy planning terms. We believe that Statistics SA will have an invaluable role to play in continuing to produce the empirical bedrock that policy-making in a rapidly changing world requires.

The results of Census `96 and the data that will be generated by the upcoming Census 2001 will strengthen the tools and sharpen the focus of policy-makers. Given the key challenge of job creation that our economy faces and the need for better indicators of what is happening in the informal and SMME sector in terms of job creation, Statistics SA’s ambitious new labour force survey will fill a critical gap which currently exists.

The DP reiterates its call on Statistics SA and the Ministry of Finance, in conjunction with the Minister of Labour and Sars, to ensure that Statistics SA includes data on the implementation of the Skills Development Act in the scope of the new labour force survey. Skills development will determine movements across the informal/formal sector divide and these movements must be tracked.

In addition to the challenges posed by Census 2001 and the labour force survey, Statistics SA indicated in the hearings on their Vote that they were in the process of compiling a comprehensive new matrix of poverty indicators that would be invaluable in altering the living conditions of the 57% of South Africans in the social exclusion trap, and will be used in the SADC region to focus poverty alleviation efforts. Future budgetary allocations must assist in this new area of activity.

Census 2001, the labour force survey and continued work on poverty indicators will be enhanced by a further dissaggregation of data into provincial and local profiles which will allow Statistics SA to give policy- makers at all three levels of government the requisite data to draft responsive policy for poverty alleviation and job creation. The DP believes that it is critically important to ensure close co-operation between Statistics SA, the National Development Agency and the Industrial Development Corporation, both in terms of Statistics SA’s new comprehensive survey of the labour force and its new work on poverty indicators to ensure that policy is properly targeted.

The debate on the Vote before us today would be incomplete without a brief reference to the silent revolution in State Expenditure, which is bound to follow in the wake of the implementation of the Public Finance Management Act and some unfinished business in the Budget reform process. The PFMA’s silent revolution started on 1 April 2000, and the Minister of Finance must be congratulated on not flinching in the face of pressure from Cabinet colleagues with reservations around this date.

The Public Finance Management Act will not only act as an important tool in ensuring sound financial management, but will act as a dynamic tool, in addition, in the fight against corruption, alongside new legislation recently passed in this House, namely the Protected Disclosures Bill. The DP believes that the Bill’s focus on outputs and the dovetailing with this Bill and the codes of conduct in new performance-related agreements with the public sector, has a potential to act as a bulwark against unspent funds and roll-overs, such as the roll-overs we have seen recently in the Departments of Health, of Welfare, and of Trade and Industry.

It is in this regard that the Department of Health’s pilot status will render valuable lessons over the coming months in terms of the feedback on the implementation of this legislation. There is little doubt that the Public Finance Management Act will enhance the transparency and role of, and data contained in, the National Expenditure Survey and place Parliament in a much better position to assess specific programmes of the departments and movements of funds between programmes within a department, as opposed to merely considering the Vote as an integrated whole.

As Parliament increasingly carves out and enhances its oversight role, this Public Finance Management Act’s shift in focus will play a significant role. However, the increased role for Parliament, which becomes possible under this Act’s provisions, remains contingent on the expansion of Parliament’s role and impact in the budgetary process as a whole. [Time expired.] [Applause.]

Mr T R MOFOKENG: Chairperson, hon Minister, hon Deputy Minister and hon members, we are once more convened in this House of Parliament today to democratically debate and give consideration to the Vote on both the SA Revenue Service and Statistics SA.

Let me deal much more with Statistics SA, because much more has been covered on the SA Revenue Service by some members who came before me here. The Vote under focus today is very fundamental to the process of change taking place in our country. President Thabo Mbeki proclaimed, on the occasion of the opening of the present Parliament, that we were on course. Yes, of course, it proves that we are on course. If one looks at this Budget of the people, it shows that it is being driven by the preparations for action. First of all, all comes up with a programme of action, and after that one comes up with the money.

One of the key challenges is our capacity to build and transform the state to effectively respond to our developmental challenge. The other key challenge in this regard, is the ability to capture information and data. Statistics SA is one of the key institutions in this regard. I would like to take this opportunity to congratulate the head of Statistics SA, Mr Mark Orkin, for yet another trailblazing feat in his already illustrious career. Many of us will remember, in the mid-1980s, when our opponents tried to undermine the disinvestment campaign, how much of an intervention Mark Orkin’s work was. His book on the attitude of black people to the disinvestment campaign remains an important point of reference.

The annual report for 1999 indicates that a lot of transformation and refocusing is taking place. The geographical information system, together with the Department of Land Affairs, will improve voting structures, and was useful to the process of local government demarcation.

Similarly, the information that Statistics SA has made available is being utilised by the Post Office, to work on a national street address project. Accurate, relevant and timely data is crucial for the formulation and evaluation of policy. That is why we keep on saying to the institutions that working within the maximum speed limit required as legislators is our watchword.

