Mr. Speaker, when the debate was adjourned last week, I had indicated that the hon. the Minister’s budget was a budget of woe, which in recording all the financial disasters which had overtaken SATS during the past year, also reflected a lack of adequate planning on the part of the hon. the Minister and the Administration to meet those disasters.

I now wish to move the following amendment—

1. (1) to provide suitably efficient services at rates necessary to attract increased volumes of goods and passenger traffic so as to ensure increased revenue;
2. (2) to take adequate steps to reduce unnecessary and wasteful expenditure;
3. (3) to arrive at a reasonable and longterm arrangement with the Treasury regarding the burden of uneconomic passenger services occasioned by the political and racial policies of the Government; and
4. (4) to develop an overall transport strategy in conjunction with the private sector to promote the free enterprise system by allowing and encouraging the private sector to make a greater contribution to the efficiency of the nation’s transportation services.”.

The hon. the Minister, in his speech last week—a short speech because the worse the news he has to tell, it seems the shorter do his speeches become—leaned heavily on the extent of the world economic recession to justify the fact that an estimated R10 million deficit budgeted for had ended in a R370 million deficit, and that this year we were budgeting for a deficit of no less than R634 million.

Apart from the recession, the only other reason—a startling one—given by the hon. the Minister, was that SATS were facing unequal competition from the private sector and were unable to meet that competition. The whole situation begs a number of questions and casts serious doubt on the judgment of those responsible for the financial control of the services and the adequacy of advance planning.

A year ago, we knew we were in a period of recession and that it was going to deteriorate further. We knew it. The Government knew it. The private sector knew it. Why then did it come as such a surprise to the hon. the Minister and SATS?

The hon. the Minister in his speech admits that it took them by surprise, as a result of which midway through the year, they were forced to take drastic action to meet the crisis that had arisen. The hon. the Minister in his budget speech says proudly: “We acted immediately and took appropriate steps to restrict the decrease in revenue and the expected operating losses to the minimum”. He then says: “A strategy was designed to tighten control over expenditure and to increase productivity at all levels by the effective utilization of labour, accessories, stocks and assets”.

He talks further and tells us that then, and only then, major capital projects were critically analysed and scaled down while some were delayed. In respect of civil work alone, according to the hon. the Minister, funds for the current and next financial years were curtailed by approximately R650 million.

Why did the hon. the Minister deem it necessary to wait until the middle of the year before he did this? Surely he should have been aware of the need for this sort of curtailment much sooner than the middle of last year. Up until then, despite the fact that everyone else was fully conscious of the steady decline in the economy, it seems, the hon. the Minister just rolled his trains and services along their merry way, apparently oblivious of all that was happening around him.

I have said that the hon. the Minister’s budget offers very little hope for the immediate future in respect of SATS. Perhaps one of the few causes for hope may be found, however, in the attitude of realism thus far displayed by the new General Manager of SATS. Here it is appropriate, on behalf of the official Opposition, in this major debate on SATS, for me to welcome Dr. Grové and to congratulate him on his appointment as General Manager of SATS. He brings to his high office a financial background and training, which are certainly desperately needed in the Services at the present time, and therefore we wish him well. He certainly has our sympathy in the sorry financial mess which he has inherited, and I trust that he will be able to exert the necessary influence and discipline over his political bosses in order to place the Services on a sound financial basis.

I have mentioned his attitude of realism when he took over, and I think it is appropriate to note some of his comments, which are themselves very revealing indeed, I believe. I quote from a statement which appeared in The Argus on 11 February 1983, when Dr. Grové was interviewed about his new responsibilities. He said, inter alia—

He then went on to say—

He does not talk about the last few weeks but refers to the last few years. He then talked about labour and pointed out that labour, “one of SATS’s biggest expenses would have to be reduced dramatically”. Dr. Grové also said Railways and Harbours personnel had already been cut from 279 000 to 250 000 and went on to say—

The statement then continues that he intends giving the capital goods section a thorough going-over. I quote him again—

He went on to say—

I believe that these are highly revealing statements in so far as the past operation of the SATS is concerned. I want to ask the hon. the Minister this afternoon whether he agrees with what the new General Manager has said, and I also want to ask him why it is that nothing has been done in respect of these matters until now. Why is it that these things have gone unnoticed? Why is it that up until now there has apparently been indiscriminate spending? These are the words used by the new General Manager. Why is it that up until now we have not taken note of the requirements of our customers? Why is it that it takes the advent of a new General Manager to allow these matters to receive our attention? I should like to know what the hon. the Minister has been doing over the past few years to which the General Manager refers in his statement. Instead of a critical analysis of the entire transport operation of the SATS the hon. the Minister has simply relied on the easy excuse of the economic recession to justify his maladministration of this department.

In his speech the other day the hon. the Minister told us when he felt compelled at the end of last year to impose further tariff increases—which in general terms amounted to some 15%—how conscious he was of the effect this would have upon the cost of living and inflation. He said—

because of these considerations. However, that did not stop him last year or the year before from raising tariffs and fares. In 1980 fares went up by some 15%, in 1981 by a further 15% early in the year and in the second part of the year by a further 10%, early in 1982 by a further 10% and then again, at the end of last year, there were further increases. All in all in just over two years fares have increased by just over 60%, air fares by nearly 100% and many goods tariffs by more than 50%.

Although there was no announcement by the hon. the Minister of increased tariffs last week—that was in fact one of the few aspects of the hon. the Minister’s speech that we welcomed by the private sector—with a budgeted deficit of some R634 million in the year ahead, further tariff increases later this year seem to be inevitable. The past history of these matters is totally alarming and certainly does not augur well for the future unless there is evidence of real long-term planning and realism in the financial structure of the SATS. On his track record the hon. the Minister has over the past two years simply gone his own merry way living from hand to mouth—the hand of the South African public, the mouth of the SATS. He has milked the public by means of successive tariff increases and fare increases without due regard to the economic climate in which he was operating. These things were taking place at a time when, from what we now see, the SATS were becoming fat on capital expenditure as a result of what the General Manager has now described as “indiscriminate buying”. In addition to this, it now also appears that during this period the Administration had a staff complement unnecessarily large and expensive, hence the cut now and the threat of further cuts in staff by the General Manager coupled with the promise of more efficient services.

When one deals with the question of tariff and fare increases we have warned in the past time and time again that these could in fact be counter-productive and could keep people away from using the services which the SATS offer. For example, the hon. the Minister has told us about the drop in passenger journeys. During his budget speech last week, he spent some time on this point but he has not ventured to explain why this is. Why has there been a drop in passenger journeys? Surely this cannot be attributed to the overseas worldwide recession? Surely the reason is much nearer home? Surely the reason is much closer to what the General Manager has described as the need for “improved quality and faster more regular services” both for goods and passengers?

Why are fewer people making use of our passenger services? They are certainly not walking, but they must certainly be finding alternative forms of transport either cheaper or more efficient or more convenient, and this I believe is an aspect to which the hon. the Minister should be giving his attention.

The same of course also applies to goods services, and the hon. the Minister must now look to the reason why people find the services provided by private hauliers more attractive for their transport requirements. The hon. the Minister complained about this during his budget speech. He talked about unfair competition, but why is it that the public are finding that the services provided by private hauliers are more satisfactory and more attractive than the services provided by SATS? This is where the hon. the Minister needs to do some soul searching. He must find out why his own services are apparently inadequate to meet the needs of the general South African public.

I want to deal also with the question of uneconomic passenger services which the SATS have to provide for socio-economic purposes. I found it strange the other day that the hon. the Minister in his introductory speech this year was strangely silent on this critical issue in respect of the financing of transport services. These are services which are largely necessitated by Government policies which dictate that in all our large urban areas our major labour force is compelled to live long distances away from their place of employment and it is therefore necessary for SATS to provide transport for these people. It is an uneconomic service, but it is a function of a socio-economic nature provided by the SATS. We know that the SATS have had to rely on subsidies or compensation, call it what one likes, from the Treasury for the provision of these services which amounts each year to several million rand.

Last year during the budget debate I drew the attention of the hon. the Minister to the portion of his speech relating to this issue. It was almost an exact repetition of the speech he had made the year before. Last year he said, dealing with this issue—

I pointed out that the previous year he had used almost exactly the same words when he said—

I want to know why the silence this year? Was it perhaps because the hon. the Minister was afraid of being guilty of tedious repetition or has any progress been made between him and his colleague in relation to this whole critical issue of providing the costs for socio-economic services performed by the SATS? The whole character of the SATS demands a resolution of this problem. Why the delay? What progress had been made? Why the silence in the hon. the Minister’s speech this year? Are the SATS in fact to be a business undertaking or are they to continue to be responsible for providing uneconomic services for socio-economic reasons? This is a vital matter of vital concern for the whole financial structure of our transport services and the hon. the Minister owes us an account as to what progress has been made. He also owes us an explanation as to why the delay in making an announcement on the recommendations of the Franzsen Commission. This was a serious omission in his speech which I hope the hon. the Minister will rectify before the conclusion of this debate.

Finally I want to refer briefly to the final leg of the amendment which I have moved and on which my colleagues will elaborate later in this debate. I am referring to the section dealing with the need to develop an overall transport strategy in conjunction with the private sector in order to allow the private sector to make a greater contribution to meet the transportation requirements of the nation. I believe that the whole question of the relationship between the SATS and the private sector needs a thorough review. In the interests of the free enterprise system, to which this Government declares itself fully committed, it is most disturbing to note the resentment that there appears to be on the part of the SATS towards what it terms unequal competition from the private sector. As I have indicated, there is surely a reason for the success the hon. the Minister claims the private sector is achieving in this connection. It is clear that in many instances the private sector is capable of providing services which are, for a number of reasons, more attractive to the public. I believe that it is high time that a general strategy be evolved jointly by the SATS and the private sector so as to provide for the maximum degree of co-operation between the two in providing for the transport needs of the nation.

I think it is thoroughly disturbing to note the hon. the Minister’s comments in his speech when he dealt with the whole question of the competition from the private sector, something he apparently fears. I believe there is a great need, in the interests of the country generally, for collaboration between the SATS and the private sector in order to have the responsibility for our transport needs shared between the two interest groups. There are clearly areas in which the private sector can provide transport services far more effectively and efficiently, and in this sense I believe that they can make a significant contribution to our transport requirements. It is high time, in my view, that these areas be clearly demarcated and that a general strategy be arrived at to allow the responsibility to be more equitably shared.

Until the matters I have highlighted in my amendment are attended to, until there is real evidence of adequate long-term planning, we believe that the SATS will remain in financial difficulties and will continue to render an unsatisfactory service.

For those reasons we cannot support the Second Reading of the Bill, and hence the amendment that I have moved.

Mr. Speaker, the hon. member for Berea has once again told us exactly the same as he told us on a previous occasion, and that is that there is really a total lack of planning in the S.A. Transport Services and that that is the reason why we have the present problem. The hon. member makes a great fuss about the fact that rail tariffs and fares have had to be increased over the past two years. Surely the hon. member knows why that was done. In the first instance—and the hon. the Minister spelt this out to us very clearly on previous occasions—it was done because, in the first place, we were faced with factors such as increased fuel costs, secondly, there were regular salary and wage adjustments and, thirdly, it was necessary to keep pace with the rise in the cost of living, particularly that of employees of the SATS. On previous occasions due justification for the increases in rates was provided. However, the hon. member creates the impression that this was purely due to maladministration. Conveniently the hon. member entirely ignores the fact that an economic recession is being experienced outside South Africa which has been compared with a depression. This is something which the hon. member ignores entirely, and he does so for the sake of convenience. I find it remarkable that that hon. member fails totally to take into account the situation within South Africa. On his side of the House there are economic experts, financial experts—particularly the hon. member for Yeoville—who have told us in the past that the money supply in South Africa should not have been restricted last year—it was too late then—but should rather have been restricted long before the time. The moment the money supply is reduced in the country, there is a simultaneous drop in economic activities. Anyone who thinks that the SATS will not experience the effect of that is simply living in a fool’s paradise.

I think that the fact that the SATS has to conclude the present financial year with a far greater deficit than expected, and that there is also going to be a major deficit in the new financial year, is largely due to the fact that there is a world recession. This is apparent in our harbours. It is apparent wherever one goes. It seems to me that the hon. member for Berea, who ought to know what goes on in the world, simply does not realize that the whole world has had transport problems. I wish to indicate by way of a few quotations what is going on in the shipping industry throughout the world today. I am not going to quote now what the General Manager of the SATS says, but I shall quote one of the newspapers that support the hon. member for Berea. Let us just see what The Cape Times said on 7 December last year. Under the heading “Shipping companies battling to survive”, one reads—

That is the position. I quote further—

I could continue in this vein and mention one fact after another to indicate that there are problems due to a world recession. I quote further—

These are the hard facts—

These things are listed one after the other in this article. I want to refer the hon. member for Berea to this. Let me quote again—

This is what is said in this article. Therefore this is proof that throughout the world problems are being experienced due to the trade recession. Accordingly we must recognize these factors domestically as well.

Let us come a little closer home and hear what Mr. Marsh, the newly-appointed executive officer of Safmarine, has to say. According to Rapport of 14 November 1982 he said—

The hon. member also had a great deal to say about the fact that the hon. the Minister had not been able to foresee the recession as far back as last year. According to him the hon. the Minister should have foreseen it by then. Surely the hon. the Minister predicted in his budget speech last year that, in the first place, the inflation rate would be approximately 13% and that, secondly, we could not expect a domestic growth rate of more than 2%. In his speech he also predicted that we would indeed be faced with foreign problems.

Let us consider what has happened in respect of companies in South Africa. These are people who expected to make tremendous profits. I refer to a report which appeared in either The Cape Times or the The Argus—I am not quite sure which—on 3 July 1982, entitled “Flood of adverse company reports”. I quote—

It is important to take note of the date, 3 July 1982. In July last year the former General Manager of the SATS also foresaw that the SATS would encounter revenue problems and that drastic action would therefore have to be taken. I quote further—

Then the report goes on to refer to what LTA expects. I quote further—

And then the hon. member for Berea is still suprised that there was a drop in the revenue of the SATS. All prominent companies expect a reduction in their revenue, but the hon. member says this is due to “a lack of planning on the part of the hon. the Minister and the Government”. I could also quote other examples of companies that were previously prosperous but which have been placed in liquidation. And then the hon. member states that there is a lack of planning in the SATS.

I might also mention that our mineral exports have dropped to R5 100 million. South Africa’s mineral exports for the first half of 1982 dropped by 15,7% in comparison with the figure for the second half of the previous year and by 8,6% in comparison with the corresponding period the previous year. All these things must have had an effect on the earnings of the SATS. The hon. the Minister mentioned that this was indeed the case.

Last year the sales of motor vehicles in South Africa dropped by 6% due to the policy of monetary and fiscal discipline which had to be adopted in this country.

How, then, can one expect the revenue and expenditure of the SATS to have been unaffected? However, according to the hon. member for Berea this is ascribable solely to a lack of planning. Regularly every year, in October and November, surveys are carried of its most important clients out by the SATS. The hon. the Minister made mention of this in his budget speech. The people who carry out these surveys can tell one exactly what the future holds. According to those surveys expected a growth rate of approximately 2% and an inflation rate of 13%. The SATS, unlike the private firms, is not in a position to kick people out of their jobs left right, and centre. They cannot reduce wages and adopt other drastic measures. The SATS has a responsibility. Contracts are entered into by the SATS and tenders are issued, and these obligations have to be met. It is true that some of the contracts and tenders can be postponed. Indeed, in some cases this has already been done, specifically with a view to economizing. But the SATS cannot act as a company or firm would in such a case by drastically curbing its expenditure when the necessary revenue is lacking.

