Madame Speaker and Deputy Speaker of the National Assembly; honourable Chairperson and Deputy Chairpersons of the National Council of Provinces; honourable Members of Parliament; Distinguished guests; Ladies and Gentlemen:

I should start by expressing my appreciation for this opportunity to exchange views with you at the beginning of this penultimate sitting of our first democratic parliament.

I wish all of you a productive New Year in the service of the people.

As government, we are confident of the progress being made to meet our mandate. We are resolved to build on the solid foundation that has been laid over the past three-and-a-half years. As always, the most critical challenge is whether we are succeeding as leaders to mobilise the people in actual practice to be their own liberators.

We know too well that on our own we cannot succeed. We know that the programmes of government are not the panacea for all the ills of our terrible past. They are but a platform for South Africans to let their strengths shine through.

By our own pronouncements and actions, we could relate to these citizens as passive recipients of government delivery, as if government were a force on high. Worse still, we could turn some constituents into passive critics, their own rationality drowned in the chorus of regret that the past has passed. On both counts, this would be a recipe for sure failure.

That is why, during the course of last year, we once again put the Masakhane campaign at the centre of our activities. And our performance should be judged above all on the basis of whether our programmes are positively affecting the lives of especially the most vulnerable sections of society: the poor, women, the disabled, children and the rural masses - the primary victims of the iniquitous system from which we have just emerged. We are proud to answer this question in the affirmative.

Last year, we increased the supply of clean and accessible water from 700 thousand to 1,3 million South Africans.

We have surpassed our plans to build or upgrade 500 clinics last year; and the primary school feeding scheme reaches 4,9-million children.

From 250 thousand in 1996, we are in line to make 421 thousand telephone connections this financial year, making life that much easier for millions of South Africans.

With more than 400 thousand electricity connections in 1997 alone, today South Africa has reached a 58% electrification level so millions can have light.

Besides the impressive land redistribution programmes, the law on secure tenure will bring more certainty in the lives of over six million citizens.

There is no magic in numbers as such. But we are proud that, through these and many other projects, our programmes are impacting on the lives of particularly the poor. This applies to varying degrees with regard to other challenges to which we shall later return.

And it is all a result of a clear strategy, properly managed plans, good governance and, more than anything else, the determination of the overwhelming majority of our country-men and -women to change their lives for the better. It is therefore understandable that, unlike some of us, those who bore the brunt of apartheid oppression say that things are a lot better.

But they also say, and are justified to say so, that what has been done is not enough. Not because they expect the legacy of centuries of colonialism to be eradicated in a few years, as we ourselves have said on countless occasions before. Not because they are frustrated with government. But because they appreciate that together we need to much more, over many years, to realise a truly just and prosperous government, they have a serious, committed and caring institution - a government that they can call their own.

We are at the beginning of an arduous and protracted struggle for a better quality of life. In the course of this struggle, we shall have immediate successes; we shall have setbacks; but we shall certainly progress, inch by inch, towards our goal.

From time to time, incidents do happen which bring out in bold relief the enormity of the challenges we face. As the saying goes, one falling tree makes more noise than millions that are growing. As such, for both good reason and bad, occasional problems are seized upon by our detractors as the stock-in-trade of this government; indeed as the essence of democracy.

I will raise a few of them, particularly, difficulties with regard to old age pensions, education, crime and corruption, housing and job-creation, because they touch on the very essence of the issues of resources to meet our obligations, the size of the public service and its management, civic duty and a new morality.

Madame Speaker;

A few weeks ago, the problem of disbursement of old age pensions and other social grants came to the fore.

Let me start off by saying that, in the way that we increased old age pensions last year, and as we eliminate fraud, we shall seek to find resources this year for a further increase - modest as it may be - working towards a life of dignity for our senior citizens. Let me further emphasise that we are committed - not merely because of statutory obligations, but because we care - to ensure that, whatever the occasional administrative hiccups, the right to a pension will always be met.

What has not received much public coverage is the fact that the problems we experienced recently derived from:

* Firstly, that the audit of our newly integrated system is not only eliminating "ghosts"; but it also identified people who were callously refused these pensions under the apartheid system and its bantustan off-shoots. They are today on the roll; and it was decided that their right to back-pay could not be disregarded.