Legislators and policy makers need to be able to assess the current state of affairs, to identify and to prioritise problems, and later to monitor the effects of laws and policies. Given the unemployment crisis facing South Africa, accurate and regular data on employment, in particular, is a crucial tool in policy evaluation and adjustment. This is one area where Statistics SA needs to improve. This should be possible, in part, through a R14 million allocation to the new bi-annual labour force survey.

The other challenge facing Statistics SA, and for which it needs to be allocated resources, is to improve its agricultural statistics; to gain better information on social issues, including rural development and the position of women; to increase the availability and affordability of statistical information to the public; and to continue its internal transformation.

As the ANC, we therefore accept this Vote because it has no qualifications in it, according to transactions of books. It is wholeheartedly accepted. I think the hon member who spoke before me, Comrade Joemat, has already given a figure of R239,155 million as being the total budget. I will not delve into that much, but I think, in dealing with the figures in this department, one has to make a short breakdown of those figures that have already been given for the sake of those who are not in the portfolio committee. There are only four items which will show the breakdown as follows. I think administration will be allocated R39,2 million out of that figure. Statistical services will be allocated R103,9 million, the population census will be allocated R95,9 million, and the associated services statistics council will be allocated R151 000.

If one analyses the figures mathematically and scientifically, one will realise that, out of that figure, certain amounts, approximately R27 million, will only focus on the labour force survey for the year 2000-2001. We thus motivate for the Vote to enable us to meet these challenges and to equip us, as legislators, with a sound basis for policy formulation and evaluation. [Applause.]

Mr M F CASSIM: Chairman, if Jannie would listen, I would tell him that it is quite positive and worth listening to.

When the Minister addressed the House a little earlier this afternoon, he raised a very important point. He said: Let every day, let every week, and let every year be an African day, an African week, and an African year. An African century would be the cumulative, sum total of what would happen if we made each day an African day. Now, why is it so important that we should make each day an African day? It is very simple. There is the old saying: Give a dog a bad name and then hang him.

The President of our country has been saying on the international platforms that when people think of Africa, they think of Africa as being just one big mess, whichever part of Africa it is. They make no distinction between the fact that South Africa is quite different from the rest of Africa. The problem that we suffer from, that many countries that were colonised suffer from, is the fact that we are all branded as nonperformers, as dangerous, as places where it is not worthwhile putting investments.

We therefore need to do something. We need to rebrand ourselves. We need to make an investment in order that people begin to see us differently. I am quite certain that if one asks people in some other part of the world to think of Africa and what would they think, they would still probably think of wild animals. They would still think of people here in derogatory terms.

When the IFP chose to be the constructive opposition, people have misunderstood the role of the IFP. Unlike the DP, which is like a giraffe that feeds on the tops of the trees … [Interjections] … we in the IFP wish to able to say to the rest of the world that we should show, in intent and in deed, how we can combine to say to the world investors: We will make things safe for you in this country. We will make it safe via the ANC, but we will also make it safe via the IFP. [Applause.] Therefore, we give you two good reasons to invest in our country.

We wish to do as my hon colleague Dr Gavin Woods has done over the past six years. He has been able, conscientiously, meticulously and through hard work, to add value to the good policies that have come up from Government, to make them better. We have not come to this platform to complain, to complain and to complain. [Applause.] But we have come to say that we want to help, that we want to help and that we want to help. We reserve the right to fight and we can fight, but we chose not to do so now. We chose to be constructive and to help, so that our economy builds and we become secure.

We also need to look at what happened in India. India decided that if it really wanted to get out of the morass, it would have to lift itself by its own bootstraps. That is why today the Indian economy is not shaken when something happens in the rest of the world economy. It is self-sustaining and it continues to grow because of its own internal resources.

Inasmuch as we want investments from the rest of the world, we also need to find a way in which we can make the small capital of the small people in our land into big capital. We need to be able to find a way in which we can get small and microenterprises going, because that is where jobs will be created. That is where the fixed investments that we are seeking will come. That is where future prosperity has to be laid.

We would need to look at how this economy can become a heritage-led economy, because we have one of the most exciting heritages of all nations in the world. We have physical beauty that is beyond compare. We have people whose diversity and culture is such a rich mix that we are really the microcosm of the world in this tiny little part of the world. We have plants here - 24% or 30% of the plants which exist nowhere else on the planet. We have these unique, wonderful attributes which we need to build on.

So while this massive building needs to go on, why should we be carping and criticising, when we need to build and make that building the foremost intention of the our purpose in this House? We need to find ways in which the Minister can unpack the declaration that he made here that tax concessions would be given to NGOs, to the arts industry, to culture, and to crafts. If this is unpacked, and more can be done in these areas, that is where phenomenal growth will come.

We recognise that it is important for every country to have a goose that lays the golden egg. And the goose that lays the golden egg for us here is our culture. South Africa has made itself unique in the annals of history by being able to do what no other nation has done, and that is to negotiate a path, without violence, through to this day when we can be a flourishing democracy.

