House of Assembly: Vol107 - MONDAY 13 MARCH 1961
First Order read: Adjourned debate on motion for House to go into Committee of Supply on Estimates of Expenditure from Railway and Harbour Fund, to be resumed.
[Debate on motion by the Minister of Transport, adjourned on 8 March, resumed.]
Mr. Speaker, transport in South Africa has, in my opinion, reached the cross-roads. Our Railways have just about finalized their vast plans of capital development and are now in a position to convey all the traffic that offers; our 25-year national road building plan has also been completed, and new and vaster schemes are imperatively called for. More than R1,400,000 has been poured into our railway system, not without imposing a certain degree of strain and creating difficulties for other branches of our economy. But the new transport need is to invest new and vaster capital in far-seeing schemes for road-building development. The call now is for a new and more dynamic approach to our whole transport problem. We must be careful that, in the spending of the immense sums that will be needed in the coming years, we see that they are invested in such a way as to aid rather than impede the natural development of other forms of transport. The Railways, as the Minister has indicated, have after a hundred years of progress reached a milestone. We must be careful from now on to see that extensions of the railway system are not carried well past the point at which contemporary needs can be economically met in full; that is to say further development should not be aimed at capturing traffic that can be better or more efficiently handled by other forms of transport. That would not be in the interests either of the country or of the Railways. There is a call now for a new and independent assessment of the future general transport needs, for the next ten years at least. We have had valuable commissions—the Newton and Viljoen Commissions I take as examples—which have taught us much of value. We must continue to build on their findings and on our own experience, and all sectors of our economy must be consulted in regard to future plans and they must be listened to.
Mr. Speaker, some of the valuable lessons we must learn and can apply are to be seen in the Minister’s present Railway Budget, which makes apparent, by its very lack of these qualifications, that the following points must be seriously considered: (1) The importance of accurate forecasting and budget control, and the necessity for employing proper financial methods; (2) the importance of a loyal and co-operative staff—properly rewarded to maintain their efficiency and their interest; (3) the importance of building up, and keeping stable, the statutory accounts and funds of the Railways. We must also, I believe, consider (4) the need to establish a fund for the redemption of interest-bearing capital, and take note of (5) the increasing importance of the non-European market to railway revenue: This trend must be closely examined. It springs from the realization that economic integration has made the non-European traveller a valuable market to be assiduously cultivated. We have learned that the “ Future is in the Air ”, especially in relation to first-class long-distance travel and that the Railways should look for increased revenue from third-class passengers, both for long- and short-distance travel. These five or six points I have outlined will cover the broad theme of our comments on this Budget, and the amendment which I will now read will set them out in more precise terms. I move—
- (1) to remedy the obvious defects of present budgetary policy by—
- (a) presenting accurate estimates of revenue and expenditure;
- (b) creating a fund for the redemption of interest-bearing capital; and
- (c) maintaining the stability of the statutory funds and reserve accounts;
- (2) to adopt a reasonable approach to fair demands by the staff and pensioners; and
- (3) to co-ordinate the transport needs of the country with the demands of modern progress”.
In my preliminary remarks made last week I dealt with two main points; first, the unsettling habit of “ haphazard ” budgeting indulged in by all Ministers of Railways, to which this hon. Minister is no exception. He has failed, as usual, to give this House or the country an even nearly true picture of the probable progress of the Railways for the year that is to follow. Secondly, I referred to the belated benefit by way of consolidation which the hon. the Minister had granted to railwaymen, and I expressed the hope that this would not be the only concession he would make to their fair demands that their financial position be improved.
I used, as you will have noticed, Mr. Speaker, the expression “ haphazard budgeting”, because the hon. the Minister has been so widely wrong in his estimating as to tell us that he expected a deficit of some R3,500,000, only to come up with a record-breaking surplus of nearly R20,000,000. There are some, however, who do not think this action is “ haphazard”. I have had it put to me by highly placed officials in the Railways, as well as by important trade union officials, that this is not haphazard; that this is a “ deliberate ” policy which the Minister employs in order to give himself what seems like a good and valid reason for refusing legitimate concessions to railwaymen. I do not accept the Minister’s dictum of last year that trade union leaders “ are not concerned with the financial plight of the undertaking in which they are employed; that they are only concerned about their own demands and getting what they can”. I believe that our railway union leaders have, for more than a generation, and especially in times of strain and stress such as during the last war, during the Sauer transportation crisis and during the Schoeman financial crisis, shown a great sense of responsibility. It is their instinct, when times are bad, to tighten their belts and to work harder. If they feel the Minister is heading for a deficit they are apt to moderate their demands. The Artisans’ Staff Association, for example, after having long subdued their requests, only became clamorous and insistent when (as a result mainly of the railwaymen’s own sacrifice and hard work) it became obvious that the Minister was heading for a Budget with an enormous surplus; when, instead of facing an estimated but false deficit, he was heading for a record-breaking surplus.
I will not go into a very detailed examination of the financial position. I will leave that to those who are to follow me. I shall, however, make certain general comments. I have referred to what the hon. the Minister called his “ conservative ” habit of underestimating revenue (last year by some R18,000,000) and over-estimating expenditure (last year by some R5,000,000). I have had a rough calculation given to me by an accountant, and I give it to the House for what it is worth. He calculates that if the same degree of inaccuracy is applied to the Budget figures given by the Minister last Wednesday, he will have a safety margin of some R30,000,000 to play with in 1961-2. In other words, if the same trend of development holds true for this year as occurred last year, and if the hon. the Minister has miscalculated this year to the same extent that he did last year, he should have an even larger surplus at the end of 1962 than he had this year. I do not claim that these figures are correct. I have not the same facilities as the Minister has for checking statistics and figures …
I hope he is right.
… but I believe there is no greater margin of error in these figures than there was in the guesswork figures the Minister gave us last year. I believe that the hon. the Minister and his Department should take a very serious second look at this year’s estimates of expenditure and revenue. I know that it is difficult to foresee the future of either revenue or expenditure for the Railways. I know that a small change in our economic circumstances, a small percentage fall in high-rated traffic, can easily cause a very big drop in revenue. But surely the hon. the Minister’s financial and budgetary control measures which he introduced and, which he says, have long passed their initial stages, should give him a better safeguard control in the future than he has had in the past. I ask him to realize that unreliable figures and uncertain forecasts place this House and the country at a great disadvantage. If his under and over-estimations are deliberate then they are reprehensible, because it is difficult for us to examine future trends at all accurately, or with any degree of helpfulness, if we are given wildly inaccurate figures.
This time last year, for example, we set out to examine the Minister’s Budget proposals and his financial prospects for 1960-1 in the light of the following information given by him. He foretold a deficit of some R3,500,000. He had made totally inadequate provision for the Betterment Fund and the Higher Replacement Cost Account, both of which were bankrupt. He had taken a loan of R10,000,000, wrongly, and applied it to the Betterment Fund to make it seem solvent. The Rates Equalization Fund was exhausted. The Renewals Fund had been vastly reduced. And, on top of that, as I have said, he anticipated a deficit of R3,500,000. Sir, it is not fair to members of Parliament to expect us to conduct debates on the basis of such inaccurate information. I ask the hon. the Minister, are his figures for this year just as wildly wrong? Can we make reliable estimates of the future on the basis of what he has told us? I am certain that no business could run efficiently on such hit-or-miss statistical information. And the Minister must realize that Parliament and the country are entitled to sounder figures. We must have better and more accurate estimates of revenue and expenditure, as we have called for in my amendment. Mr. Speaker, Dr. Verburgh …
… who occupies the Chair of Transport at the Stellenbosch University, and who well deserves the commendation from the Government side of the House, accentuates in his book, “ the need in South Africa for a financially sound national transport system ”. I believe that if we are to ensure that our transport system is “ financially sound ”, plans should be made, perhaps by way of a sinking fund, for the systematic redemption of interest-bearing capital. Each year Parliament votes to the Minister what he says he needs for capital expenditure. However, no provision is ever made for the redemption of any portion of this capital. As the hon. the Minister will know we are, at the present moment, paying interest at the rate £3 8s. per cent per annum—3.4 per cent per annum—on over R146,000,000 capital deemed to have been invested in the Railways at the time of Union. At 3.4 per cent on this R146,000,000, the interest is about R4.8 million. Let us call it R5,000,000 per year. In 50 years we have paid in interest about R250,000,000 on an original debt of R142,000,000. I cite this to show how past burdens can hamper present development. I think that we must press for the establishment of some form of a redemption fund. The interest burden on Railway capital investment increases every year and now stands at about R63,000,000 or R64,000,000. That is a very heavy burden for Railway revenue to carry. I know that this is not a new idea. It has been canvassed on several occasions by both sides of this House, and by one gentleman last year who is now a Railway Commissioner and who looks down on us from above. It was first canvassed in 1920, and I think it is a great pity that it was not introduced in the ’20s. In the past the hon. the Minister’s reply has been that “ a redemption fund would have to be built up out of revenue ”. We know that, because there is, of course, no other source. He says that “ the stability of other funds is necessary, and statutory funds must be strengthened for the same reason and from the same source ”. In any case, he says, “ the money can be diverted to other and better causes”.
I am not at all enamoured of the hon. Minister’s reasoning. This might have been considered a reasonable reply at the time when he was in the midst of financial obligations occasioned by vast expansion schemes calling for a great deal of capital. But now that these plans have been almost completed, now that the fruits of this capital expenditure should be coming back to him in the way of increased revenues, surely it is opportune to consider the establishment of a redemption fund? Every cent paid off interest-bearing capital decreases expenditure and increases essential revenue. If it is sound business to have a sinking fund, the Railways should have it, because, in the end, they will benefit. Eventually it will pay them. But it must be a standing amount set aside on a regular annual basis of appropriation, binding on the Administration, as a first charge on earnings, so that management cannot interfere with it.
The Minister has used a second excuse. He has said that he “ cannot do it without raising the tariffs ”. I ask him, does he not at the present moment do as Newton suggests, and make the interest charges a part of the burden that is borne by the Railway rates? In any case, as the burden is eased, and as expenses come down, ultimately the rates should follow suit. A gradual easement of interest debts should slowly ease the rating charges.
I would now like to examine the state of some of the statutory funds. I am still extremely unhappy about the condition, for example, of the Betterment Fund. The Minister says, in his Budget statement, these words—
I am giving round figures—
The significant words are: “ This amount … should be sufficient to meet expenditure in 1961-2.” I am not quite sure how the Minister works that out. What is the balance of the fund? He has not told us. I presume he will enlighten us before this debate is finished. Perhaps he will tell us whether it is an audited figure or a mere estimation on his part. As I see it, the Minister does not give us enough facts or figures to examine his statement properly. I think a proper statement of the Betterment Fund account might be something like this: We know that at 31 March 1960 he had a credit balance of just R7,327,607. This was the unspent portion of the “ wrongful ” loan which he had taken to bolster up his Betterment Fund. He had appropriated from net revenue for 1960-1, R3,500,000. He had an estimated expenditure of some R9,711,400. This is the estimated expenditure. The actual expenditure is, of course, not available to us at the present moment from any source that I know. Not having that precise figure, it is difficult—I should think for the Minister as well as for me—to estimate what amount he should carry forward to 1961-2. On the basis of his estimation, I carried forward the balance, which is some R1,116,207. On the basis of that balance carried forward, and having in mind that he is appropriating from the 1960-1 surplus R6,000,000, and conscious of the fact that he has estimated expenditure for the coming year at R9,698,700, and remembering that he is paying back R4,000,000 of the “ illegal loan ” he made to the Betterment Fund, he should show a deficit of R6,582,493.
On the basis of appropriations and estimated expenditure which we have had given us, the hon. the Minister seems to me to be wrong when he says that “ there should be sufficient to meet the anticipated expenditure in 1961-2”. There will not be sufficient in the fund to meet this anticipated expenditure unless his estimated expenditure from the Betterment Fund in 1960-1 is totally wrong. The deficit which I have indicated can go up or down, depending upon the accuracy or the inaccuracy of the Minister’s estimated expenditure as shown in a note on page 1 of the Brown Book for 1960-1.
I think that we should also regard the Higher Replacement Section of the Renewals Fund. It is still in a most unsatisfactory condition, in spite of the appropriation of a further R7,000,000 from this year’s surplus, supplemented by R1,000,000 from next year’s anticipated gross surplus. The hon. the Minister himself acknowledges this, for he said in his Budget speech—
He tells us that the debit balance is over R18,000,000—I think it is R18,056,278. Again I find it difficult to ascertain how he arrives at that figure, because we have no information as to estimated expenditure from this account for the period 1960-1. Perhaps he will give that to this House in due course. I feel he should have done so in his Budget. For 1961-2 he will appropriate R7,000,000 from last year’s surplus, and R1,000,000 from this year’s revenue. He will spend over R7,000,000. So that he will, at best, pay off this debit of more than R18,000,000, a mere R870,335; a most unsatisfactory state of affairs.
I now wish to say a few words about the Rates Equalization Fund. That is in credit to the extent of over R18,000,000. We all know how it is made up. The hon. the Minister of Transport has appropriated R2,701,100 to it this year. But, I ask him, is that sufficient for that fund? This fund is of particular interest to railwaymen. They regard it as their insurance policy against wage reductions should bad times overtake the Railways. The railway user regards it as his surety that railway rates will not be raised arbitrarily. But I would remind the hon. the Minister, and you, Mr. Speaker, will know only too well that responsible members of the Government Party who hold high office at the present moment, and who have had great experience of railway affairs, have insisted that this fund is neither satisfactory nor healthy unless it contains a minimum of R50,000,000 to R60,000,000. I leave that for the hon. the Minister’s consideration.
This Budget fails to provide adequate moneys to maintain the stability of the statutory accounts and funds, and, for that reason, we find it, as we have indicated in our amendment, unsatisfactory. I believe it is essential to build up these railway funds in order to make the Railways function more efficiently, in order to give the staff security and to give their families peace of mind. Mr. Speaker, the present position of the Railways also calls for comment on what I might call the economic as distinct from the purely financial considerations.
In this regard I will confine myself to calling the Minister’s attention to broad trends rather than making detailed comments. I can leave those comments to those who will follow me and are better equipped to handle them. One of the Minister’s major headaches is to devise ways and means of making passenger traffic pay. It usually results in huge losses, running into many millions. In this Budget, I think for the first time, the hon. the Minister gives facts and figures to show the growing importance to railway revenue of non-European passengers. Before I deal specifically with non-Europeans, let me say that I think the Minister must face, in the future, the fact that as air fares come down and as long as the Railways cannot reduce their rates and make them competitive enough to attract first class passengers, this tendency for reduced fares especially in long-distance first class passenger traffic is unavoidable. Specially does that apply with the Skycoach service operating to-day. To a businessman it is uneconomical, it is a waste of money to travel by train on a long journey. People would sooner travel by Skycoach than in a first class train. I am certain that the hon. the Minister must give greater attention to the cultivation of non-European travel as a source of valuable revenue. It is essential that the same tendency that is being shown in commerce and industry should be examined by the Railways, that is, the importance of the non-European market to our economy. I hope that the Minister now has a committee sitting and considering this matter. I feel that he should plan to use non-Europeans on his staff, if necessary, to promote sales and services in this sphere and to cater for the needs of non-Europeans. In this way, in third class short and long-distance travel, lies greater increases in the future passenger revenue.
In passing, I wonder whether the hon. the Minister would tell us in his reply whether he finds it satisfactory that, in round figures, a mere R4,000,000 has been paid, for the second year in succession, as a subsidy for the assistance the Railways gives in conveying passengers to and from out-of-town non-European settlements? In future it will have to be an annual payment, and I would like to know whether the Minister thinks this round figure covers his expenses in view of the increases in traffic. On what basis is this R4,000,000 calculated? What formula is used? I think we will find that the Consolidated Revenue Fund is paying far too little into the Railway funds, and I hope that in his reply the hon. the Minister will enlighten us in this respect.
The same question holds true for the carrying of drought-stricken stock. The hon. the Minister must know that there is no excuse for saying, as he said in his Budget speech, “ this stock was carried at a considerable loss to the Railways ”. No portion of the total loss should be paid by the railway user or the railway workman. That loss should be borne by the general taxpayer and I think the Minister knows it. I hope that he will press the Minister of Finance. It should be known that these benefits which are rightly given to the farmers come out of the pockets either of the railway users or the railway working man. That situation must be newly examined, and I feel sure that he hon. the Minister will do so.
I think that we should also examine the effect of Government policies on the future of the Railways. The indications are that the prosperity of the Railways is now largely dependent upon economic integration, just as is the general prosperity of our whole country. It is because the prosperity of the industrial areas attracts our Africans to the towns, because we have permanent urban African settlements near us, that the Minister can look with confidence in future to new sources of passenger income from this source. Is the hon. the Minister studying the effect on his income and on railway policy of the Government Bantustan policy? Is their policy of border industries, if ever fully implemented, going to make itself adversely felt on the Railways? He must know that the experience in all other countries is that when decentralization takes place to locations off the beaten track of the Railways, such as our Bantustans, Railways cannot efficiently or economically serve these new areas. Railways are the best means of transport between big industrial towns or areas, but not between new and smaller towns, new settlements. The hon. the Minister must know that roads are the only answer to that situation. I wonder whether he is planning in the knowledge that his Government’s policy envisages the setting up of industries inside the Bantu Reserves and on their borders. I want to know how the Minister will align his rating policy with the policy of the Government which seems to me, in certain respects, to be running counter to his own plans. I have seen no signs in this Budget that the hon. the Minister is conscious of the fact that his Government is trying to start an industrial revolution, that they have a policy of building up Black industries in Bantustans and White or semi-White industries on the borders. They will need transport for raw materials and they will need transport for their manufactured products, and the Minister should now be considering what the effect of all this will be on his railway policy.
Sir, the time has arrived for us to re-think many of our problems. We have to see how we can co-ordinate the vast expenditure on roads that must come in the future, with the future of the Railways. It is no Budget secret —the hon. the Minister of Finance gave me a hint when I spoke on the Appropriation Bill —that a larger proportion of the tax levied on road users, levies both on excise and customs duties on petrol—possibly as much as 6d. although even that is not sufficient—should be allocated to the Road Funds. I think that diesel traction should also play and pay its part. This is known, that the present unsatisfactory method of financing the Road Fund must, and will, be changed. We are at the cross-roads. We must consider the whole problem of our transport anew. This Minister will have the responsibility of co-ordinating the various facets; the duty of consulting all sectors of our economy who are interested in this problem. Now is the time to start planning for this great but changed direction of progress. Now is the time when the Minister should divulge his plans, if he has any, for this forward-looking and necessary development for South Africa. The Minister must remember that although he is a railwayman he is the Minister of Transport. He must consider the transport problem as a whole. That is why we have called for plans from him for the co-ordination of all transport in our country.
Let me conclude, Mr. Speaker, where the hon. the Minister left off, by paying tribute to the staff. I have suggested that it would be practical to give them more than mere praise. I have suggested that their demands for increases in their basic wages should be met and that the demands for shorter hours made by the Artisans’ Staff Association should be seriously considered.
I submit too, Sir, that the way in which the hon. the Minister has suggested that consolidation be carried out will most definitely offend certain trade union principles. He has forced a quid pro quo from those with whom he has negotiated. They will have to make sacrifices in over-time and Sunday time, sacrifices which, in principle, will be repugnant to trade unions. I suggest further examination of the matter and consultation with railway trade unions. I have suggested a shortening of hours for the artisan staff, as they have requested. I have been called to task for this. But what they ask would only be bringing them back to a level with industry. A concession such as this would merely be giving them a fair reward for their increased productivity. The railway artisan is really doing two hours’ overtime a week without adequate reward.
Let us not forget that the present Minister, in an election promise a few years ago, said that he would not only give rail workers but all workers a 40-hour week. He made that a solemn promise. He said “ This is not a vague promise, I intend it to be carried out ”. I now say to him “ carry it out ”.
Other hon. members on this side of the House will deal with the staff problems. I have just one more thing to say: I cannot end my speech without telling the hon. Minister to give closer consideration to the welfare of the railwaymen, and especially to have pity on the old pensioner who has served the Railways so well in the past and who now deserves at least some increase in pension from his own funds, which can well afford to bear it.
I second the amendment and wish to support the hon. member for Wynberg (Mr. Russell) in his plea for the establishment of a capital redemption account or sinking fund. On page 48 of the General Manager’s last report the capital account is shown to be £664,823,000, and this comment is made—
Then this is the portion I wish to emphasize—
The hon. member for Wynberg has indicated what it is costing us to follow this principle, and what has happened as the result of capital debt which was taken over at the time of Union, and the enormous amount of money we have paid by way of interest on that original capital debt. If the same principle is to be adopted and we are to go on paying interest at this rate in perpetuity to the Union Treasury, I say that the Railways will certainly by running into very serious difficulties in the future. When speakers on the Government side take part in this debate, as they no doubt will, and draw attention to the many records that have been broken in recent years, I hope they will not forget to comment on this record amount of money paid in interest, £26,500,000 at present per annum. The only way this figure can be reduced is by reducing the Capital Expenditure Account. Our amendment suggests that this step should be taken and soon, and I hope that the Minister will comment on this proposal when he replies to the debate.
