FRIDAY, 22 JUNE 2001 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 10:01.

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

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.

                         APPROPRIATION BILL

Resumption of debate on Vote No 1 - Presidency:

The PRESIDENT OF THE REPUBLIC: Madam Speaker, Deputy President and hon members, I would like to welcome the representatives of our Public Service who are here with us today. They are critically important to the success of what we are trying to do, which is to change this country for the better. I am, indeed, very glad that they are here this morning. [Applause.]

I am going to do something that I do not normally do and which I do not like doing. I am going to speak about myself. [Laughter.] As we grew up, we were taught always to tell the truth. We learnt that we should always search for the truth and not be happy with repeating dogma, however widespread the belief that such dogma represented the truth.

We were taught never to fear to defend what we believed was right. It was said that we must respect people, even if they hold views that are different from ours. Furthermore, we should understand that to swear at people or otherwise resort to foul language indicates that the dialogue has ended and the stage is set for a physical fight.

We were taught that no self-respecting person tells untruths and that a person who does not respect himself or herself cannot expect others to respect him or her. I am certain that there are many in this House who will recognise themselves as students who were exposed to these instructions. I speak in this manner because of some of the things that were said yesterday, as the hon members participated in the debate on the Vote of the Presidency. I refer, in particular, to the charge that far too often we use the so-called ``race card’’; that what we say and do leads to feelings of marginalisation and disempowerment among the Afrikaners; that discussion of racism leads to mutual accusations, more racism and new tensions; and that the real issue that divides our country is poverty, which can only be addressed through higher rates of economic growth.

The burden of these statements is that we should not discuss racism, because to discuss racism is racist and foments racism. Indeed, one of the speakers said that calls for reconciliation have been replaced by a debate on racism. Observations were made that even as the international community seeks to address the issue of racism, this should not take place in our country, as will happen when the UN World Conference on Racism convenes in Durban two months from now.

Evidently, some of the matters that are legitimate and correct subjects for discussion are national reconciliation, self-determination for the Afrikaners, poverty and economic growth. We must assume from this that what is spoken of here is colour-blind national reconciliation, colour-blind self-determination for the Afrikaners, colour-blind poverty and colour- blind economic growth.

Let me hasten to state that I agree fully with the hon members that we must pursue the objective of national reconciliation with the greatest determination. This is fundamental to stability in our country and the building of a new society without racial tensions.

The Government and the parties in Government will not waver in their pursuit of this goal. The Government will also continue to address the issue of the collective rights of the Afrikaner people, as it must respect and advance the collective rights of all language and cultural groups in our country. This is an inherent part of the process of our national reconciliation, and is therefore also fundamental to the building of a new society free of racial and ethnic tensions.

We also agree fully that we must sustain a concerted offensive against poverty, aiming at its complete eradication, and agree that this is one of the structural faults that characterise our society, which we cannot but attend to, using all means at our disposal. We further agree that we must work to ensure that our economy achieves higher rates of growth, to generate the opportunities and the material resources we need to realise the goal of a better life for all.

In all humility, I would like to suggest that the Government does not need educating on any of these matters. What we said in this House yesterday refers to all these matters in one way or another. Beyond what we said yesterday and have said before, an honest and unprejudiced assessment of what the Government is actually doing and has been doing will show that, at the very least, we have endeavoured to translate our words into action. This was the central message of our statement yesterday. The country and the opposition parties will be at liberty to ask, in future, whether we have kept to what we said we would do.

Accordingly, on the issues of national reconciliation, the rights and aspirations of all national groups, poverty, economic growth and development, we will continue to pursue that, ready to listen to criticism where we fail and ready to listen to the opinions of those who might not be in Government, including the opposition parties that sit in this House.

Let me now return to the matter of my educational upbringing and its relevance to the matters we have been discussing. According to the advice we received yesterday - and before - from some of the hon members of the opposition parties, one of the things we must do is to stand up and say that our country has no problem of racism, with the exception of occasional incidents of black and white racism.

We must then go on to say that the racial socioeconomic legacy we inherited from our apartheid past is no longer a distinguishing feature of our society. We would then proceed to say that, in reality, South Africa is a society of equals, regardless of race, colour, gender or geographic location.

Such inequality as exists, we are required to say, is inequality between and among social classes rather than between racial groups. I presume that, in terms of this advice, with regard to the provisions in our national Constitution, which talk about our racist legacy and prescribe that we must act to address it, we must also stand up and proclaim that these prescriptions are irrelevant and are only of rhetorical importance.

Were I to rise anywhere to make these extraordinary statements, I would not be surprised at the accompanying hoots of derisory laughter and the universal conclusion that the President is truly unhinged - which brings me back to my education. Respect for the truth, as I see it, obliges me to say that it would be eminently dishonest to pretend and assert that the legacy of centuries of colonialism and apartheid has been wiped out in a period of seven years since our liberation. [Applause.] Such an assertion would obviously be false.