The hon. member for Berea must bear this kind of thing in mind. His criticism was too negative. The only point of interest in his amendment is, perhaps, that there should be a proper arrangement between the SATS and the Treasury in regard to the losses suffered in respect of passenger services. However, the hon. member states that it is Government policy that causes these people to have to live many miles from the city. That, then, is the fault of the Government. Does the hon. member want to restrict development in South Africa? If people live 15 miles from the city now, in 20 years’ time they will live 30 miles from the city. That hon. member is one of the people who say: “We are killing the metropolitan areas.” Today, however, he says that the Government is the cause of people having to live 30 miles and more outside the city; that it is Government policy that causes them to have to travel such long distances to their places of employment. No, Sir, as the economic activities of this country develop, everyone will have to live further from their place of employment and there will have to be planning, because people will have to stay a considerable distance from their place of employment. If a proper arrangement could be effected with the Treasury in this regard then the picture could change totally. However, I wish to add that the SATS will not be able to escape the socio-economic function it has to perform, whatever we do about this. As long as I can remember there has always been a deficit on the passenger services of the SATS, precisely because they try to perform a socio-economic function. However, the hon. member furnished no reply to that. No, Sir. He states that there must be better arrangements between the private transporters etc. and he wanted to know why people did not make use of the train services. That is what he wanted to know, but he gave us no reply to the question of what should be done in this regard. If we had adopted the policy of the PFP and reduced the money supply in South Africa a long time ago, I wonder how big a deficit we would have today.

It is not a pleasure to us to close the present financial year with a deficit of almost R400 million, with the prospect that the next financial year will yield a deficit of R650 million. On the contrary, it is a torment for us. No one likes that, and it must be heart-rending for the hon. the Minister. The hon. member for Berea quoted the words of Publilius Syrus here to effect that one should criticize someone in private if one wants to, but should praise him in public. This the hon. member was unable to do on this occasion. I, too, have a few words for the hon. the Minister to meditate on today, words uttered by one Lytton. He said—

The S.A. Transport Services is engaged, in difficult circumstances, in dealing with something that they did not bring upon themselves but which was caused by circumstances.

You are making a very good speech. [Interjections.]

Let us consider what the S.A. Transport Services have done over the past year to rectify the situation. In the first place, better marketing methods have been utilized. Then, too, more effective use has been made of travel agencies. Then there is the new thing, the hiring out of trains for the purposes of conferences, among other things. Even the PFP can make use of that. It is true that it would be rather a short train, but they, too, may now hire a train to hold a conference over the week-end.

Would you allow them to pass through the Free State on a Sunday?

Certainly. They can go anywhere.

*Consider, too, the family concessions that are available. It is now possible to hire a compartment at a considerably reduced rate for oneself and one’s family. Previously this was not possible. For people of colour, too, train services are being improved. A sleeping class is now being introduced for Black people. All this is aimed at improving our train services and bringing them closer to the public.

The hon. member referred to the new General Manager, and we welcome him together with his new marketing methods that he wants to utilize in order to bring to the attention of the public what is offered by the S.A. Transport Services. There are cases where train services have been rationalized by eliminating unnecessary trains in non-peak periods without unnecessarily curtailing the conveyance of passengers during peak periods. The service is more economical without being less efficient. Moreover, in the course of time, in the course of this teething process, the public has become accustomed to this. Initially there were problems, of course. That is quite true. Many commuters were dissatisfied. In the meantime, however, problems have been ironed out and as far as I know the majority of commuters are satisfied today. This is to be welcomed, because the public of South Africa would have criticized the hon. the Minister even more bitterly than the hon. member for Berea has done if we had continued with uneconomic passenger train services, knowing all the while that we were suffering heavy losses on them.

The same, of course, could be said of the S.A. Airways. Fuel economy measure have been implemented. Aircraft are flying more slowly and use has been made of better aircraft. All possible steps to reduce the expenditure of the SATS and improve its chances of recovery have been taken. Instead of labelling this budget as one which reflects a lack of planning I believe that it attests to correct action under the circumstances. Moreover, it was action which had to be taken as soon as possible.

I have with me a newspaper extract from a news journal I received recently from Hong Kong. It is an acrimonious article about South Africa; a terrible one. It appeared in the South China Morning Post of Sunday, 26 December 1982. This article was written by one Derek Brown, a person who writes about South Africa. He has nothing good to say about us. However, he does say one positive thing about us, and I quote—

This is what was said about South Africa’s transport services in a newspaper in Hong Kong. They have nothing good to say about South Africa but the transport services at least are the one ray of light in this country. That, too, is why this man says how proud one can be of the service rendered in South Africa in this respect.

This is the time of drought for the SATS. Just as the rain will fall again in South Africa, properous times are awaiting the SATS and the hon. the Minister. All that must happen now is that we must stand fast until the economic recession is past. We must also carry out planning, because that time will certainly come again. I believe that our transport services are on the right road because the Administration believes in planning, economy and better services.

Mr. Speaker, on behalf on the CP I should like to take this opportunity to convey our sincere congratulations to Dr. Bart Grové on his appointment as General Manager. Dr. Grové is taking over as General Manager at a stage when things are really not going to be easy for him. We know that all is not well with the world economy. Our interdependence on our trade partners must of necessity leave its mark on the SATS for better or for worse. During the course of the year the General Manager will also lose the able services of two of his deputies, Mr. Eric du Toit and Mr. Hennie Loots. We also want to thank them for the faithful services they rendered to South Africa and we wish them a very pleasant and well earned rest.

It is not customary, but I should like to take this opportunity of thanking the three Commissioners, Messrs. Erasmus, Aucamp and Albertyn, for their hard work in the interests of South Africa. Few people realize the important work these people do and I think it would be a good thing if more departments appointed commissioners for then fewer mistakes would probably be made.

With the kind of budget of sad tidings we are dealing with today, one immediately looks at the chief, the captain, the person at the helm and the man who should have tried to prevent the results of such a budget. The SATS is a transport business. It is not an ordinary business, but as far as transport services are concerned, the SATS enjoys a reasonable degree of protection that other transport services do not have. The SATS need not pay dividends and as far as other transport services that do have to pay dividends are concerned, it seems as though they are not so badly off at the moment. One therefore wonders: Why the difference? One comes to the conclusion that there was a total underestimation in the advance estimates of these series of poor conditions and that the planning which of necessity followed on that created a situation which led to many deficiencies in this budget. During 1981 already a message was conveyed throughout the country that 1982 would be a difficult year, a year in which money would be scarce and expensive. Three steps had to be taken to combat these problems. In the first place it was said that the market position had to be retained at all costs, even at the expense of profits; in other words, the market position of the SATS had to be retained so that when the upswing came the SATS would be ready to cope with it. Economist also said that stocks had to be kept low and that debts had to be collected. These are basically the three steps that had to be taken.

The hon. the Minister expected the 1982 ’83 year to close with a defict of R10,5 million. The expected deficit will now be R373 million, in other words 30 times as much as what was planned for.

Free competition, in the field of transport as well, is a good thing. The hon. member for Berea referred to this. However there is already so much free enterprise that the SATS only has a minor share in the transportation of high-rated goods in South Africa. The private sector can enter the transport market to render services where a need has arisen, and naturally they want to make profits out of that situation. Of course the private sector is only interested in transporting goods that are economical, and one does not blame them for doing so. After all, one cannot enter an uneconomic industry. Nor can one remain in an industry that will lead to one’s undoing. However one cannot expect the SATS only to transport uneconomical commodities. We must also see this balance in the transport industry of South Africa. A person must not be kept out of the industry but at the same time he must not be allowed to convey the profitable commodities while the SATS is left with the unprofitable commodities. That is the point I want to make. In this regard I also agree with the hon. member for De Kuilen. Because the SATS is obliged to transport everything in the interests of the country—these are its socio-economic duties to which the hon. member for De Kuilen referred—including goods which are not profitable and to keep passenger services which are not profitable running, I think the time has come for all inhabitants of South Africa to adopt the attitude that the SATS belongs to South Africa—it belongs to us; we must support the SATS because it belongs to us and for this reason we must make as much use of these transport services as possible because they belong to South Africa.

I believe the SATS can help to promote this attitude by introducing a very active marketing programme to try and cultivate this attitude among our people.

Essential services must always be retained. The matter of hiring out trains, the matter of concessions must be closely watched. I believe that the other departments whose people use these concessions must make a bigger contribution. One welcomes the concessions given to older people and soldiers—I myself also advocated this—but the point I want to make is that the Treasury and that department must get together and assist the SATS in some or other way so that the SATS need not bear this burden alone.

In his budget speech the hon. the Minister referred to the increasing entry of illegal road carriers to the transport market. This year we drafted an Act in this regard, but I am now wondering why the hon. the Minister only introduced it this year—perhaps there was a good reason for this—but in future these matters must be very carefully supervised. I believe we should take action immediately.

The Act we passed this year, has always been law.

The legislation passed this year was concerned with illegal road carriers. [Interjections.] However, I want to make the point that last year and the year before that they were also illegal road carriers, that this amendment to the legislation was only made this year. [Interjections.] I hope the hon. Chief Whip understands this now. [Interjections.] If advance estimates are made and planning is done correctly it would not be necessary to make tariff adjustments so regularly.

One is disappointed that it has in fact become the fashion to increase tariffs when the Parliament is not in session. While we are discussing this budget the January increases are already an accomplished fact. Hon. members in this House cannot do anything about them. Consequently we are mere rubber stamps in this process. [Interjections.] It is a fact that during difficult economic conditions one can postpone tariff increases to assist the country’s economy, but on the other hand, one must also be careful with too drastic cuts in capital funds. I am so afraid that the SATS can build up a backlog, particularly as far as capital works are concerned, because as far as civil works alone are concerned, the funds for the present and next financial year have been cut by approximately R750 million. All these projects are being delayed for approximately a year. When work on these projects is resumed surely they will not be cheaper but far more expensive. The postponement of such important projects delays development in the long term and very soon a backlog is built up in the field of transport in South Africa as well. The hon. the Minister experienced a deficit of R643,2 million on the operating account. The question which comes into my mind is this. Where will the hon. the Minister get the money from, since he is not going to increase tariffs? Where is he going to find the money? Or is her perhaps going to raise a loan? He is planning, inter alia, to take R791 million from internal sources—i.e. revenue—and utilize this for capital purposes. Could the hon. the Minister not consider financing this deficit from those internal sources instead, even if this is only a bridging action.

Where do the internal sources come from?

From the revenue I have just referred to, the internal sources referred to in the budget. I do not know whether that hon. member listened to the budget speech or studied the budget. [Interjections.] I am referring to the R791 million to cover this amount. However, I just want to emphasize once again that this must be used as a bridging action and not on a permanent basis. [Interjections.]

In spite of important economizing measures that have been built into this budget, large amounts are still being spent. This is a fact. I again want to appeal to the hon. the Minister to take a look at the workshops, because the hon. the Minister is obliged to keep his employees working. He cannot discharge them. Even if the economic situation weakens, he must keep those people on in the workshops. He has well-trained people there, people with great expertise. The hon. the Minister can farm out less work to the private sector. The private sector is receiving enough. The investment in the private sector is sufficient. According to the budget R1 800 million was invested in the purchase of material. I do not think that that is a small investment in the private sector. The total salaries and labour costs amounted to R6 800 million and it is calculated that 34% of this will go to trade and industry. The salary received by the Railwayman is therefore being channelled into the private sector.

There are also a few supplementary points I want to raise. The hon. the Minister has left the way clear to increase tariffs again later this year, if necessary. I assume that this will not be very soon, but only after the next general election.

Immediately after Waterberg and Soutpansberg.

I want to make the point that the hon. the Minister will have to give our people the salary increases they need so much before the election, because with the present inflation rate the people of South Africa simply cannot keep their heads above water. I know the Railway workers are loyal to the hon. the Minister. They have also told him that they are loyal and that they understand the circumstances. However he must not allow these people to suffer too much before he helps them. He must do this before the next general election; he can then increase the tariffs after the election.

In conclusion I want to say that I have great respect for the achievements of the SAA in spite of the fuel crisis and other obstacles they have had to cope with. [Interjections.] If you will just give me a chance I just want to tell the hon. the Minister that the home ownership scheme of the SATS is one of the best in the country. I also want to refer in particular to the new pension scheme which I also had occasion to request, as did other hon. members, including the hon. the Deputy Speaker. It is absolutely essential that a pension fund be introduced to make provision for dependent children who for example lose both their parents simultaneously. We on this side of the House welcome this. Everything that is done in the interests of the people of the SATS gives us pleasure.

There is another wonderful achievement I want to refer to. The way in which I am dealing with this budget is to give credit where credit is due and to express criticism where I feel it is necessary. This is what I have being doing up to now. In spite of the fact that the budget as a whole is not a good one, as a result of circumstances that have already been outlined, the hon. the Minister has succeeded, in spite of an inflation rate of 12% and a negative growth rate of 2%, in restricting the rise in expenditure to 9,2%. I wanted to congratulate the hon. the Minister and the department on this wonderful achievement. However, I want to repeat that development may not be hampered by cutting back too much on the capital budget. If development and progress are hampered South Africa will be harmed.

I do not want to discuss the other departments today. I shall, however, as I have done in the past when discussing Votes of other departments, say that the departments are lagging behind owing to the fact that they do not have sufficient money at their disposal to establish capital works.

We are proud of the Railway Police and we should like them to enjoy the same privileges as the S.A. Police. I am not going to elaborate on this any further. I may possibly do so during the Committee Stage.

I want to conclude by saying that we are proud of all the workers of the S.A. Transport Services, and we on this side of the House appreciate what is being done by them, from the lowliest labourer right up to management.

Mr. Speaker, I hasten to congratulate the hon. member who has just resumed his seat on his promotion as that party’s chief spokesman on transport affairs. I do not want to be unnecessarily spiteful, but I do think this represents a major improvement. I also want to thank the hon. member for having in general, made a very positive contribution and for having in fact expressed little unfounded criticism. We all agree with what he said about housing schemes, pension schemes and the Railway Police.

This is a difficult budget. There is no doubt about that. However, I think that this budget should be seen in the light of four important factors, viz. economy, productivity, planning and—perhaps most important—the fact that in this budget no salary and pension increases have been announced. Right at the outset I want to convey our thanks and appreciation to the employees of the S.A. Transport Services, who have been prepared to make the sacrifice in these times and have been prepared to wait until a more suitable time when salary and pension increases may be granted. I think I am speaking on behalf of all of us when I convey a message of sincere thanks to the employees of the S.A. Transport Services for their understanding of the problems which we in this country in general and the S.A. Transport Services in particular are faced with. We are grateful to them. I know, too, that the hon. the Minister and the Management will see to it and ensure that when there is an opportunity to look after these people, they will get their rightful share. Nor can I omit to convey my personal congratulations to the new General Manager of the SATS and those who assist him. I want to give them the assurance that we on this side of the House have great respect for them. We know them. We are acquainted with Dr. Grové and his team. We are aware of the good work they have done in the past. I just wish to assure them that they need never look over their shoulders, because this side of the House will stand by them and support them. We also say to them: Carry on with the good work.