* Secondly, the measures that have been taken to eliminate corruption have uncovered many fraudsters in the government machinery, but we still have a long way to go to resolve this problem.

* Thirdly, some public servants are, to put it mildly, not imbued with the spirit of public service - to the extent that even in instances where these funds are available, they do not turn up on time and/or they relate to senior citizens with attitudes bordering on the criminal.

Through co-operation between national and provincial movements concerned, we shall ensure that these problems are dealt with methodically and with a ruthless determination.

Related to this, we did indicate last year that we expected some teething problems in the first year of total budget allocations to the provinces. Indeed, we need to pause here, to pay tribute to the provincial administrations, which were able to come through without debilitating desolation. Given the serious problems identified by central government Task Teams last year, it is thanks to the efforts of all provinces without exception that the problems have not been much worse. But we must eliminate overspending.

A related and critical matter is the issue of how the public resources at our disposal correspond with the social backlog that we have inherited.

In our view, the starting point in addressing the question of the national budget and public finances in general is that we cannot behave like fools who cut their noses to spite their faces: to throw policy out of the window in search of fractions of percentages in deficit targets. We have creatively to strive to meet our obligations within the context of a reduction of the public debt.

Indeed, we cannot pretend that the deficit targets we have set ourselves do not test our capacity and will. But we cannot divert from the course we have chosen. There is no other route to sustainable development.

Two critical matters arise from this.

In the first two years of our democracy, we sought to use the special mechanism of a so-called RDP Fund to lever changes in the patterns of departmental spending. Today this task is built into the normal functions of all departments. Reprioritisation and more reprioritisation is the challenge that we shall continue to grapple with in the coming years.

For if we should not and cannot cut down on houses and clinics being built, on the supply of water, on improving the quality of education including the building and equipping of schools, on improving policing and so on, then we have to cut down elsewhere.

There have been some commendable savings from better cash flow management. But it is not nearly enough.

And we cannot use the proceeds of privatisation to fund salaries and other consumption expenditure.

Put in simple terms, we need to cut spending on personnel.

I am confident that all of us, and the trade union movement in particular, will agree that apartheid South Africa was over-governed and over-supervised. The size of the public service had nothing to do with public service.

On the other hand, democratic governance is management of a process whereby people govern themselves. Government is not an employment agency.

This year, we shall go into this question without equivocation. Frankly put, we shall need to start comprehensive discussions with the unions on retrenchment in accordance with the provisions of our labour laws. These negotiations will need to take into account the principle that shedding jobs in the public service does not necessarily have to translate into worsening the problem of unemployment.

For instance, retrenchment packages that include investment capital and tender obligations on the part of government can in fact help expand the job market especially in depressed rural areas. We shall, as a matter of urgency, require our public service department and provinces to work out proposals in this regard.

Jobs, jobs and jobs is the clarion call that should guide us. We do pride ourselves with the health of our economic fundamentals: the declining rate of inflation; the incentives that we introduced which have attracted over R7-billion in investments; close on to 400 projects related to Spatial Development Initiatives such as the Maputo Corridor which have attracted investments to the tune of about R77-billion; the rising graph of productivity; and increased exports.

With regard to the budget, we have introduced transparency and certainty through the Medium-term Expenditure Framework. And tax collection is improving as more people are brought into the net. We can quote many more examples, including a relatively stable exchange rate in the face of global adversity; and the hundreds of thousands of jobs created through the public works, municipal infrastructure and investment promotion programmes. But the economy continues to shed too many Jobs.

This is in part because the rate of investment, particularly by ourselves as South Africans, is not enough. Within an overall increase in fixed investments of about 3%, public authorities show a massive decline in the ratio of growth of capital expenditure. Public corporations are doing much better and they need to be commended for this. The rate of growth of productive private investments has not been impressive.

As such, we should all agree that the issue is not merely one of government creating a favourable environment to attract investments. This it has done with commendable determination. What is required is a deliberate effort to increase investments: the type of investments which create jobs.

