TUESDAY, 18 MARCH 2003 __

          PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
                                ____

The Council met at 14:02.

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

QUESTIONS AND REPLIES - see that book.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.

                          NOTICES OF MOTION

Mr K D S DURR: Deputy Chairperson, I hereby give notice that I will move at the next sitting of the Council:

That the Council -

(1) notes - (a) that the civil war in the Sudan, which started in 1955, continues and that some 2 million Sudanese have been butchered by the Northern Sudanese forces over this period;

   (b)  the hope held out by the Machakos Protocol of July 2002, entered
       into between the government of the Sudan and the Sudan  Peoples'
       Liberation Movement/Sudan People's Liberation Army;


   (c)  that after a halting start and many violations, the  process  is
       still on track; and


   (d)  that the churches and their international partners  are  holding
       the annual Assembly of  the  Sudan  Ecumenical  Forum  in  South
       Africa from 23  to  27  February,  shortly  before  Sudan  peace
       negotiations begin in Nairobi. They will  discuss,  inter  alia,
       breaches of the cease-fire by the government of the  Sudan  that
       have come to light; and

(2) calls upon the Government of South Africa to encourage the parties concerned to stay within the agreement and the spirit of the Machakos Protocol and to steadfastly endeavour to bring peace, order and a newly agreed upon constitutional order to the Sudan which responds to their needs, including those of the majority of the people in the South of Sudan to the right of self-determination, tested by referendum in future.

Mr T S SETONA: Deputy Chairperson, I shall move at the next sitting of the Council:

That the Council -

(1) notes the resurgence of interest by the Democratic Party in the National Youth Commission;

(2) further notes that they have consistently attacked this institution and called for its dissolution;

(3) believes their attacks are timed to coincide with the next elections as a ploy to demobilise and demoralise the youth of this country from making a meaningful contribution in the nation-building and reconstruction of this country. (4) is of the opinion that in attacking the Youth Commission the DP is resorting to old military propagandist tactics reminiscent of their leader during the heydays of apartheid of selective truth to justify their positions;

(5) is further of the opinion that the attack of DP on the Youth Commission is at worst an attack on the youth of this country and at least a celebration of legacy of the unbearable socio-economic conditions of the youth of this country of which the DP and its predecessors were architects; and

(6) calls for a debate on the state of the youth in South Africa to expose the baseless and unpatriotic record of the DP in the history of this country in terms of youth aspirations. [Applause.]

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

Dat die Raad kennis neem van die Nuwe NP se standpunt oor die naderende en klaarblyklik onafwendbare oorlog in Irak, naamlik dat -

(1) Irak moet voldoen aan alle VN-vereistes oor ontwapening, insluitende dié van resolusie 1441;

(2) indien Irak nie aan die VN-vereistes voldoen nie, die VN- veiligheidsraad en nie die VSA op sy eie nie, strafmaatreëls teen Irak moet instel, wat selfs militêre optrede kan insluit ingevolge artikel 43 van die VN-handves;

(3) indien strafmaatreëls wel ingestel word, Suid-Afrika ten alle tye neutraal moet staan aangesien dit nie in Suid-Afrika en sy mense se belang sal wees om kant te kies vir Irak nie; en

(4) dit tyd geword het dat Suid-Afrika sê waar hy staan. (Translation of Afrikaans paragraph follows.)

[Mr A E VAN NIEKERK: Chairperson, I hereby give notice that on the next sitting day of the House I shall move:

That the Council notes the New NP’s position regarding the impending and clearly inevitable war in Iraq, namely that -

(1) Iraq has to comply with all UN regulations regarding disarmament, including that of Resolution 1441;

(2) if Iraq does not comply with the UN regulations, the UN Security Council and not the USA on its own, must introduce sanctions against Iraq that could even include military actions in terms of section 43 of the UN Charter;

(3) if sanctions are introduced South Africa should at all times remain neutral as it will not be in the best interest of South Africa and its people to take the side of Iraq; and

(4) the time has come for South Africa to say where it stands.]

                    CONDEMNATION OF WARRING GANGS

                         (Draft resolution) Dr E A CONROY: Adjunkvoorsitter, ek stel sonder kennisgewing voor:

Dat die Raad -

(1) met diepe rou kennis neem van vyf van ons kinders se lewens wat in ‘n oogwink kortgeknip is toe hulle in die afgelope weke in die omgewing van hul ouerhuise in afsonderlike insidente deur die dwaalkoeëls van strydende bendes neergevel is;

(2) saam met die ouers, familie en vriende van Tyrone Smith, Lulu Appollis, Desmoné Smith, Onelda Bosman en Romano Amsterdam treur oor hul tragiese heengaan; en

(3) dade en optredes deur onverantwoordelike individue en groeperings wat tot sinnelose verlies van onskuldige lewens lei, in die sterkste terme veroordeel. (Translation of Afrikaans paragraph follows.)

[Dr E A CONROY: Deputy Chairperson, I move without notice:

That the Council -

(1) mournfully notes that five of our children lost their lives in a fraction of a second, during the past few weeks, in the area of their parental homes when they were struck down in separate incidents by stray bullets from warring gangs;

(2) together with the parents, families and friends of Tyrone Smith, Lulu Appollis, Desmoné Smith, Onelda Bosman, and Romano Amsterdam, grieves over their tragic deaths; and

(3) condemns, in the strongest terms, deeds and acts by irresponsible individuals and groupings leading to the senseless loss of innocent lives.]

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

                     PASSING OF LINDA MBEKI-JIBA

                         (Draft resolution)

The CHIEF WHIP OF THE COUNCIL: Deputy Chairperson, I move without notice: That the Council -

(1) notes with sadness the passing away of Linda Thokozile Mbeki- Jiba, the sister of our President, at the age of 61; and

(2) extends its sincere condolences to President Mbeki and the family of comrade Mbeki-Jiba and assures them that the thoughts of all South Africans are with them at this very difficult time.

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

                     PASSING OF MR ABDUL DOCRAT

                         (Draft resolution)

Ms J L KGOALI: Deputy Chairperson, I move without notice:

That the Council notes -

(1) the death of 87-year-old Mr Abdul Docrat, widely known by local political activists in Durban as “Old Man Doc”, and that “Old Man Doc”, from Victoria Street in Durban, was active in the Natal Indian Congress and the South African Communist Party since the 1940s;

(2) that after his release from prison in 1978, he was served with the most vicious house arrest conditions preventing contact with the public for 22 hours on a weekday and for 24 hours over the weekends;

(3) that Mr Abdul Docrat was under house arrest until the unbanning of political organisations in 1990;

(4) that those that knew “Old Man Doc” would testify he was always kept abreast of political developments despite his physical restriction;

(5) that his little flat in Central Durban was a venue to access the latest political journals providing scarce sources of information for many a political strategist;

(6) that the ANC laments the loss of this stalwart of the struggle and believes that his life and contribution serves as a benchmark for all of us;

(7) that the ANC occupies the current political landscape as the result of the tremendous courage, discipline and indomitable spirit displayed by cadres such as “Old Man Doc”; and

(8) that the ANC therefore salutes him and remains committed to the tasks to which he steadfastly dedicated his life.

   Aluta continua "Old Man Doc".

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

NOMINATION OF KWAZULU-NATAL LEARNERS FOR SCIENCE TRAINING IN GERMANY

                         (Draft resolution)

Nkk J N VILAKAZI: Mphathisihlalo, ngiphakamisa ngaphandle kokwenza isaziso:

Ngiphakamisa ngaphandle kwesaziso ukuthi -

(1) loMkhandlu KaZwelonke weZifundazwe uyancoma kakhulu ukuqokwa kwabafundi abayisikhombisa KwaZulu-Natal, ophikweni lwezesayensi, abane kulababafundi abase Tisand High School kumasipala waseMhlathuze ukuba bayofunda ukuba ngochwepheshe kwezolwandle nendalo;

(2) LoMkhandlu uphinde uthakasele imfundo ephakeme abazoyithola yokuba ngongoti kulomkhakha wezasolwandle abazoyithola e-Atlantic khona olwandle;

(3) LoMkhandlu uphinde uthakasele futhi, ithuba abalitholile lokuyo qeqeshwa eNyuvesi yaseJalimani ebizwa ngokuthi yi-Alfred Wegener Institute ngakhoke sithi kuLomkhandlu KaZwelonke Wezifundazwe: ``Phambili Ma-Afrika, Phambili!’’. (Translation of Zulu motion without notice follows:)

[Mrs J N VILAKAZI: Chairperson, I move without notice: That the Council -

(1) appreciates the nomination of seven learners of KwaZulu-Natal in the science field, four of them from Tisand High School in the Mhlathuze municipality, and notes that they are going to study to be experts in marine conservation;

(2) is happy that the education they are going to receive will enable them to become experts in the field of marine life and notes that it will be a study of the Atlantic Ocean; and

(3) is also happy for the opportunity that they are going to get to be trained at a university in Germany, the Alfred Wegener Institute and says: ``Forward Africans, Forward!’’.]

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

                          CRICKET WORLD CUP

                         (Draft resolution) Mr M A SULLIMAN: Deputy Chairperson, I move without notice:

That the Council -

(1) notes -

   (a)  the 2003 Cricket World Cup has reached its semi-final stages;


   (b)  Australia,  India,  Kenya  and  Sri  Lanka  are  the  last  four
          remaining teams contesting for honours; and

(2) congratulates Kenya, our representatives from this continent, on being the first non-test playing nation to advance to the semi-final stages of a World Cup tournament;

(3) hopes that Kenya will make this continent proud and congratulates the organisers of the Cricket World Cup for ensuring that the tournament is a roaring success; and

(4) further hopes that the organisational success of the 2003 Cricket World Cup would increase our chances of hosting the 2010 Soccer World Cup.

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

Mr N M RAJU: Deputy Chair, that motion was moved last week.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): Last week we were not here. Was it moved then? [Laughter.] [Interjections.] Was it the previous session?

Mr N M RAJU: It was last year.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): I will just ask the Table to make sure. We can come back to this item.

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

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): There is no objection to the motion, but we will check our records.

              HUMAN RIGHTS DAY AND HUMAN RIGHTS ABUSES

                         (Draft resolution)

Mr V V Z WINDVOЁL: Deputy Chairperson, I’m sure this motion was not moved last week. [Laughter.] I move without notice:

That the Council -

(1) notes that -

   (a)  on 21 March 1960, 69 African people were  brutally  murdered  in
       the township of Sharpeville when police  fired  on  unarmed  and
       peaceful demonstrators;


   (b)  the action of the police in the apartheid  regime  violated  the
       right to life, freedom of  assembly,  freedom  of  movement  and
       freedom of protection;
   (c)   these  rights  are  among  the  important  fundamental   rights
       enshrined in our Constitution;


   (d)  it further mobilised people all over the world to such an extent
       that the United Nations designated 21 March as the International
       Day for the Elimination of Racial Discrimination;


   (e)  this massacre prompted the new  South  Africa  in  declaring  21
       March Human Rights Day; and


   (f)  racism still prevails and persists in  Southern  Africa  and  in
       many parts of  the  world,  and  that  its  elimination  is  the
       responsibility of all our citizens;

(2) resolves that human rights abuse in South Africa and anywhere in the world is a threat to justice everywhere and calls for the elimination thereof; and

(3) appeals for -

   (a)  the end of all forms of violence against women and children;
   (b)  the end of religious and ethnic conflict as evident  in  Nigeria
       and India;


   (c)  the end of the violation of the safety and  security  of  people
       and their right to self-determination in Palestine; and


   (d)   no  United  States-led  aggression,  without  Security  Council
       approval, against the people of Iraq.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): Are there any objections to the motion?

Ms C BOTHA: Deputy Chairperson, may I just move as an amendment:

That this Council wishes an end to the use of weapons of mass destruction against the civil population of Iraq by its rulers.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): Do you accept the amendment, hon Windvoël?

Mr V V Z WINDVOЁL; Deputy Chairperson, the amendment is rejected with the contempt it deserves.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): The amendment is rejected. Is there any objection to that?

Mr L G LEVER: Deputy Chairperson, in that case we will object to that motion.

Mr K D S DURR: Chairperson, please note the objection of the ACDP.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): The objections of those two parties are noted.

                 BRUTAL MURDER OF MR JOHAN DE JAGER

                         (Draft resolution)

Mnr J HORNE: Voorsitter, ek stel sonder kennisgewing voor:

Dat die Raad -

(1) kennis neem van die brutale moord op mnr Johan de Jager van Oap naby Upington;

(2) dit eens is dat hierdie moord in ‘n vreedsame omgewing, waar goeie verhoudings tussen die verskillende gemeenskappe bestaan, ‘n skok is;

(3) daarvan kennis neem dat die gemeenskap besorg is daaroor dat die beweerde moordenaars van ‘n provinsie duisende kilometers van Upington af kom, wat op ‘n georganiseerde bende-optrede kan dui;

(4) meen al die leiers in die gemeenskap behoort saam met die bevelvoerders en LUR van Veiligheid en Sekuriteit te vergader om voorkomende strategieë te vestig; en

(5) die naasbestaandes troos en die gemeenskap kalmte toewens. (Translation of Afrikaans motion without notice follows.)

[Mr J HORNE: Chairperson, I move without notice:

That the Council -

(1) takes note of the brutal murder of Mr John De Jager from Oap near Upington;

(2) is unanimous that this murder comes as a shock in a peaceful area where sound relationships exist amongst different communities;

(3) takes note that the community is concerned about the alleged murderers coming from a province thousands of kilometres from Upington, which could possibly point to the activities of an organised gang;

(4) is of the opinion that all the leaders in the community should meet with the commanders and MEC of Safety and Security in order to set preventative strategies; and

(5) wishes comfort to the relatives and calmness to the community.]

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

                 SHAUN POLLOCK AS SA CRICKET CAPTAIN
                         (Draft resolution)

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

That the Council -

(1) notes that Shaun Pollock, the South African Cricket Captain has been shorn of the captaincy of the national team, an action that is tantamount to being labelled as the scapegoat for the Proteas’ poor performances at the World Cup and the ills that bedevil South African cricket;

(2) nevertheless wishes to record the nation’s deep sense of appreciation and gratitude to the sacked captain for the manner in which he wore the mantle of responsibility when he took over the helm of our national cricket team during a period of darkness in South African cricket brought about by the Hansie Cronjé affair; and

(3) further wishes the new captain, Graeme Smith, and the Proteas every success in the future and trusts that South African cricket will be ushered into a new era of exemplary achievements in the international arena, bringing back national pride and honour to the sports-loving South African nation.

The DEPUTY CHAIRPERSON OF THE NCOP: Any objection to the motion?

The CHIEF WHIP OF THE COUNCIL: I move as an amendment that the paragraphs (1) and (2) be substituted by the following paragraph:

(1) recognises the contribution of Shaun Pollock as captain of the South African cricket team and wishes to record the nation’s deep sense of appreciation and gratitude to the sacked captain for the manner in which he wore the mantle of responsibility when he took over the helm of our national cricket team during a period of darkness in South African cricket brought about by the Hansie Cronjé affair; and

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

Motion, as amended, agreed to in accordance with section 65 of the Constitution, namely:

(1) recognises the contribution of Shaun Pollock as captain of the South African cricket team and wishes to record the nation’s deep sense of appreciation and gratitude to the sacked captain for the manner in which he wore the mantle of responsibility when he took over the helm of our national cricket team during a period of darkness in South African cricket brought about by the Hansie Cronjé affair; and

(2) further wishes the new captain, Graeme Smith, and the Proteas every success in the future and trusts that South African cricket will be ushered into a new era of exemplary achievements in the international arena, bringing back national pride and honour to the sports-loving South African nation.

                  COUP IN CENTRAL AFRICAN REPUBLIC

                         (Draft resolution)

Ms L JACOBUS: Deputy Chairperson, I move without notice: That the Council -

(1) notes recent reports in the media about the coup in the Central African Republic;

(2) supports the view by President Mbeki that the African continent should never tolerate the unconstitutional transfer of power from whichever quarters;

(3) believes that Africa’s problems cannot be solved through coups and other unsavoury methods; and

(4) calls upon those responsible to refrain from this unbecoming behaviour and to pursue legitimate means towards the transfer of power.

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

                          DRIVING LICENCES

                         (Draft resolution)

Ms D M RAMODIBE: Deputy Chairperson, I move without notice: That the Council -

(1) notes -

   (a)  with concern recent reports on  the  SAFM  radio  station  about
       political opportunism by a member of the DA the hon Mr Manny  de
       Freitas, who criticised the Gauteng government for introducing a
       R300 fine for late application in respect of card licences;


   (b)  that Mr De Freitas is reported to have said that  people  should
       have been given more time;


   (c)  that prospective applicants were given enough time to apply  for
       new card drivers' licences; and


   (d)  that this is once more one of the tactics  used  by  the  DA  to
       oppose every initiative by the ANC-led Government;

(2) believes that the initiative by the Gauteng government is a step in the right direction to promote and enhance the rule of law; and (3) calls upon the DA to stop having a double tongue by talking about the rule of law when it suits them.

The DEPUTY CHAIRPERSON OF THE NCOP: Any objection to the motion?

Mr L G LEVER: Deputy Chairperson, we object.

The DEPUTY CHAIRPERSON OF THE NCOP: Your objection will be noted.

                 FOOD DISTRIBUTION IN KWAZULU-NATAL

                         (Draft resolution)

Mrs E N LUBIDLA: Deputy Chairperson, I move without notice:

That the Council -

(1) notes with concern recent reports in a Sunday newspaper about attempts by the MEC for Social Development, Prince Gideon Zulu, to stall the distribution of much-needed food parcels in the province; (2) notes that Prince Zulu is once more politicising the delivery of much- needed services by accusing the Minister of Social Development of not consulting with him before these food parcels were distributed;

(3) further notes that Prince Zulu alleges that food is being distributed by ANC people and yet it is the National Development Agency which is responsible for food distribution; and

(4) calls upon the MEC to stop this unbecoming behaviour and allow the distribution of food to people in need.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): Is there any objection to the motion? [Laughter.] Hon Vilakazi, your objection will be noted.

 NEPAD AND THE PAN-AFRICAN PARLIAMENT - A VEHICLE FOR SOCIOECONOMIC
              TRANSFORMATION, PEACE AND GOOD GOVERNANCE

                      (Subject for Discussion)

The DEPUTY PRESIDENT: Deputy Chairperson, hon members and delegates, I am indeed very happy to join you in the National Council of Provinces to discuss the critical challenges we face in the country and on the continent.

The Partnership for Africa’s Development is known as Nepad, as it provides an opportunity to interact with government at all levels.

The Nepad programme is critical to the reconstruction and development of the continent. It is therefore important that all sectors of society become involved in it. It should develop into a concrete programme of action, involving all of us at all levels and sectors, both governmental and nongovernmental.

It should be possible to develop an all-encompassing programme of action, because there is general consensus on the continent about the value and importance of Nepad.

Most importantly, Nepad introduces a new style of social, economic and political governance. It is designed to make leaders accountable not only to their populations, but to their peers and neighbours as well.

Nepad’s African Peer Review Mechanism is based on the reality that our destinies are intertwined as African countries, and that we need to be aware that our actions will influence our neighbours in a particular way.

The importance of parliamentary oversight as we strive for the revival of the continent cannot be overemphasised. The establishment of the Pan- African Parliament, another key AU structure, is therefore vital. We believe members of this House can play a key role through this institution.

Our parliamentarians can seize the opportunity by forming links with their colleagues on the continent and beyond, to market Nepad as well as monitor its implementation. You would, through such parliament-to-parliament links, transcend boundaries that governments may not be able to bridge and promote popular democratic practices throughout the continent.