Love for our country and all its people also tells me that because we recognise and accept the reality of this legacy, which condemns our country to continuing conflict and the failure of the project for national reconciliation, we must act to eradicate this legacy. Because this is a legacy of racist policies, we cannot and must not avoid discussing racism, precisely to ensure that we end it in our country. It would seem only logical that to cure an illness requires, in the first instance, that the illness be diagnosed correctly. Any failure to recognise the fact of the illness, can only condemn the sick person to a further deterioration of his or her health.

I would like to believe that all this is simple enough. Yet, there is a problem. The problem is that some of our compatriots, including some in this House, are uncertain and deeply fearful of the future. Trapped in the entrenched consciousness of the past, they cannot define themselves outside the categories of the past. Accordingly, they see our country as one that is divided according to racial majorities and minorities, with conflicting and irreconcilable interests. It is in this context that they decry what they describe as ``majoritarianism.’’

They also make passionate appeals to us to abandon our long-standing allies and take them on as our new allies. They promise that they will come to us as representatives of a national minority or minorities, whereas we are defined not by what we stand for, but by the fact that we represent a racial majority. The irony in all this is that those who make this plea walked out of the Government of National Unity and refused to form a coalition government with us in this province … [Applause] … when, by popular vote, we had emerged as the single largest party in the province.

To respond to the unfounded fears about the future among some of our compatriots, we are asked to avoid telling the truth. We are asked to say that the legacy of apartheid, of racial divisions and disparities, is no more. To force us to tell falsehoods, the insult is thrown out that the very people who sacrificed everything to end racism in our country have chosen to entrench racism, for opportunistic political purposes. The problem is that we will not turn our backs on what we learnt about the absolute necessity to tell the truth, painful as the telling of that truth might be.

On 10 May last year, we discussed the issue of Zimbabwe in this House. Regardless of the fact that I had addressed the issue of Zimbabwe a number times by then, strident calls were still being made for me to make a strong statement on the situation in Zimbabwe. It was clear to me that the reason for this insistence had nothing to do with Zimbabwe, but reflected fears that here, too, we might act in a hostile manner towards our white compatriots. I said that in this House, for which I was accused, yesterday, of having used the ``race card’’ once again.

According to Hansard, what I said was this:

Here one has a black government across the Limpopo which is perceived to be doing particular things regarding this land matter. What guarantee do we have that the black Government this side of the Limpopo will not do the same things? … That is what is driving this demand, not the resolution of the Zimbabwe question.

When I made this point, I believed it to be true and remain convinced that I was right. On that occasion, here is what the hon Marthinus van Schalkwyk, leader of the New NP, said:

Madam Speaker, I was not going to ask a question but, in the light of the President’s answer, I think I must make a short statement and ask a question, because he raised the issue, as he did outside in public, that it is a black government and that is why people here react in a certain way. Let me speak as a member of a minority. When we see, as members of minorities, what happens, inter alia, to minorities in Zimbabwe, yes, there is fear … It is not a politically correct statement, but I am reacting directly to what the President said.

It is true that the hon member went on to say that the concerns of the minorities did not arise from the fact that we had black governments on both banks of the Limpopo, but from a matter of principle and the friendly relations between the ruling parties in Zimbabwe and South Africa.

Nevertheless, the point about national minorities had been made. At that point, I responded as follows:

I perfectly understand how national minorities in any country would entertain fears like that. That is perfectly natural … Why will that thing that is happening there not happen here?

On 10 May 2000 the hon member had the courage to tell the truth about the fears of the minorities. It would seem that by 21 June 2001 that courage had deserted him and what was true in May last year had turned into a ``race card’’ by June this year. [Applause.]

I have discussed this matter at this length because the creation of a nonracial society is central to the historic task of building a new South Africa. To achieve this objective, we will continue to tell the truth as we see it. We will continue to focus our energies on ending the racist legacy, which stares us in the face everyday. We will not be persuaded that the best way to deal with racism in our country is to pretend that the problem does not exist.

We are fortunate that we too are South African. We do not accept that there are some politicians who have an exclusive right and possibility to speak for the white citizens of our country. [Applause.] The overwhelming majority of our white citizens see South Africa, quite correctly, as their home. They have no desire to and will not go anywhere else. They are committed to work to rebuild this country as their own. They do not see our black citizens as a threatening horde of barbaric natives, but as compatriots with whom they work together everyday for the common good. I would never insult them by suggesting that they say agreeable things when they talk to me, while they tell a tale of fear for the future when they interact with particular political parties.

Furthermore, nobody will convince me that the Afrikaners as a whole fear that I might stalk them in the night to wreak vengeance on unsuspecting women and children. There are too many Afrikaners that I have trusted for many years and worked with to bring about change and who have done so without asking for anything in return, for me to believe political stories that the Afrikaners, in general, are afflicted by a disease of irrational fear. I know that there are some among our white compatriots who behave in unacceptable ways. Nevertheless, I am convinced that these are not representative of white opinion in our country.

