as Chairman, presented the Report of the Select Committee on Toll Financing of Roads, submitting a Bill entitled the Second National Roads Amendment Bill.

Report and proceedings to be printed.

Mr. Speaker, since we have now had a fair amount of time to consider the budget and its implications, I should like to begin by moving as an amendment to the motion of the hon. the Minister of Finance—

As I have said, a fair time has elapsed since the hon. the Minister introduced his budget. We could have called it a nine-day wonder because it was his ninth budget. However, we have had an opportunity of looking at how people have reacted to it, and as it is a custom of the hon. the Minister to quote from newspapers in order to prove how good his budget is, I shall save him some of that trouble today by referring him to some of these newspaper comments. Fortunately or unfortunately they have been rather few because there were other matters that took the news. Perhaps the most flattering one came from, inter alia, the Deputy Governor of the Reserve Bank, who said it was a budget in a new milieu. We will ask the hon. the Minister to explain to us what this new milieu is, Mr. Speaker. Furthermore the Director-General of Finance says an exciting future is being prepared. Unfortunately the hon. the Minister has omitted to tell us about that exciting future that is being prepared.

The one organ that always praises the hon. the Minister—a financial magazine the name of which we need not even mention—says that he was not seduced by the unfortunate consequences of hard times. Well, Mr. Speaker, some of us are concerned about the social consequences of hard times. A little later in the article, which is praising the hon. the Minister, it goes on to say—

And these are his words, Sir, not mine—

Another financial magazine says that this is a budget with remarkably little content; something which we can perhaps echo. It says further—

This is an aspect, Mr. Speaker, with which we too will deal at length at a later stage. Then it says—

It also says here—

Then they also express their scepticism about the projections.

When do you begin with your speech, Harry?

I am going to go through these as I please. There are not many of them, so the hon. member need not worry. [Interjections.] If we look at Sakerapport, we see it quoting an eminent economist as saying—

The SundayTribune says—

The Business Times carried the headline “Brutal debasement of the rand has devastated the economy”. I quote, as follows—

Well, that is what they say. Then the Vaderland talks about how people are becoming poorer. Then there is also The Star, which talks about it being already too late to avoid a job crisis, and then there is also The Argus, which talks about the economy shrinking for the first time since the Second World War. Well, that is what the Press has said about the hon. the Minister’s budget, and it is perhaps …

You have chosen your quotes very selectively indeed.

Well, Mr. Speaker, the hon. the Minister says I have chosen my quotes selectively. I have quoted from virtually every newspaper in the country. [Interjections.] What the hon. the Minister is going to do is to look for some carefully prepared quotations to try to prove the contrary. Let us see, however, how it goes. The reality is of course that seldom has there been a budget which has elicited so little comment as the present one. Newspapers, radio and television, as well as the financial Press, to which I have referred, have commented, but the budget, as I say, has not even become a nine-day wonder. It has simply disappeared from debate and from discussions. Admittedly—and I must say that I have a high degree of sympathy for the hon. the Minister—he was upstaged by the announcement of the referendum. This occurrence aside, however, the budget has certainly not been a newsmaking event. The hon. the Minister and his officials, as I have said, tried to make it significant but it all fell flat indeed. During this week all of us have to debate this budget, and we will certainly ask some questions.

We will ask what this budget has set out to achieve, what it has actually achieved, and what it should have done. When all the honeyed words that have been used by the hon. the Minister are brushed aside—and there have certainly been very many—there are some realities that we have to face. The realities are that, firstly, we are in a deep recession. Secondly, the country has no growth in the gross domestic product or in the gross national product. On the contrary, last year there was a decrease of 1% in the gross domestic product, which, in capital terms, is far more serious because it means a reduction of about 3,5% per capita in the gross domestic product. Thirdly, South Africa has beyond question an abnormally high inflation rate in comparison with the inflation rates which prevail amongst its major trading partners.

Fourthly it is true that not only are the numbers of unemployed on the increase, but in the face of a substantial population increase it is remarkable that the number of people who are actually in jobs is decreasing, so that we are getting more people of whom less are in fact employed. There is undoubtedly a major shortage of housing that all of us can see. As the hon. the Minister has said, there is also the increasing need to spend more money on defence. Crime is also on the increase in South Africa and there is no question either that we find ourselves in a conflict situation as far as the constitutional future of this country is concerned. No amount of pleasant phraseology on the part of the hon. the Minister or any carefully selected quotation can change the reality that our South African economy has reached one of its most serious lows. It is certainly at the lowest point since the Second World War. Our political problems too have reached a most vital turning point. In the light of these realities—because this is what they are—what does this budget set out to do?

The hon. the Minister told us in the first instance what he did not intend to do namely, he did not intend “to spend ourselves out of the recession”. That is quite an interesting remark because when the hon. the Minister presented his first budget some nine years ago, he had a slightly different tale to tell because he held a slightly different view at that time. What did the hon. the Minister have to say then? I want to quote here from his very first budget speech nine years ago. The hon. the Minister said, inter alia—

So the hon. the Minister held a different view then. The hon. the Minister went on to talk about inflation at the time, and said—

This was nine years ago—

We do not know what food prices were in 1975 compared with what they are today. The hon. the Minister went on to say—

As I say, it would appear that somebody’s economic views have changed quite remarkably over this period of nine years.

The hon. the Minister goes very much further in this present budget, however. He says that he does not regard it as his function to give any indication as to what the economy should do. He said—

Therefore, on the hon. the Minister’s own showing, this is in fact an amber light budget. It is neither a red light nor a green light budget but an amber light budget. The hon. the Minister does not know whether to tell us to go or to stop. He says: Take care, there is an intersection. You will enter it at your own risk and you will do so on your own judgment. He is able to give no indication to the economy or to the people of South Africa. Therefore, as I say, it is an amber light budget. One has to go into the intersection, into the risk situation without having been given any guidance by the people who are supposed to be leading one. The hon. the Minister summarized his objectives in the following terms—and I want to quote his words so that there can be no misunderstanding because I wish to test him according to his own words—

If we take the hon. the Minister at his word, what has he actually done? Where are the foundations for higher growth with less inflation? Is it not true that all that the hon. the Minister is doing is to wait for the economies of our major trading partners to get moving thus beginning our own economic revival? He is not doing anything; he is simply waiting for something to happen. As I have said, this is an amber light budget. There is no guidance in regard to what one should do and there is no indication of financial management to achieve results. The hon. the Minister prefers to sit back and allow market forces, particularly those from abroad over which South Africa has no control, to dictate the trade cycle, except that here he occasionally interferes in the market mechanism and creates distortions which give South Africa the worst of both worlds.

The hon. the Minister states that he will “continue to adjust our policies to changing circumstances”, but it is a policy on his part, of reaction; it is not a policy of anticipation or a policy of management to combat problems before they come up in the economy. He waits for something to happen and then he says that he will react to it. The mix which the hon. the Minister suggests, to use his own words, “provides for continued restraint on Government spending: A relatively small budget deficit before borrowing, and effective control over the money supply-”

If we test the hon. the Minister on his own mix or formula, firstly history, and in particular his history of the control over the money supply in 1980 and 1981 certainly does not give anybody any great confidence. Even now, if we take the negative growth rate together with the inflation rate, the rate of increase in the money supply cannot be regarded as satisfactory.

Secondly the relatively small budget deficit before borrowing appears to be influenced by the IMF requirements in respect of the facilities which were granted to us last year. The view is, however, held by some economists that these conditions which pertained to last year’s balance of payments conditions do not apply now and that the Government could readily have borrowed more and should in fact do so; this would have enabled relief to be given in respect of such taxation as the import levy and GST which affects the cost structure of our economy, and in any event increased borrowing could in respect of the deficit have been used to mop up liquidity.

Thirdly the so-called restraint on Government spending needs comment. The hon. the Minister said this before; he said it last year. In view of the result, however, one must be, as one of the newspapers said, a little sceptical. Actual expenditure last year was to be about 11,5% up; in fact it was about 17% up and therefore if we compare like with like the rate of increase was about 50% higher than what he had stated in his original budget speech.

There are other matters too, which are disconcerting. The budget does not present the entire picture of Government expenditure at all. There is a vast number of para State corporations, companies, entities and funds for which no budget is presented and in some cases no accounts are even seen in Parliament. Whether or not restraints will be exercised in those entities we are neither told nor can we in any way control. Parliament votes funds for some of those entities, but not for others. There is no control by Parliament, no accountability and in some cases hon. Ministers will not even answer questions.

There is one interesting example in this budget in the Department of Mineral and Energy Affairs, and I am pleased the hon. the Minister is here. In the explanatory memorandum on Vote 17—Mineral and Energy Affairs—it is stated that after the estimates had been compiled as conservatively as possible, they were reduced by R31,702 million or 5,6%. It then continues—

That is a reality.

If, with great respect, we can deal with this matter one must point out that in the Department of Mineral and Energy Affairs there was a transfer payment which was reduced in respect of the Mines and Works Compensation Fund from R9,1 million to nil. The hon. the Minister of Mineral and Energy Affairs is not even listening even though he lost R9,1 million. [Interjections.] R9,1 million was taken away from him under protest by him. It is then explained that the shortage in the account “will be financed for this financial year by prematurely selling off Government effects held by the State Account in respect of latent compensation.” This will admittedly, says that hon. Minister, lead to a heavier burden on the Exchequer in later years, but hopefully the pressure will not be as great as it is at present. What has happened here, however, is very simple indeed. An amount of R9,1 million was taken away from him under protest. So what does he do? He takes the account of this particular Fund, which is an important fund, a compensation fund for people who are suffering, and sells off Government Stock at what he says is going to be a loss. Is that the way to budget? The accounts of that Fund show, according to the latest figures available to us—and the hon. the Minister can confirm this—an expenditure under this item of R9,68 million in the year 1982, evidencing an escalating tendency as far as expenditure is concerned. It is shown that during the year the excess of expenditure over revenue in the Fund was R2,828 million after the State has paid in an amount of R9,68 million. What is going to happen, however, if the State does not pay in anything at all? What would happen to the Fund then? What would the position of the Fund then be? The total State assets in that Fund amounts to less than R30 million, and the State’s long term stock totals only about R25 million. It is true that the mines also contribute, that the mines also do have assets in that Fund, but this particular exercise shows that the State bodies and connected bodies which are not under parliamentary control can, in fact, do what they like. We have no control over them, and the truth of the matter is that this does have an effect on the economy. I am amazed that the hon. the Minister of Finance, who is so concerned about financial discipline, allows all these funds to operate without any control on his part, without any accountability to Parliament so that we can, in fact, see to it that the so-called financial discipline is indeed exercised. [Interjections.]

The reality is, however, that the budget firstly shows no signs—and I ask anyone to show anything to the contrary—that the rationalization of the Public Service, which the hon. the Prime Minister announced with such pride, has produced any saving in public expenditure at all and, secondly, that there is any endeavour, on the part of the Government, to reduce public expenditure by doing away with that part of government which concerns itself with unnecessary and discriminatory ideological concepts of government which are wasting the taxpayers’ money and do indeed represent one of the factors causing inflation. Thirdly, there is no indication that there is any slowing down in the tempo of making laws and creating administrative procedures that necessitate an increasing use of manpower in their application. On the contrary, every year we are expected to make more and more laws and create more and more administrative machinery. Then there is the complaint that one cannot keep Government expenditure under control, when in fact it is something of the Government’s own making. This is a time when the Government should be employing its expenditure to remove discrimination in the services it provides for all the people in South Africa, when it should indeed be saving money by removing discriminatory laws, removing these unnecessary forms of legislation and using the money to help with the security of the country.

Having examined the broad methods the hon. the Minister says he employs for higher growth and stronger foundations, showing that that does not really exist, and that all he is doing, in reality, is to wait for better days in the hope that the economies of our trading partners will revive, let me look at what he says he is actually doing about inflation. It is not unfair to ask the hon. the Minister specifically: What is this budget doing to combat increasing costs? Let us also look at his record over the nine years that he has been Minister of Finance as far as increases in the consumer price index are concerned, and let us compare the rate of inflation at present prevailing in South Africa with the rates of inflation of our major trading partners. Finally, we ourselves will state what we believe the budget should have done in regard to the question of increasing living costs and how to bring such costs down.

So what does this budget do? Does it seek to dampen demand inflation, because if it does, that is not actually the problem? All the indicators show that this is not a cause of inflation in this year of 1983. If it was, the abolition of the loan levy puts more money into circulation, but on the hon. the Minister’s own showing it represents about 0,5% of private consumption expenditure, and therefore it has very little effect at all either way. The interest relief he referred to will help some people meet their problems. Then there is the question of pension relief, farmers will get some assistance, and no doubt those who make brandy will get some assistance through this budget. However, to deal with the cost element of inflation, I want to say that the budget contains no meaningful fiscal measures.

What could have been done? Firstly, we say the import levy could and should have been abolished. Secondly, GST could have been reduced or could have been removed from essential foodstuffs. Thirdly, some of the ad valorem duties could have been reviewed.

If we look at the increases in costs in the last year, we see that they pertain very substantially to food. I should like to quote some examples of the increases in the index over just one year. In respect of food as a whole the index went from 240,4 to 270,7; on grain products it went from 239,2 to 290,3; on milk, milk products and eggs from 210,9 to 244,9; on fruit from 229,3 to 269,4; and on vegetables from 215,3 to a massive 291,9. If we bear in mind the present drought and the consequences it will have not only for farmers but also for consumers, is there not á case to be made out for a gesture by the Government in respect of the cost structure in South Africa as regards the three matters I have mentioned?

There are other increases which, I think, cause some degree of concern. I can mention the example of cleaning materials, the cost of which for some inexplicable reason has gone up tremendously during the period of a year.

The Government’s history in respect of inflation is, to say the least, dismal. Let us compare the rand today with what it was when the Government came into power. Today it is 39 cents against R3,13 when this Government was elected. That is, the rand could buy eight times more when this Government was elected and the hon. the Prime Minister came to Parliament than it can buy today. That is the record of this Government. Under this Government we have seen a debasement of our currency. From 1975 to the present the CPI alone has always been in double figures. It has been as high as 15,2 and it has been no lower than 10,9. That is the history of the hon. the Minister. In the whole of the nine years that he has been Minister inflation has always been in double figures. The rand in 1975 when he came into power has come down to 39 cents today. In other words, since this hon. Minister has become the Minister of Finance the rand has lost 61 cents of its purchasing power. That is the history of this Government. That is what its record is all about.

Let us compare the inflation rate of the Republic with that of its major trading partner, and not with some carefully selected Third World country. If we compare it with the inflation rate of a major trading partner, we see that it is substantially higher for this year, 1983. What is more, a recent study shows that from 1970 onwards the average annual inflation rate has been about 21% higher than in the countries which are our major trading partners.

The question, then, is: What would we do? As I have said, firstly, we would grant a concession and do away with the import levy. We would reduce GST. We would review certain of the critical ad valorem duties. We would take some effective steps to deal with monopolies, price fixing and exploitation where the Government has failed. It has failed to protect the consumer because a high degree of inflation is due to the fact that the consumer is being exploited by many people. This Government stands by and does nothing in that regard. Thirdly, we would keep a tight rein, not only on the money supply; we would also carefully watch the velocity of the money supply, something which this Government has not done. Fourthly, we would review the expenditure of the Government on laws which are discriminatory and otherwise unnecessary, and so reduce Government expenditure. Fifthly, we would examine and seek to eliminate the structural causes of inflation, such as the skilled manpower shortage.