Nor is it anything new when I say today that the SATS is the biggest employer in the Republic and provides employment to more than 250 000 people. The SATS with all its ramifications has succeeded over the years in creating an infrastructure on the basis of which our country’s economy has been built and has developed. Mining in our country, which is a very important pillar of growth, has been able to progress to its present position due to the role played by the Railways. Our gold, the exploitation of our coal, iron ore, minerals and metals are all intimately connected with the infrastructure of the SATS. However, that is not all. Transport is also the basis of the development of agriculture and stock farming. Without it we should not have been the greatest industrial giant in Africa. Without it we should not have been able to develop into that State in Africa whose economy is most strongly developed. Few States in Africa, even in the world, have the political stability we encounter here. Several large industries and many factories have been built on the infrastructure provided for them by the SATS. Many of our South African industries are in fact based on what the SATS buys from them. Here I have in mind, for example, the steel industry, the construction industry and others. From the point of view of transport. South Africa is strong and totally independent of other States.

Having said all this, one also realizes that our welfare, progress and stability is intimately linked to the welfare and stability of our neighbours, and accordingly we seek good neighbourliness. That is why we seek good relations with those who live on our borders. We prefer stable Governments and we know, too, that stability is to the benefit of our Western capitalist economy. Where stability prevails, the communist cannot gain a foothold. It is in such a climate that Western capitalism has the best opportunity to grow. We know, too, that if the Republic were to be conquered, the communists would realize that the road to the West lay open. If our stable Republic were out of the way the communists would be able to get at the West and bring it to its knees.

Since May last year the revenue of the S.A. Transport Services began to drop. It became worse and worse—so much so that the matter had to be given the most drastic attention. The hon. the Minister spelt this out to us very clearly. At that stage the private sector had not really understood what was going on. Indeed, in many respects the private sector went on as if nothing had happened. Even the public were quite unconcerned. In the S.A. Transport Services, however, it was severely felt and very quickly perceived. Only yesterday I spoke to an industrialist who told me that in his particular industry he had had no problems as yet. That is true. Sections of our economy are less effected than others by the problems we are encountering. But in a large organization like the S.A. Transport Services the economic recession has struck first and made its influence felt.

For the management of the SATS this was a sign to get to work immediately in an effort to deal with the problems. Sound forward planning was carried out in order to limit losses, and methods were developed to tighten control of expenditure, increase productivity by more effective utilization of labour and exercise improved control of supplies and assets. Moreover, major capital works were analysed critically. This led to the postponement of some, whereas others were scaled down, e.g. the electrification of our railway lines. All these were efforts made to deal with the problems that cropped up. We as MPs were able to observe the influence of the drop in imports and exports when several of us—members of the Select Committee and members of the various transport groups—visited the Durban harbour and Richards Bay last year. There we could see for ourselves what was going on. Several ships lay waiting outside the harbour in the hope of finding something to transport. Apart from that, the SATS also had to devote some of its revenue to road transport. Mention has already been made of this, and accordingly I shall not elaborate on that further.

Actually I wish to deal with the S.A. Airways. The SAA operates an extended network of domestic services, regional services and international services. Together with other airlines it provides a service to the remote corners of the world. In addition, the SAA plays a very important role in the development of the economy of our country. It forms an important part of the infrastructure and helps other industries—inter alia, agriculture, mining, the manufacturing sector— to develop their contributions to the South African economy. Directly and indirectly, the SAA creates employment opportunities for thousands of people. Air transport is an earner of foreign exchange and as such, helps to keep the balance of payments healthy. Apart from that, it plays an important role in promoting tourism to South Africa and stimulating foreign trade. The SAA has become indispensable to the businessman and the tourist. Apart from that, it efficiently conveys mail and freight to the remote corners of the world.

Let us consider the scope of the service rendered by the SAA. There are 19 return flights per week, using wide-bodied jets, between South Africa, the United Kingdom and Europe. Apart from that, there are five return services to North America, four of which end in New York, whereas the terminal for the other flight is Houston. Then, too, there are services to Australia—two per week. At the moment there is a great deal of speculation about this, but I do not want to elaborate on that now. Apart from that, there is one return flight per week to South America, one to Hong Kong and Taipei. These services are rendered in accordance with pool partnerships with the airlines of Argentina, the United Kingdom, Italy, West Germany, Spain, the Netherlands, Greece, Belgium, Switzerland, Portugal, France and Brazil. Apart from that the SAA also undertakes services to our neighbouring States, inter alia Malawi, Mauritius, Zambia, Botswana and others. In this regard, too, adjustments have had to be made in the recent past that I do not wish to dwell on at this point.

On the domestic network the SAA offers 506 flights per week and 78 638 seats per week.

The role of the SAA is therefore a very important one. It projects the image of the Republic, something we do not realize every day. The SAA maintains 53 offices in 30 countries. The success achieved by those offices in promoting tourism to South Africa, with all the supplementary benefits that it involves, is of tremendous value to us. During the 1981-’82 financial year the SAA earned $203 million in revenue from passengers and freight through its offices abroad. From April 1982 to December 1982 the corresponding figure was already R234 million. During 1981 South Africa had 446 107 visitors, 347 822 of whom were tourists, and the greater percentage of these were conveyed by air. These tourists spent an estimated R550 million in South Africa. Therefore tourism is one of the most important earners of foreign exchange for South Africa. Of the tourists who visit South Africa, approximately 100 000 per annum are from countries like West Germany and the United Kingdom; 25 000 are from Australia and the East, whereas during 1982, 12 000 immigrants were conveyed between the United Kingdom and South Africa. These people do not only come here to spend money, but in addition, return as good ambassadors for South Africa.

Another important role played by the SAA relates to its fast delivery to our overseas markets of fresh perishable agricultural products. During the past nine months, between April 1982 and December 1982, no less than 5 300 tons of fresh products were conveyed to our European markets, inter alia England, Frankfurt, Zurich, etc.—fruit such as sweet melons, avocado pears, pineapples and asparagus. Only the SAA can deliver the perishable agricultural products to the overseas markets in a fresh state and in good time.

The financial distress in which airways throughout the world find themselves today is far worse than we are experiencing in South Africa. International airways have suffered losses amounting to millions, due to the increase in fuel prices. This has had a seriously detrimental effect on the scope of the international services. Certain overseas airways have even been compelled to sell some of their assets, while several others did not have sufficient funds to replace their worn-out and obsolete equipment. Well-known airways have already disappeared from the scene. It is alleged that 10 of the most important airways in the USA suffered a joint deficit of R583 million during the first quarter of 1982.

The SAA has been exposed to all these detrimental factors to which I have just referred, and to several others. However, I wish to put it clearly to the hon. member for Berea that their achievements nevertheless attest to sound planning, to a purposeful effort to achieve productivity. Only foresight has enabled us to build up a fleet of modern aircraft which has placed the SAA in a stronger position than the majority of other airways; in spite of the political interference that compels us to fly long detours in order to serve our markets in Europe and the United Kingdom. I can only say that I regard this as an exceptionally remarkable achievement.

The question is: What is being done to economize? What is being done to increase our productivity and efficiency? Let us consider what is being done. 40% of our total annual expenditure goes on fuel. Since the fuel account is influenced to a considerable extent by the exchange rate, the SAA has concentrated on economy. In-depth negotiations with domestic suppliers have been held, and in this way R33 600 has already been saved on domestic flights, whereas more than R3 million has been saved on foreign flights for the same reason. Negotiations with overseas suppliers have resulted in a further saving of almost R3 million. By using tankers and taking on only the minimum quantity of fuel at airports where fuel prices are high, a further saving of R3 800 000 has been achieved. Talks on a lower control price at IATA airports have resulted in a saving of a further R2 million.

The total fuel account for 1973—this was 10 years ago—would in present circumstances only be enough to keep these airways operating for less than three weeks. When one bears that fact in mind, one realizes what problems we are faced with. Positive efforts to prevent delays have been launched and major success has been achieved in this regard, too. Time does not permit me to go into detail. I merely wish to point out that whereas in 1981 we had a delay of 3,3 out of 100 departures, by December 1982 this had been reduced to 1,3 per 100 departures. It may be mentioned here by way of example that the cost of delaying a Boeing 747 for one hour—on an overseas flight—costs the SAA a total of R3 600.

Landing fees have risen equally dramatically. Nowadays it costs almost R10 000 for a Boeing 747 to land in peak periods at Heathrow airport near London. I mention this because it struck me; initially I could hardly believe it. A few years ago the same aircraft could land for a mere R1 000.

On the domestic routes, too, a great deal has been done to promote efficiency. For example, fares have been adjusted. We know that an aircraft on the ground is not earning money. An empty seat on an aircraft does not earn money either. Accordingly an effort must be made to ensure that aircraft fly and seats are occupied. An excursion system has been introduced in terms of which tickets can be bought 14 days, 45 days and 60 days in advance, and such tickets qualify for substantial rebates of 15%, 25% and 30% respectively. The standby fare on which a rebate of 30% applies has also been introduced. Then, too, there is the siesta fare, which also offers a rebate of 15%. There is a rebate of 30% offered to national servicemen, and a family fare is also offered. In addition, there are lower fares offered in respect of direct flights, for example direct to Houston. We have ordered new aircraft, two of which are to be delivered this year. This will entail tremendous savings in respect of fuel consumption. We have already commissioned B737s, which will also entail a considerable reduction in fuel consumption.

I have now mentioned all these facts to show the hon. member that the SATS has not been fast asleep but has been working hard to deal with our problems. In spite of the high cost, the recession and the losses, we have succeeded in not increasing tariffs at this stage. We have been able to utilize our staff in such a way that it has been unnecessary to discharge people. I think that all these things I have mentioned in regard to the SATS represent a considerable achievement, for which the SATS deserves credit.

Mr. Speaker, in his speech the hon. member for Kempton Park expressed thanks and appreciation to the workers of the SATS not only for the work they are doing but also for the sacrifices that they are making in that they are not going to be receiving salary increases this year. We in this party would also like to associate ourselves with those sentiments. We know that the average SATS worker is loyal and is doing the best he can. However, I should like to put it to the hon. member for Kempton Park that there are many other workers in South Africa who are probably making even greater sacrifices than the workers of the SATS in that they are now out of work. Unemployment is increasing and I believe that the SATS workers can be grateful that they are not experiencing heavy retrenchments as are being experienced in other sections of the economy.

The hon. member for Kempton Park went on to say that the SATS had in fact assisted in building up the economy of South Africa. We in this party agree with him completely. The fact is that the SATS employ 250 000 people which makes it the largest single employer in South Africa. However, as such— and I want to put this point to the hon. the Minister—it is extremely important that the SATS as the major employer in this country operate on a highly efficient and economic basis. The SATS cannot afford to be complacent, certainly not in the world of today.

The hon. member for Kempton Park also mentioned four important matters that we have to consider and discuss, namely savings, productivity, planning and no salary increases; in other words, a tightening of the belt. We agree with the hon. member entirely that a great deal of attention has got to be given to these matters. I believe that the budget highlights the desperate plight in which the country finds itself at the present time, what with inflation, the lack of economic growth and the recession, and I believe that the Government must accept its share of the blame in this connection. The facts are that the Government administered prices of State corporations and enterprises such as the SATS have been increased far in excess of the inflation rate. During the past financial year, for example, the SATS had two tariff increases—in April last year, an increase of 15% and in January of this year an increase of 10%, making a total of 25% during a period when the inflation rate was only 13,8%. Escom and Iscor followed a similar pattern. They wanted a 17% increase but, as the result of an appeal on the part of the hon. the Prime Minister, I believe they have reduced it to 14,5%. Therefore, the question must be asked: Why is it that public sector enterprises have tariff increases far in excess of the inflation rate? I believe the answer is twofold. Firstly, it could be because of low productivity, it could be because of an inefficient use of the total assets at the disposal of these enterprises. Secondly it could be due to profiteering. Hon. members on that side will say that the SATS is a non-profit enterprise, and according to the Act that governs it, this is correct.

It is not supposed to be a profit-making organization. I believe, however, that the hon. the Minister must concede that the financing of transport services has altered in recent years in such a manner as to increase the so-called “costs of depreciation” so as to allow for what is termed “capital formation”, that is to say, a build up of its own capital on which to base the SATS’s capital growth and expenses in the future, rather than to basing it on loan capital as it did a few years ago.

This is the same policy which is followed by Escom and the Post Office and other public sector enterprises. I say that this is not necessarily a bad business principle. On the contrary, I think that this is possibly wise; we do it in the private sector, too. The question must arise, however, whether or not the degree of capital formation which is being permitted at present is too high for the good of the economy as a whole. The question therefore is: Are these corporations sucking too much capital out of the economy and thereby acting as an inflationary force and thereby restricting the growth in the GDP or real econmic growth in South Africa?

To give hon. members some idea of just how the financial position of the SATS has changed over the last five years, I refer them to page 6 of the hon. the Minister’s explanatory memorandum where the balance sheet is shown. If one studies this table, one finds that during the period 31 March 1977 to 31 March 1982 the SATS’s reserves increased from R633 million to R2 083 million. This is a change of fortune to the tune of R1 450 million in five years.

I believe there is such a thing as a creative or bogus form of accounting. We can increase the rate of depreciation, which we did. I was a member of the Select Committee and we agreed to do this in order to meet higher inflation costs; we can increase the rate of depreciation and thereby declare a massive loss in our books. At the same time, however, we could find a substantial increase in our depreciation reserve account.

The effects of this procedure—it is a pity the hon. member for De Kuilen is not here at the moment, because what I am going to say now concerns harbours, and he had much to say about our harbours—can be seen if one studies addendum No. 4 on page 73 of the SATS annual report of 1981-’82. There, if one studies the working results of harbours, one finds that in 1972 depreciation was based on 1,96% of the total capital invested in harbours. By 1982 this depreciation was measured at a level of 5,5% of the total capital invested. This means that whereas in 1972 the expenditure account of the harbours was debited to the tune of R2,96 million which was just on 12% of the total expenditure of harbours, by 1982 depreciation accounted for R51,4 million which was a whopping 30,5% of the total expenditure of the harbours expenditure account.

