TUESDAY, 16 MAY 2000 __

          PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
                                ____

The Council met at 10:15.

The Deputy Chairperson 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 DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! I welcome hon members back to this Chamber, and also take the opportunity to welcome our special delegates and MECs, Ministers from the provinces. We hope to have a fruitful debate.

Mnr C ACKERMANN: Voorsitter, ek gee kennis dat ek by die volgende sitting van die Raad sal voorstel: Dat die Raad -

(1) die ANC en sy leierskap versoek om die name bekend te maak van die ANC-leiers wat geldelike hulp gekry of ontvang het van Allan Boesak se ``Stigting vir Vrede en Geregtigheid’’;

(2) die beginsel bespreek of dit nodig was vir Allan Boesak se ``Stigting vir Vrede en Geregtigheid’’ om as front-organisasie op te tree om geld vir die ANC en UDF te kry, synde die feit dat die Sweedse skenkers voor 1994 geld regstreeks aan die ANC en die destydse UDF gegee het; en

(3) maniere bespreek hoe gelde wat Allan Boesak aan behoeftige en agtergeblewe kinders behoort te bestee het, nou deur die ANC aan sulke kinders teruggegee sal word. (Translation of Afrikaans notice of motion follows.)

[Mr C ACKERMANN: Chairperson, I give notice that at the next sitting of the Council I shall move:

That the Council - (1) requests the ANC and its leadership to make known the names of the ANC leaders who took or received financial assistance from Allan Boesak’s Foundation for Peace and Justice;

(2) discusses the principle as to whether it was necessary for Allan Boesak’s Foundation for Peace and Justice to act as a front organisation to receive money for the ANC and UDF, given the fact that the Swedish donors gave money directly to the ANC and the then UDF prior to 1994; and

(3) discusses ways in which money which Allan Boesak was supposed to spend on needy and disadvantaged children, will now be returned to such children by the ANC.]

Mev A M VERSVELD: Voorsitter, ek gee kennis dat ek by die volgende sitting van die Raad sal voorstel:

Dat die Raad -

(1) die Minister van Omgewingsake en Toerisme daarop wys dat bemarking, veral buitelandse bemarking, wat nou gedoen word, eers oor twee jaar realiseer;

(2) ‘n beroep doen op die Minister om so gou as moontlik die suksesvolle applikante vir die jaar 2000 van walvisbesigtiging vanaf bote bekend te maak;

(3) versoek dat die Minister oorweging sal skenk aan meer as een applikant per gebiedswater, maar hoogstens drie bote, en dat minstens een van die applikante van die plaaslike gemeenskap moet wees; en

(4) die Minister versoek om so gou as moontlik ‘n positiewe besluit te neem aangaande die walvisbewaringsgebied aangesien dit die eerste en enigste ter wêreld sal wees. (Translation of Afrikaans notice of motion follows.)

[Mrs A M VERSVELD: Chairperson, I give notice that at the next sitting of the Council I shall move:

That the Council -

(1) draws the attention of the Minister of Environmental Affairs and Tourism to the fact that marketing, and marketing abroad in particular, which is done now, will only be realised in two years’ time;

(2) appeals to the Minister to make known as soon as possible the successful applicants for whale-watching from boats for the year 2000;

(3) requests that the Minister considers more than one applicant per territorial water, but three boats at the most, and that at least one of the applicants must be from the local community; and

(4) requests the Minister to make a positive decision as soon as possible regarding the whale conservation area, as it will be the first and only one in the world.]

Mnr A E VAN NIEKERK: Voorsitter, ek gee hiermee kennis dat ek by die volgende sitting van die Raad sal voorstel:

Dat die Raad -

(1) kennis neem van die belangrikheid van die debat oor die klaarblyklike onafdwingbaarheid van Pansat se uitsprake;

(2) van mening is dat die verwarring wat geskep is deur die Minister van Kuns, Kultuur, Wetenskap en Tegnologie en Pansat se opponerende standpunt hieroor opgelos moet word;

(3) daarvan kennis neem dat die betrokke gekose komitee onder voorsitterskap van mnr Kgware, in oorleg met die betrokke portefeuljekomitee onder voorsitterskap van dr Seroti, versoek is om Pansat en die betrokke instansies teen wie uitsprake gelewer is, voor die komitees te daag om redes aan te voer waarom die uitsprake en aanbevelings óf nie ten volle uitgevoer is nie, óf geïgnoreer is;

(4) daarvan kennis neem dat die debat deur hierdie stap parlementêr in die openbaar gebring word; en

(5) van mening is dat Pansat ‘n statutêre liggaam is wat met talle beperkende faktore hulle taak goed verrig. (Translation of Afrikaans notice of motion follows.) [Mr A E VAN NIEKERK: Chairperson, I give notice that at the next sitting of the Council I shall move:

That the Council -

(1) notes the importance of the debate concerning the apparent unenforceability of PanSALB’s findings;

(2) is of the view that the confusion that has been created by the contradicting standpoints of the Minister of Arts, Culture, Science and Technology and PanSALB in this regard must be resolved;

(3) notes that the relevant select committee under the chairpersonship of Mr Kgware, in consultation with the relevant portfolio committee under the chairpersonship of Dr Seroti, has been requested to summon PanSALB and the relevant institutions against which there were pronouncements to furnish reasons before the committees as to why the findings and recommendations were not fully followed, or were ignored;

(4) notes that by this step the debate is being made public in the parliamentary context; and

(5) is of the view that PanSALB is a statutory body that, many limiting factors notwithstanding, performs its task well.]

Mr K D S DURR: Mr Chairman, I give notice that at the next session of the Council I will move:

That the Council -

(1) takes note of the University of Cape Town Professor Wilmot James report entitled ``Values, Education and Democracy’’ handed to the Minister of Education this week; and

(2) requests the Minister to consult the wider church and religious communities for their comments on major ethical issues in the report, particularly on the secular humanist content, that may well violate widely held religious beliefs, before introducing these ideas in our schools.

         NATIONAL LOTTERY PAYMENTS TO CHARITY ORGANISATIONS

                         (Draft Resolution)

Mnr C ACKERMANN: Voorsitter, ek stel sonder kennisgewing voor:

Dat die Raad -

(1) daarvan kennis neem dat daar vertragings met die eerste uitbetalings van die loterygeld aan liefdadigheidsorganisasies voorkom;

(2) ‘n beroep op die Departement van Handel en Nywerheid doen om so spoedig moontlik liefdadigheidsorganisasies tegemoet te kom en om nie, soos berig, nog drie maande te wag nie; en

(3) sy afkeuring uitspreek oor die gerugte dat loterygelde moontlik gebruik sal word om uitstaande skulde van plaaslike owerhede af te los. (Translation of Afrikaans motion without notice follows.)

[Mr C ACKERMANN: Chairperson, I move without notice: That the Council -

(1) notes the delays with the first payouts of lottery money to welfare organisations;

(2) appeals to the Department of Trade and Industry to approach welfare organisations as soon as possible and not to wait, as was reported, for another three months; and

(3) expresses its disapproval of rumours that lottery funds could possibly be used to settle the outstanding debts of local authorities.]

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! Is there any objection to the motion?

Mr M A SULLIMAN: Chairperson, we object to the motion.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! There is an objection to the motion. The motion without notice will now become notice of a motion.

                   EXPLOSION AT BEATRIX GOLD MINE
                         (Draft Resolution)

Mnr A E VAN NIEKERK: Voorsitter, ek stel sonder kennisgewing voor:

Dat die Raad -

(1) kennis neem van die ontploffing in die Beatrix-goudmyn en die verlies aan lewe van sewe van die mynwerkers;

(2) sy meegevoel uitspreek teenoor die naasbestaandes van die werkers, wat afkomstig is van Lesotho, Botswana en Mosambiek;

(3) sy lede versoek om in hulle gedagtes, en die gelowiges om in hulle gebede, aan hulle te dink in dié tyd van rou; en

(4) erken dat dit belangrik is dat die Raad ingelig sal word oor die redes vir die ontploffing en die versekering sal kry dat alles moontlik gedoen sal word om ‘n herhaling van die tragedie te voorkom. (Translation of Afrikaans notice of motion follows.) [Mr A E VAN NIEKERK: Mr Chairperson, I move without notice:

That the Council -

(1) notes the explosion at the Beatrix Gold Mine and the loss of life of seven of the mineworkers;

(2) expresses its condolences towards the next of kin of the workers, who originate from Lesotho, Botswana and Mozambique;

(3) requests its members to keep them in their thoughts, and the believers to keep them in their prayers, in this time of mourning; and

(4) concedes that it is important for the Council to be informed about the reasons for the explosion and to receive the assurance that everything possible will be done to prevent a recurrence of this tragedy.]

Motion agreed to in accordance with section 65 of the Constitution.

            WISHES FOR A SPEEDY RECOVERY TO EDDIE BARLOW
                         (Draft Resolution)

Mr N M RAJU: Chairperson, I move without notice:

That the Council -

(1) wishes one of South Africa’s greatest cricketers and coaches, Eddie Barlow, a speedy recovery from the unfortunate stroke he had been afflicted with while on his latest coaching stint in Bangladesh; and

(2) notes that Eddie Barlow, who brought joy to millions as a brilliant batsman and equally brilliant fielder in the slips, and who is generally credited with discovering Paul Adams, before catapulting him into the SA national cricket team as a spinner of colour, is recuperating in a Singapore hospital.

Motion agreed to in accordance with section 65 of the Constitution.

               GRANTING OF BAIL TO FRANCOIS SCHEEPERS

                         (Draft Resolution) Mr B J MKHALIPHI: Chairperson, I hereby move without notice:

That the Council -

(1) notes with concern that there has been a further granting of bail to murder suspect Francois Scheepers by the Magistrates’ Court of Amersfoort in Mpumalanga;

(2) further notes that Francois Scheepers should have had his initial bail withdrawn immediately after he committed a crime of a similarly serious nature by assaulting farmworker Mr Mavela Mnisi so viciously that he had to be admitted to hospital and was in a coma for several days; and

(3) requests the Department of Justice to investigate whether the policy on granting of bail in cases of this nature was complied with by the court at Amersfoort.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! Is there any objection? Mr A E VAN NIEKERK: Chairperson, on a point of order: Is it parliamentary to query … [Interjections.] I object then.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! Hon member, the matter is sub judice. That is the other problem. In any case, this will become notice of a motion.

        FEUD BETWEEN TAXI ASSOCIATIONS AND GOLDEN ARROW BUSES

                         (Draft Resolution)

Ms P C P MAJODINA: Chairperson, I move without notice:

That the Council -

(1) notes -

   (a)  with great concern the feud which has echoed this week between
       taxi associations of Cape Town and Golden Arrow buses;


   (b)  that the taxi drivers had on many occasions denied the buses
       access to Khayelitsha;
   (c)  that Golden Arrow bus drivers have refused to go into
       Khayelitsha after two colleagues escaped injury early yesterday
       when their buses were fired at;


   (d)  that the commuters at Khayelitsha are the most affected as the
       buses are responsible for the transport of almost 80% of the
       commuters; and


   (e)  that the lawlessness caused by the taxi industry on our roads
       can no longer be tolerated; and

(2) strongly urges the Department of Transport and the Department of Safety and Security to task competent officers so as to apprehend the perpetrators of this violence.

Motion agreed to in accordance with section 65 of the Constitution.

             GROWING INVESTOR CONFIDENCE IN SOUTH AFRICA

                         (Draft Resolution)

Mr G A LUCAS: Chairperson, I move without notice:

That the Council -

(1) notes that the latest report of the international credit agency, Standard and Poor’s, predicts that the South African economy will grow by up to 4% during the next year;

(2) notes the substantial increase in total new investment during the first quarter of 2000 compared to the corresponding period last year;

(3) notes that there is a new report by Statistics South Africa which indicates a significant decrease in the number of company liquidations during the first quarter of this year compared to the corresponding period last year; and

(4) is of the opinion that these developments indicate a vote of investor confidence in the economic potential of South Africa.

Motion agreed to in accordance with section 65 of the Constitution.

          ESTABLISHMENT OF A BLACK COMMERCIAL FARMING CLASS

                         (Draft Resolution)

Rev P MOATSHE: Chairperson, I move without notice:

That the Council -

(1) commends and applauds the Minister for Agriculture and Land Affairs on her decision to create a black commercial farming class as part of the overall strategy for land reform and distribution;

(2) notes that the establishment of this programme will enable South Africa’s 45 000 black farmers to enter the commercial agricultural sector;

(3) further notes that the Ministry has established a land reform credit facility to assist emerging farmers; and

(4) expresses the hope that this programme will address the unequal ownership distribution pattern in the commercial farming sector.

Motion agreed to in accordance with section 65 of the Constitution.

REFERRAL OF NATIONAL YOUTH COMMISSION AMENDMENT BILL TO JOINT MONITORING COMMITTEE ON IMPROVEMENT OF QUALITY OF LIFE AND STATUS OF CHILDREN, YOUTH AND DISABLED PERSONS

                         (Draft Resolution)

The CHIEF WHIP OF THE COUNCIL: Mr Chairman, I move the draft resolution printed in my name on the Order Paper, as follows:

That -

(1) in accordance with Joint Rule 32(2)(b), the National Youth Commission Amendment Bill, [B 25 - 2000] (National Assembly - sec 75) be referred to the Joint Monitoring Committee on Improvement of Quality of Life and Status of Children, Youth and Disabled Persons for consideration and report;

(2) for the purposes of the consideration of this Bill, Joint Rules 167 to 171 apply to the said committee; and

(3) notwithstanding Joint Rule 132E, Joint Rule 115 apply to the said committee for the purposes of taking decisions on the Bill.

Motion agreed to in accordance with section 65 of the Constitution.

                     ALLOCATION OF QUESTION TIME

                         (Draft Resolution)

The CHIEF WHIP OF THE COUNCIL: Chairperson, I move the draft resolution printed in my name on the Order Paper, as follows:

That, notwithstanding the provisions of Rule 237(1), the time allotted for questions will be 60 minutes on Tuesday, 23 May 2000.

Motion agreed to in accordance with section 65 of the Constitution.

         APPOINTMENT OF MS L L MATYOLO AS SECRETARY TO NCOP

                         (Draft Resolution)

The CHIEF WHIP OF THE COUNCIL: Chairperson, I move the draft resolution printed in my name on the Order Paper, as follows:

That the Council, on the recommendation of the Rules Committee of the National Council of Provinces, appoints Ms L L Matyolo as Secretary to the National Council of Provinces, with effect from 16 May 2000.

Motion agreed to in accordance with section 65 of the Constitution.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! I take this opportunity to congratulate Ms Matyolo on her appointment. I am not sure whether she is present in the House. If not, members will have an opportunity to congratulate her once she shows up.

                         APPROPRIATION BILL

                           (Policy debate)

Vote No 32 - Trade and Industry:

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! Once again I take this opportunity to welcome the hon the Minister of Trade and Industry and his Deputy Mrs Hendricks, and I call upon the Minister to address this House.

The MINISTER OF TRADE AND INDUSTRY: Chairperson, premier, MEC, it is a privilege for me, once again, to be able to table this budget in the NCOP. It is clearly not possible, in the short time available, to provide a full review of Trade and Industry and of the economy as a whole. This is too wide a field. My purpose is to set out some of the key features of the Department of Trade and Industry’s budget and how this relates to the broader issues of trade and industry.

Those members who participated in the conference and workshop on small, medium and micro enterprises in this House last week will know that the Department of Trade and Industry, or DTI, is undertaking a major reorganisation. Accordingly, the coming period will be an important time for the work of the Department of Trade and Industry.

The Department of Trade and Industry has reflected long and hard on its performance and on the experience we have had in the years of our democracy. Much has been achieved, but much still has to be done. In this year we are going to be carrying out an important reorganisation of the operations in the Department of Trade and Industry in order to better focus our efforts and improve on our capacity to deliver the economic services that we are responsible for providing.

The range of work covered by the DTI is very extensive and it is not possible to examine, in any depth, all aspects of that work. We have tried to improve the quality of information on all aspects of the work and to make it more accessible to members. I hope members will have a small booklet which summarises the budget and some of the highlights or key aspects of the budget and the work of the DTI.

For those members who are capable of using the Internet, and I presume it is all of them, I would encourage them to look at our website, where a great deal of information is made available, as is the case on the Brain website and others.

I am also very pleased to say that I think we have significantly increased the level of interaction with both of the parliamentary committees. I believe that our work has been very professionally and thoroughly monitored and assessed by Mr Moosa and the select committee here in the NCOP and by Dr Davies and the portfolio committee in the other House. I would really like to sincerely thank them for keeping us on track and doing so in a very frank, but supportive, way.

What is the basic task of the DTI? In the commentary from all quarters on the work of the DTI, the three most frequent matters raised are our industrial strategy, the criticism that we are not creating enough jobs and another criticism that we are failing to generate enough small and medium enterprises in the economy.

These comments certainly focus on the correct areas as these are, without doubt, at the heart of the work of the DTI. As Minister, I would like to have argued that in each of these cases there was no room for criticism, but I cannot. The fact that we must reassess our policies, programmes and actions from time to time makes just good plain common sense and does not automatically imply some wholesale policy change, as some would seem to hope. A case in point is the remarks I made in the conference on SMMEs, and I think they should be read carefully so that we do not create false expectations of some wholesale and massive change in policy.

I am confident that the basic policy approach adopted is correct for our circumstances. Given the massive structural problems that we are dealing with, the effects of policy change will take a number of years. We can now see that we did underestimate the depth of the structural problems and, accordingly, the time it would take to bring about change. The impact of the international financial crisis was severe and came as we were gathering momentum in specific areas such as the SMME sector that I spoke of. We did err in our expectations in a number of areas. While we will be adjusting, I think we are doing well overall. The main task now is to increase the tempo of positive change and utilise the greater policy space that we have built for ourselves.

At the beginning of this democracy we set out to induce a major restructuring of our economy. This could not be dealt with by the DTI alone, and our work both complemented and required changes in Finance, Labour, Agriculture and the public sector as a whole. These and other areas of change have all proceeded in the consistent and effective way that was required at the outset.

In this massive campaign to turn around the whole economy, the DTI has had to focus on a particular set of fronts. The economy, or the real economy that we faced in 1994, can succinctly be described as being overly protected, dependent upon primary and commodity exports with high costs of domestic production, characterised by extreme wealth inequality, racial and geographic inequalities and a crisis of investor confidence. The few support measures used by the old regime were unfocused and fiscally unsustainable. When an economy exports some 30% of its production and imports a little more in exchange, then it is quite clearly, in all aspects, part and parcel of the world economy. Globalisation is therefore something that we have to adjust to in a manner that leads to growth and development. We cannot try and ignore it or protect ourselves from it by a tariff war.

To accept this as a basic starting point for action is not to see globalisation as some panacea or new Utopia. Like all processes of political economy, it holds both potential and threat. This is because it is essentially a process of change, in this case very rapid change. To take advantage of this requires adaptability in the economy and at the level of the individual. Rigidities in the structure of an economy or the public and private sector institutions are a danger.

This is not to argue that the market is automatically the most efficient way of conducting economic policy. The market is adaptable, but in the absence of institutional direction, it is capable of expedient and short- sighted resource allocation, and in a global market this can happen on a global scale.

The speed with which the market now responds does make it adapt fast but it can also increase the speed with which mistakes can occur. So the demands made on the state to actually facilitate growth and development are very much more complex now than ever before. The state has to define this role and then carry out the necessary institutional changes to effect it. We would argue that we should avoid futile policy debates as to whether the state is good or bad and whether it should directly intervene in economic activity or not. The state has to change, however, if it is to have a positive impact on the economy. It has to change the composition of its resources and the qualities of its actions.

For us in the DTI the challenge posed is to keep changing and improving. As the DTI, we have to become more intelligent and the quality of our intervention in all matters has to rise. This requires the correct deployment of our human resources and a higher quality of management systems. The basic work of the DTI is set out in this brief booklet, but essentially, it is to facilitate access to sustainable economic activity and employment; to facilitate and encourage higher levels of investment, both national and international; to increase the market access for South African products; to strengthen our status as a trading nation; and to establish a fair, efficient competitive marketplace for business, workers and consumers.

To carry out these objectives we have to add value in the economy so that it is capable of providing more and better-quality employment opportunities. We have to contribute to the international competitiveness of our economy, remembering that this is not just in the exports sector, but in all sectors of the economy. We have to promote SMMEs, to ensure greater participation in the economy, more employment opportunities, greater economic efficiency and a more equitable distribution of wealth. Black economic empowerment is essential if we are to overcome the economic destruction and the reduction of capacity that has been caused by racism. Growth, development and democracy require the economic empowerment of all our people, which means that we have to pay particular attention to the majority of our people who were previously excluded. We have to build the SADC region, since we cannot grow if our neighbours are not growing. We are not a large enough economy to be able to ignore the importance of the total economic potential of this region and of Africa as a whole.

Finally, it is imperative that we act to reduce wealth inequality. Poverty is a fundamental obstacle to growth and development. The past has created excessive wealth disparity and distorted our economy. We have to be vigilant, because a powerful tendency of globalisation at present is to easily exacerbate wealth disparity, unless very specific steps are taken to counter this. If this is the work of the DTI in the broad sense, then clearly we have to have an industrial strategy. This strategy, however, has to be complex. There are a range of actions that we have to take, from detailed negotiations on investment projects to various programmes for different sectors; the changing of our commercial law; and the introduction of competition law, all of which are designed to assist with developing our industries and our capacity. But we do accept that this strategy is not sufficiently set out in an accessible form and this is a project we are now working on to state it more clearly and make it more accessible to people, policy-makers and ordinary persons.

We also realised that if are going to effectively manage such a complex strategy, we have to improve the managerial capacity and delivery mechanisms of the DTI. The support programmes of the DTI are essentially aimed at the private sector and have to be taken up by the private sector. But it is quite clear that the size of our roll-overs has given us cause for concern. We have to re-examine why we are not getting out to enterprises to get them to take this up and whether our delivery system of these programmes is as effective as we would like it to be.

A critical issue is the level of employment in our economy. Obviously the current level of unemployment is unacceptable. What that level is precisely, remains a matter of some further work. It is clear that we have difficulty in recording the precise changes in employment and unemployment patterns in this economy, precisely because the economy is changing so dramatically. But no matter what the measurement comes out to be, it is obvious that unemployment is a serious problem and that our priority now is to create more jobs.

I want to put this in context: The Government at the outset of this democracy made a very important strategic choice, one, I think, that took considerable courage.

We knew that we had to restructure this economy in a very profound way and that the DTI was responsible for a large part of that restructuring process which had to take place in the private sector. I have spelt out the reasons why we needed to restructure the economy earlier.

However, in taking this decision we knew - and this was not an easy choice

• that there would be job losses, as inefficient, protected enterprises and sectors were declining. We knew that the new job creation would not be as fast as the decline in the less efficient sectors. We have created hundreds of thousands of new jobs since 1994. The quality of those jobs is generally better and more sustainable than what we had in the past.

There is one area of concern or one caveat that we would register as DTI, and that is that it is clear that there has been an increased level of casualisation in the employment process. This is not automatically a good thing. Where it is designed to just cut wages, we would argue that this is a short-sighted approach, because what is happening in the world today is not increased production on the basis of unskilled, low-paid workers, but increased production on the basis of well-paid, skilled workers.

This is a complex problem. In the preparatory summit meeting that we had for the clothing and textile sector last Friday this is one of the issues we should have been addressing in some detail, because in the clothing and textile industry - particularly the clothing industry - the fragmentation and casualisation has increased dramatically over the last four years. The full implications of this will be examined very carefully.

I think that we also need to see that the knowledge economy requires skill and that there is no part of our economy that will escape the pressure to incorporate IT into its operations. No matter how small one is, working from one home, no matter how small the business, one increasingly sees that people, in fact, use computers. They need to operate those computers, which make their businesses more efficient.

So, there are substantial changes in our economy. This poses real challenges for all of us, because the pattern of work and the flexibility of work processes are changing. As for the unions, Government and business, we are going to have to adjust to these new realities if we are going to support our economy; the unions will have to do that, if they are going to offer real protection to their members.

So, generally, the employment situation is undergoing massive change. I think that we do not really appreciate the full extent of this structural change or exactly what is happening in all sectors. What is fundamental, however, is that we will have to develop new sectors and new geographic areas of this economy. We will have to focus on services, information technology, agro-industry and tourism as important bases for employment creation.

We have, certainly, changed the structure of this economy and created a basis for further growth.

I will not address the SMME issue in detail. I think we had a very extensive, very constructive discussion on that in the conference and I would like to congratulate the committee on organising it. The outcome of it, I think, was extremely important and very useful.

The NCOP is specifically charged with the oversight of the provincial matters, and the interaction between the DTI and the provinces is considerable and has been steadily improving in its efficiency. I would like to see even better interaction, and I think we will achieve this. In the Minmec that took place last week on 9 May we approached matters much more systematically and I think this is going to benefit us in all areas. We will be working on important interactions in the difficult and sometimes contentious industries such as liquor and gambling, and we will be moving forward to introduce legislation and amendments in both of these areas, as they are very necessary for all of us.

With regard to the special development initiatives, these programmes are unfolding. We have agreed and made more concrete plans in the Minmec to move more of the responsibility for the SDIs to the provinces, obviously still working with the national Government. The projects announced recently in Gauteng are a good example of this. I am pleased to say the announcement of the preferred bidder for Coega illustrates that these projects are maturing. In each case, including the Western Cape, Northern Cape, Mpumalanga and elsewhere, we will be creating more capacity with the provinces for the provinces themselves to take responsibility for these projects.

In the written speech, in an attachment, I have provided some information on the small and medium manufacturing development programme and on the tax holidays - quite interesting information. For example, in the last financial year some R1,7 billion in investment - an average investment per project of just over R1 million - went into the nine provinces.

However, those hon members who are familiar with these statistics will see that there is an important change in the pattern of what is happening. The three big provinces continue to dominate as they have done consistently in these programmes, and this is largely a product of their economic size; these are Gauteng, KwaZulu-Natal and the Western Cape. However, many of the hon members may remember that on previous presentations of these statistics there were some provinces, like the Northern Cape and others, that had virtually no projects; whereas what we are seeing now is an interesting growth in the number of projects in these provinces, and not insignificant amounts of investments going into them.

In the tax holidays which are also there, hon members will see that they are broken down into local and foreign investments. Again, there is better spread across the provinces for these programmes. Therefore, I think we are beginning to see the positive effects of better co-ordination and better facilitation of economic activity in the provinces.

Some final matters that I wish to go through very quickly include the famous Grappa saga. Its outcome is relatively positive; the EU agreement is now functioning, some hundreds of millions of rands of trade have already gone through in terms of that new agreement and he have had a meeting of the joint council with the EU to thrash out some of the many, many problems that we will have - and are having - in our trade agreement. This is inevitable. There are issues around cheese quotas and dairy quotas, and we are still clashing about the wine quota and other issues.

So, these things are going to carry on. Cellphone and all sorts of matters like this will have to be dealt with very constructively. [Laughter.] However, I would like to take this occasion - I think it is my first chance to do so in the NCOP - to thank all parties, because this was a cross-party initiative, for the support we got. As they say in my province: Sonqoba simunye! United we overcome!

Let me now deal with the lottery, about which I overheard something coming up a moment ago. I think we should be realistic about what is happening. Approximately R50 million now sits in the Good Cause Fund. A rough guideline for hon members, if they want to work it out, is that about a third goes to prizes, just under a third goes to administration and just over a third goes into the Good Cause Fund so that, like all lotteries, we are building up that fund.

Our advice from the British Lottery was that we should wait at least six months before we expect to see reasonable funds coming in. Obviously, to disburse earlier is senseless, because then we are going to either give a lot of money to one or two causes or very little money to a lot of causes. So, we are not delaying: we are consciously letting those funds build up. We will then distribute them when we have a reasonable basis to make the payments across a wide front and continue those payments.

Rumours of local government debt - rumours are rumours - are obviously absurd. The Act is very specific: the money has to be used for good causes, and not for anything else. In fact, it is quite explicit that one cannot pump it into ordinary budgets. We are not allowed to do that - that is very clear in the Act.

I would like to conclude by again saying that the department is very pleased that the interaction between itself and the NCOP is entering a very new and exciting phase. I think it is becoming clear that the NCOP can play a very active role in development. The end product of the work of the DTI, in fact, impacts on provincial and local governments, in hon members’ jurisdictions. This means that the NCOP plays a vital role in overseeing our work; but more than that, in assisting in the developmental activities. We are entering a very exacting year for the DTI as we make profound changes to modernise our department.

My thanks go to the committees, my Deputy Minister, Ms Hendricks, our new director-general, Dr Alistair Ruiters and his new team, as well as to my special advisor and former director-general, Dr Rustomjee. A particular word of thanks to my colleagues, the provincial MECs, who often take a lot of the flak for what we do, but little of the credit. [Applause.]

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Just before we proceed, could I ask hon members please to switch off their cellphones. Let us make sure they are all switched off. They are an embarrassment. If we all could please check! Once one cellular phone rings, then chances are that they will all stay off.

Mr M V MOOSA: Thank you very much, Chairperson, for the opportunity to speak in the debate. I also want to start by thanking the Minister, the Deputy Minister and the director-general in the Department, Alastair Ruiters, for what has been a very open, healthy and interactive relationship that we have enjoyed with the Department of Trade and Industry, over the past year that I have been the chair at least. We have found that the department is extremely responsive, both at the leadership level and at other levels of the department, with regard to information that we require and interactions that we have engaged in, and also that the liaison between personnel from the Department of Trade and Industry and Parliament has been very efficient. I want to thank the Minister and the Deputy Minister for allowing this, because it just makes for a healthy relationship between the executive and Parliament.

We have reached one of the most exciting, but also one of the most challenging junctures in our economic history in this country. We have successfully, under the leadership of the Minister of Trade and Industry and the Deputy Minister and their counterparts in the Department of Finance, charted our economy into international waters. We have begun unlocking value in new relationships that we have established, for example, with the USA in the SA-USA binational talks. We have successfully sealed an agreement with the EU on globalisation of trade and tariffs and mutual economic co-operation. We are talking to the SADC and SACU countries about taking the entire Southern African economy, as a unit, to a higher level.

In all of these exciting developments, the questions that some of us have continuously asked are: What are the adjustments that we have to make in our economy? What shift must take place in our traditional perspectives in order to maximise the benefit that is to be reaped from the new objective conditions that prevail in our economy? All of us are agreed that we need a well thought-out and dynamic but flexible strategy to get our economy to positively reap the benefits of such a new set of objective conditions. Our strategy, if poorly devised and implemented, could lead to limping agreements between ourselves and our international partners, resulting in our partners gaining more benefits from these partnerships than we might gain. Our fundamental objectives are poverty alleviation, wealth distribution and job creation in our country.

We have argued that in order for South Africa to benefit maximally, we must develop our secondary and tertiary manufacturing industries in order to take advantage of these initiatives. While our economy is well developed for primary production in raw materials such as gold, various metals and minerals, agriculture and fishing, this produce must only leave our shores in a processed form.