We would also accelerate education and training programmes and we would re-examine the entire system of administered prices and those cost inputs which are not based on sound and legitimate economic and business grounds. Sixthly, we would bring the private and public sectors together to deal with the problem of inflation. By creating an atmosphere that there is a real effort to combat it, we would reduce inflationary expectations. We submit that this budget provides no plan to combat inflation, nor does it give adequate hope that the Government has the will to get to grips with the problem. That is why, when people think of inflation, they actually think of Government. When inflation comes to one’s mind, the Government is almost synonymous with it.

I should now like to deal with some political aspects before I return to the economic issues. I want to deal specifically with the question of constitutional reform, with the question of the referendum and with some of the by-elections. Reform is a question of timing. But eventually time runs out, and however desirable or well-intentioned the people are who want to bring about reform, it becomes a practical impossibility if the timing is not right. In retrospect one cannot escape the fact that many opportunities have been lost in South Africa. When the history comes to be written eventually in relation to the Coloured people of South Africa, the removal of the Coloured people from the voters’ roll and the elimination of their representation from this Parliament will come to be regarded as a major turning point in race relations in South Africa. There are probably few opportunities left to us who sit in this House today to bring about successful reform. If these opportunities are missed the consequences are going to be disastrous for all of us. If it is correct—I want to put it to the hon. the Minister of Constitutional Development and Planning—for the Whites to be consulted by way of a referendum on any constitutional change, then, without for a moment entering into the debate on the merits or demerits of a referendum among the Blacks, the case for a referendum among the Coloureds and Indians is actually unanswerable. Without such a referendum it will be a decision of the Whites which will determine the new constitution. Thereby one of the arguments for legitimacy will in fact be endangered as the will of the Coloured and Indian peoples will not have been determined. One of the things which I believe the hon. the Minister of Constitutional Development and Planning is interested in seeing is that any new constitution has the basis of the support of the will of the people that it is designed to serve. [Interjections.]

The next aspect is that the question to be posed in the referendum and the manner of voting will, I believe, be of the utmost consequence. I think the electorate can really be divided into three categories of people. There are those who want no change and who will therefore vote against any proposal. I think they are sitting on my left. They will not change. Then there are also those who will support the Government’s proposals either out of party loyalty or because they feel something needs to be done and that acceptance of the Government’s proposals will be a safe thing to do. They will vote in favour of the Government’s proposals. However, there is also a third category of person. [Interjections.] Hon. members should listen: they might then learn something. There is still a third category of person, i.e. those who, for a variety of reasons—stretching from those on the far radical left who reject reform as a means of change through to the moderate centrists—believe either that the proposals do not have a chance of success or do not go far enough. Those who want no change, those who want no reform, can be left aside as no form of referendum remotely within the Government’s contemplation will be acceptable to them. I think everybody will agree on that. It does not matter what one does. They want no change, and there is nothing that one can do about them. The question that needs to be posed is: Does the Government want the support in a referendum of those moderate reformists who while they have difficulty with the nature of the Government’s proposals, may still see in them a degree of progress and while not supporting the proposals, would like to express their support of reform? Let me repeat the question for the hon. the Minister of Constitutional Development and Planning. I think he is very worried about it. I shall put it slowly to him. The hon. the Prime Minister has said that the Cabinet will decide the form of the question or questions in the referendum, but let me ask the hon. the Prime Minister: If he is committed to a form of consensus government and if he believes that there must be at least a substantial degree of support for any movement for reform in South Africa as opposed to the detail of reform, is not the form of the question vital for South Africa? Is it not that what is important? I put this to the hon. the Prime Minister. In those circumstances I ask whether it would not be best if the questions were formulated with reform-orientated groups not only within the Whites, but also within the Coloured and Indian communities so that the true feelings of the three communities concerned could be determined. I repeat it: Is it not important that the people who are concerned with reform should in fact be involved in the formulating of the questions? The question I want to put to the hon. the Prime Minister is: Does the Government really want a mandate for reform when it actually is going to have its referendum, or does it merely want approval for its legislation? Depending upon the answer to this a lot will depend in respect of the referendum and the future of South Africa. What does the hon. the Prime Minister want? Does he want a mandate for reform or does he merely want a approval for his legislation? If he wants approval for his legislation and a referendum says “no”, he is honour-bound to resign and go to the country and he cannot then pretend that he has a mandate. On the other hand, if he wants a mandate for reform, that is another story. I want to suggest to the hon. the Prime Minister that in the circumstances of South Africa he would be well advised to seek a mandate for reform rather than a mandate merely for approval of a particular piece of legislation.

There are other matters that relate to this particular issue and that are relevant to this budget. Until now there has been very little debate on the financial, economic and social implications of a new constitution. I think the hon. the Minister agrees. He shakes his head in agreement. While it is correct that political leaders talk about political participation, such as individual liberty, about justice and participating in the system, there is also no doubt that people see in political reform changes that affect their economic and social position. If we are going to have a new constitution next year, is this perhaps going to be the last budget in its present form? If so, how are budget debates of the future going to be conducted? I ask the question specifically. Are we going to have more time to deal with financial aspects of the budget, because the present form of debate, the limited time and the absence of a budget finance committee tend to make the financial detail of this budget secondary to policy issues which come to be debated.

Another major issue that has not yet been decided—nobody has as yet taken this House into his confidence as far as this is concerned—is what are going to be common matters and what are going to be communal matters, which matters shall have to be decided by all three chambers and which matters by only one chamber. What financial and economic matters are going to be involved in this? How will the allocation of funds be dealt with and how will the competition for scarce funds and resources be resolved? In the past the State’s function related mainly to the maintenance of peace and order and the administration of justice. But gradually over the years the State started to play a role in the regulation of the economic life of the people. On the one hand there is a development towards the State being a dominant element as in communist and socialist States and on the other hand there was the laissez-faire attitude which in order to compete with the attractiveness of socialism to the deprived, developed into a society where there was free enterprise but incentives were allowed and rules of conduct were laid down for such enterprise while social services were provided by redistribution of money obtained from taxation. And, Sir, the challenge to any new constitution comes from this issue of redistribution. How is the cake actually going to be shared?

The Government appears to be moving in a direction to the extent of escaping from this dilemma by moving more and more into what is called the market-orientated economy. This means a smaller role for the State and also that there will be less to be redistributed. It is a reversal of the process where the Government not only provides free primary and secondary education for some, vastly subsidizes post-secondary education, provides for old aged and disability pensions on different levels for various races, housing assistance in a variety of forms and free or subsidized hospital treatment depending on the person’s income level. If all this is going to be done away with and if people believe that under a new dispensation any of this can be changed they are making a fundamental error. The politician who enters into this new constitutional dispensation and these who support him in so doing will want the benefits of that dispensation as they see it now. They want a share in the cake. They do not understand that the price of their participation is cutting down on social services to be provided by the State. What is more important in the process of peaceful reform is that the leaders who participate can deliver the economic benefits to their people. A failure to deliver the goods will as far as they are concerned mean that they have to answer the question to their people why they actually participated, and then the attractions of alternative systems will become even greater. When the Constitution Bill comes to be known, the politics will be debated, but can the hon. the Minister of Finance or the hon. the Minister of Constitutional Development and Planning indicate to us when we are going to debate the economic and social aspects? When is this going to be set out in substance and how is life going to be different under the new constitution? What can the Coloured and Indian politician who participates actually deliver to his people? How much better off will these people be, Sir?

Sir, I ask, if reform is to succeed, not only will we have to create means for political participation but we will also have to give to the people a true taste of individual freedom and enable them to enjoy economic benefits which other constitutional systems cannot offer them. The reality is that reform has got to be shown to those people to bring rewards. But we cannot bluff the White people of South Africa that there are benefits from reform without there being a price to be paid for it, and that price to be paid is to look at the cake and at how it is going to be shared to see that everybody gets an equitable share in the economy of South Africa.

There are other matters which one should perhaps touch on, matters which are political. I think one should touch on them before going back to the bulk of the economic matters. I should like to refer to the election campaigns themselves. I want to talk about Waterkloof.

Mr. Speaker, we have three or four by-election campaigns on the go at the moment, and the attention appears to be focused in the main on what is going on in Waterberg, and what is going on in Soutpansberg, here we have a degree of fear which is beginning to develop, a fear about how these elections are going to turn out. In the Waterkloof campaign, however, it is a different story because in that constituency the NP has to face the official Opposition. What we find fascinating, Sir, is that in the Waterkloof campaign the canvassing is indeed taking place on the basis of the NP selling PFP policy. [Interjections.] It is indeed a most remarkable thing, Mr. Speaker. [Interjections.]

I have here in my hand a document which is designed to tell people how to canvass in Waterkloof. It tells canvassers what they must do, how they must go about convincing their voters, and …

It is an NP document, not so?

Yes, it is an NP document. It can only be an NP document.

Who wrote it? Wimpie de Klerk?

They must tell us who wrote this. Firstly, it uses an argument in which it says—

Then they begin by saying—

I wonder how this would go down in Waterberg or in Soutpansberg when the NP do their canvassing there, Mr. Speaker. [Interjections.]

’However, it goes still further, Mr. Speaker, I proceed to quote as follows—

Then it goes on to talk about the claims with regard to discrimination, about joint ownership rights, about participation, about the claims of urban Blacks. Then the following statement is made—

Then the following statement is also made—

It is not the whole solution; it is not a solution at all. [Interjections.] Then they come to the number of Blacks, and talk about statistics, about projections for the future, about Black know-how and then issue the following instruction—

But that is Wilgespruit tactics. [Interjections.]

Another instruction reads—

That is audacity for you!

Order!

Mr. Speaker, do you know what is that I do not understand? I do not understand why these matters cannot be put in such a way in this House too. Why do hon. members of the NP not stand up here and put matters just like that? They must not be bashful. [Interjections.] They also talk about the communist onslaught. Mr. Speaker, do you know what we say with regard to the communist onslaught and how it should be combated? The following is also stated here—

This is what we say too. We say this, but we are attacked for doing so. [Interjections.]

Then they also talk about Africa. The hon. member for Sea Point also talks about relations with Africa. I can quote him here and now, because I believe his own words appear verbatim in this document. [Interjections.] It states here—

This is the poor old voter over there in Waterkloof, who now has to be converted—

Surely these are the words of the hon. member for Sea Point—

However, it goes still further, and says—

†We cannot go without allies. How many times has this sort of statement not been made by hon. members on this side of the House? [Interjections.] This is really a most remarkable document. This is a most remarkable PFP document. It goes on to say—

But that is precisely what my hon. leader says. It goes on to state—

What will not save us? This is the reply that is given—

That is what is stated here. [Interjections.] I wonder what the hon. the Minister of Manpower has to say about this? [Interjections.] It goes on to state—

[Interjections.] Having set out the whole of PFP policy, they then have to append a small notation at the end to the effect that PFP policy cannot do all these things and achieve all these things. I say, therefore, that this is a most remarkable document. All I can say to those hon. members opposite with great respect is: Go on propagating PFP policy in Waterkloof but also propagate it in Waterberg and in Soutpansberg. [Interjections.] The reality of the matter is that the solution for South Africa lies in co-operation, the solution for South Africa lies in consensus, the solution for South Africa lies in reform. If we accept these, then we are on the way to solving the problems of South Africa. If we do not accept these premises then we are no different from the hon. members of the CP. [Interjections.] I say to those hon. members opposite: Do not speak with one voice in the mountains of the Northern Transvaal and with another voice in Waterkloof. Speak with the same voice. Speak with that voice here in Parliament so that South Africa can hear you. Do not be ashamed of being reformists. Do not be afraid of saying that you have made mistakes. Do not be ashamed of saying that you are going to build a better South Africa. If they are prepared to do all these things, then they can save South Africa. However, if they start being ashamed of what they are, if they have to make use of secret documents, if they have to go into back corners to persuade the voters, then they will not save South Africa. Reform is the only solution for South Africa but it has to be true reform, it has to be open reform and it has to be real reform. If they will do that, then they will save the country.

Mr. Speaker, the hon. member for Yeoville really seems to be panic-stricken about Waterkloof.

On behalf of this side of the House I should like to extend our sincere congratulations to the hon. the Minister of Finance on his ninth budget speech. This in itself is a great achievement in the history of our country. In his concluding remarks, the hon. the Minister thanked and paid tribute to the hon. the Prime Minister, his Cabinet colleagues and his staff. Unlike the hon. member for Yeoville, I want to express the thanks and appreciation of the people of South Africa this afternoon for the outstanding services rendered by the hon. the Minister of Finance over many years and for the able and dedicated way in which he and his charming wife have acquitted themselves of their important task. It is greatly appreciated by the country.

As in the past, this budget is a well-considered and well-balanced one, and its central theme remains financial discipline, not as an end in itself, but as a means of achieving healthy growth on the basis of stability over the medium and long term. The proposals have been universally welcomed by businessmen and industrialists as a conservative budget which will go a long way towards solving South Africa’s economic problems. Even the hon. member for Yeoville could not find much to criticize in the budget, except for referring to a few hardy annuals such as inflation, unemployment and the lowering of the GST. For want of a good speech, or even of any speech at all, he also quoted selectively from newspaper reports and the budget speech. Before the debate was adjourned, and immediately after the hon. the Minister had delivered his budget speech, the hon. member described it as a piece of patchwork, but when we have finished with this budget debate, the PFP will consist only of a few pieces which it will not even be possible to patch. It is not surprising, therefore, that he broke with tradition, as he himself said, by turning to politics after devoting only two minutes to finance. I shall also come to the political sphere in due course.

The hon. member alleged once again this afternoon that nothing was being done to arrest inflation. Surely this is not true. Indeed, one of the most important packages in the budget is a combination of fiscal and monetary policies providing for the following: first, the sustained curbing of Government expenditure; secondly, a relatively small budget deficit before borrowing; and thirdly, effective control over the money supply.

In the debat on the Part Appropriation Bill earlier this year I discussed the true causes of inflation at some length. I think the hon. member should go and look it up. I pointed out to him that the inflation rate was to a certain extent caused by structural factors in our developing national economy and that as long as these structural deviations were present in the national economy, a relatively high inflation rate must be accepted as inevitable. I also pointed out that there had to be two main groups of participants in the effort which would each have a specific responsibility in its own sphere. On the one hand, there are the fiscal and monetary authorities, which have the primary responsibility to follow a conservative financial and monetary policy, but on the other hand, the role of the private sector is equally important, since it is the primary task of this group to achieve certain productivity objectives which would contain inflation.

That is why the statement made by the hon. the Minister is of the utmost importance, i.e. when he said that the time was ripe for the public sector and the private sector to join forces in the interests of the country as a whole in order to examine the capital structure of organizations such as Escom, Iscor, and so on, which after all form an indispensable and integral part of South Africa’s economy, and to try to find solutions. I trust that the private sector will take the initiative in this connection.

It is often asked—the hon. member for Yeoville also asked this question this afternoon—how countries such as the USA, West Germany and Britain have managed to curb inflation. They have managed to do so after a period of great hardship in which some countries had negative growth rates for two and in some cases even up to four years in succession and in which the demand for goods and services simply disappeared. Workers were only too grateful even for rumours of jobs and no one dared argue about wage increases. A Swiss banking survey reports, for example, that no significant economic revival can be expected in the world economy and that unemployment remains the greatest single problem. The report goes on to say that Western Europe showed no economic growth last year and that the position is likely to be the same this year. Salaries and wages will decline in real terms, which will reduce consumer spending. In view of the poor prospects for world trade, unemployment in Western Europe can be expected to increase even further. The West German economy will also be characterized by sluggish consumer spending because of the high rate of unemployment and wages and salaries which will decline in real terms, while welfare services will be curtailed over a wide front. That is what this report says.