I also wish to congratulate all sections of the staff for the remarkable change in the financial position as revealed in the General Manager’s Report for the year ended 31 March 1960. To decrease working expenditure, including depreciation, by £2,919,772 and at the same time to increase earnings by £10,956,322 is a remarkable achievement. Sir, I have never doubted the ability of the staff to rise to the occasion when it is demanded of them, but I do say that they should have been given far better treatment as a result of the efforts they have made than appears from this Budget. In the financial year that is just ending, the Minister estimates that the expenditure will be reduced by about £2,500,000 and revenue will be increased by £9,000,000. Therefore in the two years 1959-60 and 1960-1 the surplus of earnings over expenditure is expected to be R35.75 million, or £17.8 million, i.e., almost £18,000,000 in two years. It is against this background that I want to discuss the Minister’s proposals in regard to consolidation.
The official Opposition welcome the long delayed and long-requested consolidation of cost-of-living allowances with basic wages. We support this step in principle. We would, however, like more details about the actual agreement that has been arrived at. Firstly it would appear that a certain amount of willingness was shown by certain groups of railway men to accept a new principle in regard to overtime payment. As I understand from the Minister’s Budget statement, weekly overtime after consolidation will be paid for at straight rates instead of time and one-third. I think an example will illustrate the position, and I have taken an artisan who has reached the top of his grade and is in receipt of 4s. 10¼d. per hour. He receives 6s. 5¾. per hour when working overtime on a week-day, at time and one-third. Under the new proposals for consolidation such artisan will receive 7s. 4¼ per hour, and when employed on weekly overtime he will not receive any additional pay, that means a sacrifice of 2s. 5¼. per hour as the result of time and one-third not being applied. As far as Sunday time is concerned, the existing overtime rate is to be retained, i.e. double time, but it will be based on the present basic rate and not on the new consolidated rate, and this involves a sacrifice of 5s. per hour. This radical departure from the long-established principle of enhanced payment for overtime is a very serious breach of trade union principles which have always been recognized in South Africa. For a former Minister of Labour to ask workers to accept this departure from trade union principles is, to say the least of it, a most regrettable step. Is this to be a permanent arrangement, or is it a device of a temporary nature to assist the Minister to finance total consolidation? I ask the Minister to answer this specific question when he replies to the debate.
Secondly, no mention is made in the Budget statement regarding the basis on which bonus work payments are to be made. Are bonus work payments to be calculated on the new consolidated basic rate? I wish to put this aspect to the Minister. If bonus earnings are to be based on the consolidated rates, but overtime payment is on the consolidated rate without enhancement, does the Minister not realize the dissatisfaction which will arise between bonus workers and non-bonus workers, particularly between workshop staff and the running staff? I need not emphasize the dangers that may result if the present principles are changed, but what about outside industry and commerce? Does the Minister not realize that he is creating a precedent which may be followed by outside employers? The State will be giving a lead which employers will tend to follow. What is the attitude of outside trade unions? I do not believe that outside trade unions will accept a radical departure from long-established practice. The principle that overtime should be made as expensive to an employer as possible, so that he will not lightly indulge in overtime working, is a long and well-established principle, and I think that under those circumstances what the Minister has outlined in his Budget speech is entirely wrong. The principle of straight payment for overtime rates should never have been put forward in the first instance. I obtained details of a recently concluded Industrial Council agreement for a very well-named industry, the explosive industry, which was recently concluded. In this industry the agreement brought about also full consolidation of C.O.L.A. with basic pay, and under that agreement the basic rate for artisans is 7s. 2¾ an hour. Overtime is time and a half, i.e. an additional 3s. 7¼d. an hour, making a total of 10s. 10d. an hour if overtime is worked, with double time for Sundays, and varying degrees of increases on a service benefit rate resulting in a 9-cent increase in the basic rate after 30 years of service. Here is the point I wish to emphasize, that bonus payments are to be paid on the full consolidated wage. Here is an agreement which has just been completed. There are, I suppose, very few industrial council agreements at present in operation which provide for full consolidation, but this is one of the exceptions and I have indicated the way in which they have met the problem of overtime and bonus payments. The first attempt to negotiate this agreement came to naught because the employers wished to reduce the overtime rate to time and a third, but the agreement was eventually concluded on the old rate of time and a half. I can see no justification for the Minister introducing this departure from this well-established trade union principle in regard to railwaymen. I say that the official Opposition will not agree to overtime being paid for at the same rate as ordinary work. We stand by the long-established trade union principle that the basic wage should be sufficient to enable workers to make a profit on their labour without the need for working overtime, but if an employer wishes them to work overtime he should be compelled to pay extra for it, and that includes the State also. We are strongly opposed to this departure from trade union principles.
The next point that arises as the result of the consolidation is in connection with annual leave payments, injury on duty and sick pay. Will they all be based on the new consolidated rate of pay? I wish the Minister would give some indication when he replies. The fourth consideration is the position in regard to members of the various pension funds, particularly the Superannuation Fund. Here I assume that the new consolidated rates of payment will be the rates upon which pensionable emoluments will be calculated. This will mean a very considerable and welcome increase in the eventual pension benefits of a large section of the staff. It also means that the Administration will be called upon to contribute a large sum on the rand-for-rand principle. What proportion of the R11,000,000 that the Minister has estimated will be spent annually, over and above the actual consolidation of C.O.L.A. and basic pay, will be spent on increased contributions on the rand-for-rand principle to the Superannuation Fund? If one takes 8 per cent as the average rate of contribution to the Superannuation Fund, and R50,000,000 as the amount to be consolidated, the Administration will be called upon to pay R4,000,000 into the Superannuation Fund on this item alone. As the members of the Superannuation Fund will collectively be paying this amount into the fund by way of contributions also, it means that a further additional R4,000,000 will be absorbed in preventing the members of the staff from taking home a smaller pay-packet at the end of every month. This leaves a balance of R4,000,000 if I include the R1,000,000 which the Minister has referred to as being there for certain concessions, to cover other items affected by consolidation, as well as certain unspecified concessions. Will the Minister say what these other concessions are? I hope that one of the concessions the Minister has decided upon is an increase in the C.O.L.A. at present being paid to existing pensioners. I can well understand that the Minister is not in a position to disclose what he would like to do in this regard because he may then be revealing one of the Budget secrets to be dealt with next Wednesday. But I hope that some of the money that the Minister has estimated will be spent as the result of consolidation and other concessions will include an amount which will enable existing pensioners, particularly those who were pensioned prior to 1944, to get some reasonable benefit.
This brings me to the question of the present pensioners and the contributors to the pension funds, and the first question I wish to ask is this: Are contributors to the Superannuation Fund who are due to retire after 1 April 1961, when consolidation takes place, to be given the opportunity of paying back for seven years so as to obtain the full benefits of consolidation when they retire? The Minister will remember that this was done after the last partial consolidation. Will it be done again? If it is, then all pensioners who retired after April 1954 will receive an improved basic pension. Pensioners who retired before April 1944 complained when the adjustment was made for the 1944-51 pensioners, and they are still complaining to-day. It is true from an actuarial point of view that there can be no increase in pension benefits without a corresponding increase in the contributions, but I wonder whether the Minister has tried to convince the pensioner who retired prior to 1944 that he is not entitled to increased benefits because he could not make any arrear payments, and at the same time explain why these pensioners who retired between 1944 and 1951 received increased pensions as well as a lump sum, due to commutation factors, without paying any arrear contributions. I have tried to explain this to many pensioners and it just does not sink in, not because I do not have certain persuasive powers, but it is just one of those things which do not make sense to the average pensioner. He just does not understand it and I do not think we will get them to understand it if the same principle is applied in respect of the new consolidation. I sincerely hope that if the Minister is going to open the fund and make it possible for those who will retire after 1 April to share in the same arrangement, he will issue a very full explanatory memo in respect of this type of adjustment. I think it is the only way in which the adjustment can be made, but it is a very difficult thing to explain. I wonder whether the Minister has read the report of the former General Manager—I say “ former ” because he retired yesterday. On page 141 of the report for the year ended 31 March 1960, he said this—
It is in that spirit that I ask the Minister to consider the position of the pensioners who will not get any benefit whatsoever even if the consolidation is made retrospective for those who are due to retire. I think these pensioners deserve the most generous treatment that the Minister can provide. They deserve a further increase in pension from the Superannuation Fund itself, which at the end of March 1960 stood at the colossal amount of R257,309,886, and is likely to be not less than R277,309,866, or £138,000,000, at the end of March 1961. It is a colossal sum of money and when we bear in mind that the interest alone on this amount is paying for the benefits which are being paid out, one can readily understand, despite what the actuaries have to say, that this fund is in a very strong financial position. I ask the Minister whether he has asked the Joint Superannuation Fund Board for a recommendation in respect of a further increase in pension benefits. I hope he has. The plight of the older pensioner is indeed a most serious one. It was their contributions from 1925 onwards which laid the foundation upon which the fund stands to-day. I hope and trust that the former General Manager’s valedictory address will be given effect to as far as these early pensioners are concerned. This question of the pension fund and those people who are due to retire in the next few months, and those who are already on pension, is a matter which I feel should be given far more consideration than the Minister has indicated in his Budget speech. It may be that he has not finalized his negotiations with the staff associations. I do not know, but the very scant information in the Budget speech has left many people throughout the Union, judging by the number of letters and telegrams I have received, in considerable doubt as to what the Minister has in mind in regard to the pensioners. I think that an early statement to clarify and amplify the Budget statement is urgently necessary. I hope the Minister will take the opportunity when he replies to this debate to answer the various question I have put, as well as others which I sure will come to him from the members of the various funds in the course of the next few days.
Now I want to say a few words about the Disciplinary Appeal Board. The General Manager’s Report for 1959-60, at page 138, reveals that during the year, 964 appeals were heard by the Board, an increase of 324 compared with the preceding 12 months. Now the Board has the power to increase or to modify punishment. This was not always the case, but it is the present position. The reason why the Board has this power is to enable it to exercise a certain amount of control over the numerous disciplinary officers throughout the Union in cases where appeals are lodged. In the year ended March 1960, punishments were increased on 11 occasions, and in 140 cases punishments were modified. I mention this because I am of opinion that the one type of punishment is most unfair, and that is the penalty of a reduction in rank, grade or class, with or without a reduction in emoluments for an unspecified period. I have examined the papers in the case of a servant who had 23 years’ service, nine years as a supervisor without a blemish on his record, who was charged and found guilty of neglect and indolence on duty. In this particular case the Administration suffered no financial loss as the result of this neglect of duty, yet this officer was reduced in rank with loss of emoluments for an indefinite period. This punishment resulted in a financial loss to the man of £25 a month, and if we take this cumulative punishment up to date it is the equivalent to a fine of £600. I mention this because this type of punishment, reduction in wage with a corresponding reduction in emoluments, is a most vicious thing. I know comparisons are odious, but I want to quote a case reported in the report of the Controller and Auditor-General for the same year, where an officer in the same grade was also found guilty of neglect, again in his case there was no financial loss sustained by the Administration, yet he was fined only £2 10s.
You can really do better than that.
It is not a question of doing better, but of bringing to the notice of the Minister a weakness in the Disciplinary Appeal Board regulations, which affects the whole staff of the Railways. The appeal I want to make to the Minister is this. The punishment of reduction in rank should not be imposed as the result of the charge which is limited to a specific case when the entire record of the person charged is not or should not be part of the inquiry. If any servant is to be degraded, his entire service should be taken into consideration at a special inquiry where a full review can take place. I leave it at that and hope that the Minister will do something about this problem. This is not an isolated case. I have had representations made to me after the servants concerned had made representations to members opposite, and because of the Appeal Board regulations the unanimous finding of the Board is final and the Minister cannot do anything about it. But the Appeal Board is in a position to reduce the punishment, and I hope the Minister will take the necessary steps to bring about the required improvements in this regard so that if it is a first offence and the man has a clean record and there is no financial loss to the Administration, he should not suffer a reduction in rank equivalent to a fine of £25 a month for the rest of his service. This punishment is beyond my comprehension and I feel that a servant should be given the advantage of a full inquiry into the whole of his service so that the matter can be seen in its proper perspective.
Now I have a word or two to say in connection with the reorganization of the executive senior officers, which the Minister has indicated will be brought about in the near future. I have no objection to the new proposals. I think that in these high executive positions the responsibility carried by the officers is considerable. The Minister will remember that one of his predecessors, Mr. Sturrock, also recognized this fact before 1948 and did attempt to do something about it but the Minister of Railways who followed him soon put an end to that. I am glad to see that the Minister has conceded that there is considerable responsibility resting on the shoulders of the senior officers and that he has attempted to lighten the burden in this way. Sir, without casting any reflection on any of the officers who have been selected for these high positions, I want to ask the Minister why it is that there have been no promotions from, inter alia, the Chief Mechanical Engineers Sections, the Chief Electrical Engineers Section and the Chief Civil Engineers Section to these high executive posts. With the exception of one, the Assistant General Manager (Technical), all the other officers who have been promoted to these high posts are from the administrative ranks and not from the technical ranks at all. There may be a reason which is not clear at the moment—it is not clear to me at any rate—for promotion to these high posts being confined to the administrative side but I do hope that when the Minister replies he will enlighten us as to why this is happening because I am convinced that the necessary incentive to build up the engineering side in the Administration should be provided and the knowledge that they can also rise to the very highest positions in the service is very necessary. It does appear to me that something is wrong. It may be that the Minister cannot afford to replace these men who have reached the top as far as the mechanical engineering, electrical and civil engineering departments are concerned; that they cannot be replaced so they have to remain there. I do not know what the reason is but I am convinced that the material is there and that it could be used in the highest executive positions in the Administration’s service.
The final point that I wish to deal with was also mentioned in the report of the General Manager for the year ending 31 March 1960, namely suggestions and inventions. I raised this matter a year or two ago, but it appears to me that the Minister has not done much about it. But here we have the position, as reported in the General Manager’s Report: During the year ending 31 March 1960, 2,028 suggestions were submitted by the staff, of which 229 were accepted, resulting in savings amounting to £36,768 being effected. Mr. Speaker, how much do you think the Administration paid out for rewards for this saving of £36,768? On page 131 of the General Manager’s Report you will find the answer— the paltry sum of £349—£349 for effecting savings to the tune of £36,768!
Is that an annual royalty?
No, these are lump sum payments, but the benefits recur annually in most cases. Sir, an average of £1 10s. per invention or suggestion for an average saving of £160 a year. I do not think it is necessary for me to say anything else. These figures speak for themselves. If the Minister wants to encourage suggestions from and inventions by members of the staff, he should attempt to give better awards when suggestions are accepted or inventions put forward to the Administration. Surely more encouragement could be given to this very valuable asset from which the Administration receives such a big benefit. We all want the Railway Administration and its servants to get the benefit of this type of contribution, but if payments are to be made on this scale, then I say it is not surprising that certain inventions are sold to outside industry at considerable gain to the Railway servant concerned, with considerable loss to the Railway Administration. I do hope that the Minister will take this matter into review and see if a better system cannot be introduced, so that the staff will get a more liberal benefit from their inventions or suggestions.
At the outset it is my pleasant duty to convey a number of messages of congratulations. In the first place, on behalf of this side of the House, I wish to congratulate Mr. Piet du Plessis, the former chairman of the Select Committee on Railways and Harbours, on his appointment as a member of the Railway Board. We were sorry to lose him but we know he will be an acquisition to the Railways in his present appointment. In the second place, I also wish to congratulate the General Manager, Mr. Hugo, on his appointment to this high and important position. We know that the cloak of Mr. du Plessis, the former General Manager, has fallen on capable shoulders, and we wish Mr. Hugo success and prosperity in the performance on the important and difficult task which rests on his shoulders. Last, but not least, I wish to congratulate the hon. the Minister, his management and the railway staff on this wonderful achievement of theirs. Everyone admits that this is an outstanding achievement. It is proof of ministerial efficiency and managerial competency; it is proof of hard work and effort on the part of the personnel. Since the Budget, appreciation has been expressed all over the country for the results which have been attained. In this connection I should like to read one expression of appreciation which appeared in the Rand Daily Mail of 9 March—
It is not surprising, therefore, that the hon. members for Wynberg (Mr. Russell) and Umhlatuzana (Mr. Eaton) found it so difficult to find weaknesses and points of criticism in this Budget. What did we get from the hon. member for Wynberg? Last Wednesday he tried to make a point of criticism of the fact that the budgets varied, that there were deficits in some years and surpluses in other years. But. Mr. Speaker, that has been the position all the years for obvious reasons, also when the United Party was in power, with this difference that, during their régime, they had more deficits than surpluses. Naturally, that will again be the position in future, because the Railways are dependent on economic factors and other circumstances beyond its control. That is nothing extraordinary, but what is extraordinary is the fact that over the past two years the Railways have succeeded in attaining this remarkable achievement of showing these large surpluses. The hon. member said that the difference between the Budget and the revised estimates was attributable to inefficiency, but even that, Sir, is not a new phenomenon. The hon. the Minister gave the reasons for that in his Budget statement. It is also a fact that these developmental works which have been completed have had a more favourable effect on the operation of the Railways than originally expected. I say that neither is this a new phenomenon, because, during the last few years of the United Party’s régime, the expenditure far exceeded the estimated amount. I do not wish to quote figures, but I cannot omit giving the figures in respect of one year. In 1946-7 expenditure exceeded the estimated amount by R17,000,000. Even the Select Committee drew attention to these increases in 1946. I say that is not something new. Many factors are responsible for that. When there was a deficit two years ago as a result of an economic recession beyond the control of the Railways, the hon. member for Wynberg attributed that to ministerial inefficiency and managerial incompetency, and he asked for a commission of inquiry into “ the mis-management and financial chaos in which the Railways found itself ”, to use his own words. He predicted that the tariffs would be increased before the end of the year, and the following year, that is to say last year, when the Minister announced a surplus of over R16,000,000, we still heard the old story of inefficiency and incompetency. The hon. member went further and made this far-reaching statement that the Minister had tampered with the books in order to create a false surplus; that the financial position of the Railways was critical. He assumed the role of prophet, a prophet of evil, and what did he prophesy? With tears in his eyes he predicted a dark and dismal future for the Railways and for the poor railway personnel. That was last year.
But they did have a hard time.
In case some hon. members have a short memory, I wish to quote what the hon. member said last year. He said that, as a result of executive and managerial inefficiency, the finances of the Railways were in such a state that the security and standard of living of the workers were in jeopardy. I want to read what he said further—
And now that these wonderful results have been achieved, whereas the hon. member for Wynberg predicted those things last year, he gets up in this House with a sweet and pious expression on his face as though he never made those accusations and never predicted those things, as though he never said that the financial position was such that the personnel would never get their due and that consolidation would never take place. What does he do? Now he says that the position of the Railways is so sound that consolidation alone is not enough; bigger concession should be made to the personnel. Even this R11,000,000 which is being granted is not enough. How can anyone still take notice of the kind of argument which we get from the hon. member for Wynberg? Any schoolgoing child—yes even the hon. member for Wynberg—ought to realize that it makes no impression on anyone. The hon. member is trying to create dissatisfaction and to look for grievances as far as the personnel is concerned which simply do not exist. The United Party is fond of posing as the mouthpiece of the railway workers but we who come into contact with the railway workers, can tell them that the railway staff is not anxious to have the United Party as their mouthpiece, because they know the United Party. They know it is just a matter of bidding for their favour and their votes; they know that by negotiating with the hon. the Minister they will achieve much more. However, I want to deal with one other statement which the hon. member for Wynberg made last Wednesday. He said that if the workers in other countries were treated in such a manner they would have gone on strike or they would have embarked on a go-slow strike. He went further and said that he wanted to warn the Minister “ not to press the railwaymen too far ”. Apart from the fact that that was a stupid statement with a view to what is being done for the staff, I accuse the hon. member of trying to encourage the workers to become obdurate. Last year a small number of hot-heads approached the Minister with demands and issued threats and the hon. member wants to cash in on that. I say that a statement such as that is irresponsible. Fortunately the railway workers will not pay any attention to it because they know that the Government and this Minister have always looked after their interests, even during the years when the Railways were in difficulties. Other hon. members on this side will tell the House what has been done for the railway workers. Mr. Speaker, these things have been done by means of negotiation between the Minister and the staff associations and the latter are satisfied with these concessions which have now been granted.
They are not.
When I talk about the staff associations I am talking about the majority. There may be exceptions here and there but the hon. the Minister is in a better position to know than that hon. member. He was not present at those negotiations. What right has he to say they are not satisfied?
We also have our contacts.