No wonder our importers and exporters and people using our harbours are complaining because this added depreciation account has risen almost three-fold as far as expenditure is concerned. It is very interesting to note that in 1972 for every rand invested in our harbours, only 37,5 cents of revenue was earned. In 1980 this declined to 27,2 cents for every rand invested, and in the peak import/export year of 1981-’82 the amount of revenue earned per rand invested only increased to a figure slightly higher than what it was in 1972; it reached the amount of 38 cents per rand invested. This shows that there was absolutely no improvement in revenue earned for capital invested which is very disappointing when one considers the tremendous amount of money spent on harbours at Saldanha and Richard’s Bay and also—this is very important—on containerization depots at all our harbours. There is no real improvement. Out of a total budget of just on R6,3 billion in the 1982-’83 financial year, 25,3% or just on R1 596 million was charged for depreciation and financing. In this year’s budget, the one before us now, this represents 29%—it is now up to 29%— R2 003 million of the total budget of R6 870 000 million which the hon. the Minister is budgeting for expenditure. This 29% is allocated to depreciation and finance charges. It is therefore clear that the SATS is adopting Escom’s method of self-financing. The question that we have to ask ourselves is: At what cost, in terms of cost-push inflation and restriction of GDP growth in South Africa? Not only does this practice push up the input costs of the private sector, but it also strips, from the private sector, much needed capital with which to finance its own endeavours. If it is agreed that this form of financing is desirable, I believe that it is extremely important that two cardinal business principles should be adhered to. Firstly, capital should only be invested in those areas in which it meets the real needs of the public in South Africa and, secondly, all investments must be cost-effective. It is for these reasons that I move as a further amendment—

1. (1) establish a Transport Commission on which will be represented all interested parties, to investigate and to make recommendations regarding the role which the South African Transport Services and private sector hauliers should play in the South African economy; and
2. (2) institute an inquiry into, inter alia, changing the composition and duties of the South African Transport Services Board so as to—
   1. (a) include representatives from organized industry, commerce, mining, agriculture and transport; and
   2. (b) enable it to act as a board of directors whose responsibility it will be to—
      1. (i) gear the South African Transport Services more to the needs of all sectors of the South African economy;
      2. (ii) ensure a tight rein on expenditure; and
      3. (iii) raise the productivity of all South African Transport Services assets.”.

The first leg of my amendment concerns the role that South African transport should play in the South African economy.

May I have a copy of that please?

Yes, my colleague will send the hon. the Minister one. Billions of rand have been spent, in recent years, on capital works such as the Sishen-Saldanha line, the Vryheid-Richards Bay line, containerization, etc. The question I want to ask the hon. the Minister is just how cost-effective these operations have proved to be. I appreciate the fact that our coal and ore exports are down at our two major bulk ports, but has there been a concerted effort to cut costs in view of the recent threat by the Japanese to cut our ore and coal prices? I have here a number of cuttings. I do not have time to quote extensively from them, but there are headings such as “Witbank coal cuts wanted—date-line Tokyo”, “Japan seeks major price-cut by South Africa”, “Price-cutting by exporters hits at coal market”, “Manganese ore—real crunch is still coming”. I think we must take cognizance of what is happening in regard to these bulk commodities. I am saying this because in Australia, I believe, one finds that the cost of transporting ore from their mines to their ports is approximately R2-20 per ton. In Brazil, another major competitor of South Africa, the cost is R2-50 per ton. In our case, however, the cost to get our ore from Sishen to Saldanha is R6-60 per ton. Therefore I believe we have to take cognizance of these factors. Talking about meeting the needs of the public, let me quote from the Freighting Containerizing Weekly dated 5 November 1982. Under the headline “Haulage fiasco as importers go back to Durban” it is said—

It goes on to state exactly how much money the importers can save by shipping to Durban and then having private hauliers take their containers to Johannesburg. I want to ask the hon. the Minister how such a development could be allowed to occur. The Minister complains about the so-called unfair competition from private road hauliers. Yet surely it is reasonable to ask whether the SATS does not only have itself to blame for botching an extremely capital-intensive container service, which was hailed by the hon. the Minister and his colleagues as the most efficient and cost-effective system in the world.

What do we find now? We find that the hon. the Minister is planning to take on the private road hauliers by expanding the road transport services. If one studies the hon. the Minister’s Additional Capital Estimates, which we passed through the House a few weeks ago, one finds that he was asking for an extra R647 000 for cartage equipment on page 10 and an extra R2,6 million for road transport service equipment on page 12. That is for truck-tractors, trailers and semis. If one studies the current Brown Book, one finds, on page 48-9, that for the current year the Minister is asking for R28,5 million for cartage equipment and R18,8 million for road transport service equipment, all trucks and trailers. If one looks further at what is to be spent in future years, one finds that in respect of cartage another R12,5 million is to be spent and that in respect of road transport services an additional R97 million on vehicles.

I think that this is a serious affair, because earlier on this session the hon. the Minister went so far as to amend the Road Transportation Act. That, as I told him, is now going to create inefficiencies on the part of hauliers in the private sector. Perhaps that was done in order to make the road transport services of the SATS more competitive. Yet, if one studies the hon. the Minister’s memorandum, one finds on page 19 that the road transport service has run up overall losses during the past four years. I wonder whether the hon. the Minister can tell us whether the cartage service, which is costing millions of rand in capital, is in fact operating at a profit. The question, I believe, therefore must be asked whether the road transport services will ever be able to compete with private sector carriers. If not, why is the Minister expanding this operation and why is he making it more expensive for the private operators to do their job? Surely the hon. the Minister should be concentrating on improving existing rail facilities like the container block rail service to the Reef so as to attract business back to rail transportation. After all, hundreds of millions of rand have been spent in recent years on this system. I believe that, rather than going into competition with private road hauliers, the Minister has to make the rail service work more efficiently and economically.

It is also said that the SATS is suffering major losses on so-called socio-economic services such as the passenger rail services. In this regard there are a number of points I should like to put to the hon. the Minister. Firstly, as I have already stated in other debates this session, the comfort of rail passengers with regard to amenities and services has been almost totally neglected. I have placed many questions on the Question Paper about this and I believe that the lack of proper facilities at stations and on the rails as such is driving people away from the railway services. Secondly, I believe that the Railways are losing millions of rand each year because of an inability to control passengers correctly so as to ensure that all passengers pay their fares. I have asked the hon. the Minister whether there had been any irregularities, but I am afraid that I did not get a satisfactory answer …

You never do.

… in regard to tickets or excess fares not being collected. He gave me a figure of R314 000 having been collected between January and June last year. I believe that a lot of people are travelling by rail without paying. I also believe there are many irregularities at our exit points where tickets are not being cancelled and there has been a reselling of tickets by Railway employees. The hon. the Minister said there have been just one or two cases and that a total of R500 has been accounted for. Yet, I have been informed that at the Montclair and Rossburgh stations this was the practice and that one ticket clerk was found to have stashed away R2 000 in his office. No doubt the hon. the Minister will look into it. I honestly believe this should be looked into to make sure that the SATS does not lose revenue which is due to it from its passengers.

Thirdly, I believe that the main reason why the rail passenger service is running at a loss, especially the mainline service, is because of the high number of what I would like to call “free loaders” who are travelling free as the result of the issuing of so-called passes. We know we have a green pass—I carry a pass in my pocket—a brown pass, a grey pass, a gold pass and who knows how many other passes. I challenged the hon. the Minister on this subject last year when I said that I estimated that 50% of people travelling first class on mainline rail were travelling free. The hon. the Minister promised to look into the matter. It is in Hansard for him to refer back to. And yet earlier this session I asked the hon. the Minister exactly how many passes are issued and at what cost to the SATS. The answer was that the information was not readily available and that it would demand much time and expense to gather the particulars. I believe the hon. the Minister should know what it is costing the SATS to carry people for nothing. I include here the SATS employees themselves, public servants and many others who travel free on the railways.

Some idea of the extent of the problem can be obtained by studying the tables on page 15 of the memorandum by the hon. the Minister of Transport Affairs. If one studies the revenue earned and compare it with the number of passenger journeys one finds that for long distance first-class travel in 1977-’78 the average journey earned the SATS only R11,70. Six years later, in 1982, the average journey on first-class mainline traffic earned the SATS R9,12. Despite tariff increases of nearly 100% the actual revenue per journey has dropped. I say it is because more and more people are travelling first-class on the mainline for nothing, and that at the cost of the SATS.

Or at a reduced fare.

Yes, or at a reduced fare. I firmly believe this matter should be looked into in great detail. The hon. the Minister is expecting a loss of R690 million on passenger services and the taxpayer is being called upon to provide massive subsidies for the so-called socio-economic commuter services. I submit the real problem lies somewhere amongst the three matters which I have raised in this regard with the hon. the Minister.

The value of concessions granted of public servants should, I believe, be debited to the departments concerned and the passenger services account of the SATS should be credited with the equivalent amount. This is absolutely necessary in order to obtain a true picture of where the costs lie. The present system is yet another example of what I have termed creative and bogus accounting, and this I believe must be set right.

I agree with you.

The hon. the Minister says he agrees with me. Then I ask him to please make sure that I get the correct answer when I ask him the question again. I want to say to the hon. the Minister that this bad habit which has crept into the SATS is now also creeping into the S.A. Airways. It could be one of the reasons why there are increasing losses. I hear of retired servants who now, during their retired life, can get a journey overseas, for their wives and themselves, at about 10% of the cost. One can squeeze the baby but eventually one is going to run the S.A. Airways into even greater losses. I should like to say that Parliament demands of the hon. the Minister that it be provided with details on these matters.

I am afraid my time has run out.

Hear, hear!

Apparently hon. members do not like to hear more home truths, but during the Committee Stage I am going to raise with the hon. the Minister many incidents of what I would call waste that is occurring on the SATS and I sincerely hope that the hon. the Minister will do something about it because, until he does I am afraid we cannot support him in this matter.

Mr. Speaker, in so far as the hon. member for Amanzimtoti referred to the policy of financing of capital works I shall leave him to those hon. members who are better versed than I am in that particular respect. Referring to his remarks about a lack of effective passenger control, there are many of the points on which I think hon. members on this side of the House agree with him. I too want to refer to some of these items in the course of my remarks.

*If we ever needed proof of the claim that the SATS is a basic infrastructure industry in the South African economy, we find it in the most recent report of the SATS, and it is also reflected in the introductory speech of the hon. the Minister from which it became clear that the drop in the volume of traffic and revenue of the SATS was already noticeable in April and May of last year, before a recession could be discerned in any other sector of the economy and certainly before it could be discerned in the business sector in general.

If it is true that the SA Transport Services is a basic infrastructure industry, this also means that the revenue of the Transport Services will be a reflection, sooner and to a greater extent than any other industry, of any recessionary situation in the country, and it will not help to blame the Government for the decline either. One could then just as well blame the Government for a recession. No economist overlooks the fact that a recession is an essential cyclical phenomenon in an economy and cannot in any case be blamed on any single country. We cannot therefore blame the Government for the recessionary conditions in the S.A. Transport Services. One can, however, ask whether the advance estimate with regard to the recession was on target. That is what the official Opposition tried to question. But then one asks oneself: What expert, what economist is ever really on target when he has to predict an upswing or a downswing? The second question one can ask oneself is whether the Administration did enough in regard to the recession. This one finds reflected in the remarks of the hon. member for Berea when he referred to faulty planning.

The hon. member for De Kuilen referred here to a drought phenomenon for the SATS that we are experiencing this year. This is probably true, but it is also true that a time of recession must also serve as a time of self-examination. We have various illustrations of the fact that during this period the SATS did not sit still, did not wait unitl the recession was there but devised plans in advance for such an eventuality. In the latest report—I am referring specifically to passenger services and to road transport—reference is made in chapter 5 to the fact that three years ago a passenger services section was created, in other words before there was any suggestion of a recession and while the country was still riding the creast of a wave of prosperity.

Since that section was established, various steps have been taken, not only to encourage potential users of our passenger services to make use of those services, but also to make general improvements to the service. However, before I get to that, I just want to point out that I think it is particularly encouraging to note that this section immediately started looking into matters, and making a thorough market analysis in order to ascertain what could be done to stimulate the use of our passenger services and to encourage more people to make use of them. In the report specific reference is made to investigations undertaken to determine the reaction of staff to passenger problems, and to place more emphasis in the training programme of the SATS staff on intensive training in human relations.

I want to adopt the standpoint that better human relations can never do any organization any harm. Since we are now discussing what is probably the largest single industry, the largest business undertaking in the country, it can only be to our advantage if the staff of the SATS is specially trained in the best possible human relations. If there were more friendliness, and if every official of the SATS were to make it his goal to be only half as friendly as the hon. the Minister, I think that we would have a far more effective service.

Hear, hear!

Con, you are now making a very good speech. [Interjections.]

Mr. Speaker, I am a person who likes making use of our mainline passenger trains, and the mere fact that a small token of goodwill greets one when one enters a compartment—there is for example, a towel, a bar of soap and a hanger to hang one’s clothes on—already makes one feel a lot more positive about the Administration of the SATS. These are little things, but not unimportant. What is however, in my opinion, more important, is the specific incentives introduced by this service during the past few years.

Last year we referred to the 40-off system—the system of a 40% rebate for people over the age of 60. Thanks to the intital success of this system it has now been improved further. During the past year the permanent or diamond card has also been introduced, which has been in use since 1 January of this year and which is obtainable on payment of a single amount of R75. More than 52 000 of these cards are now in use. This means a saving on the card itself, as well as on smaller items, for example the taking of photographs, etc. However, that is not all. Since the beginning of 1983 the so-called off-peak periods have been extended so that there are approximately ten months in the year which are considered to be off-peak periods, or times in which holders of the 40-off card or the diamond card can make use of their cards. Train journeys can also be undertaken on Saturdays now, whereas in the past they could only be undertaken from Mondays to Thursdays. In addition agreement has been reached with two large hotel groups to give holders of these cards a large discount on accommodation.

I think one must accept that every extra passenger is a plus factor for the SATS. The 40-off card plan applies mainly to mainline services—distances of 350 km and further. On our mainline services there is a certain fixed cost element which is not affected by the number of passengers making use of the service. Every extra passenger is therefore an extra plus factor as far as the combating of unnecessary expenditure and the stimulating of the revenue of the SATS is concerned.

However, that is not all. This is not the only incentive offered this year. The hon. member for De Kuilen also referred to the new family fares. Since the private motor vehicle is the largest single competitor of the SATS, the SATS is trying by means of this family fare to meet that specific requirement to make available an alternative form of travel for the family which can compete with the expenses incurred by a family in travelling from Johannesburg to Durban or Cape Town. What is involved here is direct motoring costs and accommodation costs en route. By means of these family fares a compartment can be made available to a family if the distance travelled is 350 km or further. This is an exceptional concession, because not only can the family travel as a unit with the SATS, but if it is a small family they can even take a friend along. For the SATS it is a fact that even if an entire express train like the Trans Karoo were to be filled with families making use of the family fares, the full cost of the journey would still be covered.

In the third place there are the new off-peak fares which actually replace the old concession tariffs and which, although they are only 15% instead of the old 25%, are now automatically made available to people who want to travel during off-peak periods. In addition Saturdays are now also taken into account as starting days for such journeys whereas in the past this only applies from Monday to Thursday. This brings about a more even distribution of train passengers over the available train capacity.

In conclusion I come to the fourth incentive. I am just mentioning it in passing. I am referring to the so-called “Tripper card” for national servicemen. It is not an entirely new scheme, because a great many of these tickets have already been issued. National servicemen get a rebate of 50% and the only condition is that the reservation cannot be made more than two months in advance. I can only say that it is a pity that although many national servicemen have these cards, not enough of them make use of them. Perhaps because too many national servicemen prefer hitch-hiking, which gets them to their destination more quickly.

When the hon. members therefore speak of a lack of planning—I have only tried to cover one small sector—they must be careful to weigh their words, because an organization like this has already given abundant proof in the past and particularly now during this lean period that there has been more than sufficient and more than thorough planning in its activities.

Mr. Speaker, the hon. member for Umlazi concentrated primarily on measures which have been taken to induce more people to travel by rail. I think what he has said is certainly very true. I am sure that he gave an accurate description of measure which the SATS has in hand.