Our manufacturing industry should occupy centre stage in our economy. It must, however, do so not only by providing opportunities for big business, but by giving fair opportunity to every South African man and woman and to the entire productive economic life of our country. Many programmes need to be established in order to do so. The Department of Trade and Industry has already successfully embarked on the establishment of SDIs in strategic areas throughout South Africa, and is providing useful support to the private sector.

One of the fundamental programmes that Government has to successfully implement is a programme to support and expand the SMME sector. To this end, the recent conference, as the Minister mentioned, hosted by the NCOP passed five resolutions to redirect our attention to what somebody at the conference called ``turbo charging’’ the SMME sector. The resolutions briefly deal with the financial crisis faced by small business, the creation of an entrepreneurial culture, the provision of support to the NGO sector, ongoing dialogue facilitated by the NCOP and planning and co- ordination.

I wish to spend some time talking about the last two resolutions that I have mentioned. I just quickly want to say that the NCOP is centrally located in our intergovernmental system of government and co-ordination.

The NCOP must increasingly begin to fulfil its constitutional mandate of bringing together the viewpoints of our three spheres of Government for more effective and efficient policy-making and implementation.

The conference that we organised was an attempt to this end. Given further refinement of the process, the NCOP appears to be well-placed to fulfil such a mandate, if there is sufficient support and buy-in from leadership, both from Parliament and from all spheres of Government.

The conference resolution regarding planning and co-ordination was probably one of the most important from the point of view of the NCOP, and I am going to read that quickly. The conference recommended that -

… the roles and functions of different levels of Government that provide support to SMME development must be clearly outlined. An assessment must be made of the possibilities of delivery at different levels of Government. The functions of delivery of institutions such as Khula, Ntsika, the IDC, the SABS, the CSIR, and others, and agencies of other Government departments need to operate as part of a common national strategy, each with clearly defined roles.

Joint planning and co-ordination must take place between national Government, provincial government and local government and the numerous support agencies in the following areas: Firstly, clearly defined roles and relationships; secondly, the efficient usage of and availability of resources at each level; thirdly, linkages and mentoring of SMMEs to spread and provide experience and skill as widely as possible; fourthly, the strengthening of uniform implementation and oversight of preferential procurement strategies across national, provincial and local government levels; fifthly, the targeting of different sectors, both sectorally and geographically, with specialised, but different, strategies in both urban and rural areas; sixthly, the rationalisational and effective publication of incentive strategies for SMMEs; seventhly, each level of government must conduct an audit of the support programmes offered and measure its contribution to provincial growth and employment generation. This is particularly important from the point of view of the provincial governments and local governments.

Differentiated support programmes must take account of the diverse needs faced by this sector. More appreciation must be given to differences in experience faced by the broad spectrum of enterprises in our country. Eighthly, the Regulatory Review indicates a need to move away from simplistic models of deregulation. There must be a balance between easing the burden of excessive regulation and dealing with problems arising from the lack, in certain areas, of effective regulation. Ninthly the proposed review of corporate law must address problems in forms of corporate organisation particularly accessible to small business, including co- operatives and close corporations.

I chose to read that particular resolution because today we have present in the House the delegations from different Houses. I think that Salga is here as well. It is very important that we begin the process arising out of these discussions to actually do some of the things that we have agreed that we would do at that level.

The issue is that the resolution on co-ordination and planning is more difficult and much bigger. Provinces and local government, while conforming to norms and standards set by national Government, cannot wait for central Government to provide solutions. Every province and local government must see it as their own and direct responsibility to foster growth in their subeconomies. Each province must develop a set of primary commodities that it will support and strengthen to generate wealth inside its own sphere. In the Western Cape, for example, it is wine, fruit, agriculture, fishing and tourism. In the Free State it is agriculture, minerals and so on. In Gauteng it is gold, minerals, information technology and so on. The North West has already started marketing itself as the platinum province.

Linked to this, each province must develop resilient programmes to ensure that SMMEs become the central hub of the chosen commodity production in their provinces. Local governments must be drawn into the circle and must be expected to lead and drive these processes. It is only when we do this, that we will find some real movement towards job-creation in our various different spheres in our country. To conclude, the NCOP committee will, in the near future, engage in more specific and specialised discussions in this particular area with each province, and with Salga as a separate entity, to take the process further. We are hoping that, in the process of doing so, we will require further reports on the progress at provincial local level regarding the audits that have been required, as came out of the conference.

Finally, in a joint process with the National Assembly’s committee on trade and industry, we will review the role that the banks and financial sector have played in the SMME area. We are hoping that we will get sufficient co- operation from that sector in order to find real solutions to the problems that the SMME sector faces.

With those few words, I want to thank the Minister, the Deputy Minister and the department for a very healthy relationship, as well as members of the committee who have made it possible. [Applause.]

Mr P NGCOBO (KwaZulu-Natal): Mr Chairperson, Minister and Deputy Minister, I would like to align myself with others in congratulating the Department of Trade and Industry on its review of policy.

Our province is very concerned about a number of issues that affect our province. Our banking industry has not yet changed except to say that they are rationalising their branches, thereby retrenching and outsourcing workers daily. When it comes to black empowerment, to them, the sun rises from the opposite direction. Even the Ithala Bank is better than these corporate banks which only demand collateral from people who have nothing. Therefore one would expect the Department of Trade and Industry to deal with this matter on our behalf. I want to appeal to the Minister to assist us in clarifying the status of Ithala Bank as it is the only bank which is found in deep rural areas in KwaZulu-Natal.

As far as restructuring is concerned, we are aware that the department is busy restructuring and we expect that that restructuring will speed up delivery at provincial level. Time for planning and more planning is over, and we must hit the ground running.

Where gambling in KwaZulu-Natal is concerned, we have only one casino that has been licensed thus far, the reason being that all the companies are taking each other to court. Our view is that KwaZulu-Natal might not even see the casino during our term of office, because we are dealing with people who have money to take each other to court for as long as they can. What can the Minister do for us? Our province is losing a lot in terms of jobs and tax revenue. The illegal casinos are still operating as if nothing has happened. The province is expected to pay the licensed casino a sum of R6 million a month because we have failed to deal with the illegal casinos in the province.

We are aware that spatial development initiatives will be devolved to provinces, but that must not take place in 2004. We want that to be speeded up, because we want to provide people with jobs. We do not want to see consultants simply making money in the process.

As regards job creation, tariffs are gradually being reduced, and we see Sactu marching everyday because our province has become a dumping ground. We know that a debate is going on as to whether it leads to job losses or not, but we want a clear plan from the department that will deal with the job losses in industries such as the clothing, automotive and other industries that are shedding jobs.

Our feeling in regard of SMMEs is that they need to be empowered. We have seen a number of them closing down because of a number of factors, for example the question of working capital, or no proper research being conducted or proper due diligence being observed. We have seen joint ventures failing, because the main companies do not have the time to assist the partner in the joint venture. SMMEs, particularly those operating in industries such as the paper industry, pay 40% more than what is normally paid in the industry just for raw material, as opposed to big companies, because their businesses are not big enough.

We see people walking around with contracts, trying to sort out funding. Banks do not even look at the papers. They tell them that this is only paper and that they cannot give them the money they are looking for. That is a challenge for the department, because this empowerment buzz word needs a lot of unpacking as to who is being empowered in the process.

Regarding the Liquor Bill, our province is about to conduct a workshop to deal with this matter, because we last issued licences years ago. The structures are not yet ready to deal with this matter. Hence, we are expecting the Department of Trade and Industry to lead us in this regard. [Applause.]

Mrs J L FUBBS (Gauteng): Hon Chairperson, Minister, members of the House and guests, Gauteng fully supports the Trade and Industry Vote, and furthermore congratulates the Minister and his team on carving a niche in South Africa as a whole and one in which Gauteng can realise the full thrust of its economic development, to grow the economy in a developmental way, which we believe is the only way that will lead to a sustainable economy, and one that will, in due course, promote job creation by creating an enabling environment.

Regarding the thrust of these programmes, in particular the SMME, the outline that the Minister gave us during the SMME summit which took place here and was organised by the chair of the select committee was actually very enlightening and heartening to Gauteng. We believe that SMMEs can act as a vehicle for job creation and also for developing the economy.

The Minister indicated then and again today this new direction, or the recognition that the restructuring of the economy will certainly entail this turbocharged approach. In Gauteng the manufacturing sector is more or less the same as it is at national level, but it is clear that there has been, over time, a shift in the way our economy has developed. The actual approach of the SDIs and the thrust thereof has enabled Gauteng to begin to realise its economic potential.

The Minister referred to a number of the projects, or rather simply the fact that we had launched certain projects in this direction. Suffice it to say that the Gauteng Spatial Development Initiative has actually been allocated R1,2 billion in this regard. I would just like to mention some of them and the direction that they are taking. There is the Innovation Hub Project. Again, all of the projects have been undertaken in partnership with not only business, but also parastatals and work hand-in-hand with the national sphere of government as well as the local sphere of government. Regarding the Kaserne inland port, the largest inland port in Africa, it is quite clear that if we are going to cope with our exports, we will be requiring the development of this particular port. It will leverage Gauteng’s position as the manufacturing hub for consumer goods and food products, not only for South Africa, but the whole of sub-Saharan Africa. Again, in line with that, is the development of the Johannesburg International Airport. All of these projects so far are not being carried out in isolation but in a very integrated manner. Transport linking up with, as I said, local and national Government in this regard. The high- speed train will provide much-needed transportation for these manufactured products.

There is also the Newtown Cultural Precinct and the Cradle of Humankind - the Sterkfontein initiative, of which many members have heard. Alongside that is the Rosslyn Auto Cluster. As we know, there is a national initiative on promoting the auto industry. Recently, Volvo also established its Ford plant in the area, alongside the first motor manufacturers, BMW. More recently, we have been looking at developing Constitution Hill.

What does this all show? It actually shows that Gauteng has an imaginative and innovative use of capex. But this would not have been possible without the budgetary framework of expenditure initiated by Vote 32 on Trade and Industry.

What we believe is that the current structural trajectory carved out by the Minister will also provoke the provincial economy by creating sustainable growth. In Gauteng we believe that the new growth trajectory, which the Minister has referred to, is based on three pillars: high value-added manufacturing, smart industries and business, and auxiliary services. Also, this new growth trajectory will provide higher provincial growth and employment rates in a sustainable manner during the medium and long term. However, it is also clear that a dedicated financial instrument will be required, and such instrument is in the process of being established.

The chairperson of the select committee has already referred to the SMMEs, as has the Minister. Gauteng believes that this will be a key area for our economic development for a number of reasons. First of all, we are quite well aware of the structural imbalances and racial imbalances which ensured that knowledge, a key factor in the development of the economy, was left behind. Merrill Lynch said to us that there were similarities between Eastern Europe and South Africa. In Eastern Europe there was a lack of infrastructure owing to the recent war. Although we say that we still have a lot of infrastructure to develop in South Africa, we nevertheless have a lot more than Eastern Europe and Bosnia in particular. However, we have little or no strategically developed skills to promote this sustainable thrust. I think it is going to be very important for the Ministry to interact with Education and other partners in Government to ensure that we develop the necessary skills and knowledge to build the biotechnical side, the IT side, niche markets in agriculture and the financial services side, not only in Gauteng, but elsewhere.

It has become very clear that the bulk export of maize is not going to be sustainable in order to bring in foreign capital. We are going to have to add value to the export of that maize. With respect to the minerals and so on, yes, indeed, we have minerals in Gauteng, but the time has come for us to add value to those minerals and not to export them, unless we have processed them further. It is this element of processing, together with the skills required, that needs to become a major component in the configuration.

In conclusion, we would like to indicate our full support once more and say that the growth trajectory in the province of Gauteng will have to be underpinned, as elsewhere, by strategically developed skills, and by an upgrading of current skills. [Applause.]

Mr H J BESTER (Western Cape): Chairperson, it is indeed a pleasure today, as always, to speak in the NCOP, and I must thank you for focusing on the Department of Trade and Industry, and on what really is the biggest challenge that we have, which is employment creation. I think the Minister dealt extensively in his speech with that particular issue. Much is being said currently about the issue of economic empowerment. But is not a job really the essence of economic empowerment? By that, one gives an individual and a family a recurring income with which they can not only provide for themselves, but clearly expand and grow their skills, besides which I think it is a prerequisite for social stability.

However, the fact is that indeed, and not really for domestic reasons, job creation is now more difficult in this country, as in most small open economies in the world, than ever before. The reason, by and large, is that we, as economic managers of our nation’s economic body, are no longer masters of our own house.

We are part of a global market where forces far larger than ourselves generate the ebbs and flows that determine, in most cases, failure or success. Thus, we suddenly have this incredible irony that whereas the influence of a national government, and then consequently even more so of a provincial government, on the totality of its economy, and therefore its ability to create jobs, has been limited, at the same time the role of Government has become larger and is changing all the time.

The reason for this is that Government now has what I would categorise as two broad responsibilities. Firstly, Government has to understand what is happening in the global economy. Obviously, I think the Minister touched on some of the broad thrusts in the knowledge economy. The speaker from Gauteng before me hinted at the decline worldwide of the commodity economy and the incredible need to beneficiate and to go into smart sectors, but also general technology. So we need to understand those broad thrusts. But even more important than that, we have to understand the niche sectors in which we have a potential to make an impact. That requires an incredible amount of research, analysis and, indeed, information.

I believe, and it applies not only to the national department, but also to every single province, that we have to become much better informed about those industries in which we have a slight chance of competing internationally. Thus we have to, in fact, gear up our intellectual capacity very much more. By that I mean our information capacity. That requires, indeed, that Government needs to move away from just having a regulatory function, which we will continue to have internationally through trade agreements, which that Minister handles, but also locally through trade, to an intellectual partnership with the private sector, so that we can understand what the needs of the private sector are and we can, in fact, do our bit to make that happen.

That brings me to the second point which is that we have to prepare our economy to meet those challenges. Really, what we find is that - and we have spoken a lot about SMMEs - big companies in South Africa and big conglomerates have the capacity to do scenario planning to understand the global economy. But small companies do not have that capacity. They indeed require Government to come alongside them and to play that leadership role.

Let me give the members a very interesting example. One of the most successful regional economic development agencies in the world is that of Scotland. They get a huge budget. They make the Western Cape’s development budget look like less than small change. But they very often, in those industries in which they want to create jobs and compete, put all the entrepreneurs of that particular sector on a plane. They take them to California. They arrange their information tour and they assure them that that is the cutting edge of their industry. They are warned that if they do not catch up with that, they are going to lose their jobs. But that is a government initiative. If somebody told the Minister of Trade and Industry five years ago that that is what he should be doing, he would have said that it was a private sector job and that it was not his job. But increasingly, globally, it is becoming Government’s job and indeed we have to deal with it. Regions play an important role in that. Indeed, part of this is that governments now have to change their institutional architecture to deal with industrial development all the time.

The Minister is discovering this. I urge him to go through institutional change now and I can guarantee him that within four years he will again have to go through it, simply because that is the nature of change.

Let me deal with two very specific issues in the line functions of this department which I think are interesting and are new developments.

The first one clearly is the liquor industry. There has been much policy debate on that in the past few years. A lot of it has dealt with structure and regulation. Some of it has dealt with constitutionality. This matter has now been settled on the constitutional side by the judgment of the Constitutional Court on, I believe, 11 November last year following the reference by the President.

I think that judgment attempted to set the boundaries for the various spheres of government, and I think it has shed sufficient light for a sound intergovernmental framework to be developed. The Western Cape provincial government has embarked on its own policy-making process to deal with those functional areas within our competence, but we strongly favour a nationally agreed framework within which provinces can proceed with their legislation. I think we are very excited in this sphere and I think it is an exciting challenge for our intergovernmental relations ability.

We do believe, however, that this framework must take a number of important factors into account. Firstly, there is a desperate need for the rule of law to be applied in this industry. Most liquor outlets in South Africa, in fact about 80%, are acting outside the law. So, in a sense, they make a joke of the law itself. It would be a complete waste of time if we were to attempt to design a system which cannot be enforced. Enforcement should therefore be our point of departure. I believe that the majority of illegal outlets want to come within the stream. There are those who do want to pay tax, we know that, but it is important for them to be brought in. I think that needs to be our first priority, to bring them in, and then to continue the regulation. Secondly, the competition matters between the various tiers of the liquor industry must be settled by the national Government. I do not believe that it is the domain of the provinces to do so. It primarily deals with vertical integration issues between producers, wholesalers and retailers, and I do believe that a Competition Act or perhaps an amended version could best deal with that.

Thirdly, we need to acknowledge that the use and abuse of liquor have massive consequences for our communities. It is unrealistic to believe that the licensing of liquor retailers can fully address the social consequences of liquor because it cannot. But we need to get that integrated approach to alcohol which really will start dealing with this. Let me just tell the members that it costs my government in the Western Cape several billion rands per annum to deal with the consequences of the abuse of liquor. It is estimated that between 30% and 60% of our hospitalised cases in our provincial hospitals are directly or indirectly related to alcohol abuse. It is a massive situation that we have to deal with, not even to mention the criminal justice component thereof. We have had the benefit of the national process and I think we can produce quickly. Recently, this House hosted, and I think the hon chairperson of that committee referred to it, a conference on SMME support. I believe that it is an absolutely critical debate. I would not pretend even to try to deal with that as exhaustively as the hon chairperson did. I do, however, want to use this opportunity to reinforce the critical importance of developing an extended venture capital industry in South Africa. Yes, our banking culture is too conservative and it needs to be changed. Yet, if one looks at international experience, it was by and large the interventions of government in the venture capital and equity field that have led to a change of culture on the other side.

The CHAIRPERSON OF COMMITTEES: Order! I urge the visitors in the gallery please to be quiet. Thank you.

Mr H J BESTER: Let it be far from me to interfere with the entrepreneurs of the future up there in the gallery. [Laughter.] I hope that they gain something from our debate today.

Just to restate, I do believe that Government needs to play a role in assisting with the risk-averse culture in the private sector. I want to sincerely thank Khula Enterprise Finance Limited for their initiative to create a venture capital fund for the three Cape provinces called New Cape, which the hon the Deputy Minister launched last week.

We strongly support this as the provincial government and will continue to support it. Indeed, we believe that part of the role which we should play as a provincial government is to create a forum for venture capital providers and encourage many more people from the private sector to come in.

The reason for this is twofold for the importance of venture capital. Firstly, the knowledge economy, the innovation-driven economy of the 21st century, is both a creative and a destructive process in that it creates and destroys opportunities. Secondly, we have to bring people who have never had the ability to accumulate collateral into the process. For these two reasons we must stress venture capital’s importance. [Applause.]

Dr E A CONROY: Mr Chairperson, Minister, Deputy Minister, premier, MECs and colleagues. Trade, whether in goods or services, and industry keep the wheels of the economy running. Without trade and industry, all other activity would soon come to a standstill. It is therefore logical that all other Budget Votes should take a secondary place after trade and industry as it provides the fiscal means and foreign exchange for all the other activities to take place.

The big players in the trading and manufacturing field already play a very important and, undoubtedly, highly appreciated role in the South African economy and that of the Southern African region. Government must therefore continually improve the favourable climate in which they operate.

The New NP stance on Government’s role in this connection is already well known, namely that the most favourable investment climate for foreign and local businessmen should be created in South Africa if this country wishes to enjoy the advantages of globalisation.

I will therefore concentrate on another aspect of what the Department of Trade and Industry sees as one of its main tasks, namely to facilitate access to sustainable economic activity and employment. I wish to focus on the access of the existing and potential small, medium and micro enterprises to sustainable economic activity, and on the ever-increasing important role they can play in economic empowerment and the creation of employment owing to their inherent capacity for proactivity and their propensity for being labour intensive.

Daar word dus met groot waardering kennis geneem van die feit dat die Departement van Handel en Nywerheid weer eens met ‘n vergrootglas gekyk het, en dit deurlopend doen, na die rol wat hy speel in die skepping van ‘n gunstige klimaat waarin klein, medium en mikro-ondernemings nie net ‘n beslag kan vind nie, maar ook waarin die moontlikhede van oorlewing vergroot word en hulle kan gedy.

Die Minister se erkenning tydens ‘n onlangse spitsberaad dat die Regering tot dusver nie daarin kon slaag om dié gunstige klimaat te skep nie word ook des te meer waardeer, want slegs deur ‘n mens se eie foute raak te sien en te erken kan jy ‘n nuwe begin maak en ‘n poging aanwend om daarop te verbeter.

Die spitsberaad, wat onder die beskerming van die gekose komitee belas met ekonomiese sake gehou is, kan dus kwalik op ‘n beter tydstip gekom het. (Translation of Afrikaans paragraphs follows.)

[It is therefore with great appreciation that cognisance is taken of the fact that the Department of Trade and Industry has once again scrutinised, as it continuously does, the role which it plays in the creation of a favourable climate in which it is not only possible for small, medium and micro enterprises to establish themselves, but also in which the possibilities of survival are increased and in which they can flourish.

The Minister’s admission during a recent summit that the Government had thus far been unsuccessful in creating this favourable climate is appreciated all the more, because it is only by seeing and acknowledging one’s own mistakes that one can make a fresh start and make an attempt to improve upon them.

The summit, which was held under the auspices of the select committee charged with economic affairs, could therefore scarcely have come at a better time.]

It is therefore a pity that the Minister chose to single out commercial banks as the culprits responsible for the inability of SMMEs to really take off in South Africa. Banks are in the banking business to make money and not to lose money, and they will, like any other investor, invest where their risks are the least and their chances for making a profit the most. That is what their shareholders and the depositors expect from them.

It is also generally accepted that even in other countries the life expectancy and the chances of eventual sustainable economic survival of SMMEs decrease with the decreasing size of an enterprise, and that the risks of whoever is involved in these smallest of small enterprises increase with a decrease in chances of survival. This includes the banking sector.

No wonder that it is stated in the 1995 White Paper on A National Strategy for the Development and Promotion of Small Business in South Africa that, and I quote:

Not unlike other developed countries, South Africa’s commercial banks have in the past been reluctant to provide comprehensive services for the fragmented, risk-prone and geographically dispersed small enterprise sector.

One would imagine that they would still today, for the same reasons, be reluctant to run these risks. The fact that commercial banks are keen to provide financing for the big black empowerment transactions, as the Minister stated, proves that their reluctance to finance the smaller, high- risk sector is not owing to racist considerations, but purely based on normal business decisions.

Maybe the time has come for the Government to seriously consider sharing the risk with the banks, possibly based on the example of the Credit Guarantee Insurance Corporation, by guaranteeing part or all of the risk of providing finance to SMMEs. In this way the banks can provide the funds and the necessary banking administrative infrastructure while the risk is borne by the state.

After all, if lending money to SMMEs is not as risky as the Department of Trade and Industry apparently purports it to be, the Government should not have any problem in providing the guarantee for such loans.

Ter afsluiting noem ek graag dat die Nuwe NP die begroting vir die Departement van Handel en Nywerheid, soos voorgelê deur die Minister, steun. Die Nuwe NP steun insgelyks die departement se inisiatiewe en voorgestelde strategieë ter bevordering en uitbouing van die kleinsakesektor in Suid-Afrika. [Applous.] (Translation of Afrikaans paragraph follows.)

[In conclusion, I should like to mention that the New NP supports the appropriation for the Department of Trade and Industry, as submitted by the Minister. The New NP likewise supports the department’s initiatives and proposed strategies for the promotion and development of the small business sector in South Africa. [Applause.]]

Mr J L THERON: Mr Chairperson, hon Minister, Deputy Minister, premiers and MECs, in the short time that is allocated to me I would like to take a look at trade and industry from a macro point of view and also from a micro point of view. On the macro side attention will be paid to our position in the global economy. At the micro level I will make some comments on trade and industry in South Africa, and I would like to give it a Gauteng flavour as I represent Gauteng in the National Council of Provinces. I will now address the macro viewpoint on the global economy. In South Africa we have chosen to be part of the global economy and, of course, thereby try to reap some of the substantial benefits which might accrue from this. But, of course, if we want to compete globally the competitive forces are great. Therefore we will have to play this global economic game to the best of our ability and every South African will have to accept his or her responsibility.

At the present moment - and these are yesterday’s figures - the South African rand is trading at just more than R7 to the American dollar and at R10,68 against the British pound. These indicators show that at present we are not doing so well globally. If I may briefly focus on this, it is necessary for me to make some comments about the hon the President, Thabo Mbeki, because he has a great influence on South Africa’s economy and, of course, on trade and industry in South Africa.

In the first place, maybe because of a lack of understanding of the very close linkage between global politics and global economics, his stance on Zimbabwe is, to say the least, undesirable. As was said in the media, President Thabo Mbeki had a Rubicon speech on Zimbabwe when he addressed the nation on national television. As we all know, he dismally failed to cross this Rubicon, because the rand plummeted to a record low of R7,23 to the American dollar.

In the second place, hon President Mbeki called together an international panel on HIV/Aids. The cost of this to the local economy was thousands of rands, if not millions. All this did was to set us back many years, back to the point where it was discovered that Aids is caused by the HI virus.

Thirdly, there was a furore in the media over the R300 million that is going to be spent on the new aeroplane for the President. The DP wants to know how this can be justified if more than 50% of our people are jobless. We know that since 1994 more than a million jobs have been lost in the formal sector. If, for instance, this R300 million were to be spent on developing entrepreneurs and creating new SMMEs, the unemployment problem in our country could definitely have been alleviated.

Ek wil graag voorlees uit ‘n berig in Die Burger van gister. Die opskrif van hierdie … (Translation of Afrikaans paragraph follows.)

[I would like to read from an article in Die Burger of yesterday. The headline of this … ]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Excuse me, hon member, would you please take your seat? On what point do you rise, hon member?

Mrs J L FUBBS (Gauteng): Mr Chairperson, will the hon member take a question?

The DEPUTY CHAIRPERSON OF COMMITTEES: Will you take a question, hon member?

Mr J L THERON: Yes, I will take a question when I have finished, Chairperson.

Ek wil graag vir agb lede voorlees uit ‘n berig in Die Burger van gister onder die opskrif, ``Afrika `vasteland sonder hoop oor swak leierskap’’:

Op die voorblad van die jongste uitgawe van die invloedryke Economist tydskrif …

…‘n internasionale tydskrif …

… word Afrika as die ``vasteland sonder hoop’’ uitgebeeld.

``Die nuwe millennium het meer rampe en ellende as hoop vir Afrika gebring. Erger nog, die enkele ligstraaltjies van hoop word al flouer.’’

Die Afrika-renaissance waaroor baie gepraat is, lyk na ‘n illusie. Nuwe leiers wat in die jare negentig die hoop op ‘n demokrasie en groter vryheid op die vasteland laat opvlam het, het hulle ook deur oorloë laat verlei en die gemiddelde ekonomiese groeikoers is onder 3%.

Minstens 45% van die inwoners van Afrika leef in absolute armoede. In baie lande is ekonomiese groei van 7% per jaar of meer nodig om dié syfer in die volgende 15 jaar te verbeter.

Nou wil ek die President graag vra oor die Afrika-renaissance en die leierskap wat hy openbaar. (Translation of Afrikaans paragraph follows.)

[I would like to read to hon members from an article in Die Burger of yesterday under the headline, ``African continent without hope due to poor leadership’’:

On the front page of the most recent edition of the very influential Economist magazine …

• an international magazine -

… Africa is being portrayed as the ``continent without hope’’.

``The new millennium has brought more disasters and misery than hope for Africa. What is worse, however, is that the few rays of hope are becoming weaker.’’

The Africa renaissance which is talked about a lot is looking like an illusion. New leaders of the nineties who rekindled the hope for a democracy and greater freedom on the continent, have also allowed themselves to be misled by wars and the average economic growth rate is under 3%.

Approximately 45% of the inhabitants of Africa are living in absolute poverty. In many countries economic growth of 7% or more per annum is needed to improve this figure in the next 15 years.

Now I would like to ask the President about the Africa renaissance and the leadership which he displays.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Hon member, your time has expired. [Interjections.]

Once again I would like to appeal to our visitors in the gallery to move out quietly. Thank you.

Mr M V MOOSA: Chairperson, on a point of order: There was a question on the floor.

The DEPUTY CHAIRPERSON OF COMMITTEES: Thank you for that, Mr Moosa. Hon member Mr Theron, are you still prepared to take the question?

Mr J L THERON: Chairperson, my time has expired, but if there is a question, I would be willing to answer it. [Interjections.]

Mrs J K FUBBS (Gauteng): Chairperson, of course it would be useful to know which portion represents Gauteng province and which the DP, but that is not my question.

I would like to ask the hon Theron to explain to me, and perhaps the House, exactly what he meant when he referred to the R300 million that could have been better used to create jobs. What is his understanding of the labour absorption capacity of the economy that he seems to think this is going to make such a huge indentation?

Mr J L THERON: Chairperson, I hope I understand the question correctly. We had a summit here, a very important summit, on SMMEs and on entrepreneurship. All I am saying is that if we were to use that R300 million to stimulate SMMEs and to educate entrepreneurship in this country, I think poverty would be alleviated. [Interjections.]

The DEPUTY MINISTER OF TRADE AND INDUSTRY: Chairperson, hon Minister of Trade and Industry, hon premier of Mpumalanga, hon MEC of the Western Cape

• I think he has left the House - hon members, ladies and gentlemen, it is indeed a pleasure and a privilege for me to participate in this debate in the House today.

I do not have a question for the previous speaker. I just wondered, as he was talking, what the President’s stance on Zimbabwe has to do with the budget of the DTI? What do HIV panels and their cost have to do with the budget of the DTI? What has the R300 million for the aeroplane got to do with the budget of the DTI? Because all this fall under the budgets of other departments. [Interjections.]

With regard to the allegation that the African renaissance is a dream, well, I do not know where the hon member lives. If he is from this country, he will know that the African renaissance is a reality and that it is going to happen. Hence our stance and the relationship with the SADC countries and our neighbours to ensure that this becomes a reality.

Let me start by saying that the Minister has outlined, in broad terms, the changes that we are engaged in, as a department, in order to allow us better to deliver on the challenges facing our nation. As everyone is aware, a major restructuring is under way in the Department of Trade and Industry, and its sole purpose is to achieve maximum service delivery.

I understand the delegate from KwaZulu-Natal saying that the planning must stop and that we must hit the ground with speed. We just want to be careful that we do not hit the ground and stop there because of the way and the speed with which we hit the ground. So what we are saying is that the restructuring that what we are undertaking is based on years of experience and the practice of our policies that we have been implementing. What we are restructuring is not the policies, but our structures and our institution, so that we deliver the services better. We are restructuring the implementation agencies, the implementation arms of our policies to ensure that they are more focused and that their mandates are better delivered.

I wish to direct hon members’ attention to the areas we have elected to focus on. The newly restructured Department of Trade and Industry has a new management structure which consists of the policy board, the executive committee - which we call Exco - and the management committee. These different levels of management meet at different times and fit into one another’s decisions taken at the various levels. In its new form, the department has merged the multitude of programmes into three main programmes, namely the development of international trade and investment, which is DT for short, the development of enterprise commerce and industry, Deci, and group services. These new divisions are led by the three deputy directors-general, a level of management we have reintroduced into our corporate governance structure.