I will stand up to proclaim these truths everywhere, whatever the political cost to myself. Perhaps needless to say, I will never seek to purchase popularity and approval from those who have the capacity to amplify their voices, by communicating what I know to be false, dishonest and dishonourable. The high post we occupy demands that we act with integrity, not informed by any desire to achieve cheap popularity. In addition, we will not compromise the better future of our people, both black and white, in exchange for positive opinion polls and temporary political gain. [Applause.]

In this regard, I must make the point as strongly as I can that our country is subject to too high a level of violence. Too many in our society have no respect for human life and for the inviolability of the individual. I believe that all of us have become too accustomed to violence against persons, in all its forms. For years, by far the biggest cause of death in this country has been what, in statistical tables, is described as ``external causes of death’’.

The Government must clearly take the lead in communicating the message that we have had enough of the violence in our society. We must communicate the message that an injury to any one of us, to any of our people, is an injury to all of us. Therefore, we must ensure that we give no quarter to criminal violence.

The Truth and Reconciliation Commission is approaching the conclusion of its work. As Government, we will return to Parliament with proposals about how we should build on the important work done by the commission. This will include the critical and complex issue of what the law describes as final reparations, which are an essential part of our process of national reconciliation. We will also have to discuss the issue of how we handle any unfinished work that bears on political offences that were committed in the past, for which a sizeable number of our people did not apply for amnesty.

Let me also take this opportunity to warn against the rush to reach conclusions on the basis of allegations or insufficient information. It might very well be an imperative of opposition to seize any opportunity to oppose the executive. However, I have been concerned at the ease with which some have found it possible to treat rumours and allegations as facts, driven in part by the wrong concept that the executive is necessarily corrupt and suspect.

I believe that the legislature must guard against the eventuality that the people arrive at the determination that members of Parliament are more interested in attacking the executive than in advancing the truth. The members of Parliament who sit in the executive and the executive itself, do not represent the epitome of evil, however much it might seem a beneficial political strategy to present them as such.

The peoples of the world will gather in Durban towards the end of August, to consider how humanity might respond to the challenges of racism, xenophobia and other discriminatory practices. We will have to prepare to receive these delegates with our usual hospitality, ready to engage the serious issues that the World Conference will address.

Among other things, we will have to tell the peoples of the world what we are doing to end racism in our own country. I pray that we have the possibility to speak with one voice at this important conference. I trust that we will be able to speak honestly to all the delegates about what we have done, what we plan to do and the obstacles we face in our common struggle to create a nonracial and nonsexist society. There is much that we can add to the positive outcome of the conference. The world certainly expects this of us, and we should not disappoint this expectation.

The hon Dr Mangosuthu Buthelezi spoke of what might be done to give due respect to the Office of Head of State. I thank him most sincerely for raising this question. However, it is clear to me that our country still needs time to evolve its own conventions about how to handle this office. In the meantime, we will do whatever we can to protect the dignity of this office and to position it as a representative of all the people of our country, regardless of race or political affiliation.

I have referred some of the more specific questions raised by hon members to our Ministers, who will communicate our responses to the hon members concerned. These include the matter of the former members of the Bophuthatswana Defence Force who opted for demobilisation.

I would also like to take this opportunity to thank the Deputy President and Minister Essop Pahad, Director-General Frank Chikane, the advisers and the rest of the staff in the Presidency for the valuable work they do everyday, as well as for their dedication, which means that they never have any ``tjhaile’’ or knock-off time. [Applause.]

I must also thank the Ministers, Deputy Ministers and directors-general, who have all carried out their tasks splendidly. I am not afraid to say that we have an excellent team. [Applause.] I am very pleased that we have as many women Ministers and Deputy Ministers as we do, who are central to the accomplishment of the task of creating a people-centred society.

Tomorrow, Deputy Minister Ntombazana Botha will be burying her son, Lt Col Anthony Joseph Smith, an officer serving in the School of Armour at Tempe, who succumbed to a brain tumour. I am certain that all of us extend heartfelt condolences to her.

I have appreciated the time I have spent in this House interacting with the hon members. I urge hon members to do whatever they can to contribute to the mobilisation of all our people to unite in action for change.

I thank all the members who had the opportunity to participate in this debate. We noted all the comments and will consider them carefully. I also thank Madame Speaker and the other presiding officers. Our country is proud of everything you have done and are doing. [Applause.]

Debate concluded.

                          NOTICES OF MOTION

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

That the House -

(1) notes -

   (a)  the ANC's longstanding commitment to nation-building, unity and
       reconciliation;


   (b)  the call by President Thabo Mbeki in his Vote speech for all
       South Africans to unite in action to fight poverty and speed up
       change;


   (c)  how well this call was received by the majority of South
       Africans, including the media, big business and organised
       agriculture; and


   (d)  the positive examples set by those businesspeople and farmers
       mentioned by the President, and countless others;

(2) expresses its dismay at the reaction of the DP and its leader, Tony Leon, who seem intent on widening the divides of the past; and

(3) calls on the DP to heed the call of the President for unity in action for change.