In spite of lower interest rates, there is still no incentive for industrialists to increase capital spending. The utilization of their present capacity is still far too low for this. After recessionary conditions which have prevailed in Britain over the past four years, the economic prospects in that country are beginning to improve, though. Because of strict monetary policy, the inflation rate has in fact come down from a high of 21,5% to the present level of 5,4%. What is very important, however, is the enormously high rate of unemployment which has accompanied this. In the USA, too, the most severe recession since the Second World War seems to have reached a turning point. After a negative growth rate of 1,8% was recorded last year, increased construction activities, greater motor vehicle and furniture sales and the revival in the retail trade indicate that internal consumer spending is slowly improving, but industrial occupation was only 67,3% at the end of last year, and that was the lowest level since the Second World War. The report goes on to say, however, that the budget deficit for 1983, which is estimated at about $200 billion, may in addition cause any momentum in economic activity to be nipped in the bud. Therefore little or no economic growth and unemployment are not peculiar to South Africa only. They have assumed even greater proportions in some of the Western countries.

The hon. member expressed his disappointment once again this afternoon at the fact that the GST had not been lowered. In my Second Reading speech during the Part Appropriation debate I pointed out to him that a 1% reduction might sound wonderful and might be very popular, but that a 1% reduction would mean an amount of R500 million, according to the figures for the 1981-’82 financial year. I also pointed out that he was advocating a reduction of 1% without indicating where else the amount of R500 million should be recouped. I think this is one of the most irresponsible requests which any hon. member can address to this House. I pointed out all these things to the hon. Member at the time, but this afternoon he has once again made this kind of nonsensical statement. I said that if the R500 million had to be obtained by means of a higher tax on income, it would mean an increase of 6% in income tax. Therefore the hon. member and the PFP as a whole should tell us whether they want this reduction of 1% with the accompanying increase of 6% in income tax. If they do want an increase of 6% in income tax, they should also indicate whether they want it to be added to the income tax of the lower income groups, or to that of the middle income groups or the higher income groups. Or should it be added to company tax or even to the tax on gold mines? I think it is time he and his party gave proper consideration to this matter instead of simply making general statements. I think they should tell us during this debate how else a reduction of 1% in the GST can be recouped.

However, I shall leave the hon. member at that, because I think I have already spent too much time on him. [Interjections.] The budget is a continuation of the sound approach adopted by the hon. the Minister in previous budgets and it makes one feel confident that he and the Government are taking purposeful action in order to give effect to their intention of putting the sound finances of South Africa before political popularity. When one considers the favourable comment on the budget received from many sectors of the business world, it is clear that the hon. the Minister has done everything which is possible, logical and practical. In the light of this, remarks such as “patchwork” and “disappointing” from the Opposition ranks sound rather hollow and meaningless. Critics of the budget, such as the hon. member, have only to note the high esteem in which South Africa is held in international circles. In fact, according to the findings in the latest report of the reliable Business Environment Risk Index of Switzerland, BERI for short, South Africa’s prestige in the international investment world is rapidly rising. Every quarter BERI evaluates all industrial countries in the world in terms of certain fixed criteria, such as political continuity, attitude towards foreign investments and profits, inflation, balance of payments, degree of nationalization, bureaucracy, economic growth, convertibility of currency, productivity, the extent to which contracts can be enforced, communications and transport, short-and long-term credit, and risk capital. So it covers a wide spectrum of matters. In terms of these criteria, South Africa at present occupies the twelfth position, after having occupied the fourteenth position at the beginning of last year. It is striking that South Africa has considerably improved its standing in the international investment world over the past five years. In 1977, for example, South Africa still ranked twentieth on the international list.

For the sake of interest, I may mention the countries which are ranked higher than South Africa at the moment. These are Switzerland, America, Japan, West Germany, Singapore, Holland, Norway, Canada, Saudi Arabia, Australia and Britain. For the sake of interest, I may just point out that the five lowest-ranking countries are Peru, Pakistan, Bolivia, Zaire and Iran. The latest BERI report was drawn up before exchange control over non-residents was abolished this year. The abolition of this and the major turnaround on the current account of the balance of payments should greatly increase the possibility that South Africa may be even more favourably evaluated in the next report.

As far as economic growth is concerned, the report places South Africa eighth after Saudi Arabia, Singapore, Japan, Egypt, Taiwan, South Korea and Nigeria. What is very important is that in this respect, South Africa takes precedence over all the European countries and America. I think this speaks volumes.

Furthermore, this budget testifies to an understanding of the country’s needs, but also of the needs of the man in the street. Then the hon. member for Amanzimtoti comes along and makes this absurd statement, and I quote from the Citizen of 31 March 1983—

[Inaudible.]

Surely that is not true. In spite of that, the hon. member for Durban North actually confirms it. I had expected more of him. What are the facts? Social pensions for Whites are being increased by R14 to R152 a month; for Coloureds and Asians, by R10 to R93 a month, and for Blacks by R8 to R59 a month. The means test is being adjusted by increasing the maximum assets from R34 800 to R42 000 and the maximum income from R1 392 to R1 920 a year. Once again, social pensioners are being paid a bonus of R36 for Whites, R29 for Coloureds and Asians, and R22 for Blacks. Military pensions are going up by 10% and civil pensions by 5%. These pension concessions alone amount to R100 million. Most people over the age of 70 will henceforth receive a tax rebate of R300, compared with R200 in the past.

In order to help young people in the lower and middle income groups to buy their first homes, the home ownership plan is being improved by doubling the savings limit to R20 000 and increasing the interest rate by 1% to 3%. Contributions to retirement annuity funds are now to be allowed as deductions against income. Lump sum benefits upon retirement are being generously increased from R30 000 to R40 000 and from R60 000 to R80 000 in respect of pension and provident funds on the one hand and retirement annuity funds on the other. The maximum amount of service bonuses on retirement which are exempt from tax is being increased from R20 000 to R30 000. The amount of incidental donations which are not taxable is being increased from R2 000 to R5 000, while the non-taxable portion of donations by parents to children is being increased to R20 000. The general exemption limit per tax payer on investments in Post Office saving bank certificates is being increased from R20 000 to R40 000. The 5% loan levy on personal income tax is being abolished and the loan levies of persons with a taxable income of less than R7 000 per annum are being paid back as rapidly as possible. How the hon. member for Amanzimtoti can allege that the budget offers the man in the street nothing is beyond me.

Futhermore, considerable assistance to farmers in the form of tax concessions and other measures were announced. Unfortunately, time does not allow me to go into these concessions, but I believe some of my colleagues will deal with them in greater detail.

As far as spending is concerned, the Government also demonstrated that its priorities are correct. Firstly, the amount which is being appropriated for defence will increase by 15,9% to R3 093 million. Since progress is based on external and internal security and the maintenance of law and order and of stability, the Government has consistently accorded the highest priority to a well-trained, properly equipped and effective Defence Force. Equally important, in view of the international arms embargo against South Africa, is the systematic development of a modern armaments industry.

The hon. member also referred to education. The total appropriation for education of all population groups amounts to R3 410 million. This represents a 13% increase, and comprises the largest item in the budget. Since 1975-’76, education spending has risen by 283%. Is that not an achievement?

Thirdly, the provision of sufficient housing of realistic standards is being accorded a high priority by the Government. This is apparent from the fact that R363 million is being made available for housing. Further evidence is the recent announcement that 500 000 houses are going to be made available for purchase at exceptionally fair prices. So I can continue. However, I believe that I have produced conclusive evidence that this budget has laid the foundation for an upward phase in the business cycle, which is expected to commence next year.

I can understand the hon. member for Yeoville getting excited and feeling tense about the constitutional proposals of the Government. He illustrated this again so clearly this afternoon. The hon. member and the PFP find themselves in a terrible dilemma because it is general knowledge that there are major differences of opinion within the PFP. Since the PFP began with its boycott of the President’s Council, there have been the exceptionable statements made by Mrs. Di Bishop in respect of Swapo, as well as the deeply-rooted division in the party on the recent Defence Amendment Act. In this way the hon. the Leader of the Opposition allowed himself to be backed right into a corner.

During the discussion of the Defence legislation, the PFP, and particularly the hon. member for Yeoville, got away with it by never debating the principle during the Second Reading, but the question of whether the Bill should be referred to a Select Committee prior to the Second Reading. I must say that the hon. member for Yeoville got away with this in brilliant fashion. In that way the PFP succeeded in avoiding the real issue. In the coming debate on the constitutional proposals the official Opposition would probably like to adopt a compromise similar to the one they adopted during the discussion of the Defence legislation. The hon. member has already tried to do so this afternoon. With the announcement of a referendum, however, the official Opposition now finds itself in a terrible dilemma. That is why the hon. the Leader of the Opposition, in reply to a question on how the PFP would urge voters to vote in the referendum, replied that he would first see what the legislation for a new constitution entailed, what the Government wanted and wanted to know before he adopted a standpoint. It is becoming clearer by the day that the PFP is tightly caught in the grip of a minority group which are making things impossible for the hon. the Leader of the Opposition and even the hon. member for Yeoville. The statements made by Mrs. Di Bishop on Swapo unleashed a storm at the time, not because she as a relative lightweight in the Prog hierarchy said it, but because it was so symptomatic of the situation within the PFP. This group, as has been said before, is the tail that is wagging the dog. The same attitude emerged strongly in the discussion during the Committee state of the Defence Amendment Bill. Until relatively recently the hon. member for Pinelands waxed lyrical about people with genuine religious objections, and when steps were taken to arrange for these people to be utilized in a different way, they changed their tack and spoke about people who might have moral, ethical and political objections, apparently because people did not wish to defend an “unjust society”.

For the PFP, which is divided on matters such as defence, the referendum is one of its greatest dilemmas. The left wing of the party is definitely not going to be pleased with the new constitution. We heard this again this afternoon. However, large numbers of the ordinary supporters of the PFP, and also of the hon. members sitting opposite, feel that the new dispensation ought to be supported because it is a step in the right direction. I want to state categorically this afternoon that the PFP has become a stumbling block in the politics of reform. There could be greater realism in White politics if the Houghton Progs are no longer setting the pace and indicating the direction. This can only happen if the hon. the Leader of the Opposition, or even the hon. member for Yeoville, get rid of these leftist radical elements. The constitutional proposals and the referendum creates an opportunity to get rid of the Suzmans, the Boraines, the Eglins and others. This is a prerequisite if the PFP wishes to play a meaningful role in the future of the country. Therefore it is the task and the duty of the hon. the Leader of the Opposition to state categorically whether they are going to boycott the new dispensation as well, as they are boycotting the President’s Council, whether they are going to vote against it or whether they are going to support it.

Mr. Speaker, since this is the first speech concerning a budget made by the hon. member for Smith-field as the NP’s chief spokesman on finance, I wish him everything of the best for the future.

For any Parliament a budget is the most important event by far. In South Africa there is no one who is not interested in a budget or who does not look forward to what is going to happen. It is pre-eminently a day which belongs to the Minister of Finance. One likes to read the newspapers the following day to see what they have to say about the budget. After all, this is very important. The Citizen for example, said—“Referendum to be held on reform”. I thought it would say something about the budget. What did the Cape Times say? “Whites to vote on Government plan.” And that on the front page. But nothing about the budget! The next newspaper I wish to quote is The Argus. Its headline reads: “A referendum: Why P. W. Botha did it.” I think the whole world will want to know: “Why did P. W. Botha do it?” Never before in our history has a Prime Minister or a leader done such a thing, to announce a referendum on the day which belongs to the Minister of Finance. Nor will there ever be a man after him who will do anything of the kind. What was the hon. the Prime Minister trying to achieve? I accept that the hon. the Prime Minister is busy and that he therefore cannot be present at the moment, but I hope he will be able to come, since there are still a few other matters I should like to discuss with him. [Interjections.]

I wish to say to the hon. the Minister of Finance that this budget will go down in history as the unknown budget, or the stifled budget, the stepchild of the referendum. When an hon. Minister of Finance comes forward with the most important thing for this country, a budget, and his Prime Minister undermines him in that way! When this happens, I ask myself what is the motive behind it. The hon. the Prime Minister could have announced his referendum on Tuesday, before the budget, or on Thursday, after it. Now the impression has been created that the hon. the Prime Minister wants to use the budget to suppress something. At that time the hon. the Prime Minister said that if there was any deviation from NP policy, he would hold a referendum. At the Bloemfontein congress of his party he said that he had a mandate and that he would not be holding a referendum. However, he has now come forward with a referendum at the time of the budget.

Mr. Speaker, at this stage I should like to move the following as a further amendment—

1. (1) has caused the consumer to be drastically impoverished as a result of price increases, inflation and mismanagement;
2. (2) has through its labour policy caused uncertainty on the part of the White worker and has caused his right of self-determination to be prejudiced;
3. (3) has allowed agricultural production costs to increase much more rapidly than producers’ prices and, by so doing, has plunged the agricultural industry into a crisis; and
4. (4) is destroying the sovereignty of the Whites over themselves and sound race relations in that, in accepting power sharing and multi-racial government, it is moving away from separate development.”.

I wish to say to the hon. the Minister of Finance that there are fine, positive points in his budget, and I thank him for those positive aspects of the budget. Unfortunately, however, the hon. the Minister has had to budget for an election too. The hon. the Minister stands virtually alone in the Cabinet. There are two forms of inflation: Demand inflation and cost-push inflation. Over the years the hon. the Minister has done his share as far as demand inflation is concerned. But what about cost-push inflation? How have prices not soared? And what has the hon. the Minister of Industries done to combat these price increases? Allow me to name some of these price increases, increases for which the Government, and not the private sector, is responsible. Escom’s tariffs have increased by 15,1%. Take the price of bread. In 1975 a loaf of white bread cost 14,5 cents. Today it costs 53 cents and a loaf of brown bread costs 35 cents. Let me ask the hon. the Minister of Agriculture: What has he done for the farmers? I have before me the explanatory memorandum on Vote 23. According to this memorandum the amounts in respect of all programmes except agricultural financing have been increased. This year R28,76 million less is being budgeted for than last year, and this at a time when our agriculture is in a disaster situation R49,38 million less is being budgeted for subsidies and other forms of assistance. And our agriculture is in a disaster situation! Last year I pleaded for a larger appropriation, and the then Deputy Minister of Agriculture attacked me for doing so. As I said, our agriculture is in a disaster situation, and the hon. the Minister of Finance actually yields to the other demands of his colleagues, and as a result, agriculture is receiving less. After all, this does not only affect the farmer; it affects South Africa as a whole. If we do not regard agriculture as a strategic industry and see to it that the farmer remains on the land, how are we to produce food? Where is our food to come from? This is something which is just as important to the city dweller. The price of fertilizer increased by 13,3% on 1 January. [Interjections.] Rail and air tariffs increased by an average of 15% —in fact, within the space of 12 months, rail and air tariffs increased by almost 29%. The hon. the Minister of Transport Affairs is sitting here opposite me. He finds himself in a tremendous dilemma as far as next year is concerned. Where is he going to find the R800 million to finance the deficit? The price of steel—all administered prices—has increased by 14%, and that of cement by 10%.

You said that the other day too.