These are the things, I am told, that the various sectors in NEDLAC are addressing in preparation for the Jobs Summit. By the time of this Summit, we hope that a real partnership will have emerged among government, business and labour to tackle this critical task.

One will not be exaggerating to say that, given its impact on everything else we do as a nation, including crime prevention, reconciliation and the very survival of our democracy, the Jobs Summit is perhaps the most important event since our first democratic elections; an important launching pad for a determined national drive as we move into the 21st century.

It is quite clear that as we finalise preparations for this Summit, we cannot continue to imprison ourselves in the paradigm of large profits and only large profits as the driving force of business operations. We cannot continue to wallow in the illusion that the protection of the narrow interests of the employed is the driving force to poverty alleviation.

We must launch joint efforts towards an economy that creates jobs; towards a society that cares by helping the unfortunate in its ranks to help themselves.

Honourable Members and Delegates;

Within the context of facilitating economic growth, transfer of technology and black empowerment, we have made great progress in the programme to restructure state assets. As we promised a the last opening of parliament, the previous year has seen Telkom acquire strategic partners; SunAir has been privatised; South African Airways is completing its restructuring towards acquiring a strategic partner. While the Airports Company and SAFCOL processes are taking longer than anticipated, they are on their way to completion this year.

The pace in the restructuring programme is broadly in keeping with our set time frames. Where difficulties have been experienced, they represent lessons both about our past and our present.

With the Aventura Holiday Resorts for instance, a government of the people could not ignore the complex land claims that are attached to some of these resorts. With Alexkor in diamond mining, we once again learnt that much information about the net worth of many state assets has been concealed by those who ran the previous government, or they simply did not care about these assets. But we are on course to resolve the problems.

I wish once more to reiterate that, for us, the issue of restructuring of state assets is not driven by ideology. We shall privatise where necessary. But we shall also set up new state enterprises where market imperfections and failures play themselves out to undermine social programmes. Such is the case with elements of the liquid fuels industry and the servicing of housing construction, which has not received the optimum support from the banking industry. Restructuring also means strengthening management of existing enterprises, a programme that we have intensified.

On the issue of housing in particular it is necessary to go back to the basics.

The numbers of close on to 400 thousand subsidised houses either completed or under construction and about 700 thousand subsidies allocated are important indicators of progress. But as we indicated earlier, there is no magic in numbers as such: and the target of 1 million houses in five years, provided directly by government, may not be attained. What we need to examine closely is whether, after the delays in the launch of the housing programme in 1994, we have mustered the capacity to accelerate this programme. And the answer is, yes!

The pace of housing construction is accelerating. Today one thousand houses are started or completed every two-and-a-half days, and, as a result of our programmes, 1,2 million South Africans have a permanent roof over their head.

In consultation with some of the banks, we have cleared hundreds of so-called redlined areas; we have ensured over 60 thousand loans at the upper end of the subsidy market; many constructors have been registered; monitoring of quality and the capacity of provinces have been enhanced.

In addition to issues of quality, questions have also been posed about the sizes of houses that are being built. Going back to the basics here means appreciating that government is focusing on the poor and most vulnerable sectors of society.

If we have to reach the widest spectrum of these citizens, with the resources available, we cannot increase the size of the subsidy. In addition to services and a plot of land that families can call their own, possibilities are left for them to exercise initiative with the resources available, and to improve the basic structure when they are in a position to do so.

Indeed, among the proudest moments of this programme is the involvement of the people themselves, especially women, who through their own labour and creativity are able to achieve much more with less. In consultation with local government, we have also started to examine in greater detail the question of density, integrated development and rental accommodation.

In brief, whatever the difficulties and initial delays in the first five years, we are on course to ensure that, in the end, there shall be housing and security for all.

Honourable members and delegates will agree that significant progress has been made in transforming education, including adult basic education, from the mess it was under apartheid. Today, children starting their schooling can for the first time do so just as children - not a black piccanini or a white kleinbaas. From the self-criticism last year about the school-building projects, we are happy that provinces have started to use more of the funds set aside for this purpose.