Given the many opportunities offered by the establishment of the Pan- African Parliament, we are concerned that, thus far, only 10 countries have ratified the protocol. We therefore hope that AU member states that have not signed and ratified the protocol will do so in order to expedite the launch of this important continental oversight body.

Related to the implementation of Nepad is the imperative of eradicating conflicts on some parts of the continent. There is a clear correlation between peace and stability on the one hand, and economic growth and sustainable development on the other.

Driven by this goal of creating a better Africa, South Africa is actively involved in conflict resolution in Burundi, the Democratic Republic of Congo and other parts of the continent. Substantial progress has been made in these endeavours already.

With regard to Burundi, we have scored some victories and secured three out of four ceasefire agreements, signed by the armed movements and political parties and the transitional government of Burundi. Work is continuing to implement the ceasefire agreements, and, where challenges arise, we are pleased that the various parties are always open to discussions and to finding solutions.

We believe that Burundi has been through the worst already, and that the situation can only improve. Although challenges may arise, the processes and structures exist to resolve these, both within Burundi and externally. The eventual return to constitutional legitimacy and democracy remains critical for Burundi and other conflict-ridden sister countries. We hope the belligerent parties realise the urgency with which this needs to happen.

The African Union continues efforts to ensure a return to peace and stability in Sudan, Comoros, Somalia, Western Sahara and Côte d’Ivoire. To ensure lasting peace, there is a need for the establishment of new political systems which would take into account the diversity within these societies. Diversity and differences should be viewed as providing opportunities rather than as a threat to certain political classes.

The opportunities exist for vibrant, viable democratic political systems and institutions to arise in these sister countries. Also critical is the creation of the necessary checks and balances.

The establishment of inclusive democratic political systems would permit the renewal of mandates, or the replacement of governments should the electorate so decide, within the context of constitutionalised systems. It would eliminate the reason for armed rebellions and other unconstitutional activity. In this context, Deputy Chairperson, we condemn the coup d’état in the Central African Republic over the weekend.

I would like to invite the NCOP to find ways of assisting the Burundi people in particular, and other peoples affected by strife in general, in their search for lasting solutions. Interaction and the sharing of experiences with parliamentarians in these countries would assist in spreading the message of peace, as well as in promoting democracy and good governance throughout the continent.

Nepad has all the right elements which should make it succeed in extricating the continent from the abyss of underdevelopment, poverty and conflict. It is for this reason that we spare no effort in creating the right conditions for it to succeed, whether locally or outside the continent.

It is this determination to succeed, among other things, which makes us concerned about the global security situation, in particular the American- led campaign against Iraq. It is our well-considered view that a war in Iraq will aggravate the misery and poverty in Africa and other parts of the developing world. We believe it would reverse all our gains achieved through the Nepad initiative, as it has the potential to push Africa into the background in the international arena.

We hope the United States and its allies can still find it possible to avert war, even at this 11th hour, and allow the United Nations to deal with this matter in the manner in which it has been dealing with it, multilaterally.

Deputy Chair, thank you for allowing me the opportunity to interact with colleagues in this House on these important matters. I hope there will be more interaction on this topic in the NCOP as the year progresses. It is an important matter that requires the collective wisdom of the public representatives gathered here. I thank you, Deputy Chair. [Applause.]

UMnu V V Z WINDVOЁL: Mgcinisihlalo, Liphini Lamongameli, kanye nemalunga eNdlu lahlon, ngitsandza kubonga kutfola lelitfuba lekutsi ngibeke emavi kulenkhulumomphikiswano. Loludzaba lubaluleke kakhulu ngobe sikhuluma ngekuvuka kwenkanyamba ye-Afrika.

Tivakele ticubulo ngesikhatsi silwela inkhululeko titsi: Mayibuye i- Afrika!'' Titsi: I-Africa ngeke ize ikhululeke kudzimate kukhululeke iNingizimu!’’ Leso bekusikhatsi seNhlangano yeLubumbano lwe-Afrika, OAU, lebeyibuke kukhululeka kwemave ase-Afrika kubomadlangengwenya bebatfumbi, lubandlululo kanye naletinye tinhlelo tencindzetelo. Nyalo sikhuluma ngeLubumbano lwe-Afrika, AU. [Kuhlaba lulwimi.]] (Translation of Siswati paragraphs follows.)

[Mr V V Z WINDVOЁL: Mr Chairperson, Deputy President and hon members of the House, I would like to voice my appreciation at being afforded an opportunity to participate in this debate. This is a very important debate because we are discussing the rising up of the awesome snake of Africa.

Slogans were heard during our struggle for independence saying: Africa must come back!'' They said:Africa will never be free until the South is free!’’ That was during the time of the OAU, which was looking forward to the liberation of African countries from the oppression that was colonialism, apartheid and other forms of the oppressors’ programmes. We are now talking about the AU. [Interjections.]]

Ms C BOTHA: Mr Chairperson, on a point of order: I regret that the speaker is not being interpreted.

The DEPUTY CHAIRPERSON OF COMMITTEES: I am advised that on the speakers’ list only English is indicated for this speaker. [Interjections.] Apparently this was arranged beforehand. I do not know if it is possible, but could interpreting be arranged by some means, please? Hon member, would you please continue?

UMnu V V Z WINDVOЁL: Mgcinisihlalo, nani bekunene, bengisasho kutsi nyalo sikhuluma nge AU, kugucuka kwe-OAU ibe yi-AU. Loku ngingalufanisa nekwebuta kwenkanyamba ye-Afrika - labakwatiko kwebuta - ngulesikhatsi inyoka nayihlubula sikhumba sayo lesidzala isale nalesisha. Ngulapho-ke lapho lenkanyamba ye-Afrika itilungiselela khona kubukana nesimo lesisha emhlabeni wonkhe jikelele. (Translation of Siswati paragraph follows.)

[Mr V V Z WINDVOЁL: Mr Chairperson, hon members, I was still saying that we are now talking of AU, the transformation of the OAU into the AU. I would say that that is like a snake shedding its skin and a new one appearing - those who know - it’s when a snake sheds its old skin and a new one appears. It is then that the awesome snake of Africa prepares itself for the new challenges of globalisation.]

As we know, Nepad is a pledge by African leaders, inter alia, to eradicate poverty and to place their countries, both individually and collectively, on a path of sustainable growth and development.

Surely this is anchored in the determination of Africans to extricate themselves and the continent from the malaise of underdevelopment and exclusion in a globalising world. From a socioeconomic perspective, Nepad will transform the continent from various forms of underdevelopment and poverty to the envisaged prosperity. Actions speak louder than words. As an African in the South, I am proud about the leading and constructive role that the ANC-led Government is playing in this regard. Unlike the apartheid regime, which was hell-bent on destabilising its neighbours and protecting foreign interests, our caring Government is lending a helping hand so that our fellow Africans may live and prosper.

This is no coincidence. The ANC, being the oldest liberation movement on the continent, knows the history and sufferings of Africa. Hence it is able to respond and lead accordingly.One will not dwell much on the peace missions our country has undertaken with distinction, namely in Burundi, the DRC, etc. The hon Deputy President has eloquently addressed the House on that.

A key requirement for successful socioeconomic transformation is infrastructural development. Sound and accessible infrastructure provides much needed quality services, facilities and opportunities, particularly to the poor and those in isolated areas or regions. Our Government, through various departments and parastatals, has taken the lead with projects and programmes. To name but a few: The transfrontier parks are being established through the Department of Environmental Affairs and Tourism. We are seeing the harmonisation of the railway transportation system through Spoornet, an arm of Transnet, extending up to Tanzania. The SAA, with its Open Skies initiative, has opened a route to Dakar and is also involved in establishing alliances with other African airlines.

We have seen Telkom’s assistance to Burkina Faso during the CAF Cup, which left that country with much-needed telecommunications infrastructure. We all know of the Maputo Corridor. As a Mpumalangan, I’m proud to say that our province was instrumental in its establishment. Currently, the US$1,2 billion Sasol natural gas pipeline is also under construction.

These projects have created a lot of job opportunities, enhanced economic growth and improved the quality of life of the masses they serve. These are but some of the noble causes in promoting trade and co-operation and overcoming the inherited colonial divisions between African countries.

However, it is saddening, as the Deputy President has put it, that as we speak about this glorious programme Nepad, it may be overshadowed or downtrodden by the impending war against Iraq and the people of the world - because it is true that, ultimately, it is the people in the developing countries that will suffer the consequences if a war of such magnitude is to proceed.

Africa is defying all expectations and forecasts made after September 11, which predicted a stagnation in African economic growth. Although the economies of some major industrialised countries have slowed down, with world trade growing by less than 2%. African economies, in particular that of our country, have shown robust growth despite this global economic showdown.

According to the the UN Economic Commission for Africa, African economies grew by 4,3% during 2001, which is significantly higher than the 3,5% growth in 2000, thus making Africa the only developing region to register a faster growth rate.

In conclusion, may I say that as the ANC we have no doubt that Nepad will succeed. Africa has already made significant progress in realising some of the objectives of Nepad. During the past decade many African countries have taken action to promote socioeconomic transformation. We have witnessed marked progress in democratisation and constitutional reform, with a dramatic increase in the holding of multiparty elections. I thank you. [Applause.]

Ms C BOTHA: Chairperson, the poverty levels and development indices of Africa stand in stark contrast to the prosperity and achievements of the developed world. Some of the well-worn indicators of this situation are the facts that in Africa 340 million people, or half the population, live on less than $1 a day; that the mortality rate of children under five years old is 140 per 1 000 and life expectancy at birth for the whole of Africa is only 54 years and decreasing; that only 58% of the population has access to safe water; that the rate of illiteracy for people over 15 is 41%; and that there are only 18 mainline telephones per 1 000 people in Africa, compared with 146 for the world as a whole and 567 for higher-income countries.

These statistics indicate a level of economic and social exclusion of the vast majority of African peoples which can never be desirable for those who care about Africa or those who care about global stability. This picture is further complicated by the proliferation of a social class of elite rulers in Africa who, in the words of President Mbeki, seek access to power so that they can corrupt the political order for personal gain at all costs.

Against this background South Africa has chosen the only constructive way, the international model of regional and continental co-operation, to engage globalisation head-on. It has committed huge energy to the establishment and leadership of the African Union and its endorsing of Nepad as its programme for socioeconomic development in Africa.

President Mbeki has built support and influence in global institutions like the UN and the Nonaligned Movement and interaction with the major development partners in order to create awareness of mutual need and benefit. This framework has been heartily embraced by the developed countries of the world, but also greeted with an understandable degree of cynicism. Socioeconomic transformation and good governance need more than political promises in international forums. When the spotlight recedes and the sun sets in Africa, the hard truth to face is that it is Africa, not the developed world, that will have to bridge this divide and overcome the huge credibility gap between what Nepad and the AU offer and what they will eventually deliver.

Nepad is much further down the road than the Pan-African Parliament, which has not even - we were told today - been ratified by more than 10 African states. To link these two in the same debate is to place an unfair shackle on the potential of Nepad. The Pan-African Parliament protocol has been accepted by the heads of state, but here it faltered. There seems to have been very little communication between the executives and the people, whilst its protocol specifically proposes a vision of a common platform for African peoples and their grass-roots organisations to be more involved in discussions and decision-making on the problems and challenges facing the continent.

We also know that the success of Nepad hinges very much on the perceived effectiveness of the much heralded peer review mechanism for both political and economic governance which has been set as a quid pro quo for socioeconomic upliftment.

I want to highlight the latest fundamental breach - well, the Deputy President is here, so let me address it to him - by his own ranks of these preconditions for good governance, the subject matter of most of our debates when you are in the House, hon Deputy President. This was the recent remark by Minister Dlamini-Zuma to the Press Club in Pretoria that this Government will never condemn its Zimbabwean counterpart while it is in power. Such dogmatic utterances will never lead to the functioning of a meaningful peer review mechanism. On the contrary, it completely undermines the credibility of these structures and this Government.

The Mugabe regime is exactly guilty of behaviour which categorises Africa as a high investment risk and deserving of condemnation. It is precisely this kind of behaviour which is the opposite of good governance. The very countries which we wish to engage in Nepad clearly recognise human rights abuses in Zimbabwe and the resulting destruction there of the socioeconomic progress of that country.

The effectiveness of the Pan-African Parliament and Nepad must be accompanied by a record of credibility. This requires courage and leadership, not duplicity, on the issues of human rights and human wrongs. Do not let us down by turning the African century into the African decade and do not remain quite in the face of evil in the hope of short-term gains. The long-term cost in lost socioeconomic transformation is too ghastly to contemplate. Thank you. [Applause.]

Mr S V NAICKER: Deputy Chairman, firstly, I have taken note of the statement made by the hon Deputy President and, of course, some of the terms that he used, as the need for a concrete programme and interaction with all those that are involved. He said in his statement that, in an exercise of such nobility, only 10 countries have signed thus far. But that does not mean that those who have taken the initiative must lose hope.

I have also taken note of the statements made by the hon Windvoël and Ms Botha regarding the socioeconomic levels of the people in the area.

Nepad and the Pan-African Parliament are vehicles for socioeconomic transformation, peace, growth and good governance. We are on the threshold of an era when Africa, the continent, has to awaken to the realities of economic development. That is what it is all about. From the moment that Kwame Nkrumah broke the shackles of colonialism and gave Africa the taste of political freedom when Ghana was born, the all important freedom of economic self-sufficiency has remained elusive to Africans in many other parts of Africa.

The nobility of the Nepad and the concept of Pan-African Parliament as expounded at Lusaka Summit in July 2001 are a clear indication that the time has come to firmly resolve the problems and obstacles that obstruct economic upliftment.

May I say, for the sake of the record, that this exercise has so much humanitarianism within it - and history is not without its liberators - that, as a result, those that have taken the initiative will go down as the liberators of Africa.

Can we deny that Africa has an abundance of natural resources? Most importantly its people are really the greatest assets of Africa. The mineral resources, of course, have been the envy of many colonial countries. Just in passing, let me give you an example, Sir, of the resources that are found in the province that I come from. Does the hon Deputy President know the Tugela Basin? For the information of the hon members here, the Tugela Basin has been on the drawing board for the last 55 years. The water that flows into the sea can build another four Johannesburgs, four Cape Towns and three Durbans and still have a surplus. With the water, mineral and labour resources, one can understand what we can turn that to in an economic area.

What Nepad says is that Africa must take ownership of the aspirations of African people. That is what Nepad says. Mutual respect, dignity and shared responsibility and accountability are prerequisites for sustainable development. At the end of the day, it is sustainable development. We cannot eat flags and speeches. Nepad is envisaged as a long-term vision as an African-owned and African-led development programme.

Just as the objective of the Nepad is to give impetus to Africa’s development in order to catch up with the developed parts of the rest of the world, we are faced with the threat of war all around us. Worse, still, we already have war on our hands - the war of HIV/Aids, which is one of the most pressing questions facing our people in this area. It is a war that we have to fight, which, like a pestilence, is causing destruction and decimating our population. Both these threats are certain to have a negative impact on whatever efforts are marshalled to eradicate poverty in our continent.

At this juncture in world history, it is imperative that First World developed countries contribute to the efforts of the underdeveloped nations. The eradication of poverty, in the first place, cannot be the responsibility only of the African states. It cannot be. There has to be a question in history as to who contributed to the state of affairs in Africa. And the fact that their own economies benefited from the resources taken from Africa must prick their conscience so that they contribute to the wellbeing of Africans.

South Africa is the engine room, as the Deputy President stated here. Honest interaction is expected from this forum. South Africa is the engine room and has the responsibility. Together, with all the honesty at our command, we have to see that Nepad becomes a success. Any failure will be a reflection on the existence of this House [Applause.] Mnr P A MATTHEE: Mnr die Voorsitter, by die bespreking van hierdie onderwerp is dit allereers nodig om weer vir ‘n oomblik net stil te staan by wat die oogmerk van Nepad is.

Die hoofoogmerk van Nepad is om armoede in Afrika uit te wis en om Afrika- lande, beide individueel en gesamentlik, op ‘n pad van volhoubare groei en ontwikkeling te plaas om sodoende die marginalisering van Afrika in die globalisasieproses te keer.

Die President het in sy rede op 14 Februarie hierdie jaar, toe hy gepraat het oor Nepad, gesê:

Considerable progress was made during the course of last year to cement partnerships within Africa and further afield, so that we can translate Nepad, without delay, into concrete projects that will impact positively on the lives of the people of the continent. We are heartened by the fact that Africa’s sense of urgency to start implementing this programme is shared by governments, the private sector and civil society on all continents.

Dit voorspel vir ons ook wat hierdie jaar behoort te gebeur en dat hierdie jaar werklik gesien moet word as ‘n jaar waarin erns gegee moet word aan die implementering van hierdie projekte.

Die unieke krag van Nepad is daarin geleë dat dit gelei word deur volmagtigde Afrika-leiers. Dit is hierdie uniekheid wat gebruik moet word om die baie goeie inisiatiewe wat die ondersteuning en die toewyding van Afrika se politieke leiers nodig het, te versterk. Die hoofde van state in Afrika kan hulle geloofwaardigheid en hulle politieke gewig gebruik om nuwe paaie oop te breek en bestaandes wat geblokkeer is weer oop te maak om sodoende Afrika weer op te bou en te vernuwe.

Ons is saam met vele andere bly en verheug oor president Mbeki se onlangse kritiek op Zimbabwe se grondbeleid wat volg kort op ‘n verrassende vermaning aan president Mugabe deur die Nigeriese leier, president Obasanjo, dat die Zimbabwiese president reëlings moet tref om uit te tree.

President Mbeki het volgens mediaberigte op ‘n besoek aan Botswana gesê hy het die Zimbabwiese regering meegedeel dat die herverdeling van grond nagestreef moet word op ‘n wyse wat vir alle Zimbabwiërs aanvaarbaar is. President Mbeki se jongste uitlatings het sterk hoop laat opvlam dat Suid- Afrika ‘n nuwe, beduidende rol kan speel om die oplaaiende Zimbabwiese krisis op te los.

Die president van AgriSA het volgens mediaberigte dit as ‘n reusestap vorentoe bestempel, en selfs Zimbabwe se vernaamste opposisieparty, wat in die jongste tyd skerp kritiek op president Mbeki uitgespreek het, het ook hierdie jongste uitspraak van ons President verwelkom. Die party se verteenwoordiger het bygevoeg dat daar nou verdere druk op die Zimbabwiese regering deur die President uitgeoefen moet word sodat hulle kan ophou om hulle mense se regte te skend.

Die enigste weerklank het natuurlik weer eens gekom van die DP - leier, mnr Tony Leon, wat volgens mediaberigte gesê het die uitlatings van die President is allermins ‘n veroordeling van grondbesettings in Zimbabwe en dat hy president Mugabe eintlik aanhits om op sy gekose weg voort te gaan.

Baie goeie inisiatiewe is al in die verlede ontwikkel, soos die Lagos Plan van Aksie en die Abuja Verdrag, maar dit het hoofsaaklik weens drie redes gefaal, naamlik tydsberekening, gebrek aan vermoë om te implementeer en ‘n gebrek aan werklike politieke wil.

Ons is by ‘n belangrike kruispad in ons geskiedenis. ‘n Beduidende en belangrike … (Translation of Afrikaans paragraphs follows.)

[Mr P A MATTHEE: Mr Chairperson, with the discussion of this topic it is first of all necessary to pause for a moment and look at what the objective of Nepad is.

The main objective of Nepad is to eradicate poverty in Africa and to put African countries, both individually and jointly, on a road of sustainable growth and development, in so doing to stop the marginalisation of Africa in the globalisation process.