For the sake of the hon. the Chief Whip I have to repeat it three or four times before it sinks in. The price of gold was $200 in July 1978. I seem to recall that is was $100 in January 1978. But since the present hon. Prime Minister became Prime Minister, the price of gold has risen to over $400. Therefore the hon. the Prime Minister has been fortunate in the sense that he has been able to ride on the wave of a high gold price. I wonder what would have happened if the price had remained at $200. [Interjections.] The hon. member for Winburg must be polite now and reply to me on this. He must not just sit there making interjections.

As far as inflation is concerned, we find that the inflation rate in South Africa is 13,8%. According to the Sunday Times of 27 February 1983 the inflation rate during the second half of last year was 1,2% in the USA; 1,4% in Japan; 1,6% in the United Kingdom; 2,2% in West Germany; 2% in Austria; 2,6% in the Netherlands; 3,6% in Switzerland; 5,6% in Canada and 6,8% in France. Only Italy had a tremendous high inflation rate, and we all know what Italy’s problems is.

Allow me to say to the hon. the Minister of Finance that he will not be able to do everything alone. I do not wish to scratch the hon. the Minister’s back, since I am still going to criticize him about other things. [Interjections.] The hon. member for Vryheid should rather be quiet. In fact, if I were to tell this House what he told me in private, he would be quiet. But I am not going to stoop to the same level as he did last year. I have before me the Transvaler. Sir, a great deal of money is being spent on the HSRC. In fact, never before in South Africa has the HSRC investigated so many matters. The HSRC is receiving a great deal of money, and it seems to me as if all the best talent in the country is being involved in carrying out its investigations. It is stated here very clearly, and I hope that all hon. members will be able to read it. I am referring to the Transvaler of 17 March 1983, and what is more, it is a newspaper which supports the Government. I quote—

It has never been a disgrace to work.

No, I did not say that. [Interjections.] Mr. Speaker, is it not pathetic? The hon. the Chief Whip of the NP is sitting there smiling about this. He finds it amusing. The hon. the Chief Whip of the NP is rejoicing about this.

No, he is laughing at you.

Alex, you are ridiculing people who are struggling.

Mr. Speaker, the hon. the Chief Whip of the NP is making a joke of this. It is a source of great merriment to him. He is laughing with his mouth so wide open that his ears perched on his cheeks like pimples. [Interjections.]

Order!

We cannot try to make fun of this misery our people find themselves in. The hon. the Chief Whip of the NP should rather be serious about these matters. The hon. member for Innesdal also made interjections about this. Apparently it is a joke to him too.

Jan, you are taking everything out of context, just as you took that heading in the Transvaler out of context. [Interjections.]

No, Mr. Speaker, the whole story appears here in the Transvaler. The hon. member for Innesdal would be well to go and read it for himself. [Interjections.]

Order!

Mr. Speaker, I just wish to make a few remarks about our revenue from wages and salaries in South Africa. Salaries and wages comprise the greater portion of the total annual national revenue. Therefore it is obvious that the rate at which wages and salaries increase annually, has a significant influence on the growth rate of the annual national product, as well as on the rate at which the general price level increases. It is also true that the salaries of workers in the non-agricultural sector of the economy have increased by 13,2% during the 11 years from 1970 to 1981. However, during the same period the total production of the non-agricultural sector increased by only 3,7% as opposed to the increase of 13,2% in wages and salaries.

Total employment has increased at an average rate of 2,5% annually. This means that labour productivity has increased by only 1,2%. I believe that this is the basic cause of our inflation. We cannot allow this to continue. Wages and salaries have risen a great deal more than labour productivity; a full 12%. That is hopelessly too high. This is simply unacceptable.

The rates of price inflation which the main sectors of the economy have experienced during the period of 1970 to 1981 are 23,7% in mining, a sector in which there has been little if any increase in labour productivity. Consequently a tremendously negative factor is to be detected in this respect. Price inflation as far as electricity is concerned has increased by 12,2%, whereas in the construction industry it has increased by 12,3%. The increase in the general government sector is 12,2%. This is how these things have increased, whereas there has been no productivity.

There are other matters, too, that I wish to refer to, and my time is already running out. The average real wages and salaries in the economy as a whole have increased at a rate of 1,9%. However, as far as Black workers are concerned, they have increased by 5,5%, whereas in the case of White workers they have increased by a mere 0,7%.

The HSRC has carried out an investigation into this as well. However, when this investigation is referred to, the hon. the Chief Whip of the NP laughs about it. [Interjections.]

Oh Jan, you are totally confused.

The total revenue from salaries and wages was made up as follows. In 1970 the Whites earned 70,1% of the total amount in wages and salaries, whereas the Blacks earned only 1,1%. In 1975 the total earnings of the Whites were 62,4% as against the 26,8% of the Black people. In 1981 the total income of the Whites dropped to 58,7%, whereas that of the Black people increased to 29,4%.

What do you want it to be then?

Mr. Speaker, if only that hon. member would listen, he would understand what I mean. We are telling you what has really happened. The number of Black workers as a percentage of the total labour force has remained unchanged at 57%. The percentage has remained constant but the income of these Black workers has increased tremendously. During the same period unemployment among the Blacks has increased. The percentage of Black employees taken into service has been an average of 2,5% annually, whereas the rate of increase has been 2,8%. Therefore we are saying that under the hon. the Minister of Manpower there has still been unemployment, despite his labour legislation and so on.

The hon. the Prime Minister is not present, but I should like to quote what he had to say during the discussion of his Vote last year. In Hansard, col. 4538, he said inter alia the following—

[Interjections.] I wish to ask the hon. the Prime Minister: What were we disloyal to? When we said that we stood by the sovereignty of this White Parliament, we were told that we were disloyal. [Interjections.] When the hon. the Prime Minister and those hon. members opposite wanted to do away with the power of this White Parliament completely and allow White and non-White to rule together, then they were loyal. However, I now come to the important part of the quotation. [Interjections.] The hon. the Prime Minister went on to say—

Mr. Speaker, on a point of order: Is the hon. the Chief Whip of the NP allowed to say that the hon. member for Sunnyside is lying? [Interjections.]

Order! Did the hon. the Chief Whip say that?

No, Sir. I said that he was too stupid to know that he was lying …

Order! The hon. the Chief Whip must withdraw that.

I withdraw it, Sir.

The hon. member for Sunnyside may proceed.

The hon. the Prime Minister went on to say—

The hon. the Prime Minister said: We shall crush them. [Interjections.] Now that is a leader, a statesman, that is the hon. the Prime Minister. I wish to ask the hon. the Prime Minister how far he will go to intimidate and victimize people. Even when people put questions at a meeting, men from the National Intelligence Service are sent to them.

Where did the hon. member hear that?

Oh yes. In Nelspruit.

May I please ask a question?

No, my time has almost expired. [Interjections.] I wish to state very bluntly what I expect of my Prime Minister today. When a man occupies the post of Prime Minister, I want to respect that man. I want to respect whomever occupies that post. However, I now wish to mention a few remarks which the hon. the Prime Minister made during the recent no-confidence debate in January this year. These remarks were recorded in columns 119 to 136 of Hansard. The 18 members of this party had only 120 minutes at their disposal and the hon. the Prime Minister himself spoke for 115 minutes. [Interjections.] I agree that the hon. the Prime Minister is worth more than all of us together, but then he should also be more decent than all of us together. [Interjections.] He should be more decent. I wish to quote a few remarks from the speech of the hon. the Prime Minister. Inter alia, he said—

That is very decent, is it not! He also said—

Wonderful! That is marvellous! [Interjections.] He also said—

He went on to say—

This is all in Hansard. Furthermore, the hon. the Prime Minister said—

He said that with reference to my hon. leader. However, where were his arguments? Everything was simply contemptible; that is all he said. Then, in turn, the hon. the Prime Minister said—

I wish to make a plea to the hon. the Prime Minister today. I ask that we speak to one another by way of arguments, and that the hon. the Prime Minister should please refrain from that kind of thing. It was not good for him; nor is it good for South Africa. A person who occupies the post of Prime Minister should not make that kind of banal speech.

Mr. Speaker, permit me, at the outset, to say that it is very pleasant for me to be back in this House today. It is pleasant to be among old friends and even enemies again.

I listened attentively to the hon. member for Sunnyside, particularly when he said that he still stood exactly where he had stood before. I then recalled the first words I heard him utter when I listened to him in a financial debate. At the time he used these winged words—

I assume he still stands by that standpoint of his. [Interjections.] I want to tell him that when we are gathered here on 11 May we shall find that the Fanie Botha hiking trail will again be the path to the mountain top from whence we viewed important matters and reached important decisions.

In the course of my speech I shall refer again to certain points raised by the hon. member for Sunnyside and deal with arguments he raised in that connection. At this stage, however, I want to confine myself to financial matters, and I begin by quoting the hon. the Minister of Finance when in the course of a recent speech he said—

I think the hon. the Minister may have criticized himself too severely in this case, because over the past few years, as far as I could ascertain, I have heard virtually nothing but praise for the hon. the Minister, his department and the annual budgets. In this connection I want to cross swords with the hon. member for Yeoville later in my speech. What struck me was the way in which a person like the hon. the Minister of Finance could keep his head in the midst of all the advice he received beforehand. This is the advice I came across in Sakerapport of 20 March—a week before the hon. the Minister delivered his budget speech—

When a person is given so much advice, it is probably impossible for him to satisfy everyone. However, we find that the hon. member for Yeoville never gives advice before the time; he only criticizes afterwards. Let us now consider what the subsequent reaction to the budget was. Let us consider what appeared in the financial Press after the budget speech. Financial Mail of 1 April said—

It continues in this vein, and I am now quoting a further extract—

Mention is then made of various factors which the hon. the Minister took into consideration. Specific points were mentioned which indicated why everyone was so satisfied with the budget. If we then compare other newspaper reports with each other, we find that the majority of them strongly support the hon. the Minister in what he did and has always done every year. What did the Sunday Times say?: “Prepare for the lift-off—economic boom under way”. This is the kind of comment we got. Let us also take a look at the political sphere, and here I am referring to “In search of capitalism—address by Mr. C. J. Saunders, chairman of the Tongaat-Hulett Group”. It is dated 3 February 1983, and I am quoting from it—

[Interjections.] This is the kind of comment that is being made. Let us also review South Africa’s position over the past six years, during which time I have had the privilege to listen to the hon. the Minister of Finance in this House. During that same period of course I also had to listen to the criticism of the hon. member for Yeoville. Let us consider what the Financial Mail said on 25 March about both the hon. the Minister and the hon. member for Yeoville—

It then goes on to say—

The hon. member for Sunnyside must listen to this—

I say this with acclamation—

This is the crux of the entire matter. The hon. member for Sunnyside is well aware of this, because he has pointed it out and emphasized it during the past few years. Therefore he is aware of that fact. [Interjections.] Let us consider what South Africa’s position on the international plateau is. Here I should like to quote the hon. member for Yeoville’s comparison of monetary units with the rand for the nine years that the hon. the Minister has been the Minister of Finance, and for the 35 years that the NP has governed this country. According to his figures there was a depreciation in buying power from 3,93 to 0,39, but let us consider the value of the rand compared with that of other international exchange units. Let us consider the value of the rand compared with the value of the world’s strongest, largest and most comprehensive exchange unit, the dollar. A year or two ago the rand still had a plus parity against the dollar, whereas at the moment it has a minus parity. However, the rand is advancing to parity with the dollar. Let us, however, consider the statement by the Financial Mail that if it had not been for Horwood we would at present have been in the stratosphere with the South American States. What do we find there? Ten years ago—not 35 years ago—10 pesos were equivalent to $1. However, what was the position last year, when we were there? Then 35 000 pesos were equivalent to $1. That was the official rate of exchange, but heavens above, what was it on the black market? There it was 65 000 pesos. This is the situation one encounters almost throughout, in all countries. [Interjections.] I should like to refer to a country like Brazil which has everything, including oil. They have more natural resources than those on which South Africa can rely. There the erosion of the Brazilian monetary unit was far worse than that of the South African rand. The best indication of the strength of the South African rand is to be found in the fact that nowhere in South Africa, or in the rest of the world, will one find a black market for the rand. On the contrary. Today in certain places like Hong Kong the value of the rand is such that one can obtain any currency and enter into any transaction there with the South African rand. That is more than can be said for most monetary units at international level. I think these are facts of which the hon. member for Yeoville and the hon. member for Sunnyside ought to take cognizance because these are the things we should be mindful of.

As a result of the enormous success achieved by the hon. the Minister of Finance with his submissions every year, it has been very difficult during the past few years for the hon. member for Yeoville to express criticism in financial debates. That is why the duty has already devolved on members of the Government to enter into discussions with the Minister on financial matters. It is strange that the hon. member for Yeoville said here today that he was not given sufficient time. The hon. member for Smithfield went into this matter and said that the time given to him in financial debates was usually squandered on political losses he had suffered and statements he could not substantiate with arguments.

There are a few matters I should now like to discuss with the hon. the Minister. There are also a few recommendations I should like to make.

In the first place we find in The Argus of 19 July 1982 a report under the headline “Sullivan upgrade forges ahead”. That report makes one extremely happy, particularly when one considers that by 1985 the American firms in South Africa will be training at least 5 000 Blacks, will be assisting at least 6 500 pupils with their training, will have adopted at least 1 000 schools and 700 000 pupils. The final sentence is also interesting—

I find it interesting that in spite of the Sullivan code local firms have succeeded in progressing more rapidly with upliftment work and those activities than the firms that have to be compelled to do so—and they have to be compelled in spite of the fact that they are given every encouragement by the Government.

A fact which obviously is causing us grave concern is the international debt situation. According to figures made available on 16 January 1983, the debt burden of the West rose from 3,7 trillion dollars to 14,3 trillion dollars over the past five years. The European Euro-Currency rose from 6 500 million dollars to 1 300 000 million dollars. This is an increase of 19 900%. One can also take a look at the situation with regard to the debt burden of the developing countries in particular. One can determine what is happening to that debt burden. One then notes that since 1961 “roll-overs” and deferments by banks are beginning to find favour as very profitable practices. One can also consider the situation in Mexico last year and the situation in Brazil at the end of last year and this year. Then there are also the defaults by Argentina. All this leads one to the conclusion that paper is becoming an absolute danger to the world monetary system. Then one asks oneself what would happen if these international banks were to collapse. The slightest possibility of a collapse in this group of banks could lead to a chain reaction. This is the danger facing us. That is why we are grateful that our Minister in South Africa has the matter well in hand and that South Africa has this control over its position in a world of chaos and grave danger. It is with gratitude that one takes note of what someone like Prof. Brian Kantor had to say recently about the salaries of Black people. I am quoting him—

I want to tell the hon. member for Sunnyside that irrespective of the percentages he quoted, there is one thing he has to accept, namely that this Government is committed to looking after the interests of all the people in the country. Today I want to state—and I am stating this as a White person—that if we as Whites want to try as far as possible, to retain financial benefits for ourselves we shall be creating political unrest. If we are not prepared to create just and equal benefits for everyone in the country, we are looking for trouble. As wrong as the hon. member and his party are in not guaranteeing an equal distribution of wealth for everybody in the country, as unrealistic is the hon. member for Yeoville when he deliberately misinterprets a good document here by trying to quote things out of context. I want to tell the hon. member that the NP stands by each and every one of those things, whether it is raised in Waterkloof, Waterberg or Soutpansberg. We do not have one document for Hillbrow and another for Waterkloof. We say the same thing from every platform.

Are you using the document in Waterberg?