In our new form, the department is focused on adding value to the economy, contributing to international competitiveness, promoting small, micro and medium enterprises, achieving black economic empowerment, developing the SADC region and reducing wealth inequalities. Because our fundamental task and strategy is to grow our economy through facilitating access to sustainable economic activity and employment, promoting higher levels of investment, creating increased market access for our producers in international markets and creating a fair, efficient and competitive marketplace for business and consumers, the new DTI is restructuring the relationship between itself and its institutions to improve service delivery and to create greater alignment with the economy. This will enable our institutions to become implementers and the DTI to become the policy planning, programme development, monitoring and evaluation unit that it is supposed to be. In order to generate the investment necessary in our economy for economic growth, we are focusing more intensely on promoting internal investment and foreign direct investment. In this regard, we have developed a national, regional and international strategy.

Locally, we are further strengthening the paradigm shift from demand-side measures to supply-side measures in our support schemes for industry. We are improving our industrial policy to better direct our economic activity, and strengthening our support of technology development and innovation in commerce and industry. As we all know, the department addresses the needs of our people through empowerment and sustainable development by focusing on entrepreneurship and research into development. We are bent on achieving empowerment by leveraging the economy through, amongst other things, the National Empowerment Fund, promoting our industrial participation programme, assistance for small exporters, the competitiveness fund and the sectoral partnership fund. Among our notable achievements this past year, our highlights to date are the great shifts in the demographic composition of the department. If one looks at the racial composition in the department, it has shifted more towards reflecting the racial composition of our country.

In 1993-94, the department was 90% white and 10% black. Figures for 1999- 2000 show that we are now 46% white and 54% black. This year and over the coming years, we intend accelerating this transformation process by attracting suitable women to top positions in the department and training those that are already in the department. I must say that this is the biggest challenge that we are going to face if one takes into account that the composition of our management structure at present is 100% male.

Part of the transformation at the DTI included addressing the issue of poverty as a strategy towards achieving economic growth. This meant establishing programmes to address issues of social empowerment. So far, this has included, amongst other things, the establishment of women exclusive programmes and also consciously identifying them as beneficiaries of our SMME programmes.

The challenge we face at the moment is how to broaden this programme by making sure that other previously disadvantaged groups, that is, the youth and people with disabilities, are included in our programme. This we hope to achieve and monitor by establishing an integrated social empowerment programme which will be accountable to the Ministry through the office of the director-general.

As hon members may recall and as we all know, we established a dedicated institutional framework for small business development in 1995. I think a lot has been said about the SMMEs and the support they require, as well as the environment within which they function. In the summit that everyone has been talking about, I think we canvassed a lot of issues relating to both national and provincial levels of government. I think that we are all ad idem that a lot of work has been done. However, more planning, more integration and a co-ordinated approach by national, provincial and international structures in working with local governments has to happen. We have to make our products more visible where it counts most and ensure that the target group, the women, youth and the rural people, are the recipients of our programmes. All those things were very clearly spelt out. I am hoping that the resolutions that were adopted on that day are going to actually inform the provinces in their work on the SMMEs and are actually going to strengthen their interaction with local government, especially if one takes into account the fact that the restructuring of the DTI is going to ensure that, at local level, there are going to be one-stop shops where, under one roof - whether physically or virtually - one will find all the DTI family and their products.

So, through these institutions and the financial and nonfinancial support for small business, we were able to service and support a great number of small, black and women-owned businesses, particularly in the rural areas. However, of course the success of these programmes has helped us to learn. We are currently in the process of reassessing our impact, and based on our findings, we are improving our efforts. As the Minister and I said during a conference, we will be announcing some major support measures for SMMEs and new incentives in order to try and encourage exports and internal investments.

We have redoubled our efforts to develop the SADC region. Together, we are working on various initiatives. We are actively involved in establishing bilateral and multilateral trade agreements within SADC, and improving trade policy and restructuring our tariff regiments. We are engaged in infrastructure development on a world-scale project level with our regional partners. In the last week of March, the SADC Ministers responsible for trade and industry met in Sandton and have targeted 1 September 2000 for the implementation of the SADC free-trade agreement.

Obviously, the implementation is the first stage. More work will need to be done after that in training both our people and the SADC officials, the customs officials, and to get our systems to work and talk together so that we are able to trace and track the origin of goods, because the rules of origin are the most important component in making this trade agreement work.

At the beginning of this year, Ministers from African, Caribbean and Pacific countries met the EU in Brussels to negotiate and conclude a successor agreement to the Lomé convention. I must say that this agreement has now been concluded. The role played by South Africa and its participation in the forum was of great benefit, and on 8 May we will be signing the new ACP-EU trade agreement in Fiji.

Also, in February, the Minister and I led a delegation of South African officials to the 10th session of the United Nations Conference for Trade and Development, Unctad, where the Minister handed over the presidency to Thailand. Unctad’s role in aid of developing countries was reaffirmed at this session, thereby continuing its contribution to developing countries and their participation in multilateral fora.

South Africa made major interventions at the conference, and we had the distinct honour of having our Deputy President participating in the high- level heads of state forum of the conference.

I will not touch on the issue of the World Trade Organisation and grappa. The Minister has touched on that.

Furthermore, we are undertaking big projects such as the restructuring of our companies and patents office. Anyone who knows about the setting up of a company knows that if one’s company’s registration and deregistration process is not efficient and not running smoothly, then that could delay the conclusion of contracts and the coming in of investments. We have a major corporate law reform project which will address most of the matters that the chairperson of the select committee was talking about.

We are also, as members know, setting up a parliamentary office which is going to establish active liaison between the department and members of Parliament. We hope that once the office is set up, all members of Parliament will have full access to the Department of Trade and Industry’s projects and programmes. We hope that we can extend that access to the members of the legislature in the Western Cape so that all members of Parliament know exactly what is happening in the department, and are able to actually inform their constituencies on this, and to assist the people who are supposed to use our services.

As hon members have heard, the Department of Trade and Industry has taken the challenge of meeting the needs of our people and country a step further. The changes that we are mentioning here today are indicative of an institution that has taken stock of the issues that are confronting our people and is developing the best possible solutions to these issues by creating the necessary vehicles to deliver on these. The budget that is presented here will enable us to meet these challenges.

In conclusion, I wish to thank the Minister, the Director-General of Trade and Industry, the former Deputy Minister of Trade and Industry and the chairperson of the standing committee for all the co-operation that I have received from them. [Applause.]

Mr E S MBATHA (KwaZulu-Natal): Mr Chairperson, hon Minister, hon Deputy Minister, hon Premier of Mpumalanga and hon members of this House, I would like to take this opportunity to thank the hon Minister of Trade and Industry for his well-structured Budget Vote speech, which we, as the IFP, support.

We are fully aware of the complexities that are involved in formulating and balancing the various needs and demands that this Ministry has under its wing. Having said this, I would like to comment on the matter of small, medium and micro enterprises. Our democratically elected Government should continue creating jobs in our country. Our people are desperate for jobs, and we cannot afford to let them down. It is therefore the duty of our Government to provide them with jobs.

The Government should provide a safety net for the poor and those who are unable to look after themselves. The Government should also take a lead in ensuring equality or opportunities for a just distribution of resources.

It is important, when one is now addressing the issue of small, medium and micro enterprises, to note that the SMMEs contribute at least 33% of South Africa’s GDP, and that it employs about 45% of the workforce in our country. Our province - KwaZulu-Natal - therefore feels that the Government should heavily promote this sector as being key to the generation of employment.

In order to ensure maximum impact and efficient use of resources, special attention should be given to the co-ordination of the SMME development strategy at national, provincial and local government levels. It is encouraging to note that the hon the Minister in his speech is addressing the question of SMMEs. The only problem that one observes is the question of the amount allocated to do this important job. One would have been pleased if more funds had been allocated to programme 2, which covers SMMEs quite extensively.

I would like to thank the hon the Minister for addressing the question of formulating a new consumer credit policy. We feel that the Government must address the issue of helping the millions of our people who have no easy access to credit facilities, because of being blacklisted at the ITC. It is painful to see millions of our people not being assisted by the financial institutions, solely because of ITC listings. We support the hon the Minister when he touched on turning the whole country’s economy around. We really support the Minister on this one.

When our economy exports about 30% of its production and imports a little more in exchange, then it is obviously the duty of the world economy to address this issue. We are hopeful that the Minister will indeed turn our economy around, and we know he has what it takes to do so. We really applaud him for his address this morning. [Applause.]

The DEPUTY CHAIRPERSON OF COMMITTEES: It looks as if Ms Sithole is not in the House, so we will move on to Mr Durr. Mr K D S DURR: Chairperson, Minister, I would like to say that we can be thankful for the way the Minister has pointed out and explained his availability, the openness in his department, his readiness to accept its failings and shortcomings. These are all things that we admire and respect. I am afraid, however, that the lack of development in the SA economy, unhappily, is less to do with the Minister’s department than other departments that relate to his department. It is therefore no good saying, ``Oh well, we are only discussing the Department of Trade and Industry’’. There are other things which impact very directly upon the failure of his department actually to achieve its full potential.

The hon member Fubbs and the hon member that just sat down talked about jobs, spoke about the need for us to use added-value, education, skills and so on. I think Mr Bester mentioned the same sort of thing. The fact of the matter is that we are destroying skills. We have in the past six years lost 300 000 skilled people - the very best people in this country in terms of skills and training - by emigration to the English-speaking world alone. We may have lost twice that number, if we take the world as a whole. It is not only white people. I know of people who applied for jobs with me when I was working abroad, and they were black South Africans, South Africans of colour. We have to find a way to stop this emigration. The biggest impact in stopping that would be made, of course, by reducing crime.

If we reduced crime, we would double tourism to South Africa tomorrow. The investment in crime-fighting is absolutely central to developing the economy of this country. The Minister will know that we only have to look at the fact that since 1990 South Africa Inc has destroyed more than 30% of its capital value. It is no coincidence that the dollar market capitalisation of the JSE and the dollar GDP have also shrunk by 30% since

1. That is bad news. Globalisation is good news, but globalisation must be pursued by a confident South Africa that is confidently wanting to expand to the benefit to our country as a whole. I am not always sure that that is happening. Every time I open an investment magazine, I read about investing offshore and the advantages of doing so. I know the returns have been better, but that is because of our inability to unlock the huge potential of our country and of its region and to unlock the confidence of our people.

Every day we read of one of our major companies moving abroad. When they are there, they complain about their exposure to the high risk of South Africa, and try to reduce that risk. Everyone wants to invest in dollar funds demarcated in rand, others look to invest for rand hedge funds, or in companies that are trading abroad. That is not the way in which we are going to develop our country. I am not trying to be funny or trying to score a point off the Minister.

I am very concerned, however. I think there are solutions, but the solutions do not only lie in the Minister’s department. I would say that I implore the Minister that, when he is planning, he should talk to his colleagues, engage with them and tell them the economic consequences of their action or of their inaction. If, for instance, one takes the Department of Home Affairs, it has lost control over the integrity of our boundaries, and we are thus flooding the country with immigrants, costing our local people jobs, and making us the drug-trafficking capital of the world. We cannot go on like that. [Interjections.]

Mr T S SETONA: Mr Chairperson; Minister; Deputy Minister, hon Premier of Mpumalanga province, Ndaweni Mahlangu; MEC from the Western Cape; special delegates; and members of the House at large, the recent legislative workshop on SMMEs, hosted by the Select Committee on Economic Affairs, was indeed a milestone in the national effort to bring about equality in the economic welfare of our people.

Whilst our country has successfully managed to arrive at a peaceful political settlement with concomitant political stability, economic justice and equality continue to be a reality of a distant future. This is manifested by the high unemployment rate and high levels of poverty amongst the historically disadvantaged sections of our society.

On the economic front, South Africa continues to be a two-nation state, with whites on the one hand as the first-class citizens, having access to all economic opportunities. I think Mr Durr has alluded to that. We must unpack and dissect statistics of people who have left this country because of the reasons that he has alluded to. On the other hand, one has the blacks who continue to be ravaged by poverty, homelessness and unemployment.

We cannot sit back and allow this situation to continue unabated. The White Paper on SMME development is one of the key attempts by Government to address these inequalities by bringing about economic justice to the historically disadvantaged.

These realities are more glaring in the Free State province which is a former heartland of white domination. With the closure of many mines in the goldfields and the constant mechanisation of labour, which continues to result in the mass retrenchment of our people, poverty has become synonymous with life in many areas within the Free State, particularly, the former Bantustans. I refer here to the Qwaqwa area and the former Bophuthatswana, as well as the Thaba-Nchu area next to Bloemfontein.

The Free State government, through the Department of Finance, Expenditure and Economic Affairs, has taken a myriad of steps to promote the growth of the economy with a particular bias to SMME development. The following are just a few of the initiatives of the province in promoting the growth of economy: The creation and the setting up of the business incubator in Botshabelo, in the Thaba-Nchu area, in partnership with the Flemish government, which is aimed at training emerging small and microentrepreneurs and providing mentorship for a particular period. The Free State government continues to utilise the procurement policy of Government to mainstream the historically disadvantaged section of our community through entrepreneurship. There is a small diamond jewellery factory in the goldfields which is an attempt to minimise unemployment as a result of the closure of a number of mines in that particular region.

The department has completed an investigation on the industrial development zone in the BBT area, which is Bloemfontein, Botshabelo and Thaba-Nchu. The plan is due to be submitted to the DTI for approval. The department, through the SMME desk in the economic affairs directorate, has facilitated the training of women in chicken farming in the Reitz area and the project is proving a success. The Department of Public Works, through the community- based public works programme, continues to play a critical role in the development, training and promotion of emerging contractors, thus providing jobs to many unemployed.

As part of the effort of skilling our people for challenges in income- generating projects, the Free State Youth Commission has been running a young women’s skills project to train young women on a wide range of skills regarding income-generating projects. Last year, they trained more than 30 women from far-flung rural areas of the province. A need for Khula and Ntsika as government-created structures to make a meaningful impact on the ground cannot be overemphasised, as this matter was raised sharply by a number of provinces during our summit last week.

In conclusion, we must, through our collaboration with the Ministry, grab the opportunities presented by the reorganisation of the DTI to ensure synergy and co-ordination between the national department and provincial government on three key strategic priorities, namely SMME development, job creation and implementation and monitoring of industrial strategy. We must further urge the Ministry, through Minmec, to regard the issue of the development of an integrated provincial economic strategy by provinces as a matter of urgency. The strategy must take into account the unique economic potential of each province, and further attempt to underpin collaboration between provinces and local government in pursuit of an integrated provincial development strategy.

I think it is important that on those occasions when we make statements in this House, we make those statements within the spirit of nation-building, and also to inform our public about the hard realities that confront us, first as public representatives and, second, as leaders in our own communities.

Mr Durr from the ACDP referred to more than 300 skilled people who fled this country because there were no opportunities in this country for them where their potential could be tapped for the development of our country. [Interjections.] I do not think it is appropriate for us to be misled by that statement, because I am convinced that the majority of the people who have fled this country because of the reasons he alluded to are the people who benefited from apartheid, the people who benefited from the racial segregation of the past. [Interjections.] We are not apologetic about it, whilst it remains our task as Government and Parliament to ensure that we create an environment where all our people can feel hope to contribute to the national development agenda. [Interjections.]

Mr K D S DURR: Mr Chairperson, may I ask the hon member a question?

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Mr Durr, you should state whether you are rising on a point of order.

Mr K D S DURR: I am rising to ask the hon member a question.

The DEPUTY CHAIRPERSON OF COMMITTEES: Do you want to ask the hon member a question?

Mr K D S DURR: Yes, Mr Chairperson.

The DEPUTY CHAIRPERSON OF COMMITTEES: Hon member, are you prepared to take a question?

Mr T S SETONA: I do not have time for questions. I want to put my message across. [Interjections.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Mr Durr, the Chair has already recognised you and settled the matter.

Mr T S SETONA: I would like to conclude by saying that whilst it remains our duty to ensure that we create an environment for all our people across colour lines to participate in the national development agenda of our country, we are not going to be blackmailed by those unpatriotic elements in our country that continue to try and force us to accept particular agendas, and failing that, tell us that they want to leave the country. [Applause.]

Mr M V MOOSA: Mr Chairperson, on a point of order: While you were speaking, the hon member Durr referred to the hon member Setona as a stupid person who was making stupid points. I think that is quite unparliamentary, and I would like you to discipline that member. [Interjections.]

Mr K D S DURR: I withdraw it, Mr Chairperson.

The DEPUTY CHAIRPERSON OF COMMITTEES: Hon member Mr Durr has withdrawn his comment.

The MINISTER OF TRADE AND INDUSTRY: Chairperson, firstly, let me thank all those who have spoken. In general, the level of contribution and the reportage from the provinces have been extremely positive, confirming the development, once again, that occurred in our workshop on SMMEs. I think this development of more accurate, more detailed and better-informed debate contributes massively to the NCOP playing an important role in integrating and developing the economic activities of the provinces.

If I could briefly respond to some of the points that have been raised. Firstly, I would like to respond to my comrade, Paulos Ngcobo. The issue of the banks is a matter that would have to be dealt with by the Ministries of Finance and, to a degree, Trade and Industry. In fact, this matter was discussed yesterday between the two Ministries. As I indicated last Monday, the line of approach at present is to look at various forms of community reinvestment legislation, and, as the banks themselves have indicated, they are not, in principle, opposed to this. It is a mechanism that can assist.

While I am speaking about this I would just like to say to hon member Conroy that I did not single out the banks as the sole cause of this. Any reading of my speech will show quite clearly what I was saying. I spelt out structural problems with our banking sector. Some of these problems are South Africa-specific and some are general, as the changing structure of banking in the world economy occurs. I think we need to be very cautious. This is not an attempt to bash banks. It is an attempt to accurately describe what is happening in our economy, as I did with DTI, as we have done in many other areas of the economy.

I would like to say to KwaZulu-Natal that there are problems. All our provinces have problems, but one of the things that is really very important for provinces to do in their own management of their economies is to project a positive and clear strategy as to what they are doing. Clearly, it is not possible for the national Ministry of Trade and Industry to deal with all these matters. It is imperative that the provinces project this positive and clear vision of what they are doing. One can see very clearly that the provinces that do this are attracting investment. We must be cautious about only focusing on the problem areas we have. It is imperative that we focus on our possibilities and strengths.

Bearing in mind what one can see from the statistics, KwaZulu-Natal is one of the largest attractors of investment. Their economy is probably growing faster than all other economies at present. Maybe Mpumalanga’s economy is growing a little bit faster. Just in terms of the Lubombo SDI, we are looking at R550 million worth of investment over the next five to 10 years. As all of us have seen, the SDIs and the investment that comes in to them do not happen just like that. One has to work at this repeatedly. One has to really bring in the investment and attract it.

Richards Bay, Durban, Pietermaritzburg and other areas have a considerable range of investment projects coming in. Therefore I do think that we should begin projecting and clarifying a very positive image of all our provinces, and of KwaZulu-Natal in particular.

I think the projects that have been spelt out in Gauteng have elevated and attracted peoples’ attention to what can be done. This is not because Gauteng is the only province that is doing these projects. There are massive projects elsewhere. The Western Cape has many projects, as does the Eastern Cape. But the fact is that the provincial government planned carefully and, to their great credit as was indicated, actually made funds available from their own budget over a two-year to three-year period for these projects from their own budget. They did this through very tight and careful fiscal planning, which indicates very clearly the benefits of careful fiscal planning and careful fiscal management. What this does in the end is release resources in terms of which provinces can intervene and play important roles.

The other imperative message out of this is that it is essential for the provincial governments not only to work with the national Government - this we take for granted - but to work with the local governments and, obviously, to do so in those areas where we have the big metros. In the world over metros are very important drivers of economic activity in the whole economy, not just in that of their own. This interaction and relationship is an immensely important lesson that we are learning and which we are improving our capacity to undertake.

A point has been made about skills. This is imperative. In fact, as was indicated by the Deputy Minister on our restructuring, we will be putting in a specific programme, a programme that interacts with labour, education and the tertiary educational institutions to deal with specific advanced skill requirements.

In many of our projects, for example, in the automobile and steel projects of Ngqura, it was interesting that when we examined the actual training programmes offered by the local universities and technikons, we found that at that stage they did not have programmes that were tailor-made or specific to this kind of industry.

Those hon members familiar with the automobile industry will know that elsewhere there is a tremendous amount of training that goes into the technical level skills and shop-floor management skills of this industry. I am excited to say that we have developed, with all of the tertiary education institutions in that area, a range of training programmes for management, for skilled workers and for shop-floor managers and supervisors, which will be very beneficial when these projects come into place.

So it was clear to us, as DTI, that we had to be an integrative force in the advanced skills of management, technical skills, technological skills and scientific skills, working with science, technology, education, and labour, in particular, as I indicated.

The hon MEC Hennie Bester has apologised for leaving. He had to go to another meeting. Generally, I think, he is correct. In the Minmec we had a very good discussion and all the provinces and all the MECs, including ourselves as the Minister and Deputy Minister nationally. It is surprising how much of a common approach we have to dealing with the challenges of a modern economy. I think this is absolutely correct and that, in fact, at provincial and national levels we will have to provide more information. It will be one of the key objectives of DTI to circulate more information.

The venture capital issue is important, and hon members will see that we have moved more and more in that direction to bring about venture capital. One of the weaknesses of the capital markets at present is that venture capital is not there in sufficient quantities and we need to generate it.

Let me say something with regard to exchange rates and the South African economy. These points have been raised in one way or other by members Theron and Durr. I think there is a fairly basic misunderstanding here of the fundamental economic factors that influence exchange rates and what the meaning of an exchange rate is. One of the mistakes made in South Africa by many groupings, with all due respect, is that we are still in a world where we think that South Africa is everything. We have forgotten the message which many of us here have been conveying, which is that we are actually part of the world economy now. There is nothing exceptional or different about South Africa. We are part of the world economy. This view that we are some special little enclave is from the past.

Now, on exchange rates, really it is just an absurd proposition. If one examines the exchange rates of every single successful developing country for the past 15 years, one will see the same thing, because what has happened over the past 15 to 20 years is a very clear process. Only three major currencies have strengthened, and in the past five to 10 years a fourth one joined them. What are those currencies? They are the United States dollar, the German Deutschemark and the Japanese yen. This emerges from their pre-eminent position in the world economy. In the past four years, particularly since the Labour government took over in the United Kingdom, the pound has also strengthened.

So, essentially, the European currencies are strengthening, as are the dollar and the yen. Most other developing countries’ currencies have persistently and continually depreciated. Therefore, the exercise we are doing about the dollar value of our GDP can be found repeated in virtually every developing country.

The exchange rate reflects a number of things. It reflects specific flows at a particular point in time, and it reflects the overall patterns and strengths of the world trading and capital movement systems. So capital- exporting countries tend to have stronger rates, and capital-importing countries have weaker rates. We must see this.

Even in recent times, it has been clear that the Zimbabwean issue impacts in one way or another on our currency. This is clear. How much, no one knows. But what is also manifestly clear, is that every other currency in the emerging markets is doing exactly the same. If one tracks the Australian dollar - their economy is, more and more, becoming comparable - or if one takes an Argentinian peso, one finds that they are doing exactly the same. These are changes in the current movements of capital and trade.

So let us forget this idea that somehow South Africa is some sort of basket case. This is something that keeps coming up. The DP always want to tell us that tomorrow one can expect an absolute disaster in this country. They have been saying this for 25 years. [Interjections.] In the apartheid period the DP said: ``We cannot change things. So we have to work within and sit in Parliament.’’ The ANC did not believe them. Who changed things? The ANC did.

In the current situation, the DP keeps saying: ``Tomorrow is going to be a disaster. This is a problem. That is a problem. This economy is going to the dogs.’’ Yet, every year the economy gets stronger and stronger. [Laughter.] Those with vision and belief in our people, and those who believe in democracy, who fight for justice and goodness, build economies. Those who query, quibble, moan and bleat build nothing, except for making headaches for everyone else.

Let me briefly then raise a last point. With all due respect to my colleague from the Free State, I urge him not to be lured into silly debates by the hon Durr. He must not fall into the trap of racialising everything, because it is a pity that people can only see race when they see these things. The hon Durr is just talking nonsense. [Laughter.] If one studies every single developing country, including Australia, one would see a massive brain drain of young people. If one studies India, one finds a massive brain drain there. If one studies the listings from Brazil, Argentina, India, Korea and China, one would see an even faster movement to listing on the Nasdaq and the London Stock Exchange. It is the same silly paradigm that somehow South Africa is different, and that it is all going to collapse and fail. That is nonsense. I urge that member to wake up and follow what is happening in the world.

What is happening in the world is that the strong economies I have just mentioned can afford to pay one a very good salary. There is a massive skills shortage, particularly of IT skills. More than one million people have left India over the past four or five years and gone to the United States into the IT sector. This is happening. We have to accommodate it. We are not unique. Everyone has this problem. I have absolutely no doubt that our crime contributes in a way to this. There is no doubt. It must happen in Brazil. It happens elsewhere where we have crime problems. We have to address crime. But let us not confuse all these things.

We are addressing crime, because we are not going to tolerate criminality in this country. We are not doing it to please the international markets. We are doing it to wipe out criminality and crime. Regarding skills losses, all economies in our position are experiencing them. It puts a massive burden on us. We have to train and train. So members must not get lured into these silly debates. Young black people will start finding these opportunities, and good luck to them. Let them have a crack at it.

Generally speaking, many of these people come back. They probably come back more skilled. So let us drop these views. Members must not fall into the trap. If one camp makes a nonsense statement, which is basically racist, we do not have to respond with the same.

The last point I want to make about this issue is that we can bring in all sorts of silly extraneous factors, such as the President did this or that, sneezed, did not sneeze, went to bed, woke up and therefore the economy is collapsing. This is all nonsense. One thing that is important is that the President has asked a fundamentally important question about HIV/Aids. It was the economics Ministers, others and I, who very quickly said: ``This is a very important point you are raising, Mr President. We are going to do a little bit of reading, unlike many other people’’. And we have read. A fundamentally important factor is what the mechanism transmitting Aids is. If the conventional wisdom is correct - and it may well be - that this is a virus, then geometric progression of infection is possible. Also, the impact can be on any skills strata, and the effects on our economy have to be thought about extremely seriously.

This matter arose when we began planning for the new Administration on how we actually accommodate Aids. If this problem is as severe as it would seem to be, then we have a massive economic problem, and we began thinking that through. If this is not transmitted by a virus, but is caused by a number of socioeconomic factors - no one is disputing that Aids happens, because the immune system collapses and one can see that - then there is a whole range of other implications.

So all that the President has said, time and time again, is that, in order to understand our own future and what we have to do to protect our people, we had better be absolutely certain that we know what is really happening here. That is the sign of a leader that thinks, and that is a sign that we, as economics Ministers, support that view because it is fundamental to our future planning. To stand up and start shouting at one another, to support one or other convention when we have not done much reading, does not help anybody. It is in all of our interests here, on anything to do with this economy, to put our emotions and our silly political points in the back pocket and work to build this economy because people’s jobs and their future prosperity depend on it. [Applause.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! I am sure that everybody will agree with me that the debate was indeed stimulating.

Debate concluded.

Business suspended at 12:31 and resumed at 14:02.

 CONSIDERATION OF REPORT OF SELECT COMMITTEE ON LOCAL GOVERNMENT AND
ADMINISTRATION ON DRAFT CODE OF ETHICS FOR MEMBERS OF THE CABINET AND
                    MEMBERS OF EXECUTIVE COUNCILS

The CHAIRPERSON OF COMMITTEES: Order! I did not welcome the Minister, and the way he is looking at me, I think he wants to draw the attention of the House to his not feeling welcome. Welcome, Minister and over to you. The MINISTER OF EDUCATION: Madam Chairperson, hon members and delegates, I am pleased on behalf of the Government to open the debate in this Council which gives consideration to the draft code of ethics for members of the Cabinet, Deputy Ministers and members of provincial executive councils.

This code has been drafted in accordance with the Executive Members’ Ethics Act of 1998. In accordance with that Act, the President must, after consultation with Parliament, and by proclamation in the Gazette, publish a code of ethics prescribing standards and rules with which executive members must comply in performing their official duties.

This code of ethics has its origins in the Constitution. In respect of provinces, section 133 holds members of the executive council responsible for their functions assigned to them by their premiers. The executive council is collectively accountable, and members individually accountable, to the provincial legislature. Section 136 of the Constitution requires that members of executive councils ``act in accordance with a code of ethics prescribed by national legislation’’. Similar provisions apply to Cabinet Ministers and to Deputy Ministers nationally.

In line with the Constitution, the Executive Members’ Ethics Act requires that:

The President must, after consultation with Parliament … publish a code of ethics prescribing standards and rules aimed at promoting open, democratic and accountable government and with which Cabinet members, Deputy Ministers and MECs must comply in performing their official responsibilities.

The Act includes in its definitions - and I commend the Act to hon members

• the provision regarding the President as a Cabinet Minister, and the premier of a province is included as a member of the executive council.

This debate is therefore part of the consultation process envisaged in the legislation. I have pleasure, therefore, on behalf of the President, in participating in this process.

The essence of the Constitutional provisions, the Act and this code centres around the health of a democracy, and particularly our maturing democratic system in South Africa. This process is determined, in the first instance, by the notion of disclosure. In 1995 the African National Congress did not impose their disclosure principles on other parties, because we adopted this in 1991. However, through a process of consultation - and I should add, having been involved in it, persuasion - we were able to gain support for the principles the ANC had adopted in 1991. So, in a democracy, persuasion, rather that imposition, is a vital tool. In the ANC we have a proud history of persuasion, because it is only through this route that we are able to gain the public confidence that we all require.

Public confidence in Government leads to public trust in Government and, ultimately, to respect for the political system in which we operate. It is through confidence and trust that we can stem any public cynicism, as one finds in other countries, about politicians and governments. Only through this kind of public confidence can we stem the pervading cynicism which provides good cover for the self-seeking in society. Where there is no redress for the downtrodden, or retribution for the wicked, the people’s sense of justice is understandably appalled, and society ultimately reverts to the law of the jungle and the survival of the fittest. Various international bodies have taken this point and drawn the conclusion that corruption is wasteful, inflationary and extremely bad business for nations, for companies and for individuals.

In his speech opening Parliament on 25 June last year, President Mbeki committed the Government to the construction of a people-centred society, a partnership between Government and the people, for progressive change and a better life for all in a caring society.

This partnership is also our strongest weapon against corrupt elements within our society. The fight against corruption must be the duty of every individual and every grouping in society. In fulfilling its role within the partnership, the Government has an obligation to set standards of behaviour for the executive, its elected representatives and its officials.

In his keynote address, I remind members of the House and delegates, to the Public Sector Anticorruption Conference on 19 November 1998, President Mbeki said:

Virtue and good ethical behaviour in the public sector are not inherent to the minds of public officials. The lure of the lap of luxury at state expense must be perennially interrogated through codes of ethics. While these codes may concentrate on financial disclosure, conflict of interest, or aspects of impropriety, they should be thoroughly informed by a set of implicit values and an ethical culture. This implies that a disciplinary approach to regulating the behaviour of public officials must be mediated by an overarching aspirational framework.