We should be able to show to the rest of the world how we did it. We should be able to celebrate this, because it is a curiosity in the whole world. How did the South African nation manage to do something that has defeated and escaped every other nation? So we have the opportunity of bringing people to our shores. They would like to know who we are, because we have this unique characteristic of being able to rise above the vicissitudes which we face, to be able to show just who we are - a great and successful nation. We support these Votes. [Time expired.]

Mr A J FEINSTEIN: Mr Chairperson, hon Minister and Deputy Minister, I was going to go straight into a few points on each of the Votes that have been covered, but just a couple of comments might be necessary beforehand.

Firstly, I cannot but comment with respect to the issue of the SACP that was raised by the hon Andrew. I must confess that, in the myriad of meetings that I have with investment bankers from both the UK and the US on an almost weekly basis, the issue of membership of the communist party of members of our Cabinet is something that has never been raised. [Interjections.] To raise it now, I have to confess, reminds me of my earliest experience in this House, when, in giving my second speech, somebody asked me whether I was a communist. On my reply that I was not, he reminded me that I was Jewish, which I, indeed, am. It speaks of a mindset that I think, perhaps, has seen its age, and I was a little disappointed that it seems to have reappeared.

Another interesting point to make is in the notion of the third way, which I believe, intellectually and theorectically, is a notion that we all need to be exploring for many of the obvious reasons that have been given. However, I would be interested to hear, at some point in the future, the hon Taljaard’s response to a comment made by one of perhaps the two most eminent thinkers on third way theory in a recent book. He says: Great change sits side by side with enduring truth’’, and he says further: ``I will counsel you to be careful about calling for any major structural reform of labour markets. I do not believe the third way stands for making work more insecure.’’

Finally, I have simply a comment on the interesting comparison with the Indian economic experience. I think that we must critically realise that what differentiates our economy from its Indian equivalent is the fact that we are talking, in the Indian case, of a domestic market of almost a billion people. If I may briefly raise a few points on each of the Votes that are under consideration, I feel that it is extremely gratifying to see that every year Statistics SA improves the quality and the scope of the information they make available to South Africa. The budget that has been tabled with respect to Statistics SA, with its increased allocation to labour-market information, the upgrading of inflation figures, a wider coverage of all economic sectors and, perhaps most importantly, a budget that allows for preparation for a full, rather than a sample census in 2001 over the medium- term period, is certainly to be welcomed. My only disappointment is that I thought we were going to see a statistician-general in uniform here today, but I believe that there have been delays in that process.

With respect to the SA Revenue Service, I think that within Government generally and perhaps in Parliament - in the finance committee and the Standing Committee on Public Accounts in particular - we espouse the virtues correctly of output budgeting. In the case of Sars, given certain of the issues that have been raised, we need to look at the outputs. In a word, over the past few years the outputs have been remarkable. Yes, there have been problems recently related to the shift to an accrual accounting system, but the bottom line is that Sars has delivered significantly beyond the expectations over the past few years and as a result of this we can be confident that, as in the past few years, Sars will rise to whatever challenges are put before it, and to that we must pay credit to the new commissioner and his staff. [Applause.]

Turning to the Departments of Finance and State Expenditure, the plaudits for exchequer financing, macroeconomic management, intergovernmental financial relations and international financial relations are, indeed, well deserved. It is important to note that the Public Investment Commissioners seem to have stabilised, although, as the Deputy Minister intimated, work still remains. With respect to exchequer financing, the medium-term outlook for debt costs - which sees a significant slowing in the increase in such costs - is a tribute to the department and the Ministry that has positive material implications for all South Africans.

The restructuring of Finance and State Expenditure into one national Treasury is to be welcomed and it is here that the greatest challenge lies, not only for those departments, but for Government as a whole. We are seeing improvements in financial management, but from a low base. From the perspective of the Standing Committee on Public Accounts, the improvement is too slow. Clearly, the Public Finance Management Act is the key window of opportunity to be firmly grasped if we are to achieve our policy ambitions as a Government and as a nation. I would also request of the Minister clarity over the medium-term period as to what specifically has been budgeted for implementation of the Public Finance Management Act. From the otherwise excellent documents, it is quite difficult to gauge that explicitly.

A key challenge with respect to improving financial management relates to the attraction and retention of skilled, committed financial managers. As the Minister suggested to us in the committee, the movement of personnel between the private and public sectors in both directions is important and is positive. However, the reality is that, while we have a core of highly skilled and committed financial managers - not only nationally, but also in many of the provinces - we are going to require far more of them in terms of the requirements of the PFMA. We have to ask ourselves the question as to what we can do to attract them and what we can do to keep them. The new national Treasury and the Department of the Public Service and Administration must put their heads together on this matter urgently.

In conclusion, may I commend the Minister, the Deputy Minister, the heads of departments and all their staff. Their commitment, quality and competence is unparalleled. May I also take the opportunity to commend the chairperson of the finance committee, Barbara Hogan, who has led the committee with innovation and insight. It is my belief that we have a network of departments, together with this Ministry, which compete with the very best in the world. We can rightfully be proud of them, and it is in this light that I call on all members to support these Votes. [Applause.]

