National Assembly - 23 August 2007
THURSDAY, 23 AUGUST 2007 __
PROCEEDINGS OF THE NATIONAL ASSEMBLY
____
The House met at 14:05.
House Chairperson Mr G Q M Doidge took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see col 000.
NOTICES OF MOTION
Mr C M LOWE: Chairperson, I, hereby, give notice that I shall move on behalf of the DA:
That this House debates the influx of Zimbabwean refugees into South Africa as a consequence of the political and economic situation in Zimbabwe.
Ms C C SEPTEMBER: Chairperson, on behalf of the ANC I shall move:
That the House debates the need to realise sustainable human settlements with access to livelihoods, proper recreation, education, health, arts and culture as well as basic services such as sanitation, clean running water and electricity so that the dignity of our people is restored.
I thank you. [Applause.]
Mr C T FROLICK: Chairperson, on behalf of the ANC I shall move:
That the House debates the issue of social cohesion and the challenges we need to confront as part of the construction of a cohesive nation in the building of a national democratic society.
ACHIEVEMENTS OF INDIA
(Draft Resolution)
The ACTING CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, we move without notice:
That the House –
1) notes that 15 August marks India’s independence from Great Britain
after two centuries of remorseless colonial exploitation and
oppression;
2) remembers that India was one of the first colonies to break free of
British rule after the Second World War and that its independence
marked the beginning of the decolonisation process all over the
world;
3) further remembers that India played a very significant role in the
struggle against apartheid and strongly campaigned in the United
Nations for the isolation of and imposition of sanctions against
apartheid South Africa; and
4) recalls that India, Brazil and South Africa have formed a troika
known as IBSA and that the main aim of this formation is to develop
a common vision for enhanced South-South co-operation and the
realisation of the development agenda of the South during the 21st
century; and
5) extends its best wishes to the government and peoples of India for
their achievements over the last six decades of freedom and
independence.
Motion agreed to.
LEGACY OF CHIEF ALBERT LUTHULI
(Draft Resolution)
The ACTING CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I move without notice:
That the House –
1) notes that 21 July 2007 marked the 40th anniversary of the death of
chief Albert John Mvumbi Luthuli;
2) further notes that Chief, as he was affectionately known, chose a
life of hardship and persecution when he demanded of the colonial
apartheid rule to “Let my people go” and that in doing so, he taught
us a very important lesson: That true leaders are those who are
prepared to sacrifice all to ensure freedom and justice;
3) recalls that the Luthuli name has become a colossal symbol of peace
and unity far beyond the borders of South Africa;
4) recognises that Chief Albert Luthuli was the first African to be
awarded the Nobel Prize, a well-deserved compliment to his deep
commitment to peace and justice for all;
5) acknowledges that Chief Albert Luthuli had cherished the
establishment of a society based on the ideals of equality,
nonracialism, nonsexism and democracy and that this is part of the
legacy that he bequeathed to our country and people; and
6) calls on South Africans to preserve and celebrate the legacy of
Chief Albert Luthuli through committing ourselves to the lifelong
and noble effort to create a better life for all.
Motion agreed to.
WELCOMING MRS SONIA GANDHI
(Announcement)
The HOUSE CHAIRPERSON (Mr G Q M Doidge): Before we proceed with the further business of the House, it is my honour and privilege, on behalf of the National Assembly of the Parliament of South Africa to recognise in the gallery a distinguished guest and her delegation: the leader of the Congress Party of India, Mrs Sonia Gandhi. We welcome her and wish her a fruitful visit to our Parliament and to our country. [Applause.]
20TH ANNIVERSARY OF SAYCO
(Member’s Statement)
Mr M JOHNSON (ANC): Chairperson, 20 years ago a bombshell, a boomerang, a catalyst of our revolution called Sayco was established on 28 March 1987 at the University of the Western Cape here in Cape Town.
Under the nose of the apartheid, racist security establishments - some of whose representatives or the children of those people are among us here – Sayco was formed with a slogan: “Freedom or death! Victory is certain!”
Guided by its adoption of the Freedom Charter as its policy guide to freedom and democracy, Sayco declared: “Better die to a man than let the enemy pass.”
It was at a Cosas May 1982 congress that it all started, guided by one of the resolutions that sought to accommodate the out-of-school youth, militant and revolutionary youth and students into a congress home called Sayco. This was a combination of mass disciplined and militant students and armed youth of uMkhonto weSizwe, all dedicated and selflessly focused on overthrowing the apartheid government.
This followed the legacy of the 1944 youth of yesteryear: disciplined, dedicated and death-defying, proclaiming in its Youth League Manifesto: Youth is laying its service at the disposal of the national liberation movement, the ANC, in the firm belief, knowledge and conviction that the cause of Africa must and will triumph.
As we celebrate 20 years of Sayco, we shall remember those of us who are no more, but who were in the forefront of its establishment: Tlhabano Mogashoa, Nhunhu Kheswa, Ivan Parage, Peter Mokaba, Ephraim Mogale, Eddy Mabitse, Parks Mankahlana, Ashley Kriel, among others.
We want to assure your families, your comrades, your friends and enemies alike, that it was not in vain. The youth of today have you as role models. Emulate these martyrs and join the progressive forces that seek to conclude the mission that you and those before you have started, of bringing about a nonracial, nonsexist and democratic society. Freedom or death! [Applause.]
PROBLEMS IN REACHING TARGETS FOR LAND RESTITUTION AND REFORM
(Member’s Statement)
Dr A I VAN NIEKERK (DA): Thank you, Chairman.
Dit is ’n feit dat die Departement van Grondsake sukkel om teikens vir restitusie en grondhervorming te bereik. Elke jaar verhoog die aantal hektare wat nodig is om die teiken van 30% teen 2014 te bereik omdat die jaarteikens nie bereik word nie. Die afhandeling van restitusie eise is ook al reeds uitgestel tot 2008. Die onsekerheid van beide grondeienaars en eisers oor hulle regte, word verleng met ’n gepaardgaande opbou van frustrasie. Hierdie probleme word veroorsaak deur lomp administratiewe stelsels en ’n gebrek aan kapasiteit in die department.
Dit is dus met verbasing dat ons by die DA kennis geneem het van die nuwe plan, om vyf miljoen hektaar grond te bekom vir die gebruik van plaaswerkers. Grondhervorming moet veral plaaswerkers bevoordeel, maar dit kan slegs slaag as die boerderygemeenskap hierin geken word. Die nuwe plan, aangekondig sonder dat ander belanghebbendes geraadpleeg is, lyk al te veel na ’n verkiesingsfoefie vir die volgende algemene verkiesing in 2009. Dankie. (Translation of Afrikaans member’s statement follows.)
[It is a fact that the Department of Land Affairs is struggling to cope with targets for restitution and land reform. Every year the hectares required to meet the target of 30% set for 2014, are increasing as the annual targets are not attained. The finalisation of restitution claims has also been postponed to 2008. This uncertainty of both the landowners and claimants regarding their rights is prolonged with the concomitant build-up of frustration. These problems are caused by inept administrative systems and a lack of capacity in the department.
We in the DA were therefore surprised at the new plan to acquire five million hectares of land for use by farmworkers. Land reform should particularly benefit farmworkers. However, this can only succeed if the farming community is consulted. The new plan, announced without other role- players being consulted, certainly looks like an election ploy for the next general election in 2009. Thank you.]
FREEDOM OF SPEECH VERSUS THE RIGHT TO PRIVACY
(Member’s Statement)
Mr V B NDLOVU (IFP): Ngiyabonga Somlomo. [Thank you, Chairperson.]
The IFP has closely followed the debate among South Africans regarding the Minister of Health, Dr Manto Tshabalala-Msimang. The president of the IFP, Prince Mangosuthu Buthelezi MP, has pointed out that the raging debate fills him with disquiet as it borders on a witch-hunt against the Minister. The IFP, therefore, wants to reiterate Prince Buthelezi’s stance that there is a need to maintain the dividing line between the Minister’s public accountability and the person’s private life.
The IFP believes that we should rather weigh the Minister in terms of her performance in public life. The IFP has never shied away from criticising the Minister of Health when we disagree with her, or her policies or when they fail the constitutional test. We have, for instance, been vociferous in our condemnation of the Minister’s role in the government’s failed HIV/Aids policy. But our criticism has been limited to the Minister’s public life and performance and has not crossed the line into her private life. The current debate is dangerously close to blurring the line that completely disregards one’s private life. I thank you. [Applause.]
PARTNERSHIP BETWEEN COMPANIES AND GOVERNMENT IN WARD 29
(Member’s Statement)
Mme M J J MATSOMELA (ANC): Puso ye e eteletsweng pele ke ANC e itemogela go tswelela e dirisanammogo le ditlamo, baagi le bogosi ka kakaretso go tsweletsa tlhabololo le go tlhola ditiro go fedisa lehuma, gonne Setswana sa re sedikwa-ke-ntjapedi ga se thata e bile mabogo-dinku a thebana. Seno se tsweletswa ke baagi ba Mokgalwaneng, Maatlametlo, Disake mo Ward 29 ka tshwaraganommogo le ba setlamo sa PPC kwa Dwaalboom.
Ba gaPPC ba ntshitse madi a ka naka R48 million go dira tsela ya sekontiri. Ba tshwaraganemmogo le ba puso ya Bokone-Bophirima le Masepala wa Moses Kotane. Tsela e e tla tlhola ditiro go baagi ba metse e umakilweng. Baagi ba tla thapiwa go ya ka foramo ya ditiro e leng teng mo Ward 29.
Kwa ntle ga tsela e, go na le diprojeke tseo di leng teng tsa namolo-leuba ka tshwaragano le ba PPC. Dikonteraka tse di thapile badiri ba e leng baagi ba Ward 29 ba le sekete. Seno se senolwa ke seo dipholisi tsa rona di ikaelelang go se dira go bona batho ba rona ba tswelela mo bophelong. Seno se konotelelwa gape ke Charter ya Kgololosego. ANC e tshegetsa se. Ke a leboga. [Legofi.] (Translation of Setswana member’s statement follows.)