Last year at this time I stated that there were characteristics of a monopoly of which the SATS made itself guilty. Firstly it did show signs of managing the easy way, too indulgently and failing to take the difficult and awkward decisions that have to be taken in a time like the one which we have just gone through; for example it has allowed the total amount of remuneration paid to staff to increase over two years by more than 60%. It was shifting the burden of these costs on to its customers in the shape of regular price increases. Secondly there was a tendency to empire building. This could be seen in the determination of the SATS to expand in the field of road transport and to compete with the private sector. It was not prepared to see a large proportion of its total market taken over by the private enterprise sector and to have its share considerably reduced. I would like to consider these last two characteristics and the degree to which the SATS in the context of its last year’s trading is still guilty of doing this type of thing.

The tendency to manage the easy way is normally manifested by overstaffing and an easy attitude towards pay and salary increases. However, in South Africa there are two further characteristics of self-indulgent management. The first of these is failure to integrate Blacks into the whole structure of the enterprise and also, in a period when one is cutting back, to make Blacks carry the first and biggest burden of the cut-back in staff. Secondly, there is extravagant capital expenditure. The statistics that we have been given read in conjunction with the statement of the hon. the Minister indicate an attempt to address the particularly difficult decisions that have to be made in respect of employee numbers and remuneration. There is a drop of about 5% from 270 000 to 259 000. Unfortunately, the new statistics depart from the old analysis in that they no longer give us the statistics of White and non-White employees. Whereas one would be quite happy with that in a situation where there was no discrimination, unfortunately we do not live under these circumstances and, as I have stated, one of the characteristics of easy management is to allow Blacks to bear the brunt of cut-backs in staff. This is particularly so in a large Government organization that is largely run by politicians and where Whites are voters and Blacks, of course, are not voters, and also where Whites tend to hold the more responsible positions. However, this is something that we in this House have to watch because we are supposed to be concerned with questions of national principle. I would therefore be grateful if the hon. the Minister in his reply could give us that breakdown of his 259 000 staff into Whites and non-Whites.

The hon. the Minister’s approach to staff has been to take them into his confidence and honestly tell them that they can expect no increase in the level of their remuneration in the current financial situation. This is what the situation requires. Annual increases comparable to the inflation index will one day be recognized as nothing but a deceit. They are self-defeating and they cancel themselves out completely. The increases in total remuneration between 1980 and 1981 amounted to 26,5%, and between 1981 and 1982 to 26,7%. During the past year, the increase was 14%. However, if one makes an adjustment for the reduction in staff, it will amount to probably 19% net. This, of course, is quite unsatisfactory. There is not the slightest hope of our successfully combating inflation by means of increases in total remuneration that compare with the inflation rate as this does almost exactly.

The hon. the Minister has informed his staff associations that prospects of a salary adjustment are extremely slim. I should like to commend the hon. the Minister for his courage and I also want to commend the hon. the Minister’s action to his colleagues and to people in the private sector. There is no other way in which we can break the inflation spiral.

The second area of self-indulgent management is in the field of capital expenditure. This is an area in which engineers are particularly guilty because when they are working hardest they are actually playing. This is what they like to do, especially in regard to lovely, new capital projects. It is almost impossible to argue against this type of expenditure. Capital expenditure is the easiest thing to justify. If one argues against it, one is either a reactionary or is antiquated or against progress. It is an extremely difficult thing. However, all I know is that any organization that approves capital expenditure that its management wants to be incurred almost unhindered is definitely headed for financial trouble. My guess would be that an example of vast capital expenditure on a project with no chance of showing a return even in the short term and probably not in the long term either, is the Durban station on which an amount of R136 million was spent, 30% more than the amount allocated by the Exchequer for Black housing for the whole of White South Africa last year. I would be surprised if that could be justified in any financial argument. Between 1980 and 1981 capital expenditure increased by 37% and between 1981 and 1982 by 58%, and then 21%, but as the economic situation developed in the past year, the SATS did take certain steps, and this was curtailed, I think, to a 7% increase. In the coming year it is planned that capital expenditure will drop. So measures have been taken in this direction. I want to commend the words of the hon. member for Amanzimtoti in this regard. They are highly pertinent.

The SATS is accused of empire-building by the private sector, particularly the people in the Public Carriers’ Association. Certainly the SATS has made it quite clear that it intends to follow the so-called high-rated traffic onto the road. For example, in his budget speech last year, the hon. the Minister said that transport services would, in future, have to enter the competitive transport market to a greater extent. Mr. Lessing, I think it was, reaffirmed the SATS policy of competing in the road transport market and admitted that the SATS was cutting margins to this end, adding that he did not believe that the concept of free enterprise precluded State participation in that sector. In a country that has recently embraced the free-enterprise system with such desperate ardour, why is the SATS and the Government not delighted at the fact that one has entrepreneurs in private industry who are prepared to carry the load of transport on the roads? The hon. the Minister should welcome that, because it is his policy. The main reasons given are, firstly, that the SATS is losing its high-rated traffic to private road hauliers, secondly that the private haulier is not called upon to bear the same infrastructural costs that the SATS has to bear and, thirdly, that the ability of the SATS to assist the Government in its social and political plans would be aborted if it could not cross-subsidize, in other words, rob Peter to pay Paul.

Let me deal with these points in order. Firstly, if the SATS loses high-rated traffic to the private sector, is this not because that is actually how the goods should be carted? To force the movement of goods by rail at a price which private enterprise, if given the opportunity, could undercut, is actually placing a completely arbitrary tax on those goods and creating a distortion in the market. For the SATS to chase after high-rated traffic, and to attempt to get it for its motor road services at cut rates, is folly. It is an emotional reaction that one cannot justify according to business principles. High-rated traffic by rail is not necessarily high-rated traffic when carted by road, and even less so when carted by aeroplane. The SATS has always been prepared to marginally cost some operations, and that is quite understandable in an organization of that size, with that percentage of fixed costs. One can never, however, marginally cost business that represents an expansion involving additional capital and the creation of additional overheads. To do that is classic folly in business terms.

Secondly, the SATS claims that the private haulier has an unfair advantage when competing against it. Mr. Lessing points to the inadequate contribution of road hauliers to the cost of the infrastructure. Private hauliers, however, with a lot of justification, point to a whole set of other factors involved which enable the SATS to compete at great advantage, with the private sector. For example, the SATS pays no licence fees and also pays 20 cents per litre less for fuel. Those two items alone account for almost 20% of the total cost, to the private sector, of running a vehicle. Then, of course, it has other advantages as well. It purchases spare parts, plant, equipment and vehicles without paying duty. The private sector’s reaction is: By all means let the SATS compete with us on the road, but let us do so on a like-for-lika basis with each organization having the same privileges and the same obligations. If it is shown by analysis that heavy vehicles are contributing to the infrastructure in an incorrect proportion, that is not a problem. That, I think, can be sorted out and argued about, and then dealt with equitably.

Finally, the SATS, quite rightly, always returns to the argument that it has obligations which the private sector does not have. To quote Dr. Grové—

That is perfectly correct. Surely, though, we require an urgent re-appraisal of the following issues: Firstly, the role of the SATS (a) as a national transport system; (b) as the instrument for social, economic and political policy, and (c) as an integral part of our strategic infrastructure; secondly, the compensation of the SATS for uneconomic operations carried out for other than business purposes (a) by cross-subsidization; (b) by direct payment from the Government, and (c) by other means; and, finally, the formulation of a new clear-cut objective for the SATS. A Government policy which was interpreted by Schumann 20 years ago as—

is no longer sufficient. The Government must be forced to think this thing through and to decide what it requires of the SATS. It will then establish a framework within which the SATS can work. It will establish the criteria on which the responsible people in the SATS know they are ultimately going to be judged. The critical nature of decisions that need to be made is evident from the vast losses which are made in certain areas and from the role the SATS is expected to play in this new decentralization scheme. Again, Mr. Lessing has stated—

I am sure that that is correct. These losses have been estimated in some quarters to run at R1 000 million per year.

The largest element in this vast sum is the subsidy to reduce worker transport costs in the PWV region. Could anything be more paradoxical and more stupid? While we spend millions from one pocket to encourage the decentralization of industry, from the other pocket we are subsidizing other industrialists, or the same ones, with even more millions to stay exactly where they are. It is significant that almost 20 years ago it was stated in the Schumann report—

The Klue report contains exactly the same views. That body went even further and said—

It went on to say—

Can anyone doubt, if this House had every year to approve of a lump sum of R690 million or R1 000 million, which is the loss incurred by passenger transport, that we would have acted much quicker and much more effectively? Obviously the proper situation one has to get to is that where the workers have to pay their transport costs to and from work every day, they must be able to draw the right salary to enable them to afford to pay that figure. The way we handle these subsidies means that we do not know where our elbows are. Schumann’s remarks on the South West African position many years ago were prophetic. Together with its other duties and privileges, he said, central Government should assume responsibility and compensate the S.A. Railways annually for the loss on South West African Railways. That was 20 years ago. And what do we see in the hon. the Minister’s budget speech? We see a proposal that the SATS be compensated for its South West African losses of approximately R70 million per year by means of a loan which the South African Government will make to South West Africa.

Mr. Speaker, I take pleasure in speaking after the hon. member for Walmer. As far as the criticism expressed by the hon. member in particular, and by the official Opposition in general is concerned, I should like to quote an expert. I should like to quote the fine words uttered in this House by the hon. member for Walmer on 21 September 1981. I am disappointed that the hon. member is really only a fair-weather friend. When things are going well with the SATS, he praises it, and when things are bad, he has only negative criticism. The SATS would like friends who stand by it through thick and thin. I quote what the hon. member said (Hansard, 21 September 1981, Vol. 95, col. 4330)—

Who said that?

The hon. member for Walmer.

That cannot be true. That is impossible.

The hon. member went on to say—

He also said—

He went on to say—

I should now like to come to the CP. As hon. members are aware, the hon. member for North Rand was our chief spokesman until they broke away because of disloyalty, and now they are seeking affiliation with the Herstigtes. [Interjections.] On 21 September 1981 the hon. member for North Rand was our chief spokesman for the last time. He severely reprimanded the Opposition. He did so with feeling. I quote (Hansard, 21 September, 1981, Vol. 95, col. 4298)—

I wish to say to the hon. members of the CP that the hon. member for North Rand declared here that it was reckless, irresponsible and a-national to go along with the HNP. I should like the HNP mentality of which the hon. member was speaking here, to be applied to the members of the CP. I wish to put it to them that it is reckless, irresponsible and a-national to co-operate with the HNP. I do not know whether I should call them the “gestigtes” or the “ontstigtes”. I ask the hon. members of the CP, seeing that by-elections are going to take place, to print the following remark of the hon. member for North Rand in their election pamphlets. He said (Hansard, 21 September 1981, col. 4299)—

That is what separate development brought about.

At that time those voters were told that the Government’s policy was fair and just. It was said by the hon. member for North Rand.

Now I should like to come to the official Opposition. Their chief spokesman, the hon. member for Berea, said the following on 8 March 1982 (Hansard, col. 2341)—

This was his main reason. However, this year he is speaking about inadequate planning. This has become hackneyed criticism on the part of the Opposition. They claim that the Government is the reason for the SATS not showing a profit. The USA is a country where no separate development is practised, and yet the total increase in airfares of the SAA in the previous financial year was proportionately much less than that of the USA. Does the USA also adhere to the policy of the NP? Furthermore, there was a loss on the conveyance of White passengers. How does the Opposition explain that? Let us look at another example to refute the argument of the Opposition. Take as an example the serious financial position in which the airways industry finds itself world-wide. They are experiencing record deficits. Is this also as a result of NP policy? The pattern of rising fuel prices and the world-wide recession are the reasons for this. Therefore the Oppocition must not put forward such naive arguments. Is NP policy responsible for inflation, the oil crisis, the recession in the industrial countries, the drop in the gold price, unemployment abroad, drought conditions in South Africa and for the fact that the individual prefers to drive to work in his car instead of making use of the suburban train service? One expects more realism from the Opposition. A lack of realism is the reason why the Opposition—all three opposition parties—will never be able to make an impression on the electorate.

Another old favourite argument of the Opposition is the question of the under-utilization of passenger trains. What is the reason for this? Is the Opposition not aware that peak periods play a tremendously important role? For example, in the mornings, within the space of one and a half hours, approximately 250 000 passengers are conveyed from Soweto to Johannesburg. Those trains remain unutilized for the rest of the day. I ask the Opposition to provide a solution for this. Are peak periods the result of this party’s policy as well?

Another one of the Opposition’s old and vague points of criticism is that of inefficiency. Allow me to give one example to illustrate the efficiency of the SATS. The hon. the Minister has already pointed out that a SATS wagon covers an average distance of 51 km per day. This is the best performance in the Western World. The figure for the USA is 36,8 km, for France 24,4 km and for Great Britain 19,3 km. I wish to refer to another example. The average effective work done per wagon in South Africa is 1 530 net tons per km per day. This compares favourably with 572 net tons in Japan; 512 net tons in France and 407 net tons in Great Britain. If the people of America, France and Japan come to this country to gain knowledge from us and want to know how we manage to cover such distances, surely this is proof of efficiency on the part of the SATS.

With all this negative criticism, hon. members of the Opposition forget that the SATS renders a national service. How much rolling stock is not purchased? How many industries are not kept alive by the SATS? How many new industries are not stimulated? How many job opportunities are not created? How many mouths are not fed? What is the value of the socio-economic service which the SATS renders?

Another dilemma which the SATS must take into account, is the fact that at times it is compelled to cut-back on capital expenditure, as is the case at the moment, and that when the economy recovers once again, it will have to deal with a larger volume of traffic with obsolete equipment. Then it will be exposed to criticism once again.

Because hon. members of the Opposition cannot make an essential contribution, and because they cannot produce penetrating and positive criticism, I shall try to put a few analytical questions myself and evaluate them objectively. Are there external factors which gave rise to the present unfavourable financial position in which the SATS finds itself? Of course, the reply to this is in the affirmative. The SATS is caught in an economic stranglehold beyond its control. There are factors beyond the control of the SATS, factors about which nothing can be done, which it cannot determine itself. Allow me to mention a few.

It is a fact that international activities have decreased markedly over the past month. It is also a fact that by far the majority of South Africa’s overseas imports and exports are conveyed. Therefore the harbours and railways in particular are adversely affected by this economic recession. All these things in turn have a detrimental effect on the revenue of the SATS.

There are other detrimental factors. South Africa’s export trade has declined because the international markets have remained weak. As far back as 1981 already it was clear that the recession in the industrial countries of the world was going to last much longer than had originally been expected. The oppressive conditions abroad and the decrease in real internal expenditure caused a drop in the volume of traffic. These are facts which are obvious and which the SATS cannot change.

The decline in exports and in internal transport, has adversely affected the income level of the SATS further because of the world-wide, as well as the critical domestic recession conditions. Because the SATS is a business enterprise, it is obvious that it must take timeous steps in order to balance its books. That is why tariffs and fares were increased from 1 January. If necessary, this will have to be done again at a later stage.

The real, the correct, the only, and in fact, the final test for the SATS is, and should always be, that its planning, its philosophy, its point of departure, must be aimed at the most effective, the most economical and the fastest way of conveying goods.