This is what we are trying to do, namely to provide an overarching aspirational framework in this code of ethics, because corruption is a pernicious and pervasive social evil. It undermines our ability to attract investment, and to create an economic environment that enables growth, employment opportunities and redress for the poor. It also undermines Government itself in the eyes of our people.

The Government is thus committed to putting into place all the necessary controls and systems that will detect corrupt practices speedily and effectively, especially with regard to state finances and assets.

This draft code of ethics applies to all Cabinet Ministers, Deputy Ministers and all members of executive councils. It deals with general standards of behaviour, which have to do largely with ethical matters such as integrity, credibility, good faith and honesty; secondly, situations of potential or real financial conflict of interest; thirdly, the receipt of gifts; and, finally, the disclosure of financial interests.

The code also introduces provisions for a register of financial interests of executive members to be kept by the secretary of Cabinet or, in the case of provinces, by the secretary of the executive council.

However, the disclosure of gifts received and financial interests, as we all know as members of Parliament, has already been required since 1995 in respect of both executive and nonexecutive members of Parliament. We have that in place already, and some of the provinces have already begun on the path of having disclosure for members of the legislatures.

The provision for the disclosure of members’ interests, which was the forerunner to this code, was more than ample evidence of the ANC’s commitment to clean and transparent government. It was not brought about by any crisis or any incident. This might have happened in other countries and may have occurred elsewhere, but was brought about here through considered foresight by the leadership and membership of the ANC.

As we know, the Public Service already had a code of conduct promulgated in 1997 which has a section that sets standards relating to personal conduct and private interests. The code is now part of the Public Service’s regulatory framework and is fully enforceable through the new Public Service disciplinary code and procedures.

Also, the Government has a constitutional obligation to be transparent and responsive. The essence of transparency is disclosure by the Government on the one hand and access to information by the people on the other. In our country the right of access to information is guaranteed by the Constitution and will be further strengthened in the coming months by the coming into operation of the Promotion of Access to Information Act, a legal instrument which binds Government to comply with all reasonable requests for information held by it. The whistleblowers’ provision is a very important protection for those who have access to information about malpractice and who effectively blow the whistle on malfeasants.

The role of a free press in exposing evil and fostering debate on important issues within our society is critical, and that freedom must be accepted and should not be conditional. The press has a corresponding duty to report in a responsible way, though a wise government does not prescribe how this sense of responsibility is to be carried out.

Responsiveness is also essential to good governance and is the true test of Government’s accountability to the people. Even the very best systems and controls can be subverted by those who are determined to benefit themselves and others illicitly and illegally. As we know, even some of the homes of democracy are able to describe to us how the sleaze factor has worked in those countries. In such instances, the people, the victims and especially the potential beneficiaries have an obligation to report corrupt practices.

In South Africa, there are a variety of constitutionally entrenched checks and balances against the abuse of power by Government. All of them, without exception, are greatly enhanced by the active participation of civil society. For example, the legislatures, through the committees, exercise oversight over government departments and can recommend direct action by Parliament.

Secondly, as we know, the Auditor-General audits the books and records of accounts and financial statements of all government bodies and is accountable to the National Assembly, and not the executive.

Thirdly, the Public Protector has the power to investigate any conduct in state affairs or in the public administration realm that is alleged to be improper or has resulted in impropriety or prejudice. As members are well aware, the Public Protector has already expressed an interest in having this code published as soon as possible, as he has done on two occasions already. Fourthly, the Public Service Commission is an independent watchdog on public administration and may initiate investigations into government departments aimed at eliminating corruption and wastage and promoting effective and efficient delivery of services.

So this partnership, quite rightly, places a heavy burden on Government to establish ethical standards, to introduce effective systems and controls, to exercise its powers and perform its duties in a manner that is, at all times, open to public scrutiny and, most important of all, to act as decisively against wrongdoing where it occurs.

Yet Government is not alone in the fight against corruption or the kind of misdemeanours that take place. Our Constitution has created these institutions and the legal instruments for citizens to obtain redress. Therefore it is our joint responsibility to exercise our rights and fulfil our obligations to the Constitution and to give meaning and content to the expression of good governance, because a government can only be genuinely accountable if it is regularly and rigorously called to account by the people who elected it into power.

In this spirit, the code of ethics is referred to Parliament not only because of the Government’s obligation to consult under the law, but because it is part of sound governance to carry the legislature, with the executive, every step of the way in this critical matter that strikes at the root of our public life.

We also need to give consideration to the recommendation of the National Assembly’s Portfolio Committee on Public Service and Administration that the committees dealing with rules in Parliament and in the provincial legislatures should consider developing similar codes of ethics in order to extend the public policy sentiments expressed in the Act to all members of Parliament and provincial legislatures.

In fact, I would venture so far as to suggest that one needs similar codes for all holders of public office, and I refer specifically to elected representatives of local government structures throughout the country.

In addition, codes of ethics, broader than existing codes of conduct, should apply to and be enforceable against public officials at all levels and not only be applicable to public representatives. There is a sound case for extending coverage to all senior levels of parastatal and private business activity which are areas where, before 1994, we saw substantial corruption and maladministration.

As I have already mentioned, we need to thank the Public Protector for his patient but repeated insistence that Parliament and the Presidency give attention to the finalisation of the code of ethics.

In closing, I need to stress that we are making these arrangements, as we did with our remarkable Constitution, not because others from outside such as international or private bodies have told us so or because we have been compelled to do so. As with our own Constitution, nobody has prescribed to us to what we should do. We do so our own way and for our own national reasons because it is necessary for the health of our democracy. We do it because it is the right thing to do for ourselves as South Africans. Siyabonga. [We thank you.]

Mr M J KUSCUS (North West): Madam Chairperson, the North West is proud to participate this afternoon in this very important debate on the code of ethics for members of the Cabinet and executive councils. The great French novelist Victor Hugo once wrote the following and I quote:

Greater than the threat of mighty armies is an idea whose time has come.

We are just a few months into the new century and also just about a year into our second term of Government, and in our environment out there, there is increasing evidence that ethics in public office is an idea whose time has come. We are standing on the threshold of a heightened public awareness and this awareness has taken root around the world as a very important element in the success of democratic institutions.

I do not want to repeat what the Minister has said here this afternoon, but there is increasing recognition of the devastating effects of public corruption. There are tremendous economic, social and political costs to corruption and we cannot allow our hard-earned democracy, which has been acquired through blood, sweat and tears, to be eroded away by corrupt activities. Hence, the time for this legislation is rather appropriate. It is an idea whose time has come. Let me just take members through some of the effects that corruption can have on the economy.

It can misdirect resources and discourage investment. Once there is a public perception out there that the Government and the whole public sector cannot be trusted - business, after all, is about profit - people will simply ignore them. Capital is attracted to good governance and good government. Hence, at a time when it is so important for us to build the economy of our country from the ravages of the past, a corruption-free civil institution would just be in our favour to make sure that there is absolute confidence in the economy of this country.

But there is also a social cost to corruption. It creates a culture of poverty and crime, and it deprives the neediest elements of society of the benefits of public resources. Sometimes when budgets are approved here in Parliament we are highly euphoric about the prospects of what the public purse can do to tranform the lives of our people out there.

However, it is also sad to note that some of the resources intended to transform the lives of members of the public sometimes find their way to the pockets of unscrupulous public servants. And hence we must make sure that in order for us to transform the lives of our people the money intended for specific purposes should really address the needs of the poor and the destitute.

But above all, corruption has serious political costs. Vibrant democratic institutions depend on the consent and support of the populace. Public confidence is necessary for democratic institutions to be healthy and to flourish. Corruption destroys the confidence of the people in their government and undermines the very legitimacy of political institutions.

We know that we come from an era and we have inherited a system which was characterised by neither good government nor good governance. This piece of legislation is rather timeous to, once and for all, make a public statement about this Government’s commitment to making sure that we will not allow corruption to erode away the political side of our democracy.

The Government can respond in two ways. The obvious response is to tighten laws, identify the perpetrators, lock them up, persecute, punish them or do whatever it wants to do with them. But there is a better way.

The second way is to proactively prevent misconduct from happening in the first place, by putting in place systems that will ensure the integrity of the Government, its operations and programmes. Both these systems are necessary, but enforcement systems may be overwhelmed if there are no effective preventative measures in place.

Once we allow ourselves to be elected into public office, we are also up for public scrutiny. This Bill sets a framework for the public to judge my actions and to judge members’ actions so that at the end of the day we can contribute towards confidence in the democratic dispensation of our country.

Yes, there is an outcry out there for moral renewal. There is an outcry from all sectors of society for us to make sure, as the former President once mentioned, that we have the RDP of the soul. It is important to translate that into practical reality, with the Government leading the way by making sure that its own house is in order, so that we can take the populace along. On that note, we would like to commend the Minister for the manner in which this Bill was navigated through the various processes, and, as the North West province, we would like to support this piece of legislation. [Applause.]

Mr B R HERMANUS (Northern Cape): Chairperson, Minister Asmal, premiers, hon members of and special delegates to the NCOP, comrades, ladies and gentlemen, the fact that provinces are participating and making an input in this debate on the draft code of ethics reflects the Government’s commitment to the principles of democracy. The NCOP as an institution is therefore important because of its links with provinces.

It is my privilege to address this House on the key topic of a code of ethics for members elected into office, serving as Cabinet and executive council members. This initiative of the ANC-led Government is laudable, considering the fact that in the past politicians received numerous gifts and were involved in many business deals without declaring personal interests and involvement.

The issue of transparency and accountability, and putting mechanisms in place to ensure that officials do not abuse their office, are key pillars upon which our democracy and, indeed, the prosperity of our nation, rest. It is because we are committed to these principles that we regard the adoption of a code of ethics for Cabinet and executive council members as par for the course in our democratic Government. This is a normal part of the responsibility of any elected member towards the state and, perhaps more importantly, shows the people we serve that we are dedicated to the democratic principles enshrined in the Constitution.

In support of this code of ethics for Cabinet members and members of the executive councils, the Northern Cape wishes to highlight the following matters pertaining to the conduct of executive council members. The honesty and diligence with which members execute their mandate will set the standards for our democracy. In seeking to entrench an open, accountable Government in this country, we will let our actions speak louder than our words. Our conduct should be above reproach. We are the representatives of our people, who deserve only the best.

We support the view that the code of ethics should be extended to include all public servants. It is our belief that this young democratic Government has set a high standard in the manner in which it has led this country, and we believe that we can further enhance our standards by adopting and acceding to the precepts of this code of ethics. The Northern Cape, therefore, fully supports the implementation of the code of ethics. We will continue to fulfil our mandate accountably and transparently, and in a manner worthy of the people we serve. [Applause.]

Mnr C ACKERMANN: Mevrou die voorsitter, ‘n gedragskode vir lede van die uitvoerende gesag is uiteraard van die uiterste belang. As ‘n mens maar net kyk na die sprekerslys vir hierdie debat, kan ‘n mens sien hierdie onderwerp is belangrik. Veral verblydend is die feit dat die premier van Mpumalanga ook vandag hier is.

Die daarstelling en nougesette navolging en toepassing van so ‘n gedragskode skep ‘n klimaat van deursigtigheid en skoon regering. In die meeste demokratiese lande, en veral in die VSA, word so ‘n gedragskode baie streng toegepas, en die uitvoerende gesag en by name die Amerikaanse president het baie min beweegruimte binne hulle gedragskode.

In Suid-Afrika, ‘n ontwikkelende demokrasie en ‘n land waarin korrupsie in die onderskeie uitvoerende gesagte maklik kan plaasvind, iets wat ons reeds in die afgelope jaar verskeie kere onder ANC-bewind ervaar het, is hierdie gedragskode al baie lank nodig. Die spreker van Noordwes het verwys na die korrupsie wat in die land plaasvind.

Ek wil by die Minister aansluit: het dit nie dalk weer tyd geword om ‘n anti-korrupsiekonferensie te hou nie? Ons het pas weer in Mpumalanga ervaar dat hul LUR vir finansies afgedank is, en dit nadat die Nuwe NP reeds by sy aanwysing as LUR beswaar aangeteken het. Die Nuwe NP het in sy beswaar daarop gewys dat mnr Jaques Modipane deur die vorige premier, mnr Phosa, afgedank is nadat hy onder verdenking gekom het weens die R2 miljardskandaal in die Nasionale Kruger-wildtuin en ander natuurreservate van Mpumalanga.

Bid jou aan! Die huidige premier, mnr Mahlangu, stel hom weer aan en nou is hy weer afgedank. As dié gedragskode toe bestaan het, sou dit nie moontlik gewees het nie. Dit gaan egter verder. Toe ‘n lid van die UDM in Mpumalanga, mnr James Mahlangu, na die ANC oorloop, word aan die einste premier gevra of mnr Mahlangu bevoordeel gaan word. Sy antwoord was: ``Nee, hy gaan nie’’.

En wat vind ons vandag? Mnr James Mahlangu is Direkteur van Tradisionele Sake in Mpumalanga. ‘n Mens wonder of premier Mahlangu in dié omstandighede paragraaf 2.3 van die gedragskode werklik heelhartig steun ná sy uitspraak dat politici maar leuens mag vertel.

Die ANC moet hom vandag die vraag afvra watter indruk hy by die publiek skep as sy leiers hul agter Boesak skaar en sy handjie vat nadat die hoogste hof in hierdie land hom aan bedrog skuldig bevind het. [Tussenwerpsels.] Plaas die publiek nie ‘n vraagteken agter hierdie gedragskode nie?

Daarom wil ek ‘n beroep op die President van hierdie land doen. Dit is nie genoeg as die uitvoerende gesag met lippetaal diens aan die gedragskode wil bewys nie. Daadwerklike optrede is nodig, soos die agb lid vir die Noord- Kaap gesê het. Waar oortredings, vergrype en korrupsie plaasvind, moet ons sorg dat die betrokkenes aan die pen ry sodat skoon administrasie kan seëvier. (Translation of Afrikaans paragraphs follows.)

[Mr C ACKERMANN: Madam Chairperson, a code of ethics for members of the executive authority is naturally of the utmost importance. By just looking at the list of speakers in this debate one can see that this subject is important. What is especially gratifying is the fact that the Premier of Mpumalanga is also here today.

The introduction of, careful adherence to and enforcement of such a code of ethics create a climate of transparency and clean government. In most democratic countries, and in the USA in particular, such a code of ethics is very strictly enforced, and the executive authority, the American president in person, has very little room to manoeuvre within their code of ethics.

In South Africa, a developing democracy and a country in which corruption in the various executive authorities could easily take place, something that we have already experienced a few times under ANC rule, this code of ethics has been necessary for a very long time. The speaker from the North West province referred to the corruption that takes place in this country.

I want to associate myself with the Minister: Has the time not come once again to hold an anti-corruption conference? In Mpumalanga we have just had the dismissal of their MEC for finance, and this after the New NP had objected when he was appointed as MEC. In its objection the New NP pointed out that Mr Jaques Modipane had been dismissed by the previous Premier, Mr Phosa, because he had come under suspicion owing to the R2 billion scandal in the Kruger National Park and other nature reserves in Mpumalanga.

I ask you! The current premier, Mr Mahlangu, then appointed him again and now he has been dismissed again. If this code of ethics existed then this would not have been possible. One wonders whether Premier Mahlangu, under these circumstances, really wholly supports paragraph 2.3 of the code of ethics after his statement that politicians may lie.

The ANC must ask itself today what impression it creates with the public when its leaders side with Boesak and take his little hand after the highest court in the country had found him guilty of fraud. [Interjections.] Does the public not question this code of ethics?

For that reason I want to appeal to the President of this country. It is not enough if the executive authority wants to pay lip service to the code of ethics. Real action is required, as the hon member from the Northern Cape said. Where offences, transgressions and corruption take place we must ensure that the people involved are brought to book so that clean administration can triumph.]

The New NP supports the code of ethics for members of the Cabinet and members of executive councils. However, it seems that the code of ethics for members of Parliament does not apply to members of Cabinet who were appointed by the President in terms of section 913(c) of the Constitution. I will therefore require the Minister’s view on this statement.

I want to highlight a few points. Firstly, there is the question of quick timeframes when the code is breached by a member of the executive. My party is of the view that, when a conflict or apparent conflict of interest arises, that conflict be resolved as soon as possible. Although the Executive Members’ Ethics Act does provide for a 30-day timeframe for the Public Protector to submit a report and a 14-day timeframe for the President to submit that report to the National Assembly and, in the case of a premier, to the NCOP, the Act is silent on timeframes for the different houses and legislatures to discuss that report, especially in the case of provincial legislatures, which have fewer sessions than Parliament, and this might create a problem. If the solution lies in amending the rules of the different houses, so be it, but then it must be addressed. [Time expired.]

Mr T RALANE (Free State): Chairperson, Minister, Deputy Minister, Premier, MECs and members, the Free State premier, Winkie Direko, the executive council and the legislature perceive today’s discussion of the code of conduct and ethics by the NCOP as a critical development in the campaign for transparency, accountability and clean governance.

The Free State Premier calls on all members of the legislatures to support and endorse this code of conduct and ethics. In doing so, members are urged, in the interest of clean and good governance, to declare their assets, directorships of companies and that of their spouses or partners. The premier believes the adoption of the code of conduct and ethics will ensure that public representatives are truly accountable to the public they represent and will conduct their legislative business in an open and transparent manner.

The province is of the view that public representatives should not use their position in the legislature to advance their own business interests and/or encourage others to benefit unethically through their relationship with members of the legislature. We believe that members who are engaged in such business cannot claim to be true representatives of the people. The premier will lead the adoption of this code of conduct by the provincial legislature and, in that regard, will encourage members to be honest and sincere to the pledges we made to the people on accountability, transparency and clean governance.

Following on the commitment that she made on the occasion of her inauguration, the premier and the executive council have pledged that corruption must be uprooted wherever it exists in accordance with the directives of the Public Service Commission. Members of the executive council will be asked to ascertain that senior managers in their departments declare all their assets, business interests, directorships of companies and that of their spouses or partners.

As a province, we support this initiative as the best reflection of our Government’s commitment to clean governance and the creation of a better life for all. [Applause.]

Mr C B HERANDIEN (Western Cape): Chairperson, my surname is pronounced ``Herandien’’, just for the record.

I am delighted to have the opportunity to contribute to this debate on ethics in Government, a topic which I believe to be of great importance in promoting an open and accountable government.

Whenever the subject of ethics is raised, the words trust'', integrity’’ and ``honour’’, to mention but a few, are much bandied about. These words are value-laden. Nevertheless, a person who is elected or appointed to public office is in a position of trust and the people have the right to secure and sustain that trust against abuse. Public disillusionment with the conduct of parliamentarians and executive members not only detracts the attention of both legislatures and the public from pressing and important matters, it also undermines the democratic process as a whole.

The enactment of laws to regulate the correct conduct of executives serves to emphasise the principle that I have just mentioned, namely that holders of public office are duty-bound to uphold the law and act, at all times, in accordance with the public trust placed in them. Furthermore, ethical laws serve as guidelines for all parliamentarians to follow where their private interests as citizens and their public duties are in conflict.

When attempting to regulate the conduct of its members, a legislature has several options. For example, the Canadian provinces of Alberta and Ontario have enshrined their code within a legislative framework. They have established, by means of legislation, an independent body whose responsibility it is to administer the code to oversee the conduct of members and to make reports, either to the legislature or to a committee.

In the United Kingdom the code of conduct applicable to members of the House of Commons derives its authority from resolutions of the House. It is therefore enforceable by the House of Commons in addition to further guidelines and requirements laid down by successive prime ministers. Ministers of the crown who are members of the House of Commons are subject to the rules in the same way as other members.

A third approach is that of the United States Congress, which is self- regulatory. Discipline is internal to the legislature and is based upon a detailed set of rules and guidelines.

Each house has its own official code of conduct for members and staff. Each house has an ethics committee which operates independently of the other. It is impossible to provide for every possible situation when devising a code of conduct, but any attempt to institutionalise a code of conduct should include the following: the requirement of disclosure of personal finance; restrictions on the acceptance of gifts and other financial benefits; prohibition of conflict of interest and standards of conduct to prevent and avoid them; and the establishment of a nonpartisan body to administer ethics laws with the appropriate powers of enforcement, which are lacking at this moment.

In South Africa, ethics in government has received attention. Members of the National Assembly and permanent members of the NCOP are already subject to a code of conduct. This code establishes a joint committee on ethics and members’ interests and provides for the disclosure of financial interests, ethical conduct and investigative and enforcement mechanisms in the event of the breach of the code. The Executive Members’ Ethics Act of 1998 is applicable to members of the Cabinet, Deputy Ministers and members of the provincial executive councils. The Act, however, requires the President to publish a code of ethics prescribing standards and rules aimed at promoting an open, democratic and accountable Government. Cabinet approved a draft Executive Members’ Code of Ethics in February this year.

They say citizens want honest politicians until they want something fixed. It is Henry Kissinger who said: ``Ninety percent of politicians give the other 10% a bad name.’‘[Applause.]

Mr N SINGH (KwaZulu-Natal): Madam Chairperson, it is quite coincidental that the hon Premier of KwaZulu-Natal asked me to represent him here in this debate today. He is on another mission in Pretoria.

It is coincidental because when I served in the Senate, together with some of my colleagues who are still sitting here, we dealt with the Executive Members’ Ethics Bill. I remember that it was on behalf of KwaZulu-Natal that I raised the issue of gifts of a cultural nature. Members of this Council will be quite aware that we Zulus in KwaZulu-Natal are in the habit of giving gifts to all our guests that come and address us at functions. Sometimes one gets a blanket, sometimes a basket that has been woven by the local people or sometimes one gets an igusha [sheep] or an Nguni cow. I do not know what the hon the Minister received when he was in KwaZulu-Natal, but I am sure that he must have received gifts from the people. [Laughter.] He received a sheep called igusha.

The hon the Minister has indicated to us that this code has been drafted to ensure open, transparent and accountable government by our country’s highest-ranking, democratically elected representatives. I think there can be absolutely no doubt in our minds in this Council that these are indeed worthy ideals to strive towards.

For too long, our country was ruled by a minority government that simply excelled at being unresponsive, secretive and unaccountable to the majority of our people. We as a nation simply have to put these dark days behind us. Our people deserve a government that is accountable for its actions and that is open about its dealings.

However, I believe that we should all, in the first instance, be guided by our consciences as members of executive councils, Cabinet Ministers and members of this Council. What we do must be right in the eyes of God, but unfortunately, we all have human failings, and it is necessary to have something down on paper which acts as a sanction. In principle, we believe that this code of ethics is a bold step in ensuring transparency and accountability, and we therefore support the code of ethics.

However, one cannot fail to notice some omissions or points which are not clear in the draft code of ethics. The first is that, when one looks at the definition as included in the Act and the definition included in the draft code, one sees that there is a bit of difference in the description of the President, Cabinet members and MECs. One would like to see that the definitions, as included in the Act, are actually incorporated in the code of ethics for MECS and members. We believe this should be stated in quite unequivocal terms so that no misunderstanding may arise. The hon the Minister did indicate to us that the President is also a Cabinet member and that a Premier is also a member of the MEC, but this needs to be spelt out quite clearly in the code.

A second anomaly that I wish to highlight is the fact that the code does not make it clear to whom the President and a premier is accountable to. There is no doubt in my mind that this is an omission. We need the public to be quite assured of the fact that the highest officers in the land are just as accountable as anybody else may be. We always believe that one should lead by example, and there is no better example than one that comes from the Office of the President.

Thirdly, I wish to bring to the attention of this Council the fact that the code is quite clear in most respects as to what interests and actions are not allowed for by executive members. That we welcome. It says what we should not do, what we should disclose, etc. Coming to the comment from my colleague from the North West, I think it is the question of sanctions that is not quite clear. I know the hon the Minister did indicate that this is just part of a process, and sanctions could be included in further documents, but I think it is absolutely essential that the sanctions that would be imposed against any person that breaches this code of ethics must be clearly enunciated in some kind of document. We do not want this to end up as something written very nicely on a piece of paper. It must be something that has teeth, and that will discourage members from impropriety.

We need to achieve our goals of open, transparent and accountable government, and therefore this code must be an instrument so that the members of the public can, with confidence, say that there will be punitive measures against people who have breached this particular code.

I have no doubt that the drafters of this code must include a set of procedures which are effective and visible for transgressions of the code. It was either hon member Mr Herandien or Mr Van Niekerk who also referred to the question of making sure that it is enforceable.

There are various ways one could have these kinds of sanctions. One which we would like to suggest is the question of a tribunal that would deal with allegations of transgressions of codes against members of the executive. This tribunal, we believe, should investigate allegations fully and comprehensively, and should then be able to make a decision on whether allegations have any substance and should be pursued. Often we find that people just make unfounded criticisms or allegations, and they could do that against members of the executive or members of Cabinet, and there needs to be a speedy resolution of these problems. Firstly, there needs to be some kind of tribunal or some kind of body that will actually go into the matter and see whether there is merit in pursuing the investigations. If there is not merit, I think that the integrity of that member of the executive council or of the Cabinet should be upheld, and the case should be dropped at that stage instead of it being a very long and protracted affair.

A further manner in which we can give teeth to the code is to set up a national hotline. In KwaZulu-Natal, as in other provinces, there are probably hotlines where members of the public are invited to phone in on a confidential and anonymous basis and inform on members of Parliament and members of the Public Service. We believe that something like that could be introduced where any member of the public can phone in on the hotline and indicate that he believes that member A or member B has transgressed this code of ethics. We do have other legislation and measures which are in place, such as the Public Finance Management Act and the whistleblower’s legislation that is still coming in. We believe that all these pieces of legislation would really lead towards us being very open, transparent and accountable to members of the public.

KwaZulu-Natal supports the code of ethics. [Applause.]

Mr L G LEVER: Chairperson, hon Minister, hon premiers, hon members of the executive councils and hon members of the NCOP, I hope members will forgive me for quoting an extract from the preamble to our Constitution. I believe these words bear repetition in this context. The relevant passage reads as follows:

We therefore, through our freely elected representatives, adopt this Constitution as the supreme law of the Republic so as to -

 Heal the divisions of the past and establish a society based on
 democratic values, social justice and fundamental human rights;


 Lay the foundations for a democratic and open society in which
 government is based on the will of the people and every citizen is
 equally protected by law;


 Improve the quality of life of all citizens and free the potential of
 each person; and


 Build a united and democratic South Africa able to take its rightful
 place as a sovereign state in the family of nations.

These words represent the aspirations of our people. We all have our part to play to ensure that these words are translated from fine words, in an important document, into a living reality for the benefit of our people. But this burden falls principally and primarily on the shoulders of those in the Cabinet and on those in the respective executive councils.

It is self-evident to state that these aspirations could never become a reality with a secretive and corrupt Cabinet or secretive and corrupt executive councils. Our Constitution, and hence the aspirations of our people, enjoin us to strive to achieve a democratic and open society. A democratic and open society will only be achieved if government at all levels is honest, subject to public scrutiny and accountable for its actions.

Corruption, once it has taken root, has a way of permeating and infesting every level of society. The executive of both the national and provincial governments not only have to lead by example, but also have to root out corruption wherever it is found. They would have no credibility in this task if they were not seen to be scrupulously honest and accountable in their actions, hence, the code of ethics to guide the members of the Cabinet and executive councils in the conduct of their official duties and, in so far as their private affairs may impact on their official duties, on their private affairs as well.

In order to breathe life into the aspirations of our people, members of the executive will not only have to obey the letter of the code, but also have to embody its spirit. That, in a nutshell, is the vital issue. We hope that the executive members of government, in all spheres of government, embrace the spirit of the code. We also hope that the Public Protector, who in terms of the Act and the code has to investigate breaches of the code, is vigilant in the execution of his duties.

The code of ethics before us fulfils the requirements of the Executive Members’ Ethics Act and, on the question of sanctions mentioned by the hon member from KwaZulu-Natal, provides for standards and rules aimed at promoting open democratic and accountable government.

The DP has always stood for open, democratic and accountable government and will thus support the code. As an opposition party we will, in fact, do our bit to keep the government clean. On a personal note of interest, I would be interested to hear from the hon premier, who is the next speaker on the list, on how his views on public ethics have perhaps been transformed over time. [Applause.]

The PREMIER OF MPUMALANGA (Mr N J Mahlangu): Madam Chair, our society demands that the behaviour of professionals be guided by codes of conduct. Doctors, engineers, teachers, architects, pharmacists and others must abide by codes of conduct. More often than not, those who are adamant that these professionals be held accountable to rigid codes of conduct are themselves reluctant to be held to any such codes.

As representatives of the people we must resist the temptation to shoot down suggestions of a code of ethics. Our every move, word and action is watched carefully, not only by those who elected us, but by all those who have an interest in good governance. Now, good governance goes hand in hand with transparency and accountability. Only those who have something to hide will find fault with the disclosure of financial interests. Surely there is nothing wrong in imposing on those who hold public office strict guidelines on how to conduct themselves?

The public expect us to perform our duties and powers diligently and honestly. They expect us to act in a manner that is consistent with the integrity of the office we hold. When Moses and the children of Israel wandered through the desert, I believe they knew right from wrong. But, still, their behaviour had to be regulated because it is human nature to at times take a swipe at authority. Citizens must have something they can turn to when we misrepresent them. They must be able to challenge us when we steal from them, when we treat them with disdain. That is why codes of ethics are needed.

How many times have we read about some or other government official who has embezzled money intended for the poor? Lots of times. One almost has the feeling that for some people our ascendancy to power means a chance to enrich themselves. A lot of negative sentiments exist about the conduct of some workers in the public sector. Lack of commitment to servicing the community by some in the public sector and corrupt practices have created a bad image for the public sector.

Those responsible for betraying the people’s trust in this way are also discrediting the tens of thousands of dedicated public-sector workers who selflessly provide services to our people on a daily basis. To paraphrase Plato: Some of our public servants do service for a gift. The fact that Plato mentioned this hundreds of years ago is a clear indication that corruption is as old as government itself. But that does not make it tolerable. It is as deplorable today as it was thousands of years ago.

Before 1994, peace-loving South Africans fought hard to dislodge apartheid. With the collapse of the previous racist regime, those very people who occupied the trenches were called upon to govern. This required a different moral ethos and outlook. It meant more responsibility, more loyalty and a new form of patriotism. The collapse of the old order and the ushering in of the new one necessitates a reorientation of a nation’s world-view.

Now, in a situation in which corruption was and still is rampant, some cannot resist the temptation of throwing morals, norms and values overboard. Whereas our guiding principles in the trenches were the will and aspirations of the people, some public servants have come under a heavy obligation to weigh their discretionary powers against their effectiveness in serving the public with integrity. Selfish pursuits have replaced human interdependence, suspicion has replaced mutual trust, and a just sharing was soon overtaken by greed.

We seem to be consumed by a devilish passion to place self above the people. Something is only right when it benefits me'' seems to have replaced the popular slogan ofan injury to one is an injury to all’’. We cannot afford to turn a blind eye to the perpetrators of evil stealing from the already poor, but it must all start in the mind. If we agree with the President when he says virtue and good ethical behaviour in the public sector are not inherently resident in the minds of public officials, then we need to do something to remedy the situation.

On occasion, Justice Oputa of the Federal Court of Nigeria had the following to say:

Nothing will happen in our nation, in our society, which did not first happen in our minds. If wrong is rampant, if indiscipline is rife, if corruption is the order of the day, we have to search our individual minds for that is where it all starts.