[Ms M J J MATSOMELA (ANC): The ANC-led government has established an ongoing partnership with companies, communities and chiefs to bring developments and to create jobs in order to eradicate poverty. There is a Setswana saying which says that a problem becomes simple when you work together with others and therefore people must help each other. This is what the residents of Mokgalwaneng, Maatlametlo, Disake in Ward 29 do in partnership with PPC Company in Dwaalboom.
PPC together with the North West government and Moses Kotane Municipality donated about R48 million to construct a tarred road. This road will create jobs for residents of the villages stated above, and they will be employed according to the employment forum which is present in Ward 29.
Besides the construction of this road, there are also other poverty eradicating projects available in partnership with PPC. These contractors employ 1000 residents of Ward 29. This is a reflection of what our policies want to achieve in order to improve the lives of our people. This is also endorsed by the Freedom Charter. The ANC supports this initiative. Thank you. [Applause.]]
HEALTH A VICTIM OF POLITICAL GAMESMANSHIP
(Member’s Statement)
Ms N C NKABINDE (UDM): Chairperson, the UDM expresses its deep concern over the ever deepening crisis that is playing itself out with regard to the Ministry of Health.
What has started with the sudden and seemingly hectic step of removing the Deputy Minister of Health has now escalated into a national scandal. Indeed, we must accept that certain allegations against the Minister of Health are just there as allegations. But these and other uncertain matters should all be simple for the President to establish.
It is simply incomprehensible how the President can fire a Deputy Minister who has been widely respected among health stakeholders and openly credited for repairing fractured relationships between civil society and government. The message seems to be that independent thinkers who care about the plight of the people will not be tolerated, whilst those who are loyal to certain individuals will be protected, irrespective of how badly their actions might reflect on government or how negatively it affects that portfolio.
The health of South Africans is not some light matter. It is a constitutional right that is becoming the victim of political gamesmanship. Thank you, Chairperson.
ALLEGATION OF CORRUPTION IN PARLIAMENT
(Member’s Statement)
Dr C P MULDER (FF PLUS): Chairperson, Parliament and the taxpayers of South Africa have once again been defrauded. I have information that serious fraud, theft and corruption have been committed by senior officials of Parliament and other individuals with the awarding and implementation of the access control and security system of Parliament.
At the centre of this row is a company called ASAP – African Strategic Asset Protection (Pty) Limited.
For the purposes of this contract, 67% of the shares in this company were transferred to Thobile Mtwazi, the late husband of the hon ANC MP, Ncumisa Kondlo, who subsequently became the intestate beneficiary of 67% controlling shares in ASAP.
Parliament has been overcharged on a continuous basis, while grey, imported equipment of inferior quality was sold to Parliament.
Die Parlement is uitgebuit op deurlopende basis terwyl grys produkte van swak kwaliteit ingevoer en aan die Parlement verkoop is. [Parliament has been exploited on a continuous basis while grey products of poor quality were imported and sold to Parliament.] Subsequently, ASAP has been involved in a further contract with a number of other institutions.
The FF Plus is going to request the Public Protector, as well as the Scorpions, to investigate each and every contract of this company and all of its subsidiaries that deal with taxpayers’ money. I thank you, Chairperson.
COMMEMORATION OF WANKIE AND SIPOLIO
(Member’s Statement)
Mr O E MONARENG (ANC): This year, 2007, marks the 40th anniversary of the start of the Wankie and Sipolio campaigns during which the combatants of uMkhonto weSizwe and the Zimbabwe People’s Revolutionary Army, Zipra, crossed into the then Rhodesia and took on the military might of white domination in fierce combat symbolising the real and concrete solidarity of the people of Zimbabwe and giving expression to the ANC’s Pan-Africanism and internationalism.
The units of Zipra and uMkhonto weSizwe forces were not only physically prepared, but also thoroughly politically prepared and they were very developed with the understanding of the need to forge a strong relationship between the forces of uMkhonto weSizwe and Zipra in what we call the Zipra and uMkhonto Alliance.
The spirit of cohesion and unity between us and Zimbabwe African People’s Union, Zapu, was magnificent. We were working together as one unit consulting and discussing together. The biggest legacy of the Luthuli Detachment at Wankie was of absolute commitment of our fighters to the revolution to the extent where to them things like hunger and thirst were not primary. It is this spirit of unity and cohesion and absolute commitment displayed by the Luthuli Detachment that our country and our people need. Amandla! [Power!]
INFLUX OF ZIMBABWEANS INTO SA
(Member’s Statement)
Mr I S MFUNDISI (UCDP): Chairperson, there is great concern about the influx of people from Zimbabwe flooding our country and others in the Southern African Development Region. The issue is not so much about their fleeing from the land of hunger and unemployment, but more about how we in South Africa respond to them. Different delegations from, among others, politicians, civil society, committees of Parliament and even those from the public service such as the police and custom officials from the South African Revenue Service have had interactions with these people, but each group has their own views on the matter.
The matter has become so serious that it looks like government is heading to a point of raising its hands in helplessness. This comes to mind when one takes into account that on occasions when questions have been fielded in this House, the President has said that these people come and go and at times present themselves to be repatriated so that they may go back home and come again when it suits them.
Of great concern is that all these groups have no common response regarding how to treat these Zimbabweans. Some politicians argue that farmers may not effect arrests on these people and others say that in terms of some statutes farmers are acting within their rights to effect a citizen’s arrest while the police argue that arresting them violates their right to freedom of movement.
The country has to come up with a common response regardless of who comes across the illegal immigrants. The time has come that as South Africans we sing from a common score when we deal with such issues, to avoid speaking at variance with one another and thereby sending contradictory messages. Thank you.
ELECTIONS IN KZN
(Member’s Statement)
Moulana M R SAYEDALI-SHAH (DA): Ngiyabonga, Sihlalo. [Thank you, Chairperson.]
Yesterday the DA won two by-elections in KwaZulu-Natal, significantly increasing its percentage of votes. The results constitute yet further evidence that the DA is the only viable and growing alternative to the ANC. In the Scottburgh by-election the DA won with 886 votes, or you may say 58% of all votes cast. This is 5% more than what the DA got in 2006. The ANC was beaten to second place with 36%.
In the Pennington by-election the DA won with 860 votes, or you may say 63% of all votes cast; 6% more than what the DA received in 2006. Again, the ANC was beaten into second place with 24% of the votes.
It is still some time before the 2009 general election, but already we can see that the DA is starting to build up some momentum as it strengthens its position as the second largest party in South Africa, and more and more people endorse its alternative vision of an open-opportunity society for all South Africans and reject the ANC’s closed patronising society that only ever benefits an elite few. Thank you. [Applause.]
CONVICTION OF SHOBASHOBANE KILLERS
(Member’s Statement)
Mr M E MBILI(ANC): The ANC in the lower South Coast region where I come from would like to welcome the conviction of the Shobashobane killers of Comrade Zakhele Cele who was gunned down after winning in the last local government election in March last year. Comrade Zakhele was killed together with his three comrades, who are Comrade Mandla Cele, Moses Gambushe and Nkosingiphile Mavundla. We further would like to extend our appreciation to the police in the area for work well done, assuring the successful conviction of the murderers who got four life sentences for their crimes. Those who were convicted were Mkhishwa Amos Khawula and Fananobani Ndovela. That’s an interesting name. We are saying that Fananobani Ndovela …
… uzozibona ukuthi ufana nobani ejele, edonsa izigwebo ezine. [… will realise when he is in prison serving four life sentences who he really looks like.]
The collaboration between the police and the prosecuting authority resulted in the successful conclusion of this very complicated case on Tuesday, 21 August at Ramsgate Court. We trust and hope that this will send a very clear message to the criminals out there that any form of violence, be it political or otherwise, cannot and will not be tolerated by this government.
We pray that this sentence will be the beginning of a long route to healing the wounds of those who lost their loved ones. Thank you. [Applause.]
PEOPLE TAKING LAW INTO THEIR OWN HANDS
(Member’s Statement)
Mr M W SIBUYANA (IFP): Chairperson, four men have appeared in the Mpumalanga Court in connection with the murder of a man who is alleged to have committed crimes, including rape, in the Matateng village in Bushbuckridge.
Maphanga, wa malembe ya 29, u biwile a khandliwa hi maribye na ku biwa hi swigiya a kala a fa. Hina va IFP ha swi twisisa leswaku timhaka ka nawu ti famba hi ku nonoka lero vaaka-tiko ku fika laha va xurhaka hi ku hlundzuka ivi va teka nawu va wu veka emavokweni ya vona, va endla leswi nawu wu nga swi laveki. Ha swi twisisa leswaku swi endliwa hi yini sweswo kambe a swi fanelangi leswaku vanhu va teka nawu va wu veka emavokweni ya vona ku fika laha va dlayaka hi ku va mudlayi a dlayile.
Swi fanerile leswaku va tirhisana swin’we na maphorisa na vaaka-tiko ku khomisa swigevenga hinkwaso ka swona leswaku nawu wu famba hi ndlela leyi huvo na Vumbiwa swi vulaka swona.
Ha nkhensa loko va swi kotile ku khoma lava va khomeke. Ha tshemba leswaku van’wana va ta swi kota ku hlayisa nawu na ku khoma makhamba hinkwawo. Inkomu. (Translation of Xitsonga paragraphs follows.)
[Maphanga, aged 29, was assaulted with knobkierries and stoned to death. The IFP understands that legal processes are so slow that citizens, in exasperation, take the law into their own hands. We do understand the cause, but poeple must not take the law into their own hands to the point where they kill someone because that person has killed someone else.
It is appropriate for citizens to work together with the police in ensuring that all criminals are apprehended. This will allow the law to take its course, which is what is expected in terms of the Constitution and the courts.
We appreciate the arrests that have been made. We trust that others will respect the law and aid in the apprehension of all criminals. Thank you.]
TOURISM AND ROLE OF WOMEN IN TOURISM
(Member’s Statement)
Mr D K MALULEKE (ANC): Chairperson, according to statistics released by Statistics SA for 2007, this year saw the highest number of recorded arrivals for the first five months of this year since 1998.
The increase in arrivals from across all the regions of the world and in particular air markets reflects not only the growing awareness of South Africa as a tourism destination but also the success of the Airlift strategy passed by the Cabinet last year. That resulted in increased access to the South African market for foreign carriers. International tourists are important but local tourists are just as important and, therefore, we need to nurture our domestic market.