Now I wish to proceed to determine whether the SATS meets this stringent criterion. Due to a lack of time, I am going to mention only 12 different examples. Firstly, as far as electric locomotives are concerned, innovations and effective methods have been developed. An extensive electrification programme is in progress. Railway lines are being improved and new ones are being built. Longer and heavier trains are being used for the sake of an economic industry. Secondly, the turn-round time of wagons has been improved. Thirdly, fewer train accidents, collisions and derailments are taking place. In the fourth place, in order to extend the passenger services, new incentive schemes have been developed in order to attract clients. Fifthly, suburban passenger services are being rationalized from time to time. Sixthly, in order to run the dining-car services on an economic basis, experiments are being carried out with the serving of à la carte meals. In the seventh place, the Publicity and Travel Department is advertising extensively in order to attract more passengers. In the eighth place, marketing efforts have been intensified in order to combat competition on the part of the private carriers. In the ninth place, there is efficient utilization of rolling stock. Special wagons have been designed for various commodities. In the tenth place, a great deal has been achieved in respect of the promotion of safety, effectiveness and loss control with regard to trading activities at goods depots and stations. In the eleventh place, there are examples in containerization, the delivery service, as well as harbours of effective economic and fast methods of conveying cargo. In the twelfth place, through the development of management techniques a system has been designed in terms of which the staff may be equipped and developed to the greatest extent. These 12 examples are sufficient proof that the SATS succeeds in conveying passengers and goods in the most effective, the most economic and the fastest way.

I also wish to refer to six highlights, plus factors of the SATS. I should like to know what the Opposition’s criticism of these will be. After all, one expects a little more acknowledgement from reasonable people in this regard. Firstly, the SATS has an efficient and dynamic team of managers, as well as well-trained and motivated labour forces. Secondly, the technical achievements of the SATS are unique. One example of this is that we in South Africa accomplish more on a rail gauge of 1 065 mm than other countries do on a rail guage of 1 435 mm. Today our tracks carry loads which are much heavier than those of other countries with the same rail gauge. Thirdly, it is generally acknowledged that South Africa is among the world leaders as far as the conveyance of heavy traffic is concerned. Fourthly, the handling of the energy crisis by the SATS was of vital importance. Fifthly, the various uses of the computer, sophisticated signal systems and further development in the area of the design of rolling stock; as well as operating equipment, allow the SATS to keep abreast of the transport demands in South Africa. Sixthly, we must add to this the loyalty and the service of its employees and then we can and ought to be grateful for and proud of the SATS. If it were not for the SATS, we would have been a poor and underdeveloped South Africa. To a large extent, the welfare and progress of South Africa and its people can be attributed to the efficiency of the SATS.

Mr. Speaker, the hon. member for Bloemfontein East will pardon me if I do not react to the first part of his speech because I am convinced that his knowledge of recent political events has lagged behind a little. However, the second part of his speech was far better, and in this regard I agree with him on quite a few points, as I shall indicate in my speech.

Because it is a matter of great interest to me, I want to congratulate the new General Manager, Dr. E. L. Grové, on his appointment. It is a very weighty task which rest on his shoulders, actually an enormous task which rests on his shoulders and on the shoulders of his officials, but we are convinced that they will do everything in their power to help us to get out of this dreadful quagmire. Everything of the best to those at his side who are assisting him so ably. He definitely needs assistance. I also know that as far as possible everyone in South Africa will gladly offer his services to assist in this matter, because the SATS belongs to the people of South Africa. The retired General Manager, Dr. Loubser, rendered many years of service. We want to thank him as well as the other officials who will be retiring in the near future.

We see in the Press that the Minister of Mineral and Energy Affairs is going to call for an investigation into the provision of electricity in the near future—one newspaper says it will happen and the other says it may. I am very pleased about this because electricity is one of the very expensive items the SATS has to use. It is also one of the items every person in South Africa—the farmer on his farm and every person in his house—has to use. If something good can come of this investigation, I will be extremely pleased, because it may be that one of the losses the SATS suffered could have been as a result of expensive electricity. Not only the SATS, but everyone in South Africa, will be extremely grateful if something good emerges from this investigation because, as I said, the SATS belongs to all of us.

I wish the hon. the Minister every success as far as future budgets are concerned, because no one likes to see such a budget in front of him. To say the least, it is a bleak budget. I am sure that the hon. the Minister and South Africa would have wanted it to be otherwise. Surely that is true. I say it is bleak because John Citizen does not know whether there will be a further increase in tariffs towards the middle of this year. In many institutions it has become the custom to announce price increases at any time during the course of the year. Eventually one does not know where one is. If I consider the practices that have arisen, I think we shall still have to pay through our necks during the course of this year. Many people cannot pay any more; honestly, these everlasting increases are not funny any more.

I want to refer to certain paragraphs on the hon. the Minister’s budget speech. The first paragraph I am quoting is in col. 2077 of this year’s Hansard and it reads—

The next paragraph I want to quote—it also is in col. 2077—reads—

The hon. the Minister went on to mention that the economic activities of the private sector were at this stage still quietly continuing on their course.

I find this decline extremely peculiar, because the SATS and everything associated with it is supposed to be run according to strict business principles. I do not know how this decline could have been overlooked. In any event its over and done with and water under the bridge. There are a few questions I should like to put in this regard, and I would be very grateful if the hon. the Minister would reply to them. Why was the SATS the first to be affected to such an extent? I am asking this very politely because I really want to know. In the second place, I should like to know, when actual steps were taken to take a closer look at these matters, whether any important reasons were found which could have been the cause of this large deficit. In the third place, I want to know whether there were perhaps a multitude of small things which eventually became a stream of money flowing out of the SATS coffers. After all, many small streams make a large river.

The result has been that major capital projects have been scaled down and delayed. In civil works alone the budget has been cut by R650 million, and that includes the coming year. That is definitely not child’s play. It must have had an effect on the private sector as well and the people who work for them. September and October 1982 do not seem to have been good months for the SATS. During those months the recession became worse. Unemployment was stimulated. In a country like South Africa unemployment can have very serious results, because we are not a homogeneous community. It is therefore everyone’s duty to guard against this.

The tariff increase on 1 January 1983 amounted to approximately 15,6%. A little prior to that, late last year, there was an increase in revenue of 10%. These two factors are appalling. We are very grateful that there has not been a further increase now, because if there had been an increase for the third time wihin a matter of months, we would really have been killing the goose that lays the golden eggs. It would have been quite out of place to come along and say thank you in March 1983, a mere two months later. There are certain things John Citizen simply cannot send by rail any longer. We have read about private people who do not make use of the Railways to transport things. However, can one blame those people if the rail tariff is much higher than the road tariff? Those people also have people on their pay-roll. They also have economic considerations they have to take into account. As I have said, the Railways belongs to all of us. That is the reason why we must go into this matter very thoroughly. I can understand the hon. the Minister’s attempt to salvage matters. I hope he succeeds. I say this from the bottom of my heart.

I note that the tariff on the conveyance of certain foodstuffs has been handled with great circumspection. I also read in his report that it has only been increased by a small percentage. The Minister’s intentions were very good, but food prices rocketed. The public did not therefore benefit by that reduction. Give credit where credit is due, but I am sorry to say that the hon. the Minister did not succeed with the low tariff on food, and he will never succeed unless the hon. the Minister of Industries, Commerce and Tourism ensures that price control is reintroduced. I am saying this because one can economize in every conceivable way, until one is blue in the face, but if nothing is done about the prices of food in certain chain-stores, all the good things one does mean nothing. [Interjections.] It is then that one encourages inflation as never before. [Interjections.] It is strange that when one makes an appeal on behalf of the public one is sometimes greeted with a chorus of jeers, [interjections.] That comes, of course, from those people who do not support the public. [Interjections.]

It is you who are talking such nonsense.

In his speech the hon. the Minister said the following (col. 2081)—

One really wonders if we always realize how greatly we are indebted to the police in this country, whether it be the S.A. Police or the Police of the S.A. Transport Services. We can hardly imagine how these people look after our interests day and night—when we are all peacefully asleep. That is why it is essential that every night when John Citizen goes down on his knees to give thanks to his Creator for the men on the border, he should also give thanks for the S.A. Police and the Police of the S.A. Transport Services. [Interjections.] We need only think of the fact that there is safety at our stations, that bridges and railway lines are being guarded, that aircraft are being checked to ensure that bombs and similar objects have not been concealed on them …

[Inaudible.]

That hon. member has the AWB on the brain. [Interjections.] It is ensured that loss of life is kept down to a minimum, because once a person is dead he cannot be saved. [Interjections.] It is because this kind of thing is being done that we owe the police a debt of gratitude.

That brings me to pensioners, persons who were in our employ years ago. Many years ago Railway workers in certain sectors earned very little money. Here I am thinking for example of the men who shovelled coal into locomotive furnaces until they were drenched in sweat. Those were difficult years. There was a great deal of sweat for very little money. Those people are no longer in our employ. Although adjustments are made from time to time—something I am very grateful for—some of those poeple are still living below the breadline. I therefore want to ask the hon. the Minister whether their position cannot be considered again in the near future. They are people we can never forget. They are our own people, and we must try to do what we can for them.

Are we in fact receiving the greatest possible profit from our rolling stock beyond our borders? I see that we are in fact making a good profit, but I am asking for this matter to be gone into again, because “charity begins at home”. I am convinced that the revenue from that source could perhaps be increased considerably.

Do not believe all the HNP stories.

I believe stories least of all. [Interjections.] We want to thank the association who agreed not to take salary increases this year. This is a praiseworthy, commendable action. It demonstrates the calibre of the Railwaymen. These are people one can be proud of and whose behaviour is praiseworthy in all respects. Was it not the Railway workers who established the ATKV in the past? Was it not those people whose love for their nation flourished in the past when many people were afraid and merely sat back? Was it not they who organized a symbolic ox-wagon trek for example? Was it not they who arranged the Van Riebeeck Festival? Was it not they who arranged the festivities for the Perdekop commando in the Orange Free State in 1974? Did they not collect money to erect the statue of Gen. De Wet in Bloemfontein and to erect a memorial to the Peace of Vereeniging, a memorial unveiled by Dr. Verwoerd? Were they not also the founders of the S.A. Noodhulpliga? This is the calibre of people who work for the SATS.

Today as well.

Today they are being sold out! [Interjections.]

Today one finds that if one speaks of those people, there are those who pass derogatory remarks. [Interjections.] The Railway workers of South Africa will take cognizance of the fact that there people who are passing derogatory remarks now. [Interjections.]

Order!

I find it strange that if one says anything good about an Afrikaner organization today one is jeered.

By whom? I challenge you to say by whom. [Interjections.]

Order!

I think cognizance is being taken of this throughout South Africa. I notice that there were no remarks from the PFP, but there were remarks from the neo-Progs, and one expects it least of all from them.

Mr.Speaker, I had really hoped that today I would be speaking after the hon. member for Langlaagte for the third time this session. I was waiting for the two inch copper cannon, the old Tant Grietjie they used at Blood River, with which the hon. member for Langlaagte usually shoots, and I was waiting for him with the G5 cannon of the NP, but then the hon. member for Langlaagte “chickened out” completely, as the children call it. I do not know where he is.

He is collecting!

Then the CP came along with an airgun, and I really cannot waste G5 ammunition on an airgun.

Here comes the hon. member for Langlaagte now. [Interjections.]

The hon. member for Nigel said that the speech of the hon. member for Bloemfontein East who spoke before him was in two parts, and that he could react neither to the first part nor the second. I can say the same of the hon. member for Nigel. The first part of the speech of the hon. member for Nigel was one long lament. All he did was complain continuously—he did not make a single positive contribution or suggest any solution. Then, in the second part of his speech, the last part, he tried to make a party rally speech here, and that was also a dismal failure. I want to make it quite clear to that hon. member and the other hon. members of the CP that they cannot lay sole claim to conservatism, Afrikanership, and the like. They will not and they cannot. What the hon. member said here, was true. However, he must not suggest that we are negating those things. He will not get away with that.

Why did you poke fun, then?

No one is poking fun, but some of those hon. members of the CP could be assisted as far as their delivery is concerned. [Interjections.] Mr. Speaker, I have nothing further to say …

No, let them have it, Wynand!

… about the previous speaker, the hon. member for Nigel. The budget of the SATS that the hon. the Minister submitted to us is of course a reflection of the present economic climate, not only in this country, but also in other countries in the Western World. No one is trying to hide the fact or deny the fact that this budget was a difficult one and was in certain respects a disappointment. Unfortunately wishful thinking will not help either because what we have here are the hard economic realities of the times in which we live.

The hon. the Minister and his officials do not deserve the unjustified and unfair criticism that has been heaped like coals of fire on their heads. As usual, the best helmsmen are the shorebound ones. One can imagine what a mess the SATS would have been in today if the helmsmen on that side of the House had in fact been at the helm. It is an absurd idea, but proves yet again how much one sometimes has to be grateful for.

What hon. members on that side of the House forget when they are criticizing is the fact that the SATS is an infrastructure service that must provide service that is essential to the country’s economy as a whole, in both favourable and unfavourable economic conditions. I do not want to elaborate on all the unprofitable services, but honourable members know that there are various unprofitable services that have to be provided, irrespective of poor economic conditions. If these services were to cease it could cause chaos in the country. In this way the SATS subsidizes many bodies and persons in the private sector, in the interest of the country. This is an aspect which must of necessity have had an adverse effect on this budget.

In view of the drop of about R588 million in the expected revenue from the various main services, the SATS deserves high praise for its unique achievement, in that it was able to realize a net saving of R225 million without adversely affecting services and without large-scale dismissals of staff. This attests to exemplary financial discipline, control and planning. That is why the arguments of the hon. member for Berea do not hold water. I want to congratulate the hon. member for De Kuilen on his speech this afternoon. I think he reacted and replied effectively to all the arguments of the hon. member for Berea.

Discipline, control and planning can only be meaningful if one has the right human material and this in fact is one of the greatest assets of the SATS. From the General Manager down to the lowest category of worker the SATS has employees on whom one can rely, and that is why the SATS, that employs more than a quarter of a million people, deserves high praise for the remarkable spirit of co-operation, discipline and labour peace among its employees. We are so fond of saying that labour ennobles, but nowhere have I seen this better illustrated than among the staff of the SATS. One cannot help asking oneself why this is the case and how is it possible for an organization with more than a quarter of a million people in its employ— and what is more these people come from a heterogeneous population—to enjoy such a high degree of loyalty, affection and devotion on the part of its employees. Of course, the answer to this is quite simple. It is that in the first place, we have here a dynamic and purposeful management, people who know how to manage, how to plan, how to motivate and who can take their people along with them because they inspire confidence in their people. They realize that a worker is not merely a passive being whose labour one can tap every day, but a person who must be happy in his work and also as far as his family is concerned. That is why there must be machinery for negotiation that gives the worker a say in his work situation. He must enjoy favourable conditions of employment. He must know that as far as housing is concerned he will be able to look after his family properly. He must know that he and his family can depend on good and proper medical care and that he can also make provision for his old age by joining a pension fund.

For the above reasons we find that the employees of the SATS are basically satisfied and happy people who can be relied on and who can always be depended on in the interests of the country, and we have had many examples of this in the recent past. I pointed out that there must be machinery for negotiation. In actual fact, at present the SATS is a model of good labour relations in South Africa, and it is in the enviable position of having enjoyed labour peace for more than 50 years. This has been achieved by way of well-structured labour negotiation and conciliation machinery within which ample provision has been made for communication, from the bottom right up to the hon. the Minister.

