FRIDAY, 18 JUNE 2004 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 09:02.

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

                  BIRTHDAY WISHES TO THE PRESIDENT

                         (Draft Resolution)

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Deputy Speaker, good morning. Today, 18 June 2004 marks the date on which the President of the Republic of South Africa was born. So as this House we wish the President a happy birthday and many happy returns. Thank you. [Applause.]

I therefore move:

That the House congratulates the President of the Republic on the occasion of his birthday.

THE CHIEF WHIP OF THE OPPOSITION: Madam Deputy Speaker, the DA will certainly like to be associated with good birthday wishes to the President of South Africa. Perhaps I could mention that he was born in 1942 and so was the Deputy President and so was Minister Pallo Jordan - and so was I. [Laughter.] So, I regard 1942 as a vintage year with a very special product. We want to wish the President: Long live!

Miss S RAJBALLY: Madam Deputy Speaker, the MF also wants to associate itself with congratulating and wishing our President a happy birthday and may he see many more. And I think my leader, Mr A Rajbansi, the MEC of Sports and Recreation in KwaZulu-Natal, and our President are very close in age. My leader’s birthday is in January the same year, and I wish them all well. Thank you. [Applause.]

Ms S C VOS: Deputy Speaker, the IFP obviously also expresses its best wishes and many happy returns to the President. We wish him well. Thank you.

Mr P J NEFOLOVHODWE: Azapo wishes the President of the Republic of South Africa a big birthday. We hope that he will go and play golf today so that he can have a rest before the big job that is lying ahead. Thank you. [Applause.]

Mr I S MFUNDISI: The UCDP wishes to associate itself with the motion.

Singabakwa-UCDP sithi uZizi makakhule aze akhokhobe. [Ihlombe.] [As the UCDP, we say: Long live, Zizi. [Applause.]]

Mr A HARDING: Madam Deputy Speaker, the ID wants to reserve comment on whether 1942 was a good or a bad year. But we certainly want to wish the President very many happy returns from all of us in the ID. The only question that remains is: Where is the party?

Mr M T LIKOTSI: The PAC wishes the President of the Republic of South Africa well and we want to say happy birthday. [Applause.]

Mr A Z A VAN JAARSVELD: Mevrou die Adjunkspeaker, die Nuwe NP assosieer hom met die voorstel sonder kennisgewing soos gestel deur die Hoofsweep van die Meerderheidsparty. Dankie. [Madam Deputy Speaker, the New NP associates itself with the motion without notice as moved by the Chief Whip of the Majority Party. Thank you.]

Mr K D S DURR: Madam Chair, I will resist the temptation of saying three cheers and hip hip hurray and all of that, but we do associate ourselves in the ACDP with the best wishes to the President. I hope he is at home today; I hope he has the opportunity to be with his family this weekend. One is aware of the enormous burden he carries and the enormous application with which he works and how much he travels and the sacrifice he makes. And so we wish him well, we wish him every best wish; we wish him health, happiness and success in the year ahead. Thank you. [Applause.]

Mrs N C NKABINDE: Somlomo, i-UDM ifisela uMongameli wezwe laseNingizimu Afrika iminyaka eminingi ezayo akhule kodwa angakhokhobi. Ngiyabonga. [Chairperson, the UDM wishes the President of South Africa many more returns, happy birthday.]

The DEPUTY SPEAKER: Siyabonga. [Thank you.] Nami noSomlomo … [Chair … ] we wish the President a very, very happy day and many returns. Debate concluded.

Motion agreed to.

                    BEST WISHES TO THE SPRINGBOKS

                         (Draft Resolution)

The CHIEF WHIP OF THE OPPOSITION: Madam Deputy Speaker, I hereby move:

That the House congratulates the Springbok rugby team on their inspirational victory last weekend and wishes them every strength in the second test match against the Irish rugby team tomorrow.

Agreed to.

                          NOTICE OF MOTION

Mrs C DUDLEY: Madam Deputy Speaker, I will move on behalf of the ACDP:

That the House engages in a debate on the “funding of social services” given the major challenges and obstacles facing delivery of services with particular reference to the enormous burden on nongovernmental organisations in the welfare sector to do statutory work without the budget to do so.

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Deputy Speaker, on a point of order: There is a particular procedure that we all have to follow in terms of motions without notice. Now we take note that the motion, which has just been read out now as if it is a motion without notice, has actually not been circulated amongst ourselves as parties. However, that is not the issue. The issue is that we should all emphasise this point that we should strive to ensure that the procedure is actually adhered to and properly followed, so we just want to make that point. Thank you.

The DEPUTY SPEAKER: I think the point is well taken.

                    TAXATION LAWS AMENDMENT BILL

                           (Introduction)

The MINISTER OF FINANCE: Thank you, Deputy Speaker. Good morning, hon members. The hon Durr was hoping that the President would be at home today, and for the rest of the weekend with his family. I can advise that the International Investment Council will be meeting from today, and so that will consume the President’s weekend. I should not hold the House up long because it’s clear that there is great interest in the Taxation Laws Amendment Bill today.