But as in other areas, there have been moments in this sphere which bring to the public mind the enormity of the tasks that we face. Such were the matric results of last year. It is encouraging that, in typical South African style, after the brief flurry of accusations and counter-accusations, we started to focus attention on the real issues. Among these issues is the fact that the standard of the papers was somewhat higher and security of exams somewhat tighter; most inconsequential subjects taken in the past simply to fill a certificate were done away with; the marking was more rigorous and there were minimal adjustment of the marks. As such, though ironic to say, there were fewer but better passes.

This is not to detract from the fact that we have only scratched at the surface of the legacy of apartheid education. Many children still study under trees and dilapidated buildings. Many schools are hollow shells without even the most basic equipment for normal teaching. Many teachers do not have the capacity to transmit knowledge in a professional manner. And some simply do not see it as their civic duty to relocate to areas in need.

There are inexcusable and unacceptable delays in the supply of textbooks which derive from poor management and shoddy tendering deals; let alone the non-existence of malfunctioning of many school governing bodies.

Yet, when all is said and done, many schools in disadvantaged areas have shown that serious application to duty by the school authorities and the students can bring positive results. We pay tribute to these heroes.

Madame Speaker;

This spirit of community, of partnership and of hard work is required when dealing with problems of crime and corruption.

Again, in this area, the tendency often is to exaggerate and distort the real situation; to use half-truths and sensationalism to paint a picture of a situation out of control. It is understandable that unscrupulous politicians, media commentators and those who wish to question the legitimacy of the democratic process as such will conjure up crises in the heads, where in reality there are no crises.

The task of those interested in improving the country's quality of life is to examine the real situation in its complex forms, even if this may not please the prophets of doom.

That reality is that, since 1994, there has been a marked decline in virtually all serious crimes such as murder, robbery, taxi violence, car-hijacking and others. In other words, since this democratic government came into being, there has been a decline in most serious crimes. This is a result of better co-ordination among all arms of the security services: the police, the intelligence services and the defence force, as well as co-operation across Southern Africa. One such example of effective co-ordination is in the farming areas, where there is an 80% success rate in apprehending the murderers.

The National Crime Prevention Strategy has got off the ground. And as we promised last year, the law on bail and mandatory sentences for serious crimes has been passed. A Detective Academy - interestingly the very first one in the history of South Africa - has been opened to improve police's investigative capacity and skills to do their jobs. Proposals on reducing commercial entry points including closing some so-called international airports have been finalised: and we hope that we shall receive the co-operation of all affected parties, despite the formal agreements that they may have entered into with the previous government.

Among the elements which know how effective the security forces are becoming are the crime syndicates themselves. It appears that from time to time, and not seldom during crucial political moments, they will engage in dramatic acts such as robbery of cash-in-transit, syndicate turf wars and prison escapes.

But they know, better than any politician that the net is closing on them; that the intelligence services are on their heels even if it may take time to build water-tight cases against them; that wherever they may be hiding - even in the police and other state structures, in the private security companies, among prison warders and even the legal fraternity; that even if they may form a web of political forces bent on destabilising our young democracy - they know that their days are numbered.

The same should be said about corrupt elements who see public service as an opportunity for self-enrichment. Mechanisms are in place and are being improved all the time to root them out. In this regard, I wish to thank the media for its vigilance. While there may be instances where fingers were pointed at individuals without justification, there are a good many examples where investigative journalism has helped us uncover the scoundrels - old and new - who prey on the public purse.

To find a lasting solution to all these challenges requires a community spirit among all of us, a New Patriotism which is finding root within the populace. We must build our nation into a community of citizens who appreciate their civic duty as each one of us improves our well-being. We must be ready to give back to society part of what we gain from it.

In this respect, the words of one eminent citizen who has actively joined the campaign against crime are worth repeating in this august Assembly:

"...this country, warts and all, has been good to me - it is unbelievable. It has fed me; it has clothed me; it has educated me; it has given me opportunities in the business world that were unthinkable when I was a kid in Brits. I think the very least I could do is put something back. And this is my kind of national service and I am enjoying it ..."