[Applause.]

The LEADER OF THE OPPOSITION: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DP:

That the House -

(1) notes the response of the President to the debate on his Vote yesterday ;

(2) wishes to draw attention to the fact that essentially the President was having an argument with himself and his own party, because no one in this House yesterday suggested that there was no racism in the system in South Africa, but what was suggested was that how one addresses racism in South Africa is going to be the difference between making a success and making a failure of the new South Africa; and

(3) further resolves that it will not address racism by putting more doses of racism into the system of a nonracial South Africa.

[Interjections.] [Applause.]

Mrs L R MBUYAZI: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the IFP:

That the House -

(1) notes that the Southern African region has seen a solar eclipse after almost 61 years and at the beginning of the new millennium;

(2) congratulates the Northern Province on having received substantial revenue from internal and international tourists through landing fees at its airports;

(3) applauds the fact that the solar eclipse had an impact on the South Africans, especially the Zulus and the British, when they engaged in the Anglo-Zulu War;

(4) further applauds the fact that a major historical event in Christian history took place when the eclipse overshadowed the Holy Land for three hours;

(5) commends the Department of Arts and Culture on its campaign to alert people to the dangers of the eclipse and also providing protective sunglasses; and

(6) welcomes the fact that no major terrible disaster occurred during this geographical event.

[Applause.]

Mr P A C HENDRICKSE: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House notes -

(1) that -

   (a)  the hon Sipho Mzimela has publicly accused the UDM of
       corruption; and


   (b)  the Leader of the UDM has positioned himself as a ``whistle-
       blower'' on corruption and chose to ignore allegations of
       corruption within his own ranks;

(2) believes that the deliberate ignoring of these allegations demonstrates that the hon Holomisa is not committed to fighting corruption and that he is only using this problem for cheap political point-scoring;

(3) calls on the hon Holomisa to investigate allegations of corruption within the ranks of his party; and

(4) calls on Parliament, through the Standing Committee on Public Accounts, to investigate whether the alleged corruption in the UDM includes money allocated to UDM members of Parliament to fulfil their parliamentary obligations.

[Applause.]

Mr A Z A VAN JAARSVELD: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:

That the House -

(1) notes with concern that, notwithstanding the Minister of Social Development’s undertaking -

   (a)  a total of 47 962 applicants for social security grants are
       still waiting for payment for a period longer than three months;
       and


   (b)  the estimated amount of back-pay to these poor, deprived people
       amounts to over R262 million;

(2) believes that this clearly indicates that the Government is not focused on service delivery and is not putting the people first; and

(3) therefore requires answers to the following questions: (a) how does the Government intend paying these people as no budgetary provision has been made; and

   (b)  how much longer must these people still wait before they get
       their money that the Government owes them.

[Applause.]

Dr G W KOORNHOF: Madam Speaker, I will move on behalf of the UDM …

The SPEAKER: Order hon members! Would you please take your seats?

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

That the House -

(1) notes the importance of job creation, especially in the textile industry, and specifically in the Eastern Cape, where unemployment and poverty are rife;

(2) expresses its dismay that R1 billion in foreign investment by Ramatex in the Eastern Cape, which would have resulted in 18 000 desperately needed jobs, has now been withdrawn indefinitely;

(3) condemns this state of affairs that, according to the ANC Mayor of Buffalo City, is the direct result of squabbles and confusion between the Department of Trade and Industry and the National Treasury; and

(4) further notes that foreign investment is increasingly threatened by the actions of Government, such as the yet unresolved SAA saga, specifically noting the warning by Swiss Air that South Africa must clean up its act.

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move:

That the House -

(1) endorses the position of President Mbeki on race and racism expressed in his response to the Vote debate; and

(2) believes that the motion by the hon Tony Leon does not reflect the view of the House nor that of the people of South Africa.

[Interjections.] [Applause.]

The SPEAKER: Order!

Ms C DUDLEY: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ACDP:

That the House -

(1) notes with disapproval that television authorities in Zimbabwe have banned a new live weekly talk show which was critical of President Robert Mugabe’s policies and actions; (2) acknowledges that Zimbabwe has only one broadcaster, the ZBC, in spite of the fact that the monopoly was broken last year in a ruling handed down by the Supreme Court, as no new player has been allowed into the market;

(3) further acknowledges that the new broadcasting law forbids community radio stations from carrying any political programming, bars radio stations from carrying political advertising and requires private broadcasters to give the Government one hour of airtime each week to explain policy; and

(5) calls on the South African Government and other democratic governments strongly to express their concern over this further clampdown on the media which represents another debilitating blow to democracy in Africa.

Mr J P I BLANCHÉ: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move:

That the House -

(1) notes the enormous problem that drug-taking has become in our schools;

(2) commits itself to support all legal means to protect our children from the threat that drugs pose;

(3) expresses its support for random drug testing in schools under strict guidelines including -

   (a)  the informed consent of parents for the testing of their
       children; and;


   (b)  the education and counselling of learners about drugs and their
       consequences and the implications of drug testing; and

(4) calls on the Minister of Education, Kader Asmal, to drop his objection to random drug testing in schools under these conditions.