Is it not about time that we questioned the lure of the lap of luxury at state expense? Perpetrators of corrupt practices in both the public and private sectors must be severely punished for contributing to this moral mayhem which has been allowed to creep into the fabric of our society. Zero tolerance must be offered to the parasites in our land who have scorned the public’s interest, and sought their own selfish enrichment at the state’s expense. It is against them and against the evil culture that they seek to perpetrate that we must continually rebel.

The men and women I lead in the province are fully behind the code of ethics. I believe I speak on behalf of the people of the province when I say there is no better time to introduce the code of ethics than now. [Applause.]

Mr T G FOWLER (Gauteng): Chairperson, hon Minister Asmal, Premiers and MECs and members of the NCOP, I am proud to rise on behalf of the Gauteng province to support this code of ethics. Ethical behaviour by public representatives, particularly by members of the executive, is one of the cornerstones of democracy, and I am sure the the Minister’s presence here today is also a statement that if one wants to prevent corruption from flowing like water, one needs education. [Laughter.]

The code of ethics is premised on the assumption that members of the executive are able to distinguish between right and wrong in the course of their executive responsibilities. Consequently, it does not come as a result of evidence that executive members are inherently wayward, but rather is intended to act as a guide to good conduct and proper practice. In this regard, it is intended to serve as an instrument to regulate the conduct of members of the executive to the extent that the temptation to fall prey to corrupt practices should be comprehensively eliminated. Furthermore, the code should be viewed as a guide to actions of individuals only in so far as it serves the good of the institutions the members are serving.

The point that should be reiterated is that, in the first instance, members of the executive hold positions of public trust and confidence. While they are on the job, they are seen to be exercising immense power over citizens and are equally accountable to them in ways that citizens are not normally accountable to each other. It therefore goes without saying that very stringent conditions should be applied to members of the executive.

The Premier of Gauteng, the hon Mbazima Shilowa, in his address to this year’s opening of the legislature, declared zero tolerance of corruption and requested the Speaker to introduce a code of conduct for members. I am proud to announce that the Gauteng provincial legislature has taken up the challenge, and recently adopted a code of conduct for all members, including the executive, to disclose their assets and interests, and those of their spouses and partners. It also includes the option of having an integrity commissioner to ensure enforcement. We are of the firm belief that if indeed we wish to rid society of corruption, the buck stops with us.

Therefore it is without hesitation that we support this code of conduct. In an endeavour to avoid conflicts of interest which could prejudice their judgment and undermine the electorates’ confidence, members have to accept the imposition of restrictions on outside work. It would also be ideal to have a cooling-off period before one assumes employment after a term of office in the area of work one is currently involved in.

The essence of the ethics regime is to facilitate the making of good public policy. According to Dennis Thompson, in his book Ethics in Congress from Individual to Institutional Corruption, the primary purpose of an ethics mechanism is to sustain institutional conditions that promote the integrity of the democratic process. In other words, it is expected of the executive members to consider policies on their own merits, treat the electorate of citizens and colleagues fairly, and publicly account for their actions. In determining policies, executive members should not gravitate to the realm of pecuniary interest. It is therefore incumbent upon executive members to be more willing to declare pecuniary and nonpecuniary interests for their own good. Failure to disclose these interests could result in a conflict of interest which may distort Government decision-making.

The other point worthy of consideration is the principle of accountability. Quite clearly, the value of accountability is intended to hold executive members accountable so that an environment of public confidence can be maintained. This cannot be divorced from the fact that the prohibition of conflict of interest is also an injunction to avoid the appearance of impropriety. To put it succinctly, those provisions regulate the circumstances under which members of the executive act, rather than directly prohibiting bribery, extortion and other manifest instances of improper influence. The ethics rubric should be able to affirm standards that would prohibit personal gain, as well as improper political gain.

Dennis Thompson further makes the point that in the tradition of political theory, corruption is a disease of the body politic. Like a virus invading the physical body, hostile forces spread through the political body, enfeebling the spirit of the laws and undermining the principles of the regime. The form the virus takes depends on the form of government it attacks.

When a public official accepts a bribe, it is not compensation - and I want to emphasise this - for doing the job. Neither are gifts, foreign trips or employment of the official’s family members. Whether proper or not, these are all instances of personal gain. Personal gain refers to the goods that are usable in pursuit of one’s own interests, but are not necessarily for performing the duties of that role, or are not essential by-products of performing the duties of that role. Therefore the point should be made that a member’s obligations to the public should not be subordinated to his or her personal financial interests. Improper personal gain signals the presence of corruption.

The transparency system as an integrity instrument is critical in dealing with corruption. In this instance, the question of financial disclosure by the public representative or the executive becomes even more important. There is a saying in India: If you want to clean a staircase, start sweeping at the top.

In conclusion, international experience has shown that corruption of public funds not only impinges on democratic decision-making, but directly impacts Government’s ability to implement programmes geared at the eradication of poverty. If members of the executive and public representatives lead the way in ethical behaviour, society will follow in eliminating the perceived moral decay. The programmes aimed at eliminating poverty in partnership with the people will reach their destination, creating a better life for all. Gauteng supports this code of conduct. [Applause.]

The CHAIRPERSON OF COMMITTEES: Order! Hon members, I would like to appeal to everybody to please switch off their cellphones.

Mrs M MARASHA (Eastern Cape): Thank you, Chairperson. I thought you were going to call me Mr and Mrs Marasha''. On the one speakers' list it is Mr’’ and on the other one it is Ms''. So I thought you would perhaps call meMr and Mrs’’.

Please allow me first to congratulate the lady that we have talked about this morning, namely Ms Matyolo. I am not congratulating her because we come from the same place, but because I have recently had the pleasure of working with her in our legislature in the Eastern Cape, when we were doing our rationalisation, which we called Efficiency 2000. She was one of the people who was very influential and who really assisted us. We tapped a lot of experience from her. I want to say only that she is getting into another challenge and that she must accept the challenge. I know her calibre. I know her capacity and I know her potential. She will definitely meet the requirements. [Applause.]

The issue of ethics is of fundamental importance to the human race in general and to both politicians and public servants in particular. In contrast to the natural laws established by the Creator, which regulate the functioning of the physical nature, human behaviour is regulated by social norms, such as the rules which govern us and which we must comply with in our daily life. It is also regulated by ethical norms which determine the behaviour between people from the viewpoint of good and evil. It is also regulated by religious norms, such as the Ten Commandments, and economic norms, where we get the principle of distributing and sharing of wealth for the impoverished. One can even have language norms and legal norms, which are the rules that are established by authorised institutions to maintain a harmonious balance in the relationship between people.

It is clear in our Constitution that the Republic of South Africa, as a sovereign and democratic state, is founded on a number of values. Having this code of conduct, this code of ethics, is basically intended to protect these values. I want to support the hon the Minister when he says that this code of conduct needs to be available at all levels in all public offices. The exercise that was embarked on in some provinces, if not all the provinces, when there was an evaluation of councillors, revealed a number of irregularities, which warrants that we have this type of code of conduct for all the levels. These irregularities revealed themselves in the form of disloyalty and conflicting interests, where the interests of the individuals were put in the fore to the disadvantage of the interests of the public. One would have people having contracts but also being part of awarding the contracts.

We really support what the Minister has said so that we can have this guiding document for all public officials. I also want to align myself with the speaker from KwaZulu-Natal when it comes to gifts. I think it is because I come from Pondoland. Pondoland is next to KwaZulu-Natal. I just wanted to caution members that the best thing to do is to get permission from the President or the premier before they go to that place, because they will definitely get gifts. [Laughter.] It would therefore be better if they get permission first before they even go there, because they are going to get gifts.

The executive council of the Eastern Cape has been part of these discussions and the process of establishing this code of conduct, and it is well supported. I want to assure the hon the Minister that, also in the legislature, a lot of work has been done. We have solicited views from the public at large, the experts and our colleagues by way of public hearings and debates, and this was received. There was also enthusiastic participation by the public. We are still discussing this within the different political parties. There is just one clause that some of the political parties do not agree with, but I want to assure this House that in the near future we are going to adopt our code of conduct in our legislature.

At this stage the Government, organs of civil society and everybody is taking seriously the issue of moral regeneration, is taking seriously the issue of ethical transformation, is taking seriously ibuyambo. These are the cornerstones in building our corruption free nation and also in defending our democracy. The leaders of Government then are expected to display exemplary conduct. They must be seen to be leading by example and they must put the public first in the duties that they are charged to do, and in fulfilling their constitutional obligations their interests must be subordinate to the interests of the people that they represent. This indeed is accountability and this indeed is transparency. [Applause.]

The MINISTER OF EDUCATION: Madam Chair, I have been involved in this whole question of the accountability of public representatives to the public for nearly ten years now. It is very exciting as an index, as a barometer of change in our country to realise how different this debate and the responses of the political parties have been from what happened in 1995 when we started out - a couple of members here sat on the committee with us

• and set about to introduce the disclosure of members’ interests. At the time there was enormous resistance and fear that if members disclosed issues, items or their interests, that there would be retaliation against them.

That is why, in the parliamentary disclosure lists, we have a confidential section and a public section, largely because we wanted to have agreement on this. I say this specifically because the climate has changed among members of Parliament. If one looks at other countries in the world - as Minister I cannot mention them, unfortunately - one finds crisis after crisis among public representatives. In one country there were approximately 20 acts of sleaze, as they called them. Sleaze, where members planted questions on behalf of particular large financial interests, or they took free trips and then tried to influence government policy without disclosing their interests. Unfortunately, I cannot mention these countries, but this happened because these countries never had the will, among their political parties, to carry out the provisions of either the legislation or in fact the parliamentary rules they had adopted.

I say therefore it is a matter of great pride for me as a South African that we have operated the disclosure of interests for the past five or six years, and that we take this very seriously and the committee that sits on it. And, of course, this code of ethics goes beyond the disclosure of interests. We could not get agreement on that committee, that one must disclose one’s spouse’s interests or one’s companion’s interests. We could not get agreement. We have it here in this committee, in this code of conduct for the executive. In fact, one’s parents’ interests have to be disclosed here, which we never even tried with regard to the parliamentary disclosure.

Also, one cannot accept any gifts which are incompatible with the performance of one’s function, which we do not have in the parliamentary disclosure. If it is more than R1 000, one cannot accept it in any case without the permission of the premier or the President.

In fact, this code on the executive imposes conditions and conducts behaviour which far exceed the responsibility of members of Parliament. I think it is correct, because the responsibility of the executive is greater and the capacity to win power is greater. Therefore I say very carefully that we have in fact observed the disclosure of interests by and large, without any limitation.

I think this is a credit to our country. I shall report to the President, now that the Minister of Finance is here - he has been looking at the clock for the past 10 minutes - the tone, the tenure and the conduct of this debate. However, out of respect for some members I would like to take up one or two points. For example, it is quite clear, and we shall make it even clearer, that this code applies to all members of the executive, which includes the President and the Deputy President. It is quite clear, if one looks at the Act and the code, However, as lawyers would say: ex abundanti cautela, out of an abundance of caution - and if it satisfies members, we will make it even clearer.

Secondly, and I thank Mr Ackermann for bringing this to our attention, is the question of the two members of the Cabinet from outside. If one reads section 91(1) with section 91(3)(c) of the Constitution, the Cabinet consists of the President, as head of the Cabinet, the Deputy President and Ministers. It says this without qualification. So, although the Ministers may not be members of Parliament, they are Ministers, and they are caught by the provision of the code of ethics.

However, again, if in fact out of an abundance of caution it is necessary to say so, we will say that sections 91(1) and 91(3)(c) are also caught by it. So that makes it quite clear.

In order to answer the second question, one has to read the Code, the Act and the Constitution together. The real enforcement mechanism is, of course, the Public Protector. The way it goes is through the premier and the President, and the code lays down that everybody must co-operate with the Public Protector. You see, the problem with bringing in more complex machinery is, in fact, not in keeping with the approach we have adopted.

I am sure in Outer Mongolia, which is a country I can mention without any prejudice, they have a much more sophisticated approach to this whole matter. However, Outer Mongolia may have been involved in this business for 15, 20 or 30 years. We are beginning. The less complex the approach we take, the better. In the United States the code of the executive is thick. For members of congress it is even thicker. Of course that does not mean it is not broken. The more complex the matter is, the greater the possibility of breaches.

And so, who guards the guardians? The Constitution lays down who guards the guardians. The legislature, the Public Protector, public scrutiny, party- political processes, which are very important, and, finally, impeachment and dismissal from office. I think this is the route to take. The sanction, therefore, is to rely on the Public Protector’s judgment. That is the appropriate one in South Africa.

So I thank Mr Ackermann and Mr Singh for drawing attention to this, because I think that part of the purpose of a code of conduct is that it serves as a guide or reminder in specific situations. For some reason or other, I have not won the lottery yet. I do not believe in gambling. Members of Parliament have come to me for the past five years and said that this was something that was likely to happen. Is that consistent with the disclosure principles, or is it consistent with our function as members of Parliament? So the debates of this type, and of course, the website itself, assist members of Parliament in recognising their duty and their activities.

Of course we must recognise here that corruption and inducements have a specific meaning. Errors of judgment are a different matter altogether. The Premier of Mpumalanga may have been expressing what is a political truth. We have to counter that political truth. Of course a lot of this depends on the good faith of members of Parliament and the executive. Mr Singh says we are guided by our consciences. The trouble is, sometimes our consciences are too elastic. [Laughter.] One has to turn to something which is much more black and white, and that is what we are trying to do. We are trying to put it in black and white.

Mr Ackermann rightly raises the question of the timeframe. I will advise the President to include that. The report must be made, either through the legislative assemblies or the National Assembly, as soon as it is practical, and not later than the beginning of the next term. That gives some time for discussion to the Speakers and to the Leaders of Government Business to bring the issue to a head as quickly as possible.

I am sorry to raise a partisan matter, but I think that there is a distinction between acknowledging that something is wrong and recognising its root cause. Since Mr Ackermann raised this, I would like to say that we are not paying lip service if we express our solidarity with someone who has committed a wrong and is going to serve his or her time in prison for having committed a wrong, and particularly someone who has played a very important part in enabling a nonracial NCOP to sit together in 2000, at the beginning of a new century.

There is a distinction, therefore, between the recognition of the wrong and the recognition of the right to solidarity for a person who has made enormous sacrifices, particularly recognising that mass murderers have received amnesty. One of the reasons why they did not want to disclose this, as I remember as a member of a negotiating team at Kempton Park, is that if one discloses one’s acts, one is likely to be assassinated, or one is likely to be targeted.

There are mass murderers walking the streets of South Africa, keeping their pensions, keeping all their emoluments, not disclosing the benefits they received from apartheid. Of course there has been no targeting of that. So I think there is a distinction between the kinds of errors in judgment that we are all capable of making - we are all capable of making errors in judgment - and, of course, venality and criminality. I think a House like this should be sensitive to this.

There are other issues about which I will contact hon members. I am a strong believer that there should be a cooling-off period for senior civil servants and Ministers before they undertake work immediately after Parliament. But could hon members adopt that after I retire? [Laughter.] That is very vital. I retire in four years’ time. Please adopt a cooling- off period after I retire so I can at least supplement my pension openly, fairly and correctly. [Laughter.] [Applause.]

Debate concluded.

Report adopted in accordance with section 65 of the Constitution. DIVISION OF REVENUE BILL

            (Consideration of Bill and of Report thereon)

The MINISTER OF FINANCE: Chairperson, hon members, thank you for the opportunity to discuss this very important piece of legislation here this afternoon.

One of the weaknesses of our nation is that our memories are often too short on too many things. One of the things we will need to do as this young generation of democratic South Africans is to plant stakes in the ground so that future generations can see where we have been and what we have achieved. We must never allow South Africans to forget what we have been through, and the strides that we have taken to be able to construct a democracy that means something in the lives of people. Perhaps this is very true also in the system of intergovernmental relations overall, and in respect of intergovernmental fiscal relations in particular.

It is very hard to believe that just five years ago we had complete shambles. Today this Bill that we place before this House speaks of a very high level of order that we have been able to achieve and construct consensually among ourselves. Just five years ago there was complete shambles, which was largely inherited. It was also exceedingly difficult to make the leap rapidly from that inherited disorder to where we are today, in the absence of data, systems, and human and other infrastructure to assist us along the way.

In fact, in placing this piece of legislation before the House today, we should invite all South Africans not just to look at the numbers, but also to try to understand what our achievements have been in respect of constructing this system of intergovernmental fiscal relations.

This Council, as the custodian of provincial interests, should note that the interactions between the national and provincial spheres have come of age. This past weekend we had our annual lekgotla [meeting], and MEC Kuscus and the chairperson of the select committee, Qedani Mahlangu, were there with us. One of the debates we had this time around was about the steps that we need to take in extraordinary circumstances to reconstruct areas that were devastated by the floods this year. There was not a single MEC who argued from the perspective of his province. I cannot say his or her, because all the MECs of finance, regrettably, are male. However, there was not a single MEC who argued from the perspective of his own province.

The view was: What is it that we need to do to ensure that we improve on the quality of life of people whose development has been interrupted by a natural act, an act of God? What is it that we need to do as South Africans, together? I think that that was the clearest symbol to all of us that this relationship between us has come of age, because people did not just come there on behalf of provinces. We got together to take decisions, together, as people jointly responsible for governance in South Africa, regardless of where we find ourselves geographically.

When such a point is reached, I think we can say that the system that the Constitution describes for us to implement has come of age. However, that selfsame spirit is going to be found when we debate, again, over the next few weeks, recommendations of the Financial and Fiscal Commission and the horizontal division of revenue among the provinces.

Right now we are in the throes of preparing for publication, within two months or so, our third Intergovernmental Fiscal Review. Last year’s publication goes into a lot of detail on how money is spent in each province. It gives one an idea of the state of infrastructure in education, for instance, the learner-educator ratios and how money is being spent. This document explains to us in a lot of detail what value taxpayers get for money spent in provinces.

One can only put something together like this if there is a very, very high level of collaboration among individuals, not just political office bearers, but all individuals involved in the two spheres of government. The fact that we have been able to do this twice now and are preparing it for the third time, and the fact that we can bring a Division of Revenue Bill to this House for the third time, indicates that there is indeed that very high level of collaboration that exists between us.

However, perhaps even more important is that, if one looks at what we have been able to achieve in a very short space of time in public finance management, one finds the spirit. In the 1997-98 fiscal year the combined deficit of the provinces was R5,8 billion. In the present fiscal year we anticipate a surplus of R2,3 billion. Nowhere do I know of such a turnaround in such a short space of time.

I should, of course, explain that the surplus we are speaking of is not unspent money and it is not new money generated. It is money creamed off, largely, to settle the debts that have been accumulated over the past few years. However, the spirit which has seen provinces attack those accumulated debts has also seen, for the first time this year, a number of provinces set aside significant amounts of money to deal with infrastructure backlogs.

That, too, is very highly commendable, because we are now able to understand what the fiscal framework is, what the constraint is, and that our responsibilities go beyond just financing a wage bill to dealing with issues of quality of life of our people.

Relations with the local government sphere are a bit more complex. Firstly, there are 843 local government bodies as opposed to the nine provinces. Secondly, local authorities raise the bulk of their own revenues. Some 95% of revenues at local government level are raised by them, as opposed to just under 5% of provincial revenues that are raised by the provinces themselves.

Whilst the Intergovernmental Fiscal Relations Act does construct an institution called the Budget Forum in which the Ministry of Finance and the nine MECs for finance get together with representatives of Salga and the provincial counterparts, this institution still does not work in the way that it should. What, of course, we are hoping for - we are engaged with the work of the Municipal Demarcation Board - and will try to ensure is that the product of this demarcation constructs an arrangement with which we can engage a lot more easily and get the desired outcome.

Furthermore, we are also committing additional resources as conditional grants to local authorities, and this is set out in the Division of Revenue Bill. There is R50 million to strengthen financial management and R300 million for the restructuring grant to local authorities.

We are also now finalising the Municipal Financial Management Act, which will operate at the local government level, similarly to how the PFMA does at the national and provincial spheres of government. Turning to the Bill before this House, it complies with the requirements of section 214 of the Constitution. It divides nationally raised revenues after the distribution of conditional grants - R76,1 billion to national Government, R106 billion to the provinces and R2,8 billion to local government. However, when agency payments and grants in kind are taken into account, the local government share increases to R6,7 billion.

The Bill also contains specific provisions for the planning and management of conditional grants and agency payments. These provisions build on the experiences of the past two years. Conditional grants, as we all know, are a recent innovation. We remain convinced that there has been very positive learning in the application of these conditional grants. There have also been some difficulties experienced, especially in synchronising payment schedules in respect of some departments. We remain convinced, however, that the conditional grants are an enrichment to the intergovernmental system and that they should be retained, but that the process must be streamlined.

In presenting the Division of Revenue Bill to this Council last year, I advised that the trail of accountability had been clarified and strengthened. I can repeat that statement this year. The roles of accounting officers are now further clarified, reporting requirements are now more frequent and the entire Bill is structured within the scope and ambit of the Public Finance Management Act.

In placing this Bill before the House, I need to say that from our perspective this is the most critical section 76 piece of legislation. The select committee has debated this Bill extensively and engaged with the Treasury on issues as they have arisen over the past few weeks. A few wrinkles were identified along the way. Things have, in the main, been attended to. There remains one grouping, the Western Cape Local Government Organisation, that remains unconvinced that this piece of legislation captures the spirit of the Constitution. Their views have been considered. We have spent money on getting legal opinions to test their views and, regrettably, we are of the view that having considered the matter, we are on the correct path with this Bill. I have pleasure in commending the Division of Revenue Bill to the NCOP for discussion and, hopefully, adoption. [Applause.]

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! Thank you, hon Minister. Just before I call on the next speaker to address the House, I just want to draw hon members’ attention to something that appears on the speakers’ list. The letter ``Q’’ on top of a speaker’s name suggests that that particular speaker will be posing a specific question to a specific Minister. On the following page, the Ministers, who are allocated two minutes and the like, will be responding to those questions. I have been advised that there will be no supplementary questions where members see 15 minutes allocated, and I am informed that this has been the agreement between the Whips. So, if I turn down anybody who wants to ask a supplementary question, one must understand that that was the decision of the Whips.

I now call upon the hon member Mrs Q D Mahlangu to address the House.

Ms Q D MAHLANGU: Oh, am I Mrs now? Mr Chairperson, Minister of Finance Mr Trevor Manuel, Deputy Minister of Finance, all Ministers and Deputy Ministers present here, members of this House and special delegates, first of all I must congratulate the new Secretary to the NCOP, Mrs Lulu Matyolo. I hope that she is looking forward to a challenging and daunting task.

The Division of Revenue Bill symbolises everything this House stands for as it deals with allocations from nationally raised revenue for all spheres of government. The NCOP derives its strength and influence from shaping such legislation.

Work on the Division of Revenue Bill for the financial year 2000-01 commenced in May 1999 as we were busy with the elections. The Budget Council, which consists of the Minister of Finance, the Deputy Minister of Finance and MECs of finance for each province, co-ordinates the different interests of the national Government and provincial governments to make sure that agreement is reached on how to share the nationally raised revenue. The enormous decision of allocations to provinces does not occur in one meeting. It is a long process that involves the drawing up of estimates, redrafting and negotiations.

However, there are two interrelated problems. Firstly, the Bill is tabled in the National Assembly at the same time as the national Budget. In other words, the Division of Revenue Bill has to go before the National Assembly each year before coming to this House. Secondly, the MECs of finance in each province announce their provincial budgets two weeks after the announcement of the national Budget in Cape Town. The late tabling of the Division of Revenue Bill in the NCOP gives rise to a Bill whose contents are, to a large extent, a fait accompli.

In a sense, this debate is very disempowering because it is the only opportunity this House has to comment on a Budget which was tabled by the Minister of Finance in February. This view was strongly expressed during the public hearings in late March.

The implication of this is that the National Council of Provinces, as a custodian of provinces - as the Minister has correctly said - plays an insignificant role in the Budget process. If I may indicate this, the select committee is going to engage in the medium-term expenditure framework figures relating to 2001-02 and ensure that the next Division of Revenue Bill reflects our comments and recommendations in this respect.

The NCOP’s participation in the Budget process could articulate a different perspective and provide information on the Budget debate. The present arrangement with regard to the tabling of the Division of Revenue Bill undermines, to a large extent, the status of this House or of Parliament in general.

We welcome developments in provinces, which in the two preceding financial years have generated surpluses which were used to eliminate debts and build reserves. In years to come these surpluses will be real and will be used for infrastructural development and social service delivery.

I also welcome the announcement made by the Minister of Finance in his Budget Speech that the framework legislation on provincial taxation would be in place soon. In the light of this, provinces are encouraged to use this instrument to expand their revenue-generation capacity as the Intergovernmental Fiscal Review, tabled in August last year, reflected that tax revenue from provinces is declining.

With regard to these provincial taxation issues, we are informed that both the Cabinet and the Budget Council have endorsed the gradual approach to the extension of taxation powers of provinces.

With regard to conditional grants, which are allocations of funds from national departments to provinces and local governments, being conditional on the delivery of certain services or on compliance with specified requirements, we notice that significant underspending or nonspending occurred over the past two years. This resulted in substantial roll-overs from preceding years. These roll-overs reflect not only a lack of experience in the administering of such grants, but also insufficient capacity, both at national and provincial level, to monitor and implement these programmes. As a result, ordinary people get affected.

The Gazette released on 29 December 1999 informs us that the bulk of conditional grant distribution was done in the last quarter of the financial year ending March 2000. In this regard, I would like to pose the following questions to the following Ministers: the Minister of Finance and the Ministers of Provincial and Local Government, Housing, Health, and Welfare and Population Development.

Question 1 is: Where did the delay in the distribution of conditional grants reside? Question 2 is: Did the national department not make prompt submissions to the Department of Finance for release of conditional grants? Question 3 is: Did provinces and municipalities experience difficulties with regard to cash flows as a result of delays in the distribution of conditional grants?

I look forward to responses to these questions. In addition, I would like to ask to what extent delivery of crucial services was compromised as a result of this delay in distributing these conditional grants? Conditional grants, in our view, are an instrument to further enhance delivery of services, not to further frustrate the delivery process. However, with some national departments this seems to be the case.

In the light of this, I also welcome clause 12 of the Bill, which did not appear in the previous Division of Revenue Bills. This clause allows the Minister of Finance, by notice in the Gazette, to convert conditional grants which cannot flow to provinces and municipalities, owing to noncompliance, to form part of the equitable share revenue to be allocated to provinces or municipalities. This will ensure that services are delivered and not delayed because of procedures.

We hope that in the medium to long term the select committee or the NCOP will craft and clearly define the meaningful role of the NCOP in the Budget process. I also hope that in future the Budget will be tabled in Parliament.

We will vigorously engage in discussions on our role as the Select Committee on Finance in this process, and it is only after thorough debates and constructive engagement that we will be in a position to reach consensus.

I would like to thank the Minister of Finance, his Deputy, the Director- General Ms Maria Ramos and all the officials whom we interact with from time to time. We do not only seek their co-operation and engagement with the department or Ministry, but further seek a partnership with a greater understanding of the way we execute our functions. [Applause.]

Mr F DLAMINI (KwaZulu-Natal): Chairperson, hon Minister, hon Deputy Minister and MECs present, first of all, may I thank the hon Chairperson for moving my name up the ladder. This will give me an opportunity to leave as early as I can.

May I state from the outset that we, in KwaZulu-Natal, support the Bill. However, I would also like to say that I need to make a few very strong comments before my statement is accepted. I would like to reiterate the sentiments that were expressed by different speakers during our discussion on a negotiated mandate. We, as representatives from KwaZulu-Natal, believe the timing of the tabling of the Division of Revenue Bill is simply not right.

We are well aware of the provision in section 10(1) of the Intergovernmental Fiscal Relations Act, namely that this Bill must be tabled simultaneously with the national Budget. The effect of this is that the National Assembly and the provincial legislatures are undermined and, as a matter of fact, are expected to rubber-stamp the Bill.

It is true that the NCOP and the National Assembly have the power to amend this Bill. However, one gets the feeling that, at this stage, it would be rather difficult to amend schedules and conditional grants that have already been finalised. In the light of the foregoing comments, it is therefore recommended that a proposed division of revenue should be discussed by the National Assembly and the NCOP in the early stages of the budgeting process.

We appreciate the decision of the Finance Ministry, some three years ago, to bring this Bill to this House. However, our suggestion still stands.

In the interests of transparency, it would be appreciated if the formula used in the division of revenue was made known. We in KwaZulu-Natal are particularly sensitive to this because of the following factors. Firstly, we have the highest population compared to all other provinces in this country. Secondly, demographics further tell us that we have the highest population of senior citizens and therefore pay the highest social security grants. Thirdly, KwaZulu-Natal has the highest number of school-going children. The expenditure per school-going child is still comparatively low. Fourthly, for all our sins we, of all provinces, have the highest incidence of HIV/Aids. If this scourge is regarded as a national challenge, as pronounced by the President and his Cabinet, then adequate provision must be made to fight ``ugawu-layo’’ - the very descriptive isiZulu word for HIV/Aids.

We are well aware that provinces are given lump sums to divide among their departments. The truth is one can only adequately divide what one has. Still on the subject of health, our health and social welfare services provide for people from across our borders. This is perhaps because of our good social service delivery. How is that for ego massaging!

The point I am trying to drive home, is that the division of revenue should take cognisance of all these factors. These issues can be highlighted at the proposed discussions during the early stages of the preparation of the Bill.

Another issue of concern is the allocation to the third sphere of government. We all want local government to be a success story in the transformation process. Due to the required and expected transformation in this sphere, special attention should have been paid to the allocation to local governments. We know that some transitional local councils are carrying a heavy baggage of debt in respect of municipalities. Most problems that have been encountered in the transitional councils have indicated a dire need for management expertise, particularly in the financial management area. This naturally means that the focus should be on the development of human resources. The choice of functionaries at metro and municipal level will determine how long the desired transformation will take. My argument arises out of the fact that the equitable share to local government has been increased by only 8,6%. However, we acknowledge, with appreciation, the hefty increase of 91% in conditional grants, to cater mainly for salary increases in respect of the R293 townships before their transfer to municipalities.

The overall increase in the local government allocation is about 14%; hence the concerns expressed earlier on. We are happy that the Minister has expressed, in his speech, sensitivity to these concerns and the efforts that are being made to correct the situation.

During our mandate-negotiating phase, KwaZulu-Natal expressed concern about fiscal dumping, that is, moneys allocated to provinces when it is already too late in the financial year for those moneys to be utilised. The chairperson of the finance committee in the NCOP, Ms Mahlangu, has actually alluded to this.

We also expressed concern that there appeared to be no monitoring mechanisms to ensure that allocated funds would be applied fruitfully. However, we now acknowledge that clause 7(7)(a),(b) and (c) and clause 7(8)(a) and (b) take care of our concerns.

With these few comments may I, once again, say that KwaZulu-Natal supports the Bill. [Applause.]

Mr A F MAHLALELA (Mpumalanga): Chairperson, Mpumalanga supports the Bill.