In his address on 14 February of this year, when he spoke about Nepad the President said:

Considerable progress was made during the course of last year to cement partnerships with Africa and further afield, so that we can translate Nepad, without delay, into concrete projects that will impact positively on the lives of the people of the continent. We are heartened by the fact that Africa’s sense of urgency to start implementing this programme is shared by governments, the private sector and civil society on all continents.

This predicts to us what ought to happen this year and that this year should surely be seen as a year in which we should be serious about the implementation of these projects.

The unique power of Nepad lies in the fact that it is being led by African leaders invested with full authority. It is this uniqueness which should be used to strengthen the many good initiatives which need the support and dedication of Africa’s political leaders. The heads of state in Africa can use their credibility and political weight to open up new paths and to open up existing ones which have been blocked, in so doing to renew and build up Africa once again.

Together with many others we are glad and overjoyed about President Mbeki’s recent criticism regarding Zimbabwe’s land policy which follows shortly on a surprising admonishing to President Mugabe by the Nigerian leader, President Obasanjo, that the Zimbabwean President should make arrangements to step down.

On a visit to Botswana, according to media reports, President Mbeki said that he told the Zimbabwean government that the redistribution of land should be pursued in a manner which is acceptable to all Zimbabweans. President Mbeki’s recent remarks has made hopes rise again that South Africa can play a new decisive role to solve the building Zimbabwean crisis.

According to media reports, the President of AgriSA has described this as a huge step forward and even Zimbabwe’s main opposition party, which recently expressed strong criticism to President Mbeki, has also welcomed the latest remarks of our President. The party’s representative added that further pressure should now be put on the Zimbabwean government by the President so that they can stop violating the rights of their people.

The only echo once again of course came from the DP leader Mr Tony Leon who, according to media reports, said that the remarks of the President is least of all a condemnation of the occupation of land in Zimbabwe and that he is in fact inciting President Mugabe to continue on his chosen path.

Many good initiatives have been developed in the past, such as for example the Lagos Plan of Action and the Abuja Treaty, but this mainly failed for three reasons, namely: timing, a lack of ability to implement and a lack of real political will.

We are at an important crossroads in our history. A significant and important …]

Mr V V Z WINDVOЁL: Chairperson, I was listening to the speech and abruptly the interpretation was cut off.

The DEPUTY CHAIRPERSON OF COMMITTEES: Yes, that happened all of a sudden. Hon members will remember that this has been a constant worry right through the whole session. If you could bear with us, I am sure they are doing something about it. Continue, hon member.

Mnr P A MATTHEE: Voorsitter, dit klink of dit weer aangekom het. As ek mag, sal ek graag net ‘n oomblik wil kry om die vorige paragraaf te herhaal. Baie goeie inisiatiewe is al in die verlede ontwikkel, soos die Lagos Plan van Aksie en die Abuja Verdrag, maar dit het hoofsaaklik weens drie redes gefaal, naamlik tydsberekening, gebrek aan vermoë om te implementeer en ‘n gebrek aan werklike politieke wil.

Ons is by ‘n belangrike kruispad in ons geskiedenis. ‘n Beduidende en belangrike aantal leiers op die kontinent en oorsee wat werklik verbind is tot die hernuwing van die vasteland het na vore gekom. Dit word geïllustreer deur vooruitgang in die onlangse tyd en die ooreenkoms oor internasionale ontwikkelingsdoelwitte en ‘n gemeenskaplike agenda vir Afrika.

Nepad voorsien drie nuwe sleutelelemente: eerstens, dit is en word deur Afrika ontwikkel, bestuur en besit; tweedens, dit bring die konsep van ‘n nuwe vennootskap met wedersydse verbintenisse, verpligtinge, bydraes en voordele; en derdens, Afrika onderneem sekere verpligtinge en verbintenisse wat nou nie voorwaardes is wat van buite die kontinent kom nie, maar wat deur Afrika vir Afrika … (Translation of Afrikaans paragraphs follows.)

[Mr P A MATTHEE: Chairperson, it sounds as if it came back on again. If I may, I would like to take a moment to repeat the previous paragraph.

Many good initiatives have been developed in the past, such as for example the Lagos Plan of Action and the Abuja Treaty, but this mainly failed as a result of three reasons, namely: timing, a lack of ability to implement and a lack of real political will.

We are at an important crossroads in our history. A significant and important number of leaders on the continent and abroad have come forward who are really dedicated to the renewal of the continent. This is illustrated by progress in recent time and the agreement about international development aims and a joint agenda for Africa.

Nepad provides three new key elements: firstly, it is developed, managed and owned by Africa; secondly, it brings the concept of a new partnership with mutual agreement, obligations, contributions and advantages; and thirdly, Africa undertakes certain obligations and agreements which are not conditions coming from outside the continent but from Africa for Africa …]

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

Mr P A MATTHEE: I thank you.

Ons moet dit met hierdie waardevolle geleentheid … [Onhoorbaar.] [Applous.] [With this valuable opportunity we should …] [Inaudible.] [Applause.]]

Rev P MOATSHE: Modulasetilo, Motlatsa Moporesidente wa lefatshe la rona le le tlotlegang le Ntlo yotlhe, Motswana a re, kgomo e tshwarwa ka dinaka, motho o tshwarwa ka mafoko a gagwe. [Chairperson, the Deputy President of our beloved country, and the House, a person is caught by the statements he makes.]

I am saying this because there was a contradiction in the speech of Ms Botha. She started with congratulations for what Nepad has embarked on, but at the end she started attacking our leaders for coming up with political promises which are empty. It is imperative for Ms Botha and those who are with her in her camp to know where we come from. We have a history in this country, and the leaders she is referring to are the very leaders who have brought us to where we are today. Those were not empty political promises!

We were geared to the very serious business to struggle for the liberation of the people of this part of the continent and for the continent as a whole. Therefore she does not understand. She lives in the past. She is talking like a dog that chases its tail and will never be able to catch it. [Laughter.] I am saying this because there is a lot of misunderstanding.

According to my understanding, the war in Iraq is a war against God. If the UN says no to war, and the people of the countries of the world say no to war, then they are on the side of peace and peace is the fruit of justice. Where there is no justice there can be no peace, and where there is no peace there is no justice. Nebuchadnezzar had to eat grass because he was a superpower, but waged war against God, who is the author of all things. We must be careful because, no matter where in this world, humanity is created in God’s image. If you kill, you endeavour to kill God. That is why the Gospel says, ``Thou shalt not kill.’’

We have leaders in this country who have led us to where we are today, and that makes us proud to be South Africans. Many countries of the world envy South Africa because we have men and women inspired with foresight and vision. We must be proud and encourage our leaders by assuring them that they are on the right course. I am saying, as a believer, that they comply with the statute of the Gospel imperative. That is why they are doing this, charted by the Freedom Charter, which summarises the Gospel in very concise terms. Therefore we are on a good course.

Africa has come a long way since what was called the African decade, when most of the African countries were liberated - a decade of hope, of dreams, of visions, for Africa was free and was going to continue to fight for the total liberation of this continent.

It seems like yesterday that the OAU was launched in Addis Ababa to, amongst other things, promote unity and solidarity amongst African states and achieve a better life for the people of Africa. What happened thereafter was another story, for Africa was plagued with endless wars, poverty, corruption, genocide - the list is endless. However, as our hon President Mbeki often says, ``Africa is an Africa of hope.’’

If we have leaders like those South Africa has produced, men and women with foresight and vision, leaders who withstood the test of time and the test of ages, leaders who went through the grinding mill of life experience, those are the leaders in the African society, those are the leaders of the ANC, leaders who are on the right course, leaders who project a dignity for Africa, urging everybody to comply.

It seems like yesterday when we also celebrated our first day as a liberated country, having experienced a miraculously peaceful transition, thereby setting a precedent in the history of the world. We even then realised the importance of peace and stability as a fundamental foundation to our own democracy and its future.

We realised that without peace in our democracy there would be no hope for a prosperous tomorrow. The struggles of our people would have been with no benefit. Peace is the fruit of justice, as I have already said. Their hopes, dreams, ambitions and visions would have remained just that - mere visions, dreams, ambitions and hopes - and those too would have eventually died had instability continued.

One thing that history has taught us in particular from our very own African experience in the post-liberation period is that peace and good governance are imperatives for sustainable development. They are the fuel that takes the truck of progress forward. Without that fuel, the truck cannot move … [Time expired.]

The CHAIRPERSON OF THE NCOP: Deputy Chairperson, I have to begin by saying that I continue to remain puzzled as to understanding exactly what is being demanded of the Government of South Africa with respect to Zimbabwe. I think we have made, as this country, very clear statements on our perspective with respect to Zimbabwe. The clear perspective has been repeated, and repeated again, that we would not in South Africa have the form of land policy that has been implemented in Zimbabwe. Our Government has stated this more than once. Our President has made this statement, certainly in Botswana, but before that he made similar statements expressing concern about the manner of implementation of the policy on land redistribution, while pointing out very clearly that land redistribution has to occur because the struggle in Zimbabwe was a struggle around the question of land.

So I am not sure exactly what is being asked of us, beyond perhaps going to war with Zimbabwe, and clearly we would not go to war with that country nor any country on our continent. So I remain puzzled as to exactly what is being asked of our Government. But let me come to the subject of debate for this afternoon.

I think it is clear from the contributions that we have heard that we are all agreed that Nepad and the Pan-African Parliament stand as important vehicles for socio-economic transformation and the promotion of peace and good governance on the African continent. I think as we consider this subject, and in our deliberations today, it is important, as we have said in many other meetings and fora, that we as members of Parliament need to be informed on the perspectives that we present in this House.

Allow me to refer to the recent communique emanating from the Heads of State and Government Implementation Committee on Nepad. A meeting took place on Sunday 9 March this very year, a meeting in which our President participated, and produced a set of documents that are freely available to members of the public and to members of Parliament. In those documents I think the hon Botha would find a very clear indication of the very reasons for the foremost statistics that she outlined on Africa - poverty, underdevelopment, poor infrastructure and so on, facts that we all know and which Nepad is a response to.

The steering committee indicated in its meeting the need for the Nepad steering committee to continue with its negotiations on a number of important issues. They highlighted in the steering committee the need for greater flexibility on the part of trading partners in granting the much needed trade preferences to Africa and the developing world. They mentioned the special trade access that we have made reference to, with respect to our natural resources and products of the African continent. They also made reference to the need to see a reduction in subsidies that are paid to farm producers in Europe, in the United States and other parts of the developed world - subsidies that deny Africa access to markets of the developed world.

It is this form of policy that contributes to the continuing underdevelopment of Africa. We do not choose to be underdeveloped. It is the action of the developing world towards us that underdevelops us, and we need, as members of Parliament, to be assisting our Government in challenging these very areas. The low commodity prices for commodity trading nations are a problem, and therefore commodity prices must be addressed.

We also heard a call on the African group of ambassadors in Geneva and the African ministers of trade to intensify their efforts at ensuring that all these issues of interest to the continent, including previous commitments, are fully considered at subsequent meetings and engagements with trading partners. It seems to me that if we as members of Parliament are concerned about ensuring the development of Africa, it is these areas, which the steering committee made reference to, that we as members of Parliament should be paying attention to. How much, as members of Parliament, do we talk about the subsidies that are paid to agricultural producers in Europe and elsewhere? How much do we talk about the trade preferences granted to a range of countries? But what are we doing to advocate a reduction in this form of support and a more favourable regime for our continent?

We are not doing enough as members of Parliament. We are not saying enough, we spend too much time criticising our leaders instead of engaging with the West, which is underdeveloping our continent. I think we should be doing much more.

Nepad clearly is the vehicle for ensuring the development of our continent, the development of Africa in unity. The African Union is the political organ that will ensure adequate policy formulation and action on agreed policies.

The Pan-African Parliament is the body that we have charged with ensuring African people’s contribution to and participation in all the issues and practices that directly impact on their lives. And I think it is sad testimony to the responsiveness of a number of our African parliaments that 43 of them have not as yet ratified the protocol. We congratulate the 10 that have, and I think as South Africa’s Parliament we would want to take action with the 10 to ensure that we speed up the process of encouraging other African parliaments to act on the need to ratify the protocol.

We will use our presence in African fora and other international fora to encourage our African parliaments to ensure that they ratify the protocol so that we can, in this year, have the first inaugural meeting of the Pan- African Parliament. It is an important obligation on us as the South African Parliament to ensure that indeed the Pan-African Parliament comes to life.

I think there are three critical characteristics of Africa that provide evidence that supports the decision to adopt Nepad as our framework of development and to create a Pan-African Parliament. The first is this dire poverty of Africa that has been referred to today. And I think the dire poverty is being responded to by a coherent, co-ordinated policy response which we see as Nepad and its programmes.

The second critical characteristic is the need for economic and infrastructure development on our continent as important vehicles for job creation and economic growth. Again Nepad provides the way and framework for us. The third critical feature is the challenge of developing all Africa’s human resources with the objective of supporting peace and people development on our continent. President Mbeki, speaking at the beginning of the meeting of the Nepad steering committee, made reference to the need for us to ensure that through Nepad’s programmes, women and girls, as the majority population on our continent, are not marginalised and left out of the process of development. Therefore it is vital, as we review the activities of Nepad and the actions of the African Union, that we focus on whether indeed women and girls are enjoying progress and development support on our continent.

Nepad, in my view, is the coherent plan. The Pan-African Parliament is a response to all of these, but, more particularly, it ensures the vital functions of people participation. Too often in past initiatives, as referred to by the hon Moatshe, we have not seen sufficient people participation, sufficient government contact with the people, and bringing a Parliament of Africa into being ensures that for the first time African development will be discussed by Africa’s public representatives with the people of Africa.

Secondly, we introduce accountability and transparency. International matters as subjects of international development have often been left to the domain of the executive, and -parliaments have played a minimal role in ensuring that they have oversight of international agreements and international deliberations. Through the Pan-African Parliament we introduce a new accountability, a new transparency, to African matters.

The third aspect is that through the Pan-African Parliament we build an important bridge between the African Union and the public representatives of the people. No longer, as with the organisation of African Unity, will it be the Ministers of Foreign Affairs and the Presidents who decide on Africa. We as Parliaments must play a role in deciding on Africa, and the Pan-African Parliament assures that.

A fourth aspect is that we are finally integrated into African matters. The Nepad report in March that I have referred to indicates that the Nepad steering committee is proceeding apace with its work. On reading it, despite my excitement at the progress that the steering committee is making, I am horrified that as Parliament we are not considering the work of the steering committee nor ensuring that we are in step with what is being done. The progress is exciting, but again we parliamentarians are allowing ourselves to be left behind. I think that the Deputy President made a very important point when he called on parliamentarians and the NCOP to deliberate on this subject again and again and again to ensure that indeed we are totally conversant with progress with respect to Nepad and with progress with respect to the African Union.

I think the report from the steering committee meeting provides a useful framework for examination by members in the National Council of Provinces, and I would encourage each one of us to extract the communique from its website to ensure that indeed we begin this kind of examination of whether we are making progress.

It is important, as I have stated, for us to ensure that we encourage other African countries to ratify the protocol on the Pan-African Parliament. As the Parliament of South Africa, we have indicated that we are keen to offer, through our President, our leadership in the assembly of the African Union. We have indicated an interest in offering to host the Pan-African Parliament, at least its early meetings, to ensure that we do get this important structure off the ground.

It is vital that South Africa, which enjoys today a thriving democracy, ensures that that democracy extends beyond the borders of South Africa into the totality of Africa. An important characteristic of our development from now on has to be the existence of structures of good governance, and it is parliaments that supervise the existence of structures of good governance and that ensure that we have a standard and framework throughout the continent which each of us can learn from and mirror. Certainly the Pan- African Parliament and Nepad are our vehicles for socioeconomic transformation, for the promotion of peace and security and good governance on our continent.

I thank the Deputy President for having participated in this debate and the hon members for having made very important and useful contributions. Again I request Ms Botha of the DP to kindly study the situation of Africa very carefully so that we know why there is poverty, so that we know why there is underdevelopment and do not lay the blame on those who have merely been present in Government for eight and a half years and prior to that played no role in underdeveloping Africa. Thank you very much, Deputy Chairperson. [Applause.]

Debate concluded.

 CONSTITUTION OF THE REPUBLIC OF SOUTH AFRICA FOURTH AMENDMENT BILL

            (Consideration of Bill and of Report thereon)

The MINISTER OF JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Deputy Chairperson, thank you very much. We should remember that Parliament passed four pieces of legislation last year that shared a common objective, namely to enable a member of a legislature or municipal council to become a member of another party whilst retaining membership of that legislature or council and to enable an existing party to merge with another party, or to subdivide into more than one party, or to subdivide with any one subdivision merging with another party.

The constitutional validity of the legislation that Parliament passed was subsequently challenged by certain political parties that are represented in this House. On 4 October 2002, in the case of United Democratic Movement v President of the Republic of South Africa and Others, the Constitutional Court held that crossing-of-the-floor legislation for national, provincial and local government was not inconsistent with the Constitution. Regarding the Loss or Retention of Membership of National and Provincial Legislatures Act, 2002, however, the Constitutional Court held that Parliament did not have the power to effect the provisions contemplated in that Act by means of an ordinary Act of Parliament, as opposed to an Act amending the Constitution. This led to the introduction of the Bill that is now before this House.

Hon members will agree that we have already discussed the merits and demerits of the principle underlying this legislation at great length. In fact, Parliament made its will abundantly clear last year when it passed the four Acts that I have already referred to. I am not going to revisit or dig up the old arguments that were raised in respect of this legislation. I would, however, like to reflect on some interesting aspects regarding the history and practical application of the crossing-of-the-floor phenomenon. When the legislation was put to the vote last year, it was opposed by, among others, the UDM, the IFP and the ACDP. Subsequent to the judgment of the Constitutional Court, the window period for the crossing of the floor in the local government sphere came into effect and certain councillors from other parties, for reasons best known to themselves, seized the opportunity to join, inter alia, the UDM, the IFP or the ACDP. The UDM was the first litigant to challenge this legislation. They were later joined by, among others, the IFP and the ACDP, on so-called moral grounds, as being undemocratic, as denying fundamental political rights of the voters, and the like.

In fact, the hon Holomisa felt so strongly about the matter that, in paragraph 39 of his affidavit to the Constitutional Court, he stated, among other things, the following:

I have been advised and I verily believe that the antidefection clause forms an integral part of the representative democracy contemplated in the Constitution and in Constitutional Principle VIII. The strong emphasis on participatory democracy and accountability in the Constitution is entirely incompatible with a free mandate model of representation that would allow for floor crossing. The pure list-based system of proportional representation created by the Constitution is designed to establish legislators, through the parties, as delegates of the electorate, who remain accountable to the electorate throughout the term of the legislature. Representatives elected under this system owe their seats solely to the fact that that they were placed on the list of the party under whose banner they fought the election. To allow a legislator, having obtained his or her seat based upon the party list, to turn his or her back on the party and yet retain that seat for the remainder of the term of the body, is antithetical to that system.

The hon Holomisa also stated in paragraph 66.2 of his affidavit that, and I quote again -

… the new system will be fundamentally unfair to those candidates whose names are on the existing party lists, who participated in election campaigns and who, but for the Acts, would have automatically replaced defectors.

Strong words, strong sentiments, strong convictions. And yet, did these parties now inform those councillors wishing to join them, on the basis of floor crossing, No, you are welcome to join us at the next election, but we are in principle against accepting you together with your seats in our parties without there having been an election. We think that it would be morally indefensible.'' I dare say they didn't do that. They didn't say, Ought we to receive you into our parties now that you have crossed on the basis of legislation that we are totally opposed to?’’ They didn’t.