The MINISTER OF FINANCE: Chairperson, let me thank all of the contributors to this debate, both for their contributions and the manner in which this was rendered. I think that we have got the basis for a very lively debate, going forward.

Perhaps the one pity that we should express - and I think between the Deputy Minister and myself, we try to do it unsatisfactorily - is that it is necessary to give the work of the four departments - together with the work we undertake in the financial sector, both as a link for the Reserve Bank, the relationship with the Financial Services Board, the Development Bank of Southern Africa and into that the intergovernmental relations, as well as both the wider international responsibilities we have and the regional issues - a perspective and provide something against which we can understand and test both the policy coherence, as well as the degree and rate of change in respect of implementation. It is necessary. It is not the kind of discussion we have frequently in this House, but a very necessary one, I would submit.

In respect of the issue raised by the hon Dr Woods about the term of office of the director-general, we have indentured labour outside of a contract, so those norms would apply as well. Let us abstract a few issues. The first of these is the capital gains tax. The former Governor of the Reserve Bank used to say on many issues that where one stands on an issue depends on where one sits. I think, largely, the voice against capital gains tax proves that the statement by Dr Stals was a truism.

There is an article in the Business Report this morning by Dr Lyn Olivier of RAU, where she says: Taking the history and demographics of South Africa into account, everyone who thinks capital gains tax will not be introduced is living in a fools paradise. The discrepancy between the haves and the have-nots is just too big for capital gains tax, or alternatively an annual wealth tax, not to be introduced. It is also unlikely that the implementation date would be postponed, because that would reflect badly on the Finance Minister and the SA Revenue Service.

It was well said of Prof Olivier, because that is what we have responded to, and I think that, for us, remains the impetus in what we need to undertake.

In respect of Sars and the issues raised, clearly in the implementation of the new income tax system there were genuine teething problems. Some checks should have been a bit more rigorously applied, but I think even after the first difficulties, the SA Institute of Chartered Accountants have indicated that their members are concerned with the speed with which this whole system will work, because they have never worked at quite this rate.

In respect of the issues of overzealousness, I want to tell Dr Woods, as we said earlier, that tomorrow’s children speak more softly than today’s. And I think in transformation challenges it is largely that. The insiders have had the voice, they have had the access and they have had the ear, and I think part of the challenge of transformation is to take an organisation and break it out of the reigns of those who have held it in captivity. So one seems to generate that kind of response when one transforms an organisation.

I would like to refer the hon Mnu Ken Andrew to an old Xhosa saying that goes like this: Izinja zikhonkotha imoto ehambayo. It means that dogs will not bark at a car that is standing still. They will lie in the shade of the car, and the minute one drives off, the dogs will bark. Now, it is a bit like that with the kind of criticisms coming from members who have been in this House for the length of time that the hon Andrew has. But I think it is, in part, because he needs to find the dark side of the moon, and because what we need at some point in this House, is a full ideological debate.

I think there is a paradigm difference that is so vast, that goes to core values and that deals with the fundamental question that we all need to answer. That question is: What does democracy mean to the poorest South Africans? If it means that one will be cast aside, that one will tremble on one’s rights, that we will ensure that the rich get richer, that workers have no rights in South Africa, and that it is apartheid in a different guise, with the same inequalities, the same inhumanity and the same injustices now run by a different government, then it is not something that many of us in this House will have any truck with. [Interjections.] But that is their paradigm, and what they cannot get themselves out of. [Applause.]

Mr K M ANDREW: [Inaudible.]

The CHAIRPERSON OF COMMITTEES: Order! Please continue, hon Minister.

The MINISTER: I just want to say to the hon Taljaard that I value her contribution. At the same time, I wish I could be a fly on the wall in the economics caucus of the DP. However, on her 6% growth rate, if, indeed, we had taken her advice earlier, I think we would now be revising the figures downwards on the basis of first quarter figures. This is not science. In the work of economic management there is a fair amount of art. One has to feel these issues, apply them and continue to drive.

However, the issues that she and the hon Dr Koornhof raised are important. Of course we have to raise the level of growth, but in doing so - in structuring that debate - we have to ensure that we do not sacrifice certain core values of what democracy should be to the lives of ordinary people. That is a big challenge; there must be certain things that we put at centre stage as the elements for consensus-building, in the same way as the Germans have structured something around what they call ``Die Sozial Marktekonomie’’. One must have the market, but must also take account of the needs of the people. In the same way, democracy in South Africa challenges us to find something that becomes the centre stage, and around that, we can have our differences. Perhaps what this afternoon’s debate does raise is precisely that.

Yes, indeed, if we want the third way, we need to take account of the stage of development in South Africa, which is not like the United Kingdom. We need to take the need for intervention in respect of human resource development, infrastructural development, social development and a series of other challenges very seriously. As we do that, we may then come to understand that whereas a balanced budget becomes a preoccupation in a developed country, we may have a slightly longer horizon to face the developmental challenges that arise as a consequence of our determination to meet the needs of our people. However, I think we have opened the debate which, hopefully, this House will rise to, and something that will see us developing a consensus around what we need to do.