Dr B G MBULAWA-HANS: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes that the Speaker has hinted that she intends to sue the Leader of the UDM, the hon Bantu Holomisa, for defamation;

(2) believes that public representatives and members of the public have the right to express themselves, but should do so responsibly;

(3) further believes that the recent pronunciations by the hon Bantu Holomisa were irresponsible and undermined the integrity of this House and our newly found democracy; and

(4) supports the intentions of the Speaker to discipline him and inculcate a culture of responsibility in the hon Holomisa, as this will remind him that the nation expects him to abide by the laws of the country.

[Applause.]

Mr N S BRUCE: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move: That the House -

(1) views with dismay the decision of the Malaysian company, Ramatex, to divert a new R1 billion textile factory from the Eastern Cape to Namibia because of confusion and delay over industrial incentives;

(2) notes that while industrial incentives are controversial and not always desirable, if the Government cannot make up its mind, keep its promises, sort out bureaucratic differences swiftly and improve its efficiency, other potential investments will be jeopardised; and

(3) therefore calls on the Government to review its labour and other obstructive laws so that industrial incentives are not necessary to attract fixed capital investment.

[Applause.]

Mr J H VAN DER MERWE: Madam Speaker, I give notice that I will move tomorrow that we all notice that the UDM has a new leader. [Laughter.] [Applause.] The SPEAKER: Order!

Mr J H VAN DER MERWE: Madam Speaker, I also give notice:

That the House -

(1) takes note of the fact that the Springboks will be playing against the French tomorrow;

(2) wishes the Springboks the best of luck and a great win; and

(3) urges the Minister of Finance also to support the Springboks.

[Laughter.] [Applause.]

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

That the House -

(1) notes - (a) the DA’s inhumane eviction of the Tafelsig Feeding Scheme, crèche and residents, and the cutting of the water of poor families by a security company and the police;

   (b)  the council's report on the gap between the rich and the poor,
       with unemployment at 20% and blacks earning five times less than
       whites; and


   (c)  allegations that their Mayor hands out RDP houses to his family,
       while the poor remain homeless;

(2) condemns the DA council’s vicious campaign against the poor people of Cape Town; and

(3) calls on the DA to clarify how cutting the water of the poor, closing down community-run feeding schemes and keeping the poor homeless will close the gap between rich and poor.

[Applause.]

Mr J W LE ROUX: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move: That the House -

(1) notes -

   (a)  the first anniversary of the sinking of the Treasure off the
       Cape west coast last year, which threatened almost 41% of the
       African penguin species;


   (b)  that South Africa has borne the brunt of four of the top 20 oil
       spills worldwide; and


   (c)  that Sarah Scarth, the Worldwide Emergency Relief Director, said
       her organisation was dismayed that a year had passed without the
       South African Government drawing any closer to tightening
       legislation to protect its shorelines; and

(2) urges the Government to prevent a repeat of such a disaster by following the lead of the European Commission, and to accelerate legislation introducing double-hulled tankers, monitoring and controlling maritime traffic, and ensuring oil spill compensation and liability. The SPEAKER: Before we take the last notice of motion, hon members, there are too many private conversations going on. Please, would you have them outside the House and allow the House to debate and proceed with its business!

Miss O N MNDENDE: Madam Speaker, I hereby give notice that on the next sitting day of the House I will move on behalf of the UDM:

That the House -

(1) notes with growing trepidation the increasing occurrence of criminal and violent attacks on elderly people across the country;

(2) further notes that these brutal attacks are more often than not aimed at elderly women;

(3) laments the un-African behaviour of hon President Mbeki over the weekend, when he shoved an older woman in the face in full view of the public, the youth and the TV cameras, creating the impression that it is acceptable to hit women;

(4) confirms that respect for the elderly and women are constitutionally guaranteed rights, which must be upheld by all, no matter their office of standing; and

(5) calls on all South African leaders to commit themselves to setting an example to the youth by using maturity and reason to deal with differences of opinion, instead of resorting to conflict and violence.

[Interjections.] [Applause.]

The SPEAKER: Hon members, order! Will conversations please cease? The time for notices of motion has expired. Before we proceed with the next item, I wish to recognise, as you are aware, that we have a delegation from Burundi visiting us. They are with us today and I wish to acknowledge their presence. [Applause.] We also have with us the winner of the Comrades Marathon, Andrew Kelehe. [Interjections.] [Applause.] Thank you. Hon members, the request that you cease your meetings still applies.