Instead they accepted them, they embraced them and even bragged that people had crossed to their own parties. I don’t know whether indeed that’s not a reflection of a very interesting model of morality. [Laughter.] But that does not belong in the morality of the party that I represent, a party that eventually accepted that they were right and that, indeed, the antidefection clause must be done away with.

When we thought that we were doing that, they then opposed us. I do wish that today they would support this legislation, so that we do exactly that which they said earlier on was right, namely allow people to cross the floor with their seats if they so wish. It is the will of the people themselves, we were lectured in the mid-1990s, to allow people to cross the floor with their seats. Now the moment has come for them indeed to do as they lectured and preached, namely support this legislation.

There is no part of the legislation that says that people shall only cross to one party. It allows them to do so for whatever reasons they might have. It doesn’t prescribe to them where they should go. The fact that the majority crossed to the ANC can only be reflective of the ANC’s stature in society and its history in this country and, may I say, by the way, in the world of struggles for national liberation. I thank you. [Applause.]

Kgoshi M L MOKOENA: Thank you, Chair of Chairs. The same Bill was passed last year. Unfortunately the Constitutional Court declared it unconstitutional because we passed it as an ordinary Act of Parliament. We have now taken the route of amending the Constitution.

The objectives of the Bill and what it entails were well drummed into members, even recently by the hon Minister, and I am not going to repeat it, but I just want to remind hon members. Members in all provincial legislatures will be allowed to cross to any party of their choice, if they want to, without losing their seats as MPLs. The same goes for members of the National Assembly.

The good thing about this legislation is that in the first 15-day window period there will not be a threshold. A member is not required to gun for the 10% before he or she crosses. That requirement will only apply in the second window period.

As was said, parties can merge, subdivide and so forth. But let me once more remind members that during the window period parties cannot take any action against a member who wants to cross. That is only possible after the window period. It can happen if your party does not trust you. [Interjections.] [Laughter.] If you have indicated that you want to cross the floor, my advice is that you should not go back but just cross, or you might regret it later.

There were some serious discussions about the seven days given to parties and the Speaker to submit and publish the names in the Gazette. This concern was raised by KwaZulu-Natal, for example. But, as the committee, we agreed that the Speaker would have the names immediately after parties had submitted their lists, so it would not be necessary to give the Speaker some optional time. It therefore will not be necessary for us to amend this. We are very comfortable with it. I am happy because after the explanation by the department, the province also agreed.

I want to make this appeal to our members: Please don’t jump the gun. Wait until the President has signed the Bill into law. Make sure you only jump when the window is open. [Laughter.] If the window is not clearly visible, please check with reliable members like me and we will take it from there. [Laughter.]

My heart goes out to those hon members of this Chamber who might be affected when there are crossings or movements in various provinces. It is true that some hon members might be withdrawn from this House. We are going to miss their contribution. It was the committee’s wish that something be done to members who might be affected, but because of our electoral system, that will not be possible. However, the committee adds its concerns and views in regard to members who are going to be affected. We hope and believe that one day something will be done. One member of the committee went on to say, and I quote her:

From now on very few members will be keen to serve in the NCOP knowing that their stay in this Council might be short-lived by crossings in the provinces.

She continued:

I hope and believe that sense will prevail to some parties to make sure that those members who were valuable in this Council can be redeployed somewhere.

This member is a mother, a sister and an hon member. She went on to say, and I quote again:

It is now obvious that whenever there will be a window period, members of this Council will be sitting on the edges of their seats.

Let me take this opportunity to thank those provinces that were very vocal and showed concern about the future of their permanent delegates who might be affected by this legislation.

To you, hon members of this committee, thank you very much for your undivided support. Only one sentence can describe you: No matter how deep the bottle is, the cream will always be on top.

We support this Bill. [Applause.]

Prince B Z ZULU: Deputy Chair, this Bill, the Constitution of the Republic of South Africa Fourth Amendment Bill, signifies the maturity of our democracy. This natural exercising of political choice, which has already been in operation at local government level, is now being extended to public representatives at provincial and national level, who are now, through this Bill, also afforded the opportunity to cross the floor.

The members of Parliament and the provincial legislatures who were trapped in political parties they no longer could identify with will now have the opportunity to redeem themselves, as was the case with the councils in municipalities across South Africa last year. These enthralled provincial and National Assembly members of parties do not have to suffer in silence any longer. This amending Bill offers them an opportunity to align themselves with those who want to build this nation in a constructive way. Last year South Africans witnessed how the Democratic Alliance became embroiled in internal wars and tension because of its fight-back political approach. Tony Leon, in an effort to salvage credibility in a very divided DP, had to govern Cape Town from Johannesburg. Many of his party members at national and provincial level became uncomfortable with this approach, but had to suffer in silence because they had no legislative framework empowering them to leave a party they could no longer identify with.

Later, because of the internal political wrangling, the Democratic Alliance became known as the Divided Alliance'', and, after even more political turmoil, they became known as the Divorced Alliance’’. [Laughter.] Threats and counter-threats of court action were the order of the day. Eventually sanity prevailed when legislation, namely the Local Government: Municipal Structures Amendment Act, Act 20 of 2002, pronounced itself very clearly on this matter. Therefore, in the Western Cape, when the local councillors were afforded the opportunity to cross the floor, their message was unequivocal. The rest, as they say, is history.

With the passage of this legislation MPs and MPLs will now have the opportunity to cross the floor to a party that is actively engaged in the building of our nation. Those members of Parliament and members of provincial legislatures who wish to change allegiance will hopefully be spared a great deal of the drama and trauma that followed the local government version of crossing the floor.

The legislation will ensure that there is uniformity in all three spheres of governance with regard to the loss or retention of membership of the national Parliament, provincial legislatures and all municipal councils. Parties will be allowed to merge or subdivide, but only within 15 days following the commencement of this legislation. If they fail to take advantage of this opportunity, they have two further opportunities, but only after the second year after elections and after the fourth year following elections. Members of all parties who make decisions using the opportunity afforded by this legislation will keep their seats in the National Assembly or provincial legislature.

Recently South Africans also witnessed how ordinary members of the UDM walked out of that party after losing faith in its ability to remain a relevant political force in the building of the nation. Now UDM members who are public representatives will be afforded the opportunity to remain relevant in South African politics.

The Bill addresses all the issues raised by the Constitutional Court in the case of United Democratic Movement v President of the Republic of South Africa and Others. It provides for the amendment of the Constitution as required by the court. This now gives the green light for all those who seek political freedom for their current political shackles.

I have no doubt that the implications of this Bill will have a profound effect on all political parties. How we, collectively and as individual parties, deal with the inevitable changes that this Bill brings to the political landscape will be a clear indication of our maturity as a truly democratic country.

As a representative of the ANC I am happy to endorse this Bill. I thank you. [Applause.] Mnr C ACKERMANN: Voorsitter, die Nuwe NP en die oorgrote meerderheid in die Wes-Kaap steun hierdie wetgewing. Ons beskou dit as ‘n verdere uitbreiding van ons demokrasie in Suid-Afrika. Ek wil graag vanmiddag aansluit by ons voorsitter, die agb Mokoena, deur die vraag te stel: Hoe raak hierdie wetgewing die Nasionale Raad van Provinsies?

In die eerste plek, permanente afgevaardigdes na die NRVP word gesien as lede van die Parlement, maar by die toepassing van hierdie wet is dit lede van die Nasionale Vergadering wat keuses kan uitoefen, sonder die verlies van hul amp. Met ander woorde, hulle het beskerming. As ‘n lid van die NRVP na ‘n ander party sou oorloop, en daardie party volgens die formule in die provinsie nie sy posisie in hierdie Raad verseker nie, dan is hy sy amp kwyt. Met ander woorde, dit is ‘n risiko vir hierdie Raad se permanente lede. Dit beteken dat lede van die Nasionale Vergadering die voorreg het van beskerming, om ‘n termyn van vyf jaar te kan voltooi, terwyl lede van die NRVP in gevaar is en dus nie die voorreg sal kan geniet nie - mits die formule vir hulle geskik is.

Ek beskou dit as ‘n vorm van diskriminasie teen die lede van die NRVP. Ek wil dus ‘n beroep op die Minister en die Regering doen dat indien ‘n lid van hierdie Raad deur die oorloopwetgewing in die provinsie geraak word, en sy voorregte daardeur verbeur, daardie lid na sy provinsie sal terugkeer met die voorregte van ‘n gewone lid, maar stemreg in die wetgewer word hom ontsê.

Tydens die implementering van die finale Grondwet van Suid-Afrika het ons ‘n oorgangsmaatreël daargestel en is die beginsel reeds gevestig, waar vier lede destyds van ‘n provinsie wat voorregte gehad het onder die tussentydse Grondwet daardie voorregte kon behou, sonder stemreg, en tot aan die einde van die termyn kon aanbly. (Translation of Afrikaans paragraphs follows.)

[Mr C ACKERMANN: Chairperson, the New NP and the vast majority in the Western Cape support this legislation. We regard it as a further extension of our democracy in South Africa. I would like to join our chairperson, the hon Mokoena, this afternoon by putting the question: How does this legislation affect the National Council of Provinces?

In the first place, permanent delegates to the NCOP are seen as members of Parliament, but upon the implementation of this Act, it will be the members of the National Assembly who can exercise choices, without relinquishing their position. In other words, they have protection. If a member of the NCOP crosses the floor to another party, and that party does not ensure his position in this Council according to the formula in the province, he loses his position. In other words, this is a risk for the permanent members of this Chamber. This implies that members of the National Assembly have the privilege of protection to enable them to complete a term of five years, while members of the NCOP are at risk and therefore will not be able to enjoy that privilege - unless the formula is suited to them.

I regard this as a form of discrimination against members of the NCOP. I would therefore like to appeal to the Minister and the Government that if a member of this Council is affected by the floor-crossing legislation in the province, and forfeits his privileges because of this, that member should return to his province with the privileges of an ordinary member, whilst being denied the right to vote in the legislature.

During the implementation of the final Constitution of South Africa we created a transitional measure and thus the principle has already been established, since four members of a province who had privileges under the interim Constitution at the time, could retain those privileges, without the right to vote, and could remain to the end of the term.]

What is a worrying factor is that this Chamber could be used as a dumping ground for so-called ``doubtfuls’’ in political parties. This will indeed have an impact on the effectiveness and the smooth running of the House. I am of the opinion that we should address this problem. A possible way out is to protect members of the NCOP if they want to change parties in the same way, as I have explained, as we did during the transition phase between the interim Constitution and the final Constitution. It is unfair that members of Parliament will have no protection if they cross the floor unless the formula suits them.

I also want to give attention to another worrying factor. It is very interesting that the dumping of so-called ``doubtfuls’’ in this Chamber or in the provinces is done by none other than the DP and the IFP. [Interjections.] We had an experience in the Southern Cape, where the DP sent councillors on holidays and paid for these holidays so that we couldn’t get near those councillors. We’ve had that experience. It’s intimidating. Where is Wikus Theron in this House? Why was he redeployed to the other House? Why were three members of the IFP redeployed to the provinces, and three members from the province redeployed to Parliament?

Dis nou die bedmaats wat u hier sien. Dit is nou die manne met wie die DP in die bed is. Hulle is in die bed met die IVP; hulle steun hierdie wetgewing. Hulle is in die bed met die FA - hulle steun hierdie wetgewing. Dit is nou die tipe party wat dubbele standaarde toepas. Dit is die party wat hoog opgee oor individuele regte en vryhede, maar wanneer daar regte en vryhede ter sprake kom, dan vertrap hulle daardie regte en vryhede. [Tussenwerpsels.] (Translation of Afrikaans paragraph follows.)

[These are the bedfellows that you now see here. These are the men with whom the DP is now in bed. They are in bed with the IFP; they support this legislation. They are in bed with the FA; they support this legislation. This is the type of party that applies double standards. This is the party that makes a great song and dance about individual rights and freedoms, but whenever those rights and freedoms are under discussion, they trample on those rights and freedoms. [Interjections.]]

Isn’t it interesting that the DP, which supports this legislation, calls the councillors that cross the floor ``crosstitutes’’? That’s what they call them. [Interjections.]

Mrs J N VILAKAZI: Chair, on a point of order: The member who is delivering a speech now should not talk about the IFP. [Interjections.] The IFP is practising democracy.

The CHAIRPERSON OF COMMITTEES: Hon Vilakazi, what the member has spoken about here is relevant to the topic. Carry on, hon Ackermann. [Interjections.] Oh, your time has expired, hon member. [Interjections.]

Mr T G G MASHAMBA (Northern Province): Chairperson, I am not a doubtful member of the ANC. No arrogance intended, but it is true that the ANC as a national liberation movement earned its leadership of South African society in the protracted struggle for the new democratic dispensation.

This well-earned position has been continuously affirmed, confirmed and endorsed by the South African electorate in the numerous elections at the national, provincial and local levels since 1994.

The ANC is only too aware of its responsibility to continue to earn this leadership position in the process of the construction and development of our country, the African continent and the global community as a whole. Hence our relentless pursuit to continue to spearhead the unity of all our people and of all political parties committed to the democratic ideals for which many of our people have paid the highest price, as well as the unity of the African continent, and the pursuit of world peace, justice and development. Our efforts in the SADC, Africa and further afield speak for themselves.

We as the ANC take the Constitution very seriously, but the Constitution is not carved in stone, and must therefore, at all material times, reflect the political realities of our society. In the early 1990s, discreet geographic elements and national groupings of the so-called boers'', rooineks’’, coolies'',boesmans’’ and various ``kaffir’’ groupings came together to lay the foundation for a new, nonracial, nonsexist, democratic, united and progressive society.

It was a hectic period, full of excitement and great expectations, fear, uncertainty and intensified conflict. Regionalism, racism, sexism and tribalism and all other negative features from the immediate past still weighed heavily upon all of us. It was in that context that we, the people of South Africa, black and white, had to take a special route out of our terrible past that entailed us crafting a constitution that embodied a process that has taken us up to this point.

This was the correct approach at the time to meet the demands of a specific historic conjecture. Current threats to our hard-won democracy from certain quarters notwithstanding, we are now settling down, stabilising, coming to know each other better as fellow South Africans, becoming South Africans indeed. It cannot be therefore regarded as misguided and opportunistic to ensure that our Constitution is amended to ensure that true fluid realities of our society continue to be adequately reflected and accommodated.

It is our responsibility as legislators to respond effectively and efficiently to the changing political landscape by amending our Constitution to further release our people from their apartheid ideological and political cocoons, including the hon legislators.

As society normalises, we will continue to be called upon to respond appropriately. A mechanical, historic and dogmatic approach to constitutional matters, independent of the concrete political realities of our country, can only serve to confuse rather than clarify the situation. It is to the dynamic political realities of our society that the ANC will continue to respond, and the ANC will take the lead in ensuring that an equally dynamic constitutional dispensation is in place.

Therefore let all well-meaning South African patriots accept the current amendment of our Constitution. We of the great Limpopo endorse the Bill. [Applause.]

Mr K D S DURR: Chairperson, we in the ACDP have consistently opposed the legislation, and we feel somewhat vindicated in our view, having read the Slabbert committee report, which shares our view that at this time it is undesirable.

It is no good the Minister arguing; the Minister is a clever man who can turn an argument. The fact of the matter is that it’s disingenuous of the Minister to say that about the court judgment. All the court did was to judge that it was not unconstitutional. The court did not judge on the desirability of the measure at all.

The ACDP believes that we are in transition - not that we have an ideal system, but that whilst we are in transition, the system we have at the moment is appropriate.

The measure which is before the House and what went before was meant to contribute to political stability. That was what it was meant to do. I would say that, with the benefit of hindsight, it has had the very opposite effect. Cape Town suffered a paralysis of government for a year or more. In KwaZulu-Natal, terrible stresses and strains have been unleashed, and government was destabilised by these measures. So it had the very opposite effect of stabilising the political process.

Of course, on the question of the desirability of floor-crossing and amendments, the Minister is right. The court said it was constitutional. It did not say it was desirable. It is instructive for us to read the court’s previous comments on the desirability of the antidefection clause as expressed during the 1996 certification judgment. I will only read one or two clauses from the certification judgment. I quote:

It prevents parties in power from enticing members …

This is why they said an antidefection clause was necessary. This is what they said. They argued it was necessary because:

It prevents parties in power from enticing members of small parties to defect from the party upon whose list they were elected to join the governing party. If this were permitted, it would enable the governing party to obtain a special majority which it might not otherwise be able to muster, which is not a reflection of the view of the electorate.

Then there are other clauses which they argue, which I am sure the Minister is familiar with. The court accepted that the main reasons for the inclusion of the antidefection clause was to secure a more stable government and to avoid corruption in legislation.

Our Parliament and our Constitution, in our view, are not being strengthened or enriched by this opportunistic legislation. It is disingenuous to argue that, somehow, a party which votes for a particular measure and then is defeated can now not have the benefit of … [Time expired.]

The CHAIRPERSON OF COMMITTEES: I call upon the hon Lever.

Mr L G LEVER: Chairperson, I note my name appears after Mr Naicker’s on the speakers’ list. I don’t know if that is intentional. [Interjections.] Must I proceed?

THE CHAIRPERSON OF COMMITTEES: Hon member, I suppose I was in a hurry to go home. I’m not well.

Mr S V NAICKER (KwaZulu-Natal): Madam Chair, mine has been a very long journey. In the early days, when anybody crossed at night, we used to call them cockroaches … [Laughter] … but when they crossed during the day, we called them grasshoppers. Such was the politics of the yesteryear.

I just want to remind my hon friend Mr Ackermann from the New NP that we must be very cautious when we make statements. Let us not interfere with the rights of any political parties, be it the IFP or the ANC. They have all the right. It is their prerogative to decide how best they think members should be deployed.

As a result, there was that shift. [Interjections.] Yes, I will have to teach you. [Interjections.]

The CHAIRPERSON OF COMMITTEES: Order!

Mr S V NAICKER: Madam Chair, for the information of this Chamber, this is my 23rd year in Parliament. There came a time when I decided to depart from my political party. What did I do? I withdrew from the political party and I withdrew from Parliament.

The CHAIRPERSON OF COMMITTEES: Is that a point of order? Mr V V Z WINDVOЁL: Chairperson, I wanted to ask whether it is parliamentary for a member to give us an autobiography instead of proceeding with the debate. [Laughter.]

The CHAIRPERSON OF COMMITTEES: Hon Naicker, carry on.

Mr S V NAICKER: Perhaps my autobiography is not palatable to the hon member! [Laughter.]

What we are saying is that I resigned from my political party and resigned from Parliament. It is a matter of principle. It is a very relevant issue which we are involved in at the moment.

Let us accept the circumstances in which we find ourselves in this particular country, which acquired democracy only about nine years ago. This particular legislation and what transpired in the last six months or so have left scars on us as far as that is concerned.

Dr E A CONROY: On a point of order, Chair: Does the hon member know what the difference is between leaving without saying goodbye, and saying goodbye and not leaving? [Laughter.] The CHAIRPERSON OF COMMITTEES: I haven’t established that anything specifically is out of order.

Mr S V NAICKER: That was perhaps an immature political point of order.

This Bill, I may say, is a naked attempt to subvert the will of the people. The idea that a one-party state is preferable to a multiparty democracy is anathema to all decent South Africans.

The coalition between the ANC and the IFP was intended to bring stability and peace to the province of KwaZulu-Natal, which had been racked by political violence.

What has changed is that one of the partners, the ANC, wishes to change what was a good government in partnership, perhaps for political expediency. Surely the will of the people must triumph in the end?