Let me conclude by again appealing that Census 2001 will be exceedingly important to all of us. Each one of us, where we find ourselves, will need to be involved in communicating its importance and ensuring that all of our people are counted. [Applause.]

Debate concluded.

The House adjourned at 18:54. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS: National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Joint Tagging Mechanism (JTM) on 25 May 2000 in terms of
     Joint Rule 160(3), classified the following Bills as section 75
     Bills:


     (i)     Firearms Control Bill [B 34 - 2000] (National Assembly -
              sec 75) - (Portfolio Committee on Safety and Security -
              National Assembly).

     (ii)    Local Government: Municipal Electoral Bill [B 35 - 2000]
              (National Assembly - sec 75) - (Portfolio Committee on
              Home Affairs - National Assembly).

1. The Speaker and the Chairperson:

 (1)    The following papers have been tabled and are now referred to
     the relevant committees as mentioned below:


     (1)     The following paper is referred to the Standing Committee
          on Public Accounts for consideration and report. It is also
          referred to the Joint Standing Committee on Intelligence, the
          Portfolio Committee on Safety and Security and to the Select
          Committee on Security and Constitutional Affairs for
          information:

     Report of the Auditor-General on the Secret Services Account, the
      Related Departmental Accounts and the Security Services Special
      Account for 1998-99 [RP 125-99].


     (2)     The following papers are referred to the Portfolio
          Committee on Arts, Culture, Science and Technology and to the
          Select Committee on Education and Recreation:


          (1) Government Notice No 1466 published in the Government
              Gazette No 20692 dated 10 December 1999, Amendment of
              Item 8 of Government Notice No 1584 of 4 October 1996,
              made in terms of section 10(2)(a) of the National
              Monuments Act, 1969 (Act No 28 of 1969).

          (2) Government Notice No 127 published in the Government
              Gazette No 20705 dated 10 December 1999, Board Notice No
              127 of 1999, made in terms of section 11(7) of the Pan
              South African Language Board Act, 1995 (Act No 59 of
              1995).

          (3) Government Notice No 128 published in the Government
              Gazette No 20705 dated 10 December 1999, Designation of a
              Provincial Language Committee: KwaZulu-Natal, made in
              terms of section 8(8) of the Pan South African Language
              Board Act, 1995 (Act No 59 of 1995).

          (4) Government Notice No 52 published in the Government
              Gazette No 20820 dated 28 January 2000, Designation as a
              conservation area: The Air Force Base Swartkop in
              Pretoria, made in terms of section 5(9) of the National
              Monuments Act, 1969 (Act No 28 of 1969).
          (5) Government Notice No 83 published in the Government
              Gazette No 20837 dated 4 February 2000, Approval of
              official place names by the National Place Names
              Committee.

          (6) Government Notice No 158 published in the Government
              Gazette No 20877 dated 18 February 2000, Application for
              registration of heraldic representations and objections
              thereto, made in terms of section 7A and B of the
              Heraldry Act, 1962 (Act No 18 of 1962).

          (7) Government Notice No 159 published in the Government
              Gazette No 20877 dated 18 February 2000, Registration of
              heraldic representations, made in terms of section 10 of
              the Heraldry Act, 1962 (Act No 18 of 1962).

          (8) Government Notice No 160 published in the Government
              Gazette No 20877 dated 18 February 2000, Registration of
              heraldic representations, made in terms of section 10 of
              the Heraldry Act, 1962 (Act No 18 of 1962).


     (3)     The following paper is referred to the Portfolio Committee
          on Housing and to the Select Committee on Public Services:


          The Report of the Department of Housing for 1999 [RP 74-2000].

COMMITTEE REPORTS:

National Assembly:

1. Report of the Portfolio Committee on Public Service and Administration on Draft Code of Ethics for Members of the Cabinet and Executive Councils, dated 23 May 2000:

 The Portfolio Committee on Public Service and Administration, having
 considered the Draft Code of Ethics for Members of the Cabinet and
 Executive Councils, referred to it, reports as follows:


 A.     Requirements of Constitution


     The Constitution requires the State to be open, accountable and
     responsive (sec 1). In terms of the doctrine of separation of
     powers, the legislature exercises oversight of the executive,
     while another branch, the judiciary, has the power to review both
     the laws of the legislature and administrative acts of the
     executive. All three branches must act in accordance with the
     Constitution, which is the supreme law.

     In terms of the Constitution, the national Cabinet is accountable
     collectively and individually to Parliament for the exercise of
     their powers and the performance of their functions. Members of
     the Cabinet are further required to act in accordance with the
     Constitution, and must provide Parliament with "full and regular
     reports" concerning matters under their control (sec 92). Members
     of the Executive Council of a province are similarly accountable
     to the relevant legislature (sec 133).