It also gives me pleasure to be able to mention that in spite of the financial problems the SATS is facing, labour relations have remained on a very sound basis. The Coloured and Indian trade unions have also been admitted as full-fledged members of the Federal Council of Staff Associations of the SATS on the basis of the new dispensation with regard to labour relations, and the mutual co-operation is excellent. Despite the fact that the trade union for Black employees was only established less than two years ago, approximately 52% of the Black workers of the SATS have already been organized and the relevant trade union is actively engaged in involving as many of these workers as possible in the trade union. This trade union has already done the necessary spadework to affiliate with the Federal Council of Staff Associations of the SATS, and there is every indication that their integration with this federation will not create any problems. When this affiliation of the Black trade union with the aforementioned council has been finalized, the SATS will be able to negotiate with all its employees, irrespective of race or colour, on a common basis. In view of the changing labour dispensation it was decided to order a thorough high-level investigation into the entire matter of trade union representation in the SATS, and we are aware of the task group that has been appointed in this regard. That is why I think it is such a pity that during a previous debate on the conditions of Employment (South African Transport Services) Bill, the hon. members of the official Opposition as well as hon. members of the CP tried to politicize the transport services. From the CP we heard petty and short-term political speeches aimed at short-term political gain, and as far as the official Opposition are concerned, they, as I said on that occasion, want to internationalize the labour situation in the SATS and in addition they have become the spokesmen for the unaffiliated trade unions, namely the General Workers Union, in this House. It will be of no use for hon. members to keep trying to run away from this. I should like to warn hon. members who have been guilty of these things, that in this case they are backing the wrong horse, and that the staff of the SATS will rise above these petty matters and will therefore totally reject those hon. members.

I have already referred to housing. It is a fact that there are good housing schemes for the staff of the SATS. In addition, a development account has been opened to make provision for the development of residential areas to be financed from home ownership scheme funds. The eventual aim of this development account is to provide housing at as low a cost as possible to participants in home ownership schemes. The idea behind this development account arose when houses were built on a project basis on departmental land not immediately needed for departmental purposes. Those houses were then allocated to staff in the lower-paid grades. This attempt was so successful that it was carried on with on this basis. Similar projects have been launched in various centres. Some of these have already been completed and taken into use with great success.

These development projects are the right way of keeping property prices, for the lower-paid workers of the SATS in particular, within relatively reasonable bounds. The reason for this is that the relevant plots can be purchased at cheaper prices, and accordingly quotations could be obtained on the customary competitive basis, which naturally lead to the eventual price per residence being far lower than would have been the case if quotations had been obtained on one house at a time. Of course the houses are of varied design, and in addition, the houses are placed on the plots in such a way that one does not gain the impression of a railway camp.

I think that we in South Africa have long ago got away from the idea of railway camps in our towns. If I may refer to my own constituency, I want to state that the SATS community that town is a well-integrated part of our community. They are honoured and respected people at every level of that community.

Now that the home ownership schemes subdivision has the facilities of such a development account at its disposal, the development of land obtained in this way can be finalized more quickly because the participants in the home ownership schemes have a direct interest, and it is possible to negotiate lower prices on a business basis in the open market. This also means that these schemes do not miss out on good opportunities. This applies in particular to people of colour, because land for development for this group of employees is extremely scarce. When a piece of land is available in a proclaimed area, the negotiating home ownership scheme must be able to purchase it immediately so that the land can be developed further.

It is therefore clear that as far as housing is concerned, ample provision has been made for the staff of the SATS, with a view to the future as well.

In conclusion I just wish to say a few words about medical care. Hon. members are all aware that on 1 April 1982 we switched to the new medical scheme, the Transmed Scheme. I just wish to discuss a few of the most important characteristics of this scheme. In the first place, no membership fee is paid, but a nominal amount of R4 a month is payable by employees with dependants, and R2 by employees with no dependants. Members now have a free choice of general practitioners, specialists, hospitals and pharmacies. Only a fraction of the medical costs need be paid, varying from as little as 10% to 25% in some exceptional cases. Pensioners and widows of members, and those persons who retire on pension or are widowed within five years of 1 April 1982 need not pay part of the fees of general practitioners and specialists, with the exception of the payment of 10% for medicine. In addition, members have no expenditure as regards hospitalization, operations, theatre services, ambulance services, blood transfusions and private nursing. Except in certain exceptional cases, accounts are paid by the department, and the fraction of the medical expenses for which the member is responsible is deducted from monthly salaries or even pensions. This is proof positive that as far as medical services are concerned, excellent care is being taken of the staff of the SATS.

I do not want to elaborate on the pension scheme. The hon. member for De Aar referred to it and gave it his support. I also want to thank the hon. member for that. We have an excellent pension fund for employees of the SATS, and last year ample adjustments were made with regard to the older group of pensioners who, if I remember correctly, totalled about 18% of all SATS pensioners.

I want to conclude by saying that the staff of the SATS, these people I have been discussing this afternoon, these people of whom not only the SATS but everyone in South Africa is particularly proud, will also play their part of these difficult economic circumstances in helping to get this wagon, which is now slightly bogged down, through this drift, with the General Manager leading the way. I take pleasure in paying tribute to them today.

Mr. Speaker, the hon. member for Kroonstad has struck up another verse in the hymn of praise to the hon. the Minister and the department. There is not much one can say in reply to his remarks, therefore, except for expressing one’s gratitude for the fact that thanks to him, the hon. the Minister may not be so disgruntled when he has to listen to the Opposition while they are doing their duty by voicing a few criticisms.

In times of recession, any organization is expected, of course, to undertake a self-examination to try to ascertain where it can cut down and what measures it can take to stay in business. The businessman has a few spheres on which he can concentrate in the short term. The first of these is reducing his expenditure. In the second place, he should try to increase his productivity. There is also the question of more aggressive marketing, and, together with that, one’s pricing policy has to be watched very closely in an attempt to obtain or retain a bigger share of the market. When we consider cost reductions, then the first step that can be taken is to discontinue one’s uneconomic services. In this field, I believe, the SATS has already been fairly successful. In Natal we are very much aware of the fact that there are many uneconomic passenger as well as goods services which have already been curtailed and I think this is simply good policy. In my constituency, too, there are stations that have been closed down, for example, due to the fact that they are uneconomical because the area has switched from timber production to the production of sugar, which cannot so easily be transported by rail. I also want to ask hon. members to adopt a balanced approach when the SATS has to take steps such as these in an attempt to reduce its expenses. They should not try to attract a few votes. In my constituency I inherited an uneconomic station which should have been closed years ago, but the previous MP probably said that if they closed that station, all the people there would vote for the CP. If one has any ingenuity, one will not find oneself in a difficult position. I persuaded half the farmers there to vote for the PFP, because they see that one does not only want to be popular, but that one can even help the SATS in its attempts to economize. The other half are going to vote for the CP in any case, because they say: Just look what the Government is doing in Greytown with the help of the PFP.

A further method of cutting costs, of course, is to reduce the salary account as such. This can be done in various ways, some of these being difficult and others very unpopular. The first way of cutting down on salaries is to bring about a reduction in the relative salaries. This can be done by reducing overtime or by withholding increases. I want to congratulate the hon. the Minister once agian, on his attempts in this connection as well. It required some tact and courage on his part not to yield to the pressure to be popular. If the relations between employer and employees are good, the employees will respect an employer if they know that ultimately he is acting in the best interests of all.

Another method of reducing the salary account is, of course, to reduce the number of employees. In this connection, too, I think the SATS has introduced a policy of non-replacent of natural losses. In this way, disruption is minimized, and therefore this method is very strongly to be recommended. Laying off workers is, of course, the most unpopular way of reducing the number of employees. For that reason it is a pity that the moment one can no longer see in the statistics the ratios between the various population groups that make up the staff structure. Now one cannot see which population group has had to absorb the largest number of retrenchments. One can probably assume, since an organization does not lay off its key staff first, that the reduction has been mostly among the Black employees. However, I should like the hon. the Minister to give the assurance that a policy of retrenchment will be formulated with the greatest circumspection, for example, by first laying off the staff that have already reached retirement age or pensioners that have been re-employed, rather than young recruits who may have less experience, but who would find it more difficult to get along without a job, and who would on top of that be wasting precious time that could have been spent gaining experience which could benefit the SATS, themselves and the country in general for a long time to come.

A third method of reducing the salary account, of course, is to pay lower salaries. In a free market, salaries are determined by supply and demand, with the proviso that a minimum wage is sometimes laid down, which can be regarded as a living wage. I am convinced that some of the salaries in the SATS would never pass the test of supply and demand. This is a result, of course, of the distortion which I regard as a product of the old days of job reservation and the days when the educational and training opportunities for non-Whites were very limited. I think one sees this very clearly when one examines the statistics relating to the staff as well as the salary structure. The SATS is probably the only major employer in the country which still has a ratio of only 1,3 Black employees for every White employee. This is what the situation was at the end of 1981; we have no statistics for the period since then. This ratio certainly does not reflect the state of affairs in the rest of the economy of South Africa. One may ask why this is so; does it not mean, perhaps, that the salaries of White employees in the SATS are excessively high compared with those in the private sector? One knows that there is a major shortage of highly qualified manpower; hence, of course, the policy of occupational differentiation of the Public Service, especially with regard to posts in scientific and highly technical disciplines which from the nature of the case are still being filled mainly from the ranks of the Whites. This means that the ratio of White employment in the S.A. Transport Services at the lower and intermediate levels is even more unnatural than in the rest of the economy. When one examines salary structures, one sees that 90% of all clerical posts in the S.A. Transport Services carry a salary of more than R6 000, that 67% of all clerical posts carry a salary of more than R9 000 and that most of those posts are filled by Whites. I feel that this is out of all proportion to the private sector, for example, where Blacks, Indians and Coloureds are now entering clerical occupations in larger numbers. The same applies when one looks further down the list, for example, at the positions of lower-level technicians, traffic staff and other supporting staff in the salary structure.

There can only be a few reasons why this intermediate level of the SATS is so unnaturally White. Firstly, it may be an indication of the fact that there is no mobility of people to the private sector, which means that the salary structures are too high. In other words, people cling to their posts at the SATS. That is one possibility. The second possibility is that there is no movement of the constantly growing number of trained non-Whites into posts within the SATS, and this obviously means either that job reservation still features in the policy of the SATS. or that the staff associations are making it impossible for people of colour to be appointed to these posts. I should like to hear from the hon. the Minister what the real state of affairs in this connection is. Another possibility, of course, is that the SATS is not using its people effectively, i.e. that it requires too high a degree of training for each post, so that the posts always have to be filled from the ranks of the more highly skilled group, i.e. the White group. These are the kind of reasons one can advance.

The hon. the Minister would therefore do well to consider the idea of occupational differentiation, which arises, of course, from the old principle of supply and demand, and I think he could apply it to many of the middle-ranking posts, probably as many as 50 000 posts or more. Then one may say that although there would not be an absolute reduction in salaries, there would nevertheless be a smaller increase because of the greater supply from the ranks of the non-Whites for these posts at the intermediate level. In the end one could say, of course, that there need not be an upward adjustment of wages only to close the wage gap and to reach parity, i.e. parity with a White salary scale which may be artificially inflated as a result of job reservation and the poor training and school facilities of non-Whites in the past.

There are a few other possibilities for cutting down on expenses, but we shall come back to those in the Committee Stage.

The next factor of importance in the strategy for survival is effectiveness. According to available figures, it is clear that because of the immediate or rapid decline in traffic, the corresponding adjustments with regard to staff, etc., were not made in good time, and at this stage, therefore, the figures with regard to effectiveness are no better than in the past. The turnaround time of trains, for example, has increased. One can understand this, because the same equipment has been conveying less goods. We trust that the next series of figures will reflect an improved effectiveness.

The last area in which survival tactics can be used in a recession is that of marketing, and together with that, the whole pricing policy. One’s approach must be aimed at increasing one’s share of a limited market. In respect of the Railways alone, for example, one finds under two different headings that a total amount of R6,4 million is being spent on advertising. Now I find it very difficult to believe that that R6,4 million is being used effectively, because the Minister keeps complaining that the private sector is poaching his goods. Is this perhaps due to the fact that his pricing policy is not right and that as a result of this, it is impossible for him to compete with the private sector in respect of high-rated traffic, etc.?

Let us examine a few examples of what a businessman can do with his pricing policy, with a little ingenuity and creative thinking. The first example one finds in the SATS itself. In April last year, dry dock tariffs were increased to such an extent that the country lost a lot of business, not only because foreigners had their work done elsewhere, but because even local operators went to Europe or elsewhere to effect repairs there. This ill-judged decision in the field of pricing policy was a major setback at the wrong moment, in my opinion. It was a major setback for our shipbuilders as well as for the SATS as such.

We welcome the new tariffs. They prove that a little creative thinking can help. The cutting off of the tariff in respect of any ship over 80 000 tons means that we shall be much more competitive when it comes to big ships When the dry dock is occupied, after all, it does not matter whether it is occupied by a ship of 80 00 tons or by one of 100 000 tons. One hopes that this small change will enable us to attract the big ships to this country for their repairs.

Since the dry dock work has to compete in a world market, the tariffs should not only be competitive, but also comparable. People should be able to compare like with like. It is a pity, therefore, that the SATS has not included additional services, such as cranes and compressed air, in the tariffs. This is making it very difficult for local ship repair operators to quote in the open world market. I also think that some clients may be in for a big shock when they get the account for the auxiliary services.

As regards the first leg of the amendment of the hon. member for Berea, I want to say that the pricing policy of marginal costs can be put to good use, i.e. by recovering only the operating expenditure on certain products or services. However, this should not be done, as the hon. member for Walmer said, in the case where capital investment is necessary to make the service possible. Let me give an example. Every weekend, thousands of people travel from Durban to the Wild Coast casino; so much so that pressure is being brought to bear on the hon. the Minister by the hon. member for South Coast and others to build a freeway along that route, for example, primarily for the convenience of those people who want to visit the casino, but others would also benefit. However, the hon. the Minister knows that he finds it very difficult to obtain money for building freeways. However, has he considered introducing a “Casino Special” and marketing it as such? The rail and the coaches are not being used at all over weekends. The same applies to the buses operated by the private sector at Port Shepstone and elsewhere, which could convey people from the terminus to the casino. I am sure that by merely covering operating expenditure, the hon. the Minister could offer a very attractive alternative to road traffic.

Graham, you are a clergyman; do you agree with him?

As long as it is a luxury service.

In fact, the hon. the Minister could begin by providing customs facilities at Durban station, then he could instal a few one-armed bandits on the train, so as to prepare the people for the weekend to come.

The principle of marginal costs could also be put to good use on many old lines which have long been paid for and where the utilization is so low in any event that the maintenance costs are much lower than those applicable to a normal line, and where the eventual replacement or rebuilding will never take place, owing to the low utilization. I am thinking, for example, of a line such as the one to Greytown. When one adds replacement costs and the normal cost of repairs applicable over the entire network to the tariffs of such a line, there seems to be a loss on such a line. If such a service were discontinued, the revenue would be reduced, but there would not necessarily be a proportionate reduction in costs. Therefore one actually takes the decision to discontinue a service on the basis of a misrepresentation of the true cost of operating a service on a particular line, especially the old ones.