We deplore the fact that after a law has been declared unconstitutional, the Constitution would be amended only to accommodate an expedient political objective with no basis in national interest on public policy. The CHAIRPERSON OF COMMITTEES: There’s a point of order. Kgoshi, let’s hear what is out of order.

Chief M L MOKOENA: Chairperson, I am rising on a point of order to find out if the hon member is speaking on behalf of the province, or on behalf of the IFP, because as far as the minutes and the mandate are concerned, KwaZulu-Natal fully supports the Bill. [Interjections.] That was a formal mandate. Can we verify if he is speaking on behalf of the province or on behalf of the IFP?

The CHAIRPERSON OF COMMITTEES: Hon member Naicker, you are at liberty, in terms of the Rules, either to answer to the question or to not answer the question that has been posed here.

Mr S V NAICKER: I was saying that the IFP calls on the friends of democracy to promote multiparty democracy through the ballot box and the will of the people and to prevent the consolidation of a one-party state. There is no reason to bring about this change to our electoral system, which unilaterally modifies the fundamental contract between the voters and the elected representatives.

Political parties should choose candidates knowing that they could not cross the floor and, therefore, the importance of remaining committed to upholding the Constitution is of paramount importance. [Time expired.]

The CHAIRPERSON OF COMMITTEES: Hon member Kgware, do let us give the speaker a chance.

The next speaker is the hon N Kondlo. Sorry, it’s supposed to be the hon Lever.

Mr L G LEVER: Chairperson, it seems it doesn’t pay to be generous in this House and to wait your turn, because you might miss your turn. [Laughter.]

On a serious note, the hon Minister has covered what the Bill actually encompasses, and such minor gaps as that might have left have been filled in by the hon Kgoshi Mokoena. However, I do need to address the selective memory of the hon member Ackermann.

I would like to remind members of this House that there was once a lady from the Western Cape provincial delegation by the name of Dr Van Zyl. She sat in this House for such a short period of time that perhaps many of you don’t remember her. But she was passing through - in fact, it was a revolving door - and shortly thereafter she was relieved of her position in the New NP.

And there’s another incident. We were informed on the news last night that the New NP’s disciplinary committee meeting for Messrs Malatsi and Marais started sitting from 8 pm last night and, we are informed, sat until late into the night, according to the news.

What is interesting is not the treatment these persons might receive at the hands of the New NP, but the nervousness it reveals on the part of the New NP at the prospect of losing even a single seat in the Western Cape provincial legislature. This would transform them from being a very junior partner to the ANC to becoming an irrelevant partner. It seems that it is not only in the Western Cape that they will potentially lose seats, but also in the Northern Cape, potentially in KwaZulu-Natal and potentially in many other provinces. [Interjections.] I don’t need to go into those details. History will tell us very shortly what the position is.

But it is also interesting to note that since 1994 the Nationalists - or the New Nationalists, as they like to be called - haven’t managed to retain or gain any single seat of power on their own. So, whether they have to be new or take on any other new appellation or form an alliance with the African nationalists, it seems to me that history will really consign them to the place where they ought to be consigned. [Interjections.] Just in closing, the DP does support this piece of legislation. [Interjections.] [Applause.]

Ms N C KONDLO: Deputy Chairperson, hon Minister and hon members, the ANC’s position on this Bill is articulated by the following statement which was made by the ANC’s president in his opening address at our 51st conference in Stellenbosch. The hon member who has just spoken might remember that town. I quote:

The circumstances leading to the formation and failure of the Democratic Alliance, the DA, had indicated that significant numbers of our people, as well as of those they had elected as public representatives, were reassessing their political positions.

This suggested that the time had come that our democratic system should create the space for the attendant adjustments in our legislatures to take place.

The approach of the ANC to this matter derives from the premise that we should allow public representatives, in cases where there has been a major shift in political alignment among constituencies and within political parties, to cross the floor without losing their seats.

Indeed, when the country’s Constitution was being finalised, those who today cry wolf and attribute all kinds of strange motives to the ANC argued for this to be allowed. In turn, we insisted that any changes in the law and the Constitution should prevent destabilising and unprincipled movements of people between political parties, that have little to do with the politics of society as a whole.

As we progress further away from the period of apartheid, the political views of many of our people will change. Our legal and constitutional framework should not block this natural political process. Only those afraid of change because they want to cling to the mindset of the past argue otherwise.

The objective of the ANC is to create a society based on nonracism, democracy and nonsexism. As such, it is the only movement which is capable of galvanising and uniting behind it all forces that are committed to these same principles.

Yile nto ke, Mphathiswa, le mibutho yezopolitiko mincananyana inexhala icinga ukuba lo Mthetho uYilwayo ulungiselela i-ANC ukuze bonke abantu beze kuyo. (Translation of Xhosa paragraph follows.)

[Hon Minister, that is why these small political organisations have a fear that this Bill is going to attract, if not steal, their members and join the ANC.]

It is in the history and in the tradition of the movement to galvanise people behind it.

Asizi kuyinceda ke into yokuba abantu abaninzi basuke kwaba nomgogwana bamaqela ezopolitiko beze kwi-ANC. Kambe wona umthetho awenzelwanga ukuba abantu basuke kwimibutho yabo beze kwi-ANC. Bangasuka nalapha kwi-ANC baye kweminye imibutho. Kambe ngenxa yokwazi imbali ye-ANC, loo nto ayizi kufane yenzeke. (Translation of Xhosa paragraphs follows.)

[We cannot help that people resign from these retrogressive political parties to join the ANC. The law does not specifically give people the right to just leave their parties and come to the ANC. They have a right to leave the ANC too and join other parties. However, knowing the history of the ANC, that will not happen very easily.]

A steadfast commitment to these principles and the successes of our social transformation programmes have seen the ANC steadily increase its support amongst the widest range of people, including elected members at national, provincial and local levels, as well as among other parties.

The problem for many of these elected public representatives is that they are trapped in political parties that no longer represent their political views. They feel imprisoned in parties that do not contribute to social transformation, that do not promote nonracism or democracy and nonsexism, but instead fan flames of racial polarisation and negativity. We need a mechanism to give such members the opportunity to break ranks with these retrogressive forces without losing their seats and allow them to play a meaningful role in the further transformation of our society.

This mechanism is contained in the Bill that is currently before the House. I won’t get into the details of how the mechanisms should operate because I assume that the hon members here are well versed in that.

Introducing legislation to allow for crossing of the floor will have important ramifications for our electoral and parliamentary systems and, ultimately, our democratic dispensation. The arguments for making such provision for crossing of the floor under our proportional representation system include the following.

First, the ANC will unite all the forces that are committed to these principles, if they cross over to it. Second, the ANC has the historic responsibility to lead both the people and opposition in normalising politics in our country. Third, for the future of democracy in our country, we need more parties that are nonracial, nonsexist and democratic. In actual fact, the Bill itself says that people can cross, parties can be formed, parties can merge: anything is possible. That is in the character and nature of democracy.

Otherwise, if this Bill were not to be effected, we would be keeping and propping up parties that belong in the past, and that continue the racial polarisation of our society. We should move from the premise that the future of South African belongs to the goals and causes that the ANC stands for. It is therefore our intention to expand the hegemony of the ANC and to win support amongst the widest range of forces in society for these goals.

The balance of forces has changed since the adoption of the interim constitution. The realignment in Parliament and the provincial legislatures is reflective of transitions in the broader society, as a result of our programme of transformation. We should adopt the principle under the current electoral system in the period of transition, so that if there are major upheavals in political alignment between elections, the system should accommodate this and not imprison people in their parties, especially if they no longer agree with such parties’ objectives.

Ndifuna ukuthi, xa ndiza kuhlala phantsi, xa iinkokeli zale mibutho yezopolitiko zingawuthandi lo mthetho, mazikwenze oko zisenzela iziqu zazo. Maziyeke amalungu afuna inkululeko yawo ayixhamle. Kunjalonje, ezi nkokeli maziyeke ukugrogrisa abo bafuna ukwahlukana nemibutho yazo kuba bengasenankolelo kwiinjongo zazo.

Kwakhona, ukuba umbutho usekelwe kwindlela engeyiyo, inene awuna kamva, kwaye amalungu awo nawuphi na umbutho ahamba ahambe afikelele kwithuba lokwazi into oyiyo umbutho lowo. Kamnandi, nabo babecinga ngokukhusela iimfuno neenjongo zabo ngabanye kuba beziinkokeli zale mibutho, eneneni abaliphumelelanga elo dabi kuba nakwiinkundla zamatyala lo mthetho umi kakuhle.

Kwakhona, ndiyafuna ukuveza ukuba nokuba lo mthetho ubungekho okanye ubukhona, amalungu emibutho yezopolitiko athi engengawo amalungu ePalamente asuke aye kuzimanya namanye amaqela ezopolitiko. Phaya eMpuma Koloni sinomzekelo omhle wayizolo elinye. Amalungu angama-63 e-UDM - angengawo malungu epalamente yephondo kodwa amalungu nje - asuka ngemini enye, ngexesha elinye, ashiya i-UDM aya kuzimanya ne-ANC. Yintoni enokuthintela la alapha e-UDM angaphumi kwi-UDM aze kwi-ANC? Kungenxa yokuba elapha ePalamente enexhala lokuphulukana nezihlalo zawo?

Lo Mthetho usaYilwayo uqinisa idemokhrasi nenkululeko yabantu njengoko abantu befuna. Ndiyabulela, Mhlalingaphambili. [Kwaqhwatywa.] (Translation of isiXhosa paragraphs follows.)

[Furthermore, I would like to say that leaders of parties that are opposed to this Bill should do so of their own free will. They should not try to stop the members that want freedom for them. These leaders must also stop threatening those that want out of their parties because they (the members) no longer agree with those parties’ principles and objectives. Furthermore, if a party is based on wrong principles, I tell you, it does not have a future and members of any party will eventually demand to know what it is all about. It is nice to note that they, too, thought about protecting their needs and objectives as leaders, however, they have not won that battle because this law has been proved constitutional even in courts of law. I also would like to point out that this Act may not have been there, but technically it did exist in the sense that members of political organisations could join other organisations while they were not members of Parliament. In the Eastern Cape we have a good example that we could cite of something that happened the day before last. Sixty-three members of the UDM - they were not members of the provincial parliament - decided, on the same day, to resign from the UDM and cross the floor to join the ANC. What could stop members from the ANC from doing the same thing? Is it because they are members of Parliament and probably fear losing their seats?

This Bill is in line with democratic principles and is going to strengthen our democracy and the freedom of our people as they wish. I thank you, Chairperson. [Applause.]]

Mr M A SULLIMAN: Chairperson, a point of order was raised by the hon member Kgoshi Mokoena, and the hon member’s point was valid.

The CHAIRPERSON OF COMMITTEES: Hon Sulliman, where are you now?

Mr M A SULLIMAN: That was when the hon member Naicker was speaking. I just wanted to bring to your attention that the point of order which was raised by Kgoshi Mokoena was a valid one in terms of our Rules and the Constitution and we would like the Chair to make a ruling in that regard. Thank you.

The CHAIRPERSON OF THE COMMITTEES: Mnu Sulliman ohloniphekileyo, besingawulibelanga loo mba. [Hon Sulliman, we have not forgotten about that issue.]

That was not a point of order. A ruling will be made.

The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Madam Chair, thank you very much. I must first and foremost thank the hon members for what I think has been a very good and very interesting debate on the Bill before the House. I undertake to ensure that the question that was raised by both hon Prince B Z Zulu and hon Mr C Ackermann will be looked into - the question in regard to the situation of the members of House who may be affected by floor-crossing in the provinces particularly.

Hon member Durr quite correctly summarised what I had said. I certainly didn’t say that the Constitutional Court was called upon to adjudicate upon the desirability or otherwise of these laws or, in fact, of the crossing of the floor, because I should be credited with a bit of understanding of how the system works. The court was never called upon to do so because it is not a function of a court of law to determine the desirability or otherwise of a law. It just goes into the question of legality or constitutional validity. That is the only function that the court was expected to perform.

The desirability or otherwise of a law or of an amendment is a political question, really. It does not require determination by a court of law. It is left to us here. We are the ones who have to determine whether or not a particular law is desirable. Once we have actually determined that it is desirable, we then go about it correctly in terms of both manner and form, in order to ensure that that which we have adjudged to be desirable is then indeed not adjudged to be unconstitutional further down the line.

I think the House needs to know that those who raise the moral question - who say it is immoral for any person to cross the floor with a seat - and who have raised it even now actually were beneficiaries to some extent. The UDM itself accepted no fewer than 11 councillors who crossed the floor. It didn’t, as I have said, say to them, ``No, it’s immoral for us to accept you, so please go wherever else, but don’t come to the UDM.’’

The IFP forgot the question of morality when it received nine councillors who crossed the floor. They are members of the IFP and they represent the IFP. They have exercised their freedom to choose. They made that choice and the law allowed them to choose to go to the IFP. The ACDP accepted two people. It again did not even preach Christian morality to them about crossing the floor. [Laughter.]

So I am surprised that indeed this question arises now. I am sure that if they would want to raise this question, the test is coming when the window of opportunity to cross is opened, and opened very wide, after this Bill has come into effect. They should then indeed be very consistent and say to people, for instance, ``No, don’t come to us. It is not in keeping with the Christian morality of the ACDP to accept you.’’ [Laughter.] Then we will take them very seriously, but right now it’s laughable that they say this and at the same time accept people.

That is exactly what is disingenuous: to label people as cockroaches or grasshoppers and call them prostitutes, and then at the same time, when they cross over to you, to indulge in a lovely dalliance with them and forget about your own morality. [Interjections.]

Mr K D S DURR: We never did any of those things.

The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Yes. Thank you.

Mr K D S DURR: You’re falsely accusing us. [Inaudible.] [Interjections.]

The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: You never said any of those things?

Mr K D S DURR: No.

The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Yes. [Interjections.]

Mr K D S DURR: [Inaudible.]

The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Yes. Right. [Interjections.]

The CHAIRPERSON OF COMMITTEES: Dialogue will not be allowed. [Interjections.]

Mr K D S DURR: [Inaudible.] … use the moral … [Inaudible.]

The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: So indeed, with regard to you, the moral argument does not arise. People are free to cross, so support the legislation.

Mr K D S DURR: [Inaudible.]

The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: There is a logic in what you are saying now. But, you see, the last bit must also be placed on record. In 1996, during the certification process - I don’t know where the hon member Mr Naicker was then - the IFP argued against the so-called antidefection clause. We had a wonderful argument presented by the lawyers who represented the IFP and were paid by the IFP to present that argument. Now, nowhere did they talk about the immorality of the antidefection clause. But they told the court that the antidefection clause prevented people from exercising the choices that a democracy must allow them to make.

Now, those of us who then indeed argued that maybe at that point it was not desirable for people to be allowed to cross were castigated in many forums for taking that stance - so much so that eventually we said, ``You know, maybe they are right.’’ Just at that point, when we began to embrace their position, they then swung around and said it was immoral. I can’t understand this inconsistency, really.

It is only tsotsis who say, ``Look, the principle is applicable right now, and when I change my mind it doesn’t apply.’’ It is only in that world that you are allowed to be inconsistent, the world of thugs. The world of people who want to be taken seriously as leaders should be intolerant of that kind of behaviour.

Lastly - very, very lastly - the hon Naicker quite correctly said that the ANC-IFP arrangement in KwaZulu-Natal in particular was put together for the correct purposes. We debated it at great length between our two parties as well as within the ANC. I do not know whether the IFP did that, but I am sure it did. I can imagine it did that. But some of the strangest things started happening, and they culminated in the unceremonious sacking of two MECs and their replacement with members of their new-found ally, the DA.

It’s a very interesting thing. Of course, because we believe that the relationship with the IFP is in the best interests of this country, we did not behave the way they did. We did not respond in kind at all. We have kept to that arrangement. At critical levels there are IFP members who are ambassadors representing the Republic of South Africa who would never have been appointed by the IFP because it is not the majority party in this country.

I am not going to say more, but I am just saying that we have at least been consistent. Honest people will say that even when we were going through a real political storm and MECs were sacked in KwaZulu-Natal, the ANC stood firm. Thank you. [Applause.]

Debate concluded.

Question put: That the Bill be agreed to.

The CHAIRPERSON OF COMMITTEES: As the decision is dealt with in terms of section 74(3) of the Constitution, I shall first ascertain whether all the delegation heads are present in the Chamber to cast their provinces’ votes. Are all the delegation heads present?

HON MEMBERS: Yes.

The CHAIRPERSON OF COMMITTEES: In accordance with Rule 71, I shall first allow provinces the opportunity to make their declarations of vote if they so wish.

We shall now proceed to voting on the question. I will do this in alphabetical order per province. Delegation heads must please indicate to the Chair whether they vote in favour or against or abstain from voting. Eastern Cape?

Nksz B N DLULANE: Siyaxhasa ngokupheleleyo. [We support fully.]

The CHAIRPERSON OF COMMITTEES: Free State?

Mr T S SETONA: We vote in favour.

The CHAIRPERSON OF COMMITTEES: Gauteng?

Ms J L KGOALI: Gauteng e theha molao oo ka botlalo. [Gauteng fully supports the Bill.]

The CHAIRPERSON OF COMMITTEES: KwaZulu-Natal?

Mrs J N VILAKAZI: IKwaZulu-Natali iyawuvuma noma zikhona izinto. [Ubuwele- wele.] [Ihlombe.] [KwaZulu-Natal supports, although there are some issues. [Interjections.] [Applause.]]

The CHAIRPERSON OF COMMITTEES: Mpumalanga?

Ms M P THEMBA: IMpumalanga iyawusekela. [Mpumalanga supports.]

The CHAIRPERSON OF COMMITTEES: Northern Cape?

Ms E N LUBIDLA: The Northern Cape supports.

The CHAIRPERSON OF COMMITTEES: Northern Province? Mr M I MAKOELA: Ha seketela. [We support.]

The CHAIRPERSON OF COMMITTEES: North West?

Mr L G LEVER: The North West supports the Bill.

The CHAIRPERSON OF COMMITTEES: I didn’t hear.

Mr L G LEVER: The North West supports the Bill, Madam Chair.

The CHAIRPERSON OF COMMITTEES: Western Cape?

Mr C ACKERMANN: We support.

The CHAIRPERSON OF COMMITTEES: Nine provinces have voted in favour. I therefore declare the Bill agreed to. [Applause.]

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

The Council adjourned at 17:38. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

                        FRIDAY, 14 MARCH 2003

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. Introduction of Bills:

 (1)    The Minister of Finance:


     (i)     Bophuthatswana National Provident Fund Act Repeal  Bill  [B
             13 - 2003] (National Assembly - sec  75)  [Bill  and  prior
             notice of its introduction published in Government  Gazette
             No 25032 of 11 March 2003.]


     (ii)    Sefalana Employee Benefits Organisation Act Repeal Bill  [B
             14 - 2003] (National Assembly - sec  75)  [Bill  and  prior
             notice of its introduction published in Government  Gazette
             No 25032 of 11 March 2003.]


     Introduction and referral to the Portfolio Committee on Finance  of
     the National Assembly, as well as referral  to  the  Joint  Tagging
     Mechanism (JTM) for classification in terms of Joint Rule  160,  on
     14 March 2003.


     In terms of Joint Rule 154 written views on the  classification  of
     the Bills may be submitted to the  Joint  Tagging  Mechanism  (JTM)
     within three parliamentary working days.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister for Agriculture and Land Affairs:

 Strategic Plan for the Department of Agriculture for 2003-2006.

National Council of Provinces:

1. The Chairperson:

 Correspondence from the  Office  of  the  MEC  for  Housing  and  Local
 Government, (Northern Cape)  in  terms  section  106(3)  of  the  Local
 Government: Municipal Systems Act, 2000 (Act No 32 of 2000).