During the special dinner to celebrate women’s month and saluting women in tourism, Minister Van Schalkwyk said, “This is the inspiration for our gathering this evening as we celebrate women’s month and salute women in tourism on the eve of a national tourism month”.
The empowerment of women has been at the forefront of our national liberation struggle. During national women’s month, we remember the integral role that women played in the struggle to rid our country of the injustices of the past and we celebrate the role that they continue to play in the entrenchment of democracy in our society today. Through our social responsibility programme, we have created 7 511 job opportunities for women in tourism-related projects over the past three years. In total, through the help of tourism enterprise programmes, 911 …
I, therefore, wish to salute the women of South Africa and the world! [Time expired.] [Applause.]
PROBLEMS IN ZIMBABWE
(Member’s Statement)
Mr E W TRENT (DA): Chairperson, “The problems in Zimbabwe must be solved by Zimbabweans.” This was what hon Minister Trevor Manuel’s answer was to the Zimbabwean crisis that threatens to overwhelm a once prosperous country and subject millions of people to starvation and abuse by their leaders.
His answer, it would appear, is that we should do nothing, but sit by and idly watch as an entire country and its people are robbed of their dignity, their freedom and their most basic rights to food, shelter and clean water.
Only a right-wing person could do nothing. Of course, all Manuel is doing, is to mimic our President who has made no progress whatsoever in his mediation in the Zimbabwean crisis and seems quite content to treat the dictator of Harare as a hero.
The hon Minister has also conveniently forgotten that during the terrible 80s the ANC didn’t even support the policy of constructive engagement which has been pursued by some of our countries, believing that the only option was the armed struggle.
The hon Minister has also conveniently forgotten that he is a former member of the UDF. That organisation was subjected to the same brutal tactics that the MDC is being subjected to, today, by the Mugabe regime.
Hon Minister, I believe that you owe the suffering masses in Zimbabwe an apology for this heartless point of view that you have adopted. [Applause.]
IMPROVED SERVICE DELIVERY IN WARD 100 IN JOHANNESBURG
(Member’s Statement)
Mr G D SCHNEEMANN (ANC): Chairperson, in the local government elections of 2006, the residents of Ward 100 in Johannesburg overwhelmingly voted for the ANC to govern the ward. The ward had experienced the uncaring rule of the DA in the previous five years during which time no delivery had taken place.
Since March 2006 delivery has started to roll out, which has had a positive impact on the lives of the residents. In the informal settlement of Zandspruit internal roads are being constructed; solar powered streetlights have been installed; high-mast lighting has been erected; piped water has been installed; an improved refuse collection system is being rolled out; processes for the purchase of additional land are under way and the construction of 500 housing units is due to start in the current financial year.
Residents throughout the ward have expressed both their satisfaction and confidence in the ANC. The progress made in Ward 100 since March 2006 clearly indicates that the ANC’s election commitment of, and I quote, “A plan to make local government work better for you” is, indeed, being implemented. I thank you.
DEPARTMENTS OF TRANSPORT AND PUBLIC WORKS WORKING TOGETHER ON LEARNERSHIPS AND EXPANDED PUBLIC WORKS PROGRAMME
(Member’s Statement)
Mrs J CHALMERS (ANC): Chair, 130 job opportunities for the youth and women have been created at Jansenville and Klipplaat, as well as the surrounding areas through an Expanded Public Works Programme.
The Departments of Public Works and Transport are busy constructing the road between Jansenville and Klipplaat. This EPWP programme also included a learnership; 68 learners were recruited and have just completed NQF1 on Road Construction. NQF2 will commence in due course. The project progresses very well with manageable challenges.
The Public Service Commission, in consultation with the Departments of Transport and Public Works, were able to identify the best learner and the learner was seconded for her studies in a Civil Engineering Construction National Diploma.
Noting that these communities are poverty-stricken, we appreciate this learnership programme and we hope it will go a long way to improve our communities. I personally will appreciate the new road. Thank you, Chair.
COLLECTIVE RESPONSIBILITY OF EXECUTIVE
ZIMBABWEAN ISSUE
(Minister’s Response)
The MINISTER OF FINANCE: Chairperson, let me deal with a few issues, starting with the statements by the hon V B Ndlovu and the hon Nkabinde and then coming to those raised by hon Mfundisi and hon Trent. Let me start with the hon Nkabinde … when I have her attention, Chair …
The HOUSE CHAIRPERSON (Mr G Q M Doidge): Hon Nkabinde, there’s a response to your statement.
The MINISTER OF FINANCE: We serve in Cabinet, and I have done so for the past 13-odd years. We serve as a matter of choice and we serve in the letter and spirit of the Constitution. We take an oath of office and we respect the Constitution and one of the things in the Constitution, in section 91(2), is the right of the President to appoint and dismiss members of the executive. It is there.
We have no other legal protection - we serve at his pleasure and part of serving at his pleasure means we accept collective responsibility. There is no place in any Cabinet anywhere in the world for people who won’t accept the collective responsibility.
So, to try and convert those who refuse to accept discipline into heroes, is to destroy democracy anywhere. And I would ask you, hon Nkabinde, be careful of what you wish for.
And in the same spirit, I would like to express my fullest appreciation for the statement by the hon Ndlovu because, indeed, we must be judged on the service we render and we ask that the private lives of individuals be excluded. That is the letter and spirit of democracy; it applies almost anywhere and people who seek to undermine that, seek to undermine democracy.
Turning to the issues in relation to Zimbabwe, the hon Mfundisi says different government departments deal with people differently. Yesterday, I heard the Minister of Safety and Security deal at length with the question of the right to citizen’s arrests and the right to the protection of private property. We can’t treat people as a group, because their entry into South Africa is different, their conduct is different and I think that we must allow time and circumstance to deal with the issue.
In respect of that which has been raised by the hon Trent, I say without fear of contradiction that I and a number of my colleagues have been in more meetings with both the ZANU-PF and the MDC trying to resolve issues than anybody in the DA could ever dream to be. We have a commitment to the resolution, but that commitment is something that must be expressed by Zimbabweans as and when they are ready.
I don’t need to apologise. I will stand by the right of Zimbabweans to elect their democratic government and what you have in Zimbabwe is an elected government, elected on universal franchise by all the people of Zimbabwe. [Interjections.] That is a fact. [Interjections.] Anybody who seeks to distort that has never read anything, doesn’t understand democracy and refuses to listen. [Interjections.] There is no point in trying to convince them otherwise anyway. [Interjections.] Thank you, Chairperson. [Applause.]
Mr E W TRENT: Chair, will the hon Minister take a question?
The HOUSE CHAIRPERSON (Mr G Q M Doidge): No, you had your chance. You made a statement.
Mr E W TRENT: Yes, but now I want to ask him a question.
The HOUSE CHAIRPERSON (Mr G Q M Doidge): And Questions were yesterday. Sorry, Mr Trent, take your seat.
PERFORMANCE OF TOURISM INDUSTRY
(Minister’s Response)
The MINISTER OF ENVIRONMENTAL AFFAIRS AND TOURISM: Chairperson, I would like to thank the hon member Maluleke for his motion. Yes, the first five months of this year were, from a tourism point of view, the best five months we have had since 1998 and there are basically two major factors in that performance. The first one is very targeted, focused marketing, which is going well from that point of view, and the second one is the new Airlift strategy that Cabinet adopted.
With regard to the markets, from the US, we have grown by 5% - it is good growth from that market – and from India, growth is over 10%. But then also from Africa there is a very encouraging trend; from Nigeria there is 22% growth and from Kenya we’ve seen 12% growth. We are doing well in our traditional markets as well. From France we had over 11% growth. So we are quite satisfied.
With regard to airlines announcing that they will be flying to South Africa, a number of airlines announced that they will now be flying to South Africa. Delta airlines, Thai Airways and a number of others have announced that they are increasing their flights; Air France, Lufthansa, and so forth.
So, just from an international perspective, we are looking, again, at another very, very good year for tourism in this country.
With regard to the issues around women’s empowerment, this year we have allocated R65 million to the Tourism Enterprise Programme and next year it will be R70 million. A huge percentage of that money will specifically go to women and women-owned businesses. That is our contribution in line with government policy. Thank you.
CELEBRATING THE ROLE OF OUR YOUTH
(Minister’s Response)
The MINISTER OF DEFENCE: Chairperson, I would like to respond to the statement made about the exploits and achievements of the youth of our country in the past, both at Wankie and Sipolio as well as Sayco, by saying that we must celebrate in memory of those youth. We must celebrate the fact that the youth of our country has since heeded the call for national reconciliation, that the youth of our country, black and white, young men and young women, are filling-up the ranks of the SA National Defence Force today, joining in a common cause to defend our democracy and our nation.
We must celebrate the fact of their dedication with which they carry out peace missions in sister countries like Burundi, the DRC, Darfur in the Sudan, Mozambique, etc., in order to bring stability to these countries and, therefore, lay the foundations for development.
Our government and the leaders of our respective political parties must continue every effort to nurture the unity of all young people as a foundation for the cultivation of a united South African nation. Therefore, we call on all our people to unite behind the youth that will represent the Republic of South Africa at the coming Rugby World Cup tournament in France. Thank you.
CELEBRATING WOMEN’S CONTRIBUTION
CO-OPERATION WITH FARMERS’ UNIONS
(Minister’s Response)
The MINISTER FOR AGRICULTURE AND LAND AFFAIRS: Chairperson, let me first salute the women of South Africa during this, the women’s month. I also want to congratulate the women of South Africa on their achievements in tourism and business, particularly women in the rural areas, women in finance and women in agriculture. We have gone a long way since 1994 in terms of developing and empowering our women in South Africa and I’m sure we’ll hear more about this during the Women’s Parliament, next week.
I would like to respond to the hon Nel that, indeed, the syllabus has left him behind. We are working together with the farmers. A week ago we had a meeting with the three farmers’ unions, including AgriSA and National African Farmers’ Union, and we agreed that we are going to work together on various issues including food security strategies, evictions and land reform, which includes our restitution programme.