It may be used anywhere. Would the hon. member be prepared to take the Houghton Progs to Waterkloof and vice versa? Would he be prepared to take the documents given to everyone in Houghton to the other side as well? That party cannot even agree on such a cardinal matter as defence. [Interjections.]

I should like to refer to a matter in connection with housing, viz. housing as far as farmers are concerned. All we need do is take a look at the speech made by the hon. the Minister on 13 May 1982 to the President 100 Club in Johannesburg. He said the following—

The hon. member for Sunnyside said that the Government did not consider agriculture to be a cardinal and strategic industry. I reject that statement with the contempt it deserves. It is in fact this Government that has always been the farmer’s friend in times of crisis.

I want to tell the hon. the Minister of Finance that as far as the tax concessions are concerned, the time has come to look specifically at tax concessions made to farmers as against those applying to the industrial and business sectors. In order to illustrate my argument I want to single out just one factor, namely housing. There is a difference between concessions which apply to farmers and those which apply to the business sector. The matter does not end there either, because it also has social after-effects, namely that a farmer—there are farmers sitting near me, and they may correct me if I am wrong—only has housing for productive labour on his farm. The moment a labourer is no longer productive he has to leave the farm and find another place to live. [Interjections.] I am not suggesting that everyone does this. However, the farmer no longer receives any return from him and cannot therefore justify providing him with accommodation. I want to ask the hon. the Minister to place tax concessions to agriculture on the same level as concessions to the business and industrial sectors. The provision of housing for labourers should receive the same subsidies and concessions in all sectors.

I want to take this matter further and particularly with regard to the aged I want to ask that provision be made for housing for them in the same way as is done in urban complexes so that provision can also be made for that type of person on farms.

The final matter I want to bring to the attention of the hon. the Minister is a short report in the Miami Herald of 17 October 1982, and I am quoting briefly from it—

†Apparently in America they have a gold coin that is nominally worth 1 cent. This gentleman, his land having been expropriated, is now asking the court that he be awarded payment in gold coins. The difference is that if he received payment in paper money he would receive $33 000 whereas if he could receive payment in gold he would receive $742 000. This is something which I hope the hon. the Minister will also bring into operation in South Africa.

Mr. Speaker, may I at the outset welcome the hon. member for Vasco back to the House. We know that he has not been too well. So it is very nice to see him back again and especially to hear him make a rather interesting speech. I think he has made a valuable contribution. In regard to international finance I see that he has the same fears that I have about the stability on the economies and the financial systems in many overseas countries, and I believe that we must never lose sight of it.

I should also like to refer to something that the hon. member for Smithfield said earlier on when he criticized me for having made a statement to the Press after the hon. the Minister presented his budget, in statement in which I said that the budget had no real relief for the man in the street.

Are you sorry?

I am not sorry; not at all, because I believe what I said is correct. They say that beauty lies in the eye of the beholder. So one must expect hon. members on the Government side to see only the plus points in the budget. And let us not kid ourselves. There are many positive points in the budget. The improvements in our balance of payments position over the last year has indeed been very remarkable. I think it is a credit not only to the hon. the Minister but to South Africa as a whole. The fact that there now seems to be a better control over the money supply and that a tight reign has been kept on Government expenditure in order not to have to increase taxation, is, as I have said, a plus point as far as this budget is concerned. However, we in these benches view things slightly differently. We see these things developing as a result of the hon. the Minister’s efforts to rectify the Government’s past mismanagement of the economy. And there is no doubt that there has been mismanagement of the economy in the past. For instance, one cannot ignore the fact that inflation is running at a totally unacceptably high level. We simply cannot afford inflation to be running a 14,9%. Furthermore we have a negative growth rate of 10% in the GDP. This gives us very little cause for complacency. The fact is—and I put it to the hon. member for Smithfield—that South Africa at the present time is losing the all-important battle against time, namely the battle that has often been debated in this House, the battle to maintain an average growth rate of 5% per annum over the last two decades of this century. It is a battle which, I am sure hon. members opposite will agree, we have to win, especially if we want our children to inherit a society based on the values and the standards which we of our generation hold dear. While we see these positive signs contained in the budget, and—might I say—especially the positive signs as far as the containment of Government expenditure is concerned, I should like to echo the words of the hon. the Minister of Finance when he thanked his Cabinet colleagues for having pulled in their belts at this critical time and for cutting their expenditure. Even though I am an Opposition party member I should nevertheless like to thank hon. Cabinet Ministers for having restrained themselves when it comes to Government expenditure. I am, however, afraid that we cannot support the Second Reading of this Appropriation Bill, and therefore I am now moving as a further amendment the following—

1. (1) its failure to bring down the rate of inflation, thereby contributing to the ever increasing cost of living; and
2. (2) a negative growth rate in the gross domestic product, with a substantial increase in unemployment.”.

Mr. Speaker, …

You are talking rubbish.

Mr. Speaker, the hon. member for Turffontein says I am talking rubbish. Let us just listen then to what the hon. the Minister himself had to say. The hon. the Minister concedes that inflation remains a serious problem, at a rate of 14,9% a year. When he introduced this Bill nearly two weeks ago the hon. the Minister expressed pleasure in the fact that despite the high inflation rate real wages and salaries per worker, with the exception of the agricultural sector, had still increased by 3,6% during the first nine months of 1982. He claimed therefore that the living standards continued to rise throughout most sectors of the economy.

I believe that the hon. the Minister’s assessment in this regard is totally misleading. With a negative growth rate of 1% —I put it to the hon. the Minister—coupled with a 3,6% increase in real wages and salaries, it can, to my way of thinking, only mean one thing. That is that more and more people have joined the ranks of the unemployed. That must be the logical result of such figures. To my mind, Mr. Speaker, the economic realities of today only emphasize the danger of losing the race against time, to which I have already referred. We in these benches—at least I—have stated before that the economic objective of South Africa should be an annual average growth rate of the GDP of 5%, and an inflation rate which should not be less than 5%.

The hon. member for Sunnyside referred to how low the inflation rates are among our major trading partners throughout the world. If we do not curb our own inflation rate we are going to outprice ourselves on the international market, and that will be a disaster for our export trade.

To achieve these objectives which I have mentioned, certainly requires a correct mix of monetary fiscal control and management, and a sound balance of payments. As I have already said, the hon. the Minister has succeeded in achieving that in recent years. However, it also requires, in the first instance, the productive use of the two most important input assets in any productive enterprise: Capital and labour. Secondly, it requires a marketing system based on competition which promotes the work ethic and productivity. Instead of this, however, what do we have in South Africa today? Firstly we have those public and private sector enterprises which offer services and goods at the so-called administered tariffs and prices. Under this system there is no incentive for efficient and productive use of capital and labour because the system guarantees a fixed return on capital and a recovery of production and management costs.

The accounting system which is in use also applies the so-called inflation accounting methods, which includes a depreciation based on replacement costs, which, when taken together with the guaranteed return on capital, acts as an incentive, I believe, for overcapitalization. We have seen this in many industries in South Africa today. The end result of all this is the fact that these enterpises are today gobbling up tens of billions of rands in capital each year, much of it in capital-intensive investment which has little or no chance of ever being challenged by the forces of competition. Where such opportunities do arise, we find that the State steps in to squash the competition. A particular case in point is the containerization programme of the SATS which established the so-called container port at City Deep in Johannesburg. Hundreds of millions if not thousands of millions of rands were spent on the Durban harbour facilities, the container trains and the installations at the so-called port at City Deep near Johannesburg for what at the time was reputed to be the most up to date transportation system of its kind in the world. What has happened? Transvaal importers today consign their containerized imports through Durban harbour from whence private road hauliers transport them to their destinations on the Reef. They do this more quickly and at a far lower cost than the SATS can do it by rail. Because the SATS are now losing money on this particular service, the hon. the Minister of Transport Affairs—I am sorry he is not here today—came along earlier this session and amended the Road Transportation Act in such a way that the costs of the private hauliers are now going to increase. Presumably the hon. the Minister did this in the hope of making the SATS container service more attractive to the public. [Interjections.] That is a classic example of what we are talking about.

Moreover, with the system of administered prices, salary and wage increases, including perks, are automatically written into the prices of services and goods. As a result, these increases often exceed the rate of inflation. The hon. the Minister himself admits to a 3,6% real growth in income but because there is not real competition, there is little incentive, if any at all, to management to strive for higher efficiency and higher productivity in their enterprises. I believe that the present system of administered prices makes nonsense of sound economic principles and I believe that it must be fully investigated. Whilst I welcome the hon. the Minister’s plans to investigate the possibility of the private sector’s becoming financially involved in the so-called public corporations, I do believe that the investigation should go much further than just that. I say this because I believe that it should also look into the second urgent requirement in the battle against inflation and that is a market system based on competition which promotes the work ethic and productivity. I am sure hon. members will agree that there is too little competition in South Africa today. We have too many monopolies and price fixing cartels which I believe are ripping off the public by profiteering. There are people whose avarice is pushing up prices and this is contributing to inflation with its detrimental effects upon real growth and its concomitant unemployment. I believe that these are South Africa’s greatest economic problems today, namely lack of competition, high inflation, low growth, recession and unemployment and, unless we rid ourselves of these evils, more and more people are going to be driven into poverty, as we see happening today. I believe that we must not forget that the real wealth of the Western industrialized nations was built up on the work ethic and the principles of free enterprise and competition. Regrettably, in recent decades these principles have been ignored by many nations which are now paying a heavy price for so doing.

I had an interesting experience about 16 months ago, and I am sure that the hon. the Minister will also find what I have to say interesting. For the third year in a row I paid a visit to the United States of America and there I found people rethinking their role and their economic policy. I am quite sure that those hon. members who have visited the USA will know that Americans are great on slogans. One finds many bumper stickers and bumper plates attached to motor cars and which project a particular image or slogan. I have one here which I just could not resist buying because I wanted to show it to the hon. the Minister. I believe that it has a very great message for South Africa. “I fight poverty; I work”. When I saw that, I thought that I should buy it and I was almost tempted to put it on the bumber of my car. I say this because this is the real spirit of free enterprise in the USA. I should like to point out to the hon. the Minister, however, that it does not only imply that the person who displays this plate on his bumper believes in the work ethics and that he is prepared to work in order to enjoy a life free of poverty, but it also implies that the economy of the country must be healthy enough to be able to provide that individual with a job. South Africa today, however, is just not providing sufficient job opportunities for all its people as we see from our growing ranks of unemployed.

I should like to suggest to the hon. the Minister of Finance that perhaps in the past we have gone a bit too far in providing too great an incentive through our investment allowances for an industry to invest in capital-intensive projects when really we should have been creating more incentives for investment in more labour-intensive projects. It seems to me that we are caught in a vicious spiral—which applies not only to the major industrial companies, but also to agriculture and many businesses today—where on the one hand our so-called social conscience or our social responsibility demands of us to close the wage gap by paying Black workers higher wages when on the other hand, having done this, we find that in order to remain productive and economically competitive we have to cut labour costs by mechanizing and computerizing. We are actually encouraged to do so through the tax allowances which the hon. the Minister has granted, such as investment and depreciation allowances. The result, I believe, is the increasing unemployment which South Africa can ill afford at the present time.

As I have already said, our greatest economic problems today are lack of competition in certain vital areas, high inflation, low growth, recession and unemployment. Speaking of lack of competition, I want to point out that under the provisions of the Maintenance and Promotion of Competition Act, the Competitions Board has been established with the specific task of ensuring the necessary degree of competition in the various sectors of our economy, competition which I believe and which I am sure the hon. the Minister believes is so vital and necessary in order to prevent the economic evils of profiteering and price fixing. This board has made some very worthwhile investigations over the years and the hon. the Minister of Industries, Commerce and Tourism has in the past acted on its recommendations,

I want to ask the hon. the Minister on this occasion what has happened to the board’s recommendations after a three-year-long investigation into the liquor industry. It would appear to me that where certain vested interests are concerned, the hon. the Minister has acted more in the interest of those vested interests than in the best interests of the South African economy as a whole. We know that while this investigation was in progress, the Cabinet approved a restructuring of the entire industry which created a beer monopoly as well as a virtual monopoly in the wine and spirits industry. It is also apparent that the board’s recommendations are tantamount to unreserved condemnation of this reshuffle of the liquor industry.

We now find that by its actions the Government has entrenched these monopolies in these particular industries. I believe that the leader which appeared in The Natal Mercury of 26 March sums up the Government’s attitude in this regard. I should like to quote to the hon. the Minister the portion which reads—

We in these benches believe that the Government is to be condemned for these actions.

I have very little time left, but I want to raise a subject about which a lot has been talked in the Press lately. This is the subject of corruption in business and public administration in South Africa and which has received this tremendous publicity I believe as a result of the allegations in a recent speech made by Mr. Denis Etheredge when he said that such corruption was rampant in South Africa. Such allegations, coming from a man of such standing in the business community, prompted the hon. the Prime Minister to respond by calling upon Mr. Etheredge to substantiate his allegations. Unfortunately Mr. Etheredge decided to put the evidence he had acquired through a paper shredder—at least that is what he is reported to have done—and he did this because much of the evidence, he said, had been volunteered in confidence and he felt that was the correct thing for him to do. I use the word “unfortunately” because I feel that in so doing Mr. Etheredge actually fell into the same trap to which he himself referred in his speech, and I quote—

I now also want to quote from a letter I received just a year ago from a retired advocate—

Two years have now passed since I first raised the matter of the allegations of fraud and contraventions of the Companies’ Act by directors of National Fund Investments Limited. My time is running out, so I should like to refer hon. members to my Hansard speech on 9 October 1981, column 6240, if they are interested in some of the details. For nearly 14 years an ordinary citizen, Mr. Richard Benson, has waged a campaign on behalf of an estimated 200 000 South Africans who are shareholders in NFI and who lost, in 1983 rand values, an estimated R100 million as a result of the collapse of NFI. After many frustrations, and after an intense investigation, Mr. Benson’s attorneys and his counsel drew up a 19-charge indictment alleging fraud and contraventions of the Companies’ Act by directors of NFI.

In February last year I requested a meeting with the hon. the Minister of Justice, who is unfortunately not here at the moment. Also present was the hon. the Deputy Minister of Finance who is here at the moment. At the time the indictment was presented to the hon. the Minister of Justice by Mr. Benson’s counsel who informed the hon. the Minister that he was so sure of the validity of his case, and so concerned about the immensity of the alleged injustices that had been perpetrated, that he was prepared—at his own expense, not his client’s expense—to travel to Johannesburg to meet the Attorney General in order to discuss the matter. This he did, and in a letter to the hon. the Minister of Justice dated 22 June 1982 he itemized, in chronological order, what actually happened in the debacle, detailing how the directors concerned had contravened sections of the Companies’ Act and how the fact of the contraventions had actually been minutes in the company’s records. He concluded his letter as follows—

As I have said, the hon. the Minister of Justice is not here at the moment, but I do wish to thank him for the many courtesies he has extended to me over the years in this matter. He informs me that the Attorney General has completed his investigations of the indictment and that the hon. the Minister will be making an announcement shortly. The 15 directors cited in this indictment are amongst the most powerful and prominent men in financial and banking services in South Africa. Their affiliations cut right across political lines. Let me refer to an article in the 18 February issue of the Natal Mercury which has a copy of the indictment. I quote—

I do not believe that the merits of the allegations should be judged by either this legislature or the executive. Therefore I sincerely hoped—and I hope the hon. the Minister will pass this request on to the hon. the Prime Minister and also to the hon. the Minister of Justice—that a judicial commission of inquiry would be appointed with powers of subpoena, a commission whose meetings would be held in public, to investigate all the ramifications of this matter, including the suggestion* that there has been a massive cover-up. I have in my possession evidence which seems to indicate such a cover-up. When the hon. the Prime Minister took office, he pledged to strive for a clean administration, and I honestly believe that the hon. the Prime Minister is sincere in this regard. What I want recorded here is that I feel that my own conscience would deny me my self-respect as a public representative if I were to ignore the evidence contained in the indictment I have here and other evidence which has been brought to my attention and which points, as I have said, to an attempt to cover up these facts.