     Related provisions confer powers upon the legislatures that
     correspond with the executive's duty of accountability. Oversight
     powers are conferred on the National Assembly (sec 55), the
     National Council of Provinces (sec 66) and provincial legislatures
     (sec 114).

     Within this framework of executive accountability to the
     legislature, the Constitution also contains provisions regarding
     the conduct of Members of the Cabinet and Deputy Ministers (sec
     96) and Members of the Executive Council of a province (sec 136).
     Members of Cabinet, Deputy Ministers and Members of Executive
     Councils are required "to act in accordance with a code of ethics
     prescribed by national legislation".

     By specifically proscribing certain conduct, the Constitution
     provides a minimum content for the envisaged code of ethics.
     Executive members are prohibited from -


     1. undertaking any other paid work;


     2. acting in a manner inconsistent with their office, or exposing
          themselves to any situation involving the risk of a conflict
          of interest between their official responsibilities and their
          private interests; or


     3. using their position or information entrusted to them to enrich
          themselves or improperly benefit any other person (sec 96(2)
          and 136(2) of the Constitution).


     The Constitution contains several instructions requiring
     Parliament to pass legislation to give effect to its provisions.
     For example, in February 2000 Parliament passed four such Acts:
     Two aimed at the promotion of equality, namely the Preferential
     Procurement Framework Policy Act, in terms of sec 217(3), and the
     Prevention of Discrimination and the Promotion of Equality Act, in
     terms of sec 9(4); and two that give legal force and effect to
     constitutionally protected rights (the Promotion of Access to
     Information Act, in terms of sec 32(2), and the Promotion of
     Administrative Justice Act, in terms of sec 33(3).

     These four Acts were passed in terms of three-year deadlines
     imposed in terms of the constitutional transitional arrangements.
     No such deadline was in place for the passage of the Executive
     Members' Ethics Act, which was passed by Parliament and assented
     to by the President, and came into operation on 20 October 1998.
     This Act gives effect to the constitutional requirements outlined
     in sec 96 and 136.


 B.     Enabling legislation


     The Executive Members' Ethics Act is located within the context of
     the accountability of the executive to the legislature, and the
     national and provincial legislatures' power and duty of oversight
     of the exercise of national and provincial executive authority
     (sec 55(2) and 114(2), respectively). The Act permits only members
     of the national and provincial legislatures and the President to
     submit complaints for investigation (sec 4(1) of the Act).
     In terms of the Act, complaints are to be investigated by the
     Public Protector, who is required to submit a report to the
     President, if the complaint is against a Member of Cabinet or a
     Deputy Minister, or the relevant Premier, if the complaint is
     against the MEC of a province. The President or Premier is then
     obliged to report to the legislature (to Parliament if a Member of
     Cabinet has been investigated, to the National Council of
     Provinces in the case of a Premier and to the legislature in the
     case of a Member of an Executive Council). Stringent time-frames
     and deadlines apply.

     The Act requires that the code of ethics contain positive
     exhortations (such as the requirement of good faith), and further
     requires that the code contain the proscriptions listed in the
     Constitution (sec 96(2) and 136(2)). The Act also requires the
     disclosure of financial interests, citing the existing code for
     Members of Parliament as a minimum standard.


 C.     Reports 11 and 12 of Public Protector
     Two special reports of the Public Protector, published during 1999
     (No 11 - Report on the Investigation of Allegations of Nepotism in
     Government [RP98-99], and No 12 - Report on the Investigation of a
     Public Statement made by the Premier of Mpumalanga, Mr N Mahlangu,
     on 22 June 1999 [RP121-99]) alluded to the fact that although the
     enabling legislation for a code of ethics, the Executive Members
     Ethics Act, was in place, the code itself had not been compiled
     and published.

     Report 11 was tabled on 26 April 1999, after Parliament had
     dissolved for the June 1999 elections. The Public Protector, in
     addition to investigating the specific complaints referred to him,
     made some general observations and recommendations. He noted in
     his report that a Code of Conduct for Public Servants was in
     place, that an Executive Members' Ethics Act was also in place,
     but that the code of ethics enabled by the Act and required by the
     Constitution had not yet been promulgated. He further noted that
     no general code of conduct for members of Parliament was in place,
     only a Code of Conduct in Regard to Financial Interests. He
     therefore recommended that -


     1. the code of ethics as envisaged in the Executive Members'
          Ethics Act be promulgated "as soon as possible";


     2. public office-bearers and officials raise awareness of the Code
          of Conduct for Public Servants; and


     3. the Rules Committees of Parliament develop a general code of
          conduct for members of Parliament.


     Before Report 11 was formally considered by a committee of the
     National Assembly, Report 12, an "own initiative" investigation of
     the Public Protector in terms of section 7(1) of the Public
     Protector Act, was tabled. The subject of the investigation was a
     statement made by the Premier of Mpumalanga. The report was tabled
     in the National Assembly, the National Council of Provinces and
     the Provincial Legislature of Mpumalanga. The Public Protector
     again bemoaned the absence of the code of ethics:


       "The importance of the code of ethics being finalised and
       promulgated without any delay has again been emphasised by this
       matter. The Act seeks to ensure public accountability on the
       part of those holding office. Such accountability can, however,
       only be properly enforced where there are clearly defined
       ethical prescripts". (Page 3 of the Report.)