                      AFRICA PUBLIC SERVICE DAY
                         (Draft Resolution)

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice:

That the House -

 (1)    notes that on 23 June 2001 public servants all over the African
     continent will celebrate Africa Public Service Day and the South
     African Public Service will participate in the celebration on 22
     June and 23 June 2001;


 (2)    further notes that these celebrations will give public servants
     a moment to reflect on -


     (a)     issues affecting the African public service;


     (b)     the working conditions of men and women who devote their
          lives to service delivery to the public;


     (c)     encouraging a more favourable perception of public
          servants among ordinary people; and
     (d)     rewarding good initiatives and the promotion of
          professionalism; and


 (3)    joins the Public Service in celebrating Africa Public Service
     Day.

Agreed to.

         ROLE OF AFRIKANER BUSINESS COMMUNITY IN DEVELOPMENT

                         (Draft Resolution)

Mr G Q M DOIDGE: Madam Speaker, I move without notice:

That the House -

 (1)    notes that Saambou Bank will build a multifaceted school complex
     for more than 200 disabled children at the Vulekani Special School
     at Umzimkhulu in the Eastern Cape;


 (2)    also notes that former President Mandela and the Minister of
     Social Development, Dr Zola Skweyiya, commended the Afrikaner
     business community at the opening of the project for their role in
     development;


 (3)    concurs with Madiba that all South Africans, both black and
     white, must unite in action for change; and


 (4)    calls on the entire business community to emulate this example
     and work with the Government in helping to play a leading role in
     the development of the country.

Agreed to.

ACKNOWLEDGEMENT OF DR G W KOORNHOF’S ACHIEVEMENT IN THE COMRADES MARATHON

The SPEAKER: Order! Hon members, it is not customary to recognise hon members and acknowledge their achievements. However, I think it will be remiss of me not to recognise that one of our members completed the Comrades Marathon last week. He has shown me his medal - the hon Dr Koornhof! [Applause.]

I am looking forward to acknowledging many more members in the coming months. [Applause.]

                     REVENUE LAWS AMENDMENT BILL

                           (Introduction)

The MINISTER OF TRADE AND INDUSTRY: Madam Speaker, thank you very much for this chance to replace the Finance Minister briefly. I shall resist the temptation to increase my Vote favourably, but I shall reduce Parliament’s budget if it does not listen quietly to what I have to say!

The SPEAKER: Order! Hon member, your time has expired! [Laughter.]

The MINISTER: My apologies, hon Speaker, your budget has been increased. [Laughter.]

The amendments contained in this Bill can be grouped under four broad headings. These are the codification of the majority of the tax proposals announced earlier this year; the amendments to facilitate Sars’ Siyakha initiatives, which are intended to improve both service and compliance levels; amendments to the Value-Added Tax Act to improve its administration; and the first set of technical corrections to the capital gains tax legislation.

With regard to tax proposals, although this Bill implements a number of tax measures that were announced on Budget Day, I am only going to concentrate on a few of the more significant ones. Firstly, there is the issue of tax relief for individuals. The restructuring of the tax brackets and additional rebates mean that an additional R8,3 billion will go back to individual taxpayers, with more than 50% of the relief going to taxpayers with incomes of less than R80 000 per annum. This is the continuation of a trend that has put some R33,6 billion back into the pockets of individual taxpayers since 1995.

The exemption for interest and foreign dividends earned by a natural person has been increased from R3 000 to R4 000 for those under 65 and from R4 000 to R5 000 for those who are 65 and older. This reduces the complexity of the income tax system for those whose income from these sources is less than the limits.

Another measure to simplify the income tax system for the smaller or less sophisticated investor is the increase in the threshold for nonemployment income at which most individuals need to register as provisional taxpayers, from R1 000 to R2 000. In addition, the threshold for interest, dividend, rental and remuneration income at which those of 65 or older need to register as provisional taxpayers, has been increased from R60 000 to R80 000.

In regard to pay-as-you-earn for private company directors, presently directors of private companies are not subject to monthly PAYE deductions on their salaries and other remuneration. In the past this has been justified on the basis of the practical problems that arise when fixing a private company director’s final salary for a year of assessment. The result of this concession is that private company directors need only settle the tax bill on their salaries when they make their provisional tax payments and finally on assessment. My advice to members is to listen to this very carefully.

This gives private company directors a substantial cash-flow advantage over ordinary employees. In addition, public companies have devised structures to permit their directors to take advantage of this cash-flow advantage. In order to create equity between directors and ordinary employees, this Bill proposes that PAYE be deducted from payments to directors on the basis of the remuneration that accrued to them in respect of previous years. The current formula to implement this proposal is the product of a consultative process, during which the first proposals in this regard were substantially modified to address the practical problems that were identified by commentators. This proposal is a workable one that will be monitored for unintended consequences for either taxpayers or the fiscus.

Small, medium and micro enterprises have an important role to play in economic development and employment creation, especially in the manufacturing and tourism sectors. In the light of this, the concept of a small business corporation and a split tax rate for small business corporations were introduced into the income tax system last year. This year sees the continuation of that split rate of 15% for the first R100 000 of taxable income and 30% for any remaining taxable income. In addition, this Bill proposes that small business corporations be permitted to write off the full cost of manufacturing plant and equipment in the year that they are brought into use, as opposed to the five years’ write off for other taxpayers.