I want to reassure the hon member that indeed, the farmers have agreed to work with us in this area and mobilise their constituency to ensure that we fast-track land reform and meet our targets on land restitution. It is in all of our interest to fast-track this programme, in particular restitution, so that we can get started with the programme of nation building and reconciliation in South Africa.
On the matter of Mrs Nkabinde, it is quite clear that she is not an independent thinker; she has simply regurgitated all the propaganda that she has read in the press and is simply reading it out to us, without doing her own independent research and assessment of what really happened.
I also want to say, “Viva” to the heroes and heroines who launched the South African National Civic Organisation, Sanco, and built the youth movement of South Africa. [Applause.]
CONSIDERATION OF SECOND REPORT OF AD HOC COMMITTEE ON OPERATIONAL PROBLEMS IN OFFICE OF PUBLIC PROTECTOR
Prof A K ASMAL: This is a kiss of death. [Laughter.] Mr Chairperson and hon members, the report before the House today brings to a conclusion a rather unique exercise in which the National Assembly and this committee have been engaged over the past 12 months, investigating operational problems being experienced in the office of the Public Protector and recommending appropriate solutions.
This office plays a vital role in strengthening our constitutional democracy in that it provides an accessible mechanism for citizens to obtain redress in the event of improprieties in the public administration that affect the constitutionally entrenched rights. For that reason, this office is identified in the Constitution as one of the state institutions that is independent of other arms of government. Furthermore, other organs of state are enjoined to assist and protect the office to ensure its independence, its impartiality, its dignity and its effectiveness and they may not interfere with its functioning.
The office is, however, accountable directly to the National Assembly, and this House, in addition, recommends people for appointment as Public Protector and Deputy Public Protector and it may effect their removal from office on the specific grounds of misconduct, incapacity, or incompetence.
Against this background, hon members will be aware that what gave rise to this special intervention by the National Assembly was a rather unseemly, unhappy and undignified public spat that developed between the Public Protector and his deputy involving allegations and counter-allegations, which led the Public Protector to turn to this National Assembly for assistance.
The ad hoc committee, which was then set up by the House, was tasked to inquire into operational problems, which were experienced in the office of the Public Protector as reported to the Speaker, by the Public Protector.
In the first report by this committee of 5 September 2006, the committee identified a range of operational problems in the office that negatively impacted on its ability to function optimally. The committee reported that some of the identified problems existed prior to the appointment of the Deputy Public Protector and contributed to the tensions resulting in the breakdown of relations between them.
The committee, accordingly, made a number of recommendations in a rather lengthy report and submitted it to the National Assembly. These were aimed at strengthening the office and resolving the specific problems. These recommendations were adopted by the House on 7 September 2006.
The committee was subsequently reconvened by the House on 27 March 2007, in accordance with the earlier decision of this House in September 2006 and its purpose was to assess progress made with the implementation of the recommendations and to determine any further action that may be required. The committee saw it as its main task to establish whether it was satisfied with what had been done to implement the recommendations and whether good relations had been restored between the Public Protector and his deputy.
We then looked at the implementation of the recommendations. In response to an invitation by the committee, the Public Protector and his deputy submitted a report co-signed by them, detailing the measures that had been taken, or were in the process of being taken, to give effect to the recommendations adopted by the Assembly in order to resolve the identified problems.
These steps included the formal observance of the lines of authority within the office and between the office and other organs of state as identified by the committee and a document setting out the delegated powers of the Deputy Public Protector was also submitted, on which the committee, at the invitation of the Public Protector, gave further guidance, because the powers delegated were, in fact, too extensive and the committee stressed the need to ensure that the delegated parts related specifically to the core functions of the office.
It was also reported that key senior posts in the office, including the chief executive and the chief finance officer had been filled, and this came about because of the intervention of the National Assembly. The committee is satisfied that these developments establish an adequate foundation for the effective functioning of this office.
The Public Protector did report a concern relating to the practical interaction between his office, the National Treasury and the Department of Justice and Constitutional Development on financial and administrative matters and the committee recommends that the House refer these inputs to the ad hoc committee specifically appointed to review these issues.
Well, the ad hoc committee on the Chapter 9 institutions reported to the House yesterday, therefore completing its business. This report was written before the legal report was submitted to the House.
Now we conclude by looking at the status of the working relations between the Public Protector and his deputy. As I’ve said on behalf of the committee, the committee indicated in its first report that the operational problems in the office arose, partly, from the breakdown in relations between the Public Protector and his deputy.
It was also reported that as at 5 September 2006, a legal action between the Public Protector and his deputy was still pending and in the committee’s view, it was undesirable that such action should remain in the public domain and unresolved, as it would unavoidably impede the best functioning of the office.
Both the Public Protector and his deputy in their engagement with the committee on 6 May 2007, assured the committee that with the implementation of the recommendations and the confidence-building measures, amicable working relations between them had been restored, and they met regularly on operational issues.
In the light of these assurances, the committee notes with concern that the Public Protector and his deputy had not specifically met to discuss the committee’s report, after its adoption by this House in September 2006. Moreover, the committee must report, more in sorrow than in anger, that despite the clear concerns expressed in the first report, no attempt has been made by either party to settle the differences and the legal action by the Public Protector and a counter-claim by his deputy are still being proceeded with.
At the suggestion of the committee, I as the Chairperson, made a further attempt to encourage a settlement, but was unsuccessful. They view the court action as being of a personal nature and each intends clearing his or her name, but the committee remains of the view that responsibility for the optimal functioning of the office in our democratic dispensation must rank as of paramount importance. In the circumstances the continuing legal action between these two appointed senior office bearers, is inconceivable as it will unavoidably impact on the dignity, authority and effective functioning of the office.
When the committee says these things it is with regret, as we respect the independence of these bodies; we respect the need to ensure their dignity; and it is with this in mind that the committee made these recommendations.
It is hoped that the Public Protector and his deputy will reassess their options in the interests of the vital institution they serve and its critical role in our democracy. A clear message from the National Assembly is necessary, in order to protect the dignity of this institution.
Mr Chairperson, the report is commended for your attention. Siyabonga. [Thank you.] [Applause.]
The ACTING CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I move:
That the Report be adopted.
Motion agreed to.
Report accordingly adopted.
BANKS AMENDMENT BILL
(Second Reading debate)
The MINISTER OF FINANCE: Chairperson, hon members, the Banks Amendment Bill seeks to substantially announce a regulatory framework for banks in this country. Furthermore, it seeks to effect the latest international standards published as the Revised Framework on International Convergence of Capital Measurement and Capital Standards, better known as Basel II or the New Capital Accord.
The aim of Basel II is to enhance financial stability in the system by ensuring that banks keep sufficient capital to cover various risks associated with their business. Basel II does this by requiring banks to risk weight all their assets and to hold minimum capital to back any loss associated with those assets. This is important since these assets, which are dominated by loans and advances, are predominantly funded by deposits from the public.
Basel II, as broadly incorporated in the Bill, before the House today, seeks to achieve this by introducing three pillars to the banking regulatory framework. The first pillar deals with capital requirement; the second pillar deals with the supervisory review process and the third pillar deals with market discipline.
The incorporation of the three-pillar framework into the legislation will ensure, firstly, that enhanced regulation of all relevant banks and banking groups is on a consolidated basis; secondly, clearly defined roles and responsibilities of consolidating and host supervisors; thirdly, the co- operation and sharing of information between supervisors; fourthly, clarifications of the responsibilities of banks, banking groups, boards of directors of banking groups; fifthly, improved disclosure requirements for banks and banking groups; sixthly, risk-sensitive minimum capital requirement in respect of credit, market and operational risk exposures; and seventhly, an enhanced supervisory review process in order to, among other things, assess the capital adequacy and control environment of both banks and banking groups.
The National Treasury also undertook an extensive economic impact study of the implementation of Basel II in South Africa. The result of this study indicates that while the potential direct impact on the bank capital requirements, bank pricing and the macro economy is expected to be negligible, the potential longer-term economic impact is considered to be significantly positive, given that Basel II is expected to lead to improved international competitiveness, enhanced financial stability and more efficient allocation of economic capital.
The Banks Amendment Bill of 2007 has gone through very extensive consultation. The passing of this Bill into an Act this year will ensure that South Africa fulfils its commitment to implement Basel II on 1 January 2008, which will put South Africa in the leading group of countries that have introduced this measure of international best practices. The passing of the Bill will also send a clear message that the confidence that international and local investors have in entrusting their monies with our banks is well placed.
I would like to take this opportunity to thank the Registrar of Banks for all the efforts in assisting with the Bill. I would also like to thank the Deputy Minister, Jabu Moleketi, the Director-General of National Treasury and his team, and more importantly, the Portfolio Committee on Finance, under the able chairpersonship of Mr Nhlanhla Nene.
I, hereby, table the Banks Amendment Bill for consideration and debate now. Thank you, Chair. [Applause.]
Mr N M NENE: Chairperson and hon members, the South African economy and its financial services under the stewardship of the ANC have risen to occupy a position which is the envy of many in developing and developed economies alike.
Pre-1994 we would not be in a position to discuss our position, because we had an illegitimate government that was isolated from the rest of the world and only catered for the needs of the few to the total exclusion of the vast majority of the people.
The financial services sector and particularly the banking industry has continued to be an anchor of macroeconomic stability through keeping pace with global developments as this Bill clearly demonstrates.
The objects of this Bill, as the Minister has already indicated, are to facilitate the implementation of Basel II and to align the Act to the changing supervisory policy and market developments.
This Bill primarily contains amendments to the Act necessitated by the Revised Framework on International Convergence of Capital Measurement and Capital Standards published by the International Basel Committee on 26 June
- These Basel II amendments are intended to create a robust regulatory environment that will enable the registrar to properly discharge his or her respective roles and responsibilities in respect of banks, controlling companies and banking groups on a single, cross-border or consolidated basis.