This is a challenge to all of us, especially those whose past privileges have afforded them skills that are in high demand in public service, to volunteer skills to help improve the lot of the nation.

Indeed, on the vexed question of crime, we could do more if each South African of integrity consciously ask themselves everyday whether they may have assisted in the commission of crime:

* as a parent who conceals the activities of a child who is taking drugs, without assisting the police to track down the suppliers;

* as a customer who co-operates in a transaction which allows you a large discount because the seller will not pay VAT;

* as a trade unionist or ordinary worker who turns a blind eye to pilfering on the shop-floor or worse still to corruption in government service;

* as a politician who stands behind individuals who break the law, in the name of challenging bodies such as the Truth and Reconciliation Commission;

* as a parent or spouse who avoids asking questions when a relative is suddenly awash with money, and behaves like a fugitive from justice.

Don't many of us do this and more; and yet express bewilderment at the high rate of crime.

What this emphasises is that we need a campaign of moral regeneration. As we reconstruct the material conditions of our existence, we must also change our way of thinking, to respect the value and result of honest work, and to treat each law of the country as our own.

This is our call to all South Africans to firm up the moral fibre of our nation. It is a call to artists and musicians and sportspeople, to religious leaders and traditional institutions, to intellectuals, to the media and to all those who should give leadership as we established new symbols and role models: all of us to join hands in a New Patriotism; not because the government says so, but because it is in our common interest to do it.

In this regard, it is encouraging that the youth of our country through the National Youth Commission have taken important steps to define a youth policy that will give all - irrespective of the skin colour that is the accident of birth - a stake in our new society. Particularly heartening is the proposal for youth community service, which can be broadened to encompass most of society: be it in helping to clean streets, volunteering services in schools and so on.

Civic duty is the central purpose behind the Masakhane Campaign, whose awareness week last year was fairly successful. We shall continue this year and beyond to intensify this drive, including the mobilisation of, and assistance to, Non-Governmental and Community-Based Organisations who truly have the interests of the community at heart.

Honourable Members and Delegates;

It is to promote the spirit of Masakhane that we set up the President's Award for Community Initiative. This annual award honours those who roll up their sleeves and take the initiative to uplift their conditions.

We are privileged today to have with us, as guests of the President, representatives of the nine communities that were the first Provincial Winners. Selected from some two thousand entries, they embody the unquenchable determination of South Africans to better their own lives.

We recognise the Buhlebemvelo Garden Project from KwaZulu-Natal; the Ikgodisent Sewing Project from Huhudi; the Malungeni Training and Development Centre; the Bekkersdal Flagship Project for unemployed mothers; the Dassie pre-school Centre from Oudtshoorn; the Khotsong Branch of the Homeless People's Federation; the Nkomazi Farmers Association, the Hantam Community Education Trust - and finally, the project which was yesterday announced as the National Winner of the President's Award for Community Initiative, the Mhala Development Centre in the Northern Province, set up by retrenched mineworkers working with their union and their former employer.

Our congratulations to those whom you represent, and indeed to all the 54 runners-up. May the financial prizes from government strengthen your efforts - and may your example inspire others to seek this honour in future years.

There are also countless others outside the limelight who deserve our admiration, and gratitude, such as school principal Mr Mandla Hlatshwayo of Ndwedwe in KwaZulu-Natal, who braved a raging river during torrential rains to deliver matric examination papers to his students; the security guard who risked life and limb single-handedly to hold highway robbers at bay, leading to their arrest; the many sportspeople and other citizens who make us proud to be South African.

This multifaceted effort to build our society on the basis of a new morality demands that we should be open about mistakes that we committed in the past. Such is the importance of the Truth and Reconciliation Commission. Because these mistakes were committed by us, so will their airing in public be hurtful and at times embarrassing. But the more we know about how low we once sank, the more difficult it will be to repeat these mistakes.

At the hearings of the TRC over the past year many horrid details emerged. We cannot fail to have been moved by the remorse of some perpetrators, and the preparedness of victims to forgive. We cannot fail to have been astounded by their very modest appeals for their dignity to be restored. But this should not be surprising, for their suffering was not for pecuniary gain, but for the great prize of freedom and a better life for all.