The most priceless thing the hon. member for Wynberg said was this: He said that these improvements on the Railways had been effected because of the criticism which had come from the United Party. I do not want to elaborate on that Sir, except to say this that if the hon. the Minister had done the things which they recommended he would in the first instance not have curtailed overtime and Sunday time, because they were against that; he would have made greater concessions to private hauliers in which case private hauliers would have got away with the major portion of the high-tariff goods with a consequent heavy loss to the Railways. That is what they have continually pleaded for; in that even the Minister would have had to lower the tariff on high-rated goods, because that was what they have always pleaded for, something which would also have had a very bad effect on the revenue of the Railways. I say that if the Minister had paid attention to the criticism and suggestions and advice which came from the United Party the Railways would indeed have been in a financial mess to-day; in that event the future of the railway workers would have been endangered. Sir, during the course of my speech I shall deal with other arguments that have been advanced.
The hon. the Minister and his management have set four objectives for the Railways, in the first place to increase the carrying capacity of the Railways in such a way that all the traffic offered will be conveyed and so that the Railways will future be able to keep pace with development in the country. In the second place to place the finances of the Railways on a sound basis. In the third instance to treat the staff justly and reasonably thereby making them satisfied and obtaining their fullest cooperation, and in the fourth instance to attain and maintain the highest degree of efficiency. Without fear of contradiction I say that all these four objectives have been achieved. As far as the last-mentioned point is concerned, namely efficiency, every effort is still being made to attain greater efficiency and the efforts in this respect will not be slackened. As a result of proper planning and efficient management we have succeeded in giving South Africa an extremely modern and efficient rail transportation system, a system which compares favourably with the best in the world, a system which is to-day capable of meeting the demands and needs of the country and which will in future keep pace with the development in South Africa. The attainment of these objectives, Sir, was a gigantic task; a task which necessitated strenuous efforts and a task which demanded a large amount of capital, but it was an essential and profitable investment which is already paying good dividends to-day. Few people realize the scope of this gigantic developmental programme which has been carried out. Let me show what has been done. I merely want to refer to this in passing: Numerous new railway lines have been constructed; others have been doubled; hundreds of miles have been electrified; existing lines have been altered and improved; bottlenecks have been eliminated—diesel power, modern train control systems and mechanization have been introduced; officials and technicians went overseas and studied the most modern methods in this respect and we are continually developing in this direction; great new workshops and other buildings have been constructed; and in order to have achieved all this proper and effective planning was necessary. In 1954 a Planning and Development Board was established at head office. Another important factor was the firmer financial control system which was introduced into the Railways a few years ago. An Estimates Control Division was established and committees were established in the various divisions.
Who suggested that?
Yes, I suppose it was the hon. member for Turffontein (Mr. Durrant). I am not sure but I take it that that is so because everything that is good originates with them.
That is right.
These financial control measures are to-day paying dividends and we are continuing to build on them. More attention is to-day being given to the financial aspect of the Railways than before. Another sphere in which great progress has been made is the more effective use of labour, and in striving for greater efficiency more attention is being given to studying the type of work to be performed and using labour more effectively. The staff is receiving more intensive training; the bursary scheme has been expanded; the departmental training schemes have been expanded and improved a great deal and even non-Whites are to-day being trained to do better work so that higher productivity can be obtained. Although I have only given briefly what has been done the energetic programme is proof of efficiency and managerial competency. What have been the results of this developmental programme? In the first place the backlog in regard to the carrying capacity has been wiped out and the Railways carry all the traffic that is offered to-day. There is even a surplus in so far as its carrying capacity is concerned. In the second place more effective services are being offered; as a result of the elimination of bottlenecks the service is faster to-day; passenger and goods traffic services have been improved. In addition to that special services have been introduced. I have in mind, for instance, the fast goods service. Here I have the Manufacturer of January 1961 in which they write as follows—
They give the various times that are saved because of that faster and improved service. Mr. Speaker, I cannot omit to refer just in passing to the important role which the Railways have played in times of drought in the drought-stricken areas. Here I have a newspaper cutting which reads: “ Railways fighting to avoid a catastrophe: Tens of thousands of sheep saved daily.” Those are special services which are being rendered. As far as service is concerned the Railways have established more and better facilities for the railway users, lust think of all the new stations and buildings that have been constructed. Then I come to the third result. The third result was that the finances of the Railways have been placed on a sounder basis.
The last point in connection with the developmental programme that I wish to deal with is the question of whether the huge amount of capital that has been spent, more than R1,200,000,000, has been justified; whether it has had the desired effect. The hon. members for Jeppes (Dr. Cronje) and Johannesburg (North) (Mr. Plewman) said, inter alia, last year that there was over-capitalization on the Railways. When we analyse the effect of this capital expenditure on the Railways, there are a few elementary principles which we have to take into account. Firstly, it is a fact that you do not see the results immediately. Big schemes must first be completed and it takes years sometimes before any benefit is derived from them; secondly, irrespective of how much capital is spent, the Railways remain dependent on the traffic offered and thirdly not all the capital spent has a direct effect on operational activities. For example, millions of rand had to be spent on improving the working conditions of the staff. There was a big backlog in this regard. As far back as the days of the United Party régime a commission found that the working conditions of the Railway personnel were deplorable but nothing was done to put the position right. That backlog had to be wiped out and millions of rand had to be spent on creating better working conditions for the staff, on establishing better facilities—sheds were improved, workshops and office accommodation were improved, eating and washing facilities were improved, recreation facilities were improved. That, Sir, is capital expenditure which has no direct effect on revenue or on operational activities. Large amounts had to be spent on creating better facilities for the public, the users of file railways. The hon. member for Jeppes said last year that we had reached the stage on the Railways where the revenue from capital investment had decreased. He referred to the decline in the percentage of revenue from capital investments. I have already referred to capital which has no direct effect on revenue. In providing for the future development of the country’s potential assets have been built up. We who have confidence in the future of South Africa bear the future in mind, because we have faith and confidence in that future and for that reason the carrying capacity has been improved beyond present-day requirements. In spite of all these facts, the percentage income from capital has risen remarkably since 1959. In 1960 it was R9.4 as compared with R5.3 in 1959—an increase of 180 per cent. Revenue per open mile has increased by R1,104 and there has been an increase of 6.4 per cent per train mile. There can, therefore, be no question of our having reached a stage where the revenue on capital investment is declining. The ratio between running expenditure and revenue has improved very much over the past two years. As a percentage of revenue, expenditure has improved by 177 per cent from 1959 to 1960. The indications are there that in the present financial year there will be a greater improvement in this regard. As a percentage of revenue, labour costs, which is an excellent yardstick to measure efficiency, have decreased. In 1944-5 labour costs constituted 57.75 per cent of revenue; in 1959-60 it had dropped to 49.14 per cent, a decrease of nearly 9 per cent. And then the hon. member still talks about inefficiency! No, it is a sign of efficiency. Last year the hon. member for Jeppes quoted figures to show the increase in the cost per unit but even those figures were obsolete because they only went as far as 1958-9 when the effect of these developmental works was not as strong as it is to-day. The latest figures show a big decrease in unit costs. The 1959-60 traffic costs per 1,000 gross ton mile had decreased by 5.05 per cent. Expenditure on traffic services had dropped by 6.79 per cent. The argument and allegations which the United Party tried to make the previous year in regard to operational costs have therefore been proved groundless. The clever economic theories advanced by the hon. member for Jeppes in connection with over-capitalization have been proved false by the results obtained. The big developmental programme which has been so effectively embarked upon by the Railways is to-day showing excellent results and the standard of efficiency is higher to-day than ever before.
I just want to give the House a few more figures to show that there is greater efficiency than ever before. In respect of every 100,000 ton of traffic conveyed in 1947 186 Whites and 170 non-Whites were employed; a total of 356 employees. In 1959 that figure was 130 Whites, 138 non-Whites, a total of 268 and in 1960 it had dropped to 125 Whites and 121 non-Whites, a total of 246. Therefore, in respect of every 100,000 ton of traffic there are to-day (in 1960) 110 fewer employees than there were in 1947—excellent proof of greater efficiency. For every 1,000 train and locomotive miles 516 ton of traffic was conveyed in 1947-8; in 1956-7 598 ton traffic, in 1959-60 712 ton traffic, an increase of 196 ton traffic per 1,000 locomotive and train miles.
But we are not the only people who say that the Railways are more efficient to-day, Sir. Here I have an issue of the Financial Mail dated 10 February 1961, before the Minister had made his Budget statement. The Financial Mail writes as follows—
Efficiency, providing a competitive economic service, cuts in expenditure and lots of hard work improved the results of practically every sector of the Railways’ empire.
Probably, industry, which has had many bones to pick with the Railways in the past, would wish to pay tribute to the fine recovery which marks the end of the present general manager’s reign.
We are not the only people, therefore, who say that the Railways are efficient to-day. The hon. member for Wynberg and other hon. members who still come with this type of criticism are like Rip van Winkel, they do not realize that over the past few years the Railways have undergone an unbelievable transformation. A very important development which has taken place in recent years is that the Railways, after they had made up the leeway in respect of their carrying capacity, have paid more attention to sound financial measures. I have already referred to the stricter financial control and other measures which have already yielded good results and which are still being expanded. The finances of the Railways are to-day on a sound basis. The hon. member for Wynberg has referred to the Betterment Fund and the increase in the replacement cost under the Renewal Fund. It is true that as a result of the large betterment works that had to be undertaken, the funds had become somewhat exhausted. The Betterment Fund always varies according to the requirements. It does not remain constant. The Minister has made ample provision for this fund from his surplus: R10,000,000 will go to the Betterment Fund; of which R4,000,000 will naturally be in reduction of the capital amount which was drawn from Capital Account. Seven million rand of the surplus will go towards the increase in replacement costs and provision is made for a further R1,000,000 in the 1961-2 Budget. That was another backlog, but I wish to point out that higher replacement costs form part of the Renewal Fund and on 20 November 1960 the Renewal Fund stood at over £63,000,000, one of the highest figures it had ever reached. The position is therefore not as unfavourable as the hon. member would make us believe. Once it is strengthened by this amount of R2,701,000 the Rates Equalization Fund will ultimately stand at R18,000,000. These funds are gradually being built up as our finances allow it, which is, of course, a sound principle. I think the hon. the Minister will agree that it will be better to make adequate provision for contributions to these funds from net revenue in the Appropriation Account in the main Estimates, so that contributions will not come from surpluses alone. We are apparently heading for that stage.
What is remarkable, Sir, is the fact that the Railways have been able to obtain these results without having found it necessary to increase tariffs lo any great extent. Since 1948 Railway tariffs have been increased by only 65.7 per cent, whereas wholesale prices of locally manufactured articles have risen by 108.7 per cent. Since 1945 to 1958 the railway tariffs in other countries have risen as follows (that is to say during the same period in which our tariffs have risen by only 65 per cent): In the United States, 98 per cent; Canada, 113 per cent; Great Britain, 124 per cent; South Africa, 65 per cent. What makes this comparison even more favourable is the fact that many of those countries show a very big deficit to-day. Britain, for example, has an accumulated deficit of over R740,000,000.
The Railways constitute an important factor in the political economy of South Africa. It has made a tremendous contribution towards the progress and development of South Africa. This modern railway system which we have to-day will continue to make a great contribution towards the development and prosperity of the Republic of South Africa.
I am sure the hon. member for Vasco (Mr. C. V. de Villiers) will excuse me if I do not reply to his very comprehensive review of the Railway position. But I have an amendment to move and I wish to make out a case for that amendment. I move the following further amendment—
To omit all the words after “That” and to substitute “ this House declines to go into Committee of Supply on the Estimates of Expenditure from the Railway and Harbour Fund unless and until the Government agrees to a plan for the capital reconstruction of the South African Railways—
- (1) by writing down capital in respect of obsolete assets acquired prior to 1950;
- (2) by creating a Capital Redemption Account; and
- (3) by granting relief for a period of five years from the burden of interest to the extent of R30,000,000 per year;
in order to enable the South African Railways—
- (a) to restore Railway funds to adequate levels;
- (b) to relieve Railway workers from recurring threats to their earnings and standard of living;
- (c) to permit of a review of Railway tariffs with a view to lowering transport costs; and
- (d) to consider the complete reorganization of the structure and co-ordination of all forms of transport, whether public or private”.
Before I start, I would like to make one opening comment and that is that I believe that these stereotype Railways debates we have every year are totally unrealistic and the sooner we change our method in this House, the better. We in this corner of the House believe that the discussion of the Railway Budget in vacuo, without simultaneously reviewing the problems of the whole of the transport system of this country, is completely outdated, and as long as we go on in that way, we will tacitly acknowledge the continuance of the present monopolistic position of the Railways. There is, therefore, in our opinion a crying need that in the transport field we should run the Railway and the Transport debates concurrently, so that every aspect of transport can be considered on an equal basis. We think it is quite wrong to consider capital expenditure on Railways without simultaneously considering capital expenditure on other forms of transport, such as road transport, petrol pipelines, or whatever it may be.
I want first of all to review very briefly certain salient features of the Railway Budget, so as to show the background against which the Progressive Party has put up the rather sweeping and novel proposals that are included in my amendment. First of all, I want to review the fact that there has been a dramatic improvement in the position of Railway Finances during the past two years. This improvement, however, has been occasioned by certain remarkable features. The first of these is the fact that irregular methods of finance were used in respect of the year 1959-60 to secure an improved return; secondly, that heavy sacrifices were called for from the operating staff; and thirdly, that there has been a considerable rise in tonnage of goods carried by the Railways, due very largely to the increased capacity of the Railway system of this country; fourthly, to the undoubted fact that certain of the improvements must be attributed to the modernization and the greater degree of efficiency that has been introduced by the hon. the Minister in the Railway Administration and which are now making themselves felt for the first time.
I want to make certain comments on the last three Railway Budgets. In respect of the year 1959-60 the hon. the Minister budgeted for a deficit, as indeed he has done in respect of the subsequent two budgets, and I think the most remarkable feature of that year, 1959-60, in respect of which the final figures were produced earlier this year, is the fact that there was a very marked discrepancy between the revised estimates and the final figures. I have looked through the Railway accounts for many years, and I have found that invariably there was a close association between the revised Estimates and the final figures. It is remarkable that in respect of that year there should have been in the very short space of about five weeks, between the end of the year and the Budget speech on 24 February, an improvement of not less than £6,000,000. That should be explained by the hon. the Minister. In the second case, I want to refer to the year 1960-1, which is still not completed. In respect of that year, the hon. the Minister budgeted for a net deficit, after appropriations, of £1,750,000, and the revised estimates show that he anticipates a surplus of no less than R19,000,000. That is a phenomenal increase, and I think that is one that should be explained; either the hon. the Minister was excessively cautious or else he had some objective in framing his original Budget in that way. It does appear from an examination of statistics that are available that even that estimate may be a considerable under-estimate as compared with the final result. We may have the same wide variation between the revised estimates and the final figures as we had in the preceding year. This year again, the hon. the Minister has budgeted for an estimated net deficit, after net appropriations of R1,500,000, after providing for the consolidation of cost-of-living allowances to the tune of approximately R12,000,000.
The feature that stands out is that although this gesture is being made to the staff, I do not believe there can be any real satisfaction on the part of the staff that their position is secure, because we have had three concurrent deficit budgets and there is no knowing whether the estimates in the year will prove to be correct in view of the uncertainties facing this country this year. That is a feature which I think must be taken into account: The uncertainty as far as staff security is concerned.
The next point I want to make is this, that the estimates in the last two years, for 1960-1 and 1959-60, have been so wide off the mark that it makes accurate commentary on the Budget an extremely difficult proposition for members of the Opposition. I hope it will be possible to get more accurate budgeting in future.
The next point I want to refer to is the question of interest. If one studies the manner in which the interest burden has been growing during the last six years, one finds that the interest debt has risen from R14.6 million to R30,000,000 this year; in 1956-7, it was £14.6 million, the next year R17.1 million, the next year R20,000,000, the year after that R23,800,000 and last year it was a little over R27,000,000 and for the current year it will be approximately R30,000,000. The future trend is, of course, entirely dependent on future capital investment policy, but this phenominal growth in the capital structure of the country is something, although we may be proud of it, which creates a considerable burden for the Administration. With this astronomical growth in the interest burden, it seems to me that it will be several years at least before the increased traffic which will inevitably come with the increased capacity of the Railway system, earns sufficient revenue to offset the effect of the increase in interest.
The first feature I want to refer to is the distressing position of the Railway Funds, because they are in a very depleted state at present. First of all there is the Rates Equalization Fund which is exhausted but will receive R15,477,794 from net revenue appropriation in respect of the year 1959-60 once the Finance Act is put through and a further R2,701,000 in respect of 1960-1. But even at this figure it stands to my mind far lower than what it should be when one takes it in relation to the amount that is paid out in railway salaries, which in the case of the Europeans alone is in the neighbourhood of R260,000,000 per year. To be an adequate reserve to afford protection to the staff, I think the fund should be no less than R50,000,000. The balance standing in the Betterment Fund on 30 November plus net appropriations for 1960-1, is R5,772,000 and it appears to fall far short of its commitments in respect of the years 1960-1 and 1961-2. Moreover there still remains a debit balance of R6,000,000 repayable to Loan Funds after net revenue appropriation of R4,000,000 this year from the 1960-1 Account.
The next item is the Renewals Fund and this account appears to be even worse off, because despite a balance of R63,000,000 as at 30 November, and despite net revenue appropriations in respect of 1960-1 of R7,000,000 plus a further R1,000,000 on the 1960-1 Account, there still remains a debit balance of R18,000,000 in the Higher Replacement Cost Account. So these three funds in order to be restored to the level which we think is desirable in relation to the size of the Railway Budget to-day, should in our opinion require an infusion of no less than R60,000,000 to R70,000,000 in the course of the next few years. Viewed against that background of the problems confronting the Railways, there seems to be very little likelihood that we can count on securing that desirable state of affairs in the next two or three years. The next feature I want to comment on is the traffic rate.
A study of statistics submitted to this House by the General Manager, reveals some remarkable information. In the first place, there has been a considerable upsurge in the carriage of the goods handled, made possible by the increased railway capacity. It is also apparent that there is still a substantial reserve capacity available. The second point is that the increases are almost entirely confined to the import-export traffic; in other words due to the buoyant conditions overseas, we are flourishing in the reflected prosperity of other countries, and the demand for our products has far outweighed the disadvantages we have suffered through boycotts from one small country to another. This applies particularly to ore, manganese, chrome, coal, minerals, also to maize, and also to general imports and to the timber traffic. On the other hand, the balance of the traffic consisted almost entirely of internal traffic, and there, if one studies the figures presented to us, it is quite obvious that internal traffic in almost every sector has either been static or has been receding during the past year. This, of course, is undoubtedly due to lack of confidence both in this country and overseas in the Government’s policy, and this has been reflected in a record outflow of foreign investment capital, in a net outflow of emigrants and in a gradual slowing down in the tempo of industrial and commercial expansion. Nor has that been improved in any way by the political developments in connection with constitutional changes in this country.
This static or receding trend is shown particularly in respect of general merchandise; in respect of all building material; all machinery and particularly of foodstuffs. So if one studies the accounts, on balance, I would say that had it not been for this buoyant demand from overseas, the Railways would have had a most disastrous year.
I want to make one further observation on these figures and that is that I think one is entitled to draw a remarkable conclusion and that is that the increased earnings of the Railways are almost entirely connected with the long-distance haulage for export of low-rated minerals and an item such as maize, and, Sir, if the Railways can produce such a remarkable improvement in figures with this type of traffic, then I believe it is going to upset all our inherent prejudices which make us believe that the Railways are so completely dependent on maintaining such a high proportion of high-rated traffic. Of course, it will not be possible to deal with that adequately until the production of the final figures. But I do believe that it may be possible to recast our ideas on this very vital question.
Now I want to say a few words also on the passenger figures, because closely linked up with the internal traffic of general merchandise is also the falling returns in respect of first and second class passenger traffic, both for long-distance and short-distance passengers. And may I say in passing that the remarkable increase in respect of third class passengers, both long distance and short distance, reveals the extent to which the Railway system to-day is becoming more and more dependent upon an integrated society in South Africa. I believe it is a fair criterion to level at the Railways to-day that whether it is goods or whether it is passengers, the Railways do not do sufficient to encourage more business in that respect. They do not go out of their way sufficiently to sell transport. I believe it is high time that the Railways should get new ideas on that subject. I believe that system managers should be given a much greater degree of autonomy in the granting of excursion fares to suit particular developments, or events or attractions which occur in that particular sphere from time to time. I think much more should be done in this way to fill the empty seats in our passenger trains, and I believe that an intelligent campaign of this sort could do much to improve these returns. I also believe that the Railways do not make sufficient of the inherent advantages of railway travel. We know the high mortality rates on the roads to-day, and I believe that if the Railways concentrated more on the fact that they can offer safe, punctual, comfortable and speedy travel with suitable allowances for car-owners trucking their cars, they could get a great deal more business than they do.