It is not for me or my party to judge the merits of these allegations, but they are there. When retired advocates, legal men of this country, indicate their concern in this regard, I believe it is the task of the judiciary to investigate those allegations and I sincerely hope that the request I have made will not fall on deaf ears. I have made it before in this House and hon. members of the PFP supported my request for a judicial inquiry. The hon. the Minister of Co-operation and Development also supported my request for a judicial inquiry. However, all we hear is words of support. We get no action. I sincerely hope that the hon. the Minister will take action.

Mr. Speaker, I listened carefully to the hon. member for Amanzimtoti and understood him to say that the matter in regard to National Fund Investments Ltd, was investigated, that he met with the Minister of Justice and the then Deputy Minister of Finance and, further, that he got a reply to the effect that the matter went to the Attorney-General and that the outcome of that was awaited. I know that the hon. member for Amanzimtoti is a reasonable person. He will therefore agree with me that the Government cannot take any action until it gets a report from the Attorney-General with his recommendations. The hon. member is quite correct in putting his plea to the House, but I think that in all fairness we should await the decision of the Attorney-General and the outcome of the Government’s response to that. I should like to go further, if I may. The hon. member, as I understood him, coupled his remarks to some contained in an advocate’s letter. Well, the advocate can do the same thing all the other people have done, viz. he can bring the matter to the attention of the Police, the Attorney-General…

That has been done repeatedly over 14 years and nothing has been done.

I am not now talking about the NFI, but about the other letter the hon. member received from the advocate.

That has to do with the NFI.

But in regard to the NFI the hon. member is satisfied now that the matter is before the Attorney-General. [Interjections.] It is the quality of the investigation that is important, and obviously the matter is being properly investigated.

The hon. member also referred to the remarks made by Mr. Etheredge in regard to corruption in the public and private sectors. The hon. the Prime Minister has made it abundantly clear that he will not tolerate corruption whatsoever at any level. On accepting the position as Prime Minister, he spoke of clean administration. Honest administration is the highest priority of the hon. the Prime Minister and the Government and he has proved that in the past and will do so in the future. The hon. the Prime Minister responded immediately to Mr. Etheredge’s claims and urged him to make a complete disclosure to enable the matter to be cut open to the bone. In a public statement the hon. the Prime Minister urged him to do that and suggested to him that he should consider all the alternatives. Firstly, Mr. Etheredge could give the information to the S.A. Police for immediate investigation. Secondly, he could go with the information to the Advocate-General. Thirdly, he could bring the information to the attention of the Minister under whom the Commission for Administration falls. I should like to quote the final paragraph of the hon. the Prime Minister’s statement. In reply to Mr. Etheredge he says—

This matter has been strongly put by the hon. the Prime Minister. If my memory serves me correctly the reports were to the effect that Mr. Etheredge did a few things. Firstly, he wrote to the hon. the Prime Minister. He did not give any concrete examples of any corruption in the public sector. Secondly, he appealed to other people to come forward to substantiate his claim. Thirdly, he was going to see the Advocate-General. We do not know yet what the outcome of that visit was. Fourthly, he sent a copy of his speech to the Minister responsible for the Commission for Administration. Should Mr. Etheredge or any other persons be able to assist in giving information showing corrupt practices, then the law must take its course and the people will be prosecuted. Mr. Etheredge has made very serious allegations and the hon. the Prime Minister has responded equally seriously. There is a substantial onus on Mr. Etheredge to produce the information on which he based his allegation. The hon. member for Amanzimtoti can rest assured that the hon. the Prime Minister, the Cabinet, the Advocate-General, the Police and the Attorney-General will leave no stone unturned to see that justice is done. If the investigations are proceeding then it is unreasonable to expect the hon. the Prime Minister to interfere in these investigations. The hon. the Prime Minister has stressed the urgency of the situation and he, like every citizen, must await the outcome of the investigations.

Mr. Etheredge replied to the hon. the Prime Minister by telex and agreed to the publication of the telex. Three paragraphs make it abundantly clear that Mr. Etheredge has no proof against the public sector. I should like to quote these three paragraphs in the telex from Mr. Etheredge—

So far there is nothing in what Mr. Etheredge has said that warrants a cloud of suspicion to be placed on the Public Service. In fact, unless people can produce substantiated evidence against the people in the Public Service, those who continue to make these wild allegations can be considered to be scandalmongering.

*Over the years foreign investors have shown that they have the greatest confidence in the stability of South Africa. Recently, when exchange control was relaxed, more money entered the country. Many thousands of skilled labourers and experts in almost every field are queueing up to enter the country and to settle here. Our country is twelfth on the list of countries in which foreign investors are recommended to invest. Despite the UN and other adversaries we have negotiated a loan of approximately R1 200 million from the International Monetary Fund. Everyone has confidence in the future of this country except the majority of hon. members of the Opposition. Hon. members of the Opposition have lost confidence in themselves and have moreover lost the confidence of the majority of their supporters. Nothing is said about the fact that in spite of the greatest world depression of all time, South Africa has maintained its position in every field. There are, of course, people who are having a very hard time of it, and the Government is doing its best, within the limits of the country’s means, to be of assistance to such people; indeed it has always assisted them. The Opposition does not assist the people but is simply sowing dissension for the purposes of short-term gain. All that the political extremists to the left and to the right are doing is to make it more difficult to maintain orderly and stable government. Fortunately the majority of South Africans are reasonable people and they will deal with the boycotters, those who are destructive and those who obscure the truth by malicious gossip. I ask the Official Opposition and the CP: Do the hon. members not wish to conduct responsible politics in this country, in order to secure the future of our children and grandchildren and the future generations? After all, we are blessed with one of the finest countries in the world, and we are also blessed with the resources necessary to build this country up into one of the greatest and most powerful countries in the world. The inhabitants of this country are our greatest asset, but the extremists seek to ensure that our greatest asset could also become our greatest burden. There are sufficient opportunities to differ with the Government by advancing constructive criticism, while nevertheless making our contribution to the country. The contribution of the official Opposition and the CP is negative and destructive. Instead of having a share in the solutions of this country, they are part of the problem in this country.

†The hon. member for Yeoville and other hon. members were critical of various aspects of the budget, but let us look at what the real experts have to say. When one looks at an article by Stephen Orpen in Business Times of 3 April 1983 one sees that he says the following—

I should also like to quote from page 15 of the Sunday Times of 3 April 1983 from an article written by a professor of economics at the University of Cape Town where he states—

This professor refers to Mr. Horwood’s performance over the period as a miracle that was beyond the wildest amibitions of the President of the United States or the Prime Minister of Great Britain. People throughout South Africa and the rest of the world recognize the achievements of the hon. the Minister of Finance and his financial team. That is one of the most important reasons why we have the financial respect and the confidence of investors both inside and outside South Africa.

The hon. member for Yeoville asked: “Where in this budget can one point to something really being done to combat unemployment in South Africa?” The hon. member for Amanzimtoti asked more or less the same question. I am surprised that the hon. member for Yeoville should be so unprepared and should ask a question like that. In fact, I think it would be for the best for the hon. the Minister of Finance to appoint an official from each department to accompany the hon. member for Yeoville through the various departments and to show him how job situations are being created and how unemployment is being combated in every single department. I should like to refer the hon. member for Yeoville to a few examples of where employment opportunities are being created. The hon. member will recall the decentralization concessions were announced on 1 April 1982, and the Government set aside R100 million for the financial year to pay out industrialists who qualified for these financial concessions. In addition, concessions were announced in a package that made it most attractive for local and foreign investors to invest in new industry or to expand existing industries. These concessions and written agreements which were arrived at between South Africa and other African States were announced. These concessions will take industries to the areas where we have the greatest amount of unemployment. Not only will employment opportunities be provided, but I believe this is also a blue print for the greatest industrial expansion and prosperity that we can leave as a legacy to future generations.

It must be remembered that in 1982 we were already moving into a quiet economic period. There was a world recession, and yet in the period April to November 1982 the Decentralization Board approved R483 million’s worth of applications for new or additional industries, and employment for 46 000 people was created. If we take into account that there are possibly five people to a family, it is clear that more than 200 000 people benefited from those concessions.

In time to come, when we will be going through an economic boom again, these decentralization concessions will ensure that thousands of millions of rand will be spent on new industries, and that millions of people will benefit by employment in those industries. The hon. member for Yeoville will concede that there is a major source of employment being created by the budget in this respect. In fact, if he looks at Vote No. 18 he will see that there is R187 million which is being voted for concessions to assist people to retain their jobs and also to create new jobs. In order to educate people and to ensure that they obtain better employment opportunities the Government is spending R3 400 million on education, which means that all South Africans will be better equipped to take advantage of the employment opportunities offered them in South Africa.

Every building item, whether it is in the central Government’s budget or in a provincial budget, creates employment for people. The more than R100 million that is spent in exporting incentives ensures that South African businesses engaged in export can export thousands of millions of rands’ worth of South African goods. This in turn means combating unemployment that would otherwise hit thousands of people in South Africa.

The concession the hon. the Minister has made in connection with housing will also ensure that thousands of people will gainfully be employed in the home building industry. I have given the hon. member for Yeoville sufficient examples to show that job creation and job retention are very high Government priorities.

In addition I should like to quote a few lines from an editorial in the Sunday Times dated 3 April 1983, in which the hon. the Prime Minister’s calling a referendum is explained. I quote—

Mr. Speaker, I should like to point out that this does not involve a vote of confidence or no confidence in the Government. It is merely a testing of public opinion on the constitutional future of this country, and nobody’s career is at stake. The Sunday Times goes on to say—

The Sunday Times states further—

They talk of a healthy majority of those who favour genuine reform, and then say—

The Sunday Times is giving the hon. Leader of the Opposition sound advice. Unfortunately the hon. Leader of the Opposition and most hon. members of his party will be amongst the minority of sclerotic citizens who will remain locked in a dangerous and discredited past. I shall deal with the official Opposition presently, however.

The importance of reform and the referendum are going to create a climate that will make it possible to achieve our goals in peace and harmony, and in political and economic stability. This is an opportunity of a lifetime, and no one who has the interests of South Africa at heart, and who has the interests of future generations at heart, can afford to do anything less than his best. The newspapers have a very vital role to play during this period. They may have to sacrifice some sensationalism in order to adopt a more positive attitude. During this period, which will be a short one, there will be extremists on the left and on the right, who will be looking for headlines by doing everything possible to ensure that this referendum fails. A courageous Press, courageous editors and directors of newspapers also have a vital role to play. Directors of newspapers know that it is now or never for reforms to go through. Reforms will ensure that people’s assets are protected, and that there will be a future in South Africa for children, grandchildren and future generations. I believe that the future of the country will be at stake. I have sufficient confidence in the electorate to give the hon. the Prime Minister a mandate but when the referendum is over I should like to see the extremists and opposition elements accept the majority decision in peace and stability. Let me say immediately that I see no militant elements in the NRP. There is no doubt that there is an element of the AWB in the CP and that element is looking for trouble. They will find, however, that ordinary, decent South Africans are not going to be very tolerant of them. The HNP and the CP tried to finalize an agreement before the by-elections whereby they would divide the seats on a 50% basis throughout the country. In the four by-elections in the Transvaal they achieved the aims of the partnership by the HNP’s standing back in two of the four seats—that was the 50% requirement. Whether the HNP and the CP can reach written agreement is not important as they have already implemented the verbal agreement in Soutpansberg and Waterkloof. [Interjections.] Is that not so? They have already reached agreement in Waterkloof and Soutpansberg. In other words, the HNP and the CP have to accept responsibility for each other. The problem that I have with the HNP and their attitude and policies is that they are stoking the fires of revolution and by so doing endangering not only themselves but also everybody about them. The CP and the HNP will soon link up on a road to nowhere. Both refuse to accept the realities of the South African situation and the fact that there is a place in the sun for everyone without any one group endangering the self-determination and the existence of any other group.

We come now to the PFP. In the first place, the immediate reaction of the hon. the Leader of the Opposition to the hon. the Prime Minister’s announcement of a referendum was to call for all the people in South Africa to have a vote in the referendum; in other words, to quote an editorial in the Sunday Times—

The hon. the Leader of the Opposition is being totally unrealistic in his attitude.

The hon. the Leader of the Opposition took the lead in boycotting the President’s Council. He took the lead in forcing Mr. Japie Basson, a founder member of his party, to resign because Mr. Basson would not be a party to boycotts. The hon. the Leader of the Opposition rejects the guidelines for a new constitution and by his actions and attitude he has encouraged others to do the same. The hon. the Leader of the Opposition is now faced with the choice of supporting the referendum on a new constitution which excludes Blacks. As the hon. the Leader of the Opposition knows, the Black people are provided with a different dispensation to that for Whites, Coloureds and Indians. His main allegations and boycott actions are as a result of the exclusion of Black people. He knows that the constitutional legislation will be based on the guidelines that have been published and that have been seen by him. He knows that the referendum will flow from the guidelines and the Bill. [Interjections.] The hon. the Leader of the Opposition also knows that because of his boycott attitude he has to oppose both the Bill and the referendum. There are tens of thousands of people in South Africa who were formerly United Party supporters and who voted Program when the United Party was dissolved simply because they wanted a viable Opposition. Those people have lost faith and are disappointed in the hon. the Leader of the Opposition and they are going to reject him in the referendum. The hon. the Leader of the Opposition has lost the confidence of South Africa. In the first instance, he officially boycotted working together with people of other races on the President’s Council in their efforts to find solutions.

Who boycotted whom in Port Elizabeth?

We shall see what happens in Port Elizabeth with the referendum. Secondly, notwithstanding the fact that young and brave South Africans have lost life and limb on the border and notwithstanding the fact that innocent men, women and children of all races have been butchered by murdering terrorists, Mrs. Bishop, the PFP MPC considers these terrorists to be freedom fighters. [Interjections.] Instead of the hon. the Leader of the Opposition repudiating her, he endorsed her candidature in the Stellenbosch by-election.

You are a political hyena.

On 24 February 1983 in the Cape Provincial Council, Mrs. Blackburn, the PFP MPC for Walmer said in reply to a question that the ANC and the Communist Party should be allowed to operate legally in South Africa if they forswear violence. I want to ask the hon. the Leader of the Opposition if he endorses this attitude. Actually, I was going to ask the hon. member for Houghton …

Mr. Speaker, on a point of order: May the hon. member for Port Elizabeth Central say that the hon. member Mr. Aronson is a “political hyena”?

Did the hon. member for Port Elizabeth Central say that?

Yes, Sir.

The hon. member must withdraw it.

I withdraw it, Sir.