     The Public Protector was of the view that "further delay will
     cause unnecessary uncertainty in the minds of those affected by
     the provisions of the Act as to what is expected from them and/or
     of them" (Ibid.). This report was not well received in the
     Mpumalanga legislature, where members alleged that the Public
     Protector was on "a frolic of his own".

     He responded to his detractors in the legislature in an article in
     the Sunday Times of 10 October 1999, entitled "Intemperance in the
     House Bodes Ill for the Rule of Law", drawing attention to the
     constitutional obligation on organs of state to assist and protect
     Chapter 9 institutions (sec 181(3) of the Constitution).
     Soon after the commencement of the Second Parliament in August
     1999, the Speaker referred Report 11 to the, at the time recently
     constituted, Portfolio Committee on Public Service and
     Administration. The Committee requested a special briefing on the
     Report by the Public Protector, which took place on 27 October
     1999. The Committee requested additional information on the
     measures in place to combat nepotism and on the extent to which
     the Public Protector's recommendations had been implemented. That
     Report of the Committee was published in the Announcements,
     Tablings and Committee Reports, dated 17 November 1999.


 D.     Findings and recommendations in respect of Report 11


     The Committee supported the Public Protector's call for the
     promulgation of the code of ethics, as required by sec 2(1) of the
     Executive Members' Ethics Act and sec 96 and 136 of the
     Constitution. The Committee also noted that public servants and
     officials elected to local government were covered by codes of
     conduct, but that non-executive members of Parliament, members of
     provincial legislatures and local government officials were
     excluded from the operation of the existing codes.

     The Committee accordingly recommended that the President publish a
     code of ethics, as envisaged in sec 2 of the Executive Members'
     Ethics Act, by 1 June 2000. The Committee also made
     recommendations that the relevant authorities develop codes for
     non-executive members of Parliament and legislatures and for local
     government employees (pp 486-487 of that Report).


 E.     Parliamentary consideration of Draft Code


     The Draft Code for Members of the Cabinet and Members of Executive
     Councils was tabled in the National Assembly and the National
     Council of Provinces by the Committee of Ministers convened by the
     Minister of Education, Prof A K Asmal, on 13 April 2000. The
     Minister opened a debate on the Draft Code in the National Council
     of Provinces on 16 May, which was also addressed by senior
     representatives of the provinces, including the Premier of
     Mpumalanga.

     During the debate, the following points, inter alia, were raised
     by provincial delegates:


     1. The Northern Cape delegate expressed his appreciation for the
          referral of the Draft Code to the legislatures for their
          consideration.


     2. The Western Cape delegate asked whether a Minister appointed in
          terms of sec 91 of the Constitution would be covered by the
          Draft Code. He added that the NNP supported the Draft Code,
          but wanted the time-frames to be shorter.


     3. The Free State delegate said that the requirement of disclosure
          of financial interests should be extended to the Public
          Service.


     4. The Speaker of the KwaZulu-Natal Legislature raised a concern
          regarding the Draft Code's impact on gifts of a cultural or
          customary nature. He also asked whether the President and
          Premiers were covered by the provisions of the Draft Code,
          since in places it referred to a "Member of the Cabinet" or
          "member of Executive Council", without specifically including
          the President or the Premier, as the case may be. He also
          indicated that the Draft Code prescribed no sanctions for
          breaches thereof, and felt that a tribunal should be
          established to adjudicate such matters. He also called for the
          establishment of a national hotline for reporting allegations
          against elected officials and public servants.


     5. The Premier of Mpumalanga said that professional bodies have
          codes of conduct and that it was therefore fitting for public
          representatives to adopt and enforce similar codes. He added
          that public representatives' every word and action are closely
          scrutinised.


     6. The Gauteng delegate indicated that the legislature had also
          drawn up a code for its members, which had been adopted
          recently by the legislature. The post of Integrity
          Commissioner had been created in the legislature to enforce
          the code. A "cooling-off" period had been activated for
          "outside-remunerated" work currently undertaken by members.


     7. The Eastern Cape delegate gave an undertaking the Eastern Cape
          legislature would follow suit.


     The Minister, in his reply to the debate, gave the assurance that
     Ministers appointed in terms of sec 91 would also be covered by
     the Code, and that the definitional concerns of members were
     unwarranted. Nonetheless, he said, "out of an abundance of
     caution" the President and Premier could be explicitly included in
     the provisions.

     The Speaker of the National Assembly referred the report to the
     Portfolio Committee on Public Service and Administration on 9 May.
     The Committee was briefed by Mr Allan Taylor, Special Adviser to
     the Minister of Education, on 19 May. At the briefing, members of
     the Committee made the following remarks:


     (1)     Mr Modisenyane (ANC) pointed out that paragraphs 2.3(d)
          and (i) contained the same provision and that one should be
          deleted.