In the case of goods too, I believe that the volume of traffic could be greatly increased by an intelligent revision of our tariff rates. After all we have the truck capacity, we have the rolling stock capacity. In the first place there is the question of a reduction for full car loads which I believe would make a very great difference to the Railways to-day. Not only would it mean a lowering of the cost to consumers and stimulating the demand for goods, but it would also mean an accelerated turnround for vehicles, in that way earning a greater amount of revenue from a given amount of rolling stock. The lowering of certain high-rated tariffs, which are unreasonably high in my opinion, is very long overdue, and this applies particularly to foodstuffs and to certain classes of merchandise and manufactured goods, because I believe that those people who use the Railways will agree with me that many of the high-rated tariffs are so high as to act as a restraint on trade. This question of tariff revision calls into question le chief functions of transport, and I believe the chief functions of transport are two: One is to speed delivery and the other is to lower transport costs, and any move of the Railway Administration in accelerating delivery—and I do not simply mean in respect of express trains, which is admirable, but not sufficient— and also any reduction in tariffs, will, I believe, by lowering costs lead to a considerable increase in demand on the one hand and a considerable increase in productivity on the other hand, which in turn would lead to a higher standard of living in this country and also redound to the benefit of the Railways themselves. But, of course, under present circumstances it is very difficult for me to come to the Minister and ask for tariff reduction.
The fifth feature I want to refer to is the question of research and planning, because I think the Budget speech was significant for its particular failure to make any mention of the forward plans of the Railways for expansion. We seem to have reached the end of an era with the retirement of Mr. du Plessis and also with the termination of the five-year plan. I want to know, and I think the whole country wants to know, what the Railways have in mind for the future. For the last year or so we have been regaled with comparisons of present figures with what took place ten years ago or 50 years ago, and of course we are all extremely proud of those achievements. But we have had enough of these comparisons. It is the future that interests us. This is a very vital stage in railway development and that is why I would have liked to hear the Minister say something about the future plans. I want to list a few things that we would have liked to have heard about. In the first place, I think, there is still a very urgent call for one particular new line and that follows from the virtual decision by the British Government to build a railway through the heart of Swaziland to link up with Gollel and that is the construction of a railway line connecting Piet Retief with Gollel. I say that with due regard to the enormous cost involved because I believe it would have such a fantastic influence in developing Northern Zululand the Makatini area and the Pongola area and that from an economic point of view it would be fully justified. I believe no time should be lost in initiating the building of such a line. The second matter about which we would have liked to hear something is the potential bottlenecks on our main lines. If one studies the tonnages that are being handled by certain sectors of the Railways to-day there is a potential bottleneck in the event of any upsurge in business on the section from Union right through Volksrust down to Ladysmith and from Ladysmith to Bethlehem. I believe there is another very serious potential bottleneck in the single regraded line between Umlaas Road and Pietermaritzburg and I would like the hon. the Minister to tell us something of what he proposes to do in regard to these two items.
Might I also mention another point, and that is how much progress is being made with the railway plans in view of the development of border industries. Certain areas, of course, stand out pre-eminently. One of them, of course, is the East London area with its proximity to the Transkei. I wonder why it is that of all the railway lines linking the interior with the coast, the Cape Eastern Line from East London, Queenstown to Burgersdorp is the only line that has not been completely regraded. I also think that the hon. the Minister could tell us something about the future of the industrial complex of Colenso-Ladysmith and Newcastle, because he cannot be ignorant of that most remarkable piece of socio-economic research the Second Report on the Tugela Basin which has been produced under the chairmanship of the eminent scientist, Dr. Scully, and produced by Mr. Thorrington Smith on behalf of the Natal Provincial Council. That area, the coming industrial heart of South Africa, is one to which the Railways should now be devoting their fullest attention. Would the hon. Minister tell us something of what he has in mind there?
We are also aware that Foskor, Iscor, Escom, Sasol, all have big plans for expansion, and yet not a word has been said by the hon. Minister in regard to the necessary improvements in railway services for those vast financial concerns.
I have only referred to a few of those urgent problems, but it is apparent that there is still a very great capital expenditure programme required if we are to be in a position to take advantage of the next industrial upsurge, which I believe, must inevitably come to us in the near future when we find the solution for our racial problems in this country.
It is obvious then from what I have said, that there is an urgent need to continue with considerable capital expenditure; there is also a need for a more enlightened attitude towards other methods of transport which can reduce costs for the community, and I think all railway users will also agree that there is a crying need for tariff reform. There is also this compelling need to raise and maintain the morale of the railway workers, by freeing them from these recurrent threats to their earnings and their standard of living through deficits in Railway Accounts. There is also the increasing need for greater efficiency by getting rid of excessive diversity in activities which is becoming characteristic of the Railway Administration to-day and for the introduction of a greater measure of specialization, as is being done to-day in case of the Airways, and which could well be extended to harbours too. And yet, Sir, action in every sphere I have mentioned is practically precluded or paralyzed by the fear of losing revenue, or of showing deficits, and it is accentuated by the extremely vulnerable position of the Railway Funds and by the growing burden of interest arising from a programme of extension, and which will continue for some years to come. Moreover, it is affected by the heavy capital debt in relation to the earning capacity of the railway system as a whole, and it is also influenced by the smallness of the gap, even in the most favourable years, between any gross surplus that is made and a deficit. In other words, the hon. the Minister is always working too close to the red. In those conditions I believe it is quite unrealistic to ask the hon. the Minister to introduce these changes and take the drastic steps that we suggest because he is, so to speak, in an economic straight-jacket all the time. What he needs above anything else to-day, in our opinion, is complete freedom of action. It is in that spirit that we have put forward the proposals that are embodied in our amendment to-day.
It seems to me, Mr. Speaker, that what the Railways really need is a breathing space in which they can put the whole of their financial and administrative system on a sound basis. A position of preparedness for the next great burst of industrial activity should be sought, so that we can meet the next demands feat flow from that expansion. The question of what we are to do to assist the Railways to put their house in order and to give them a new start, is a question that has confronted other countries as well. I would like to draw the attention of the hon. the Minister to the example of England where an imaginative plan of action has been put forward for capital reconstruction and for relief from the crushing burden of interest arising from precisely the same sort of problems with which we are faced in this country. Of course, the hon. Minister may say that our railway system and the British railway system cannot be compared. He may say that in England they have been running on a system of deficit budgeting financed by repayable advances from the Treasury for the last five years. In doing so they have accumulated a deficit of over £400,000,000 but, on the other hand, they have had the benefit of a competitive transport system. They believe that to write off the £400,000,000 loss on the railway system has been far more than compensated by the advantages incurred for their industrial system by having competitive transport systems.
The comparison with England is not really so remote, because they have had a modernization scheme running over the last five years and involving an expenditure of something like £1,500,000,000. Basically the problems, not only of England, but also of South Africa— and indeed, all major railway systems all over the world—are these: First of all the railways, as a long-standing method of transport, are faced in certain spheres of their activity, by obsolescence. Secondly, they are faced with the problems of how to compete with modern forms of transport which offer advantages which no railway system can offer and which are free from the inflexibility of a railway system and the appalling costs that are attached to it. Thirdly, they are faced with the problem of how to secure an adequate financial return on the fabulous costs of any capital programme, such as is still essential to this country if we are to have an adequate transportation system.
I want to make it quite clear, Mr. Speaker, that I am the last person in this House who would urge any scaling down or cessation of the railway programme of expansion.
These problems exist to virtually the same extent in every country that is highly industrialized. I have studied the financial returns of all the continental railways for the years 1957-8, and I find that, with the exception of Holland and Switzerland, every single country in Europe which has a big railway system made a substantial loss in both years. It is for this reason that we urge those steps as detailed in our amendment. First of all, we urge a plan for capital reconstruction involving the scaling down of capital in respect of obsolete or obsolescent items acquired before 1950 and which are still standing in the capital account at their original cost. I believe I am right, but I say this subject to correction, in saying that there are a number of items particularly things like buildings and installations of that sort, items which do not come within the operation of depreciation as do plant and equipment and tracks and so on; and those items should be removed from the capital account. I believe that that is the first thing the Railway Administration should do. I believe that to-day the Railways are suffering from an over-loaded capital account.
In the second place, I suggest that there should be relief for a period of five years, by funds which should be supplied from the Consolidated Fund in the way of a substantial proportion of the interest arising from the modernization and expansion scheme, to the extent of no less than R30,000,000 per year. In explanation, let me say this: We have more than doubled the capital of the Railways in the last ten years, and the great benefits that will flow from that fantastic programme of expansion will, I believe, not be fully felt for another five or even more years. I therefore believe the Railways are entitled to that relief over that period. I would make it clear that the question of this relief amounting to R30,000,000 a year, would be in the form of advances from the Consolidated Fund and which would not be repayable at the termination of that period.
Thirdly, I think that the Railways should institute a capital redemption account and so try and ensure that in future the capital account of the Railways does not become overburdened as it has done in the past. I believe that money should be set aside every year, from revenue, which, placed in a fund at 3 per cent compound interest would, over an extended period of time—say 99 years— counter-balance the whole of the cost of that capital development.
The effect of all this would be to give the hon. the Minister freedom. It would give him five years in which to put the Railway finances completely in order, and it would enable him to take bold and imaginative steps to revise the tariffs and reconsider the Railway attitude towards competitive forms of transport. It would also enable the hon. the Minister, without any fear of incurring deficits or sailing close to the wind, to make provision which would ensure that railway workers would always get a square deal and that their earnings would not be in jeopardy. It would also, I believe, confer lasting benefits on the whole of our economy, particularly industry and the general users of the Railways. And, as I have said, it would give the hon. the Minister ample time to reorganize.
It follows obviously, from my remarks, that this relief in the form of a lightening of the burden of the interest would have to be borne by the general taxpayer. If the money was provided by the Consolidated Fund it would have to be found under general taxation. In that way the whole burden of the reconstitution and reorganization of the transport system could be spread over the general public of South Africa. But I believe that the public of South Africa would be willing to do this, knowing the fantastic advantages which would accrue to them in the long run by giving the Minister of Railways this opportunity of maneuvering and getting his finances straight.
I am not going to comment on the proposal that is also included in this amendment that during this moratorium, so to speak, of five years, the Minister could then review the whole question of the relationship of other forms of transport, both public and privately owned, with a view to securing a better co-ordinated system. I do not have to remind the Minister that virtually every responsible organized body of railway users throughout the country has, time after time, during the last ten years, pleaded for this to be done. It is quite apparent that to ask the Railways to do a thing like that without giving them relief and without giving them time to make preparations for the change, and without assuring themselves in advance of what the position will be when it is completed, is asking too much of the Minister. And so I put this plea forward, and I hope that it will be accepted in the spirit in which it is offered. I firmly believe that this country is on the verge of fantastic expansion. I believe that this is the last golden opportunity we will have to embody new ideas in our transport world. And, with the coming of the new General Manager, Mr. Hugo, I tender these remarks from the Progressive Party. I move.
I should like to confine myself to the amendment introduced by the hon. member for Wynberg (Mr. Russell), and I am sorry that the hon. member is not in the House at the moment. In the first place one of the obvious defects (as the amendment puts it) which he wants to remedy in the present budgetary policy is the fact that the hon. the Minister fails to submit accurate estimates of expenditure and revenue. The hon. the Minister is accused of having made inefficient estimates of revenue and expenditure for the year which is now drawing to a close; of having under-estimated the revenue by 4.4 per cent. That is much less than the 17 per cent by which former Minister Sturrock was out in his estimate in 1941-2 and much less than the 10 per cent and the 14 per cent by which he was out in 1945 and 1946-7 respectively. If, however, the head of an undertaking under-estimates his revenue and over-estimates his expenditure, as has happened in the case of the hon. the Minister, then he is still quite on the safe side. The Minister over-estimated his expenditure by R5,099,000. But in 1944 and 1945 Mr. Sturrock under-estimated his expenditure in both years by an amount of R10,000,000, while in 1947-48 he under-estimated it by R14,000,000. I repeat that if you under-estimate your revenue and over-estimate your expenditure, you are still on the safe side and it testifies to a careful and wise policy, a conservative policy. I have much more confidence in a Minister who estimates in that way than in a Minister who is inclined to overestimate his revenue and to under-estimate his expenditure.
The criticism of the hon. member for Wynberg, who is still not in his seat, was so weak that apparently he does not take sufficient interest to be present while this debate is going on. That is a great pity. But on 13 March 1952, the hon. member stated in this House that the Railways should give more attention to improving their transportation facilities and be less concerned about their own profits. At that time his attitude was that more attention should be given to transportation facilities and that that was more essential than to worry about the profits made by the Railways. Today, however, the profit made by the Railways is of greater importance than the question of improved transportation facilities. Although the Railways to-day are in every respect meeting the requirements of a transportation undertaking, we do not get a single word of thanks from the hon. member for Wynberg. He does not even thank the hon. the Minister for the sound financial results achieved. No, what we get is criticism because these excellent financial results were not foreseen. The Minister budgeted for a deficit of R3,506,000 and he hoped to end with a surplus of R19,701,000. The hon. member for Wynberg must not pretend that this is such a terrible thing that has never happened in the history of the Railways. May I remind him of the fact that in 1941-2 Mr. Sturrock budgeted for a surplus of R89,000 and ended with a surplus of R21,000,000? Mr. Sturrock was therefore out by a million rand more than the hop, the Minister in this case.
The hon. member described railway finances under the National Party regime as “ a disturbing switchback of surplus and deficit financing ”. But the hon. member does not know the history of the Railways in South Africa. In point of fact the history of the Railways is a history of continual fluctuations between surpluses and deficits. Mr. Speaker, does he not know that since 1910 the South African Railways have had 26 surpluses and 24 deficits and that no surplus or deficit has ever been repeated for longer than a few years? Railway finances have continually fluctuated between surpluses and deficits. Why then does the hon. member describe it to-day as weakness on the part of the National Party régime; why does he try to represent it as weakness on the part of the hon. the Minister and his management? The hon. the Minister has only been Minister of Transport for the past seven years; Mr. Danie du Plessis has been General Manager of the Railways for the past nine or ten years, and the National Party Government has only been in power for 13 years. The United Party was in power for nearly 30 years out of the 50 years since Union, and under its Ministers and General Managers there were the same fluctuations between Railway surpluses and deficits.
The hon. member goes on to say, “ It is alarming to this House and to our country’s finances and to our economic development to have this uncertainty ”. I can well understand, Mr. Speaker—and indeed everybody accepts this—that Railway revenue is a barometer of the economic development of the country. I can also understand perfectly well that tariff increases or the lowering of wages of the railway staff may have a detrimental effect on the economic development of this country. But how railway deficits and surpluses and the fluctuations between deficits and surpluses can be disadvantageous to the country’s economy is something which I cannot understand; it is something which exists only in the economics of the hon. member for Wynberg. I think the hon. member is comparing things here which are simply not comparable. But let us accept, for the sake of argument, the hon. member’s argument that fluctuations between deficits and surpluses in railway budgets do have a detrimental effect on our economy, then I say that it has had that detrimental effect not only under the National Party régime but throughout the history of South African since 1910. And in spite of this uncertainty, which the hon. member suggests is detrimental to our economy, we have had enormous development in South Africa; our economy has grown into a mighty strong economy, as this record surplus reveals. When South Africa fares well in the economic sphere, then the Railways also do well. This record surplus also refutes the United Party’s story that we are allegedly heading for an economic recession. They are too unpatriotic to rejoice with this country and to congratulate the Minister on the fact that the Railways are doing so well. This record surplus is a reflection of the strength of this country’s economy. In spite of Sharpeville, in spite of all the disturbances which took place last year, in spite of the state of emergency that we had in this country, our economy has gone from strength to strength. In spite of the referendum and the outcome of the referendum, in regard to which there was so much scaremongering and people were told that it would lead to our economic setback, our economy has steadily grown, a fact which is reflected in this budget with its record revenue and its record surplus. No wonder that the Cape Times expressed its surprise in these words—
I am glad that the United Party’s criticism is not going to make the hon. the Minister deviate from his course, because this year he is again estimating just as conservatively as he did last year. Whereas the total revenue of the Railways for the present financial year was 7.1 per cent more than in the previous year, the Minister is budgeting for a revenue increase of 1.1 per cent; and, whereas the expenditure for the present financial year was 3.2 per cent more than in the previous financial year, he is budgeting for an increase of 3.4 per cent in expenditure. Nobody can find any fault with the fact that his estimate of expenditure is practically the same as for the previous year, because I believe that the efficiency campaign on the Railways will again have its beneficial effects this year. His estimate of revenue, on the other hand, is once again very conservative, and I shall not be surprised if the figure is a good deal higher, unless import restrictions adversely affect the Railways. However, I subscribe to the policy of rather being on the safe side in estimating revenue. It creates confidence in the country, it creates confidence in the minds of the railway workers, and I am grateful for the fact that the Minister is continuing to pursue that course.
As far as the second part of the amendment of the hon. member for Wynberg is concerned, he says that there is a second defect that he wants to remedy in the present budgetary policy; he wants to create a fund for the redemption of interest-bearing capital. I take it that the hon. member realizes, of course, that the money for such a fund would have to come from revenue.
I said that.
A huge sum of money would be required for that purpose in order to make it worth while at all. The hon. member went on to say—and, indeed, this can also be inferred from his motion—that they want the Betterment Fund, the Renewals Fund and the Rates Equalization Fund to be strengthened. The money for that purpose would also have to come out of revenue. Then I also want to add this in connection with the amendment of the hon. member for Wynberg, that what is most important of all, to my mind, is what his amendment omitted to say. I should have liked to know whether the United Party still stands by the policy of giving greater concessions to private road hauliers. If they still stand by that policy—it is not mentioned in the amendment—it means a further sacrifice of revenue by the Railways. Because we know that private hauliers, if greater concessions were granted, would only take the cream of the traffic, namely the high-rated traffic.
But the high-rated traffic has dropped.
That is not the point I am making. The hon. member for Turffontein (Mr. Durrant) should listen more carefully. I say that if revenue has to be found for all these things for which the hon. member for Wynberg asks in his amendment, he should also tell us where the money is to come from. It is easy to enumerate all the things that should be done, but it is quite a different matter to find the money for what the Opposition says should be done. Then the hon. member should also suggest that tariffs should be increased in order to find the necessary money, because it involves a considerable sum. Mr. Speaker, if we want to create a Capital Redemption Fund, and if we want to make it worth while at all, then I cannot see how we can start with less than R20,000,000 in the Redemption Fund.
The former chairman of the Railway Select Committee asked for it.
Yes, but the previous chairman of the Select Committee was not prepared to sacrifice the same Railway revenue that the United Party is prepared to sacrifice, namely by making concessions to private road hauliers. The previous chairman of the Railway Select Committee did not want to do what the hon. member asks for in his amendment, namely that the funds should also be strengthened further. The previous chairman of the Select Committee simply expressed *the opinion that this should be considered by the hon. the Minister.
With regard to the third leg of this amendment dealing with defects in Railway budgetary policy, the hon. member wants to maintain the stability of the statutory funds and reserve accounts. Let me say here that these three funds are being strengthened considerably this year. If the United Party want a further strengthening of these funds at the present moment, they should also bear in mind that these funds would have to be supplemented out of revenue. When we compare the position of the funds this year with the position in 1947-8, when this Government came into power, we find that at that time the Betterment Fund stood at R5,500,000. At the moment it stands at R5,772,000. In 1947-8 the Renewals Fund stood at R18,461,000. To-day it stands at R63,000,000. The Rates Equalization Fund stood at R15,000,000 in 1947-8; to-day it stands at R18,000,000.
Then I come to the fourth portion of the amendment of the hon. member for Wynberg, “ to adopt a reasonable approach to fair demands by the staff and pensioners ”, Here we have a repetition of the old charge that is made regularly from year to year that not enough is being done for the staff. Of course, it is always a popular cry to tell people that they are not being paid enough. But one expects more responsibility from an Opposition than to incite the staff continually, to stir them up and to encourage them to become dissatisfied. It has become a favourite habit of the Opposition’s to tell the staff that injustices are being done to them.
They probably read in the Burger that there may be an election.
Precisely. But what benefit have they derived from it? The only result has been that in those constituencies in the country in which there are many railway officials, this Government has received more and more support. Our majorities in those constituencies have become greater and greater at every election. But, Mr. Speaker, by this time you probably know that a United Party supporter is a person who never learns. Whether anything is in the interest of this country or in the interest of the Railways, and, in the result, in the interest of the railwaymen themselves, simply does not matter to them. They have decided once again to court the railwaymen’s vote in the Railway debate-this year by telling them how unjustly they are being treated, and that more should be done for them. Because, as the hon. member for Mossel Bay (Dr. van Nierop) has stated quite correctly, there are rumours once again of a general election in this country. I want to tell hon. members on the other side that this propaganda will not help them at all. I can only infer from this criticism of the Opposition that not enough is being done for the railwaymen, that the Opposition does not like the idea that it has been possible to do so much for the railway staff this year, because it is far-reaching to describe the consolidation of cost-of-living allowances, which will amount to nearly R12,000,000 this year, as crumbs falling from the rich man’s table. [Interjections.] R12,000,000 cannot be described as crumbs. I shall be glad if the hon. member for Turffontein will go and tell his constituents that R12,000,000 represents crumbs falling from the rich man’s table. [Interjection.]