I want to ask the hon. member for Houghton, knowing the background of the Communist Party and the ANC as proponents of violence, murder and terrorism, whether the PFP is prepared to allow them to operate legally in South Africa. Is it that party’s plea that Black members of the Communist Party and the ANC should take part in the referendum? I ask this because the PFP insists that everybody must take part in the referendum. There can be no doubt that should the PFP come into power, the Communist Party and the ANC would be legally recognized in South Africa, but this would lead to anarchy and chaos. Stability is a prerequisite for a sound economy, but that would disappear and so would the political rights of all people. The hon. member for Houghton is of course also one who believes that the Communist Party can operate in South Africa provided it does so within the law. One can see a quotation in this regard in Hansard (Vol. 82 of 1979, col. 542).

I should like to ask the hon. member for Walmer whether he supports Mrs. Blackburn, the MPC for Walmer and member of the PFP, on allowing the Communist Party and the ANC to be legalized in South Africa. I wonder if the hon. member would indicate across the floor of the House whether he supports his MPC in this regard.

He will reply when he participates in the debate just now.

I realize why the hon. member for Walmer is speechless because he knows he supports her but he cannot say so in public. I do not think that the hon. member for Yeoville supports either the Communist Party or the ANC operating in South Africa in any way whatsoever. Surely, amongst the PFP MPs there are some hon. members who support the hon. member for Yeoville in regard to the boycott and negative attitude of the PFP towards the new constitutional proposals and the referendum.

I have much pleasure in supporting the budget.

Mr. Speaker, I have very little time at my disposal but during the course of my address I shall deal with some of the questions asked by the hon. member.

All evidence points to a Government vision of South Africa something like this: There will be the present Black States with approximately the area which they comprise today and their boundaries will be similar to those of the present self-governing States. The rest of South Africa will be ruled by Whites, Coloureds and Indians with the Whites in out and out control and the Coloureds and the Indians are supposed to accept discriminatory legislation with patience and servility. The present Black townships will be given the status of super municipalities while their inhabitants will exercise their political rights in the independent Black States or possibly in some confederal body for the different States.

The Science Committee of the President’s Council, however, has issued a report which makes absolute nonsense of the type of dispensation which I have just described. By the year 2020 there will be approximately 66,5 million people living in the area of the old Union of South Africa. Of these Whites will number 5,5 million; Coloureds, 4,5 million; Asians, 1,5 million; and Blacks; 55 million. In the so-called White areas the same numbers of Whites, Coloureds and Asians will exist, but Blacks will number 23,5 million—more than double the total number of Whites, Coloureds and Indians, but then one has to convince oneself that the Black areas will be able to accommodate 31,5 million people. This involves Ciskei increasing its population three times, it involves kwaZulu increasing its population from 3,2 million to 10 million and all this within a period of 37 years. The surplus population of those territories would obviously have slopped over the little boundaries that we produce at so much expense and so much effort at the moment long before this situation occurs.

It is the Government’s failure to face these facts that has seriously eroded the White man’s chance of a reasonable future in South Africa. Government policy has become a haphazard collection of contradictions, and it must be so, because if goals are ill-defined and if they are unrealistic, policy becomes a contradiction of the facts. The ruling party, grown arrogant and callous, now brazens out contradictions as a routine aspect of political life. [Interjections.] The budget should reveal what integrity and what purpose lie behind the Government’s new constitutional proposals and its vague calls for reform. Instead we have a dithering dichotomy. On the one hand we have competent technocrats, the Director General and his staff and the Governor of the Reserve Bank doing their best to keep the show on the road. On the other hand there is the hon. the Prime Minister and his Cabinet, politically expedient, their judgment impaired by years of indoctrination, dictating policy and the speed of implementation of such policy, with an ambivalent linkage between the hon. the Prime Minister and the hon. the Minister of Finance, who is reassuring when he talks on finance, but amazingly naive when it comes to matters political. The contradictions that arise from this situation are revealed in our financial policy. The budget becomes a set of annual and increasingly incomplete accounts.

Let us look at some of the contributions that this Government believes it can afford but which are affecting the welfare, and will continue to affect the welfare, of all of us. It has, for example, seized upon economic growth as a way of getting past our problem. It is, of course, a course of action with many attractions. It is saleable to the private sector, because one can only achieve this economic growth by the stimulation of the private sector. It appears to sidestep the problems of wealth redistribution. It does not call upon the “haves” to fork out anything, but the growth in wealth is going to be distributed acceptably amongst the “have-nots”. It commits a steadily increasing proportion of the population to the free-enterprise system and, of course, this can be considered a bulwark against communism. Most of us realize that this is a gross over-simplification, but all of us realize that one cannot negotiate the transition to a more just regime without rapid growth. It is also widely believed that the factor of production most likely to inhibit growth is capital. The Kleu report stresses this and states that South Africa cannot afford to rely on investments from abroad to augment its own savings. It also emphasizes that we must encourage exports as the alternative source of un-inflationary capital. The report cautions against actions that would make our industries uncompetitive. In his budget speech the hon. the Minister put it more strongly when he said that exports were of vital importance to the economy. He also told us why, mentioning the incentives that were going to be granted to encourage the export industry. These philosophies are, however, negated by Government policy. It will be spending R650 million per annum on regional development by 1985 and R1 000 million per annum by the year 1990, a reckless use of capital resources. By establishing industries in remote areas, it is stimulting inflation and making all South African industry—not only the decentralized industry—uncompetitive. No cost benefit study has ever been done in regard to this policy, because the Government’s own economic advisers acknowledge that the prime motivation for the policy is not economic, but political. [Interjections.] The hon. the Prime Minister states that his economic strategy is to achieve growth through free enterprise and the market mechanism. In contradiction to this, however, what do we find? The SATS is involved in a determined effort to compete with private road transport, and the Government aids and abets it all the time with any legislative and economic advantages that it can conjure up. SATV operates as a complete monopoly which is ruthlessly used by the NP for propaganda purposes. We have the so-called free enterprise system but 83% of the population is not free to start an enterprise where it chooses on the grounds only of skin colour. The property market is distorted by the Group Areas Act, the labour market by legislation preventing mobility of labour—not only mobility geographically, but also vertical mobility. I have here a recent copy of the Eastern Province Herald in which a situation that has developed in Grahamstown is described, a situation where businessmen may be charged under the Group Areas Act for illegally employing Coloured or Black managers. It states here—

Can you conceive of such a madness: This country in the face of the Human Sciences Research Council reports and Manpower Commission reports is actually busy investigating cases where Black and Coloured managers are operating in White areas in Grahamstown. These reports highlight that a shortage of managers can bring our growth plan to its knees. I want to ask the hon. the Prime Minister what he thinks of a situation like that. What does he think of the situation where in this day and age the bosses of Black and Coloured managers are being charged under the Group Areas Act?

They can have the vote, but they cannot be managers.

The food market is being distorted by administered prices, and industrial markets are being grotesquely distorted by ill-considered strategic industries and excessive incentives to move industries to remote areas. The list goes on and on.

Let me, however, give another topical example. The free enterprise system produces its advantages through effective competition. This is what makes people ingenious and industrious. Consequently, enlightened private enterprise is quite as concerned as the consumer to ensure that monopolies and restrictive practices do not take root. In his budget speech, the hon. the Minister of Finance referred to inadequate competition as one of the causes of inflation. The Government professes to share the same concern, but actually that is just a cynical statement. While it was introducing The Maintenance and Promotion of Competition Act, it was acting as midwife to the monopolistic restructuring of the liquor industry. In one move Dr. Anton Rupert’s group was wrested from a disastrous investment in Intercontinental Breweries and the wine and spirits industry was tidily sewn into a virtual monopoly. The Competition Board courageously recommended the dismantling of this cosy arrangement. The Government has now repudiated this recommendation and in an act of blatant political cowardice chosen to side with two potent national political powergroups, viz. the wine farmers and the KWV, and Dr. Anton Rupert’s Oude Meester group of companies.

I am not nit-picking. I am telling the House that the Government is paralysed by indecision, lack of vision, and lack of courage to take the steps that are necessary if this country is to survive. Inconsistency is the theme of its rule. It expects Coloureds to participate in a new political dispensation, but they cannot share the beaches. It allows Blacks to play in international teams, but after the match they and their families have to return home to segregated compartments. The Government has been forced to accept Black home ownership, but it turns its back on half the benefits that could flow from this by its refusal to grant freehold title. It pays lip service to the development of the informal sector and, as I saw in Rink Street, Port Elizabeth, the other day, Coloured hawkers are thrown into the back of a police van for selling tomatoes on the street. It resists urbanization when only a positive approach to urbanization can actually save this country from ruin. Most frightening of all, we have a Government which is obviously terrified of communism but whose policies suck communism into the most vulnerable areas of this country.

I have painted a picture of a Government running around like a decapitated chicken: When it appears to be going in the right direction, we are expected to exclaim “What enlightened leadership”; when it takes off in the opposite direction, we are expected to say “The poor Prime Minister is having difficulties with the more conservative followers in his party.” I am not unaware of the difficult decisions which face any South African Government, but that does not exonerate this Government from the necessity of facing up to these decisions. But it has failed to differentiate between what it would like and what is possible. Unless it redefines the role of the White man in the real South Africa of tomorrow and plans and works for his transition from despot to participant, the leaders of the NP must not expect to be remembered with gratitude by their children.

Mr. Speaker, we have listened to the hon. member for Walmer trying to score political points off us. If there is one person who ought to be grateful to the Government for all the contracts his company has been awarded in the past then it is that hon. member. In the meantime, however, he advances the severest criticism and on top of that he talks about monopolies. I shall leave the hon. member at that. I shall come back to his general approach later.

Sir, what have we had this afternoon from the official Opposition? Thus far we have had two speakers on that side. The first speaker, the hon. member for Yeoville, discussed finance briefly and then went on to politics, because he was unable to level any real criticism at the budget. The second spokesman of the official Opposition, the hon. member for Walmer, advanced trifling points of criticism. Those two hon. members should rather have taken a leaf from the book of the hon. member for Amanzimtoti. He also criticized the Government for its financial management of the country, but at the same time he advanced positive criticism. However, we have had nothing of that kind from those two hon. members.

The hon. member for Yeoville was terribly concerned about the lack of success shown by the Government and the hon. the Minister in the fight against inflation. We are all concerned about that because it remains a serious problem for South Africa. The hon. member mentioned several causes and I want to dwell on only two of them. The first cause, according to the hon. member, is that in recent times salary and wage adjustments have risen more rapidly than productivity. That is true, but is it the fault of the Government alone that this has boosted inflation? The hon. member did not say a word about the contribution of the private sector to these salary and wage adjustments that have risen more rapidly than the level of productivity. If blame is to be allocated then the private sector, for which the hon. member is a very strong apologist, must also bear blame. In this regard I wish to associate myself with the hon. member for Amanzimtoti. He suggested an excellent slogan to the effect that we in this country should give far more consideration to the productivity of our workers than in the past. Our people must begin to learn to work harder. The slogan suggested by the hon. member could be changed to read: “I fight inflation. I work.” Then we would get somewhere in our fight against inflation.

The second aspect raised by the hon. member for Yeoville relates to the administered prices of bodies such as Escom, Iscor, the Post Office and the S.A. Transport Services. It is true that the services rendered by those bodies in our economy contribute to increased inflation. However, the hon. member must tell us what the solution is. After all, these bodies have to provide specific services to our economy. In our growing economy these bodies are obliged to expand continuously, and to do so they require capital. These bodies do not have their own share capital. There is only one way they can obtain capital and that is by borrowing, and if they borrow capital, whether internally or abroad, then that increases the possibility of an increase in the rate of inflation. Moreover it puts such a body in a difficult position, in that its burden of interest steadily increases, and if its burden of interest increases then its production costs increase, and if the production costs of the service it provides increase then it can only recover such costs in one way and that is by way of increased tariffs, which in turn invoke the spectre of inflation. The hon. member for Yeoville suggests no solution whatsoever for these problems. He merely criticizes. Therefore one need not take too much notice of the hon. member.

The hon. member went on to state that the value of the rand in 1948 was eight times as much as it is at present. This may be so. The hon. member is thereby trying to indicate that the standard of living in South Africa has dropped. Why else would he make such a statement without qualifying it? Looking at the insinuations of the hon. member one finds that it is definitely untrue that the standard of living of the people in South Africa has dropped since 1948. Indeed, we heard the hon. the Minister of Finance saying in the course of his budget speech that in spite of South Africa’s high inflation, the real wages and salaries per worker have increased by 3,6% in the first three quarters of 1982; in other words, the standard of living continued to improve last year. I read a very interesting article in the October 1982 edition of Tegniek concerning this very issue, viz. the cost of living and the standard of living. In that article the statement is made—and I agree with it—that South Africa is a country in which many people want to take more out of the economy than they are prepared to put into it. Many people say that inflation reduces the level of prosperity of the individual because he is able to buy less and less with his rand. However, this article quotes the findings of a working group of the Afrikaanse Handelsinstitute which proves that we are all considerably better off today than we were in 1960. After all, low prices are not synonymous with a high standard of living, nor are high prices necessarily synonymous with a low standard of living. The level of prosperity is not determined solely by the prices one has to pay for things one needs, but also by the income one earns to enable one to live. If one’s income rises more rapidly than do prices, then surely one’s level of prosperity rises. One’s standard of living rises. To say, therefore, as the hon. member for Yeoville does, that the value of the rand in 1948 was eight times higher than it is now is meaningless if one does not also determine what the income of the average worker was in 1948 as against its present level. Wild statements are being made here without proper motivation.

In more or less the same vein the hon. member for Sunnyside tried to say: Consider what a white loaf costs today! In the article to which I have just referred, certain interesting facts are provided. In 1960 the average White factory worker had to work 6,4 minutes to afford a white loaf, as against 4,2 minutes in March 1982. The hon. member is making the same mistake as the hon. member for Yeoville by only referring to the price of a white loaf today. Surely one also has to consider how long a worker has to work to buy a white loaf today. The facts are available and have been scientifically investigated. Therefore we should not bandy this kind of a argument about in this House.

Do you agree with the report of the HSRC or not? [Interjections.]

Yes. Since we are dealing with the hon. member for Sunnyside now—I see that he is getting very excited—I want to point out that he made the statement that the Government was impoverishing the taxpayer in South Africa. Indeed, I believe that that statement of his also appears in the formal amendment moved by the hon. member. If I am correct, that is what he said.

Yes, I did say that. Just read the report of the HSRC.

Very well. The hon. member concedes that he did make that statement. [Interjections.]

Mr. Speaker, may I ask the hon. member a question?

No, I do not have the time to answer questions now. In any event, Mr. Speaker, that statement by the hon. member is nothing new. What we have heard here is nothing new. [Interjections.]

Order!

We have been hearing statements of this nature from the HNP since 1970. It is an old story of Mr. Jaap Marais’ that the Government uses the printing press of the Reserve Bank to increase the money supply so that the Whites are impoverished. Now the hon. member for Sunnyside—disguised HNP supporter that he is—comes forward with exactly the same story. [Interjections.]

Come on, be honest now. What does the report of the HSRC say? [Interjections.]

Mr. Speaker, can we never expect of the Opposition parties in this House that when they advance criticism they should also, in the first place, advance valid criticism? In the second place, they ought to give praise and gratitude when it is due, as the hon. member for Amanzimtoti did here this afternoon. I want to give the hon. member full credit for that. [Interjections.]

Let us briefly consider the achievements of the hon. the Minister of Finance and his officials; achievements that were accomplished last year in the financial sphere. I do not wish to go into that in detail. In the first place, of course, there was a dramatic improvement in our balance of payments position. This applied to both the current account and the capital account. Then, too, there was the loan agreement negotiated with the IMF. This was an achievement. We are given credit for that throughout the world.