It is further strengthened in the following areas. To avoid repeating the areas that the Minister has mentioned, I’ll just run through them quite quickly, also taking advantage that some of the people were listening: regulation of all relevant banks and banking groups on a consolidated basis; stating the respective roles and responsibilities of consolidating and host supervisors; provision for co-operation and sharing of information between supervisors – currently the Act does not make specific provision for this co-operation; clarification of the responsibilities of banks, banking groups and boards of directors of banks and banking groups, which otherwise was not adequately provided for in the current legislation; increased reporting requirements and comprehensive disclosure requirements for banks and banking groups; facilitation of the various options available to banks and banking groups in calculating minimum capital requirements in respect of credit risk exposure, market risk exposure and operational risk exposure; and elaboration of the supervisory review process in order to, among other things, assess the capital adequacy and control environment of banks and banking groups.
In addition, the Bill also clarifies and strengthens the powers of the registrar to ensure compliance with the Act. He or she is empowered to issue circulars, guidance notes and directives to request information from relevant institutions and to impose administrative penalties. The registrar’s power to object to the appointment of directors is also clarified.
Currently, the regulatory authority of the registrar is limited to banks, and this Bill extends it to divisions and controlling companies of banks in certain respects.
This Bill also imposes an obligation on the registrar to keep a register of registered controlling companies, branches, eligible institutions, representative offices of foreign institutions or the subsidiaries and branches of banks.
The other amendments are of a more technical nature and I would not want to bore the House with those.
The committee held public hearings on this Bill and based on the responses received we are satisfied that the Bill is acceptable to the industry and that it is in the interests of all South Africans.
According to the note on assessment of the economic impact of Basel II by National Treasury, SMEs are not going to be adversely affected by the regulatory capital requirements introduced by Basel II. We are assured that capital requirements for lending to retail SMEs are actually expected to decrease under Basel II, which will in turn have a positive effect on SMEs’ access to finance. We are also assured that the introduction of Basel II requirements will not change the banks’ commitment in terms of the Financial Services Charter and BEE financing.
The commitment of the ANC-led government to the total emancipation of our people from all kinds of bondage, including economic bondage, is at the heart of this legislation. The ANC supports this Bill.
Thank you, Chair. [Applause.]
Mr D H M GIBSON: Chairperson, because this is my maiden speech as DA Finance spokesperson, I assume that the hon Minister of Finance and the rest of the House will listen in the respectful silence normally accorded to maidens. [Laughter.]
Perhaps you will allow me to start by saying that I have been happy serving on the Portfolio Committee on Finance for the last two months. The hon Mr Nhlanhla Nene is an exemplary chairman and he and his members have made me feel very welcome and at home and I’d like to thank them for that. You’ll be glad to know, Chairperson, that I will not detain you for very long this afternoon.
There are just two points I would like to make: The first is to say that South Africa’s banking structure forms part of a globalised economy. It is absolutely right that we should shoulder the responsibilities and make the most of the opportunities that arise. Basel II requires measures to strengthen the soundness and stability of the international banking system and we, through this amending Bill, seek to strengthen the South African banking system.
The second point that I wish to make is that the subject of bank stability is very topical and relevant, given the events of the last week and the consequent turmoil on international markets. These were stabilised by unexpected action by the US Federal Reserve. The loss of confidence in certain US financial institutions resulted from what are euphemistically called subprime loans. What they really are, are loans that had inadequate security and borrowers who could not afford to repay them - that’s what they really were.
The good news is that there was and is no banking crisis in South Africa. There was no run on any South African bank and we know that if there had been the Reserve Bank would have been ready, willing and able to step in immediately to help. We as a party might have reservations about the extent of bank fees and charges and we also might have greater ambitions about more of our people being able to join the modern economy by having access to banking services, but one thing is certain and that is that South Africa has a modern banking system on par with the best in the world. It is reliable and it is a positive factor in making our country able to compete for investment funds, locally and internationally. The DA supports this Bill.
Mr H J BEKKER: Chairperson, it’s not every day that I follow on the hon Gibson and particularly not when he is delivering his maiden speech in this House. I had the privilege that he had to listen and was forced to listen to my maiden speech in 1981 in the old Transvaal Provincial Council. We served there together for five years, but I think he will make a worthwhile contribution over here and in the spirit of that we wish to welcome him, particularly as a new maiden to this particular setup. [Laughter.]
The Banks Amendment Bill is really a Bill that is based on a convention, on a conference and that type of thing and it is very, very positive what has happened there and that South Africa can be part of this Basel II convention. The amending Bill introduces a plethora of new concepts in the definition sections of the Banks Act and to be in line with the spirit of the revised international framework known as Basel II.
The Basel II framework is based on a three-pronged structure comprising of minimum capital requirements, the supervisory review process and market discipline. The IFP hopes that this Bill has captured most of the important recommendations of the Basel II framework and that the banks will over time derive positive benefits for compliance and, therefore, the IFP will definitely support this Bill.
Although Fidentia is not a bank, it has been masquerading in terms of certain of its investments and it has wilfully and meaningfully misled the organisations that are investing monies with banks and I think this is also an aspect that the Reserve Bank, via the Financial Services Board could take up and be sanctioned in terms of certain of these things. We support and thank you for the opportunity. Thank you. [Applause.]
Mr M T LIKOTSI: Chairperson, this Bill brings about a regulatory framework. It defines certain expressions of the Banks Act of 1990 and other related matters of controlling and consolidating the banking industry through various statutory bodies and individually controlled bodies, and deals with an accord implementation forum, the regulatory framework subcommittee, the register, managers, supervisors, as well as organised sharing of valuable information and technology.
The Bill, if passed, will facilitate the implementation of a capital framework for banks, the International Convergence of Capital Measurement and Capital Standards, a revised framework known as Basel II. As stated in the Bill, this will strengthen the soundness and stability of international banking systems by the adoption of stronger risk management practices by the banking industry.
The PAC of Azania has taken a principled position, as far as the total liberation of Africans is concerned. It will support all measures that are intended to develop a full potential human being. The PAC of Azania will devise all reasonable security measures in protecting the economic treasure of the Africans and the human kingdom all over the globe.
The PAC welcomes this Bill and gives a thumbs up for other processes to be put in place with the full roll-out of Basel II in January 2008. The PAC firmly believes in equitable distribution of wealth, which must be state driven. The PAC supports the Bill.
Mr R B BHOOLA: Chairperson, Basel II is set to bring more sound and stable banking to the South African banking arena. We support the Bill’s deliberation on the registrar functions, duties and parameters that certainly cater for clarity in this regard and steer away from any autonomy.
Banking fraud is indeed undoubtedly a great concern and we hope that the new system will make it impossible for crimes of this nature to be committed.
While extended banking hours makes banking more accessible, the MF calls for the banks to explore methods of making finance for small and medium entrepreneurs possible with minimal risk and charges.
Technology has facilitated banking via telephone and Internet, meaning that we do not have to leave our homes to manage our funds. However, exorbitant bank charges eat at our funds and the MF calls for a revision of bank charges to reduce them to a minimum.
We wish all banks well in the implementation of Basel II, but we would like to see an oversight of the efficacy of this implementation to secure intent.
The MF will support the Bill.
Ms J L FUBBS: Chairperson, hon members, the Banks Amendment Bill before this House today, is yet another step in the economic and social transformation that this country has undergone since an ANC-led government took over.
Our ANC-led government is currently grappling with legislation that would allow for new tiers of banking such as savings and loan banks.
This Bill based on, or informed by Basel II, enables the current highly concentrated banking sector to be opened to the lower middle-income consumer. This is a statutory instrument to implement the new capital accord which will further strengthen the credibility and stability of the international banking system of which South Africa is a sound member.
Some of the highlights which we have already heard today, which I want to ensure that I have time to mention, are that, while improvements and risk management systems as well as human resource training may contribute to some degree to the cost of regulatory compliance, they would also result in lower capital charges.
This is extremely pertinent to South Africa where the smaller banks with limited capacity will now be able to avoid higher charges and this is certainly going to be done through this Bill once it is enacted, by targeting more standardised approaches which are similar to the existing requirements of Basel I.
One of the things which, I think, we have learnt as a country and an international banking community, is that Basel I gave us a first opportunity to address capital requirement and risk management. But what is particularly important is that through its implementation and application, we began to realise, particularly South Africa and other developing countries - but of course our banking system is on a par with the First World - that you cannot go with a ``one-size-fits-all’’ financial system. You need not only to strengthen the credibility and stability but you also need to ensure that there is a lot more flexibility. And this is now being done.
The three-pillar concept, which we all heard the Minister and others allude to, has enabled this much broader approach to the banking system so that “Pillar 1”, the capital requirements, “Pillar 2” the supervisory review process, and the market discipline in “Pillar 3”, enable us to address three interrelated but different challenges facing banking in our country.
The other fact which I think we can’t ignore is that over the past 20 years or so, there has been, without a doubt, a significant change in the environment that we face whereas prior to this we know that physical geography used to be an impediment. Today it is absolutely no impediment to the movement of money and the growth in our cross-border trade, finance and investment, has accelerated beyond our expectations.
Perhaps another significant aspect which this Bill will address within the Basel II framework is the technological advances that have been made - the computing power, the storage, the networks, the communications. Of course, there is capacity now to do what we perhaps could not have done some 20, 15 or 10 years ago - which was to develop highly sophisticated and complex products with the advances in financial engineering.
Another aspect that I just want to touch on is that there is often a view or perception that if we address, maintain and meet some of the international standards required in this instance by the banking system, we may in fact overlook the challenges facing our own country.
However, the flexible approaches that Basil II offers as options to each country looking at it enable us to address economic groupings, financial investments and so on, that stretch from your macro international financial investments right down to your small and micro enterprises and so on. I think that is very important.
Another very useful aspect of this Bill, and a very constructive aspect, is the whole approach to the supervisory element. Rather than simply a stickler approach, there is a home network and regulatory framework and support process that enables the bank itself to offer far more support, especially to fledgling financial investment institutions and the smaller banks. Under this Bill they will be able, once it has been enacted, to intervene at much earlier stages to prevent capital falling below minimum levels.
Various other criteria have been identified peculiar to each country’s financial system. Particularly important in our country, is the fact that transparency has received a fresh sense of support. Here the enhanced disclosure which we didn’t have before, will improve our ability to engage and interact with the banks and will also provide incentives to avoid bank failure and prevent it.
I think, the poorly managed banks will become more and more a thing of the past and will no longer happen by accident because there will be all of the capacitating.