May I tell the hon. member that the staff regarded this question of the consolidation of cost-of-living allowances as priority number one. Mr. N. Hall, chairman of the Federal Consultative Council of Staff Associations, in a discussion with the Minister, which was fully reported in the Salstaff Bulletin of December 1960, said this—
Mr. Hall stated very clearly that the staff organizations felt that the question of consolidation should receive first consideration and I am convinced that it was also in the light of this that the hon. the Minister made this concession of nearly R12,000,000 in order to comply with this request on the part of the staff associations. I do not know whether the hon. member for Turffontein realizes that this places an additional annual burden of R12,000,000 on the finances of the Railways. A case may possibly be made out for further wage increases to the staff. I do not wish to argue about that but does the Opposition really think that a responsible Minister will see his way clear to make further concessions at this stage? No, the truth of the matter is that the Opposition is disappointed because so much has been done for the staff, and they now wish to belittle it. I will tell you why they are disappointed, Sir. The hon. member for Vasco (Mr. C. V. de Villiers) has already referred to the sombre predictions the hon. member for Wynberg (Mr. Russell) made last year when he predicted a dark future for the railway workers. I do not want to weary the House by quoting from almost every one of those speeches, but the hon. member for Umhlatuzana (Mr. Eaton) said this. In desperation he cried out—
And then he cried out in disbelief: “ When will that be?” [Interjection.]
They now want to suggest that Hansard be abolished.
I think what the Minister has said just now is right; when I think what the hon. member for Wynberg has been saying during the last three years in connection with Railway finances, he will welcome nothing more than to see all the Hansards of the past three years burnt. But we will deal with that at a later stage. The hon. member for Wynberg avoided that in the amendment which he moved to-day, but we will return to that at a later stage. Mr. Speaker, you can imagine the disappointment of those hon. members. Nothing has come of their predictions and they can no longer make the wonderful propaganda that they wanted to make with a view to a possible election this year because something has been done for the staff this year. If you, Sir, had made those simple predictions which the hon. member for Wynberg made last year when he said that consolidation would not be possible for a long time to come, you too will hardly be able to hide your disappointment, and that is why the hon. member for Wynberg spoke about the crumbs off the rich Minister’s table.
All we did was to believe the Minister.
Will the railwayman believe them in future? Their predictions have not materialized. All this talk about better wages for the railway workers is just so many words, words which find no echo in the ear of the railway worker. Let me give hon. members some friendly advice on behalf of the staff. They can safely leave the question of higher wages to the staff associations. They represent the staff and they have channels which the Minister has created whereby they can make representations to him. They are quite capable of pleading their own cause and they prefer to do it themselves, because they are afraid the United Party will make a hash of it, just as they have made a hash of every policy issue which they have undertaken. They are talking without having consulted the staff. That is why they can confidently leave the matter in the hands of the staff associations. The railway worker will not take any notice of the United Party, because they realize that their friends are on this side of the House. The railway worker realizes that since 1948 the National Party has improved their position to a tune of no less than R109,000,000.
Where do you get that figure?
If the hon. member takes the trouble to read the memorandum submitted by the Minister, he will find it there. The hon. member should give more attention to his homework. During this period the Government has spent no less than R97,000,000 on railway housing. Not only has the Minister done more than any other Minister to improve the position of the railway worker but he has always kept his word as far as the staff is concerned, as he did in this instance, because he had promised them that as soon as there was an improvement in the finances he would attend to the staff, and it is no use hon. members trying to belittle that gesture.
Before dealing with the final issue I just want to say this. What is important in the amendment of the hon. member for Wynberg is that which he omitted from it. What has happened to the United Party’s tariff policy? Year after year that has formed part of die United Party’s amendment. That is an important policy, the policy that direct costs plus a contribution towards administrative costs should be the only basis on which to calculate tariffs.
We never said that that was the only basis, but that it was one of the important considerations.
I shall read what the hon. member said and then he will really wish that all the Hansards could be burnt. The hon. member says that on no occasion did he say that that should be the only yardstick. If that is true, then the hon. member has never differed from the hon. the Minister’s tariff policy. It is a principle which is taken into proper account by the Administration in laying down tariffs but the hon. member now says that that has not always been his policy or that of his party. Why is the hon. member running away from his own policy? He tries to give the impression of being a brave member with the courage of his convictions. Why does he run away now from the policy which he has always advocated? Have the Minister and we on this side of the House convinced him of the stupidity of his tariff policy or does the hon. member deny that he ever said that direct costs plus a contribution towards administrative costs should be the only basis on which tariffs should be determined? He still has an opportunity to put the position right.
I have already denied it.
No, I will respect the hon. member if he admitted like a man that he has changed his opinion, but to say that he never on any occasion stated that direct costs plus a contribution towards administrative costs was the sole basis on which to calculate tariffs is far-fetched. For years, ever since 1958, this matter has been discussed regularly during Railway debates. The United Party have repeatedly declared that to be their tariff policy and this side of the House has repeatedly pointed out that that would be wrong. Does the hon. member think he can run away from his sins by merely denying them? I want to give him one last chance before I continue quoting what he had said. Last year the hon. member for Wynberg said this—
The hon. member will find that in the 1960 Hansard.
What does basis mean then? It cannot be clearer than that. It is not asked that that should be considered as a principle. No, it says here in unequivocal terms that that should be the basis. He also stated it clearly in 1959. Let me read this. Sir, if the hon. member, for Durban (Point) (Mr. Raw) has any difficulty with the word “ basis ”. The hon. member for Wynberg said this in 1959—
Foundation is the same as basis. [Laughter.]
I really do not know, Sir. It is difficult to get hon. members opposite to understand the meaning of the word “ basis ”. I say that the hon. member for Wynberg is running away because he has become convinced that their tariff policy is a stupid one. In the meantime this House has wasted hours unnecessarily on the policy announced by the hon. member, a policy from which he is now running away as fast as he can. I think Adv. Strauss was kicked out as leader of that party for less reason than that. I think the time has arrived that the same thing happened to that hon. member. His words are recorded in Hansard, clearly and unequivocally, and anyone who knows Afrikaans can understand them. He cannot get away from it and in the future the country and the railwayman will know what value to attach to the words of the hon. member for Wynberg.
I just want to say a few words. Unfortunately two speakers have to follow each other on this side of the House. I should like to say something about what the hon. member for Wynberg (Mr. Russell) said and also in regard to the remark made by the hon. member for Turffontein (Mr. Durrant) in regard to the consolidation of cost-of-living allowances, as if that can just be brushed aside and regarded as crumbs. I think that if we convey this to the broad masses of the Railway staff, the United Party will bitterly regret the remarks they made here, that R12,000,000 is just a few crumbs when it is added to basic wages. The main aspect of the matter is that these people, when one day they are old, will be so much better off than they are now. That is when one needs it, and not when one is young. I have many railwaymen in my constituency.
But did we not plead for it in this House year after year?
The hon. member will have an opportunity to make his speech. One can stand kicking against a closed door, and that is what the United Party has done. They plead for something which is impossible when the money is not available, but when the Minister has succeeded in putting the funds on such a basis that he can make these concessions, they say they are merely crumbs. The hon. member for Wynberg said: “Times were hard. They had to tighten their belts and work hard.” We know that there were times when there were difficulties. It would take an hour to tell the House why times were hard. It is because there was a time when responsible people, not on this side of the House, neglected their duties. That is why times became hard and difficulties arose on the Railways. When we took over the traffic which was offered could not be moved. We know that people froze in winter because they could not obtain coal. Therefore I want to congratulate the Minister, because when he assumed office he said that if he could not shift the traffic offered he would resign. Today he does not need to resign. He has succeeded in transporting an increasing tonnage. The hon. member for Wynberg, who is a businessman, knows that if he wants to transport certain articles by rail it is done immediately. There may be a delay here and there, because there is always the human element, but that is on a very small scale. We should not forget that it is not fair now to try to catch a few votes. The railwaymen as a whole stand by this side of the House. I have clear proof of that in my own constituency, and all members on this side who have railwaymen in their constituencies also have that experience. When my constituency became nationalist, the majority was 31. After a few years it is now almost 4,000. That speaks volumes for the treatment received by the railwayman, and there are many more railwaymen in my constituency than other voters. Therefore, that is the clearest proof that the Nationalist Party has retained the confidence of the railwayman because he was treated decently. But if we take the increasing tonnage transported into consideration and one listened to the speech for the hon. member for Wynberg, I would at least have expected him to say that the economy of South Africa is basically sound.
Of course it is sound.
It is sound because the barometer is the increased tonnages transported by the Railways. When one see how that has increased in recent years, we can be satisfied that our economy is sound.
Then I would like to say a word to the Railways staff in general. I think we can congratulate them because all of them, from the highest ranks to the lowest, deserve every praise for the manner in which, when times were difficult, they were not dissatisfied and did not cause trouble, but did their best.
Are you not busy catching votes now?
No, I am not so hard up for votes as that hon. member is. They all did their duty. Well, the railwayman is afraid of the United Party because the United Party has a record, and the record of the United Party is that at a time When they also had a deficit the railwayman was threatened that he would lose his position and be replaced by non-Whites.
That is what is happening to-day.
I shall come to that. It seems to me the hon. member is living in the land of the blind.
Then the hon. member should not take too much notice of him.
There was a time during the United Party régime when the Minister of Transport had to go to the Minister of Finance to ask for money with which to pay the salaries of his staff. That is the record of the United Party. Therefore one cannot blame the railwayman if he has no confidence in the United Party. Now the United Party is going from place to place. It was recently brought to my notice that the staff is being tampered with, if I may use that expression. The hon. member for Turffontein has also said now that thousands will be dismissed. I have the figures of how many Whites were dismissed, and they were not really dismissed. There was a time when men who had to go on pension were kept in employment because there was a shortage of staff. The Minister asked them to stay on until they reached a certain age, but as young people became available these men felt that they had done their duty. But the Minister was so decent as to give the General Manager instructions not to dismiss all these men immediately; those who were still strong enough to work could remain on. They were dismissed gradually, with the result that there are now 1,682 fewer of them. That is in regard to the graded staff, but not a single one of the ordinary railway workers was dismissed. On the contrary, there are more of them in employment now than before.
Now we come to the non-Whites. They were reduced by more than 3,000, but it became necessary to do so. Most of them are Natives. Anybody with any knowledge of a Native knows that one can do the same amount of work with three Natives as with four. In other words, out of every 440 one can dismiss 100. It all depends on the boss. If the boss can organize, he can do the work, but I am afraid that the hon. member for Turffontein would need 500 Natives instead of 300 to do the work.
In regard to these 1,682 casual workers, the position is as follows: There was a tremendous shortage of housing and a large number of people were placed in special employment— contractors, building workers, plasterers, plumbers, etc.—to catch up with the backlog in housing. Here one can also congratulate the Railways on the fact that the backlog in regard to housing has practically been eliminated. There was a time when Railway housing was in a critical position, but I shall revert to that later. Right throughout the country new railway stations and hostels for young men had to be built. The programme was completed and thereafter some of these casual workers had to be dismissed. But in regard to these casual workers, not a single one was dismissed. On the contrary, an additional number were employed. In regard to clerks, persons who had reached the age limit were retained to augment the shortage of staff, but when the vacancies had been filled up those people were gradually dismissed. But at the special request of the Minister, nobody who could still do a day’s work was thrown to the wolves; his services were retained.
In regard to the non-Whites, there was an economy drive, and the non-Whites particularly were affected, because the Minister and the General Manager felt that there were too many Natives in the employment of the South African Railways. This economy was brought about in two ways. Firstly, Natives whose services became redundant were dismissed, and in the second place the existing feeding scheme was stopped. If one has a feeding scheme for one racial group of one’s employees, it must also be extended to the other racial groups, and I think it was no more than fair to abolish the feeding scheme in order to effect economies. These economies, although the country was making fast progress, did not cause traffic to pile up, but a saving of R7,500,000 was effected. Sir, what do we now hear from the United Party? I had a letter last Friday from which it appears that here and there there are still political organizers who say that the Minister went so far as to cut Sunday time and overtime. I think the hon. member for Wynberg or the previous speaker mentioned it here. It is not true that Sunday time and overtime were abolished completely. It is not quite honest to bring the railwayman under the impression that overtime and Sunday time have completely been abolished. It is true that a request was directed to the various sections to reduce overtime and Sunday time in order to effect economies, but the railwayman did not suffer much as a result of it. That hon. member opposite, towards the end of his speech, asked for a shorter working week. Sir, surely it is unrealistic on the one hand to ask for shorter working hours and on the other hand to plead for overtime and Sunday time. Any worker, whether White or non-White, deserves a weekend of rest after having worked for 5½ days, and that is why Sunday time was reduced to a large extent, but it was not done at the cost of traffic piling up. Whenever it was necessary to work on Sundays, shunters, drivers and other trained staff still had the full right to work on Sundays if it was necessary to shift traffic. In regard to Sunday time and overtime, I just want to give a few figures to prove that the railwayman did not suffer serious financial loss. The average time worked in 1958 was 49.9 hours per week. In April 1959, it was 40.7, a difference of not even two hours. In regard to wages, it made so little difference that it need hardly be mentioned. The highest figure in April 1958, was 72.6 and in April 1959 it was 71.8, which is a very small difference. The shortest time worked in April 1958, was 52.5 and in 1959 it was 35.5. Now take the stokers. The average time worked in 1958 was 41.8 and in April 1959 it was 41 hours. The highest figure was 77.1 and the lowest was 71.2. In other words, there was practically no difference after overtime and Sunday time had been reduced. The lowest figure in 1958 was 21.1 and in 1959 it was 39.6. Take the case of conductors. The average figure in 1958 was 38.3; the lowest in 1958 was 31.2 and the highest was 60.4. Therefore even in that case there was no appreciable difference. What is the position in regard to wages? Take the driver: In his case it was R6.4 per month, and in the case of the stoker it was R4.6, and for the ticket-examiner it was R3 per month. Now we come to the other story by means of which the United Party tries to frighten the railwayman. I made inquiries and absolutely convinced myself that it is a false story. I refer to the story that rent was increased so terribly by the Minister. I have a pamphlet here issued by the United Party in which the railwayman is told that rent was doubled in some cases. We have various schemes to-day. There is the house ownership scheme at 10 per cent, where a big concession is made to the railwayman to enable him to obtain a house, and then there are also the departmental houses which he can buy from the Railways. The railwayman made good use of all these schemes. I still remember what the position was 12 years ago in regard to the housing of railwaymen. Then it was simply critical. Twelve years ago, if one went to a large town with many railwaymen, the bad housing of those people immediately struck one. They practically lived in hovels. To-day, however, if one sees the luxurious houses built for railwaymen, one really feels proud of what the Department has done for them. Twelve years ago when one came to a town and asked for a certain driver, or shunter or conductor, the reply always was: Go and look for him down there in the railway camp. The idea of housing all railwaymen in one camp was completely rejected by this Government. In the olden days railwaymen were simply housed together in an unattractive part of the town. To-day they are spread over the whole community with decent houses which fit in with the vicinity, so that the house of the railwayman cannot be distinguished from the other houses. That results in the railwayman mixing with the public; it results in his participating in social life and in the local management of the town in which he lives. In various places we have found railwaymen becoming the mayors of their towns. I just want to mention a few figures to show what the position in regard to housing was and what it is to-day. In 1948-9, 510 houses were built; in 1949-50, 315; in 1950-1, 280; in 1951-2, 119; in 1952-3, 164; in 1953-4, 601; in 1954-5, 524; in 1955-6, 805; in 1956-7, 2,337; 1957-8, 1,907; 1958-9, 1,583; 1959-60, 747; in the few months of 1961, 271, making a total of 10,274 new houses built during the régime of this Government, houses which were absolutely essential because, as I have already said, the housing of railwaymen was in a very critical position. A very sound course now being adopted is the building of hostels for young men. Everywhere such hostels are being built where hundreds of unmarried young men are housed under the supervision of a decent housefather and his wife, where they are fed decently and have nice, clean rooms, and where there is supervision over these young persons, and where amusement is also provided so that they can enjoy their leisure in these hostels without having to go out. That results in parents today being much more willing to allow their young sons to join the Railway service than formerly when they had to leave home perhaps at the age of 16 or 17. In regard to rent, there is no question of doubling it. I have the official figures here both for the rural and the urban areas. In the rural areas it was £7 16s. and it was increased to £9, an increase of £1 4s. In the cities it was also £7 16s. and there the rate was increased by £2 2s.
Another important matter to which the Administration to-day devotes much attention is the establishment of railway clubs where the railwayman can relax. After having done his work he can go to his club. Members of the public are also allowed in those clubs, and there again the railwayman has the opportunity of mixing with the public. Recently in my constituency there was a wedding and the guests were entertained in one of these railway clubs and the way in which the manager of the club catered for the refreshments, etc., really came as a pleasant surprise.
The last allegation in regard to which I want to say a few words is that the railwayman is not receiving his justifiable share of the increased revenue of the Railways. I just want to give the figures for the last few years to show what the railwayman has received from this increased revenue. In 1948-9 he received R14,750,000; in 1949-50, R3,750,000; in 1950-1, R28,000; in 1951-2, R23,000,000; in 1952-3, R12,000,000; in 1953-4, just over R8,000,000; in 1954-5, almost R3,000,000; in 1955-6, R9,000,000; in 1956-7, R7,500,000; in 1957-8, almost R1,000,000; in 1959-60, R14,000,000; and in 1959-60, R8,000,000. That was last year when there was a big deficit, but even in that bad year the railwayman received something.
And in 1961?
The hon. member knows what they received — R11,000,000. Mr. Speaker, it has been mentioned before, but I want to repeat that the Railways are equipped to-day to handle all the traffic, and not only coal. It has been brought to my notice and prominent farmers in the drought-stricken areas that they did not have the slightest difficulty in regard to the transportation of their animals during the drought, and that the Railways did everything in their power to deliver those animals at their destination as soon as possible, in order to eliminate further losses to the farmer.
Before resuming my seat, I just want to say a few words in connection with the retiring General Manager. I am sorry that he cannot be here this afternoon. He is a very good friend of mine and I want to thank him heartily for the years of good treatment all South Africans received from him. He really played a great role in the development of the South African Railways. He was always courteous and prepared to listen to one’s representations. On behalf of the railway workers and myself, I want to thank him heartily for what he has done for the country. I also want to congratulate my good friend here, who has now become General Manager and whom, I have also known for many years, on his appointment. I wish him many years of prosperity and success, together with all the officials assisting him, to maintain the successes achieved by his predecessor, and to maintain and even to improve the efficiency of the Railways.
I wish to deal with a particular aspect of railway affairs, and I hope therefore that the hon. members who have spoken last, will not expect me to comment specifically on all the points they made. I shall, however, deal with some of those points in the course of the remarks that I wish to direct to the hon. the Minister. Let me say at the outset that the financial results on Revenue Account for the two years 1959-60 and 1960-1 are striking on paper, and in that regard they are commendable. But as my colleague, the hon. member for Wynberg (Mr. Russell) has pointed out there is something disingenuous about current budgetary practice which I find disturbing, indeed alarming. No purpose can be served by quoting mistakes of the past as a counter to the mistakes of the present, as the hon. member for Bloemfontein (East) (Mr. van Rensburg) is apparently trying to do. Two wrongs do not make a right and the hon. member would be well advised to remember that to learn from past mistakes you do not repeat them. In any case, we are here concerned with the present and the future and not with the past about which very little can be done at this stage anyway. Therefore I repeat that there is something disingenuous about current budgetary practice. Let me explain. Instead of an expected deficit of some R64,000 at the end of 1959-60, the hon. the Minister was able to pull out of his ministerial top hat a substantial surplus of over R1 6,000,000. And again during the current year, 1960-1, an estimated deficit of R3,500,000 is to be converted by that same sleight deft trick into a substantial surplus of more than R19,000,000. Sir, in his pride at being able to announce these results, the hon. the Minister literally rolled up his sleeves last Wednesday to prove how good a magician he really is and how easy it is for him to pull surpluses out of his top hat. As happens in all tricks of magic, however, so in this case too the hon. the Minister’s figures really concealed far more then they revealed. Someone has kindly sent me a very apt limerick which illustrates this point, and I gladly quote this to the Minister. It reads as follows—
Make quite an impressive array
Of vital statistics and final ballistics.
But conceal far more than they display.