 Referred  to   the   Select   Committee   on   Local   Government   and
 Administration.


 Copy of the letter available from office of Clerk of the Papers.

1. The Minister of Public Enterprises:

 Response by the Minister of Public Enterprises to a resolution  adopted
 by the House on 16 May 2002 concerning South African Express Airways:


 Please insert scanned pages here.

COMMITTEE REPORTS:

National Council of Provinces:

1. Report of the Select Committee on Local Government and Administration on the Local Government: Municipal Structures Second Amendment Bill [B 68B - 2002] (National Assembly - sec 75), dated 10 March 2003:

   The Select Committee on Local Government and Administration, having considered the subject of the Local Government: Municipal Structures Second Amendment Bill [B 68B - 2002] (National Assembly

   • sec 75), referred to it, reports that it has agreed to the Bill.

                  MONDAY, 17 MARCH 2003
     

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. Introduction of Bills:

 (1)    The Minister of Finance:


     (i)     Banks Amendment Bill [B 15 -  2003]  (National  Assembly  -
          sec 75) [Bill and prior notice of its  introduction  published
          in Government Gazette No 25020 of 7 March 2003.]


     Introduction and referral to the Portfolio Committee on Finance  of
     the National Assembly, as well as referral  to  the  Joint  Tagging
     Mechanism (JTM) for classification in terms of Joint Rule  160,  on
     18 March 2003.


     In terms of Joint Rule 154 written views on the  classification  of
     the Bill may be submitted to  the  Joint  Tagging  Mechanism  (JTM)
     within three parliamentary working days.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Social Development:

 Strategic Plan of the Department of Social  Development  for  2003-2006
 [RP 28-2003]. 2.    The Minister of Housing:


 Report and Financial Statements of  the  People's  Housing  Partnership
 Trust for 2000-2001.

1. The Minister of Water Affairs and Forestry:

 Government Notice No 193 published in Government Gazette No 24363 dated
 7 February 2003: Extension of time for general authorisation  in  terms
 of section 36 of the National Water Act, 1998 (Act No 36 of 1998).

COMMITTEE REPORTS:

1. Report of the Portfolio Committee on Finance on the Appropriation Bill [B 8 - 2003] (National Assembly - sec 77), dated 14 March 2003:

 The Portfolio Committee on Finance, having considered the Appropriation
 Bill [B 8 - 2003] (National Assembly - sec  77),  referred  to  it  and
 classified by the Joint Tagging Mechanism as a Money Bill,  reports  as
 follows:


 A.     INTRODUCTION
     The Portfolio Committee on Finance and the Joint  Budget  Committee
     together held hearings on the 2003/04 Budget  between  27  February
     2003  and  6  March  2003.  The   Committee   wishes   to   express
     appreciation to all participants for their  contributions.  Written
     presentations submitted form part of the records of  the  Committee
     Section. The Committee would also like to express its  appreciation
     to the Minister of Finance, the Deputy  Minister  of  Finance,  the
     Director-General of Finance, the Commissioner of the South  African
     Revenue Service,  the  Chairperson  of  the  Financial  and  Fiscal
     Commission and their staff for  their  presence  and  contributions
     during the hearings. A list containing the names of all  those  who
     made oral submissions is included in part D of this Report.


 B.     OVERVIEW OF THE BUDGET


     The 2003/04 Budget was presented in the context of  South  Africa's
     relative economic resilience and  growth  in  the  face  of  global
     slowdown and uncertainty. The  expansionary  fiscal  policy  stance
     began in 2001 is continued. In line with the  2002/03  Budget,  the
     2003/04 Budget offers considerable personal income  tax  relief  to
     lower  and  middle-income  groups,  and  shows  strong  growth   in
     expenditure which focuses on the themes set out in the Medium  Term
     Budget Policy Statement (MTBPS). Continuing  on  from  last  year's
     Budget, the focus areas of this Budget include  poverty  reduction,
     increased  infrastructure   investment,   broadening   the   social
     security net, strengthening access to health  and  education  while
     focusing on the quality of service delivery and  the  expansion  of
     municipal and provincial services.  Real  non-interest  expenditure
     growth of 4,5 per cent is expected over the MTEF.


     1. ECONOMIC POLICY AND OUTLOOK


          (a) International context and forecast


              Internationally,   global    economic    conditions    are
              unfavourable, with falling stock  markets,  weak  consumer
              and business confidence, and sluggish output and  activity
              indicators.


              Despite  this  global  slowdown,   and   hardship   within
              Southern Africa due to  drought,  shortfalls  in  regional
              grain production and rising food  prices,  South  Africa's
              economy is growing steadily.  Growth  and  development  is
              expected to gather momentum in  the  years  ahead  due  to
              initiatives to encourage investment, raise  skills  levels
              and reduce  constraints  on  business  formation.  Further
              gradual liberalisation of exchange control is proposed  to
              support the further integration of South Africa  with  the
              global economy.


          (b) GDP Growth


              South  Africa's   growth   proved   resilient   in   2002,
              increasing to 3 per cent. Projected  growth  for  2003  is
              3,3 per cent, rising to 4 per cent by 2005.  A  number  of
              factors  underpin  Treasury's  optimism:  strong  consumer
              demand and investment spending  (investment  grew  by  6,6
              per cent in 2002 and  is  expected  to  continue  to  grow
              around 6 per cent a year over the medium term);  declining
              household  debt;  formal  sector  employment  is   turning
              around;  the  current  account  balance  is  healthy;  and
              inflation is expected to decline in 2003 and 2004.


          (c) Interest rates


              Following the sharp depreciation of the  currency,  rising
              food prices and the increase in money demand in the  early
              part of 2002, the Reserve Bank  increased  interest  rates
              by 400 basis points in the first nine months of last  year
              in an effort to stem second round inflationary  pressures.
              This has assisted in moderating the inflation trend.


          (d) Inflation


              Inflation increased sharply in 2002, with  CPIX  inflation
              peaking at 12,7 per cent in November 2002,  with  headline
              CPI inflation rising to 14,5 per cent in the  same  month.
              Towards the end of 2001 the depreciation of the  Rand  put
              upward pressure on inflation. Consumer price inflation  as
              measured by CPIX averaged 10 per cent in 2002  and  peaked
              at 12,7 per cent for the year to  November.  Much  of  the
              increase was  due  to  rising  food  prices,  housing  and
              medical costs.


              Following the Rand's subsequent recovery,  CPIX  inflation
              started to decline, and is set to fall within  the  target
              range  in  2004.  The  Treasury   remains   committed   to
              inflation targeting and stated that the  inflation  target
              of 3 to 6 per cent will be retained for 2005.


          (e) Output and investment trends


              Investment growth was strong across the economy  in  2002,
              increasing by 6,3 per cent. Treasury believes  it  is  set
              to grow by around 6 per cent over the medium term,  buoyed
              by robust public infrastructure  spending,  several  major
              mining projects and diversified manufacturing growth.


              Net foreign direct investment  reached  R12,8  billion  in
              the first three quarters of 2002.  Gradual  liberalisation
              of  exchange  controls  continues  this  year,  supporting
              global expansion by South African companies and  unwinding
              of blocked assets.


          (f) The Balance of Payments and the Current Account


              The balance of payments remains healthy. A surplus on  the
              current account of the balance of  payments  was  recorded
              in  2002,  despite  sluggish  global  demand   for   South
              Africa's exports. Manufactured exports continued  to  grow
              strongly, tourism is  booming  and  trade  performance  is
              expected to benefit from the global recovery. With  strong
              investment growth  and  increased  import  demand,  it  is
              expected  that  the  current  account  will  move  into  a
              moderate deficit of 0,5 per cent of GDP in 2003.


              The latest data indicates net  capital  inflows  of  R21,4
              billion for the year to September.


          (g) The Net Open Forward Position


              Treasury has made significant  progress  in  reducing  the
              net open forward position (NOFP) from  US$4,8  billion  at
              the end of December 2001 to US$1,5 billion at the  end  of
              January 2003.
          (h) Employment and productivity


              Formal sector employment increased in 2002 for  the  first
              time since 1996,  and  labour  productivity  continues  to
              improve steadily, increasing the  competitiveness  of  the
              economy  and  helping  to   stabilise   prices.   Treasury
              announced  that  black  economic  empowerment  must   take
              priority  over  the  next   decade.   Alongside   sectoral
              initiatives to deepen participation in the  ownership  and
              management of South  African  companies,  government  will
              support  the  funding  of  new   ventures   and   business
              expansions that meet agreed empowerment criteria.


          (i) Accountability for service delivery


              Treasury   hopes   that   the   Estimates   of    National
              Expenditure, together with the  publication  of  the  2003
              Intergovernmental Fiscal Review  in  April,  will  provide
              all 10 legislatures with  comprehensive  and  quantifiable
              information to exercise their oversight responsibilities.


     2. FISCAL POLICY AND BUDGET FRAMEWORK


          (a) Fiscal policy trends and targets


              Beginning  with  the  2001  Budget,  a  more  expansionary
              stance   was   enabled   by   the   earlier   period    of
              consolidation.  Strong  real  spending   growth   is   now
              projected within  a  sustainable  fiscal  framework,  with
              social spending and infrastructure  investment  increasing
              strongly. At the same  time,  tax  relief  again  benefits
              lower   income   households   and   encourages    targeted
              industrial  investment.  Over  the  next  three  years,  a
              budget  deficit  of  between  2  and  2,5  per   cent   is
              accommodated  within  a  sustainable   framework   and   a
              declining debt-GDP ratio, after an estimated 1,4 per  cent
              in the current year.


              General government capital formation is targeted  to  grow
              by  at  least  5  per  cent  a  year,   while   government
              consumption expenditure will stabilise  at  about  19  per
              cent of GDP. General government tax  revenue  will  remain
              at between 27 and 28 per cent  of  GDP,  and  interest  on
              public debt is expected to decline from 4,9  per  cent  of
              GDP in 2002 to 4,2 per  cent  in  2005.  A  public  sector
              borrowing  requirement  of  2,6  per  cent   of   GDP   is
              projected.


          (b) Revised budget framework


              The main budget provides for expenditure of  R334  billion
              in 2003/04, rising to R395,6 billion in  2005/06.  Revenue
              increases from R304,5 billion to R361,2 billion  over  the
              same period. Higher GDP growth  and  inflation  contribute
              to substantial upward revisions in revenue  estimates  for
              2002/03  and  the  following  three  years.  Main   budget
              revenue is expected to be 26,6 per  cent  of  GDP  in  the
              budget year, and to remain at that  level  over  the  next
              three  years,  which  again  allows  for  substantial  tax
              relief in 2003/04.


              The budget deficit for 2002/03 is expected to be  1,4  per
              cent  of  GDP,  mainly  due  to  robust  revenue   growth.
              Expansion in spending planned for  the  MTEF  period  will
              however raise the deficit to a projected 2,4 per  cent  of
              GDP in 2003/04.


              Debt service costs, however, are  expected  to  fall  from
              4,2 per cent  of  GDP  in  2002/03  to  3,8  per  cent  by
              2005/06.  National  government  debt  will  decline  to  a
              projected 36,8 per cent by the end of the MTEF period,  in
              contrast to its level of 48,1 per cent of GDP at  the  end
              of 1997/98.


          (c) Fiscal policy as tool for growth and development


              This budget framework reinforces  growth  and  development
              partly through strong expenditure growth and  tax  relief,
              but also through the emphasis on investment and  transfers
              to households.


              The Minister emphasised that growth in spending has to  be
              accompanied by improved management  and  service  delivery
              at  all  levels,  with  measurable   objectives   in   the
              Estimates  of  National  Expenditure  aimed  at  improving
              accountability  and  oversight.   Additional   allocations
              signal a marked shift in favour  of  provinces  and  local
              government, whose role in driving  successful  development
              is recognised.


     3. REVENUE


          Revenue   collections   remain   buoyant,   reflecting    both
          improvements in administration and longer term benefits of tax
          policy reforms. This provides scope for  further  tax  relief,
          increased incentives for domestic investment and savings,  and
          tax  reforms  designed  to  stimulate  business   growth   and
          development. All  of  these  trends  are  in  line  with  this
          budget's expansionary stance concentrating on  employment  and
          enhanced economic development.


          (a) 2003/04 tax relief proposals


              (i)  Direct tax measures affecting individuals


                   *     The tax threshold is raised by 11,1 per cent to
                       R30 000, so those earning less than  this  amount
                       will not  pay  personal  income  tax  next  year.
                       Income tax brackets  have  been  adjusted  across
                       the income spectrum to  provide  relief  for  all
                       income earners  and  to  compensate  for  bracket
                       creep.


                   *     Interest income exemption is raised from R6 000
                       to R10 000 for individuals below  65  years,  and
                       from R10 000 to 15 000 for individuals  65  years
                       and older.
                   *     The transfer duty threshold is  increased  from
                       R100 000  to  R140  000,  reducing  the  cost  of
                       buying property at the lower end of the market.


                   *     The tax on retirement funds is reduced from  25
                       per cent to 18 per cent once again. However,  tax
                       treatment  of  retirement   vehicles   is   under
                       comprehensive review,  with  legislative  changes
                       expected in 2004.


              (ii) Business tax stimulus measures


                   *      Accelerated  depreciation  for  investment  in
                       designated urban areas.


                   *      Conversion  of  the  accelerated  depreciation
                       window period for  manufacturing  assets  into  a
                       permanent feature.
                   *      Comprehensive  business   asset   reinvestment
                       relief.


                   *     Losses on sale of depreciable business assets.


                   *      Accelerated  depreciation  for  research   and
                       development.


                   *     Accelerated depreciation  for  biodiesel  plant
                       and machinery.
                       Small  businesses  are  given  tax   relief   and
                       incentives in the form of  lower  tax  rates,  an
                       increased turnover limit and extra deductions  on
                       start-up expenses. Tax rules  will  be  clarified
                       in the case of start-up expenses.


                       The tax on foreign dividends is removed  where  a
                       South African taxpayer has a meaningful  interest
                       in the foreign subsidiary paying the dividend.  A
                       number of collateral changes accompany this.


                       The  list   of   public   benefit   organisations
                       eligible   for   tax-deductible   donations    is
                       expanded,  and  government  grants  are  exempted
                       from income tax.


          (b) Indirect taxes


              Excise duties  on  alcohol  and  tobacco  products  see  a
              general increase on all alcoholic beverages of between  10
              and 11 per cent. Sorghum beer and sorghum  flour  are  the
              only exceptions; these products  will  see  no  change  in
              excise duty. Taxes on  tobacco  products  will  also  rise
              from 11 per cent (cigarettes and pipe tobacco) to  39  per
              cent (cigars).


              The fuel levy increases an average of  some  4  cents  per
              litre.


              Other excises and  charges:  Ad  valorem  excise  duty  on
              computers is abolished, and duties  on  lower  cost  motor
              vehicles are adjusted for inflation.  A  levy  on  plastic
              bags  will  be  introduced  and  some  of   the   revenues
              collected will be earmarked for the recycling  of  plastic
              bags. Air passenger departure tax will be adjusted  by  10
              per cent.


          (c) Foreign exchange amnesty
              Government has  moved  to  introduce  a  tax  and  foreign
              exchange amnesty in order to  facilitate  repatriation  of
              assets illegally  moved  offshore.  Government's  view  is
              that  individuals  with  illegally  held  offshore  assets
              increasingly  want  to  repatriate  these   assets,   both
              because domestic and international  enforcement  targeting
              illicit funds has increased, and because of  disappointing
              yields of foreign markets.


              The amnesty  will  run  for  six  months.  A  5  per  cent
              Exchange Control one-time levy will be  enforced  for  the
              repatriation of any foreign assets,  and  a  10  per  cent
              Exchange Control one-time levy will  be  enforced  to  the
              extent  that  any  foreign  assets  remain  offshore.  All
              individuals filing for amnesty relief  are  released  from
              all  civil  penalties  and  criminal  liabilities,  except
              those currently under investigation, who may not file.


          (d) Measures to enhance tax administration
              Tax  administration  is  being   enhanced   by   reforming
              collection mechanisms, increasing the penalties  for  non-
              compliance and introducing  an  advance  rulings  process.
              Reforming  collection   mechanisms   include   outsourcing
              undisputed tax debts to private  collection  agencies  and
              making  those  responsible  for  collecting  VAT  directly
              liable for failure to pay.


     4. ASSET AND LIABILITY MANAGEMENT


          (a) Debt management strategy


              Since 1999, debt management's  primary  aim  has  been  to
              reduce  debt  costs   within   risk   limits.   The   debt
              consolidation  programme  is  now  complete,   and   total
              nominal value of outstanding illiquid government bonds  is
              now some R2 billion, down from  R50  billion  three  years
              ago.


              Government has steadily increased  the  share  of  foreign
              debt in the overall debt portfolio. The proceeds of  these
              issues have contributed to reducing the net  open  forward
              position (NOFP) held by  the  Reserve  Bank  from  US$23,3
              billion in 1998 to US$1,5 billion at the  end  of  January
              2003.


              South African debt has  performed  well  on  international
              and local markets.


          (b) Borrowing requirements, debt costs and total debt trends


              In addition to financing the budget  deficit,  the  budget
              provides  for  extraordinary  payments  of   R28   billion
              between 2002/03 and  2005/06  to  compensate  for  forward
              cover losses.


              R10,2 billion is expected to be paid into  the  fiscus  in
              2003/04 from Transnet's disposal of its  M-Cell  interest,
              sale of Telkom shares, and  restructuring  dividends  from
              the Central Energy Fund.


          (c) Contingent liability


              Contingent  liability  is  provided  for,  to  deal   with
              unexpected  eventualities  such  as  natural   and   human
              disasters, and  to  provide  stability  to  the  financial
              sector.


              In 2002/03 a total of R10,5  billion  in  guarantees  were
              provided. The Saambou liquidation includes an  outstanding
              claim against the State for R4 billion.


          (d) Public enterprise restructuring and corporate governance


              The Telkom listing in March 2003 is viewed  as  broadening
              equity participation in the SA economy,  while  a  20  per
              cent stake in M-Cell has been  bought  by  its  management
              and staff.


              Forthcoming projects include concessioning of  the  Durban
              port container terminal; sale of 30 per cent of  Denel  to
              British  Aerospace;  sale  of  30  per  cent  of   Eskom's
              generation   business;   transformation   of   electricity
              distribution   under   management   of   an    Electricity
              Distribution Holding Company; sale of 51% of Western  Cape
              Safcol  forests;  and  completion  of  sale  of   Aventura
              resorts.


              Cabinet has  approved  a  revised  Protocol  on  Corporate
              Governance for public entities.


     5. MEDIUM-TERM EXPENDITURE ESTIMATES


          (a) Policy priorities and the MTEF


              Priorities include  deepening  infrastructure  expenditure
              by all levels of government; with  increased  emphasis  on
              investing   in   skills;   public-private    partnerships;
              targeting poverty  through  extending  the  child  support
              grant, skills investment, access to education and  health,
              land  redistribution  and  small   business   development.
              Provision  for   increased   local   government   funding,
              utilities user support and capacity  building  initiatives
              stress  local  upliftment,  while  strengthening  of   the
              social protection services (police, justice and  prisons),
              increased    foreign     representation,     peace-keeping
              activities and support for NEPAD are envisaged.


              Additions to the MTEF spending plans include:


              *     R11,0  billion  more  for  extension  of  the  child
                   support grant to children up to 14  by  2005/06,  and
                   primary school nutrition.


              *    R38 billion more for hospital and  road  improvement,
                   medicines and school books, as well as increased  pay
                   for health care and welfare workers.