The Bill is largely the codification of that which we raised in the Budget, largely published in the Budget Review. The Portfolio Committee on Finance has had the draft. The changes in the Bill include a variety of issues, such as changes to personal income tax rates, facilitating new home ownership, and technical refinements to last year’s foreign exchange amnesty. The Bill follows this Government’s continued history of providing income tax relief for individual taxpayers. These amendments provide tax relief to all individual taxpayers from 1 March this year, thereby providing a stimulus for private consumption expenditure and, hence, domestic economic growth.

The Bill also introduces into law further annual changes to excise duties on tobacco and alcohol. Those are now well known. Last year the National Treasury stressed the importance of biofuels to provide not only a renewable and environmentally friendly form of energy, but also important economic backward linkages to rural agricultural areas. Under current law, tax depreciation for farming equipment, including the production of biofuels, amounts to a three-year-period write-off at 50:30:20. The attached Bill extends this favourable depreciation treatment for biofuel production that does not occur on the farm itself.

In its ongoing review of pension taxation, Government has identified two immediate issues requiring attention. Firstly, parties wishing to form a pension plan must undergo dual approval of their plans both from the FSB and Sars. The attached Bill allows Sars to delegate its approval process to the FSB for a more efficient one-stop approval system. Secondly, the current tax on retirement funds system contains an omission that prevents the payment of interest on delayed refunds. The attached Bill remedies this omission, thereby allowing for the refund of interest, which enhances the fairness of the tax system.

In respect of the Mineral and Petroleum Resources Development Act, which came into operation on 1 May this year, the main body of legislation returns mineral and petroleum rights to the state in order to ensure that all South Africans benefit from the permanent loss of the country’s nonrenewable resources. This change in rights requires amendments to the tax system in order to eliminate unintended tax consequences.

In the Budget Review published in February, we announced the five-year delay in the proposed gross ad valorem royalty. This delay was necessary because the conversion process for the entire mineral industry will occur within a five-year legislatively mandated window. This window, however, creates an unintended anomaly for mineral rights currently leased from the state. Under current law, the legal right to lease payments will cease once private holders of mineral state leases convert their leasing rights to new order rights. What the Bill does is to reinstate the state’s lease collections with respect to these new order rights within the current state- owned areas.

The final notable aspect of the Bill relates to last year’s exchange control amnesty with supporting tax measures. While early indications strongly suggest that the amnesty has been a success, a few technical anomalies remain that could inadvertently result in the denial of amnesty for certain applicants.

Specifically, the Bill introduces the following technical adjustments. Firstly, the amnesty currently requires applicants to file their 2002-03 income tax returns by 29 February this year. This tax return due date has been extended to 31 March 2004 consistent with the final tax return due dates. Secondly, an amnesty applicant can be given a further extension with respect to his or her income tax returns if such applicant is waiting to be registered as a new taxpayer, or in cases in which he or she has registered after a period of dormancy. Thirdly, pursuant to newly issued regulations, the amnesty unit will be given the authority to accept amnesty applications after 29 February if the request for the exchange control relief was incorrectly submitted to the SA Reserve Bank before that date.

Finally, I would like to thank the chair and members of the Ad Hoc Committee on Finance for their constructive engagement with the SA Revenue Service and National Treasury teams with a view to improving this first important Taxation Laws Amendment Bill, which will be followed by a second Bill in October or November this year. I hereby table the Taxation Laws Amendment Bill, 2004. I thank you. [Applause.]

Bill referred to the Ad Hoc committee on Finance for consideration and report.

CONSIDERATION OF REQUEST FOR APPROVAL BY PARLIAMENT OF AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF SOUTH AFRICA AND THE GOVERNMENT OF THE KINGDOM OF SWAZILAND FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME, IN TERMS OF SECTION 231(2) OF CONSTITUTION.

(Consideration of request for approval by Parliament in terms of section 231(2) of Constitution)

There was no debate.

Agreement between the Government of the Republic of South Africa and the Government of the Kingdom of Swaziland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income approved.

           PUBLIC AUDIT BILL - CONSIDERATION TO BE RESUMED
                         (Draft Resolution)

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

That the House –

(1) notes that -

   (a)  in the Second Parliament the Ad Hoc Committee on Public Auditing
       Function, as mandated by the Assembly, had introduced the Public
       Audit Bill [B 1 - 2004] in the House on 3 February 2004 together
       with its report on the Bill (see ATC of 11 February);


   (b)  the Bill, after a debate, was read a second time in the Assembly
       on 17 February 2004, the committee's report being noted; and


   (c)  the National Council of Provinces was unable to complete its
       consideration of the Bill before the end of the Second
       Parliament and the Bill consequently lapsed; and

(2) therefore resolves, subject to the concurrence of the Council, that the Bill be revived and consideration of the Bill be resumed from the stage previously reached with its passage through Parliament.

Agreed to.

HOUSE TO INSTRUCT AD HOC COMMITTEE ON FINANCE TO CONSIDER SUBJECT OF
               FINANCIAL ADMINISTRATION OF PARLIAMENT

                         (Draft Resolution)

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

That the House instructs the Ad Hoc Committee on Finance to -

(1) consider the subject of the financial administration of Parliament with a view to introducing a Bill dealing with the matter, in accordance with the Assembly Rules;

(2) report to the House by no later than 31 August 2004; and

(3) subject to the concurrence of the National Council of Provinces, confer with the Select Committee on Finance of the Council.

Agreed to.

The House adjourned at 09:17.