Sir, I shall come back to the point made in the limerick. Meanwhile, taking this impressive array of figures at their face value, everyone is naturally pleased to see the Railway out of the red, and no one of course more so than the railway worker whose patience with the hon. the Minister and his Administration has also been commendable. It has frequently been suggested that: “ What is good for the Railways is good for South Africa,” and I personally would be quite unstinting in my praise for the financial results I have just mentioned if I could be assured that this up-turn in Railway business is truly indicative of the up-turn of economic activity in industry, trade and agriculture. But one must be cautious in drawing such a conclusion, for the reasons stated from this side of the House during the recent debate on the Part Appropriation proposals. Moreover members will remember the cautious tone of the Governor of the Reserve Bank in his address in August 1960 at the annual meeting of stockholders, when he said, inter alia—
Sir, the unhappy position is that that stagnation in investment trends is still with us, but strangely enough the hon. the Minister prides himself on the downward trend in capital expenditure for the coming year. There is one other factor which makes caution still more necessary in drawing conclusions from figures presented to the country by this hon. Minister. Just let me explain what has happened. When the Minister on 24 February 1960 gave this House revised Estimates of the year’s working for 1959-60, he explained that the surplus would be just under R4,000,000. The figure then was £1,900,000. That was only one month before the close of the financial year. That means with only one month to run the Administration’s financial forecast was out by more than R12,000,000. I think that reveals a very serious dereliction of duty or a complete evasion of duty on the part of someone along the line in the financial administration of the Railways. Sir, this House and the country are entitled to better service and more reliable financial disclosure than happened to be made on that occasion, one month before the close of the financial year. What happened then is spoken of outside this House as “ managerial manipulation ”. That is a very harsh term, but seemingly an apt description. However, the most disturbing thing about what happened is that only two alternative deductions can be made from the facts I have quoted. Either the Minister himself was being misled as late as just one month before the close of the financial year by slovenly financial forecasting and ineffective financial administration, which is very serious. The other alternative is that the Minister chose, figuratively speaking of course, to keep this House in the dark, while he appeared to be carefully elaborating a so-called revised figure for the year, and that, I say, is even more serious, I leave it to the hon. the Minister to tell us which of those two alternatives is the correct one. I will, however, assume that it was the Minister who was being left in the dark. I do so because even still later, on 18 May 1960, when he introduced Additional Estimates of Expenditure for the current year 1960-1, the House was again left in the dark about this surprising up-turn in the financial results of Railway working for the year 1959-60. What about the current year, 1960-1? Again, with less than a month to run, the position is briefly as follows: Revenue is likely to be R18,000,000 better than originally estimated, that is to say it reveals a 4 per cent underestimating of revenue; and expenditure is likely to be R5,000,000 less than originally estimated, and that reveals a clear case of over-estimated expenditure. I think I am entitled to say, all this is there in order to gild the financial results. Here again I will assume in the Minister’s favour if there is to be a still more surprising result after the close of this financial year that it will be the Minister who has been left in the dark once again. I repeat therefore that on paper the financial results for the two years 1959-60 and 1960-1 are commendable. I want to say with emphasis, however, that the information presented to this House is really a shocking display of budgetary hocus-pocus. And it is budgetary hocus-pocus on the part of the Minister who must accept final responsibility, whether in fact he was being kept in the dark or not, or whether the outside criticism of “ managerial manipulation ” is correct or not.
Why not try to prove that?
If the hon. member had listened I think he would know what was in fact proved. Sir, the gravamen of my charge against the Minister’s Budget proposals is that for three years running now information and financial forecasts placed before this House have been a mockery of parliamentary budgetary procedure and parliamentary control over Railway finances.
Why did you not criticize that when you were Auditor-General? Did you not have the courage?
If the hon. the Minister will indicate any year in which criticism on on public accounts should have been made and wasn’t, I would invite him to tell me so. But it is not the Auditor-General’s function to deal with budgetary arrangements. It is the function of this House and I level my criticism here, in the only place where it should be made and can be made. Sir, one can have no enthusiasm about estimates of revenue and expenditure that are so unreliable as to reduce Parliament’s financial functions to virtually a nullity. One cannot be enthusiastic for what my limerick writer very aptly described as “ an impressive array of vital statistics and financial ballistics, that conceal far more than what they display”.
Leave those limericks alone and try to prove your statements.
Railway business is admittedly big business, but it is big monopoly business. The Administration virtually has a stranglehold on rail, road and air transport, and that fact makes it all the easier and all the more necessary that estimates must not be this hit-or-miss business which they are today and have been over the past three years. It is hardly necessary for me to quote the constitutional injunctions contained in Section 127 of the South Africa Act, but I will mention the two injunctions contained therein: (1) The Railways shall be administered on business principles and (2) total earnings shall provide for the necessary outlays for working, maintenance, betterment, depreciation and the payment of interest due on capital. I say with some emphasis therefore that to-day there is complete disingenuous budgetary practice in respect of both those constitutional precepts.
Having dealt with what the figures are supposed to reveal, I come next to what they conceal. In other words, I too will take a look at some of the skeletons in the Minister’s financial cupboard. Now I need not delay the House in regard to the Rates Equalization Fund, which, as the hon. member for Wynberg has already indicated, is intended to serve two purposes—it is intended to be a buffer against tariff fluctuations and it is supposed to be a guarantee of security for the railway workers. We know that the skeleton stood in the cupboard for two years when the fund was there in name only. Admittedly the position has improved. I need not go into figures. The fund has been credited with the surplus of 1959-60 and will get a portion of the expected surplus for 1960-1. That will leave some R17,000,000 or R18,000,000 in the fund. That of course is not adequate having regard to present money values, and therefore although the skeleton has now been removed, I am afraid the ghost will still linger on.
I come next to the Betterment Fund, which on paper appears to be solvent. Here again we are faced with the situation that the figures conceal more than they reveal. I need not go into too much detail, but the fund stood at 31 March 1960 at R7,300,000, but by 30 November that figure had been reduced to R5,700,000. But that is a paper figure, for the fact is that R10,000,000 is owing to the Loan Account, and the fund was therefore really in deficit to the extent of R4,200,000 at the latter date. By 31 March this year, it is likely to be in deficit to the order of something like R5,000,000. Notwithstanding that alarming situation, in the current Estimates for 1961-2, no contribution for Revenue has been provided. That in itself financially is bad. But the worst aspect is that by making no contribution, there is a serious breach of financial principle. It is true that later in this year, the fund is also going to benefit from contributions from the expected surplus for the current financial year, and therefore it will be credited with approximately R10,000,000. But the commitments on this fund at 31 March 1960 as disclosed in the Auditor-General’s Report exceed R22,000,000, and it is quite obvious therefore that this fund is likely to remain for some time a skeleton in this Minister’s financial cupboard. I wish to emphasize and to repeat that the more serious aspect about the whole matter is the blatant breach of financial principle, which is being hidden by the Minister’s array of figures both in his Budget address and in the White Paper presented to this House last Wednesday. In passing may I say in regard to the White Paper that I am very pleased to see that it now contains figures for eight months and not for six. Sir, the principle underlying the establishment of this Betterment Fund is not only long established and based on sound railway practice, but it is also a good rule of business and, as I have indicated, it is enshrined in the South Africa Act. Simply stated, the principle is that “ regular annual contributions shall be appropriated from current earnings (that is from current working revenues) to the fund and such contributions shall be made irrespective of whether the Budget for the year reflects a surplus or a deficit ”. That is a sound business rule. There must be an appropriation to comply firstly with good railway practice, and secondly to comply with the constitutional precept of the South Africa Act. There must be a regular contribution to the Betterment Fund, but that is not taking place. And if therefore managerial or ministerial manipulation is a suitable term to be applied to the other appropriation malpractices that I have already mentioned, then of course a very much stronger term is needed when so well-established a principle of public finance is so blatantly transgressed. It seems that in railway affairs “ business principles ” is now apparently synonymous to hit-or-miss tactics of the slick financial adviser.
I have time to comment on only one other skeleton in the financial cupboard, namely, the Higher Replacement Cost Account. At 31 March 1960 that reserve account was in deficit to the extent of R12,700,000 and by 31 August 1960 that is six months later, the deficit had risen to R16,500,000. Now the hon. the Minister tells us that on 31 December 1960 the deficit had become still greater, namely, R18,050,000. But here again, according to the Auditor-General’s Report the commitments on this account as at 31 March 1960 amounted to nearly R14,000,000. So this House must obviously expect further deterioration to take place in regard to the deficit on this account. Notwithstanding the position disclosed no more than R1,000,000 is to be contributed from Revenue for the coming year. It is true that the account is also to benefit from a portion of the expected surplus for the coming financial year, but that contribution is quite inadequate and the account will still be seriously in deficit. All I can say about that is: What a travesty of business principles! What a travesty of the principle of parliamentary appropriation to leave two essential reserve accounts, that is the Betterment Fund and the Higher Replacement Cost Account, in this shocking state of deficiency, whilst pretending with quite an impressive array of figures that the so-called budgetary surplus figures show efficiency in the financial administration. One wonders, Sir, who is being fooled. I am very glad to say it is not the Controller and the Auditor-General, because for the first time in Railway history, the Controller and Auditor-General has given what is in effect a qualified certificate in respect of the so-called Budget surpluses. I refer the House to his comments on page 5 of his 1959-60 report, in which as I say for the first time he draws attention to and qualifies the certificate by indicating the unsatisfactory financial position of the Betterment Fund and also of the Higher Replacement Cost Account.
Of course the real truth is that this Government with its granite-hold on the party caucus, simply expects that the Estimates placed before this House will be passed. Accuracy of detail and adherence to principle have accordingly become matters of no importance in administrative circles. After all we must bear in mind that the precedent of bolstering up Reserve Accounts from Loan Funds, is now an acknowledged remedy so far as this hon. Minister is concerned.
Finally, I come to the Capital Account, about which the hon. the Minister told this House next to nothing. The only reference to the Capital Account is the one I mentioned in which he prides himself that there is going to be a downward trend in capital expenditure. It is true the hon. Minister makes some reference to the increasing burden of the interest charges, but he suggests no remedy. I would therefore commend to the hon. the Minister the suggestion made in both the amendments, namely, that there should be established a sinking fund. I would like to impress upon the hon. the Minister that that is a long-term project. He must not deal with it, as he dealt with it last session when I raised the matter, as a short-term matter; he must not convert a principle into a debating point by asking: “Where is the money to come from? ” Everybody knows where the money has to come from. Obviously it has got to come out of revenue. But nobody expects a sinking fund to be built up overnight. It is a long-term project, and if the principle is sound, the money must be found, but it must be found in a far more adequate way than is happening in the case of the Betterment Fund, or the Higher Replacement Cost Account. There we are reduced to a completely hit-or-miss business. I therefore urge the hon. the Minister not to make a debating point of a principle, as he did last year.
Although spending on Capital Account according to the Estimates is to be some R45,000,000 less in the coming year, 1961-2, than in the current year 1960-1, that figure is quite misleading. Drawings on Loan Funds are estimated at R85,000,000 in the coming year 1961-2 as against R132,000,000 in the current year, 1960-1. But, Sir, it is already quite evident from the Exchequer figures that fully R34,000,000 of the latter figure will remain unspent at the end of this year and will have to be surrendered to the Treasury. There is an important aspect which I think the hon. the Minister should have told us about in regard to capital expenditure. Let me point out to him therefore that expenditure on capital and betterment works for the coming year to an amount of R110,000,000 is really no different than it will be in the current year for which the figure will be round about R100,000,000. But the extraordinary fact of course is the one mentioned by the hon. member for Durban (Berea) (Mr. Butcher) that apparently no allowance is being made for extra capital expenditure to keep the Railways abreast of development schemes which are being planned by the hon. the Minister of Economic Affairs in regard to Iscor and Sasol and various other bodies, and the schemes which are being planned by the hon. the Minister of Bantu Administration and Development in regard to the Native reserves. In that regard we have had absolutely no information at all. But I would ask the hon. the Minister to explain why there is this under-spending to the tune of the figure I gave just now. I hope that in his reply the hon. the Minister will tell us why there was this apparent excess of appropriation for the current year on capital and betterment funds, far in excess of the needs of the day. What in effect is happening—and I ask the hon. the Minister to tell me whether my figures are correct—is that something to the tune of R34,000,000 has been tied up because it cannot be employed on any other project which is essential in the public sector of the economy.
Lastly, there is one other significant matter on Capital Account that I think calls for an explanation. It appears that the Administration on 31 March 1960 had an excess of R10,800,000 in the Working Capital Account. The exact amount was £5,461,111. That was cash held in the Working Capital Account. Now there are two questions that arise from this. The first one is that notwithstanding so large an amount of idle money in the hands of the Administration at 31 March 1960, the Minister asked Parliament to appropriate a further R4.190 million for the coming year in addition to R3.135 million which was appropriated for the current year. It seems therefore that there is idle cash now lying in the Working Capital Account far in excess of the £5,000,000 because that was on 31 March 1960, a year ago. I simply ask the hon. the Minister why was this excess not foreseen, and secondly, how long does he intend to keep this surplus lying idle in the Account. It is true that it may be invested either in Treasury bills, or with the National Finance Corporation, but that is not the function of the appropriation of £5,000,000 to the Working Capital Account. The surprising thing of course is that this money should be left lying idle in this account at a time when capital investment is so difficult to raise. Here the Minister is simply holding in an account a sum of money which is likely to exceed substantially R10,000,000. I hope that in his reply the hon. the Minister will deal with this serious aspect of financial administration because to my mind it is an extremely serious matter to ask Parliament to continue appropriating money whilst there is idle cash lying in the hands of the Administration.
I should like to reply to the hon. member who has just sat down and who has made one or two deplorable remarks, but I shall come back to him later.
The South African Railways are an undertaking which is of the utmost importance to our nation and which also plays a great and important role in the South African economy. We can regard the South African Railways as one of the greatest if not the greatest undertaking in our country. Let us examine the importance of this undertaking, and let us first ask how those who are interested in it derive benefit from its operations. In the case of any economic undertaking, whether it is of a private nature such as an ordinary company established by ordinary entrepreneurs, or a semi-State undertaking or a full-fledged State undertaking such as Iscor, Sasol or the South African Railways, the primary and main object of such an undertaking is to benefit those who are interested in it. They derive benefit from such an economic undertaking as a result of the fact that the undertaking in the first place establishes itself on a sound financial basis with sufficient capital to enable it to function and to acquire and maintain its equipment. In the second place, the aim is to run the undertaking and to let it function as efficiently as possible. In the third place the undertaking must function on as economic a basis as possible so that the maximum potential advantage can be derived from its activities, and in the fourth place it must be planned on such a basis that the undertaking can provide the best services possible in fulfilling its duties, as well as in serving the objects of the founders. Finally steps must be taken to ensure that the assets which are used in the process of rendering service, are maintained and replaced when necessary. The interested parties in an ordinary economic undertaking are shareholders, together with the organizations and persons who benefit from the activities of the undertaking concerned. In the case of the South African Railways the interested parties are in the first place our country as a whole and all her economic and other undertakings, the railway users and the railway employees. The employees are not of primary concern in the sense that the South African Railways exists for their benefit alone. The railways are of importance to them in the sense that they are dependent on the railways for their livelihood and they are important to the South African Railways in the sense that they are the driving force and the machinery which keep the whole undertaking running smoothly and keep it functioning. We must remember that one out of every eight Whites in South Africa are dependent on the railways. Although these employees do not have shares in the S.A.R. in the ordinary way, they are nevertheless shareholders in the sense that they are interested in it as far as their future is concerned. Because if they should allow the South African Railways to go under, their personal loss would be great; it would be an economic setback for them. In addition there are other persons and groups of interested parties, that is to say the public and the railway users. All the interested parties or shareholders must ensure that inter alia the correct financial methods are used so that all those concerned will continue to benefit from the activities of this undertaking. Let us now examine the basic financial aspects of any undertaking which must yield dividends and I refer mainly to the financial position as far as its capital position is concerned. In the first place there must be permanent capital available, that is to say capital which is acquired by the issuing of shares. In the second place, there must be temporary capital, that is to say, capital which is obtained by means of loans, and in the third place there must be reserve capital which is derived mainly from accumulated profits. Such reserve capital is utilized for two main objects, that is to say, in the first place for the replacement of obsolete assets or assets which should be replaced as a result of depreciation or use, and in the second place it is used as a cushion or safeguard in case the undertaking should experience setbacks or unfavourable developments should take place which affect and harm the undertaking.
The South African Railways do not have share capital because nearly all their capital consists of loan capital to the extent of R1,482,000,000, of which R1,369,000,000 represents interest-bearing capital, as is apparent from the Railway accounts. What is of importance is to what extent the loan capital should be increased and how strong the reserves should be. We can leave the increase in capital on one side, and let us analyse the reserves as regards the size of those reserves and the use to which they are put. It is absolutely essential that the South African Railways should provide for the replacement of certain assets, and this is in fact done through the medium of the Renewals Fund, while the Rates Equalization Fund is used for meeting setbacks. At present there is no credit balance in the Rates Equalization Fund, as the hon. member has just shown. The Rates Equalization Fund is therefore empty. Its first funds are being provided by the present Budget. Let us now examine the way in which the South African Railways use their funds, which also represents a type of reserve, namely by setting aside and using a certain proportion of its revenue for capital purposes. This offers security because it is investment from the Railways’ own revenue and also because it is interest-free working capital. Consequently it is a sound policy not to pay all interest-free capital into the Betterment Fund but to invest it directly, as for example in housing, because in truth all these funds are being mainly used for capital purposes, whether they are used to increase the Betterment Fund which is used to finance certain works of a limited scope, or it is used for the building of houses. In passing I can mention that the Betterment Fund has had to be strengthened during the past year by the large sum of R10,000,000 in loan moneys. As long as the revenue of the South African Railways is not used for this purpose excessively so that it results in direct tariff increases, it is a sound financial policy. In considering the financial position of any undertaking, various aspects of its capital position are very important. In the first place, as I have already mentioned, there is the permanent capital in the form of share capital, in the second place there is temporary capital in the form of loans, and in the third place there is reserve capital in the form of accumulated profits which are used for a dual purpose, namely the following: (1) for replacement and (2) for setbacks. The South African Railways do not have share capital, but in a state undertaking there is very little difference between permanent capital or share capital and temporary capital and loan capital, because the state does not try to earn higher dividends on permanent capital. Its main aim is the promotion of the national interest and this is equivalent to interest on temporary capital. In the case of financial institutions permanent capital would be approximately one-tenth of the temporary capital. And it is assumed that the permanent capital, that is to say the share capital of the Railways, on which a dividend of 6 per cent to 6½ per cent can be justified, that is to say what surplus is required after making allowance for net appropriation, is the temporary capital on which interest can be calculated.
Business suspended at 6.30 p.m. and resumed at 8.5 p.m.
Mr. Speaker, allow me to recapitulate a little in order to make the trend of my argument quite clear. I have already said that in the case of financial institutions permanent capital can be approximately 10 per cent of the temporary capital, which should earn profits for the interested parties. What we therefore assume is that the permanent capital, that is to say the share capital of the Railways on which a divident of 6 per cent and 6£ per cent is justified, that is to say what surplus is required, after allowing for net appropriation. This forms part of the temporary capital (loan capital) on which the calculations will be based. It is said that a 20 per cent profit is reasonable in industry before allowing for taxation, that is to say, that is the gross profit; and 10 per cent after allowance has been made for taxation (the net profit). When we make these calculations in the case of the South African Railways it means that depreciation has not already been deducted from the reserves and dividends. No, only depreciation has been deducted, but the reserves and dividends are taken from the net profit. A certain profit, a net surplus, is required to supplement the reserves at regular intervals. It must be realized and accepted that you and I as users of the South African Railways (including the Harbours and the Airways) together with commerce, industry, our whole manufacturing industry, and the staff of the South African Railways, must all allow the Railways a reasonable net surplus at regular intervals for supplementing the essential reserves before we can claim any benefits for ourselves.
The provision of such reserves is of greater value to us than immediate benefits. The user must support the Railways by helping to increase the turnover of the Railways. The employees on the other hand must ensure that increased efficiency is achieved. If these two groups of shareholders are going to demand for themselves alone such profits as are made by in the first place demanding reduced tariffs and in the second place by increasing the privileges of the staff alone, what funds will there by to meet setbacks? The correct attitude on the part of both groups will have to be to build security for the future on a systematic basis by inter alia strengthening the reserve funds. The experience of the past year or more obliges all interested parties first to look to the future and then to the present. The Railway Administration adopted this attitude, even in the difficult days of the immediate past, when they continued with large-scale development works and when benefits were still granted to the staff in the form of pension benefits as embodied in the 1959 Act. Is it therefore not of the utmost practical importance that we should plan for the following contingencies: How large should the surpluses be? How strong should the reserves be, particularly the Rates Equalization Fund? How strong should all these funds be?
We do not have to give an absolute answer to these questions because the economy of the South African Railways as a state undertaking is quite different to that of other private or even of other State undertakings. We must bear in mind the different viewpoints, as well as the accounting methods. When we therefore examine the share capital of the Railways in order to review its interest-bearing capacity, it is clear that if, say, 10 per cent of the Railways total share capital of R1,482,000 can be regarded as their own capital, that is to say approximately R1 48,000,000, then a profit of 10 per cent, after allowance has been made for taxation, is equal to R1 4,000,000. If the Railways own share capital is approximately 25 per cent, that is to say plus minus R370,000,000, then a profit of 10 per cent is equal to R37,000,000. Consequently, the net surplus (for reserves) could be R14,000,000 in the case of one year and more or less in other years. But reserves must be built up out of net revenue. In the nature of things it will vary as the capital structure changes, as the rating policy develops, as the economic development of the country varies, and as various types of traffic increase or decline. But rather than take a step of such immediate significance (that is to say by estimating the desired annual surpluses) I want to refer in the first place to certain essential objects and in the second place to certain harmful standpoints or dictums.