We also have further achievements to our credit. One was the abolition of exchange control on non-residents. However, hon. members of the Opposition say nothing about that. We are given the finest testimonials for that, and the result of that step exceeded even our own wildest expectations. In all respects, then, it was a successful operation.

I want to mention a further achievement about which hon. members of the Opposition parties have said nothing at all. It is that the deficit before loans in the 1982-’83 financial year was considerably lower than the amount originally budgeted for. Moreover, it amounted to a mere 2,2% of the gross domestic product.

One final achievement to which I want to refer briefly relates to our loan redemption payments for the 1982-’83 financial year, which are considerably higher than originally estimated. In this regard we paid off approximately R500 million in foreign debts. Compare that with the situation in the rest of the world, where nowadays very few countries—even so-called economically strong countries—are able to meet their international financial obligations.

I should like to leave hon. members of the Opposition parties at that and confine my attention to the approach adopted by the hon. the Minister of Finance to the drafting and submission of the budget for the financial year that lies before us. In doing so, we must consider South Africa’s present circumstances, and they are that, like the rest of the world, South Africa is still in a situation of recession. In this regard I want to come back to the hon. member for Yeoville who says that we are present in the poorest economic situation since the Second World War. That is probably true, but who is in the same boat and in even poorer circumstances? The USA, Europe, not even to mention Africa and the rest of the world.

The other circumstance of our present situation is that our economy is still sluggish. There are some authorities who say that over the course of the next few months our economy may slow down even further this year, but most people are at least agreed on one thing and that is that matters will begin to look up by the end of the year or early in 1984.

Within this framework the hon. the Minister of Finance had to make certain choices. The first possibility was to stimulate the economy by pumping in more expendable money. However, this could only be done either by way of increased Government expenditure or by reducing taxes. The result of such steps would be a bigger budget deficit before loans and we should therefore have had to borrow more, either abroad or at home. We should then also have had an increased public debt which would have been strongly inflationary. In addition, there would have been a higher rate of increase in the money supply, the so-called M2, which would be just as inflationary. At the same time interest rates would drop, and that would be detrimental to all investors. Locally, our elderly people who live off investment income would be detrimentally affected thereby. We should not have been able to encourage thrift effectively, and as a result the building societies would have received fewer savings funds and our housing situation would have suffered as a result. As far as the outside world is concerned, we should not only have suffered an outflow of existing capital, but also a slower or even negative inflow of new capital. Finally, there would have been a depreciation of the rand. This would have been detrimental to our balance of payments and prejudiced our creditworthiness abroad. Moreover, we must bear in mind that it is not good for any country when its monetary unit is weakened. Accordingly, the hon. the Minister must be congratulated for not having exercised this choice. He may have been very popular if he had indeed done so, but that would not have been in the interests of our economy and our country.

He preferred to choose the second possibility, and that was to proceed cautiously in these difficult international circumstances, with the possibility of adapting to rapidly changing circumstances. Accordingly, he retained the conservative approach. What is important is that in his budget he made special provision for the people who suffer most severely under the present circumstances, and assisted them. Therefore we must tackle the most important problem in our economy with a will, viz. the combating of inflation and the payment of our short term foreign debt. By doing so we shall be preparing in the best way possible for the next economic upswing. Because the Government has exercised the correct choice, I believe that we should regard the budget as the best instrument with which to enter the coming upswing from a position of strength and in so doing to enter the trajectory of the upswing that will certainly take place, so as to utilize it in the best possible way.

Mr. Speaker, much to my surprise, at the end of the first day of this budget debate we are still on finance despite what has happened in most of this year’s financial debates. The hon. member for Ermelo spoke about inflation, and I want to stay on that subject particularly in so far as the question of inflation has a bearing on welfare payments. I shall therefore not react to specific points. There is, however, one point I should like to make and here I want to refer to the fact that the hon. member for Ermelo said that the income of employees tended to rise as the rate of inflation increased. I think that is correct because people in employment can in fact normally protect themselves. The problem though is that there are people who cannot protect themselves in that way by negotiating higher salaries. This is of course the problem of the aged or of people who have to live on fixed incomes. These are the people who are particularly affected.

There has been a great deal of talk about inflation. This topic was also discussed by the hon. member for Vasco. At this stage, Sir, may I say to the hon. member for Vasco that we are very pleased to see him back in this House and we hope that he is feeling much better and that he will continue to improve. The hon. member for Vasco pointed out that there are countries that have far higher rates of inflation than South Africa. That is correct because we know that this is so in countries like the Argentine and Brazil. During the debate on the Part Appropriation Bill the hon. the Minister of Finance asked whether an inflation rate of 14% was so bad. I think that this raises the critical question of the inflation rate that we in South Africa should be experiencing. I think that we can determine the answer to this question when we look at page 15 of the Statistical Economic Review in relation to our pattern of imports and exports. We see from these statistics that the countries we tend to trade with are not Brazil and the Argentine but the United Kingdom, the European Economic Community, the United States and Japan. Our exports to the rest of the world are also high. I think that that is probably the gold that we export to Switzerland. When we consider the question of the inflation rate that we should be trying to maintain in South Africa, I think the critical question is that we should be looking at a rate of inflation that keeps us competitive in the external market, because South Africa is a very important trading nation. When we consider our imports and exports as a percentage of our GDP, we find it is something like 47%. This fact makes us one of the most important trading nations in the world, not in absolute terms but percentagewise in relation to GDP. Our inflation rate should be such that we should be able to maintain our competitiveness in the overseas trading world. This was the point made by the hon. member for Amanzimtoti. When we consider our inflation rate, we find that the weighted average inflation rate in respect of our trading partners is about 5%. Obviously, if we are going to have an inflation rate of 14,9% as we had for the period ended February 1983, or 15,1% as we had last year, then we are going to become less competitive. This is dangerous in South Africa because—and I am sure the hon. the Minister will agree with me in this—many of our recoveries in South Africa, our economic recoveries, have been export led. Therefore it is vital that we maintain our competitive position as far as our exports are concerned.

However, there are other problems in regard to inflation. Not only do we have to combat inflation in order to remain competitive overseas, but we also know that when we have sustained inflation we tend to have economic, social and political unrest. There is also another problem in regard to inflation. I can remember when the hon. the Minister of Finance used to lecture us on the question of money. He continually told us that money was a store of value, that it was a fiduciary instrument. However, the problem is that not only in South Africa but in other countries as well money is not a store of value any more. In fact, people are beginning to look at shares or property or the so-called hard assets. They try to get out of money as fast as they can. When we consider the position today, we find that property is probably the ultimate store of value in South Africa. When one talks to the average man in the street he tells one how much his house cost him two years ago and what its value is now. He feels that he is considerably better off. The irony of the matter is that we have aided and abetted the position both in the private and public sectors. I have nothing against providing a man with basic housing and I want to use the building society movement to illustrate my point. When the going market rate is 20 and we are providing people with housing bonds at 15%, what are we actually achieving? We are encouraging people to go into housing, and here I am not talking about basic housing, because the people who really benefit are those who are going in for very opulent housing.

Is that not social democracy?

No, not at all. We are, however, going even further. What about subsidies at 4% when the going rate is 20%, when that is the cost of participation bond money, when that is the free-market growth?

What about the subsidies on bread?

Just hang on. I cannot cover everything in 15 minutes. [Interjections.]

The other problem with this is the fact that money begins to break down as a store of value, a point made by the hon. member for Amanzimtoti. I think it was a good one. I am referring to the attitude in South Africa of making “a fast rand”. People no longer believe that they have to give service. I am now not talking about grand fraud. Let me give an example of what I am actually talking about. When somebody builds one a swimming-pool, he digs the hole as quickly as he can because he then gets his 70% paid out. He then puts in the concrete and another 20%. The 70% covers his costs, the 20% is the profit and, my God, try to get any action for the remaining 10%! There is too much of this attitude.

The other thing that high inflation does, of course, is to discourage saving. People no longer save. They say: Why should we save? Let us just look at the statistical economic review, which is a very good one indeed. I have looked at personal savings as a percentage of personal disposable income. The trend I have found there is a disturbing one. In 1972 we saved 12% of our personal disposal income. In 1981 the figure was 6,7% and in 1982 only 4,6%. Between 1973 and 1980 savings, as a percentage of personal disposable income, fluctuated in the range between 8% and 12%, with the exception of 1976. In absolute terms, in 1982, we saved less than we did in 1977. This brings me back to the statement that money is no longer the store of value, because inflation begins to kill the desire to save. I think that the greatest danger, however, is that inflation begins, because of this, to channel a country’s assets into unproductive areas, because often unproductive expenditure is rewarded more than productive expenditure. The result is that we are not providing the infrastructure that we need. We only have to look at the position over the last 10 years, going back to the time of the survey. The real growth in our GDP was 3,3%. In October 1981 Merca-bank brought out a survey which actually showed that to achieve our social and economic objectives in South Africa we would have to have a growth rate of something like 4,5%.

What can we do to control this inflation? Obviously we can control the money supply. I think that one of the reasons why we had high inflation in 1982 was because in 1980 and 1981 the supply of money and near money increased at a very rapid rate indeed. [Interjections.]

I think that there is another thing we have to do, however, and that is to look at the role we anticipate that the public sector is going to play in the South African economy. That is an important sector, because it accounts for something like half of the fixed capital assets of South Africa and generates approximately, according to the latest figures, 23,9% of the GDP. There is an interesting point here, because half of the assets are being employed by the public sector, but it is only producing a quarter of the GDP. That is because a lot of expenditure is unproductive, and here I am not necessarily talking of things like laziness and so on, because defence expenditure, for example, is unproductive expenditure from an economic point of view, even though it might be very necessary.

Because of the role of the Government, I want to look at one particular area that interests me, and this is the question of pensions. The hon. the Minister said, I think, that in the last eight years the among spent on pensions for all race groups had trebled, but if one takes the figure from the year ending March 1973 to this year, one sees a 13-fold increase in the cost of social pensions for all race groups in South Africa. I want to come back to that, because the hon. the Minister has quoted a figure of R7 000 million by the year 2000. I did my own calculations some time ago and I arrived at a figure of R17 000 million by the year 2000.

I said mine was a conservative figure.

Yes. However, if one just takes the increase in the past 12 years and one projects it further, one is talking of a figure of approximately R14,5 million.

The critical question, then, is what we can do in this particular area. If we continue to plough more and more money into things like this, however, necessary it may be, that money can then not be spent in productive economic sectors. I think there are four things we can do in this particular area to provide a long-term solution. The first is that every employer must establish a pension fund and every employee must belong to it. There must be transferability of pensions, and there must be vesting of pensions. In the latest report of the Registrar of Pension Funds, one sees that in 1980 R249 million was paid out on account of legislation. Now that was not re-invested; it just went.

We have raised this point before and I want to come forward with a suggestion for the hon. the Minister of Finance’s consideration. I think that the problem we had with the pensions last time was quite honestly a political problem rather than a financial one. I think part of the problem was the way it was implemented. I think we have to do something in this area fairly urgently for the long term. I should like to recommend that the hon. the Minister of Finance should appoint a commission in this field, a commission on which should be represented both the public and private sectors and both employers and employees. The various race groups should also be represented on that commission. I think we should get together around a table to start thrashing this question out, because each time we delay the implementation, the problem is going to become greater and greater with the passage of time.

Mr. Speaker, two weeks ago when the budget speech was delivered, I was in the USA. I observed with great interest the reaction to the hon. the Minister’s budget in the local newspapers. I was quite surprised that so much attention should be given to the South African budget in America. Over there, however, they have a specific saying: “The golden rule is that he who owns gold rules”. That is why so much attention is given to the South African budget. It was very interesting to read what was said about the budget in the newspapers over there, particularly the financial newspapers.

†One read there that the budget was described by most economists as neutral and in line with expectations. A very senior economist said, for instance, that it was a very responsible budget and that he was particularly pleased and impressed by the small increase in Government spending. Another senior economist said the budget should have a neutral effect on the economy. Another very well known person said the Minister of Finance correctly gave the country a conservative budget.

*A tailpiece was tagged on to all these reports, namely that “Mr. Harry Schwarz, the PFP spokesman on finance, said that the budget was a major disappointment”. I want to tell the hon. member for Yeoville that he was quoted.

In what newspaper was that? [Interjections.]

I must say I found it to be in complete contrast to the other standpoints which I observed there. I shall give it to the hon. member later.

The hon. member for Edenvale referred to the question of inflation. I want to tell the hon. member for Edenvale at once that, as the hon. member for Ermelo correctly pointed out, this side of the House is thoroughly aware of the problems which inflation brings in its wake in South Africa. Recently we conducted a very comprehensive debate on the question of inflation, and I think the problems which exist in South Africa were very clearly set out in that debate, for example the problem of a heterogeneous population, a combination of a First and Third World situation. The problems which stem from such a situation and the problems which a country experiences in keeping its inflation rate low were very clearly set out. The Americans have an inflation rate of 4%. They are very satisfied and do not expect it to rise much further. However, America has an unemployment rate of 10,5%. This is a tremendously high rate. To a very large extent America has a homogeneous population and can therefore afford to have a high unemployment rate.

What is our unemployment rate?

Unemployment in respect of Whites does not exist.

That is not true. As far as the Whites, Coloureds and Asians are concerned, the rate went up by more than 50% in the course of a year. [Interjections.]

An increase of 50% of nothing still remains nothing, an increase of 50% on one is one and a half, and on two is three. In practice this is not an unemployment rate.

You treat unemployment with contempt.

You go and say that in Waterkloof.

I will say it in Waterkloof.

I should like to draw a few very interesting comparisons, on the basis of a visit which a few of us were privileged to pay to the USA, between the situation there and the situation in South Africa. In particular I want to point out the effect which the economy of the USA, particularly the recovery of the USA economy, will have on the economy of South Africa in the foreseeable future. In addition, I should very much like to try to point out what effect the American economy, and its recovery, is going to have on the future of the USA during the next two or three years in respect of the election or re-election of a President. I think it is going to play a decisive role. In that respect it is going to have a very important effect on the future of South Africa, not only as far as its economy is concerned, but also as far as its foreign relations as a whole are concerned.

I want to begin with another comparison, namely a comparison in respect of the loyalty of the ordinary American citizen to his State and the symbols of his State. Sometimes, when I listen to some hon. members of the official Opposition, I get the feeling that there is a lack of loyalty to the State on their part. This applies in respect of some hon. members. I do not wish to apply this statements to all the hon. members. I just wish to point out that in the USA I got the impression that whether a person was a Republican or a Democrat, he ultimately declared his full loyalty to the symbols of that State. I am referring here to symbols such as his flag, his national anthem, and also his President, even though he is not supported by the entire population. Even those who voted against him declared their full loyalty to him. I shall be very happy the day we are able to say that all hon. members in this House also declare their full loyalty to similar symbols here and to our leaders.

What are you suggesting?

If the hon. member would listen, he would realize what I mean. [Interjections.]

Mr. Speaker, on a point of order: The inference from what the hon. member is saying is clearly that there are hon. members of this House who are not loyal to the State. That he is not entitled to say.

I am waiting to see how the hon. member develops his argument. The hon. member may proceed.

I wish to mention the example of the recent opening of a school in Paarl when the hon. the Prime Minister presented that school with a flag. It was a flag which had flown from the top of this Parliamentary building for a day. The hon. the Prime Minister presented this as an example of the connection which ought to exist between the State and subject. It was a wonderful example.