Now that macroeconomic stability and fiscal consolidation have been achieved, it is possible to propose microeconomic reforms that are growth- orientated. Two of these reforms are the investment incentive for strategic projects and the wage incentive. The Department of Trade and Industry announced a number of industrial incentives to facilitate investment in South Africa in 2000. This Bill proposes an extension of the range of available policy tools to encourage investment by introducing an investment incentive for qualifying strategic investment projects. This incentive will provide a targeted instrument to encourage projects that have significant direct and indirect benefits for the South African economy in the areas of growth or employment.

It is proposed that the incentives take the form of an additional 50% or 100% initial investment allowance on industrial assets used in a qualifying strategic industrial project. The allowance is a deduction against the income of the industrialist and is granted in addition to the annual capital allowance granted in respect of the assets. The maximum amount of the investment allowance is capped at R300 million for projects qualifying for the 50% allowance and at R600 million for the investments qualifying for the 100% allowance.

The total amount budgeted for this incentive is R3 billion over four years, which means that the total of the investment allowances that may be granted, in terms of this programme, is R10 billion. Depending on the mix of qualifying strategic projects, the investments that may be attracted will total between R10 billion and R20 billion.

An adjudication committee will evaluate applications for the incentive on the basis of both mandatory and scoring criteria. Where an industrial project meets the mandatory criteria and the thresholds for the scoring criteria, it will qualify for either the 50% or the 100% allowance. The committee will make appropriate recommendations to the Minister of Trade and Industry, who will finally approve an application.

The mandatory criteria include the requirements that the industrial project must bring into use industrial assets of at least R50 million, must have long-term commercial viability after the incentive is exhausted, may not qualify for more than one incentive concurrently, and may not be an industrial participation project in terms of the National Industry Participation Programme.

Scoring criteria are arranged around three broad themes of upgrading industry, improved business linkages, and increased employment. These criteria, therefore, include the introduction of new processes or products, the improvement of the competitiveness of existing industrial projects, the acquisition of goods or services from small, medium, and micro enterprises, and the creation of employment in South Africa.

A company that enjoys an investment allowance in terms of this provision must report annually to the Minister of Trade and Industry on its achievement of both mandatory and scoring criteria. Where it fails to meet the criteria, the Minister of Trade and Industry must direct the commissioner to withdraw any investment allowance in that year or a subsequent year. An exception is provided for in cases where the failure to meet the criteria was due to circumstances outside the company’s control and the Minister of Trade and Industry agrees to permit the investment allowances’ continuation.

An annual report must be submitted to Parliament setting out various details of qualifying strategic industrial projects and their benefits to growth and employment. This report will also cover decisions to withdraw or continue with the investment allowance where companies fail to meet the mandatory or scoring criteria used. These criteria and reporting requirements are intended to minimise the abuse that has been associated with certain previous investment incentives, while encouraging growth or employment in South Africa.

I want to say, very briefly, that it will be in everyone’s best interest, as our President urged us, not to comment on speculative matters in connection with Ramatex, but to wait until the facts are known. We will then be able to show, quite clearly, that considerable efforts have been made to secure the investment. But should this company decide to invest in Namibia, we, as South Africa, should not begrudge that, but every effort has been made. Let us address the facts not the speculations.

With regard to wage incentives, the wage incentive that was announced on Budget Day continues to be the focus of an interdepartemental team. It will be included in the next round of income tax legislation for implementation on 1 October 2001.

With regard to airport infrastructure, the capital allowances on permanent structures became part of the income tax law last year, in order to promote private investment in public infrastructure. It is now proposed that the allowances be extended to new investment in aircraft hangars, aprons, runways and taxiways for international airports and that such structures be written off over 20 years.

The ad valorem tax system currently requires a cumbersome administrative system, which leads to high compliance costs and provides scope for tax evasion. In order to simplify the system, a move to the invoice price as the basis for calculating the duty is proposed. This broadening of the base is then paired with the reduction in rates to 7% and 5%, as announced in the Budget.

The cosmetics industry has indicated that it will be particularly hard hit by the changes proposed and will experience an increase in the duties it pays despite the reduction in rates. An interim arrangement has been made with this industry to overcome the problem created by its specific circumstances. This arrangement will be reviewed over the coming year as part of the overall review of the products to which ad valorem duties apply.

Siyakha - which means ``we are building’’ - is a project which Sars has launched to make more efficient use of its resources through the re- engineering of its work processes and the introduction of new technologies. The project will be piloted in Kwazulu-Natal later this year. However, to implement the new initiatives, various changes to the tax laws are required. Most of these changes are of an enabling nature and relate to changes to the Customs and Excise Act.