However, we would like to highlight a few critical points. As hon members have already indicated, the timing of this Bill is also a problem for our province. It does not give us, especially in the legislature, an opportunity to interact with the Bill in a more scientific way so that we are in a position to give the required input. We hope this anomaly will be addressed in future.

As critical as this Bill is, we, as a province, want to highlight a few issues. One of them relates especially to the grants transferred to social services and education. As hon members know, our province is surrounded by neighbouring countries, such as Swaziland and Mozambique, and these factors are not taken into consideration when the division of revenue is done.

The truth of the matter is that there are large numbers of people from those neighbouring countries who come to our schools. We have large numbers of people from Swaziland and Mozambique who receive a pension from the social services in the province. The majority of people work in Gauteng, but when they retire, they come to Mpumalanga. That factor, when the division of revenue is done, is not taken into consideration. This has a serious effect on the province.

When it comes to the local authorities and the division of revenue as it relates to local government, I agree with the Minister that it is a complex issue. It is complex because one does not always have the correct data that one requires, at that point in time, to tell one how to begin to assist in the budgetary process.

The other predicament that we have is that we have some grants that are put forward for local authorities to receive under certain conditions. One has a situation where there is not capacity within the local authority, especially in rural areas, and as a result, those grants hardly reach those local authorities that are rural in nature. One has a situation where mostly those local authorities that have capacity and are in the cities and big towns are the ones who benefit from those grants.

If one looks at local economic development, one finds that there are grant farms and special social plans which are aimed at areas where there has been high retrenchment, etc. One finds situations where people at a particular mine are retrenched. Because those people do not come from that area within Bloemfontein or Gauteng, immediately when they are retrenched, they go into the rural areas where they then stay. When one looks at the capacity of those local authorities in those rural areas, they do not have the capacity to access those funds. As a result, the special social funds will not always fully address the needs of these people who are retrenched, and this is a matter that we should be taking into consideration as well.

The question of the community-based public works programme needs to be looked into as well, because we need to ensure that the backlog is addressed. We have a problem where the money arrives at a later stage, and it is not easy for local authorities or even the province to quickly implement programmes. That creates a problem in terms of accelerating change and delivery. We appeal for these community-based public works programmes not only to be allocated to the province, because the province will have to start another process as well, and also for local authorities that have capacity to be given access to those funds so that we accelerate change.

I need to indicate that, as it relates to infrastructure, the state of the roads in our province is very bad. The floods have worsened the situation. If one looks at this Bill, it does not really address this situation. We have a serious backlog in relation to road infrastructure in the province. As some point, we decided that some of the roads need to be regravelled, because we do not have the necessary funds to begin to deal with that problem. We are hoping that, in future, such issues will be taken into consideration.

The last point that I want to raise is about the R293 town staff. We have a legacy of personnel that we inherited who cannot be absorbed and taken on by other local authorities. They will remain a burden on the province. This will add to the financial constraints that the province is experiencing. I hope that national Government will not just leave the matter to the province to deal with, because it is not a problem of our making. It is a legacy that we got. We hope that national Government will assist us in dealing with the problem of the R293 staff that we inherited.

In conclusion, we support the Bill, but there is one critical issue which I have not raised yet. This issue is about the demarcation process that is unfolding. We commend the department for making money available especially to deal with the amalgamation of the new municipalities that have been established. The only concern that we have is in relation to the condition, as it relates to category B, that only those municipalities that have a budget of more than R300 million will benefit from this. We are really concerned because, as a province, only about four or five new municipalities will benefit, and the majority of the municipalities will not be in a position to benefit from that grant. The question that is raised is why these municipalities are being left out of the whole process, because they also have to undergo a transformation. They also need to deliver, just as any other municipality does. It is not clear why the figure of R300 million is being used as a cut-off figure since it only benefits certain municipalities. We would like to know what mechanism is going to be put in place for those that have a budget below this figure, because they will be undergoing that process as well. They will also need to be assisted in one way or another.

Those are the issues that we wanted to raise. [Applause.]

Mr K D S DURR: Mr Chairperson, because Mr Markovitz of the Western Cape legislature could not be here this afternoon, he asked me to rise and support the legislation on behalf of the Western Cape government.

As the Minister has said, many of the technicalities which were raised were dealt with at the select committee level or were answered in writing by the department. We thank the Minister for that. I have to say to the Minister that he has informed us very well on his department. We have had all the information that we needed to have. The green book is very useful and comprehensive. The fiscal framework is clear. There has been enormous progress.

I just want to say to the Minister that I am reminded of a great concert pianist who was playing at one of the great venues in England. He records in his book that, halfway through a concert at which he had played a wonderful piece of music, he bumped into one of the greatest conductors in the world during the interval. The conductor said to him You are doing extremely well. It's brilliant.'' Then there was a pause. Then he saidSo far.’’

So I should like to congratulate the Minister and inform him that he has the support of the Western Capeÿ.ÿ.ÿ. so far. [Applause.]

Mr G A LUCAS: Chairperson, hon Minister, Deputy Minister, all other Ministers seated here today, special delegates from provinces and permanent delegates of the NCOP, the majority of South Africans, especially black people, continue to live under the very difficult conditions of poverty, illiteracy, unemployment, etc. These are the realities which continue to confront all South Africans in their daily lives and activities. Therefore, for the majority of our people who are poor and who continue to feel the harsh realities of exploitation, oppression and apartheid, their only hope for a better life lies in us, their elected representatives, to represent them well and ensure that we take decisions which are appropriate and in their best interests. It therefore requires of us to champion continually the cause of the poor and to make a meaningful contribution towards addressing their plight.

It is my belief that a debate of this nature on the division of revenue is more relevant to addressing the issues of policy implementation which we continually deliberate upon, precisely because it deals with the allocation of resources to all spheres of government, thus, to a greater extent, it calls on us to show our real commitment and dedication to contributing towards alleviating the socioeconomic backlog which the majority of our people live under. I am sure that all of us seated here today, despite our ideological or political differences, have in common the goals of the eradication of poverty, the creation of a nonracial society and the democratisation of South Africa. These are the ideals which are enshrined in our Constitution, a product of all South Africans. Let me take this opportunity to thank the Minister and his department for the R69 million budget allocation, for the year 1999-2000, towards the building of our provincial legislature in the Northern Cape. I wish to inform the Minister and this House that the construction of the legislature will start in earnest around August this year. This has became a reality because of the private-public partnership in our province. Therefore we hope that the new legislature will, in a way, be able to integrate Galeshewe and the greater city of Kimberley into one and thus contribute towards the deracialisation of our society.

We are confident that the construction of the legislature, and other infrastructural developments taking place around Kimberley, will be able to contribute positively to the development and rejuvenation of our city’s economy, which has been a victim of colonisation for all these years. We know that all our mineral resources are no longer there, because those who had power then took them away and therefore our city is becoming poorer and poorer.

We are of the opinion that greater assistance is required from the national Ministry and the department towards the project of the legislature. Therefore, in that context, I want to find out what other assistance our Minister will be able to contribute towards the construction of the legislature. This is because it is not only R69 million which is required, but other resources are required to continue to ensure that we build our legislature and that it becomes economically viable to Kimberley itself.

As we deliberate on the Division of Revenue Bill we are somewhat moved by the vision of the many millions in our country who are poor and destitute - the unemployed, the homeless, the landless, and those who, despite our truly heroic efforts over the past few years, still have no access to clean water, health care, decent classrooms and ordinary food. Here I am particularly referring to the men and women of our rural communities. We should remember that just recently these communities were struck by a national disaster in the form of floods, which washed away many roads, destroyed homes and schools, their crops and their farming cattle, sheep, goats and so forth.

In essence, these floods destroyed in the main their only hope for a better future. It is in this light that we should continually struggle to devote greater and greater amounts of our public resources to the goal of meeting the social needs of the people, especially the rural poor. In the context of the medium-term expenditure framework projections, it is really commendable on the part of our Government that it intends to spend more on the major rural provinces of our country, including my province, the Northern Cape. It clearly shows the commitment of our Government to the development of our rural communities.

I am sure that the R300 million infrastructure grant and other allocations will go a long way towards rebuilding some of our communities who happen to be affected badly by the recent floods. We also welcome the R50 million financial management grant that will, in a way, contribute towards the upgrading of expertise around district councils and so forth. I think these are commendable.

During the period of the heavy floods in my province, the small community of Williston, whose major source of economic activity is sheep farming, appeared on the SABC TV news. Now the funny thing about their appearance on the news is that it was not about good things, but about the realities of how the floods were able to destroy that small community. That in itself shows how our media are skewed and how they are unable to report good things about our communities. It is in this context that it would really be appreciated if we begin to spend more on our rural communities, especially those which have been struck by disaster. I am appealing especially for Williston, which is a very small community whose only means of survival is sheep farming. This highlights the realities which our rural communities face in their daily activities.

Our President stated the importance of an integrated rural development strategy, in that when one builds a clinic, one must ensure that there is a a road to make the clinic accessible, that it has clean water and electricity. Above all, one must ensure that it has well-trained personnel to provide the necessary professional services to our people. It is in this context that we should continually advocate the principle of an integrated rural development strategy so as to ensure that we will be able to respond to problems such as that faced by the Leonardsville community in the Northern Cape where a clinic was build by the IDT in 1996. The problem with this clinic is that it is not helpful to the community, because it only opens once a week. Also, when it is open it does not have the necessary medication or personnel to provide the required services. Therefore, in that context, it is important that we are able to advocate the importance of an integrated rural development strategy.

In conclusion, we should always be dissatisfied with the kind of progress we are making, no matter how crucial and fundamental that progress may be, because as long as there is inequality in our society, there will be those who are wealthy and live a comfortable life while others are poor and live an uncomfortable life. We should and must be dissatisfied with our work. It is through our dissatisfaction that we shall continue to move at greater speed towards the eradication of poverty in our rural communities.

The smiles on the faces of our children and rural women will be a reflection of the sunshine in their hearts. They are the victims of abject poverty. We will be confident that the hon the Minister and his team are working and that they are on track and succeeding when our children and mothers in rural communities are indeed smiling, reflecting the sunshine in their hearts. The Northern Cape supports the Bill. [Applause.]

Mr G R KRUMBOCK: Chairperson, the Division of Revenue Bill 2000-01 was introduced in the National Assembly by the Minister of Finance on 23 February 2000. The Bill provides for the equitable division of revenue among the national, provincial and local governments, the determination of each province’s share, and for any other allocations to provinces, local governments or municipalities from the national Government share of revenue in line with the requirements of the Constitution.

After debt service costs, a total of R185 billion must be allocated in terms of the equitable share formula set out in the Bill for the 2000-01 financial year. The formula takes into consideration the needs and interests of the national Government, developmental and other needs of provinces, local government and municipalities, economic disparities within and among provinces, as well as a host of other factors.

Although the Financial and Fiscal Commission made no specific recommendations for the 2000-01 Budget, it has adopted the view that the sharing of national revenue should be in the interests of equity. It argues that a number of factors should be taken into account when dividing revenue between national and subnational spheres of government. Accordingly, important national objectives, including South Africa’s international responsibilities, modernisation of the judicial system and the fight against HIV/Aids, have impacted on the national Government’s sphere of its share of the 2000-01 Budget.

Revenue accruing to the provinces’ equitable share has been distributed on the basis of a redistributable formula that reflects provinces’ demographic and economic profiles. However, owing to insufficient data being available, provinces with relatively greater needs, as assessed by objective criteria, have not benefited to the fullest possible extent in terms of the horizontal division of revenue. Using the 1996-97 financial year as a budget base, according to the FFC’s recommendation this year the Northern Province and the North West should have received 13,58% and 8,84% of the formula allocation per province respectively. In fact, these historically disadvantaged provinces have received 13,37% and 8,48% respectively.

Now this represents a loss of potential shared revenue to the Northern Province and North West of R198 million and R339 million respectively. While the equitable share of revenue is undoubtedly moving in the right direction, the NCOP in general, and the provinces in particular, need to ensure that information systems are in place to ensure that revenue is shared in the most equitable way possible.

As a member of the Audit Commission, I would like to raise an issue affecting that body, which is becoming extremely problematic. That is the very serious erosion of the Auditor-General’s office working capital base owing to the late or nonpayment of statutory audit fees by far too many local authorities.

The Auditor-General plays a key role in underpinning democratic institutions and that office must continue to meet its statutory obligations. Equally, the Minister of Finance is correct in his assessment that simply bailing out the Auditor-General’s office for unpaid statutory audits will be extremely counterproductive. The DP therefore welcomes the amendment of section 11(4) in this Bill, which allows the Minister discretion to approve funds or portions of funds withheld in terms of subsection 1 to be used to address a municipality’s outstanding commitments. Consequently, as soon as the proposed municipal public finance management Bill is adopted by Parliament, we recommend that the Minister exercise the discretion provided for in terms of section 11(4) and assist the Auditor-General’s office accordingly.

In conclusion, the Division of Revenue Bill provides for a fairer and more equitable sharing of revenue between the three spheres of Government and among provinces. In addition, it achieves this aim in a manner which is reasonable and practical, and which addresses historical disadvantage. The DP therefore supports this Bill. [Applause.]

Mr A MARAIS: Chairperson, I am supposed to depict the particularities of my province pertaining to matters invariably related to this Bill. From a provincial perspective, we have elected to approach this debate slightly differently today. Instead of being very elaborative, we have chosen to submit the following.

To govern, as they say, is to choose. To choose requires the assertion of priorities, which often causes dissatisfaction and, at times, even conflict. The ongoing devolution of responsibilities to subnational spheres of Government allows for a greater number of choices to be made at these levels. This, in turn, occasions an even greater demand for resources to be devolved and, at the same time, greater innovativeness towards self- reliance. However, this thirst remains to be quenched.

As politicians, our primary objective is positive social development, of which budgets are essential enabling instruments. We are cognisant of the fact that the ideal system remains distant, remains ever perfectible, and that at subnational levels there is the constant striving for the attainment of autarchy status, an enormous challenge. As the Free State we will remain committed to searching, that is, in total collaboration with other provinces, for the mechanisms to achieve these goals.

It is from this premise that we support the Division of Revenue Bill. We are further of the contention that the trajectory identified and traversed to date is most appropriate. We commend the hon the Minister and his financial boffins for the manner in which they have gone about enhancing the legitimacy of our financial systems, of which this is a shining example, noting the amount of work that needs to be done to get it to be an ideal instrument. Even the Minister’s worst enemies and critics cannot escape this reality.

I do, however, have a question and it relates to the Minister of Housing: Almost R3 billion was awarded to the National Housing Fund in the financial year ending March 2000. Could the Department of Housing give a detailed indication of how the money will be spent? How many houses could be built from this programme, and why was the conditional grant in respect of the upgrading of hostels delayed for a year? The Free State supports the Bill. [Applause.]

Dr E A CONROY: Mnr die Voorsitter, Ministers, Adjunkminister, LUR en kollegas, mag ek reg aan die begin sê dat die Nuwe NP die wetsontwerp oor die verdeling van inkomste van 2000 as sodanig steun. Hierdie is wetgewing wat grootliks bydra tot deursigtigheid in die totale jaarlikse begrotingsproses, veral ten opsigte van provinsiale begrotings, wat uit die aard van die saak vir hierdie Huis van besondere belang is. Daar is egter ‘n paar aspekte wat hinder waarna ek graag in die verloop van my toespraak wil verwys. (Translation of Afrikaans paragraph follows.) [Dr E A CONROY: Mr Chairperson, Ministers, Deputy Minister, MEC and colleagues, may I say right at the outset that the New NP supports the Bill on the division of revenue of 2000 as such. This is legislation which greatly contributes to transparency in the total annual budgeting process, especially in respect of provincial budgets, which inevitably are of particular concern to this House. However, there are a few troublesome aspects to which I would like to refer in the course of my speech.]

As it is a section 76 Bill that is before us today, this House has the power to, and can in principle, amend it. However, one tends to get the feeling that by passing this Bill more than two months after the Minister of Finance’s Budget Speech, we cannot really articulate the requirements of the provinces we represent, which is one of the crucial aspects of the activities and duties of this House, and that this House is only required to place a rubber stamp on it, as it is too late to amend the proposals, or rather, that nothing should be done at this stage, lest one upsets the apple cart.

I said, one tends to get that feeling. One, however, also realises that things have to happen in a certain order and certain things have to be finalised within certain timeframes. Maybe the time has come for this House, through the select committee on which I have the honour to serve, to empower itself to become actively involved in the whole budgeting process at a much earlier stage by playing a co-ordinating role in the preparation and submission of the various provinces’ proposals at the stage of the MTEF discussions, and to convince the Ministry of Finance that the select committee has a proactive, creative and participating role to play in the preparation of the annual budget. In this manner the annual debate on the Division of Revenue Bill will not be perceived as just a rubber-stamp event, but a ceremony where the seal of approval is finally placed on a transparent process in which this House will have played an active and participating role.

‘n Tweede punt wat hinder, is dat daar skynbaar in enkele provinsies nie ernstige aandag aan die aspek van uitgawebeheer van die hele begrotingsbestuurproses gegee word nie. Om sinvolle aanbevelings ten opsigte van ‘n begroting vir ‘n toekomstige tydperk te kan maak, is inligting ten opsigte van die bestedingspatroon in die verlede noodsaaklik; is dit nodig om te weet of die fondse wat in die vorige periode vir ‘n sekere doel gestem is, wel vir die doel aangewend is en of fiskale dissipline in die bestedingsproses toegepas is. (Translation of Afrikaans paragraph follows.)

[A second area of concern is that in a few provinces apparently no serious attention is being given to the aspect of expenditure control of the whole budget management process. In order to make sensible recommendations regarding the budget for a forthcoming period, information in respect of the pattern of past expenditure is essential; it is necessary to know whether the funds that were voted in the previous period for a certain purpose were indeed utilised for that purpose and whether fiscal discipline was applied in the expenditure process.]

It is for this reason that public accounts committees function at the national and provincial levels; institutions which are independent in their various spheres, subject only to the Constitution and the law and which are supposed to be impartial and to exercise their powers, and to perform their functions without fear, favour or prejudice - usually chaired in democratic countries by a member of an opposition party. This is, however, not the case in the Northern Province and the Northern Cape, this despite the fact that the Premier of the Northern Province, in an address in that legislature, declared in this regard that, and I quote:

… there is no one who can be a player and a referee - even the best of referees would cheat - I am sure - in that sort of a situation.

It would appear that the public accounts committee of the Northern Province has still not been able to obtain satisfactory responses from transgressing departments and/or persons on various findings of unauthorised spending and overspending, as reported in the Auditor-General’s report, PR 63/1999, for the financial year which ended 31 March 1997, tabled in the legislature on 26 August 1999, despite the chairperson of the public accounts committee indicating that -

… the committee is looking forward to tabling a comprehensive report on the matter early in the next session of the legislature.

In the meantime, the Auditor General’s report, PR 20/2000, for the financial year which ended 31 March 1998, was tabled on 2 March 2000. In his latest report the Auditor-General states that -

… as was the case with my report for 1996/7, this report is also published without any appropriation accounts of the provincial government.

During the course of that year’s audit, the total unauthorised expenditure which came to the Auditor General’s attention amounted to R87,9 million. He furthermore mentions, inter alia, that excessive amounts had been claimed by certain officials for overtime worked, and that a number of cases were identified where the amount claimed by the officials for overtime exceeded their annual salaries. The amount paid out in this regard was in excess of R529 000. It was also found that certain members of the legislature were overpaid to the amount of more than R885 000, which has still not been recovered from them.

It is unfortunately not possible, in the limited time allocated to me, to enumerate all the irregularities referred to in the Auditor-General’s report. One therefore wonders whether a special debate citing this as a matter of public importance should not be requested in terms of Rule 84(2)(c) of the NCOP Rules.

Another matter which should, in my humble opinion, also receive serious attention is the fact that a province such as Gauteng attracts thousands of migrant workers from across its borders on a daily basis. These non- Gautengers, so to speak, add to that province’s expenditure bill as far as health services, welfare, housing, transport and education are concerned. These migrant workers who are not formally part of the Gauteng population as reflected in the census, and who return to their own provinces and homes and countries over weekends and during holidays, help to drain its limited budget during their sojourn in the province of gold. This is apparently not taken into consideration in the horizontal division of revenue, as the equitable share formula makes use of demographic data such as the number of learners enrolled in ordinary schools, the proportion of the population without access to medical aid funding, the estimated number of people entitled to social security grants, etc. I thank you.

Mrs J L FUBBS (Gauteng): Hon Chairperson, I am rather pleased I am placed at this point in the debate because I will be able to make our position in the province a bit clearer. Hon Chairperson, Ministers, members of this House and guests, I think what is important is that we have just heard comments from Mpumalanga in this debate about people working in Gauteng who then, of course, go back to Mpumalanga as pensioners and about some of the problems that that raises. We have just heard the New NP’s comment with respect to its interpretation of the position in Gauteng. I think, though, that the province is well aware that it is precisely because of these issues that we have an equitable division of revenue, rather than an equal division of revenue. If we were to take everything into account, which we at the moment do not have sufficient disaggregated data to do, we may well find that Gauteng could lose a bit more of its revenue from the national Government.

Let me come back to the points I wish to make on the Division of Revenue Bill. I think that our view in Gauteng rests on the understanding of what this division is. In fact, the very concept of a division of revenue may well have misled some members of this House into thinking it was simply that - namely, a division of revenue without taking account of a number of factors that have been alluded to by other members of this House here.

There is the need, on the one hand, for fiscal prudence which we do see in the top slice. There is also a need, on the other hand, to harmonise the different interests of the different spheres of government, as well their functionality and, again, the different economic capacities and other factors of the provinces. We believe that this particular division of revenue has certainly learned from the past. In particular, we refer to some of the transfers to agencies such as housing, which now has a conditional grant. This makes sense, certainly as far as Gauteng is concerned, although we have often criticised the whole concept of conditional grants. Nevertheless, we do recognise that, certainly, with respect to housing and other areas, there may be a necessity to do this to ensure that the amount allocated is fully accounted for and is spent in the right manner. I will return to the issue of conditional grants just before I conclude.

The other point Gauteng wishes to make is that the division of revenue, as far as we are concerned, has been done within a developmental framework. Gauteng sees these conditional grants as being used as a fiscal instrument to ensure that the general principles of nondiscrimination, equal access and mobility rights are guaranteed. I am just so sorry Dr Conroy has left, now that he has dropped this bombshell. To put it another way, conditional grants attempt to harmonise the design of programmes that have implications for interprovincial exchange. When conditional grants are used to achieve the objectives of equity, we do believe that there could be an element of distortion with respect to horizontal implementation.

With respect to housing, we do believe that this does improve transparency and accountability. We also support the use of such grants for building administrative capacity as the development of capacity has been identified as a major determinant for effective delivery.

The time has come for a review, though, we believe, of both the vertical and the horizontal division of revenue. We say this because we have in fact established that we can begin to discern a pattern, and it is always important to strategically review what it is we have in place.

We are aware, all of us, that the Financial and Fiscal Commission has also done a lot of research and prepared a study in this regard, but this does not relate directly to this division of revenue. With respect to the timing, I think that, certainly, some of the points being made about when this should be done, are very important. While one realises one cannot, at the 11th hour, make certain serious changes, by the same token, we believe that the information which is now represented in the intergovernmental fiscal review indicates a maturity in the data collection and analysis of the Department of Finance. We think that this could be used effectively perhaps to review the cycle.

I just want to comment in respect of clause 10 of the Division of Revenue Bill about which certain concerns were raised, although not by Gauteng. I think, as the Minister is well aware, that our cash flow is well in order. The concerns that were raised in respect of clause 10 were about the delays experienced in the payments of instalments from national Government and the fact that this drawing down would impact negatively on the delivery of services. One has to balance this against the fact that we do need accountable governance.

The Public Finance Management Act makes it very clear that funds should not be allocated while provinces have not accounted for the moneys that they have already spent. I do not think that anyone here would disagree with that particular principle.

Another aspect, of course, is the real need to understand where the division of revenue is coming from. There has been talk of us as provinces benefiting from the interest that the national Government enjoys when there is a surplus and that this should be made available immediately. On the other hand, when such moneys are made available, then provinces talk about fiscal dumping. Again, I think that it is the whole question of how one interprets this. Does one want fiscal dumping? Does one want the national Government to keep the interest?

Gauteng’s particular view on this is that certainly, with respect to conditional grants and other planned transfers, we would like to see this happen as planned. With respect to any interest that national Government would incur, we believe that this should be allocated, not only towards the national debt, but towards other identified areas that we have already heard the Minister refer to, such as floods. This would, once again, address this whole principle of equitability in terms of addressing the imbalances that are existing in the provinces.

With respect to the way grants are made, and the way the division of revenue is made, it does seem that Gauteng and perhaps a few other provinces have actually worked very hard at fiscal prudence and delivery, and that sometimes we do not enjoy the benefits thereof. We would certainly appeal for greater monitoring of some provinces, which perhaps are not applying themselves as strongly as some other provinces in the allocative efficiency of this revenue. We would also like to see the integrity of all conditional grants retained.

So, once again, we would like to congratulate the Minister on the improvements that have been made in the division of revenue, which we believe has underpinned, once again, the cardinal principles of co- operative governance in South Africa. [Applause.]

Mr T B TAABE: Mr Chairperson, the Constitution of this country assigns the primary sources of Government revenue, as you know, to national Government. Local government then finances the bulk of its expenditure from property rates, user charges and fees, which basically means that the national Government receives more revenue than it requires to meet its obligation. If this is so, the reality of the situation is that local government is therefore largely financing itself, but that provincial expenditure responsibility exceeds provincial sources of revenue.

This imbalance is addressed by sharing nationally collected revenues between the spheres, with provinces probably receiving the largest equitable share. While the Constitution confers significant autonomy on provincial governments to determine provincial priorities, national Government retains the overall responsibility for policy development, and for monitoring implementation within shared functions.

Hon members in this House have dealt with other critical areas basically relating to the Division of Revenue Bill. However, as representatives from provinces, it is quite imperative that we are also able to deal with conspecifics in the provinces in terms of how things are happening down there on a daily basis, and in terms of how such conspecifics relate to the Bill we are dealing with today. In this instance, I am going to deal with the consolidated municipal infrastructure projects in relation to local authorities. Hon members would know that the conditional grants provide funds for national priorities that are implemented by provincial and local governments. As a matter of fact, the Department of Provincial and Local Government has allocated an amount of R883 million to the consolidated municipal infrastructure programme for basic infrastructure and a community-based public works programme to begin to deal with the problem of the colossal unemployment in this country.

With regard to the consolidated municipal infrastructure programme, it is important to mention the following: There has generally been a shift in the linking of services to housing-related projects which, in essence, should benefit councils which at least provide serviced sites at a local level. It is therefore important to mention that funding levels in this instance have got to increase to ensure that at least basic services are being provided in municipalities in the various provinces.

The other reality is that the consolidated municipal infrastructure programme has a biased approach. It tends to favour bulk infrastructure, which is an inadequate measure, because it does not address the other needs confronting local authorities on a daily basis. It is important to also make the point that more resources are therefore required so that we are able to foster an integrated funding approach to assist structures such as the district councils in provinces.

It must also be mentioned that the joint funding approach is not being followed by provinces. This basically requires further attention so that, at least, we enable these councils to afford the provision of basic services, and also to begin to enforce cost recovery on a much more reliable basis.

It is also important that hon members know that grant funding has got to be made available to finance basic infrastructure in the province so that these funds are therefore released for proper maintenance of services. Currently, as hon members would know, in the provinces, maintenance of such services at a local authority level is very poor.

On this note, I would like to pose a question to the Minister for Provincial and Local Government, namely: Has the department indeed distributed the conditional grants in respect of the consolidated municipal infrastructure programme to the provinces and municipalities for the financial year ending 31 March 2000? If that as been done, what are the details? If not, the question then becomes: Why not?

I am also going to briefly touch on the issue which my hon colleague from Mpumalanga, Comrade Fisher, also raised in respect of the R293 grants. I think hon members would know that these R293 towns are those towns that were serviced by former Bantustan governments. The functions and personnel were transferred to the appropriate municipalities, the primary aim obviously being to consolidate the integration of these towns into the mainstream of governance in the new South Africa.

However, in view of the slow progress, one would like to know what the stance of the national Minister has been in respect of the cut-off date of 31 August 2000, which has been set for the transferring of personnel. The hon special delegate from Mpumalanga has raised the issue in terms of the way in which it is difficult for local municipalities to absorb staff from towns which were historically administered by the Bantustan administrations.

One knows for a fact that, again, there is this issue about competent staff who have to run these municipalities, and the question becomes: Do these municipalities have enough funding to be able to employ and pay competent staff in these local authorities to ensure that delivery is indeed expedited at a local level?

In this regard I would also pose a question to the Minister for Provincial and Local Government as to whether progress has been made with regard to the transfer of the R293 personnel to municipalities. Further, I also want to know if provinces and municipalities received the R293 town personnel conditional grants, and what monitoring mechanisms are in place to ensure that the transfer of personnel proceeds smoothly.

One last issue which I also want to raise, time allowing, relates to the problem of the floods which Mpumalanga has had in the past few months, and which have set the province back a thousand times. I say this in the sense that the province was already moving in terms of ensuring that basic infrastructure was indeed in place in the various municipalities, which never really had the benefit of having infrastructure. However, in relation to the floods that have hit the province quite recently, it would be very difficult for our province to be able to begin to rehabilitate basic infrastructure in the province and it would require that a substantial chunk of our provincial cake, basically, would be diverted to this particular cause.

It is quite imperative that we are able to raise these issues with the Minister so that at least there is a way in which a province which is hard hit by the recent floods, like Mpumalanga, is actually assisted. [Applause.]

Councillor M MADLALA (Salga): Chairperson, Minister Trevor Manuel, distinguished members of the NCOP, it is our constitutional obligation to speak on the important legislative debate regarding the Division of Revenue Bill.

Salga is delighted that it was part of the formulation and was consulted throughout debate which has taken place on the Division of Revenue Bill. It is in this regard that we support the Bill.

It is our belief that there is no piece of legislation that can satisfy everybody at any given time. We have raised our concern on the following. The schedule did not take into account the establishment and disestablishment of municipalities as determined by the Municipal Demarcation Board. We hope the study undertaken by the Department of Provincial and Local Government will address this problem.

Salga raised concerns regarding municipal grants channelled through provincial governments, of which sizeable amounts were returned to national Government unspent at the end of the financial year. We hope Salga will still be consulted on this matter. The equitable share allocation to local government is still not equitable, but Salga will deal with this problem within structures of government for future allocations.

Local government is required to collect 95% of its revenue from rates and taxes, the national grants constituting less than 5%. The reality of the situation is that all municipalities, as has been stated by some speakers here, have problems collecting revenue from trade in services such as electricity, water, refuse, and so on, which are provided to residents. On the other hand, national Government has a better oiled machinery to collect revenue. We, as Salga, will approach our counterparts in a spirit of co- operative governance, debate this issue at a desirable forum, and also indicate the extent to which the national and provincial governments can assist us in collecting revenue in order for municipalities to be financially viable.