              *    R6,5 billion more  to  extend  free  basic  services,
                   municipal infrastructure and community services.
              *    Significant additions for courts and  police,  higher
                   education and further skills  development,  and  land
                   restitution and land reform.


              *    Increased support for  services  to  citizens,  SARS,
                   research and technology development.


              *    More for a growing international role,  peace-keeping
                   and NEPAD.


          (b) Consolidated expenditure by function


              Social services account for 58,3  per  cent  of  spending,
              and will grow rapidly in the years ahead,  mainly  because
              of the extension of child support. Growth in the  criminal
              justice sector is mainly service-orientated.


     6. PROVINCIAL AND LOCAL GOVERNMENT FINANCE


          (a) Provincial grants and spending trends


              The division of revenue in the 2003  Budget  shows  strong
              increases at provincial and local level, reflecting  their
              responsibilities for delivery.
              The provincial  share  of  nationally  raised  revenue  is
              projected to rise from 56 per cent in 2002/03 to 57,6  per
              cent  in  2005/6.  The  provincial  equitable   share   is
              increased to improve education  and  health  materials  as
              well as personnel  pay,  social  assistance  grants,  road
              construction  and  maintenance  and  economic  development
              services.


          (b) Local government


              The financing framework  for  local  government  is  under
              review,  with  both  revenue  and  spending  issues  under
              scrutiny. A new division of powers and  functions  between
              local and  district  municipalities  will  be  part  of  a
              transformation of municipal finances this year.


              National budget transfers to municipalities will  increase
              by  18,4  per  cent  over  the  MTEF  period.  Free  basic
              electricity,  water  and  sanitation  services  for   poor
              households   are   an   important    factor    in    this.
              Infrastructure  grants  to  municipalities  and   district
              management areas are a key  instrument  in  urban  renewal
              and  rural  development,  and  their  rationalisation   is
              proposed.


     7. ISSUES RAISED BY THE COMMITTEE


          Poverty alleviation: The Committee approved  of  the  measures
          taken in the Budget to alleviate poverty, as  they  felt  that
          this would support economic stability and raise  standards  of
          living. The question of how  to  ensure  that  the  vision  of
          policy makers is shared by policy implementers was posed.  The
          Minister replied that standards of delivery would be  improved
          by holding management accountable, and emphasised that  local-
          level accountability was important.  National  office  bearers
          should not be involved  in  implementing  policy  on  a  local
          level.


          Privatisation: In reply to a committee enquiry about the  drop
          in projected returns from privatisation, the Minister  pointed
          out that the current situation was quite  different  from  the
          heady dot.com period when privatisation was first mooted. This
          is not a uniquely  South  African  problem:  there  have  been
          worldwide  shifts  in  both  market  sentiment  and   business
          thinking,  which  are  reflected  in  the  modest  anticipated
          proceeds.   Further,   headlong   privatisation   can   create
          additional  problems,  as  this  is  not  an  easy  time   for
          privatising large industries.


          Growth and skills: Asked about the limits placed  on  tertiary
          sector growth by skills shortages, the Minister said that  the
          tertiary sector is indeed the  main  growth  sector  and  will
          remain so. It will run into absorption ceilings because of the
          skills  supply  constraint.  In  this   budget,   the   skills
          development fund is up to R3,5 billion from R3,3 billion,  but
          there is little suggesting that SETAS focus  on  output.  They
          have few measurable objectives for training, and it  is  wrong
          that SETAS' required outputs are as vague as at present.
          Consumer activism: In relation to the  food  price  monitoring
          programme, the Minister raised the issue of consumer activism,
          which is still weak in SA. Media  comparisons  of  prices  are
          useful. Government is not looking at price controls, but  will
          closely scrutinise retailers' behaviour.


          TRC Reparations: Asked why there  was  no  provision  for  TRC
          reparations in this budget, the Minister pointed out  that  in
          the  2001/02  Budget,  R800  million  was  allocated  to   the
          Department of Justice for reparations. Now that the litigation
          threat  has  passed,  discussion  can  go  forward  with   the
          Department  of  Justice,  since  the  R800  million  is  still
          available, plus interest.


          Black Economic Empowerment: Asked how BEE would be  delivered,
          the Minister responded that BEE was not a budgetary issue, but
          part of the economic plan. The details are  being  worked  on,
          and within three weeks the  DTI  should  announce  these.  The
          Minister said that  the  National  Empowerment  Fund  must  be
          revamped with substantially amended legislation  and  Treasury
          representatives on the board, to be used as a vehicle for BEE,
          quite different than hitherto.


          He added that he was not saying that the R10 billion allocated
          for BEE would be financed via the  foreign  exchange  amnesty,
          but that it would  be  good  if  the  levy  from  the  amnesty
          facilitates expansion of the economy. It cannot  be  the  only
          source, as the amnesty lasts six months, and  BEE  is  planned
          for at least the next five years.


          Management and delivery: The Committee was concerned that  the
          value-for-money and  performance  measures  mentioned  in  the
          Budget would not be realised. When questioned as to  how  this
          would be done, the Minister said that greater  emphasis  would
          be placed on management training, specifically  management  in
          the accounting for and planning of expenditures. If management
          were trained  and  skilled,  they  would  be  better  able  to
          implement public programmes.
 C.     RESPONSES TO THE BUDGET


     1. MACROECONOMIC PERSPECTIVES ON THE BUDGET


          Three economists made submissions to the  Committee,  focusing
          on the macroeconomic implications of the Budget. All  strongly
          endorsed the Budget and the expansionary policies it embodied,
          and stressed that there was higher private  sector  confidence
          in government's will to deliver on policy than ever before.


          (a) Sandra Gordon: Independent economist


              Ms Gordon  noted  that  this  is  the  boldest  pro-growth
              Budget to date, and  called  for  still  more  stimulatory
              measures aimed  at  domestic  demand,  as  the  export-led
              growth  strategy  comes  under  pressure  in  the  present
              global context. She sees an increased role for the State.


              Local growth is set to slow in 2003, due  to  the  effects
              of high inflation and high interest  rates,  and  domestic
              demand has declined. Although the tax cuts tabled  in  the
              2003 Budget have addressed this to  some  extent,  further
              oil price  increases  are  likely  to  act  as  a  tax  on
              consumers and negate some of the benefits of tax relief.


              Additional factors slowing growth in 2003:


              *    Export-led growth,  so  successful  during  2002,  is
                   beginning to falter, due  in  part  to  the  stronger
                   Rand.


              *    The global economic slowdown  is  also  cutting  into
                   export performance, with war fears  and  uncertainty,
                   and consequent higher fuel prices exacerbating this.


              *    In the medium term, US economic recovery will  see  a
                   lower growth norm of around 2 to  2,5  per  cent;  it
                   will cease to be the global growth engine.


              *    Positive pro-growth government policies include:


                   -      Inflation  targeting,  if   wage   and   price
                       increases can be kept within target levels.


                   -     Tax relief, which  reinforces  stability,  with
                       consumer spending less  volatile,  and  household
                       debt dropping to its lowest since 1991.


              She noted that  there  is  a  tendency  by  government  to
              underestimate   revenue,   which   affects   GDP   deficit
              projections and results ultimately in a  less  stimulatory
              Budget. Government should develop  additional  methods  to
              manage  inflation,  supplementing   the   Reserve   Bank's
              interest rate interventions.


              During the period of jobless growth in  the  1990s,  South
              Africa experienced a steady shedding of employment.  There
              needed to be a strong focus on the capacity to deliver  on
              expenditure.


              Economic reforms in the 1990s have  created  a  much  more
              resilient economy.  However,  they  also  saw  the  steady
              shedding of employment. She acknowledged  the  success  of
              policies in generating growth, and setting the  stage  for
              further growth,  but  stressed  global  trends  suggest  a
              shift of focus to  fostering  domestic  demand.  There  is
              scope  for  an  increased   role   for   government.   New
              stimulatory measures, notably capital expenditure,  should
              be accelerated as capacity for delivery improves.


          (b) Prof Charles C  Okeahalam,  Chair  of  Minerva  Group  and
              Professor at WITS


              Prof Okeahalam's view was that the  crux  of  this  Budget
              was the decline in sovereign debt and debt service  costs,
              which have brought down the overall cost of capital.


              In general he reviewed the Budget  positively,  areas  for
              concern to be:


              *    The household savings structure.


              *    Uncertainty about the long-term effects of HIV/AIDS.


              *    The ability of the supply-side to deliver.


              The last was his major concern: he felt that  policies  to
              stimulate the private  sector  must  not  be  expected  to
              solve the problems of unemployment and  poverty.  However,
              he  noted  increased  spending  on  infrastructure,   with
              government capital expenditure projected  to  increase  to
              23,3 per cent over the 2003/04 period, and  the  increased
              focus on service delivery. However,  he  felt  that  there
              had  been   insufficient   attention   to   HIV/AIDS   and
              competition issues.


          (c) Dr Iraj Abedian, Director and  Group  Economist,  Standard
              Bank


              Dr Abedian's overview was strongly positive,  seeing  this
              Budget as a  leap  forward  in  normalising  macroeconomic
              conditions. He pointed to three major developments:


              *     The  rising  level   of   general   confidence,   in
                   particular of the business sector in government.


              *    The nature of the global economy in which the  Budget
                   is presented. For the  first  time  in  four  decades
                   South Africa's growth rate of 3 per cent is above the
                   global average of 2,5 per cent.


              *     Budget  2003  is  a  leap  forward  in   normalising
                   macroeconomic conditions. He pointed to the fact that
                   disposable incomes have been rising since 1994.


              The  increasing  resilience  of  South  Africa's   economy
              stands on four pillars:


              *    Reinforced  by  structural  changes,  South  Africa's
                   economic efficiency is rising. South Africa's economy
                   is no longer dominated  by  the  primary  sector.  In
                   combination,  the  secondary  and  tertiary  sectors'
                   share of GDP is  close  to  90  per  cent,  with  the
                   tertiary sector dominant at 66 per cent of GDP. These
                   structural changes have transformed the economy.


              *    South Africa's export diversification is paying  off.
                   In  the  World   Economic   Forum's   competitiveness
                   rankings, South Africa is  in  now  32nd  out  of  84
                   industrial and emerging economies.
              *    Macroeconomic stability and solid  fiscal  conditions
                   afford  predictability,  with  steady  real  GDP  and
                   rising  fixed  investment,   and   inflation   trends
                   declining.


              *     Deepening  democracy  and  social   stability   also
                   strengthen confidence.


              Dr Abedian stressed that  in  the  now  dominant  tertiary
              sector, confidence was far more important  than  in  other
              sectors. Availability of skills is  also  a  key  limiting
              factor. He was also critical  of  SETAs  as  being  poorly
              designed  and  failing  to  deliver.  Although   continued
              privatisation  was   important   to   maintain   political
              credibility, he  said,  the  government  should  pay  more
              attention to ensuring that better competition  policy  and
              regulations were in place in all sectors.


          (d) Major issues raised by the Committee


              (i)  Concrete measures to improve demand


                   Ms Gordon responded that demand  within  the  economy
                   could  be  increased  through  land   redistribution,
                   public  works  programmes  -  though  these   are   a
                   temporary measure - and supporting  establishment  of
                   more   SMMEs   by   simplifying   their    regulatory
                   environment. Creating an entrepreneurial  spirit  and
                   effective learnerships in  the  workplace  were  also
                   important.


                   She stressed that she advocated broadening the growth
                   policy focus to  include  domestic  demand,  but  not
                   abandoning  export  led  growth.   Some   supply-side
                   measures   are   needed   in   the   present   global
                   uncertainties.  To  supplement  these  with  domestic
                   demand stimulus, one should look towards the  primary
                   and secondary sectors, which have greater capacity to
                   absorb less  skilled  labour.  Dr  Abedian,  however,
                   noted  that  activity  in  the  secondary  sector  is
                   different from 10 years ago, with greatly  diminished
                   labour intensity.


                   Ms Gordon added that the  business  sector  would  be
                   happy with smaller tax cuts  if  government  had  the
                   capacity  to  spend  more  to  alleviate  poverty  or
                   strengthen  SA's   growth   rate   -   stability   is
                   increasingly seen as a priority.


             (ii)  Inflation


                   The Committee questioned whether there was a conflict
                   between  trying  to  increase  domestic  demand   and
                   containing inflation. Ms Gordon's  opinion  was  that
                   there was no conflict at present.  The  Reserve  Bank
                   should cut interest rates as soon  as  possible.  She
                   noted that the  position  of  the  Reserve  Bank  was
                   severely complicated by the present value of the Rand
                   and the threat of war, with the  possibility  of  oil
                   prices spiking at $40 per bbl.


                   Asked  how  inflation   policy   could   be   managed
                   differently, her view was  that  inflation  targeting
                   should have  been  on  hold  until  pre-privatisation
                   price increases  introduced  by  rationalisations  by
                   parastatals had been absorbed.


                   Asked  about  the  effects  of  privatisation,   Prof
                   Okeahalam replied that privatisation has value as  an
                   effective efficiency policy, but called for a  robust
                   regulatory framework.


                   Dr Abedian's view was that the main focus should  not
                   be  privatisation  per  se,  but  with  promotion  of
                   competition and an appropriate regulatory frameworks.
                   He stressed that government should not simply replace
                   a public monopoly  with  a  private  monopoly,  which
                   improves neither pricing nor delivery.


           (iii)   Cash surpluses


                   The Committee enquired about cash  surpluses  in  the
                   corporate sector due to a lack of domestic investment
                   opportunities. Ms Gordon agreed  that  they  existed,
                   but stated  that  this  was  because  of  a  lack  of
                   investment opportunities internationally as  well  as
                   in SA. Such money used  to  be  taken  offshore,  but
                   perception  of  the  international  environment   has
                   changed.


                   Ms Gordon felt that if government took the initiative
                   in  investing  in  capital  expenditure   and   these
                   projects were perceived as raising SA's growth,  then
                   the corporate sector was likely to become involved in
                   the form of public-private partnerships.


             (iv)  Growth and the need for skills


                   The Committee raised  the  issue  of  how  government
                   could continue to  drive  tertiary  sector  expansion
                   since it is our main growth area, while at  the  same
                   time stimulating the  primary  and  secondary  sector
                   because   those   impact   more   strongly   on   the
                   unemployment problem. Dr Abedian commented that there
                   are no shortcuts in this regard. The national  skills
                   shortfall is an intergenerational problem,  requiring
                   retraining and commitment to growing existing  skills
                   as much as possible, while taking care of  those  who
                   will never gain the skills.


                   There  is  a  real  challenge  for  SETAs  to  become
                   industry-led, providing usable skills,  the  kind  of
                   training that is genuinely  demanded.  They  must  be
                   held accountable for delivery.


                   He criticised  the  new  immigration  legislation  as
                   inappropriate for  an  economy  with  a  shortage  of
                   expertise, especially since much growth  was  in  the
                   tertiary sector, which needs  skilled  professionals.
                   Saying xenophobia is costly, he estimated  that  each
                   skilled immigrant could generate four to eight jobs.


              (v)  Black Economic Empowerment


                   Asked for views on the Budget's  BEE  measures,  Prof
                   Okeahalam responded that a number of countries have a
                   history of adopting such policies. A  common  problem
                   is that only a small number of  elites  benefit  from
                   BEE, with intended beneficiaries often not reached.


                   Dr  Abedian's  view  is  that  BEE  is  part  of  the
                   normalisation of South Africa,  and  will  take  some
                   time. The present risk is one of  maldistribution  of
                   wealth and income, making BEE  a  dangerous,  double-
                   edged sword. In general, where the tertiary sector is
                   dominant,  the  economy  is  increasingly  knowledge-
                   based, with knowledge as the major wealth creator. In
                   efforts to broaden BEE,  the  focus  must  remain  on
                   effectively increasing and dispersing  knowledge  and
                   thus wealth.


     2. BUDGET 2003/04: PERSPECTIVES ON TAX POLICY


          Representatives of the National Treasury  and  SARS  presented
          the tax proposals set  out  in  the  Budget,  outlining  their
          projected impact and setting the strategic context of  medium-
          term  tax  policy.   SARS'   compliance   strategy,   use   of
          depreciation as incentive, exchange control amnesty and  their
          effect on  taxpayers  were  discussed  at  some  length.  Prof
          Matthew Lester and Prof Pieter le Roux gave  their  respective
          views on the effectiveness  of  tax  policy  to  date  and  of
          potential policy developments.


          (a) National Treasury


              A representative of Treasury outlined  the  background  to
              the  present  tax  proposals,  setting  out  their  global
              context and objectives. He noted that personal income  tax
              (PIT) relief has been a feature  of  Budget  policy  since
              1995, with R49 billion  given  in  relief  over  the  past
              eight years, and  corporate  tax  having  dropped  10  per
              cent, to 30 per cent,  since  1994.  These  rates  compare
              favourably to the rest of the world, notably  the  EU  and
              OECD economies.


              He outlined the 2003/04 tax  relief  proposals  and  their
              objectives (See Section B3 above). Direct tax  provisions,
              general business tax stimulus measures  and  indirect  tax
              provisions were presented and motivated. Notable  elements
              were exemption of foreign dividends from  taxation  and  a
              six-month amnesty period  for  repatriating  or  declaring
              illegally exported assets.


          (b) The South African Revenue Service


              The SARS presentation outlined  the  revenue  position  to
              date, and the target for 2003/04:


              *    The revised  estimate  is  R11,6  billion  above  the
                   Budget estimate - R280,1 billion compared  to  R268,5
                   billion.


              *    For the past  six  years  SARS  has  had  collections
                   above its targets, with total additional  collections
                   at R46,8 billion.


              *    Additional collections have assisted  in  the  reform
                   of tax rates and increased expenditure programmes.


              *    The revenue target for 2003/04 is R310 billion.


              SARS  unveiled  its  Compliance  Strategy,  as  based   on
              education to create a culture of  compliance;  enforcement
              through high visibility  and  targeted  campaigns;  and  a
              service    culture,    focusing    on    efficiency    and
              communication.


              The foreign exchange amnesty was motivated as  having  low
              penalties relative to international  standards,  and  easy
              accessibility.


          (c) Prof Matthew Lester


              Professor Matthew Lester of Rhodes University presented  a
              review of the period between the 2000/01 and  the  2003/04
              Budgets.  He  argued  that  last  year  was  a   year   of
              consolidation, while the  coming  year  is  one  in  which
              major legislation comes into force.


              He reviewed in detail the following changes:


              *    Individuals' tax position,  showing  that  payers  of
                   PIT are clear gainers over five  years,  despite  the
                   fact that a number of loopholes have been closed over
                   the period.


              *    Elderly and retired taxpayers  he  calculates  to  be
                   entitled to R62 222 free of tax, and obliged  to  pay
                   only 14,9 per cent on  R155  000  under  the  current
                   proposals.


              *    Corporate tax  collections  have  increased  in  real
                   terms by more than a third since 2000. Major  factors
                   are the introduction of capital gains tax (CGT),  the
                   residence-based tax system (RBT), and the disallowing
                   of  personal  service  companies,  as  well  as   the
                   increase in SARS' efficiency.


              *    The change in residential property rules  means  that
                   individual ownership, as opposed to trust or  company
                   membership, will from this year pay far less  in  tax
                   and duties when selling property.


          (d) Prof Pieter le Roux


              Prof Pieter le  Roux  of  UWC  presented  an  argument  in
              favour of increasing VAT  to  21  per  cent  in  order  to
              finance a basic income grant of R100 per person.


              He argued that the VAT increase would bite hardest on  the
              richest five per cent of  the  population,  despite  their
              also receiving the BIG, allowing  a  net  benefit  to  the
              poorest 80 per cent of the populace. He  felt  this  would
              be  an  effective  measure  to  alleviate  poverty,  while
              acknowledging the practical problems in implementing it.