Some of the most important initiatives are: better reporting requirements in respect of cargo on importation and exportation; stricter controls in respect of the movement of goods within and through South Africa; the movement of the point of liability for excise duties on tobacco, alcohol and oil products closer to the manufacturing stage, thereby removing the need for and control of storage warehouses; better control over the registration and licensing requirements for persons doing customs business; accreditation of licensed or registered persons doing customs business; and the regulation of electronic communication for purposes of customs and excise procedures.

With regard to VAT on accommodation, the Value-Added Tax Act has special provisions relating to long-term accommodation in hotels, boarding houses and homes for the elderly. These provisions are aimed at putting people living in such institutions on an even footing, from a VAT point of view, with people living in their own or rented homes. This is necessary because interest, municipal rates and home rentals are not subject to VAT. The present rules are, however, very complicated and experience has shown that they are seldom applied correctly. The proposed amendments substantially simplify the valuation rules and will result in a slight decrease in the VAT payable by the residents of such institutions from October this year.

With regard to VAT on small cane growers, the sugar and wattle industries have, over a number of years, encouraged the development of small-scale farmers producing sugar for the sugar mills, and wattle timber and bark for the wattle industry. This has brought a steady income to some 40 000 previously unemployed persons, many of whom are women. The so-called flat rate scheme allows the sugar mills and wattle industry to pay the producers the same basic price as they pay the big producers and to compensate them for the input VAT they incurred, without these 40 000 producers having to register for VAT. The proposed amendment formalises a previous arrangement between Sars and the respective industries.

With regard to Capital Gains Tax, the proposed Bill also brings about the first set of technical corrections to the tax on capital gains that comes into operation on 1 October 2001. These amendments are generally of a minor nature and will, no doubt, be followed by many more in years to come as the legislation is clarified and the loopholes plugged. A more substantial set of related amendments will follow in the next round of tax legislation and will include measures in respect of group restructuring.

In conclusion, this Bill is the product of the combined efforts of officials at Sars, the National Treasury and the Department of Trade and Industry, as well as individuals and groups that have commented on the drafts and participated in the hearings before the Portfolio Committee on Finance and the Select Committee on Finance. My thanks and Mr Manuel’s thanks go to all those involved.

I hereby table the Revenue Laws Amendment Bill, 2001. [Applause.]

Bill, together with the introductory speech, referred to the Joint Committee on Revenue Laws Amendment Bill for consideration and report.

                  CRIMINAL PROCEDURE AMENDMENT BILL

                       (Second Reading debate)

Order disposed of without debate.

Bill read a second time.

                      SOUTH AFRICAN BOXING BILL

            (Consideration of Bill and of Report thereon) Order disposed of without debate.

Report adopted and Bill agreed to.

            NATIONAL FOREST AND FIRE LAWS AMENDMENT BILL

                       (Second Reading debate)

Order disposed of without debate.

Bill read a second time.

The House adjourned at 11:03. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 The Revenue Laws Amendment Bill [B 36 - 2001] was introduced in the
 National Assembly by the Acting Minister of Finance on 22 June 2001. In
 accordance with resolutions passed by the National Assembly and the
 National Council of Provinces on 5 June 2001, the Bill has been
 referred to a joint committee established in terms of Joint Rule 111.

1. The Speaker and the Chairperson:

 (1)    The following Bill was introduced by the Minister of
     Environmental Affairs and Tourism in the National Assembly on 22
     June 2001 and referred to the Joint Tagging Mechanism (JTM) for
     classification in terms of Joint Rule 160:


     (i)     National Parks Amendment Bill [B 38 - 2001] (National
          Assembly - sec 75) [Explanatory summary of Bill and prior
          notice of its introduction published in Government Gazette No
          22357 of 15 June 2001.]


     The Bill has also been referred to the Portfolio Committee on
     Environmental Affairs and Tourism of the National Assembly.

National Assembly:

1. The Speaker:

 Bills passed by National Assembly on 22 June 2001: To be submitted to
 President of the Republic for assent:


 (i)    South African Boxing Bill [B 13D - 2001] (National Assembly -
       sec 75);


 (ii)   National Forest and Fire Laws Amendment Bill [B 14B - 2001]
       (National Council of Provinces - sec 76).

TABLINGS:

National Assembly and National Council of Provinces:

Bills:

1. The Minister of Trade and Industry:

 (1)    Wysigingswetsontwerp op Patente [W 24 - 2001].


     The Patents Amendment Bill [B 24 - 2001] (National Assembly - sec
     75) was introduced in the National Assembly on 17 May 2001 and
     referred to the Portfolio Committee on Trade and Industry.

Papers:

1. The Speaker and the Chairperson:

 Report on Parliament for 2000.

1. The Minister of Environmental and Tourism:

 Request of the Department of Environmental Affairs and Tourism, in
 terms of section 6 of the Sea-shore Act, 1935 (Act No 21 of 1935), to
 lease to Salmon Salar Sea Farming (Pty) Ltd sea space for the
 mariculture of salmon in an offshore floating area at Kleinbaai
 (Franskraal) area NAJLZLMN, near Gansbaai in the Western Cape.