As far as pricing is concerned, I want to say, finally, that it is time the whole question of high-rated and low-rated traffic, as well as cross-subsidization, was seriously reviewed. There is only one way in which the hon. the Minister can prove that he is in fact providing an effective service, and that is by making tariffs competitive, rather than making use of protective measures. If this is not done, one will not achieve maximum utilization of resources.

Mr. Speaker, the hon. member for Greytown has suggested, among other things, a modus operandi for cutting down on salaries and reducing expenses, which is the main objective. He complained that there was not enough mobility as far as the employees of the SATS were concerned. In other words, he wants the employees to leave the service of the SATS and to seek work elsewhere on a larger scale. How on earth can one advance such a silly argument at this late hour of the afternoon? I want to explain to the hon. member at once that the employee of the SATS is a person who takes pride in his work. The task which he performs is a special one. He does not simply abandon his task in order to try another one the next day, because he will never be able to perform the other task as well as the one he is performing in the SATS, because he has been trained to do it. He meets all the demands that are made on him. It is astonishing that there are people who are silly enough to complain about the lack of mobility among the workers of the SATS.

It is a pity that on this peaceful afternoon we should have had to listen once again to the old allegation that the hon. the Minister and his staff are treating our non-White labourers unfairly. Such a remark is quite uncalled for. The hon. member could simply have consulted the annual report of the SATS. I do not want to take up the time of this House, but I do want to quote what it says on page 66 of the annual report—

We shall leave it at that.

No, get stuck into him some more!

Another general remark I want to make in this connection is that the chief spokesman of the PFP and some of the other speakers this afternoon have regarded the world-wide tendency of recession, inflation, unemployment and cost increases in isolation, and are unable to understand that these can have an effect on the operating results of our Transport Services as well. But everyone knows, for example, that harbour activities are the best barometer, not only of the state of the South African economy, but of the state of the world economy, and especially the economies of our trading partners. If the world is reaping the bitter fruits of inflation, recession, unemployment and cost increases, these are bound to affect not only the South African economy, but the operating results of our harbour traffic and services as well. When one examines the operating results of the Western European harbours, what does one find? I could mention numerous examples, but I shall take only Amsterdam as an example. There, revenue from general cargo traffic has declined by 20%. Container traffic is down by 16%. If this is the position at big, powerful international harbours in Western Europe, how much more profoundly will the harbour industry of South Africa be affected by the world recession with all its bitter consequences? However, there is yet another element involved when we consider our harbour industry. It is calculated that as a result of the system of containerization which has been introduced throughout the world, one container ship does the work of approximately 10 conventional ships today. Anyone who can put two and two together must realize that if this is the case, the shipping traffic around the southern tip of Africa, traffic which makes use of our harbours, must inevitably have declined sharply, and when the shipping traffic declines, this means less business for the SATS. Surely this is a logical conclusion. However, this is not all. In addition to all these trends, there has been an inevitable escalation in the cost of operating our harbours, an escalation in respect of operations, labour, electricity, fuel and other commodities which are essential for operating our harbours.

When all this has been taken into consideration, it is obvious of course, that with regard to this important component of the SATS, too, there is bound to be a decline in otherwise favourable operating results. Unfortunately, we cannot compare the results with those of previous years, and I shall presently explain why not. What I want to point out, however, is that shipping was to a large extent responsible for making the operating results of the SATS appear less successful. When one looks at our dry docks, for example, what does one find? The Durban dry dock is 69,7% occupied; that of East London, 27,7%; Cape Town’s Sturrock dry dock, 63,6%; and the Robinson dry dock, 86,3%. However, this is not a tendency which is limited to the dry docks in the South African harbours. Just go and look at the big international harbours of Europe, such as Marseilles, and one will see that there is no sign of activity in any of those dry docks. Therefore the present economic recession has affected dry dock activities throughout the world, and particularly in South Africa. Let us examine some other operating results which are a direct consequence of this tendency. In 1981-’82, we shipped approximately 84,5 million tons of cargo; in 1982-’83, 67 million tons, and the estimate for 1983-’84 is 73,5% million tons of cargo. As far as containerization is concerned, the estimate for the coming financial year is down by thousands of containers. As far as direct revenue is concerned, we expect that while we are budgeting for a surplus of R239 000, the 1983-’84 financial year will end with a surplus of only R189 000.

Let us examine some other factors, such as international trade conditions. When one does that, one asks oneself how the harbour authorities of the South African harbours have actually managed to be as successful as they have been. Compared with harbour authorities in other parts of the world, the South African harbour authorities can still be credited with magnificent achievements under these very difficult circumstances. How do they do it? How can this important component of the SATS still make such a major contribution to the cross-subsidizing of other less profitable components? The answer lies in the fact that the harbour authorities not only have a definite policy, but are very well aware of the important role they play. What is the operating policy of our harbour authorities? It is to provide economic harbour services at all times, services which will satisfy the needs of the country. When we consider the role played by harbours, we see that although our harbour traffic is in fact not a direct transport service, it is nevertheless the point of contact, the actual link in the great chain of transport components, the meeting-place, the point of contact and the link between us and our trading partners. What is also interesting is the fact that South Africa’s position at the southern tip of Africa was responsible for the founding of our country in 1652. In 1658, the first wooden landing stage was erected here in Table Bay, the first real harbour facility, therefore, at the southern tip of Africa.

Our harbours play an ernormous role in promoting international trade and international relations. When we talk to harbour authorities in Western Europe, for example, we find that they have the greatest respect and admiration for the role played by our relatively small harbours, compared with the big world harbours. Therefore we are grateful to see that our harbours are meeting all the demands made upon them. In taking cognizance of the role played by these harbours, it is also important to know to what other factors their success can be attributed. Then one realizes that our harbours can in fact be successful, for two very important reasons. They are in fact successful because they never fail to perform the two most important functions which our harbours have to perform, namely the marine function and the shipping function with regard to cargo. These two functions are still being performed.

A brief examination of the marine function, for example, a function without which no good harbour could prosper and grow, makes one realize that it has become proverbial in all the languages of the world that a safe harbour is that harbour where there are calm waters, where cargo can be transferred under pleasant circumstances and safe from the danger of the elements. A very great deal is required in order to make such a harbour available. The cost involved is also extremely high. Since our harbours can pride themselves today on complying with these prerequisites—the necessary breakwaters, deep water along the quays, suitable places for tying up, the necessary modem navigational instruments, the necessary tug services, proper control over the movement of ships within the harbour, sufficient terminals for the repair of the vessels and the availability of fuel and other shipping requirements— surely this is proof of a magnificent achievement. Our five big harbours fully comply with these international prerequisites for shipping. Surely this is an enormous achievement for this young and beautiful country of ours.

All this costs a great deal of money, however. In this way, for example, the old tug service, which still used coal-burning tugs, had to be completely replaced by modern tugs, so that they could provide the proper modern service which international shipping relies on.

This brings me to a further important function of our harbours, i.e. the handling of cargo. When we consider this function, we realize that our harbour authorities do not stand on the sidelines, but that they are actively participating in the world-wide process of evolution, a process which has progressed from the transportation of separate parcels through the stage of cargo units, until the great modern system of containerization was eventually arrived at. Our harbour athorities could so easily have watched this process from the sidelines, because it was an expensive, complicated and very difficult transition which had to be accomplished. However, when a decision was taken that we would adopt this system—that was in 1974—it was possible for us to complete the transition to the system of containerization within three years. Even today this is regarded as a magnificent achievement by world standards. Within the space of only three years, at a cost of R400 million to ourselves and R2 000 million to the shipping lines, we succeeded in changing over from the conventional method of cargo transportation to the revolutionary system of containerization. It is likely that this will always be regarded as a magnificent achievement, by all shipping experts as well.

In the process, there were magnificent achievements on the part of the men in control of our shipping services and of our harbours. The same applies to many other people. During the first year of containerization, for example, approximately 150 000 containers were handled. By the end of last year, the number had grown to 616 000 containers. If the present economic recession had not occurred, the number of containers would probably have been very close to 700 000 per annum at the end of 1982. To date, three million containers have been safely handled by our harbours. What is more—and this is very important—one shudders to think what would have happened if we had not embarked upon this process, and if these enormous changes had not been brought about—how we would have been able today to compete with other big harbours. After all, containerization means a saving of 40% on expenses for importers as well as exporters. There are other achievements in this connection as well. We are the only country in the world which can boast of handling four container lengths, namely 3 m, 6 m, 9 m and 12 m.

There have been achievements with regard to shipping as well. The cargo of Safmarine’s Helderberg was landed in one and a quarter shifts, its cargo of 605 containers was shipped, and 24 labourers worked in every shift. If the cargo had been handled in the conventional way, it would have required six shifts, which would have taken 48 hours, and there would have been 90 labourers working in every shift. These are magnificent achievements which could not easily be equalled anywhere else in the world. With regard to these achievements, but in a lighter vein, I think of the Port Elizabeth harbour, which continues to hold the record of 1 101 containers handled in 24 hours in 1982. I just want to tell hon. members from Natal that the Durban harbour has come very close to equalling this record.

When we talk about our South African harbours, it is quite clear that in this modern world of ours, it is not really enough for harbour authorities to know their marine functions and their cargo traffic functions. There is at present a downturn in international trade and we find ourselves in a period in which the survival of the fittest will apply. Only the fittest will survive. For this reason, the hon. the Minister and his officials have had to keep their fingers on the pulse of all the needs of our harbours. In the process, of course, great expenses have been incurred, and in these times of financial stringency or the problems connected with investment capital, they had to continue effecting the most essential improvements to our five most important harbours. I do not want to spell out all these changes in detail; I only want to refer to a few of them.

In the first place—and this is very important—the Cape Town harbour had to provide a refrigerated holding store for containers, and this is nearing completion. At Richards Bay, various new developments and expansions were called for. One of my hon. colleagues on this side will elaborate on these at a later stage. At the Durban harbour, the necessary workshop had to be provided for the maintenance of equipment relating to containerization and container handling facilities at that harbour. At the Port Elizabeth harbour, the Chari Malan quay had to be widened and certain other container facilities had to be provided. At Saldanha Bay, facilities had to be created for harbour traffic. These expansions and facilities are all necessary in order that our harbours may remain competitive. With regard to harbour management, too, we have had to keep pace with the demands of the times. Where a financial dividing line was drawn in 1912, for example—and one does not easily change conventions or old rules during one’s lifetime—this financial dividing line between the harbour functions on the one hand and the railway functions on the other has proved to be no longer functional. It was often found that certain berths and certain sheds were situated on the railway side, while they were actually being served by the harbour facilities. Therefore it was essential to draw a new financial dividing line between harbour and railway facilities. A task group was appointed in this connection. For this reason, the figures for 1982-’83 cannot really be compared with the figures for previous years, because, as I have already said, that new financial dividing line has been drawn. What is important, however, is that our harbour management is now being enabled to produce clear, accurate working results. They can also determine very accurately the extent of the cross-subsidizing of our harbours.

My time has expired; I should have liked to refer to all the other things which have been done by the harbour authorities in order to meet the demands of our times. My time has expired, so I only want to say on this occasion that as long as the hon. the Minister and his brilliant harbour management are able to keep their fingers on the pulse of the needs of our harbours, these will always remain one of the admirable components of the SATS.

Mr. Speaker, I have listened very attentively to the debate today. Anyone listening to the speeches made by the hon. members of the NP would have found it quite easy to understand the problems of the SATS and those of the hon. the Minister and of management. However, I have also listened attentively to the arguments advanced by Opposition members, for although we have been criticized, we have not been told what the alternative is and how they would have handled it.

I shall begin with the hon. member for Berea, the PFP’s shadow Minister of Transport Affairs.

He is greatly to be pitied.

I do pity him, because I know that when I have finished with him, the hon. the Minister is going to tackle him, and then there will be very little left of him.

The hon. member for Berea accused us of a lack of planning, inadequate advance planning, as he put it. When a member of the Opposition makes such a charge against the Government, it is important that the hon. member should suggest an alternative. However, he did not do so. I have been sitting here since 14h15 and I am still waiting for it. However, it has not been forthcoming, not from his two team-mates either. The hon. member for Greytown made a speech which was wide of the mark. He speculated about possible solutions, the way an economist often does. Of course, he is not an economist, but he tried to be one. He speculated without really suggesting any solution.

I want to come back to the charge of a lack of advance planning. I want to ask the hon. member for Berea what he would have done if he had been Minister of Transport and if he had had to handle the whole situation. What would he have done? Would he have laid people off? He does not reply, so I shall repeat my question: Would he have laid people off? He does not reply. I ask him yet again: Would he have laid people off? I ask him whether he would have reduced their salaries.

Perhaps he should be asked in English.

Yes, perhaps I should do that. The relevant words are “salaries” and “wages”—would he have reduced them?

Yes, ask him that.

Now the hon. member sits there chewing gum. I ask him whether he would cut down on capital expenditure. I ask him, but there is no reply.

That is the dilemma of an Opposition when they are faced with a good budget. That is the dilemma of the Opposition. They have to criticize the budget, but in such a way that they do not really have to suggest any alternative.

Is this a good budget?

The hon. member for Berea says that the share of the private sector in the transport industry as a whole is too small. However, he does not tell us what the share is which he wants the private sector to obtain. I am still waiting; I think the entire House is waiting with great interest.

You were not listening.

No, I was listening very attentively. The only conclusion one could come to on the basis of his criticism was that he wants the private sector to have the more profitable part of the operations. I think we have to cross swords with the hon. member for Berea. He quoted Dr. Grové, the new General Manager, from The Argus of some or other date. I think the hon. member should quote from a newspaper which is more objective, one which would give the unadulterated facts so that we could then use facts in this House. The hon. member quoted that part of Dr. Grové’s statement in which he said that the SATS had lost a great part of its share in the transport market. However, he omitted the preceding sentence. Dr. Grové had in fact said that we had lost that part because of the decline in traffic. I think it is unfair of the hon. member to criticize the new General Manager of the SATS in this way here in this House. I think it is very unfair of him to make use of his position in this House to cast reflections on a respected official who cannot reply. I think he owes Dr. Grové an apology. Let us compare that hon. member’s quotation with what Dr. Grové actually said. Dr. Grové said—

The hon. member did not quote that part to us. He quoted selectively. Surely that is not honest politics. Dr. Grové went on to say—

The hon. member for Berea said that our planning was inadequate. Then the hon. member for Greytown came along, however, and said that we were right. The first positive contribution from the Progs was that we shall have to discontinue these services.

I want to come to the hon. member for Nigel, who made a speech here and concluded on a note which really did not become him, in my opinion. It is very clear that the CP’s strategy is to enlist the sympathy of the workers in this country. The hon. member accused us on this side of the House of holding him up to ridicule when he talks about cultural matters and matters which are close to the heart of the Afrikaner. I do not think it becomes the hon. member to adopt that standpoint. I think he should be able to take it when we criticize him for making an unfortunate statement.

But what did I say wrong?

The hon. member can go and read his speech. Then he will see why we have criticized him today.

Mr. Speaker, it is getting late and I want to come to what I had been planning to say before those hon. members annoyed me. However, I think my time is going to run out, and I shall have to conclude my speech tomorrow. Perhaps you will help me by suspending the proceedings at this stage. [Interjections.]

Get stuck into Barnard.

No, I do not want to talk about the hon. member for Langlaagte at this stage. This hon. member suggests that the workers of the SATS are stupid. However, they are going to find him out one day. They are not as stupid as he suggests.