          (e) Issues interrogated by the Committee


              (i)  Impact of tax cuts


                   The  Committee  enquired  whether  the  Treasury   is
                   realising the desired benefits of the tax cuts  given
                   so far to taxpayers, for example  in  higher  private
                   savings or increased consumption.


                   Individual savings behaviour over the last five years
                   has  shown  improvement,  officials  indicated,   and
                   Treasury is working on a modelling exercise that  may
                   provide hard data. Meanwhile, it is difficult  to  be
                   exact as to how many changes in economic activity are
                   direct effects of tax cuts.


                   However,  over   the   past   two   years   household
                   consumption expenditure  in  South  Africa  has  been
                   robust, growing in excess of 3 per  cent  per  annum.
                   Treasury believes that the tax cuts did underpin  the
                   growth in household consumption expenditure,  because
                   the household sector has not yet been saving.


              (ii) Value-Added Tax (VAT)


                   The Committee expressed relief that VAT had not  been
                   increased, and wanted to know if this was premised on
                   the assumption that no VAT increase  compensated  for
                   inflationary increases.


                   Treasury noted that it was loathe to tamper with VAT,
                   as this would open up a debate  which  might  not  be
                   productive. South Africa's VAT  model  is  very  much
                   designed to support the enforcement capacity of SARS.
                   Currently it  contributes  some  24-25  per  cent  to
                   overall revenue, which is the  world  average.  South
                   Africa's relatively low VAT rate of 14 per cent still
                   contributes 6,5 per cent of GDP.


              (iii)      The foreign exchange amnesty
                   Prof Lester sparked  some  discussion  by  suggesting
                   that the amnesty might not succeed if perceived as  a
                   witch hunt. The Committee noted that all applications
                   for  amnesty  would  be  dealt  with  confidentially,
                   because this is how SARS is obliged to operate.


                   The Commissioner responded that the amnesty move  was
                   about cleaning up SARS'  history  and  its  act,  and
                   making sure that it broadens the tax  base.  It  also
                   serves to create a new kind of compliance culture  in
                   South Africa and to  ensure  that,  as  of  the  2003
                   return, SARS gets a different  set  of  figures  that
                   appear on its books, which it can then  take  forward
                   from that point.


              (iv) Viability of BIG


                   The Committee asked whether any serious work had been
                   done on the macro-economic impact of a social  income
                   grant versus tax relief, because this seems to be  at
                   the heart of the current debate in South Africa.


                   This work, which is ongoing within Treasury, is  more
                   comprehensive  than  the  BIG  concept   because   it
                   considers the entirety of social  security  provision
                   in South Africa. However, Treasury is also guided  by
                   the need to  give  as  many  people  as  possible  an
                   opportunity to participate meaningfully  in  economic
                   activity,  guiding  them  away  from  dependence   on
                   welfare.


                   Prof le Roux argued for raising a BIG  by  increasing
                   indirect taxes, notably VAT. There  was  some  debate
                   about whether this would be harshly punitive  to  the
                   poor, a larger proportion of whose spending would  be
                   in  respect  of   VAT,   even   without   calculating
                   distribution costs, before BIG benefits reached them.
              (v)  Urban Development Zones


                   The Committee asked whether Treasury has  focused  on
                   depreciation because it is  believed  to  be  a  more
                   effective stimulator  than  income  tax  adjustments.
                   With the urban zone depreciation provisions, Treasury
                   incentivises a specific behaviour, with  the  aim  of
                   channelling  investment   towards   declining   urban
                   centres. It is a highly targeted  approach.  Treasury
                   has clearly limited it to some 13 areas major  areas,
                   where the biggest impact can be made.


                   Prof Lester, however, noted that numerous examples of
                   targeted incentives have had unintended consequences,
                   been ineffective or even corrupting.


              (vi) The fuel levy


                   The Committee posed questions about the impact of  an
                   increased fuel levy. Public sector transport would be
                   severely affected, and the Committee asked about  the
                   impact on long-distance commuters.


                   The Treasury replied:


                   *     The taxi  industry  has  the  oldest  stock  of
                       vehicles, mainly using  leaded  fuel,  and  these
                       would need to be upgraded. There may  be  a  time
                       lag, but taxi recapitalisation will  happen  this
                       year.


                   *     The contingency reserve of R8 billion over  the
                       next three  MTEF  years  is  available  for  taxi
                       recapitalisation, after which  taxis  would  most
                       probably be utilising diesel-powered engines.


                   *     Tax policy has taken into account incentives to
                       use  larger   vehicles   using   more   efficient
                       (diesel) fuel.


              (vii)      Corporate tax rate


                   The Committee raised the issue of whether a reduction
                   in the corporate tax  rate  was  desirable.  Treasury
                   responded that numerous international instances  show
                   a convergence of corporate tax  rates  at  30-32  per
                   cent.


                   Treasury is unconvinced by the argument that the rate
                   should be reduced:


                   *     Instead it favours creating a stable investment
                       environment    with    attractive     accelerated
                       depreciation  allowances.   With   the   proposed
                       increased  depreciation  regime,  effective   tax
                       rates faced by companies in the first year  could
                       effectively be zero, with  subsequent  tax  rates
                       for South Africa companies being as low  as  5-15
                       per cent.


                   *     Investors, whether domestic  or  international,
                       prefer  predictability.  Where   some   countries
                       dropped  company  tax  to  unsustainable  levels,
                       only to increase it again, investors  recoiled  -
                       consistency is investor-friendly.


                   *     There is a also a premium  willingly  paid  for
                       the business environment:  South  Africa  has  an
                       excellent  banking  regulatory  environment   and
                       profit opportunities relative to  the  developing
                       world.


                   Prof Lester also took the view that lower company tax
                   was not the biggest drawcard for investment. He  felt
                   that investors are not scared away by taxes  as  much
                   as by the economic climate of a country.


              (viii)     Revenue estimates and increased collections


                   The  Committee  enquired  whether  South  Africa  has
                   reached a plateau in the rising trend of its  revenue
                   collections. SARS believes not, noting that  some  48
                   hours after  the  amnesty  provision  was  announced,
                   almost  R3  billion  was  already   on   the   table,
                   indicating a significant amount of  unreported  money
                   still extant.


                   The Tax Gap Project has  given  SARS  a  much  better
                   understanding  of  where  the  revenue   leaks   are,
                   enabling a more  targeted  approach  this  year.  The
                   Commissioner responded that SARS does hold a view  on
                   the actual quantum of the tax gap, loosely estimating
                   it at R30 billion.
                   The Committee asked why  SARS  continued  to  have  a
                   problem with overruns on its revenue  estimates.  The
                   Commissioner  replied  that  it  was   due   to   the
                   unpredictability of economic  endeavour,  citing  the
                   effects of unexpected inflation, fuel, the  resources
                   sector and war on 2002's estimates.


                   While forecasting of corporate tax is most  difficult
                   because of all the external factors impacting on  it,
                   Treasury believes that South Africa has a good record
                   when it comes to indirect taxes, and  in  many  cases
                   South Africa is out R30 million on a tax base of  R16
                   billion.


              (ix) Ringfencing of secondary trade losses


                   The Committee raised a number of points and  concerns
                   about the ringfencing of secondary trade losses,  and
                   asked if this would  not  unfairly  penalise  certain
                   taxpayers who  have  a  legitimate  secondary  trade,
                   notably in agriculture.


                   SARS emphasised that the proposed  legislation  would
                   not impact on someone  who  is  in  the  business  of
                   farming, but would impact on someone who  is  in  the
                   secondary business of farming. In  the  second  case,
                   SARS argues, they could use tax  write-offs  unfairly
                   to compete with people who not able  to  exploit  the
                   tax system. The fiscus was being undermined by people
                   who used secondary trade tax for a tax write-off.  It
                   was  these  people  who  were  the  target   of   the
                   ringfencing.


              (x)  Complexity and coherence of the tax system


                   The Committee asked for comment on how  coherent  the
                   tax system is as  a  macroeconomic  instrument.  Prof
                   Lester's view was  that  SARS  had  never  worked  as
                   effectively as  now,  to  the  extent  of  generating
                   taxpayer paranoia and terror.


                   Asked  whether  the  system  was  over-complex,  Prof
                   Lester noted that he was not sure that the law  could
                   be simplified.  By  international  standards,  it  is
                   relatively simple. It had increased in complexity  in
                   order to align itself with  international  standards.
                   The cost of compliance on  the  government  side  has
                   shown a positive return, but has become  much  harder
                   for businesses - an unfortunate effect of the use  of
                   best practice.


     3. SUBMISSIONS BY ORGANISED BUSINESS AND LABOUR


          (a) The Black Business Council (BBC)


              The BBC was represented by Ms Futhi Mtoba  of  Deloitte  &
              Touche,  Mr  Mandla   Maleka,   Chief   Economist:   Eskom
              Treasury, and Mr Veli Ntombela, Director  Taxation:  Sizwe
              Ntsaluba.


              The  BBC  broadly  endorsed   the   Budget,   specifically
              referring  to  the  child  support   grant,   government's
              position on inflation targeting,  relaxation  of  exchange
              controls and the proposed amnesty and the 4%  increase  in
              government  consumption.  A   major   element   of   their
              presentation involved SMME-friendly proposals to be  taken
              into account in the 2004/05 budget.


              (i)  Small business support measures
                   The BBC felt  that  the  tax  dispensation  of  SMMEs
                   requires review, specifically:


                   *     Redefinition of "small business" in the  Income
                       Tax Act, as the BBC felt this was too narrow.
                   *      Further  simplification  of   tax   compliance
                       requirements.


                   *     Further extension of the turnover ceiling.


                   The accelerated  depreciation  provisions  for  urban
                   development areas would help small business in  these
                   areas. It went on to  call  for  extension  of  these
                   concessions to other sectors, such as tourism.


              (ii) Black Economic Empowerment


                   The BBC believes that the proposed  R10  billion  BEE
                   support funding will  foster  economic  participation
                   for the deprived sector of  the  economy.  It  awaits
                   details of the funding strategy, and  requested  that
                   it be consulted on the process of disbursement.


                   The moves to promote corporate reorganisation  should
                   include BEE transactions, and the BBC proposed:


                   *     A shareholding test of at least  50%  (and  not
                       75%) for BEE companies.


                   *     That inclusion of community trusts should  also
                       be considered.


              (iii)      Poverty relief and social support


                   The BBC appreciated  the  increase  in  transfers  to
                   pensioners and disabled people. It  put  forward  the
                   following proposals:


                   *     Reducing the pensionable age for women  by  2-5
                       years (from 60).
                   *      Next  year's  tax  bracket  adjustment  should
                       concentrate on lower  earners,  enabling  savings
                       from this to support a lower pensionable age  for
                       women.


                   *     Rather than considering increasing the eligible
                       age for child support grants above 14 years in  a
                       future MTEF, equivalent funding should rather  be
                       allocated to ensure  that  primary  education  is
                       genuinely free.


          (b) Die Afrikaanse Handelsinstituut (AHI)


              Mr Jac Laubscher (Chief Economist: Sanlam)  and  Ms  Anne-
              Marie Wiehahn (Sasol Economist) presented  Die  Afrikaanse
              Handelsinstituut's (AHI) submission to the Committee.


              The AHI feels that  the  Budget  enhances  South  Africa's
              appeal to international investment  through  the  proposed
              urban  areas  depreciation  allowances;  exchange  control
              relaxation;  the   strong   increase   in   infrastructure
              expenditure; and increased spending on policing.


              The AHI foresees that:


              *    Inflationary pressure could come from an increase  in
                   the government wage bill and  a  pickup  in  domestic
                   demand.


              *    A short-term depreciation of  the  Rand  will  follow
                   exchange   control   relaxation,   with   medium-term
                   stabilisation. An  IMF  study  suggested  an  optimal
                   value of the Rand at R8,80 to the US Dollar.


          (c) South African Chamber of Business (SACOB)


              Karl Muller,  Des  Kruger,  John  Lewis  and  Adv  Meiring
              presented on behalf of SACOB.


              SACOB called for simplification  of  the  tax  system  and
              reduction of the administrative burden  on  taxpayers.  It
              asked for a familiarisation period for business people  to
              implement   tax   regime   changes,   and   clarify    new
              developments in  foreign  dividend  taxation  and  capital
              gains tax.


              Some upward pressure on inflation is  expected  from  this
              Budget's tax relief measures,  but  SACOB  emphasised  the
              negative  impact  on  price  stability  of  large   public
              enterprises' annual tariff increases.


              Recommendations and representations by SACOB included:


              *     The  present  depreciation  allowance  discriminates
                   between suppliers  of  goods  on  the  one  hand  and
                   services on the other. SACOB proposes  that  this  be
                   equalised.


              *     Adjustments  to  personal  income  tax   effectively
                   offset  bracket  creep,  and  this  should  become  a
                   standard policy for the national budget.
              *    SACOB called for further increase in the  expenditure
                   on transport infrastructure, to promote international
                   competitiveness.


              *    SACOB questioned  SARS'  decision  to  regulate  "tax
                   practitioners" and to clamp down on tax avoidance, as
                   minimising one's tax burden was well within the  law,
                   and  taxpayers  should  be  allowed  to  employ   the
                   services of advisors not linked to the  SARS  in  any
                   way.


              *    On ringfencing  of  secondary  trades,  SACOB  argued
                   that owners of a legitimate second business would  be
                   penalised for the sins of a few. It  added  that  the
                   distinction under tax law is usually  between  active
                   and passive incomes, and not the different sources of
                   income.


          (d) Federation of Unions of South Africa (FEDUSA)


              Ms  Gretchen  Humphries  (FEDUSA  Parliamentary   Officer)
              presented the submission.


              FEDUSA raised concerns about the trend of unemployment  in
              South Africa. It welcomed  increased  social  spending  by
              the  State,  seeing  this  as  a  vehicle  for   increased
              development, especially where it is labour-intensive.


              FEDUSA feels that the Budget did  not  adequately  address
              HIV/AIDS, and feels that greater provision should be  made
              to fund the prevention and treatment of HIV/AIDS.


              FEDUSA recommends:


              *    That a detailed and specific budget be  outlined  for
                   HIV/AIDS treatment/prevention.


              *    Intensification of HIV/AIDS awareness campaigns.


              *     That  Government  should   implement   a   treatment
                   strategy  outlining   the   availability   of   anti-
                   retrovirals.


              *    That funds should be specifically allocated  for  the
                   empowerment of Health  Care  Professionals,  for  the
                   training  of  lay  counsellors  and   for   community
                   upliftment programmes.


              *    A legislative  framework  should  be  established  by
                   Government to  ensure  all  employers  negotiate  and
                   adopt workplace policies on HIV/AIDS.


          (e) Focus areas of discussion in Committee


              (i)  Support for SMMEs and BEE


                   The Committee focused on the issue of  SMME  support,
                   endorsing the fact that the BBC put forward proposals
                   for future budgetary policy, and the extension of the
                   legal definition of SMMEs, and enquired about further
                   action to remove obstacles here.
                   The BBC is investigating a number of legal and  other
                   changes  that  will  increase  SMMEs'  success  rate,
                   feeling the economic environment opens  opportunities
                   for employment creation.


                   The BBC also said it  was  preparing  submissions  to
                   SARS on the problems that SMMEs have with paying VAT,
                   since the current lump sum affects their liquidity.


              (ii) Women's pensions


                   The Committee queried the constitutional implications
                   of reducing the pensionable age for  women  only.  An
                   additional concern was  whether  it  would  have  the
                   effect of shortening women's careers, which generally
                   start later than men's. The BBC  responded  that  the
                   retirement age for men is 65 and for women is 60,  an
                   existing  differential.  In  South  Africa's   unique
                   circumstances it could be an  effective  addition  to
                   social spending.


                   He added that to  stimulate  savings  the  government
                   would have to allow for more disposable income.


              (iii)      Skills levy


                   Responding to a request for feedback  on  the  skills
                   levy, the BBC said it found that not very many people
                   are making use of it. Part of the problem was lack of
                   public awareness, due to a lack  of  information  and
                   education on the levy.


              (iv) Targeted child benefits


                   On the BBC's proposal not to extend the child support
                   grant to children over 14, but instead use the  money
                   for free primary education, the BBC said in  response
                   to a question that their motivation was that intended
                   beneficiaries often are not the  ones  receiving  the
                   benefits. Ensuring free schooling would be one method
                   of ensuring that the funding  reaches  those  it  was
                   intended for.


 D.     Oral submissions


     The following people made oral submissions  before  the  Committee,
     some in their personal capacity.  These submissions  are  available
     on request from the Committee Section of Parliament.


     1. Mr J Josie, Deputy Chairperson: Finance and Fiscal Commission.
     2. Mr B Khumalo, Finance and Fiscal Commission.
     3. Dr H Fast, Manager: Parliamentary  Office,  Finance  and  Fiscal
          Commission.
     4. Mr C van Gass, Finance and Fiscal Commission.
     5. Mr I Momoniat, DDG: Intergovernmental Fiscal Relations.
     6.  Mr  V  Khahle,   Legal   Services:   Intergovernmental   Fiscal
          Relations.
     7. Prof M Lester, Rhodes University, Tax Expert.
     8. Prof P Le Roux, University of the Western Cape, Tax Expert.
     9. Dr I Abedian, Macroeconomist: Standard Corporate Merchant Bank.
     10.     Prof C Okeahalam, Wits University, Macroeconomist.
     11.     Ms S Gordon, Macroeconomist.
     12.     Ms M Mtomba, Black Business Council.
     13.     Mr V Ntombela, Black Business Council.
     14.     Mr M Maleka, Black Business Council.
     15.     Mr J Laubscher, Die Afrikaanse Handelsinstituut.
     16.     Ms A Wiehahn, Die Afrikaanse Handelsinstituut.
     17.     Mr Karl Muller, Chairperson: SACOB Taxation Committee.
     18.     Mr Des Kruger, Member Taxation Committee.
     19.     Mr John Luss, Deputy Chairperson:  SACOB  Economic  Affairs
          Committee.
     20.      Adv  Abri  Meiring,   Chairperson:   SACOB   Parliamentary
          Committee.
     21.     Mrs Peggy Drotskie - SACOB Director: Policy.
     22.     Ms G Humphries, Parliament Officer: FEDUSA.

National Council of Provinces:

1. Report of the Select Committee on Security and Constitutional Affairs on the Constitution of the Republic of South Africa Fourth Amendment Bill [B 69B - 2002] (National Assembly - sec 74), dated 17 March 2003:

   The Select Committee on Security and Constitutional Affairs, having considered the subject of the Constitution of the Republic of South Africa Fourth Amendment Bill [B 69B - 2002] (National Assembly - sec 74), referred to it, reports the Bill without amendment. TUESDAY, 18 MARCH 2003

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. Bill passed by Houses - to be submitted to President for assent:

 (1)    Bill passed by National Council of Provinces on 18 March 2003:


     (i)      Constitution  of  the  Republic  of  South  Africa  Fourth
          Amendment Bill [B 69B - 2002] (National Assembly - sec 74).


     NOTE: If the Bill is assented to by the President, the name of  the
     Act will be Constitution of the Republic of South Africa  Amendment
     Act, 2003.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Foreign Affairs:

 (a)    Southern African Development  Community  Protocol  on  Politics,
     Defence and Security  Co-operation,  tabled  in  terms  of  section
     231(2) of the Constitution, 1996.


 (b)    Explanatory Memorandum on the Protocol.

1. The Minister for Agriculture and Land Affairs:

 Report and Financial  Statements  of  the  Perishable  Products  Export
 Control Board for the year ended 31 December 2001.