The government has heard the appeals for urgent reparations. And we shall be ready to provide modest assistance when the details have been forwarded. As part of the multi-year budget, account will be taken of the needs, within our limited resources; and we hope that those who benefited from the suppression of others will find it within themselves to make a contribution. As the TRC moves towards finalising its work, we shall do our best to ensure that their needs are provided for. But we know too that this will not be the end, but the beginning of the process of reconciliation.

It is quite unfortunate that some among us still refuse to co-operate with the TRC. Given that part of its task is to unmask the networks that not only violated human rights, but also formed one web with crime syndicates, the question will haunt such forces forever, why it is that they continue to conceal this information! We need to make it clear that those who cringe at the banks of the Rubicon of truth, those who served in state structures and refused to apply for amnesty, will not be assisted by the state in the face of whatever consequences accrue to them from their past.

Related to this is the danger of any political leadership and media to continue with the campaign of exploiting the fear, uncertainty and anxiety of certain communities about the transition. The clamour among some parties to outdo one another in this regard is counter-productive, to say the least. It worsens polarisation and stokes the fires that have the potential of consuming all of us.

In any case, it is pointless because it will not stop change. Transformation is this government's reason for existence; and we shall not for a moment shirk our responsibility to the poor. This government is humane, and we know that the well-being of those previously denied their rights is the sure guarantee for the well-being of all.

It is for this reason that it pains me personally when I listen to some of the debates in this chamber. Always, a clear distinction emerges between those who were at the cutting edge of the struggle for freedom who strive for change; and those who implemented of benefited from oppression who seek to block transformation, in defence of a modified form of the old order.

I should take this opportunity to pay homage to the institutions charged with the task of enhancing our democracy and culture of human rights. If we say with confidence that South Africa will succeed, it is in part because we know there is a Constitutional Court, the Public Protector, the Human rights Commission, the Electoral Commission, which has started its challenging work, and the Auditor-General, all of which will assist in ensuring that what we do is not only constitutional, legal and legitimate, but that it is seen to be so by all and sundry, including the weakest among us.

A word of congratulations to the Gender Commission which has started its work to ensure that our society is true to the principles of consistent equality in everything we do. Yet this Commission and the Office on the Status of Women should not be seen as watchdogs of an alien force bent on doing wrong. Rather society as a whole should see them as part of our joint efforts as men and women, to liberate themselves from gender prejudice.

We are also encouraged by the systematic work being done regarding the position of the disabled. What matters is not merely the thousands of wheel-chairs, hearing aids and tens of thousands of cataract operations provided in the past year alone; but also ensuring that the attitude in employment practises, in discourse, in design of infrastructure and more - all these should be changed with the participation of the disabled themselves.

This year, we shall ensure the intensification of the efforts regarding multi-lingualism in government work, and we should thank the Pan-South African Language Board for its vigilance. Further, after extensive consultations during the course of last year, we are a step closer towards the setting up of the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities.

Madame Speaker;

Our programme for this year will once more seek to speed up the improvement of the lives of all, with particular emphasis on the most vulnerable and needy.

Some of the additional highlights of this programme, whose detail will be announced by the various ministries during the course of next week, include:

Our commitment to meet our budget deficit targets, as we further improve the efficiency of tax collection. As the further steps we took recently indicated, we shall continue, on a case-by-case basis, to lift exchange controls as conditions for such mature. Construction starts on many Maputo Development Corridor projects; two new development initiatives in the Cape West Coast and Northern KwaZulu-Natal will be launched in the first half of the year. Work starts in the West to complete the Highway across South Africa from Maputo to Walvis Bay. The basic economy is being revolutionised.

The integrated tourism programme will be launched in earnest, with the potential to create 300 thousand jobs by the turn of the century.

In the work-place, the departure from apartheid practices will be felt even more keenly as we finalise and implement the bill on employment equity. And let us hasten to add in this regard, that we shall not be discouraged by the sirens of self-interest that are being sounded in defence of privilege, and the insults that equate women, Africans, Indians, Coloureds and the disabled with a lowering of standards. As we have said before, affirmative action is corrective action. There is no other way of moving away from racial discrimination to true equality. We therefore reject campaigns which are based on fear, rumour and gossip.