We are told that there is a structure of local government that intends blocking this piece of legislation from going through, the Minister particularly quoted Wecloga. Salga wants to ensure that that is not the position of organised local government in South Africa. If Parliament or this House is made a respondent in any court of law on this Bill, we will be an equal respondent. The total sum of municipalities in the country constitutes local government, therefore Salga constitutes local government and is a mouthpiece for municipalities in South Africa. There is no other institution in the country that could claim authority to represent all municipalities in South Africa except Salga. On behalf of Salga I want to emphasise that we support this Bill. [Applause.]

Mr M I MAKOELA: Mr Chairperson, hon Ministers, Deputy Minister and colleagues, the Division of Revenue Bill is the foundation on which the national and provincial budgets are built, and the expression of resources necessary to make the realisation of delivery of services possible at national, provincial, and local spheres of government.

It is the primary instrument most suited for the implementation of the policy of intergovernmental fiscal relations in co-operative governance. However, it is at the level of provincial and local spheres of government that most of the delivery of service takes place and that the bulk of the government’s mandate is successfully executed, or otherwise, is reflected. The division of revenue should be geared towards the realisation of, amongst other things, the above code.

Therefore, for all intents and purposes, the Division of Revenue Bill should be a vehicle by which the Government demonstrates its will towards the promotion of a stable society by enabling provinces, especially through increased revenue funding, to be able to budget for increased and more effective spending on service delivery.

There is no doubt that the situation continues to improve as reflected by the figures in the MTEF. However, the question remains whether the limited annual budgetary improvements will be enough to facilitate, through the provinces, increased access to basic social services by the majority of the poor living in rural provinces, such as the Northern Province, the Eastern Cape and KwaZulu-Natal, where the ravages of the policies of the previous dispensation are most evident.

This brings me to the questions of whether all provinces are in receipt of conditional grants in respect of primary school nutrition programmes and whether the Government is in a position, or has put mechanisms in place, to monitor the effectiveness of the programmes in the various provinces.

I ask these questions because it has been found that the majority of poor children are unable to learn properly, because they go to school hungry and the majority of families in these provinces rely on social security provisions for their survival. The latter, I think, should be the one aspect of the budget that will have to be continually revisited and improved so as to be able to cater for the needs of the poor and vulnerable.

Another worrying factor is the continual inability of provincial departments to spend all the money allocated to them, as demonstrated by a roll-over of funds in respect of the redistribution of specialised health services. While I am on this issue, I want to ask the Minister of Health whether the delay in payment for the redistribution of tertiary health services to provinces hampers in any way the deliver of health services in provinces, and whether the conditional grants for health professionals’ training and research have been distributed to the provinces for the financial year ending March 2000.

The Division of Revenue Bill, as a vehicle for the promotion of equity among provinces through the budgetary process, is welcome. However, it should also be noted that provinces raise around 4% of their revenue through their own resources and spend almost 85% of their budgets on the delivery of social services, such as health, welfare and education, while the majority of the people in mostly rural provinces rely on social security grants, such as old age pensions, grants for physical and mental disability, poverty alleviation and others.

Therefore it should remain the resolve of this Government, which, after all, sets the national eligibility standards, to help improve the capability of provincial administrations to discharge their responsibilities in a manner that allows for the maximum utilisation of available funds to the benefit of those most in need. We in the Northern Province support the Bill. [Applause.]

Mr M J KUSCUS (North West): Hon Chair, the difficulty with speaking so late in a debate is that most of the people have already said what I wanted to say. The other difficulty is that I was so intricately involved in team finance in crafting this arrangement that I do not want to break ranks here and betray the comradeship that exists in that environment. However, I am speaking on behalf of the North West province here today. [Laughter.] In wearing that cap, I would like to first state that we are very grateful for some of the comments made by the Minister today in highlighting some of the progress made in intergovernmental fiscal relations. Provinces are sometimes projected as corrupt, inefficient and unable to deal with fiscal matters, but the successes that we have registered over the past five years are hardly mentioned by the scribes in the media. I share the distinction with my colleague in Gauteng of being the longest- serving MEC for finance in the country. I know we have been going through a lot of pain here. The Minister met us in finance.

I must say that intergovernmental fiscal relations have come of age in this country. There was a time when our debates were prefaced by issues of my province'',my own sectoral interests’’, but we have gone beyond that and we are looking now at intergovernmental fiscal relations in a more holistic fashion.

Our track record on the prudential application of fiscal resources has earned us the necessary respect in the marketplace, both domestically and internationally. In many respects we have outperformed our contemporaries as an emerging market by taking very bold initiatives to put in place the necessary legislative and institutional frameworks to bring about macroeconomic stability. Our strong resolve has even been entrenched in the Constitution. Key features of Chapters 9 and 13 of the Constitution include issues such as treasury control, the organs of oversight, such as the Auditor-General’s Office, an independent central bank to protect the value of our currency and, the subject of our discussion, section 214 that deals with equitable revenue sharing.

William Thompson once said:

When you can measure what you are speaking about and express it in numbers, you know something about it; but when you cannot express it in numbers your knowledge is of a meagre and unsatisfactory kind. It may be the beginning of knowledge but you have scarcely in your thought advanced to the stage of science.

All our good ideals, all our good intentions and the policies that we so fervently articulate over podiums, even in this Chamber, in provincial legislatures, the National Assembly, etc, will not materialise if our fiscal plans are not based on correct assumptions. In the words of William Thompson, we must be able to measure what we are speaking about.

I think the Division of Revenue Bill is an attempt to set a broad framework so that we know, not through the subjectivity of the Minister of Finance and his relationship with whoever and the pressures of the day, but by clearly definable parameters that are worked out and which bring predictability to our budgets, what we are entitled to. In this regard, the Intergovernmental Fiscal Review is a major achievement. It spells out very clearly how we spend our resources, both on the provincial and on the national front.

However, what will become increasingly important in future is the whole notion of value for money. At the end of the day it is not about arguing for more money for our provinces, but about asking the critical question: ``To what extent are we utilising the money at our disposal?’’ There is still too much wastage, inefficiency and duplication at various levels of the delivery chain, and the sooner we start addressing that issue, the quicker we will arrive at more substantive solutions to some of the vexing developmental problems we are facing in our country.

Given the legacies that we have inherited - a lot has already been said about the disparities in our provinces - the work of the Financial and Fiscal Commission is becoming increasingly important. We welcome the latest report issued by the FFC. Some very critical questions are being raised there and addressed, and we hope that even in this Chamber, through a very interactive process with provinces, we can give real meaning to some of the proposals made in that document.

My brief this afternoon is not to argue for more money for the province of the North West. I have known the Minister of Finance for a while now. There is no way in which I can coerce him through this Chamber. However, some of the issues that I wanted to address this afternoon have already been addressed. Amongst them was the whole question of conditional grants, the late arrival of these grants, their effect on delivery, and the resultant roll-overs, etc.

However, what is of particular importance to us as a province is the financial situation of local governments. We welcome the announcements made by the Minister this afternoon on local governments, including some of the financial assistance given to build capacity, etc. However, it would appear

• and this is our observation of the whole situation - that the demarcation process which spells out the new local government dispensation seems not to have taken account of some of the fiscal implications of these new configurations. Some very serious work needs to be done, because in this very financial year some of these local governments will come into being. And, unless we seriously address the fiscal implications of what this new demarcation process holds for us, as already raised here by the representative of Salga this afternoon, we are going to find serious blockages in the delivery chain of local government.

I would like to conclude this afternoon by thanking the Minister for his personal role in giving leadership on intergovernmental fiscal relations. He has, indeed, developed a formidable team, not only at a political level, but also at an official level, which is a shining example of how we can give real meaning to co-operative governance. We really value what the Minister is doing. I know that sometimes he has to defy popular opinion to drive his point home, but we really appreciate the firm leadership that he has been exercising up till now. From the North West province, as already demonstrated in our track record, we will be a firm supporter of the Minister in his pursuit of fiscal discipline. He will never find us wanting in making sure that as a collective we live within our means. On that note, I would like to state that the North West province supports this Bill. [Applause.]

Mr Z S KOLWENI: Chairperson, Ministers, hon members, well beyond sharing in the equitable division of revenue lies a challenge to both provincial and local authorities. That challenge is whether social grant allocations really do reach earmarked beneficiaries without hindrance.

In saying so, I refer to social welfare grants such as disability grants, child support grants and pensioners’ grants. More often than not, recipients of these grants are vulnerable to all types of abuse, from paypoints right up to their homes. At paypoints, they are ripped off mostly by people who purport to be volunteering as support staff to pay officials.

Since this corruption is practised in the territory of the local authorities, I wonder if it is not about time that this House again looked at the notion of reintroducing municipal policemen to take charge of these out-of-hand situations where people are being abused.

Over and above that, we appeal to NGOs and social welfare community structures to consolidate their capacity so as to be able to fast-track the flow of new applicants and to take stock of successes and shortcomings. Failing that, sooner or later, we may be faced with another social welfare roll-over since a smaller number of social-grant recipients are accessing the system. As the current statistics suggest, millions of our people, Africans in particular, have not accessed the system and are still starving.

In conclusion, please allow me to pose one of a few questions, though most questions have already been asked by my colleagues here. The question that I have is directed primarily to the Department of Welfare. Why was funding for developmental programmes for unemployed women with children under five years of age delayed for a year?

The other question is whether the department has distributed conditional grants in respect of the financial management of social security for the financial year ending 31 March 2000. If so, what are the details? If not, why not? [Applause.]

Mrs J N VILAKAZI: Chairperson, hon Minister, hon MECs from the provinces and hon colleagues - well, well, nothing is absolutely good or bad, but every change is scrutinised, one way or another.

The IFP has this to say, according to my understanding of the concept. The Government has now made a policy called the medium-term expenditure framework which means that we no longer budget for one year at a time. By budgeting for a period of three to five years, the department has a good idea of what it can or cannot do.

This allows for scientific decision-making. It prevents the department from making expenditures which cannot be sustained in the medium to long term. Therefore it allows for certainty and will influence policy-making in our country. All the concerns already expressed by my colleagues here will be addressed during the process of change.

The second development relates to the Public Finance Management Act. This Act allows for responsibilities to be split between the Minister and the director-general. At present, the Minister is responsible for political decisions and this is called outcomes'', while the director-general is responsible for management, which is calledoutput’’.

While the Minister is responsible for policy and is answerable to Parliament for outcomes to be achieved from taxpayers’ money, proper management has to be the responsibility of the director-general. Parliament can therefore now call the director-general to account for the way in which he or she manages his or her department. In this way, Parliament makes it quite clear who is responsible for what. Because the director-general is responsible for output, he must outline the programme which will be implemented to achieve the outcome determined by the Minister.

Since every department, and that includes every provincial department, will have to become PFM compliant, money may not be transferred from one programme to another. Each programme has to be measurable. In this way Parliament can determine whether a programme has succeeded or failed. It also makes for greater transparency.

Noma yini ephathelene nezimali, ibucayi kakhulu. Uma kuzoba khona ukuhlukaniswa kokusebenza kwazo phakathi kukaNgqongqoshe womnyango kanye nomQondisi-Jikelele womnyango, kuzokwenza ukuthi izinto zicace uma sekuya ekusebenzeni kwazo zonke izinhlelo zomnyango kuwo womathathu amazinga kaHulumeni, kuze kufike nakohulumeni basekhaya.

UHulumeni uzokwazi uma izinto zingahambanga kahle ukuthi ubani oqondene nalokho, nokuthi ubani okudingeka aphendule kanye nokuthi ubani ongabekwa icala. Uma sekwenzeke izinto ezingahambi ngendlela, kuzophela ukuthi omunye akhombe omunye esweni, omunye avikele iso lakhe. (Translation of Zulu paragraphs follows.)

[Any situation that has something to do with money is a delicate one. If the use of money is going to be decided by the Minister concerned and the Auditor-General, things will be clear when it comes to the functioning of all department structures in the three tiers of government. This will also impact on local governments.

If things do not go well, the Government will be able to identify the person responsible and who can be brought to the hearing. This will put an end to a situation in which people point at others if things do not go well.]

In conclusion, the IFP appeals to all departments to take every step necessary to become fully compliant before the next Budget. Parliament will view failure to do so in a very negative light. As members have already expressed their concerns, we appeal to all departments to raise whatever difficulties they have with the PFM right now, and not to wait for the next Budget.

The time for stories is over. We must now deliver to the people and they must tell us whether or not the Government is delivering to them. [Applause.]

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Hon members, before I call on the next speaker, I want to make a slight amendment. I think the hon the Minister of Finance will respond to all questions by giving an overall response.

Hon Minister Skweyiya will respond to all three questions put to him. In other words, he is given six minutes to deal with all the questions in their entirety. Talking for two minutes at a time becomes extremely difficult.

The MINISTER FOR WELFARE AND POPULATION DEVELOPMENT: Chairperson, I will be answering for three Ministers today.

Could I start with the question that was posed by the hon member Mrs Mahlangu? First of all, in response to the question that was posed on provincial governments, the question was whether they noticed that the bulk of conditional grant distribution was done in the last quarter of the year ending March 2000.

The answer is as follows. Reasons for delays in the distribution of allocations are twofold. Firstly, conditional transfers are only made after provinces and/or municipalities have complied with the conditions for transfer stipulated in the Division of Revenue Act of 1999 and by the department. Various provinces only complied with the conditions to transfer during the last quarter of the 1999-2000 financial year.

Secondly, certain funds such as the Social Plan Fund and the Local Economic Development Fund were only secured on the budget of the department during the third quarter of 1999.

The same question was posed by hon member Mahlangu to the Welfare department. The main reasons why some of the conditional grants were only distributed in March 2000 were that, firstly, there were outstanding provincial business plans; secondly, there had to be finalisation of administrative procedures such as obtaining the correct banking details of provinces to distribute the funds through the electronic fund transfer system as prescribed; thirdly, mechanisms had to be set up to ensure compliance with the conditions as set out in the Division of Revenue Act; and lastly, consultation had to take place with the provincial co- ordinators.

The second question was whether provinces and municipalities experienced cash flow difficulties as a result of the delays in the distribution of conditional grants. As far as the Department of Welfare is concerned, provinces did not experience any difficulties with their cash flow as a result of the delays in the distribution of the conditional grants.

The answer to the question posed to the Ministry of Housing is three pages long. Could I table it?

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Hon Marais, do you have a objection to the response to your question to the Minister of Housing being tabled because it is too long?

Mr A MARAIS: No objections.

The MINISTER: In so far as other questions posed by Mr Kolweni to Welfare are concerned, it is stated here that there was no delayed funding for the development of a grant for unemployed women with children under the age of five years. The above-mentioned programme was administered as an agency service. Advances were given to the provinces and documentary proof was needed to reconsider expenditure and outcomes according to the Government’s prescripts before new advances could be provided.

On the question of the amounts gazetted for the different provinces, the answer is about two pages long. I wonder whether I could also table that response?

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Mr Kolweni, you have any objections?

Mr Z S KOLWENI: No objections.

The MINISTER: In response to the question raised by Mr Tony Marais and put to the Minister of Housing, the response is also about four pages long, and I once again request that the response be tabled.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): What about the question on provincial affairs? I do not know whether you dealt with that.

The MINISTER: Which question was that - on provincial affairs?

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): It was posed by Mr Taabe, I think.

The MINISTER: Mr Chairperson, the answer to the last question on provincial affairs is also long.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Thank you. We can table it. [Laughter.]

The MINISTER: There is an answer to the question from …

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order!

Mr A E VAN NIEKERK: Mr Chairperson, I just wanted to raise a point of order, but I will let the Minister finish first.

The MINISTER: I can read the response from Welfare to the question on the child support grant, co-operation with the criminal justice system and the victim empowerment programme, but I do not think I will take any less than four minutes to do that. I request that I also be allowed to table this response.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Hon member, do you have any objection? Remember, we have allocated the speakers two minutes to respond to the questions. If they are reading statistics, they will not be able to say much in two minutes. Do you have any objection if it is tabled? Mr Z S KOLWENI: No.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Thank you. There was a point of order?

Mr A E VAN NIEKERK: Mr Chairperson, on a point of order …

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Against whom, Mr Van Niekerk?

Mr A E VAN NIEKERK: It is a point of order about the process of questions that we are dealing with at the moment. I want it to be recorded that the process that we are following now is obviously orchestrated, and it was not a transparent or consultative process. The questions should have been asked during normal question time. The hon the Ministers are here, they wasted a lot of their time, and now just …

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): That is unfortunately not a point of order against anybody. That is a matter which you must take up with your Whips. It was the request of the Whips, and they have agreed on this. We cannot entertain this matter here. We now have hon Minister Matsepe standing in for the hon the Minister of Health.

The MINISTER OF COMMUNICATIONS: Mr Chairperson, I am standing in for the Minister of Health, who is attending the World Health Assembly in Geneva.

Owing to the two minutes allocated, and since it seems as if there is a bit of confusion, I will deal briefly with some of the questions. I do want to hand over the answers to be tabled.

With regard to questions that were raised by Mr Makoela on conditional grants, I will answer questions 1 and 2 together. The answer is that the full amounts of the grants were allocated to the provinces and the amounts paid over in terms of a predetermined cash flow pattern that provided cash for every two weeks.

In the area of health professional training and research grants, the allocation for the Eastern Cape was R50 310 million, for the Free State R80 496 million, for Gauteng R479 622 million, and for KwaZulu-Natal R139 750 million. For the four provinces Mpumalanga, Northern Cape, Northern Province and North West, it amounted to R22 360 million. For the Western Cape it was R278 382 million.

With regard to hospital grants for the year 1999-2000, for the Free State it was R235 698 million, for Gauteng R14 081 307 million, for KwaZulu-Natal R403 496 million, and for the Western Cape R954 499 million.

With regard to the questions regarding roll-overs in respect of distribution amounting to R53 million, the reply is rather long, and I would like to table it.

For the fourth question on whether all provinces are in receipt of school nutrition, the answer is also relatively long. I would also like to table that answer.

With regard to the answer as to whether there were roll-over funds in respect of the construction of the Umtata regional hospital and whether the amount of R88 million was adequate, the Umtata hospital is to be funded on a rand-to-rand basis. The amount voted for the budget of the national Department of Health only represents 50% of the total budget.

The project has experienced certain setbacks from its onset. The original design was not suitable and the hospital had to be redesigned. This caused a delay of five months. There were adverse weather conditions due to the freak tornado. The delayed start of the project also resulted in ongoing shifts in the time schedule and expenditure. The lack of proper project management and the weak monitoring by the Public Works Department resulted in the project review being instituted later than expected. The national Department of Health has reached a written agreement with the Department of Finance in terms of which the national Department of Health will pay all accounts, until the allocated funds run out, after which the Eastern Cape will take over the responsibility for funding. There are some figures but I shall table them as well.

There were questions from Ms Mahlangu. She wanted to know where the delay in the distribution of conditional grants resided and whether the national department had made prompt submissions to the Department of Finance for release. The operation-type conditional grants flowed smoothly; however, some of the funds for construction are provided by conditional grants and these flowed in the latter half of the financial year, the reason being that construction programmes inherently start with a slow flow of funds which accelerate close to the completion of the project. Also, the more costly items in the construction process are installed in the latter portion of a project.

The delays occurred at a variety of places; however, the most common were slow movement of documentation, especially by provincial tender boards, and problems experienced with contractors. Prompt submission to and payments by the Department of Finance were made. There was no delay in the distribution of the hospital RNR grants. The hospital reconstruction and rehabilitation allocation for 1999-2000 was R200 million. Disbursement of these funds is dependent on the approval of the business plans. In spite of having been constantly guided, provinces were not progressing fast enough with the development of their strategic plans and properly costed business plans for individual projects.

Appropriate projects were also not identified on time by provinces, the reasons being the lack of human resources both provincial health and public works departments; the lack of skills, especially in project management; poor detailed budget planning, which resulted in overestimating expenditure on projects; and the problems with some of the provincial tender boards.

The final question was whether the provinces and municipalities had experienced difficulties with regard to cash flow. The answer is that during the year under review provinces certified their invoices and forwarded these to the national Department of Health, where the suppliers were paid directly. This system had the effect that these grants did not impact on provincial cash flows.

The MINISTER OF FINANCE: Chairperson, let me express appreciation to the many colleagues and comrades who contributed to this very important debate. I have just a few formal questions that were tabled, but perhaps more important are the views expressed in the course of this debate, and I will try to respond to them together rather than to treat them as separate.

I think the point to start with is the role of the NCOP in relation to the finalisation of the Division of Revenue Bill, the issue of timing and so on. I think it is important to understand the legal and constitutional framework. The first thing is that one has to appropriate the money before one can divide it. It is for that reason that I would submit here that the Intergovernmental Fiscal Relations Act, which requires us to table this legislation alongside the Budget, is correct, because it requires of us to appropriate generally and then divide.

I think to place the cart before the horse would be quite an unwieldy situation. Supposing one first divided the revenue, but then discovered that Parliament would not appropriate that revenue, I think one would have a gridlock, which would be quite untenable. However, I think that there is a lost opportunity, and that opportunity arises in respect of the failure - I put it as a failure - to engage with the issues timeously.

I am delighted by the comments of Miss - I think she is still Miss …. Everybody married her off this afternoon, but I think that she is still Miss Qedani Mahlangu. She will confirm that, thank you. [Laughter.] I am delighted by the comments of Miss Mahlangu that the select committee will engage with the issue differently. What we have tried to do in the documentation available is to give the trend lines in allocation, as part of the medium-term expenditure framework. Therefore, if one looks at the Budget Review, one will find that the baseline for allocations for next year and the following year are included there. Our invitation to the select committee, also in discussion last week, is that it must engage with these issues now and talk to us, certainly by August, so that that has an influence on the issues going forward.

It does not help to debate these issues once the Bill has been tabled, because what we have had to do - and I think I am also replying to some of the comments by the hon Dlamini, Krumbock and others - was to try to avoid step changes in the allocations. We have tried to smooth the path. We recognise that we have not quite met even the demographic requirements arising from Census 1996, but I think MEC Kuscus and others would be able to confirm that in the Budget Council we have taken the view that we will smooth the flow, and so the full implementation of the demographic data will only be felt in the year 2003.

This is something that I think we share and this I think has also created circumstances where there is a greater level of certainty going forward. Therefore, assume no change, assume that we accept the present definition and basis for equity. We will proceed along that path. I think that if colleagues here understood that, we then have a platform upon which we can engage with these issues over the coming months. My appeal will certainly be that that be taken up. This will then change this idea that the NCOP is completely disempowered, or that it is invited here only to rubber-stamp the Bill. In fact, there is nothing to prevent those discussions from happening now.

On timing, in particular, we tabled the Bill, as members know, on 23 February. It was approved by the National Assembly, without detailed debate, on 9 March, and I am advised that it was transferred on that date to the NCOP. That it is only debated today I cannot be held responsible for. That is something that, within the realm of this House, members will have to resolve. I do not live here, I am visiting, so I will invite the Chair, along with the Whippery, to resolve those kinds of matters.

I will now respond to some of the detailed questions. The hon Lucas asked about the R69 million for the legislature in the Northern Cape. I made a very good suggestion to our colleagues in the Northern Cape. In fact, they can build a legislature that fits in with the terrain and save a lot of money in the process. All that they have to do is hang scaffolding inside the big hole. [Laughter.] They have a wonderful natural amphitheatre to host the legislature. It is wonderfully air-conditioned, it never rains there and I think everybody would be happy. [Laughter.] But the R69 million is a national Government contribution. We are hoping that the province will come on budget with that, but there has been an agreement signed between Premier Dipico and I on this matter, and any overruns would be for the account of the province.

A second broad theme was raised in respect of local government, provincial government, and, let me say, also in respect of national Government, and this relates to the adequacy of resources.

There is indeed a lot of literature available on this question and I think that what we need to understand is that there is no such thing as an absolute number. Everything is relative. The Constitution certainly sets out the fact that one needs to take account of certain issues. Beyond that, the division must be fully compliant with the Constitution, but it always is a relative set of figures.

The key aspect that then arises is the point that the hon Marais made, namely to govern is to choose. What one has available, one has to stretch as far as possible. One really has to stretch that as far as possible. And so, when hon Mashilele raises questions, and asks about this local authority or that road or the gravelling of that road, those are the choices that must be exercised.

Let me make the point very strongly here in the NCOP, where custodianship of provincial interests vest. Provincial governments are not provincial administrations. Choices must be exercised and in the exercise of those choices, within a fixed and constrained fiscal envelope, we will be able to distinguish between good and bad government. We have seen this. We have seen the coming into being of this in a number of provinces. Just this weekend we learned about how Gauteng has decided that one cannot ride a dead horse. When a horse is dead, one gets up and one walks away from that horse. One does not spend money on consultants to prove that the horse is alive. If the horse is dead, the horse is dead. But in so many provinces we believe that we can ride dead horses. We spend money on the dead horses, we spend money on vets for the horses, we span these horses together believing that if a number of dead horses come together, one may have some energy. That does not work.

I think the hon Kuscus, who is here from the North West, will be able to spend time in this House advising how he has had to take forensic experts and even police into his treasury, and has had to effect arrests for violations. There was one case of the arrest of a senior staff member of a department. When he was coming out of the departmental bosberaad, they were waiting for him at the gate. They arrested him, because the treasury is keen to ensure that the money is properly utilised. There are many, many stories like that, that tell about the discipline and determination to ensure that the money is stretched as far as possible. I think, fundamentally, we believe that to govern is to choose.

I think that within that context, a third point to make is on the R300 million under the Department of Finance Vote. We reached an agreement this past weekend with all of the provinces that this R300 million should in fact be the first tranche of money to be utilised for flood relief. It is a bird in the hand. The rest we may have to raise in whatever way, but this is money in hand. It had been intended to be allocated for some of the real backlogs, especially in education and so on. We will come back to that as we proceed in the period ahead. This R300 million will go to the worst affected provinces. By agreement between ourselves, these are the Northern Province, Mpumalanga, the Free State and KwaZulu-Natal. This does not exclude the needs of other provinces that were affected by floods, but these four provinces will be at the front of the queue for that R300 million.

With regard to the point raised by the hon Lucas about a clinic that only opens once a week: Find the member of Parliament responsible for that area, ensure that he or she fulfils his or her mandate by finding out what the issues are. It does not help to walk away. We are all in this together. We are responsible. We are sent here by our people. In dealing with these issues, if a member is the MP responsible, find out what the details are and sort those things out in the area or in the district or in the province. I have no control over allocation of resources for the opening of a clinic, or in fact over whether the staff work or not. If we are true representatives of the people, then we will assume the responsibility where we find ourselves. In respect of the local authority, I still stand by the position. The Auditor-General, if he cannot recover money, is in a serious position. The audit commission must audit his books and he must explain, because it is unauthorised and fruitless for him not to be able to recover his own resources. We have to put pressure on the Auditor-General. We cannot create a new moral hazard where local authorities say, well, we have paid for another local authority. Suddenly, to audit these books becomes the responsibility of the national Government. It is wrong, because one cannot even run a corner shop without providing for a bookkeeper so that one can account for what one has done at the end of the period. If local authorities then believe that they can run these institutions out of the back pocket, where nobody checks where the money is going, then those individuals, who are assigned positions of responsibility as senior public servants at that level, must be held to account or they must be dismissed from their jobs. It is as simple as that. Nobody can tell me that people do not allocate for audit fees. Once we encourage bad habits, we will never recover from it.

In respect of the fiscal implications and the demarcation, in fact, I think it is something we must all view very seriously. I think we have not been able to allocate adequately, because we do not know exactly what the outcomes are. In some instances where one has cross-boundary local authorities, I think it will have a profound impact.

The new Pretoria metro is going to take a third of the population of the North West when it takes Ga-Rankuwa, Mabopane, Winterveld and all of those areas. These are going to be profound issues going forward. We cannot second-guess all of the outcomes but we remain engaged with the process. I think that, in the course of this year, we will have to try to understand this better. I have a sense, though, that because of the Demarcation Board, which is still in session at the moment, the division of revenue 2001 may actually look profoundly different. I do not have any details yet. I just have a hunch if we truly want to take account of many of these issues, the outcomes are going to be very different.

I think that on the questions raised by Miss Mahlangu - yes, she is still Miss, she has not gotten married in the past six minutes - on the conditional grants, we can formally table that. I think the answer would be very much a repeat of Minister Skweyiya’s reply on the delays and also Minister Matsepe-Casaburri’s reply on behalf of the Minister of Health.

Let me conclude by again expressing my appreciation, and reminding colleagues here that these kinds of debates help us. I repeat that when I found MEC Kuscus and MEC Moleketi there four- and-a-bit years ago, intergovernmental fiscal relations looked very different. We have come a long way. We need to remind ourselves how far we have come and also remind ourselves that these kinds of discussions we are having here this afternoon and the kinds of discussions we have with the select committee assist us in sharpening our performance and ensuring that we can develop a set of guidelines that will stand for all time.

We have come further than most countries. I think that our intergovernmental system is a lot clearer than that of India, which has been around for just over 50 years now, clearer than that of Australia, which has been around for about 55 years, and clearer than most other complex intergovernmental fiscal relationships. We have been able to do this in a very short space of time, within five years. This is because of our determination to delivery democracy to the people, because of our commitment to build a better life for all of our people.

I think to everybody involved, the provinces, certainly the MECs for finance and their treasuries, the select or standing committees on finance in the provinces which hold their provincial governments to account, to the staff of the Treasury at national level, to the portfolio committee and the select committee here, to everybody involved in keeping us collectively on our toes, a very big thank you on behalf of people who ultimately are the beneficiaries of better fiscal management. [Applause.]

Debate concluded.

Bill agreed to in accordance with section 65 of the Constitution.

The Council adjourned at 17:51.

                             __________

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

                      WEDNESDAY, 19 APRIL 2000

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The following Bill was introduced in the National Assembly by
     the Minister in the Office of the President on 19 April 2000 and
     referred to the Joint Tagging Mechanism (JTM) for classification
     in terms of Joint Rule 160:


     (i)     National Youth Commission Amendment Bill [B 25 - 2000]
          (National Assembly - sec 75). The Bill has not yet been
          referred to a committee. [Explanatory summary of Bill and
          prior notice of its introduction published in Government
          Gazette No 21107 of 17 April 2000.]

TABLINGS:

National Assembly and National Council of Provinces: Papers:

1. The Speaker and the Chairperson:

 Report of the Auditor-General on the Financial Statements of the
 Economic Co-operation Promotion Loan Fund for 1998-99 [RP 63-2000].

1. The Minister for Justice and Constitutional Development:

 (1)    Report of the Department of Justice for 1998-99 [RP 52-2000].


 (2)    Report of the South African Law Commission for 1999 [RP 53-
     2000].


 (3)    Report of the Judicial Service Commission for 1998-99.


 (4)    Draft Protocol to the African Charter on Human and Peoples'
     Rights on the Establishment of an African Court on Human and
     Peoples' Rights, tabled in terms of section 231(2) of the
     Constitution, 1996.


 (5) Explanatory Memorandum to the Draft Protocol.

                       THURSDAY, 20 APRIL 2000

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Speaker and the Chairperson:

 Report of the Office of the Auditor-General on the Budget of Income and
 Expenditure for the financial year ending 31 March 2001 [RP 76 - 2000].