The last point that I wish to make is that the expanded risk measures in respect of both capital requirements and operational risk management will lead, I believe, to more efficient allocation of resources within the banks and improved international competitiveness while at the same time expanding access to finance to the broader population which after all is the goal of our ANC-led government.
The ANC supports this Bill. I thank you. [Applause.]
The MINISTER OF FINANCE: Chairperson, clearly it’s uncontroversial because it is a step forward but, in expressing appreciation for the various comments made and the detail made in the interventions by members across the floor, let me just remind us of a few issues.
The first of these is in respect of what is raised by the hon Bhoola in particular. Banks intermediate, and there’s a rationale that it has to intermediate, between people who deposit and people who borrow, and if there are fewer depositors than borrowers, then banks will charge. It’s a rationale of intermediation. I think it’s one of the issues that we must always be mindful of. Banks don’t generate money in and of themselves, unless there’s a crisis and you have central bank intervention as you have seen in the last two weeks or so.
One of the things about South Africa is just the amount of change that we have lived through over the past 13 years. The Revised Framework on International Convergence of Capital Measurement and Capital Standards, known as Basel II, comes at a particular point, but I think the changes are manifest across the entire banking sector including the issues of access.
There are now three million or so South Africans who have access to banking services that previously they didn’t have. It might still be elementary at the level of Mzansi accounts and so on, but it is important that first- level access is there and is part of this general change.
Also, in respect of that which banks report on and the respective Financial Services Charter obligations, they have to report on access lending to small business enterprise development and a series of other changes that are now there.
I hope the hon Gibson will remain an active part of the Portfolio Committee on Finance. Within the next few weeks, I imagine Mr Godongwana, on behalf of the Financial Sector Charter Council, will report to the committee. It’s very important that Parliament engages with the progress that we can measure there.
In respect of the financial crisis, I want to comment on a very good article in one of the newspapers, yesterday. It started with the story: ``Now I have less in my pension fund because the white boys in Albuquerque were lending to ninjas, no income, no job and no assets’’.
When you don’t have adequate banking supervision you have that kind of problem, where some institutions have been able to take horrible loans - unsecured loans - package them as something else, get them triple–A rated by rating agencies and then sell them onto derivative funds. What you’ve seen over the past two weeks has been a knock-on effect. So, part of the Basel II, and part of the changes we are talking of ensure that banks must hold capital against risk.
That first pillar is so important because it’s by that introduction, hopefully, that the largest economy in the world, the United States, will get to the point where they, too, implement Basel II at some time in the not too distant future, because what we’ve seen is the contagion effect of poor supervision in some of these institutions.
Here we’d like to hold our heads up high and mark this as another important step forward in the security of the deposits of savers, because that sends the best possible signals about savings and investment in our economy.
Thank you very much, Chairperson, and thanks to all parties for their support. [Applause.]
Debate concluded.
Bill read a second time.
The HOUSE CHAIRPERSON (Mr G Q M Doidge): The Bill will be sent to the NCOP for concurrence.
DIAMOND EXPORT LEVY BILL
(First Reading debate)
There was no debate.
Bill read a first time.
DIAMOND EXPORT LEVY BILL AND
DIAMOND EXPORT LEVY (ADMINISTRATION) BILL
(Second Reading debate)
The MINISTER OF FINANCE: Thank you, Chairperson and hon members. Chairperson, I hope you noticed that the secretary defied you when you asked her to read the Bill. She didn’t read the Bill, but she just read its name. So, there is something wrong on the papers.
The imposition of an export levy on rough diamonds is contained in current legislation. In fact, the Diamond Act of 1986 contained this provision. However, given our new constitutional dispensation, amendments to that Act of 1986 during 2005, resulted in the need for amendment supervisions relating to the export levy on rough diamonds, hence a need a for a separate money Bill.
Early in the House, Chair, you recognised the presence of the leader of the Indian Congress Party, the hon Sonia Gandhi. She shared with us this morning that India is a country that employs a few million people in the cutting and polishing of diamonds, though they haven’t countries that have any diamond resources of their own. She said that the Indian government is very committed to ensuring that countries like South Africa, that have considerable diamond resources, will also be able to create employment in the cutting and polishing.
I think it is very important that we understand the context of the legislation before us. Part of what we want to do is to ensure that there is sufficient rough that remains in this country as a source of employment and also for value addition. It is essentially that the levy must facilitate and make people who want to export rough, pay. At the same time, the primary legislation will ensure that those who want to cut and polish in South Africa would be benefited. That is essentially what the money Bill sets out to be.
There are a number of relief measures or exemptions covered in the legislation: firstly, relief for large producers; secondly, for medium sized producers, the relief there would be if 15% of the producer’s total annual growth sale is to local diamond beneficiates; and thirdly, some exemptions for small producers who don’t exceed R20 million a year.
The purpose of the export levy is primarily regulatory in nature. The import credit and exemption may be limited in order to raise revenue if deemed necessary. At this time we see no need for this limitation because the new regulator and all related admin expenses are being fully funded on the budget. The historical context of the local diamond industry and the nature of how the local diamond market players operate, indicate that there is a higher set of local beneficiation requirements on large producers.
Lastly, the diamond export levy will not be deductible for income tax purposes. It is clear that the export levy can be avoided in full if producers meet the necessary requirements to supply local cutters and polishers. Hence, the levy effectively acts as a penalty where producers fail to meet these local supplier requirements. It is, therefore, reasonable to argue that given its penalty nature, this levy should not be considered as being deductible expenses for income tax purposes.
I raised that here because somehow one of the journalists got it wrong and reported that this would be deductible; but clearly it would be contrary to the letter and spirit of the Diamond Export Levy Bill itself. Chairperson, I, hereby, request that this House supports the Diamond Export Levy Bill,
- Again, I want to express my appreciation to the usual suspects, starting with the distinguished chairperson of the portfolio committee, its members and those involved in the Treasury - in the preparation of this legislation. I thank you.
Mr N M NENE: Chairperson, the usual suspect is back. The Minister wanted to know if I was back and he called me. Madam Deputy Speaker and hon members, the Bill before the House is an unequivocal demonstration by the ANC-led government that the aspirations of the drafters of the Freedom Charter were not a pipe dream, but a realisable vision that requires a resolute developmental state that consciously intervenes in the best interest of the people.
The mineral wealth of this country is at the centre of this intervention - in an economy that is confronted by a number of challenges that seek to undermine the enormous gains we have made since the advent of our democracy. As has already been indicated, the main object of this Bill is to give effect to the Diamond Act of 1986, that was amended in 1998 and later in 2005.
The 2005 version creates space for this Parliament to make provision for the imposition for an export levy on unpolished diamonds and also allows for offsets with respect to that levy. The 1998 version sought to promote local beneficiation of rough diamonds by imposing a 15% levy on the ones exported from the country. This 15% was not able to realise its intended objective as there are provisions or exemptions that allowed exporting parties to justify such exports by demonstrating the promotion of local beneficiation through other means.
This resulted the an unintended consequence that the 15% levy was rarely applied, if ever. The ANC-led government’s policy is determined by the needs of the people, particularly those that are vulnerable. In this instance, the beneficiation is not only an instrument of and for economic development, but also has the potential of creating jobs locally, through the development of a diamond beneficiation industry.
As I have already indicated, this Bill gives effect to the Diamond Act of 2005, among other things establishing the state diamond trader with the intention of ensuring that rough diamonds are retained in the country and to promote local beneficiation. The state diamond trader, in terms of this Bill, is intended to purchase 10% of rough diamonds before considering exporting. The state diamond trader will, in turn, sell these diamonds to local cutters for polishing and further beneficiation. This process will create a steady long-term supply for local cutters.
This Bill proposes an export levy of 5%, as has been indicated, to be levied on all rough diamonds exported and this is triggered by section 69 of the Diamond Act, which states that an unpolished diamond intended for export, will be subject to this levy. The 5% levy applies to the market value of exported diamonds as determined by this section.
As a safeguard against undervaluation, this levy will be imposed on the greater of the two following values: The greater of the value specified by an exporter on a return, as required by section 69 of the Diamond Act; or a value assessed by the diamond and precious metals regulator, who in this case is the government diamond valuator.
After lengthy deliberations on the appropriateness of the reduction of the levy from 15% to 5%, the committee was satisfied that this rate is high enough to contribute towards local beneficiation, whilst low enough not to unduly encourage smuggling. The other point to be borne in mind is that this levy is not necessarily intended to generate tax revenue, but to encourage local beneficiation. This piece of legislation fits perfectly into the government’s strategy informed by the People’s Charter of sharing in the country’s wealth, in particular, mineral wealth. The introduction of the levy does not prevent the Minister of Minerals and Energy from granting exemptions, but to the extent that sufficient measures exist to ensure that local cutters receive a sufficient and sustainable supply of unpolished diamonds. In line with our democratic responsibility of promoting public participation, the committee held public hearings on this Bill together with the Portfolio Committee on Minerals and Energy. We were convinced that the stakeholders’ views were adequately canvassed and where possible, accommodated.
To mention but a few of these: a number of industry players requested that the definition or threshold for small mines be increased from an annual turnover of R10 million to R35 million, in line with the threshold as per the BEE – Black Economic Empowerment - codes used by the Department of Trade and Industry. It was further felt that the requirement of parcels consisting of 10 stones was always practical.
These concerns were addressed and the threshold was relaxed, and the requirement of parcels was dropped. The other concern was that the large producer monetary threshold of R5 billion was too high and was subsequently reduced to R3 billion. These were just some of those concerns that were raised and addressed and those that relate to the Diamond Act were accordingly referred to the appropriate Ministry and committee for further discussions.
The Bill is a conscious and deliberate intervention by the developmental state, with a distinct objective of promoting economic development in a manner that addresses the dual economy divide without compromising productivity. It is the committee’s view that the passing of the Bill is fully supportive of the objectives of the Diamond Act and that, once passed, the constraints prevailing as a result of the void, will be laid to rest. The ANC supports the Bill. I thank you.
Mr S J F MARAIS: Chairperson, the primary objective of the Diamond Export Levy Bill is to provide for the imposition of an export levy on rough diamonds and to allow for offsets, or credits, against the levy. The Bill aims to replace the 15% with a reduced 5% levy on diamonds exclusively purchased and exported through the Diamond Exchange and Export Centre. It further aims to disallow local diamond houses and traders as sites for export sales.