Mr. Speaker, the essential objects are that the first appropriation from our surpluses should be used for the following objects: Reserves for the Rates Equalization Fund, and interest-free capital for services and the Betterment Fund. Then immediate benefits can be granted. The Rates Equalization Fund can be actively strengthened in the near future so that it can reach a level of at least R20,000,000 as soon as possible. Thereafter it must be progressively further strengthened so that a strong fund can be built up. The Rates Equalization Fund must be strong so that it can stand setbacks in successive years. But I appreciate fully that a huge Rates Equalization Fund would necessitate increased tariffs within a short period.
The harmful standpoints or dictums are the following—and they are advocated by the Opposition. In the first place that private hauliers should be free to transport goods; that the losses which the Railways suffer as the result of such competition by private hauliers should be subsidized by the Consolidated Revenue Fund. May I ask: Is this a recognized commercial principle? It would therefore mean that a subsidy would have to be paid from the Consolidated Revenue Fund, and what will be the result? The hauliers will be given the right to take all the high-rated traffic and the South African Railways will retain the low-rated traffic and will also suffer the losses. Such losses will therefore in reality be borne by the Central Government and will consequently be met directly out of the pockets of the taxpayers. This is surely a case of far-fetched sectional covetousness.
A further result will be that the private sector must inevitably be enriched and the State will have to bear the consequences as far as the Railways are concerned. The country will then also have a weaker service in general, and there will be even greater Railway deficits and less security for the employees. Is this a so-called commercial principle? Let us remember that the guarantee of R4,000,000 in respect of the resettlement lines cannot be used as a comparison because in that case it is in the interests of national policy and in the general public interest that housing should be provided—the aim is not to enrich private magnates. The impossibility of paying subsidies from the Consolidated Revenue Fund was discussed on 1 March 1946 by Mr. Sturrock, and I read from Hansard, Col. 2756, Vol. 55—
A further harmful standpoint is also one which the Opposition have put forward, namely that the basis of our rating policy is wrong, in the first place because there is not a rates tribunal. In this regard I should like to refer to the hon. member for Wynberg (Mr. Russell) who is unfortunately not here. If hon. members will examine the 1959 Hansard (Vol. 99, Col. 2226 (Afr.)), they will see that he proposed the establishment of an independent rates tribunal and argued that deficits should be covered by subsidies from the Consolidated Revenue Fund. I wonder what he would have said if Mr. Sturrock had still been the Minister of Transport. Furthermore the Opposition says that the rating policy is wrong because the tariffs are not based on the actual cost of conveying goods. As a result the hon. member for Wynberg also made certain prophesies in this regard. I read from Hansard (Vol. 99, Col. 1978 (Afr.))—
In Col. 2227 (Afr.) of the same Hansard he went on to prophesy—
What a poor prophet!\ Furthermore, the Opposition have in the third place submitted that the Railways should purchase all their requirements from outside. In the first place many of their requirements are already manufactured outside, and to such an extent that the importation of certain foreign-made articles to meet the requirements of the Railways has declined. There are specific items which the Railways have always been best able to produce to meet their own requirements. Years ago when the market was still limited, private undertakings did not offer to produce the requirements of the Railways. Suddenly, now that the Railways have shown their ability to supply their own requirements internally and now that the market has increased, everyone is interested—once again merely for selfish reasons.
The requirements of the Railways are of such a nature that there are certain specific types of items which the Railways produce themselves and factories will have to be protected if they are to manufacture such items which would then give them monopolistic rights. That would be quite unsound. What are the Railways going to do with all the capital they have invested in large buildings, machinery, etc., which were used for the production of their own requirements when other concerns could not assist them? Must these buildings now be pulled down or sold for next to nothing? And by whom will the staff be taken over once they are unemployed? What about the townships and the housing schemes which have been erected for the staff near such works? Must they now become ghost towns? Must good workers also be deprived of this benefit? What logic is there in this argument that all the Railways’ requirements should be produced outside the Railways?
A further harmful standpoint is that loans should be entered into in respect of certain capital works, as the hon. the Leader of the Opposition inter alia advocated in February 1958 when he stated at Witbank from an election platform—
At the same meeting he went on to say—
The hon. member for Simonstown (Mr. Gay) has also said that the funds of the population register should be used for investment in the South African Railways. How can one reconcile these arguments?
Then the Opposition further says that the Railways should make concessions to agriculture, State Departments, etc. Will these concessions not all have to be financed from the pockets of the taxpayers?
Mr. Speaker, notwithstanding all these harmful standpoints and the Opposition’s ineffective criticism, the country is thankful that our Government as represented by the Minister of Transport has submitted such a brilliant Railway Budget, one which embodies purposeful planning for the future. And in conclusion I just want to say this to the hon. member for Johannesburg (North) (Mr. Plewman): Ne sutor supra crepidam judicaret.
While I sat and listened to the Opposition speakers, and as we are now discussing trains and the railways, I could not help comparing the Opposition with the locomotive which is standing still although its wheels are turning. They do not even have sufficient knowledge to know that one should throw a little sand on the track; then the locomotive will move forward again. I think the hon. the Minister and the Government benches find themselves to-night in a genuine atmosphere of festival celebration, and I think we cannot do any better to-night, and the same applies to the Opposition, than to celebrate this festival together, because when we see how far the hon. the Minister of Transport has brought the railways, then I think that even the Opposition have to admit that this has been a tremendous achievement on the part of the Minister. I want to prophesy—as you, Mr. Speaker, have seen, this far yourself—that the Opposition’s criticism has already collapsed; although I do not want to say that we shall not find one or two members who will still rise and speak. I am thinking of the hon. member for Turffontein (Mr. Durrant) and the hon. member for Drakensberg (Mrs. S. M. van Niekerk) who very often remind me of a chicken in a chicken run. When a chicken gets hold of a red rag, he runs madly around and all the other chickens follow him. As I have said, we may get this type of criticism from the Opposition, but, Mr. Speaker, you will notice in the course of the debate that even the Opposition will have to admit that the railways are doing well. When the hon. the Minister accepted this portfolio on 3 December 1954, he was faced with a tremendous challenge. After his predecessor, Minister Sauer, had controlled the railways since 1948, he had to take the railways over, and we all know that in 1948 the railway train, the train of South Africa, had already stopped moving, at a time when it was still only at the foot of the steep mountain of industrial and economic development. We know that it had come to a halt through lack of vision in the first place, through lack of funds, through lack of staff, through lack of tractive power, through lack of rolling stock and through lack of a good Minister and a good General Manager. But when the National Government took over in 1948 that train came to life again. At first it was Minister Sauer who drove the locomotive, and since 1954 it has been the hon. Minister Schoeman—since then it has been Oom Ben as he is better known among the railway servants, who has driven the locomotive. The train then started to move up the mountain with a groan, as we all know a train can groan when it is climbing a mountain; but this was a new sound. It was not the sound of “ I cannot ” but the sound of “ I think I can; I believe I can; I know I can ”. To-day we all know that that train has climbed high up the mountain and that we are facing a period of prosperity on the Railways in view of the fact that we have at last reached the stage where the Railways have developed to such an extent that they have nearly outpaced the development of the country. But, Mr. Speaker, it is not only we who know that; the Opposition know it as well. I at least want to grant them sufficient intelligence to know that the Railways are doing well. But all the other sectors of our national life know it; Commerce, industry, the mines, agriculture and all the people of South Africa. The success which the Railways have achieved has not come of its own accord. It has cost hard work on the part of the Minister, the General Manager of Railways, with his managerial staff, the staff, the railwaymen; everyone from the highest to the lowest has had to make sacrifices and work hard. Hard work alone was not sufficient. I as a farmer know very well that if I were to stand from morning to night working with a spade, doing purposeless hard work, I should not achieve much success. But the secret of success is planning and yet more planning. Furthermore, funds were required and those funds had to be used efficiently. The railway officials had to render service. Now we find that the hon. the Minister has appointed a planning and development council, a council which consists of highly specialized technical and administrative officers, people who are specialized in their work. What has been their task? Planning and yet more planning. They have had to make a study of the whole railway network and Mr. Speaker, that network covers 13,564 miles. They have had to make recommendations as to what steps should be taken to make the wheels roll more rapidly and more efficiently, so that all the traffic which lay piled up on the stations and in our ports could be carried. They had to overhaul the whole service. In 1956 they submitted a five-year plan to the Minister, and I want to mention one or two of the recommendations. They recommended the electrification of lines, the doubling of lines in order to eliminate crossings, the electrification of suburban services where a more rapid service was required, the straightening of lines and the elimination of steep gradients by the construction of tunnels. I want to quote a very, good example the section from Johannesburg to Durban, one of the best examples of the increased efficiency of our Railways. There is also the Cape Midlands section to Port Elizabeth. They recommended that diesel electric locomotives should be used on certain sections where water and coal were a problem. I am thinking of South West Africa where the diesels are being used today so that it is no longer necessary to convey coal over great distances. Not only have they planned to meet the more important problems, but the lesser every-day problems involved in conveying traffic have been examined. I give the example of the new system of centralized traffic control, whereby up to 20 minutes have been saved at crossings. Not only has time been saved, but manpower as well, particularly as a result of the fact that on Sundays especially it is not necessary to have someone at every station or on branch lines to change the points. I give the example of hump shunting in certain shunting yards, and I believe that this system will be extended to other shunting yards as well. As a result of this new system unnecessary shunting and time is saved. Manpower is also saved. I give the House another example of what I regard as a very important proposal which has been made, namely that loop lines should be extended so that they can carry trains with heavier loads and additional axles. I give the example of the block-load system which has been introduced, by which one train loaded with fertilizer is sent from Durban to the Free State. I remember the former position when three or four trucks of fertilizer which were meant for Bethlehem, for example, were not coupled to one train, but to various trains, and unnecessary shunting was the result. The object of all these improvements was that by 1 January 1961, the Railways should be in a position to convey all the traffic offered. And the Minister was in the fortunate position that eight months before that date he could announce that the Railways could carry all the traffic. Now the Opposition will say: But there was a recession. I admit that that is so. But the Minister did not sit back; he went on with his planning, despite the recession. This enabled him during the past financial year to carry no less than 6,000,000 tons more than in the previous year. I believe that if there is one thing which has made the Railways as efficient as they are to-day, it is planning and yet more planning. I want to congratulate the hon. the Minister on his new planning methods which have emanated from the office of the General Manager and other managerial offices where he has appointed more officials who are charged with the responsibility for planning, and I congratulate him particularly on the fact that he has appointed an official to act as the Railways’ Minister of Finance. I believe that as a result we shall not only have further development and more rapid development, but I believe that we shall also have development at less cost. If there is one thing which the Opposition can perhaps say, it is that the Minister could have carried out this development more cheaply. But, Mr. Speaker, speed was essential. There was no time to work cheaply and they had only one object, namely “ the job must be done ”. But the hon. the Minister was also fortunate in having a National Party Government which rules the country so well that the necessary capital was available for the development of the Railways. If we bear in mind that from 1955-60 the capital invested in the Railways increased by no less than R578,000,000, we can see what a tremendous task it has been. To-day we are reaping the benefit of these large amounts which have been invested. We are not sorry that the hon. the Minister has done what he has.
Mr. Speaker, I now come to the third point, namely that the hon. the Minister realized, and he has mentioned this as well, that he could not accept this challenge unless he had the co-operation of his staff. What has he done? He has done everything he can to satisfy the staff, to make them contented. When we examine the White Paper—this has already been mentioned and I do not want to repeat it—we see how many millions of rand the Railways staff have received in the form of improved wages and allowances under the régime of the present Minister. I now come to this very important concession, namely the consolidation of the cost-of-living allowance with the basic wages. This is an important concession which the Opposition have now dismissed as being of no consequence. They regard this as something quite ordinary. But I do not know whether the Opposition realize what it really means to the railwaymen. As a result of the consolidation of the cost-of-living allowance and the fact that together with the basic salary it now forms part of the new basic salary, the railwaymen must make very much bigger contributions to the pension fund. They must pay bigger monthly contributions. But the Minister realized this as well and from April he is going to increase their salaries and wages to compensate for the increased contributions which they must pay to the pension fund. And, Mr. Speaker, do you know what these increased contributions will mean? It will involve an amount of nearly R3,000,000 in additional salary over and above this great benefit being granted them in that their cost-of-living allowance is being consolidated, which will mean that when they retire their pensions will be 40 to 60 per cent higher.
But the Minister has not only granted improved salaries, he has also provided improved working conditions. I still remember clearly that the hon. member for Drakensberg made a great fuss a few years ago about the conditions of the workers at Danskraal. I then told her: Look, before the National Party Government took over the Railways, nearly every railway centre was a Danskraal. When one remembers the working conditions of the railwaymen under the régime of the Opposition, one is really ashamed that Whites had to work under those conditions. In 1956 the Ford Commission was appointed—by this Minister as well—with the special instruction to inquire into the working conditions of the Railway staff, and this commission submitted its report. I am glad that I can say that nearly all its recommendations have already been carried out so that the working conditions of the staff can be improved.
It has also been mentioned how the hon. the Minister has also provided for the social side of the life of his staff; hon. members have mentioned how much has been done to provide recreation facilities and recreation clubs. I should like to give the figures. During the five years from 1954-60 an amount of £651,067 or R1,300,000 was devoted to the improvement and construction of recreation clubs, together with R830,000 in the form of loans to these clubs.
Mr. Speaker, I am not going to say much more, except that I do just want to add these few words. The railwaymen know when they are well off. They know to whom they can look and who looks after them. They know that as long as there is a National Party Government in power, things will go well with them. The farmers also know that things will go well with them so long as there is a Nationalist Minister of Transport. I should like to associate myself with what has already been said about the great assistance which has been provided to the drought-stricken parts of our country. I should just like to mention that from September to November, 1959, that is to say a period of three months, no less than 250 special trains left Hutchinson, Carnarvon and Calvinia. In addition we must remember that this stock was carried at reduced rates. The Railways bear 75 per cent of the cost involved in transporting this stock, and the Department of Agriculture 18.75 per cent, while the farmer only contributes 6.25 per cent to the cost of conveying these animals. In addition fodder has also been carried to the drought-stricken areas at low tariffs. The Railways bear 50 per cent of the loss, agriculture 25 per cent and the farmer 25 per cent of the cost involved. Consequently, if I can give the Opposition sound advice, they should urge that the question should now be put so that they can stop talking.
The last speaker flattered the United Party a little when he compared the position of the Railways in 1948 with the position in 1960. Is he unaware of the fact that there had just been six years of war? [Interjections.] Apparently he expects that the backlog caused by the war should have been overtaken in a period of three years. But then we have the real peculiarity. He said that the Minister was faced with a tremendous task when he took over from the previous Minister in 1954. The position is therefore that after six years of Nationalist rule, from 1948 to 1954, there had apparently not been sufficient time to overtake the backlog. Nevertheless he criticizes the United Party for being responsible for the position in which we appreciate the Railways were after six years of war. But without using such a false comparison, he cannot praise the Government. As far as the hon. member for Edenvale (Mr. G. H. van Wyk) is concerned, he has tried to compare the Railways with a private company. May I just tell him that if the Railways were a private company, the Minister of Economic Affairs would long ago have prosecuted them for monopolistic practices under the Monopolies legislation. [Interjections.] Before proceeding I just want to say something about a strange interjection which the hon. the Minister made while the hon. member for Johannesburg (North) (Mr. Plewman) was discussing the tendency which he says exists to under-estimate revenue and over-estimate expenditure. The Minister then said by way of an interjection: Why did you not report on that aspect while you were Auditor-General? Does the hon. the Minister not realize that that is not the function of the Auditor-General? If Parliament believes that the estimates of revenue and expenditure are incorrect, it is Parliament’s function to criticize that aspect. That is exactly what the hon. member has done in his capacity as a Member of Parliament. It would have been irregular for him as Auditor-General to refer to that aspect because the Minister should know that once Parliament has voted money, the function of the Auditor-General is merely to ensure that the money is spent for the purpose for which it has been voted. I think the Minister should say he is very sorry that he has made this remark.
The hon. the Minister also assured the House during his speech that the present tariff structure provided economic tariffs to every sector of the country. I want to discuss that matter and I want to subject this statement to the well-known test of, as the Englishman says: “The proof of the pudding is in the eating.” I should like to give the Minister a few examples of existing tariffs and I should like him to tell me what the underlying principle is. I assume that if a tariff is economic, there must be certain economic principles which cause the Minister to fix those tariffs. The first example I want to give is the wellknown example of the various tariffs which apply to two raw materials, the one being coal and the other oil and petrol. In the eyes of the economist these are both raw materials which are used for the generation of power and for transport purposes and it is essential in both cases that they should be equally cheap or expensive. But what do we find? We find that while coal is conveyed at cost or below cost—it seems to me no one is sure —we find that in the case of oil and petrol a profit of 500 per cent is being made. I should like to ask the Minister on the basis of what economic principle he draws such a vast difference between these two raw materials, which fulfil the same function. X I should also like to ask the Minister what economic principle underlies the fact that his voters and mine who happen to live in the interior, who happen to live a few hundred miles from the coast, have to pay a tax of 4d. or 5d. in comparison with voters who live at the coast. This is a form of racial discrimination because surely he knows that most of the English people live at the coast and most of the farmers in the interior! What is the underlying principle?
I then turn to the second example where I cannot see what the underlying economic principle is. Take cotton. When one picks cotton, one has cotton fibre which contains a great deal of seed. It is called seed cotton. Before it can be used in the factories, the seed must first be removed by the ginning process, and then the fibre can be pressed. This cannot be done until the seed has been extracted because otherwise the cotton is full of oil. Consequently it must first be ginned before it can be used. The obvious thing is to erect the gins near the cotton fields because it makes matters far easier for the farmers. The farmer delivers his cotton to the gin and he is immediately paid in cash. The cotton is then ginned and pressed and it is then sent in large quantities to the spinning mills which are normally situated in the cities. Here in South Africa we find that if one wants to do that, the tariff on ginned cotton, on the cotton fibre after it has been pressed, is far higher than on seed cotton. This discourages people from erecting gins near the cotton fields. But in South Africa there happen to be gins near the cotton fields. Many of the gin-owners say to-day however that it might be better for them if they were nearer the factories because of the Railway tariff. It means that when the cotton has been pressed, the Railways convey a smaller volume, but they make one pay a higher tariff. If the Minister and the Railways wish to carry out their duty under the South Africa Act and run the Railways on business principles, they should in fact encourage people who are reducing the volume of goods requiring transport. From the point of view of the country as a whole, that is the economic thing to do. The Railways should not encourage an increase in the volume of goods to be conveyed but they should encourage a reduction. This is a further example of the Minister’s policy and I should like to know what the underlying economic principle is.
The principle is that we charge what the traffic can bear. Have you never heard of it?
Do you admit that that is the principle? I shall come back to this admission later. But in this particular case that principle is not very appropriate because the price of cotton seed and the price of cotton are more or less the same.
But we find the same phenomenon in the case of timber. If a plywood factory wishes to establish itself near its source of raw material and wishes to process the timber there, it finds that the tariff on processed plywood is so much higher than that on the raw timber, despite the fact that its volume is far less, that it is far more economic to go to the cities. The Minister will of course once again say that he charges what the traffic can bear. The Newton Commission as well as the Viljoen Commission rejected that principle.
Read the report again.
I have done so and although this is a factor which one must take into account, one must also take into account the direct costs of conveyance, and in the two examples I have given this has not been done at all.
There are further examples. Take citrus. When citrus is to be exported abroad, it is conveyed at a certain tariff. If one wishes to convey the same citrus to a coastal port to make fruit juice for export, the tariff is doubled, with the result that foreign concerns which wish to produce juices are discouraged. It pays them better to export the oranges than to process them here. The industry has approached the Minister time and time again and asked him to grant special tariffs in respect of complete truckloads. The Minister has not made that concession in this Budget. I can just read from the latest Financial Mail.
Even if the Minister is working on the principle of what the traffic can bear, and even if he is applying that principle which economically speaking is incorrect, here is one case where he can make an exception in the interests of our country’s economy as a whole as well as of the Railways. There are so many other examples which I could give and which show that there is no logic or economic principles underlying the Minister’s policy. But I do not want to detain the House all evening. I just want to give one final example.
Apparently the Railways allow beer producers to deliver beer within 30 miles of the factory with their own vehicles, but the limitation in the case of cool drinks is 50 miles. What is the principle in this instance and why is there this differentiation?
This is a matter for the Minister of Transport and not for the Minister of Railways. [Laughter.]
Furthermore, there is one example which I am surprised that none of the farmers opposite have raised as yet. I should also like to know what the underlying economic principle in this case is. I am referring to wool. When wool prices shot up after the Korean war, the Minister increased the wool tariff tremendously. The economic principle was apparently to charge what the traffic could bear, but what has happened over the past five years? Wool prices are less than half what they were at that time, but the tariff remains unchanged. Here the principle is simply that of a monopoly which is in such a strong position that it can do what it likes because the people concerned have no other way of transporting their wool. But what is the result of this policy of charging what the traffic can bear? The principle adopted by the Newton Commission and the Viljoen Commission is that one should at least cover one’s direct costs and that every product should make a certain contribution to the indirect costs.