                         TUESDAY, 2 MAY 2000

National Assembly and National Council of Provinces:

Papers:

1. The Speaker and the Chairperson: Reports of the Auditor-General on the -

 (1)    JLB Smith Institute of Ichthyology for 1997-98 [RP 49-2000];


 (2)    Departments of Posts and Telecommunications of the former TBVC
     Countries for 1995-96 [RP 73-2000].

1. The Minister for Public Enterprises:

 Report and Financial Statements of Eskom for 1999.

1. The Minister of Environmental Affairs and Tourism:

 (1)    Report and Financial Statements of the South African Tourism
     Board for 1997-98.


 (2)    Report and Financial Statements of the National Botanical
     Institute for 1998-99.

                         FRIDAY, 5 MAY 2000 ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Minister of Transport on 5 May 2000 submitted drafts of the
     Administrative Adjudication of Road Traffic Offences Amendment
     Bill, 2000, and the Road Traffic Management Corporation Amendment
     Bill, 2000, and the memorandums explaining the objects of the
     proposed legislation, to the Speaker and the Chairperson in terms
     of Joint Rule 159. The drafts have been referred by the Speaker
     and the Chairperson to the Portfolio Committee on Transport and
     the Select Committee on Public Services, respectively, in
     accordance with Joint Rule 159(2).


 (2)    The Joint Tagging Mechanism (JTM) on 28 April 2000 in terms of
     Joint Rule 160(3), classified the following Bill as a section 75
     Bill:


     (i)     Administration of Estates Amendment Bill [B 24 - 2000]
          (National Assembly - sec 75) - (Portfolio Committee on Justice
          and Constitutional Development - National Assembly).


 (3)    The following Bill was introduced in the National Assembly on 5
     May 2000 and referred to the Joint Tagging Mechanism (JTM) for
     classification in terms of Joint Rule 160:


     (i)     Local Government: Municipal Systems Bill [B 27 - 2000]
          (National Assembly - sec 75) - (Portfolio Committee on
          Provincial and Local Government - National Assembly)
          [Explanatory summary of Bill and prior notice of its
          introduction published in Government Gazette No 21071 of 13
          April 2000.]


 (4)    On 3 May 2000 the following Bill, at the request of the Minister
     of Education, was introduced in the National Council of Provinces
     by the Select Committee on Education and Recreation. It has been
     referred to the Joint Tagging Mechanism (JTM) for classification
     in terms of Joint Rule 160:


     (i)     South African Council for Educators Bill [B 26 - 2000]
          (National Council of Provinces - sec 76) - (Select Committee
          on Education and Recreation - National Council of Provinces)
          [Explanatory summary of Bill and prior notice of its
          introduction published in Government Gazette No 20956 of 3
          March 2000.]


 (5)    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 Portfolio Committee
          on Public Service and Administration and to the Select
          Committee on Local Government and Administration:


          Report of the Department of Public Service and Administration
          for 1999-2000.


     (2)     The following paper is referred to the Standing Committee
          on Public Accounts for consideration and report. It is also
          referred to the Portfolio Committee on Home Affairs and to the
          Select Committee on Public Services for information:


          Report of the Auditor-General on the Financial Statements of
          Vote 17 - Home Affairs for 1998-99 [RP 141-99].


     (3)     The following paper is referred to the Standing Committee
          on Public Accounts for consideration and report. It is also
          referred to the Portfolio Committee on Public Works and to the
          Select Committee on Public Services for information:


          Report of the Auditor-General on the Financial Statements of
          Vote 28 - Public Works for 1998-99 [RP 152-99].


     (4)     The following paper is referred to the Standing Committee
          on Public Accounts for consideration and report. It is also
          referred to the Portfolio Committee on Arts, Culture, Science
          and Technology and to the Select Committee on Education and
          Recreation for information:
          Report of the Auditor-General on the Financial Statements of
          the Zoological Gardens of South Africa for 1998-99 [RP 65-
          2000].
     (5)     The following paper is referred to the Portfolio Committee
          on Welfare and Population Development and to the Select
          Committee on Social Services:


          Report of the Department of Welfare and Population Development
          for 1999-2000 [RP 86-2000].


     (6)     The following paper is referred to the Standing Committee
          on Public Accounts for consideration and report. It is also
          referred to the Portfolio Committee on Trade and Industry and
          to the Select Committee on Economic Affairs for information:


          Report of the Auditor-General on the Financial Statements of
          the Independent Development Trust (Main Fund) for 1997-98 [RP
          182-99].


     (7)     The following papers are referred to the Portfolio
          Committee on Arts, Culture, Science and Technology and to the
          Select Committee on Education and Recreation:
          (a) Report of the Board of Control of the Woordeboek van die
              Afrikaanse Taal for 1998-99.


          (b) Government Notice No 1034 published in the Government
              Gazette No 20410 dated 3 September 1999, Withdrawal of
              Government Notice No 644 of 19 April 1999 made in terms
              of section 5(1)(c) of the National Monuments Act, 1969
              (Act No 28 of 1969).


          (c) Government Notice No 1044 published in the Government
              Gazette No 20410 dated 3 September 1999, Entries in the
              register of immovable conservation-worthy property in
              terms of section 5(1)(cC) of the National Monuments Act,
              1969 (Act No 28 of 1969).


          (d) Government Notice No 2063 published in the Government
              Gazette No 20436 dated 10 September 1999, European
              Programme: Support for small, medium and micro
              enterprises in South Africa.


          (e) Government Notice No 90 published in the Government
              Gazette No 20458 dated 10 September 1999, Designation of
              Provincial Language Committee in the North West, made in
              terms of section 8(8)(a) of the Pan South African
              Language Board Act, 1995 (Act No 59 of 1995).


          (f) Government Notice No 92 published in the Government
              Gazette No 20458 dated 10 September 1999, Designation of
              Provincial Language Committee in the Western Cape, made
              in terms of section 8(8)(a) of the Pan South African
              Language Board Act, 1995 (Act No 59 of 1995).


          (g) Government Notice No 91 published in the Government
              Gazette No 20458 dated 10 September 1999, Publication of
              a decision in terms of section 11(7) of the Pan South
              African Language Board Act, 1995 (Act No 59 of 1995).


          (h) Government Notice No 1125 published in the Government
              Gazette No 20476 dated 23 September 1999, Registration of
              heraldic representations made in terms of section 10 of
              the Heraldry Act, 1962 (Act No 18 of 1962).


          (i) Government Notice No 97 published in the Government
              Gazette No 20499 dated 01 October 1999, Designation of
              Khoi and San National Language Body, made in terms of
              section 8(8)(b) of the Pan South African Language Board
              Act, 1995 (Act No 59 of 1995).


          (j) Government Notice No 98 published in the Government
              Gazette No 20499 dated 1 October 1999, Normative
              Framework for the recognition of Provincial Language
              Committees made in terms of the Pan South Language Board
              Act, 1995.


          (k) Convention on the Means of Prohibition and Preventing the
              Illicit Import, Export and Transfer of Ownership of
              Cultural Property, tabled in terms of section 231(2) of
              the Constitution, 1996.


          (l) Explanatory Memorandum to the Convention.


          (m) Convention to the International Centre for the Study of
              the Preservation and Restoration of Cultural Property
              (ICCROM), tabled in terms of section 231(2) of the
              Constitution, 1996.


          (n) Explanatory Memorandum to the Convention.


     (8)     The following paper is referred to the Subcommittee on
          Internal Arrangements:


          Rider Number One to the Financing Agreement between the
          Government of the Republic of South Africa and the European
          Community concerning Parliamentary Support Programme, tabled
          in terms of section 231(3) of the Constitution, 1996.


     (9)     The following paper is referred to the Portfolio Committee
          on Safety and Security and to the Select Committee on Security
          and Constitutional Affairs:


          Rider Number One to the Financing Agreement between the
          Government of the Republic of South Africa and the European
          Community concerning Policing in the Eastern Cape, tabled in
          terms of section 231(3) of the Constitution, 1996.

     (10)The following papers are referred to the Portfolio Committee
          on Education and to the Select Committee on Education and
          Recreation:


          (a) Rider Number One to the Financing Agreement between the
              Government of the Republic of South Africa and the
              European Community concerning Technical Support to the
              South African Department of Education, tabled in terms of
              section 231(3) of the Constitution, 1996.


          (b) Amendment Agreement between the Government of United
              States of America and the Government of the Republic of
              South Africa on Primary Education Results Package
              Programme: Department of Education, tabled in terms of
              section 231(3) of the Constitution, 1996.


     (11)The following paper is referred to the Portfolio Committee on
          Public Service and Administration and to the Select Committee
          on Local Government and Administration:


          Rider Number One to the Financing Agreement between the
          Government of the Republic of South Africa and the European
          Community concerning Public Service Management Development,
          tabled in terms of section 231(3) of the Constitution, 1996.


     (12)The following paper is referred to the Portfolio Committee on
          Justice and Constitutional Development and to the Select
          Committee on Security and Constitutional Affairs:


          Rider Number One to the Financing Agreement between the
          Government of the Republic of South Africa and the European
          Community concerning the Truth and Reconciliation Commission,
          tabled in terms of section 231(3) of the Constitution, 1996.


     (13)The following paper is referred to the Portfolio Committee on
          Provincial and Local Government and to the Select Committee on
          Local Government and Administration:


          Rider Number One to the Financing Agreement between the
          Government of the Republic of South Africa and the European
          Community concerning the Cato Manor Development Programme,
          tabled in terms of section 231(3) of the Constitution, 1996.
     (14)The following papers are referred to the Portfolio Committee
          on Trade and Industry and to the Select Committee on Economic
          Affairs:
          (a) Rider Number One to the Financing Agreement between the
              Government of the Republic of South Africa and the
              European Community concerning Private Sector Development
              Programme, tabled in terms of section 231(3) of the
              Constitution, 1996.


          (b) Rider Number Two to the Financing Agreement between the
              Government of the Republic of South Africa and the
              European Community concerning SADC Finance and Investment
              Research Programme, tabled in terms of section 231(3) of
              the Constitution, 1996.


          (c) Rider Number Two to the Financing Agreement between the
              Government of the Republic of South Africa and the
              European Community concerning Private Sector Development
              Programme: Small and Micro Enterprises, tabled in terms
              of section 231(3) of the Constitution, 1996.


     (15)The following papers are referred to the Portfolio Committee
          on Finance and to the Select Committee on Finance:


          (a) Rider Number One to the Financing Agreement between the
              Government of the Republic of South Africa and the
              European Community concerning FISCU, tabled in terms of
              section 231(3) of the Constitution, 1996.


          (b) Rider Number Two to the Financing Agreement between the
              Government of the Republic of South Africa and the
              European Community concerning Technical Assistance
              Consultancy Support, tabled in terms of section 231(3) of
              the Constitution, 1996.


     (16)The following papers are referred to the Portfolio Committee
          on Health and to the Select Committee on Social Services:


          (a) Rider Number Three to the Financing Agreement between the
              Government of the Republic of South Africa and the
              European Community concerning District Health System, to
              be tabled in terms of section 231(3) of the Constitution,
              1996.


          (b) Rider Number Three to the Financing Agreement between the
              Government of the Republic of South Africa and the
              European Community concerning Health Technical Support,
              tabled in terms of section 231(3) of the Constitution,
              1996.


          (c) Rider Number Three to the Financing Agreement between the
              Government of the Republic of South Africa and the
              European Community concerning HIV/AIDS Programme, tabled
              in terms of section 231(3) of the Constitution, 1996.


          (d) Rider Number Four to the Financing Agreement between the
              Government of the Republic of South Africa and the
              European Community concerning District Health System,
              tabled in terms of section 231(3) of the Constitution,
              1996.


          (e) Rider Number Four to the Financing Agreement between the
              Government of the Republic of South Africa and the
              European Community concerning Health Technical Support,
              tabled in terms of section 231(3) of the Constitution,
              1996.


          (f) Rider Number One to the Financing Agreement between the
              Government of the Republic of South Africa and the
              European Community concerning Public Health Sectoral
              Support Programme, tabled in terms of section 231(3) of
              the Constitution, 1996.


     (17)The following paper is referred to the Portfolio Committee on
          Minerals and Energy and Portfolio Committee on Education and
          to the Select Committee on Economic Affairs and the Select
          Committee on Education and Recreation:


          Rider Number Two to the Financing Agreement between the
          Government of the Republic of South Africa and the European
          Community concerning Non-Grid Electrification of Rural
          Schools, tabled in terms of section 231(3) of the
          Constitution, 1996.


     (18)The following papers are referred to the Portfolio Committee
          on Water Affairs and Forestry and to the Select Committee on
          Land and Environmental Affairs:


          (a) Financing Agreement between the Government of the Republic
              of South Africa and the European Community concerning
              Sector Support for Community Water Supply and Sanitation,
              to be tabled in terms of section 231(3) of the
              Constitution, 1996.


          (b) Amendment Agreement between the Government of United
              States of America and the Government of the Republic of
              South Africa on Community-based Water Board Development
              Project, tabled in terms of section 231(3) of the
              Constitution, 1996.


     (19)The following paper is referred to the Portfolio Committee on
          Foreign Affairs and to the Select Committee on Economic
          Affairs:


          Agreement between the Government of Sweden and the Government
          of the Republic of South Africa on General Terms and
          Conditions for Development Co-operation, tabled in terms of
          section 231(3) of the Constitution, 1996.


     (20)The following papers are referred to the Portfolio Committee
          on Justice and Constitutional Development and to the Select
          Committee on Security and Constitutional Affairs:


          (a) Report of the Department of Justice for 1998-99 [RP 52-
              2000].


          (b) Report of the South African Law Commission for 1999 [RP 53-
              2000].
          (c) Report of the Judicial Service Commission for 1998-99.


          (d) Draft Protocol to the African Charter on Human and
              Peoples' Rights on the Establishment of an African Court
              on Human and Peoples' Rights, tabled in terms of section
              231(2) of the Constitution, 1996.


          (e) Explanatory Memorandum to the Draft Protocol.


     (21)The following paper is referred to the Standing Committee on
          Public Accounts for consideration and report. It is also
          referred to the Portfolio Committee on Trade and Industry and
          to the Select Committee on Economic Affairs for information:


          Report of the Auditor-General on the Financial Statements of
          the Economic Co-operation Promotion Loan Fund for 1998-99 [RP
          63-2000].

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Speaker and the Chairperson:

 Report of the Auditor-General on the Financial Statements of Vote 31 -
 South African Police Service and the Secretariat for Safety and
 Security for 1998-99 [RP 154-99].

1. The Minister of Water Affairs and Forestry:

 (1)    Government Notice No 15 published in the Government Gazette No
     20793 dated 14 January 2000, Determination of an interest rate in
     terms of section 59(3)(a) of the National Water Act, 1998 (Act No
     36 of 1998).


 (2)    Proclamation No 6 published in the Government Gazette No 20897
     dated 25 February 2000, Commencement of certain provisions of the
     National Forests Act, 1998 (Act No 84 of 1998).


 (3)    Government Notice No 212 published in the Government Gazette No
     20946 dated 10 March 2000, Request to register a water use in
     terms of the National Water Act, 1998 (Act No 36 of 1998).


 (4)    Government Notice No 213 published in the Government Gazette No
     20946 dated 10 March 2000, Request to register a water use in
     terms of the National Water Act, 1998 (Act No 36 of 1998).


 (5)    Government Notice No 234 published in the Government Gazette No
     20965 dated 17 March 2000, made in terms of section 50(4) of the
     National Forests Act, 1998 (Act No 84 of 1998).


 (6)    Government Notice No 277 published in the Government Gazette No
     21017 dated 24 March 2000, Trans-Caledon Tunnel Authority Notice
     made in terms of Chapter 10 of the National Water Act, 1998 (Act
     No 36 of 1998).


 (7)    Government Notice No 338 published in the Government Gazette No
     21042 dated 7 April 2000, Rates and charges for the Water Research
     Fund made in terms of the Water Research Act, 1971 (Act No 34 of
     1971).
 (8)    Report and Financial Statements of the Water Research Commission
     for 1999, including the Report of the Auditor-General on the
     Financial Statements for 1998.

                         MONDAY, 8 MAY 2000

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Minister of Transport on 8 May 2000 submitted a draft of the
     Sea Transport Documents Bill , 2000, and the memorandum explaining
     the objects of the proposed legislation, to the Speaker and the
     Chairperson in terms of Joint Rule 159. The draft has been
     referred by the Speaker and the Chairperson to the Portfolio
     Committee on Transport and the Select Committee on Public
     Services, respectively, in accordance with Joint Rule 159(2).


 (2)    The Joint Tagging Mechanism (JTM) on 8 May 2000 in terms of
     Joint Rule 160(3), classified the following Bill as a section 75
     Bill:


     (i)     National Youth Commission Amendment Bill [B 25 - 2000]
          (National Assembly - sec 75). The Bill has not yet been
          referred to a committee.


 (3)    The following Bills were introduced in the National Assembly on
     8 May 2000 and referred to the Joint Tagging Mechanism (JTM) for
     classification in terms of Joint Rule 160:


    (i)      Sea Transport Documents Bill [B 28 - 2000] (National
          Assembly - sec 75) - (Portfolio Committee on Transport -
          National Assembly) [Explanatory summary of Bill and prior
          notice of its introduction published in Government Gazette No
          21158 of 8 May 2000.]


     (ii)    Meat Safety Bill [B 29 - 2000] (National Assembly - sec
           76(1)) - (Portfolio Committee on Agriculture and Land Affairs
           - National Assembly) [Explanatory summary of Bill and prior
           notice of its introduction published in Government Gazette No
           21155 of 8 May 2000.]

National Council of Provinces:

1. The Chairperson:

 (1)    The following paper has been tabled and is now referred to the
     Select Committee on Security and Constitutional Affairs for
     consideration and report:


     Draft Code of Ethics for Members of the Cabinet and Members of
     Executive Councils.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Finance:

 (1)    Report and Financial Statements of the Department of Finance for
     1999, including the Report of the Auditor-General on the Financial
     Statements of Vote 14 - Finance for 1998-99 [RP 56-2000].


 (2)    Report and Financial Statements of the Department of State
     Expenditure for 1999, including the Report of the Auditor-General
     on the Financial Statements of Vote 33 - State Expenditure for
     1998-99 [RP 69-2000].


 (3)    Report of the Statistics South Africa for 1999 [RP 41-2000].


 (4)    Report and Financial Statements of the South African Revenue
     Service for 1998-99, including the Report of the Auditor-General
     on the Financial Statements for 1998-99.

1. The Minister of Arts, Culture, Science and Technology:

 Report of the Department of Arts, Culture, Science and Technology for
 1999, Volume One.

                         TUESDAY, 9 MAY 2000

ANNOUNCEMENTS:

National Council of Provinces:

1. The Chairperson:

 The following paper was incorrectly referred to the Select Committee on
 Security and Constitutional Affairs. It is now referred to the Select
 Committee on Local Government and Administration for consideration and
 report.


 Draft Code of Ethics for Members of the Cabinet and Members of the
 Executive Councils.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Correctional Services:

 Report and Financial Statements of the Department of Correctional
 Services for 1999 [RP 50-2000].

1. The Minister of Minerals and Energy:

 Report of the Department of Minerals and Energy for 1999.


                       WEDNESDAY, 10 MAY 2000

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Home Affairs:

 Report of the Independent Electoral Commission on the National and
 Provincial Elections of 2 June 1999 [RP 83-2000].

1. The Minister for Provincial and Local Government:

 Reasons for declaring a state of disaster in the Magisterial Districts
 of Phutaditjhaba Transitional Local Council, Qwaqwa Rural Council and
 Maluti Transitional Rural Council in the Free State Province submitted
 to Parliament in terms of section 2(4) of the Civil Protection Act,
 1977 (Act No 67 of 1997).

1. The Minister of Safety and Security:

 Regulation Number R.389 published in the Government Gazette Number
 21088 dated 14 April 2000, the South African Police Service Employment
 Regulations made in terms of section 24(1) of the South African Police
 Service Act, 1995 (Act No 68 of 1995).

                        THURSDAY, 11 MAY 2000

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Home Affairs:

 Report of the Department of Home Affairs for 1999 [RP 98-2000].

1. The Minister of Correctional Services:

 Report and Financial Statements of the Judicial Inspectorate for the
 period 1 June 1998 to 1 February 2000.

1. The Minister of Health:

 (1)    Protocol on Health in the Southern African Development
     Community, tabled in terms of section 231(2) of the Constitution,
     1996.


 (2)    Explanatory Memorandum to the Protocol.

                         FRIDAY, 12 MAY 2000 ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 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 Portfolio Committee on Arts, Culture, Science and
     Technology and to the Select Committee on Education and Recreation
     for information:


     Report of the Auditor-General on the JLB Smith Institute of
     Ichthyology for 1997-98 [RP 49-2000].


 (2)    The following papers are referred to the Standing Committee on
     Public Accounts for consideration and report. It is also referred
     to the Portfolio Committee on Communications and to the Select
     Committee on Labour and Public Enterprises for information:


     (a)     Report of the Auditor-General on the Departments of Posts
          and Telecommunications of the former TBVC Countries for 1995-
          96 [RP 73-2000].


     (b)     Report and Financial Statements of Eskom for 1999.


 (3)    The following papers are referred to the Portfolio Committee on
     Environmental Affairs and Tourism and to the Select Committee on
     Land and Environmental Affairs:


     (a)     Report and Financial Statements of the South African
          Tourism Board for 1997-98.


     (b)     Report and Financial Statements of the National Botanical
          Institute for 1998-99.


 (4)    The following papers are referred to the Portfolio Committee on
     Water Affairs and Forestry and to the Select Committee on Land and
     Environmental Affairs:


     (a)     Government Notice No 15 published in the Government
          Gazette No 20793 dated 14 January 2000, Determination of an
          interest rate in terms of section 59(3)(a) of the National
          Water Act, 1998 (Act No 36 of 1998).


     (b)     Proclamation No 6 published in the Government Gazette No
          20897 dated 25 February 2000, Commencement of certain
          provisions of the National Forests Act, 1998 (Act No 84 of
          1998).


     (c)     Government Notice No 212 published in the Government
          Gazette No 20946 dated 10 March 2000, Request to register a
          water use in terms of the National Water Act, 1998 (Act No 36
          of 1998).


     (d)     Government Notice No 213 published in the Government
          Gazette No 20946 dated 10 March 2000, Request to register a
          water use in terms of the National Water Act, 1998 (Act No 36
          of 1998).


     (e)     Government Notice No 234 published in the Government
          Gazette No 20965 dated 17 March 2000, made in terms of section
          50(4) of the National Forests Act, 1998 (Act No 84 of 1998).
     (f)     Government Notice No 277 published in the Government
          Gazette No 21017 dated 24 March 2000, Trans-Caledon Tunnel
          Authority Notice made in terms of Chapter 10 of the National
          Water Act, 1998 (Act No 36 of 1998).


     (g)     Government Notice No 338 published in the Government
          Gazette No 21042 dated 7 April 2000, Rates and charges for the
          Water Research Fund made in terms of the Water Research Act,
          1971 (Act No 34 of 1971).


     (h)     Report and Financial Statements of the Water Research
          Commission for 1999, including the Report of the Auditor-
          General on the Financial Statements for 1998.


 (5)    The following paper is referred to the Standing Committee on
     Public Accounts for consideration and report. It is also referred
     to 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 Financial Statements of Vote
     31 - South African Police Service and the Secretariat for Safety
     and Security for 1998-99 [RP 154-99].


 (6)    The following paper is referred to the Portfolio Committee on
     Arts, Culture, Science and Technology and to the Select Committee
     on Education and Recreation:


     Report of the Department of Arts, Culture, Science and Technology
     for 1999, Volume One.


 (7)    The following papers are referred to the Portfolio Committee on
     Finance and to the Select Committee on Finance. The Reports of the
     Auditor-General included in these papers are referred to the
     Standing Committee on Public Accounts for consideration and
     report:


     (a)     Report and Financial Statements of the Department of
          Finance for 1999, including the Report of the Auditor-General
          on the Financial Statements of Vote 14 - Finance for 1998-99
          [RP 56-2000].


     (b)     Report and Financial Statements of the Department of State
          Expenditure for 1999, including the Report of the Auditor-
          General on the Financial Statements of Vote 33 - State
          Expenditure for 1998-99 [RP 69-2000].


     (c)     Report and Financial Statements of the South African
          Revenue Service for 1998-99, including the Report of the
          Auditor-General on the Financial Statements for 1998-99.


 (8)    The following paper is referred to the Portfolio Committee on
     Finance and to the Select Committee on Finance:


     Report of the Statistics South Africa for 1999 [RP 41-2000].

(9) The following paper is referred to the Portfolio Committee on Correctional Services and to the Select Committee on Security and Constitutional Affairs:

     Report and Financial Statements of the Department of Correctional
     Services for 1999 [RP 50-2000].


 (10)The following paper is referred to the Portfolio Committee on
      Minerals and Energy and to the Select Committee on Economic
      Affairs:


     Report of the Department of Minerals and Energy for 1999.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Speaker and the Chairperson: Reports of the Auditor-General on the -

 (a)    Financial Statements of Enerkom (Proprietary) Limited for 1998-
     99 [RP 57-2000];


 (b)    Financial Statements of the Unemployment Insurance Fund for 1997
     and 1998 [RP 77-2000];


 (c)    Financial Statements of the Agricultural Research Council for
     1998-99 [RP 40-2000].

1. The Minister of Health:

 Report of the Department of Health for 1999-2000 [RP 75-2000].

                         MONDAY, 15 MAY 2000

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    On 15 May 2000 the following Bills, at the request of the
     Minister of Transport, were introduced in the National Council of
     Provinces by the Select Committee on Public Services. They have
     been referred to the Joint Tagging Mechanism (JTM) for
     classification in terms of Joint Rule 160:


     (i)     Administrative Adjudication of Road Traffic Offences
          Amendment Bill [B 31 - 2000] (National Council of Provinces -
          sec 76) - (Select Committee on Public Services - National
          Council of Provinces) [Explanatory summary of Bill and prior
          notice of its introduction published in Government Gazette No
          21077 of 7 April 2000.]


     (ii)Road Traffic Management Corporation Amendment Bill [B 32 -
          2000] (National Council of Provinces - sec 76) - (Select
          Committee on Public Services - National Council of Provinces)
          [Explanatory summary of Bill and prior notice of its
          introduction published in Government Gazette No 21077 of 7
          April 2000.]


 (2)    Assent by the President of the Republic in respect of the
     following Bills:


    Financial Services Board Amendment Bill [B 62B - 99] - Act No 12 of
    2000 (assented to and signed by President on 20 April 2000); and


     Independent Communications Authority of South Africa Bill [B 14B -
    2000] - Act No 13 of 2000 (assented to and signed by President on 4
    May 2000).


 (3)    The Joint Tagging Mechanism (JTM) on 15 May 2000 in terms of
     Joint Rule 160(3), classified the following Bills as section 75
     Bills:


     (i)     Local Government: Municipal Systems Bill [B 27 - 2000]
          (National Assembly - sec 75) - (Portfolio Committee on
          Provincial and Local Government - National Assembly).


     (ii)    Sea Transport Documents Bill [B 28 - 2000] (National
          Assembly - sec 75) - (Portfolio Committee on Transport -
          National Assembly).


 (4)    The Joint Tagging Mechanism (JTM) on 15 May 2000 in terms of
     Joint Rule 160(4), classified the following Bills as section 76
     Bills:


     (i)     South African Council for Educators Bill [B 26 - 2000]
          (National Council of Provinces - sec 76) - (Select Committee
          on Education and Recreation - National Council of Provinces).


     (ii)    Meat Safety Bill [B 29 - 2000] (National Assembly - sec
          76(1)) - (Portfolio Committee on Agriculture and Land Affairs
          - National Assembly).

1. The Speaker and the Chairperson:

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


 (1)    The following papers are referred to the Portfolio Committee on
     Home Affairs and to the Select Committee on Social Services:


     (a)     Report of the Independent Electoral Commission on the
          National and Provincial Elections of 2 June 1999 [RP 83-2000].


     (b)     Report of the Department of Home Affairs for 1999 [RP 98-
          2000].


 (2)    The following paper is referred to the Portfolio Committee on
     Safety and Security and to the Select Committee on Security and
     Constitutional Affairs:


     Regulation Number R.389 published in the Government Gazette Number
     21088 dated 14 April 2000, the South African Police Service
     Employment Regulations made in terms of section 24(1) of the South
     African Police Service Act, 1995 (Act No 68 of 1995).


 (3)    The following paper is referred to the Portfolio Committee on
     Provincial and Local Government and to the Select Committee on
     Local Government and Administration:


     Reasons for declaring a state of disaster in the Magisterial
     Districts of Phutaditjhaba Transitional Local Council, Qwaqwa
     Rural Council and Maluti Transitional Rural Council in the Free
     State Province submitted to Parliament in terms of section 2(4) of
     the Civil Protection Act, 1977 (Act No 67 of 1977).


 (4)    The following paper is referred to the Portfolio Committee on
     Correctional Services and to the Select Committee on Security and
     Constitutional Affairs:


     Report and Financial Statements of the Judicial Inspectorate for
     the period 1 June 1998 to 1 February 2000.


 (5)    The following papers are referred to the Portfolio Committee on
     Health and to the Select Committee on Social Services for
     consideration and report:


     (a)     Protocol on Health in the Southern African Development
          Community, tabled in terms of section 231(2) of the
          Constitution, 1996.


     (b)     Explanatory Memorandum to the Protocol.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Speaker and the Chairperson:

 Reports of the Auditor-General on the -


 (a)    Financial Statements of the South African Telecommunications
     Regulatory Authority for 1998-99 [RP 84-2000];


 (b)    Financial Statements of the Ciskei Broadcasting Corporation for
     1993-94 to 1996-97 and the period ended 30 November 1997 [RP 79-
     2000];


 (c)    Group Annual Financial Statements of Soekor (Pty) Ltd for 1997-
     98 [RP 78-2000];


 (d)    Financial Statements of the Commission on Gender Equality for
     1998-99 [RP 85-2000].

COMMITTEE REPORTS:

National Council of Provinces:

1. Report of the Select Committee on Local Government and Administration on the Draft Code of Ethics for Members of the Cabinet and Members of Executive Councils, dated 15 May 2000:

   The Select Committee on Local Government and Administration, having considered the Draft Code of Ethics for Members of the Cabinet and Members of Executive Councils, referred to it, reports that it approves of the Draft Code.

 Report to be considered.

                        TUESDAY, 16 MAY 2000

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson: (1) The Joint Tagging Mechanism (JTM) on 16 May 2000 in terms of Joint Rule 160(6), classified the following Bill as a section 75 Bill:

   (i) Protected Disclosures Bill [B 30 - 2000] (National Assembly - sec 75) - (Portfolio Committee on Justice and Constitutional Development - National Assembly).

National Council of Provinces:

1. The Chairperson:

 Message from National Assembly to National Council of Provinces:


 Bill passed by National Assembly on 16 May 2000 and transmitted for
 concurrence:


    Protected Disclosures Bill [B 30 - 2000] (National Assembly - sec
     75) - (Select Committee on Security and Constitutional Affairs -
     National Council of Provinces).