Some proposed relief measures include credits on imported unpolished diamonds; temporary export for expo and display purposes; and a 5% window in respect of the threshold requirements. Levels of exemption to local large, medium and small producers will still be applicable, subject to different turnover and threshold requirements for local sales and the DEEC tendering process, where the Minister may waive some of these requirements for large producers.
The secondary objective is to promote local beneficiation of the polishing and cutting of rough diamonds. This will be based on the following: Producers will be obliged to sell a portion of their production to the state diamond trader, who in turn will resell this to local cutters and polishers. Diamonds for export from the state diamond trader will not be exempt from the 5% levy. Exemption will be applicable to the extent that local cutters and polishers receive a sufficient and sustainable supply of unpolished diamonds.
The objective of the Diamond Export Levy Administration Bill is to provide for the administration matters relating to the imposition of the requirements of the Diamond Export Levy Bill.
The most critical implications of this Bill, among others, is the fact that all legal persons must be registered with SARS if they want to acquire an export permit and the fact that the term ``producer’’ will be extended beyond the holder of the mining rights to other companies within the same group.
Voorsitter, daar is egter sekere bekommernisse ook geïdentifiseer: Om kompeterend op die uitvoermarkte te wees, het produsente die vrystelling van hierdie heffings nodig. Dis ’n kompeterende wêreld daar buite. Hulle is verplig om hul diamante by die DEEC aan te bied hoewel daar geen beheer is oor wie hierdie kopers is nie. Krediete teen die heffings kan verdien word slegs as hulle diamante aan plaaslike bevoordeeldes verkoop word, terwyl slegs die onverkoopte gedeelte dan uitgevoer kan word.
Ongelukkig is daar tans geen bewyse beskikbaar om die lewensvatbare en volhoubare kapasiteit te bevestig en om te sien dat die bedryf wel sal groei en ontwikkel nie.
Die toename in die regulasies vanuit hierdie wetsontwerp mag die nadeel inhou dat dit verdere vastekapitaalinvestering in die diamantmyn- en die slyp- en poleerbedrywe kan ontmoedig.
Groot mynhuise kan selfs oorweeg om hulle basisse na ander lande met meer stimulerende vereistes, te verskuif. Sulke optrede sal ons diamante se kompeterende voordeel op die wêreldmarkte verswak, met moontlike werksverliese, wat natuurlik strydig is met die bedoeling van plaaslike bevoordeling van slypers en poleerders.
Hierdie wetsontwerp gee ook aan die Minister van Finansies die magte om invoerkrediete aan te pas as ’n inkomstemeganisme.
Ná ’n deeglike evaluering van die inhoud van hierdie wetsontwerp, wat noodwendig saamgelees moet word met ander diamantverwante wetgewings, is dit geensins duidelik dat dit in werklikheid tot voordeel van beide die diamantmyn- asook die diamantslyp- en -poleerbedryf sal strek nie.
Die DA sal daarom nie hierdie wetgewing in sy huidige formaat steun nie. Ek dank u. (Translation of Afrikaans paragraphs follows.)
[Certain points of concern, however, were also identified. In order to be competitive on the export markets, producers need exemption from these levies. It is a competitive world out there. They are obliged to offer their diamonds at the DEEC, although there is no control over who these buyers are. Credits against the levies can only be earned if they sell their diamonds to local beneficiaries, and only the unsold portion can then be exported.
Unfortunately there is no evidence available at present to confirm the viable and sustainable capacity and to provide assurance that the industry will indeed grow and develop.
The increase in regulations resulting from this Bill might have the disadvantage of discouraging further fixed capital investment in the diamond mining and cutting and polishing industries.
Large mining houses might even consider moving their bases to other countries with more stimulating requirements. Such action will weaken the competitive advantages of our diamonds on the world markets, with possible job losses, which, of course, is contrary to the objective of benefiting local cutters and polishers.
This Bill also confers on the Minister of Finance the powers to adjust import credits as an income mechanism.
After thorough evaluation of the contents of this Bill, that needs to be read together with other diamond related legislation, it is not at all clear that it will, in fact, be to the advantage of the diamond mining and diamond cutting and polishing industries.
For this reason the DA will not be supporting the legislation in its present format. Thank you.]
Mr H J BEKKER: Madam Deputy Speaker, the IFP wants to reiterate its support for the diamond levy Bills before us.
As the hon chairperson has said, the proposed diamond levy Bill of 2007 reduces the export levy on rough diamonds to 5%. It replaces the current 15% export levy as provided for in the Diamond Act of 1996.
The aim of the levy under the current Bills is not intended to generate revenue but rather to encourage the supply of rough diamonds to the local polishing and cutting industries.
The beneficiation of rough diamonds is seen as important to encourage local economic development, skills and employment creation. The IFP sincerely trusts that this will indeed happen.
Furthermore, the Bills are in line with the spirit of the previous amendments made to the Diamond Act in 2005 and the Diamond Second Amendment Act 30 of 2005.
For these reasons the IFP has no grounds to object to the passing of these Bills.
With tongue, in cheek, and also maybe playing devil’s advocate, I heard that De Beers and others didn’t object about the taxation aspects. I also think that it was better that they didn’t do so, because apparently they’ve taken almost a truckload of diamonds out of this country and I don’t know whether the appropriated levies had been paid at that stage. I’m talking about prior 1994 and in terms of this it would be perhaps prudent for them to stay a bit out of the limelight in terms of this particular Act and also support the Bills. I thank you, Madam Speaker. [Applause.]
Mr M T LIKOTSI: Deputy Speaker, the matter of mineral resources in the country has been a contentious issue since the arrival of the European immigrants in the 16th century in Azania. Diamond, gold, copper and many other mineral resources were mined at will without any form of regulation by the aggressors whose belief was to take anything at our disposal and make us perpetual slaves and keep us in permanent poverty as is the case today.
The PAC of Azania welcomes efforts such as those contained in this Bill to regulate the export of unpolished diamond from our country. The 5% levy on the export of unpolished diamonds will assist in the development of our underdeveloped country where the majority of the Africans are living in squalid conditions.
The PAC of Azania firmly believes that this Bill that is tabled, if controlled, monitored and evaluated accordingly, may produce the required outcomes of job creation through our local beneficiation.
The involvement of diamond exchange institutions and the diamond export centre will be a deterrent factor to any form of cheating. The medium and small diamond producers will benefit from the exemptions of the export levy and this may go a long way in making sustainable African diamond producers. The mining industries need an economic revolution that will speedily turn it into a conveyor belt of world distribution in our country. The PAC supports the Bill.
Ms S RAJBALLY: Some religious beliefs identify diamonds as the tears of God – that’s how important they are. Diamond sales are lucrative globally, and South Africa over the years has supplied the world with many of these exquisite stones.
We are pleased that this Bill serves to develop a local beneficiation industry and shall allow new entrants, dealers, cutters and polishers to participate in the diamond industry. We hope that the identification of a need for more polishers and cutters would stimulate growth employment and interest in this arena.
The export levy shall harness control over the export of rough diamonds and encourage local beneficiation. The MF believes that the state diamond trader shall further manage and control the industry. We believe that the Bill has encouraged a fair discharge of the tax burden between role players.
The MF voices its support to end the trade of blood diamonds globally. We call on the House to secure the diamond industry from this inhumane and illegal trade. The MF supports the Diamond Export Levy Bill. I thank you.
Mr S E ASIYA: Mhlalingaphambili, ndiyabulela, ndibhotisa kananjalo. [Thank you Chairperson and greetings to you all.]
This is the first time that I will be deliberating or standing here in the absence of my colleague, my friend and a comrade, Comrade Yusuf Bhamjee, who has been redeployed to KwaZulu-Natal. I hope that he will move from stride to stride there in KwaZulu-Natal.
Somlomo ohloniphekileyo, baPhathiswa abahloniphekileyo, malungu ahloniphekileyo nani maqabane. Le ntetho ndiyinikela kubafundi abangamalungu eCosas beminyaka yama-’70. Aba bafundi bathatha uMqulu weNkululeko bawenza umkhomba-ndlela wabo. Yaba luxanduva lwabo ukuba baseke amasebe olutsha kwiilali, iidolophana, iidolophu, iinqila neengingqi zoMzantsi Afrika jikelele. Loo nkqubo yenza kwaba lula ukusekwa kombutho owaba ngugalel’ ebhayini, iSayco, eyongamela yonke imibutho yolutsha apha emhlab’ uhlangene.
Lo mbutho wasekwa ngomnyaka ka-1987 apha eKapa, kwaye wathi wazimanya nombutho wabahlali i-United Democratic Front. Isikhokelo sayo yonke le mibutho neenkqubo zayo zazisekelwe kuMqulu weNkululeko. Ndifuna ukugxininisa kumhlathi othi: “Abantu baya kwabelana ngobuncwane beli lizwe.”
Elinye lamagunya aqulathwe kuMgaqo-siseko weli lizwe lithi amalungu athe anyulwa ngabantu, kulilungelo lawo ukuba aphumeze imithetho eya kwenza inguqu kweli lizwe loMzantsi Afrika. Kwinkongolo ye-ANC eStellenbosch ngomnyaka ka-2002, lo mbutho wathi waphawula ukuba izimbiwa zeli lizwe zisaweliswa iilwandle ukuba ziye kugqityezelwa khona, nto leyo ebangela ukuba abantu beli bangaxhamli kwizimbiwa zeli.
Lo Mthetho uYilwayo uthiwe thaca apha uzama ukulungisa oko. Inkqubo yale Ndlu ibekekileyo isinika igunya lokuba siwuphumeze lo Mthetho uYilwayo. Lo Mthetho uYilwayo uthe wahliwa amahlongwane yikomiti, saze savumelana ngamxhelomnye ngawo. Ngoko sibongoza le Ndlu ibekekileyo ukuba iwamkele.
Lo Mthetho uYilwayo uguzula amasolotya oMthetho ka-1986, uMthetho onguNombolo 56, kwaye unika igunya lokuba iidayimani ezikrwada ezifumaneka emhlabeni nakwizimbiwa zeli zilungiswe, zigqityezelwe kweli ukuze noosomashishini abasakhasayo bakwazi ukuxhamla.