     (2)     Mr De Beer (UDM) raised the question of sanctions to be
          applied in the case of a breach.

     (3)     Adv Madasa (ACDP) said that such a code was appropriate
          because executive members have far more power and therefore
          far more opportunities to abuse that power.

     (4)     Mr Sithole (ANC) said that the moral aspect of the code
          did not come through clearly enough. He and Mr Mfundisi (UCDP)
          enquired regarding the distinction between a code of ethics
          and a code of conduct.

     (5)     Mr Da Camara (DP) asked whether the term "inconsistent"
          was not too vague.

     (6)     Several members were of the view that such a code should
          apply to senior civil servants as well.


 F.     Observations


     1. The Committee congratulates Minister Asmal and the Committee of
          Ministers on the work they have done in developing the Draft
          Code. The Committee is also cognisant that the tabling of the
          Draft Code on 13 April is demonstrative of a willingness on
          the part of the executive to be bound by, and to act in
          accordance with, resolutions of the legislature - in this
          instance a resolution of the National Assembly in respect of
          the promulgation of the code by 1 June 2000 - and accordingly
          commends the executive for the spirit in which it has complied
          with the Assembly's resolution.


     2. The Committee is of the view that the Draft Code is in
          compliance with, and gives full effect to, the provisions of
          sec 96 and 136 of the Constitution and of the Executive
          Members Ethics Act. The Committee is, however, of the view
          that Parliament, specifically the Joint Subcommittee on Ethics
          and Members' Interests, should review both the enabling
          legislation and the code one year after the promulgation of
          the code in the Gazette.


     3. Such a review by the joint subcommittee might incorporate the
          following issues:


          (1) The number and nature of complaints submitted by members
              of legislatures.


          (2) The efficacy of procedures provided for in the Act and the
              Code.


          (3) Any technical problems which may have arisen.


          (4) An evaluation of the manner in which the relevant
              legislatures have dealt with the reports of the Public
              Protector investigating such complaints.


          (5) Any other matter that it deems fit to incorporate.
     4. The Committee is further of the view that the Code should have
          the title and name provided for in paragraph 8.4 of the Draft
          Code ("Executive Ethics Code"), since the working title "Draft
          Code for Members of the Cabinet and Members of Executive
          Councils" does not expressly include Deputy Ministers, who are
          required to be subject to the Code in terms of the
          Constitution, and are in fact subject to it in terms of the
          definitions contained in the Draft Code.


     5. The Committee believes it is important that there be greater
          awareness of the provisions of the Code and the procedures by
          which the conduct of executive members may be brought under
          the scrutiny of the relevant legislature. It therefore
          believes that Parliament should consider producing an
          information pamphlet on executive members' accountability for
          their conduct, including the kinds of sanctions that may be
          imposed, as this was an issue of concern for members in both
          Houses.


     6. The Committee remains of the view, expressed in its Report on
          report 11 of the Public Protector, that the application of the
          Code should be extended to all members of Parliament, with
          such modifications as may be appropriate, that the Code should
          be adopted by the Joint Rules Committee of Parliament, and
          that the application of the Code should likewise be extended
          by the appropriate structures in the legislatures to all
          members of provincial legislatures.


     7. The Committee notes further that it has already made a
          recommendation in respect of the development by the provincial
          and local government Minmec of a Code of Conduct for Local
          Government employees by 1 January 2001.


     8. The Committee supports the extension of a requirement of
          disclosure of financial interests to senior public servants,
          and takes note of the fact that the Department of Public
          Service and Administration (DPSA) and the Public Service
          Commission (PSC) are working on the introduction of an assets
          register for senior civil servants.


 G.     Recommendations


     The Committee therefore recommends as follows:


     1. That the National Assembly endorse the Draft Code tabled by the
          Committee of Ministers.


     2. That the Joint Subcommittee on Ethics and Members' Interests
          conduct a review, as outlined above, one year after the
          promulgation of the Draft Code.


     3. That Parliament, specifically the Joint Subcommittee on Ethics
          and Members' Interests, assume responsibility for the
          production of an information pamphlet for the general public
          on the ways in which the public can hold executive members
          accountable for their conduct, and the kinds of sanctions
          which may be applied by the relevant executive head and the
          relevant legislature.
     4. That Parliament extend the application of the Code to all
          members of Parliament, with such modifications as may be
          appropriate, and that such Code be adopted by the Joint Rules
          Committee of Parliament by the end of the year.


     5. That provincial legislatures, through their appropriate
          structures, similarly extend the application of the Code to
          all members of provincial legislatures, with such
          modifications as may be appropriate, by the end of the year.


     6. That a Code of Conduct for local government employees be put in
          place by 1 January 2001, in accordance with the earlier
          recommendation of the Committee in this regard.


     7. That the DPSA and the PSC report to the Committee on progress
          made in respect of the development of an asset register for
          senior civil servants during the third quarter of 2000.


 Report to be considered.