Special attention this year will be paid to the further consolidation of Local Government, with its critical contribution in areas of infrastructure, job-creation, small business development and the very legitimacy of democracy. We should also take this opportunity to acknowledge local government Delegates present her, and with them celebrate the beginning of their full participation in the National Council of Provinces and Inter-Governmental Forums.

The White Paper and new legislation on local government which should be finalised this year will help streamline this sphere of government without derogating from representivity and accountability. And to start meeting the requirements of the constitution in the context of poverty alleviation, over R3 billion will this year be equitably and directly allocated to this sphere of government.

As we attend to these matters, particular attention will be paid to continued dialogue with traditional leaders, so as to ensure that all of them become full and active partners in the struggle for local development.

This year also sees the launch of the new Government Communications and Information Service, which, we are certain, will contribute to the challenge to improve communication among South Africans, to afford citizens their rights to information and to air their views.

Our continuing work to reduce incidents of crime will also pay particular attention to women and child abuse, crimes which, regrettably seem to be on the increase. Special programmes for the 6 metropolitan areas which account for the bulk of violent crimes are being finalised for immediate implementation. Let us once more underline to those who choose to live a life of violent crime, that as recent incidents regarding cash heists have shown, we shall, with the combined might of the security services, return fire with overwhelming fire.

This year, we launch the programme that will streamline the judicial system so as to alleviate overcrowding in prisons, without creating any new dangers to society. Above all, we shall appoint the National Director of Public Prosecutions and provincial counterparts - a first in the history of our country.

Within the intelligence services, it has become even more urgent to unearth the few rotten apples who arrogantly pursue an agenda counter to transformation. To put it mildly, they are an affront to our security and our pride as a nation; they are a blight on the commendable work that these services are doing to defend democracy.

We are proud that, after a year of so of healthy and informative debate, we can now start the protracted process of re-equipping our National Defence Force. We wish to congratulate the armed forces and economic ministries which have ensured that much of this will be done without a strain on the budget, and in a way that will benefit the economy.

Our social programme will be aimed at accelerating implementation and consolidation of what has been achieved within the limits of our resources. This includes:

* Ensuring that 90% of mothers and young children have access to free medical care; starting the child support grant system which will reach 3-million children by the fifth year; achieving an 85% cure rate for tuberculosis; implementing the new laws to make drugs and doctors accessible; and, in addition to the building of clinics, dedicating R100 million to the upgrading of hospitals.

* In this, the Year of Science and Technology, our programmes to improve the learning environment, including the setting up of the Council on Higher Education, will be enhanced by a campaign to usher in a new and dynamic culture of scientific and technical innovation rooted in our schools, communities and enterprises.

* In the next financial year, a further 580-thousand telephones will be installed. And we aim to supply a further 1-million citizens with clean and accessible water. At the same time, it is our responsibility, as the Water Bill is finalised, to change our own water consumption culture, recognising that this is a scarce resource that must not be squandered.

As cabinet finalises these and other plans in the context of multi-year budgeting, we shall, as always be guided by our concern for the poor and most vulnerable sectors of society; to provide basic services, to improve the economy and job-creation, to deepen democracy and good governance and to improve the safety and security of all.

I should also announce that, as a pro-active measure to further improve good governance and in accordance with the Constitution, the President's Office will this year start drafting legislation on ethics in government, including a statutory Code of Conduct applying to members of the executive at national and provincial levels.

Honourable Members and Delegates;

In our efforts, we draw inspiration from countries that have to address problems to varying degrees similar to ours.

In our relationship with the world, we can now confidently say that South Africa has found her niche as an independent participant in world affairs.

Our starting point in these relations is the obvious: That South Africa is an African country. Thus we draw pride from the fact of increased trade with Africa reflected in a 70% increase in exports and 60% in imports since 1995. We shall continue to expand these relations and close co-operation with our sister African nations bilaterally and through the OAU, within the context of Africa's renaissance. We are grateful that African nations have afforded us the opportunity to make our humble contribution to the resolution of problems and reconstruction in places like the now Democratic Republic of Congo, the Great Lakes Region and the Sudan.