Urhulumente oxhuzula imikhala we-ANC, ugweba indlala kwaye lo Mthetho uYilwayo uza kuvula amathuba emisebenzi nakwimizi-mveliso esakhasayo ukuze nayo iphuhle, de ifikelele kwinqanaba loosomashishini ekukudala bexhamla.
Ngokuphumeza kwethu lo Mthetho uYilwayo, liya kuba liphelile ithuba koongxowa-nkulu ababehlawula ama-50 ekhulwini njengerhafu. Kwaye babe neendlela abebesithi ngazo bakwazi ukuphepha ukuhlawula ezi rhafu. Ngoku wonke ubani othi ashishine ngeli litye linomthika uya kuhlawula irhafu esisihlanu ekhulwini. Liphelile ithuba lokuba athi ubani xa ethe walizuza eli litye kufuneke ukuba asimbele isinqe aye koo-De Beers, bona bamvuze ngendlela abathanda ngayo. Loo nto ibibangela ukuba abantu bakuthi balithubelezise eli litye baye kulithengise kumazwe angaphandle.
Ngoko ke, ngokumisela kwethu lo mthetho, sithi wonke umntu weli lizwe uvumelekile ukuba axhamle kolu shishino. Kambe, senza isilumkiso kubantu abaza kuthi gqolo bethengisa eli litye linomthika kumazwe angaphandle ngelithi baya kudibana neembila zithutha.
Ndimvile umhlekazi obe suka apha esithi oo-De Beers noobani bavumile, kodwa manditsho ukuba bekungemnandanga, kuba kaloku bebexhamla. Sixambulile phambi kokuba bavume oo-De Beers, ukuze kube nokuxhamla wonke ummi weli. Kodwa ke, ngokukhokelwa ngusihlalo wethu, siye savumelana ngamxhelo-mnye ngalo Mthetho uYilwayo uthiwe thaca apha.
Njengommi nomhlali wephondo loMntla Koloni, ndiziva ndinemincili xa kusenzeka ezi nguqu. Wagwetywa ndlala!, kuba kuza kuvuleleka amathuba emisebenzi ze kuphuhle nezakhono. UMphathiswa ebesetshilo ukuba i-Indiya ithi ikulungele ukuba ithumele amagosa ayo ukuba aze kusifundisa indlela yokupolisha nokusika, ukugqibelelisa iidayimani zethu.
Kubantu baseKimberley, Barkly West, Richtersveld, Longlands, nabezinyee iidolophu kwamanye amaphondo, ndithi: Indlala igwetyiwe! Nali ithuba, masilisebenzise. Umbutho wesizwe, iNkongolo, uyawamkela lo Mthetho uYilwayo kwaye ubongoza le Ndlu ibekekileyo ukuba nayo yenjenjalo, iwamkele. Camagu! Enkosi. [Kwaqhwatywa.] (Translation of isiXhosa paragraphs follows.)
[Madam Speaker, Ministers, hon members and comrades, I dedicate my speech to the learners who were members of Cosas of the 1970s. These learners took the Freedom Charter forward and used it as their guideline. They took it upon themselves to form new youth organisations in villages, in towns and cities, in regions and districts all over South Africa. Because of these initiatives it was very easy to form the umbrella organisation which was called Sayco, which in turn brought all youth organisations under its banner in this country.
This organisation was formed in Cape Town in 1987 and it joined forces with the community organisation called United Democratic Front. The foundation for all of these organisations was based on the Freedom Charter. I want to emphasise this phrase: “The people shall share in the country’s wealth.”
One of the key responsibilities contained in the Constitution for the members who have been elected by the people is to see that they pass laws which will bring change here in South Africa. At the ANC conference in Stellenbosch in 2002, the ANC acknowledged that minerals of this country are still exported in order for beneficiation abroad and this leaves the people here suffering because they do not benefit anything.
This Bill aims at correcting that. This House gives us the right to pass this Bill. The committee looked at this Bill thoroughly and we finally agreed on it. We therefore ask this august House to accept this Bill.
This Bill is an amendment to Act No 56 of 1986 and it gives the right not to export our raw material so that the small businesses of this country could benefit.
The ANC-led government is opening doors for growth even to small companies and this Bill will create business opportunities for small business and they will also grow their businesses like the other businesses.
When this Bill is working the chances of bigger companies paying 50% will be over. They also have the chance of not paying the tax. Now everybody who is dealing with diamonds will pay the same amount of tax which is 5%. De Beers is no longer going to enjoy the privilege of taking part in diamond dealing and pay what ever amount to compensate. Because of the heavy burden of tax people were taking these materials secretly and sending them to other countries.
Through this Bill everybody is getting a chance to enjoy this trade. We are warning people against selling these materials to other countries because they will be in trouble.
I heard the hon member who spoke here earlier on saying that De Beers and others agreed to the conditions but I must mention that they were not happy because they had previously always enjoyed the privileges. We did struggle before De Beers and others agreed to ensure that everybody in this country enjoys the fruits. Through the leadership of our chairperson we eventually agreed on the Bill currently being debated.
As a resident of the Northern Province myself, I feel very happy to see all these changes. There will be no hunger because there will be more job opportunities and economic growth. The Minister did tell us that India is willing to send expetts to come and show us how to polish and cut our diamonds.
To the people of Kimberley, Barkley West, Richterveld, Longlands, and other towns in other provinces I would like to say: There shall be no more hunger! Here is our chance, let us use it. The ANC supports the Bill and asks this House to do so as well. Well done! Thank you. [Applause.]]
The MINISTER OF FINANCE: Chairperson, this was clearly a very entertaining debate this afternoon. I liked the way in which the hon Asiya stretched from youth in 1987 to diamonds. I liked it.
I think it’s necessary to record the fact that the history of this country has been shaped by the quantum of these stones that have been found. There is an interesting bit of that history that suggests that the original De Beers farm where the diamonds were discovered in 1867 was in fact in the Republic of the Orange Free State, and the border was moved.
All of these are part of our history and, I think, understanding this issue, understanding the transfer of wealth, understanding the construction of a South African global monopoly, in fact, in the management of diamonds, it is important in understanding the context of this legislation.
It surely can’t be correct that all of the wealth can be removed, and nothing remains – no jobs, no wealth, and so, in the letter and spirit of the Mineral and Petroleum Resources Development Act, we establish natural patrimony over our mineral rights and so we must use it to the benefit of all South Africans. That’s the objective of this legislation. [Interjections.] The hon Bekker says that De Beers removed a truckload of diamonds!
There are two points to make. I read something, a few weeks ago, in a Sunday newspaper. The journalist writes, because he doesn’t ask questions, that a new train line will be constructed to carry diamonds. Now, you need to find a heck of a lot of these things to construct a train line to carry diamonds!
The second point to make is: We don’t know what the truckload is worth, because it could be highly valued gems, or they could be industrial diamonds, and so, part of managing this is understanding the detail and ensuring that the diamond trader has the requisite skills and capabilities in place.
Essentially, I think that the legislative arrangement here must lay the basis for an ease of administration to ensure that those who extract the diamonds from the earth either commit to a legitimate business, or they steal. That, I think, is what we must try and do. I have looked at mineral legislation from around the world and I am pretty sure that in some of these areas, we actually are quite tame.
It is a very necessary step forward and as I said earlier, I am very encouraged by the way in which we are being egged on by the hon Sonia Gandhi and others from around the world to actually take this up more seriously.
Against this background, I am concerned that the hon Marais says that the DA will not support this legislation. It’s fine if people don’t want to comply. They can leave our diamonds and go away. It’s as simple as that. We are saying that it’s not a revenue measure. The hon Bekker was clear about this. It’s not a revenue measure. It’s using our natural resources to improve the quality of life of more people than just those who happen to have the licence. If that doesn’t accord with the principles that the DA supports, well, that’s tough.
I am glad that the majority of parties in this House support it. I think that it’s a very progressive step, and one that we must support and ensure that, from time to time, the administrators will come back to Parliament and report on the progress in respect of this legislation. It’s one of those things that we want to measure.
In respect of the hon Likotsi, I have a bit of a problem, sir. You spoke about the mineral wealth of Azania. I have looked again at the Bill. It’s the Republic of South Africa Diamond Export Levy Bill. So, it only covers South Africa. It doesn’t cover Azania. Thanks for the support anyway. Thanks so much. [Applause.]
Debate concluded.
The DEPUTY SPEAKER: Are there any objections to the Diamond Export Levy Bill being read a second time? [Interjections.] Do you want us to note your objections?
Ms S V KALYAN: Thank you, Deputy Speaker. Will you please record the objection of the DA?
The DEPUTY SPEAKER: I wish you had stood up there longer so that you could make other members who do not have blazers of their own institution jealous! [Interjections.]
Diamond Export Levy Bill read a second time (Democratic Alliance dissenting).
Diamond Export Levy (Administration) Bill read a second time. The House adjourned at 16:02. ____
ANNOUNCEMENTS.TABLINGS AND COMMITTEE REPORTS
ANNOUNCEMENTS
National Assembly and National Council of Provinces
The Speaker and the Chairperson
- Introduction of Bills
(1) The Minister of Environmental Affairs and Tourism
(a) National Environment Laws Amendment Bill [B 35 – 2007]
(National Assembly– proposed sec 76) [Explanatory summary of
Bill and prior notice of its introduction published in
Government Gazette No 30142 of 3 August 2007.]
Introduction and referral to the Portfolio Committee on
Environmental Affairs and Tourism of the National Assembly, as
well as referral to the Joint Tagging Mechanism (JTM) for
classification in terms of Joint Rule 160.
In terms of Joint Rule 154 written views on the classification
of the Bill may be submitted to the JTM within three
parliamentary working days TABLINGS
National Assembly
-
The Speaker
(a) Final Report of the Special Pensions Board, from the Minister of Finance, in response to recommendations in the Report of the Portfolio Committee on Finance on the progress report from the Special Pensions Board on the Implementation of the Special Pensions Amendment Act, No 28, 2005, (Act No 69 of 1996, as amended), as adopted by the House on 16 November 2006.
Referred to the Portfolio Committee on Finance.