During the course of this year, we shall host Africa Telecom, to work out strategies and plans for the continent to become part of the communications highway.

Within SADC, we were honoured to take collective leadership of the process towards a Free Trade Area. The matters to be resolved on this course are complex and, as to be expected, there is much individual self-interest. But the will and determination are there, including the difficult question of ensuring that the democratic gains that have been made over the past few years are not reversed.

As an active and respected part of the developing world, we shall in August host the Summit of leaders of the Non-Aligned Movement. As such we shall be afforded the opportunity to play a leadership role as these countries, in their own terms, define the nature and direction of globalisation. All of us in these countries are concerned about the widening gap between the rich and the poor both within and among nations. But we also recognise the challenge to ensure that our own co-operation helps to define the new world order.

As a country, we are making strides in this direction: as shown by the fact that today, Asia is our second largest trading partner after Europe; and we are starting to exploit the huge potential that exists with regard to Latin America. This year we started a strategic relationship with the People's Republic of China, the biggest nation on earth. The launch last year of the Indian Ocean Rim Association is a great step that will re-establish, in the new age, strong relations that date back to pre-colonial days. At the same time, we have intensified dialogue with the North about a common human agenda as we enter the millennium.

In such dialogue, pertinent questions about the structure of the United Nations and its agencies, as well as the issues of the international financial system, the debt crisis and world trade, are on the agenda. There is world consensus that solutions need to be found to the causes and rampant effects of stock market crashes that can beggar even those economies which have got their fundamentals in place.

It is encouraging that the Commonwealth of Nations, a body-straddling the North-South divide, and whose summit we attended last year, put high on the agenda the issue of economic development. Again, as a reflection of the place we occupy in international relations, this body decided to hold its 1999 summit in South Africa.

Our relations with North American countries, Europe and Japan have grown from strength to strength. We value these relations with our main trading partners and sources of investment and aid. More particularly, we have now reached the point at which negotiations with the European Union on free trade should soon reach finality.

We shall continue to make our humble contribution to the search for peace and the humane conduct of international relations. Our condition on these issues, including the campaign for a ban on anti-personnel land-mines and nuclear disarmament, derives from our own experience about what humanity should not do to itself.

Ahead of any other country, South Africa destroyed its stockpile of over 200 thousand land-mines in a record of 5 months. The severed limbs of children, women and men in our neighbouring countries are a loud warning to us that, never again should our country be a source of destabilisation. As such, we shall support the stern action taken by countries whose peace is disturbed by any South Africans.

We are driven by this desire for peace when we urge for the resumption of Middle East peace talks on the basis of the Oslo Agreements. We are driven by what we believe are the long-term interests of the Palestinian and Jewish communities when we condemn prevarication and provocation by those who calculate that they can use might to prevent right. We condemn without equivocation violence by any party, for it feeds animosity rather than encourages reconciliation.

In the same spirit, we call for a peaceful resolution of the conflict in Western Sahara and East Timor, and we shall do our best to assist where we can.

Madame Speaker;

Wherever we go internationally, we are always moved by the appreciation of the world for our efforts in resolving problems that seemed intractable.

These international forces are always willing to assist in our exciting transition. But they recognise that, in the final analysis, our success will depend on our own efforts. They appreciate and have confidence in our economic environment, and equally, they expect the same among South Africans themselves.

They respect our nation because they know we are contributing to the collective efforts of humankind redefining itself and reclaiming its humanity as we move into the new millennium.

This, our programme for 1998, is a humble contribution to the quest for a better world. As always, we are encouraged, first and foremost, by the fact that South Africans are ready; and they have rolled up their sleeves to build a society that cares.

These millions of South Africans are joining hands to sustain their democratic achievement; and they will protect it like the apple of their eye. They are filled with hope about the bright future that beckons. They shall not be distracted by the noise of a falling tree amidst the dignified silence of a new future starting to blossom; because they know that:

The foundation has been laid; and the building has begun!