But that is the principle.
But the principle is not being applied in all these cases. In our amendment we ask that the transport needs of the country as a whole should be co-ordinated. Tremendous developments are taking place today in the field of transport. Fifty years ago the Railways were perhaps the main form of transport, but its importance has decreased greatly to-day. New methods of transport, such as pipelines for conveying oil products and fluids in general, have been developed and there has been the tremendous development of road transport. But as long as we have this tariff structure under which the tariffs differ so greatly from the actual cost of transporting the product concerned, it will be impossible to co-ordinate our transport needs and to utilize these new methods of transport. I want to give one example. Seeing that the Railways are making such great profits out of the conveyance of oil, it is understandable that they oppose any pipeline scheme because it will deprive them of some of their profitable traffic. In other words, as far as the co-ordination of rail transport and pipeline transport is concerned, it is being obstructed by the abnormal tariff structure of the Railways. The same applies to road transport. Where road transport in general has been found to be the most efficient form of transport, in most other countries of the world, has been precisely in the conveyance of those products which are conveyed at the highest tariffs. For that reason the Administration will oppose any extension of road transport, although it may be the right policy when seen from the point of view of the economy of the country as a whole. I have come to the conclusion that the Minister does not quite understand the South Africa Act. If the intention of the South Africa Act was that an efficient and cheap transport service should be provided to all sectors of the national economy, it does not mean for one moment that the Railways should try to handle all transport in our country. Seen from the national point of view and from the point of view of the taxpayer, the Railways should give way, when they find that a certain type of transport can be undertaken more cheaply by other methods, even if it means a temporary loss. That is the basis of the whole process of economic development, i.e. the ruthless elimination of the less economic and less efficient processes in industry.
Must the Railways be eliminated as well?
No, there are certain types of transport which the Railways can provide more efficiently, and the Railways must confine themselves to those types. If goods can be conveyed by air, by means of pipelines or by other means, the Railways, if they want to interpret the South Africa Act correctly, must give way, because this is the process which is taking place throughout the world and is the position with which the private industrialist is always faced. If he has a factory which produces cotton shirts and someone starts producing nylon shirts and the public prefers those shirts, he simply goes under, but that is economic progress.
I just want clarity. The hon. member says that oil pipelines could be constructed, and this will mean a tremendous loss of revenue to the Railways. He says that there should be increased road transport which will also cause losses. Will the hon. member just tell the House who will then have to bear the losses incurred by the Railways?
It does not follow at all that there will be losses. According to the Newton Commission there will not be losses because that commission said that goods should not be conveyed at a loss. But if it is the Government’s policy to convey certain articles at less than cost, then the general taxpayer should pay. Why should the man who uses oil and petrol subsidize the man who uses coal? There is no economic justification for that. As far as the pipeline is concerned, we must look to the long-term interests of the country. If for the next 50 years it will be cheaper for people in the interior to be supplied with petrol by means of a pipeline, must the consumer pay more for the conveyance of his petrol for the next 50 years? What justification is there for that? What the Government should do is to apply the same yardstick as it applies to other sectors of the economy. If there is a monopoly in terms of the monopolies legislation, it is prohibited if it is against the public interest. That legislation is of course not applicable to the Railways, but the Minister should always keep this same principle in mind. It is only on that basis that we shall establish a really efficient and co-ordinated system of transport.
The previous speaker has replied to the statements made by the hon. member for Bethlehem (Mr. Knobel). He has referred to the deplorable conditions under which the railwayman had to work for a certain period and as an excuse he has said that the hon. member for Bethlehem has apparently forgotten that there had been six years of war and he has used that as an excuse for the conditions under which the railwaymen had to work. But he forgets that in 1947 the Grindley-Ferris Commission submitted a report and in that report the commission referred to a departmental committee which had been appointed as long ago as 1940 to investigate these deplorable conditions. The Grindley-Ferris Commission also stated in 1947 that it deplored the fact that from that time until 1947 nothing had been done. Conditions were already deplorable in 1940, and that was not due to the war. The only assistance which they offered to those workers was 3s. per day where conditions were too bad in order to compensate them for the conditions under which they had to work. But we cannot attribute those conditions to the war.
The success of any undertaking depends of course on whether its staff are satisfied and contented, and the bigger the staff the more important it is that they should be looked after because they play such a tremendously important role. When we examine the establishment of the Railways as at 31 March 1960 when the total figure for Whites and non-Whites was 217,992, we appreciate that here we are dealing with a vitally important element whose interests must be looked after if we want to achieve the best results. Now we can say without fear of contradiction that the staff of the Railways are satisfied and contented. One proof of the truth of this submission is that it is so much easier to recruit staff to-day. There was a time not very long ago when resignations far exceeded the number of applications for re-employment, but over the past three years we find that in 1958 there were 13,024 resignations but there were 17,067 applications for re-employment. In 1959 there were 12,212 resignations and 13,641 applications for re-employment. In 1960 there were 11,000 resignations and 14,000 applications for re-employment. In the past three years the applications for re-employment have exceeded the resignations by more than 8,000. When we ask to what this is attributable, there is no other answer than that the persons concerned consider the Railways an attractive field of employment where they can be contented and satisfied, and what are the reasons for this position?
In the first place the Railways offer their workers the necessary security. The financial benefits in which they share are far greater and more attractive to-day then in the past. If we take the position for the last six years, we find that the Railways have granted their staff financial concessions, such as wage increases which have totalled more than R15,000,000; improvements in travelling and relieving expenses and transfer expenses which have totalled nearly R1,000,000; allowances which have totalled nearly R14,000,000; improved conditions of service; improved grading and improved pensions. Pensioners have been allowed to join the sick fund, and in addition there have been other less important concessions. The total amount involved over this period of six years has been R35,010,908, which shows why we can say that the railwaymen feel contented in their work. Take a smaller item such as uniforms. As a result of representations and as a result of the additional allocations which have been made over the past six years, concessions totalling R1,500,000 per annum in respect of uniforms alone have been made, and the improved uniform allowance has cost the Administration more than R10,000,000 over the past six years. When we consider another important item such as pensions, we must say at once that the Railways have one of the best pension schemes. The pension funds are subject to the provisions of the 1925 Act. But this Government has periodically introduced amendments which have greatly benefited the pensioners. Take the widows’ pension fund for example. Previously, when a worker died, his widow only received a single cash sum which was the equivalent of twice the contributions the husband had made without interest. The widow of a pensioner was in a very bad position. The Railways first calculated what the husband’s annuity would have been when he retired if he had accepted a cash sum, and the monthly cash amounts which had already been paid were then deducted. The position was so bad that if there was balance—and usually after six and a half years there was no balance—that was all the widow received. This position was relieved by Act 63 of 1951 and in addition by the 1956 Act with the result that a cash sum as well as an increased annuity are paid to the widows which means that the widows enjoy far greater protection with the result that there is great satisfaction. When we for example consider the position relating to the increased contributions to the pension fund, or the improved pension benefits for the railwayman himself, we can refer to various steps which have been taken by means of legislation. For example Parliament in 1953 approved legislation which allowed the railwayman to contribute on an additional 25 per cent of his pensionable emoluments in order to obtain increased pension benefits for himself. In 1959 those benefits were extended so that 7,000 pensioners who had retired between 1944 and 1953 could also share in those benefits. In 1956 we had the first consolidation, the forerunner of the present consolidation, whereby 15 per cent of the cost-of-living allowance of married officials was consolidated with their basic salaries and wages, and their pension benefits were consequently increased. In 1959 pension benefits payable to railwaymen and their widows were increased by 10 per cent. In 1960 further consolidation took place and this cost the Administration R11,000,000. The first consolidation cost R5,500,000. In other words, these two steps cost the Administration R16,500,000. Mr. Speaker, there are many other lesser benefits which are not always borne in mind. Think for example of the fact that concessions have been made so that the pensioner and his wife can have one free pass per annum plus 48 tickets at quarter price, while children below the age of 17 years who are still dependent on their parents are entitled to one ticket per annum at half price. There is the increase in the retirement age which has been raised by three years; first-class holiday and medical free passes have been granted to officials with ten years’ service; improved travelling facilities have been accorded the non-White railwaymen; officials who obtain university degrees have been given more generous recognition; the Service Act has been amended so that an official who has been dismissed can, if he has accumulated leave to his credit up to a maximum of nine months, still take that leave on his dismissal. Enough has been said about housing, but I want to emphasize once again that when one remembers the railway houses with which we were familiar previously, the type of house one found in a railway area, we remember that those houses were of such a type that one often felt ashamed. It undermined all one’s self-respect. The railwayman developed a sort of railway complex; they lived in a railway camp which was, if we must describe it to-day, nothing but a sort of railway location. But to-day we can go to any of the large centres and what do we see? I am thinking for example of the housing scheme at Kimberley where the railwaymen live amongst the other people in the city. They are living in extremely well-planned houses and the railwayman need not be ashamed of his house. He no longer lives in the type of house which made one think when one entered it that one was entering through the back door, so bad were they, only to find eventually that one had entered through the front door. No, the railwayman to-day lives in a properly planned house of which no one need be ashamed.
Much has been done in recent years to improve the cultural and recreational facilities of the railwayman. From 1954 to 1960 more than R13,000,000 was spent on the improvement of these facilities. Swimming baths, tennis courts, athletic tracks, clubs, etc., have been provided for the railwaymen.
Who did all that?
Mr. Speaker, I think it was the hon. member for Durban (Point) (Mr. Raw) because it must have been a rather loud-mouthed person if he came from outside and succeeded in doing all this.
When we consider the improved efficiency of the staff, we think for example of this new course which is being provided on human relations. The members of the Select Committee who recently had an opportunity to visit the railway college at Esselen Park saw what methods were being adopted to select the cream of the railwaymen and to train them in human relations. When we see what wonderful results are being achieved …
May I ask the hon. member a question?
I am sorry; I only have a few minutes; the hon. member can rather put his question later. When we think of these human relations and when we hear the evidence of what it has meant to men who have already spent years in the Railway service, we appreciate the value of this course. Railway officials with years of service say: We never realized how many mistakes we were making in our attitude towards the public and towards our fellow workers. This is all attributable to this excellent course which is being provided. Just think of the bursary scheme which has been established. In 1953 a start was made with granting bursaries to deserving cases so that they could take the B.Sc. in engineering. These bursaries were provided subject to reasonable conditions. Half the bursary is a free grant and the remainder is interest-free. In 1955 further progress was made and free bursaries to the value of R500 or R600 were granted to persons who wished to take this course at the university and who wished to return to the Railways in order to devote their abilities to the further service of the Railways. By the end of 1959 there were already 66 persons who had completed their studies and at present there are 163 students who are studying full-time under this scheme. The Railways do this because they want to make the best talent available for the Railways. In 1958 a scheme was devised whereby approved officials and even applicants from outside could take the B.Comm. degree at universities, a B.Comm. degree which has been adjusted to meet the requirements of the Railways. When we examine all this, Sir, we must admit that much has been done not only to equip the railwayman better but to make him a contented and efficient worker In addition we think of the attention which is Paid to the spiritual needs of these people. We think of what has been done in respect of welfare services; we think of the Railways Christian Union and the various churches and the facilities which have been made available to them. They have received concrete support by means of contributions from the Railways to help them in caring for the spiritual needs of the railwayman. We foresee that there are great possibilities in the future. The training college at Esselin Park should achieve even more in the future. We know that the Railways who have so many thousands of people in their service cannot suddenly proceed to adopt the most modern methods, that is to say, the methods whereby persons are tested and are then placed in employment in accordance with their ability and aptitude, but we have every confidence that as time goes by, methods will be devised in this same college and put into operation so that the persons who are recruited in the future for the service of the Railways can be properly selected on the basis of their aptitude and their interests and will then be placed in employment in the sphere for which they are best suited.
It is really pathetic to see the writhing and torment of soul and the tortures of the flesh which hon. members opposite must endure in order to find something to say against this remarkable and excellent Budget. They found it very difficult, because we can understand that it is difficult to find something to say against a Budget which is as excellent as this one. The year before last when there was a deficit on the Railways, due to circumstances beyond the control of the Administration or the Government or of the country, but which was the result of the world recession which necessarily also had its effect on South Africa and on the revenue of the South African Railways, hon. members opposite made a great fuss. The hon. member for Wynberg (Mr. Russell) was the chief critic and he had much to say about “ Ministerial and managerial inefficiency ” in regard to the Railways. The hon. member for Wynberg tried to tell the people outside and also the people overseas that the Railways, in as far as their finances are concerned, were approaching a crisis and would go under. During a time of recession, which was a world recession, they adopted that attitude. By adopting that attitude, they wanted, if possible, to turn that recession into a depression in this country. Where has one ever before seen greater irresponsibility? There we have the actions of a weak, irresponsible and unpatriotic Opposition. They did not mind in the least what happened to their own fatherland as long as they could just derive some temporary political benefit from the position. That was their attitude two years ago. Last year when it seemed that in spite of their irresponsibility the Railways would achieve success as the result of the far-seeing policy of the Administration and the Minister in planning on a long-term basis which then began to bear the first fruits, and when it appeared that there would be a surplus, they changed their criticism. We then heard less about ministerial and managerial inefficiency; then they bemoaned the fate of the poor railwayman. That was then their main line of attack, and do you know why, Mr. Speaker? It had then already been decided that there would be a referendum on the question of a republic, and once again they were weighed and found waiting. They then had to do their utmost to try to gain votes amongst the railwaymen, and they then had much to say about the deplorable conditions in which the railwaymen found themselves, knowing full well that although the Administration and the Minister at that time had a surplus of R17,000,000, it was in the interest not only of the country but of the railwayman as such to use that surplus in the first instance again to make the Tariffs Reserve Fund solvent, because the deficit of the previous year had depleted that fund. It was the duty of the Administration, not only in the interest of the Railways as such, but particularly of the railwayman, to make that fund solvent again, because the Tariffs Reserve Fund is the guarantee for the salary and the conditions of service and the wages of the railwayman in future. I say that because of the energetic tackling of the problem and the planning and the implementation of that five-year plan there was a change in the position of the Railways. Then we heard much less about managerial and Ministerial inefficiency. As I say, there was then a referendum in the offing and once again the Opposition revealed themselves as being the opportunists they are. They were a dwindling party, a frustrated party, and as such they tried to catch the vote of the railwayman. Hopeless as they are, they again started doing that. I would like to see an Opposition with a more hopeless and sombre past and a more hopeless and gloomy future than the hon. members opposite. But in passing, Sir, speaking about a hopeless and dark past, hon. members opposite are the last people to talk about the lot of the railwayman. I would like to remind them that in 1922 the Railways were in an utterly hopeless position in regard to their finances. They did not know which way to turn. And what did they do? The first victim was the poor railwayman. They took away the whole of the cost-of-living allowance and they did so at a time when these people were in great difficulties, at a time when the railwayman and his family were hungry, when they did not have the money to buy a bit of bread or a piece of meat every day. Then those hon. members deprived the railwayman completely of his C.O.L.A. What right have they, as they did last year, for the sake of party politics to try to accuse this side of the House of not treating the railwayman decently?
It is dangerous for a party like the United Party with their past history to come and tell us such things. However, I want to say this, that there has never been a Government before —and I say this with all the seriousness at my disposal—which has done so much good in the relatively short period of 12 years to so many railwaymen as was done by this party and this Government. I do not want to quote figures—it has been proved over and over in past debates. Hon. members have quoted figures to-night to show what this Government has done for the railwayman. Millions of rand have been spent in respect of higher wages and salaries and improved conditions of service and housing. No previous Government has done for the railwayman what this Government has done. I challenge any hon. member opposite to get up after I have sat down and to deny it. Let us compare our record with theirs and you will see, Sir, that the comparison will not flatter them.
I must say this in honour of the railwayman. As I said a moment ago, there we have an Opposition which is tattered and torn, and which has a hopeless past and an even more hopeless future. They remind me of that animal of which it is said that he has no past and no future—a mule. The railwaymen showed more responsibility than hon. members opposite, who ought to be responsible people. If I have to award marks in respect of a sense of responsibility between the Railway staff and hon. members opposite, I would give the railwaymen 100 marks and hon. members of the Opposition nothing. Their whole course of action in this House has shown that they have not the slightest sense of responsibility; they have not the slightest love and loyalty for their own fatherland or for their own people. As against that, the railwayman has shown of what steel he is made; but not only has he a sense of responsibility but that he takes an interest not only in himself but in the country and in its people as a whole. Hon. members of the Opposition in the past tried to influence the railway workers in such a way that they would catch their votes, but I want to give the Opposition the assurance that they will never manage it, because the railway workers know what their position was when that party was in power.
There was a period in the history of our people and in the economy of this country when this party took the railwayman by the hand and ensured a decent life for him. I do not want to go too far back in history, but we know that that policy was already commenced in 1924 when the late Minister Charlie Malan introduced the White labour policy in the Railways. Even at that time he laid down a policy whereby every White man who joined the Railways could advance from the lowest ranks to the highest. I need not mention examples, Sir, but the man who recently retired as General Manager of Railways was one of those who entered the Railway Service under that set-up, and we see what progress he has made. But I do not want to go far back into history. I want to start with 1948 when this party came into power. What was the position of the Railways then? We are told that there was a war on. The war is used as an excuse for many things, Sir. But the fact remains that this Government within a very short period of 12 years provided living conditions for the Railway staff and improved their wages, their salaries and their living standards to an unprecedented degree. I think the railwayman to-day is very satisfied and he would not exchange the policy of this Government for that of the Opposition for anything in the world. I have said what the position was two years ago and what it was last year. What is the position this year? What is the weak criticism that the Opposition wants to voice this year? The hon. member for Wynberg who is the main critic on that side tried to paint a picture which he knows is not true. His main allegation against the Minister and the Government is that we and the people outside never know when there will be a surplus or a deficit. That is his main point of criticism. In other words, he has now come along with a new point of criticism by saying that it is “ Ministerial budgeting inefficiency ”. But what is the actual position, Sir? What the hon. member forgets is that a Railway Budget is not like any other budget. It is not like the budget of a private business. A Railway Budget, as in fact any State Budget, is limited by what the Railways and Harbours Act says their policy should be and what that Budget should bear in mind. And what does the Railways and Harbours Act say? The Act provides that the Railways and the Harbours should be run on businesslike lines so that the revenue covers the expenditure, the expenditure in respect of salaries, wages, conditions of service and the maintenance of certain statutory funds like the Tariffs Reserve Fund, the Betterment Fund and the Pensions Fund? To that extent the Railways must be run on businesslike lines, but furthermore, and this is of importance, the Railways should also aim at promoting the development of the country in the industrial sphere. That is equally important, if not more so. In other words, not only must the Railways show a profit and not only must the motive be to make profits, but the motive should also be to render services. Therefore its tariff structure must be of such a nature that it should not necessarily show profits, because its main object must be to render services to the country. That is the object of the Railway Budget and from the very nature of the case we will always find that in all Railway Budgets there will be a deficit some years and a surplus in other years. It is not only during the régime of this Government that we had that position, but we had the same thing when the Opposition was in power.
May I put a question to the hon. member?
I am sorry I have no time to answer questions. That was in fact the position also in their time, with perhaps this difference, that in their time there were greater deficits and more often than there were surpluses. Another thing the hon. member for Wynberg forgot when he voiced this criticism was this: Our Railways are of such a nature that any recession in any part of the world must necessarily affect the position of South Africa. He himself admitted in his speech this afternoon that in regard to the revenue of the Railways they are very sensitive to recessions in other parts of the world. Therefore it is only a wise Government and a wise Minister who in respect of the Budget every year are conservative in estimating the revenue of the Railways. Unless he does so, he can land in difficulties and create chaos in the country. So much for the criticism of the hon. member for Wynberg.
It is interesting to know how the Railway Budget has been framed in order to render these services, and to know, as other hon. members have already pointed out, that whilst the wholesale prices of manufactured articles sometimes increased by 108 per cent, as in fact was the case after the last war, railway tariffs were increased by only 67.7 per cent. It is also interesting to know that in respect of the transportation of coal in this country, coal which is practically our only source of power, that amounts to 20,000,000 tons per annum out of a total traffic of 88 million tons, i.e. 25 per cent of the traffic carried by the Railways. But in spite of that, the total revenue derived by the Railways from the transportation of coal is only 10.94 per cent. I mention these things to show you, Sir, that the whole tariff structure of the Railways is designed not only to make profits but also to render services. Therefore we never expect the Railways to budget for tremendous surpluses.
I conclude. Mr. Speaker, by saying this: The Opposition, if it wants to be worthy of the name of an Opposition and does not want to be as it is now, tattered and tom, will have to adopt a different course. They will have to reveal a greater sense of responsibility; they will have to act more like responsible people and as an Opposition should act. That will not only be in the interest of the country as such, but also in the interest of our party, because then we will have an Opposition worth while fighting against.
My time in this debate is very limited, and I shall not follow the hon. member who has just sat down, except to say that he spoke in such loving terms of the Opposition, that I am sure, in the very near future, he will be sitting on the Opposition benches!
There are one or two points which I would like to make in the time which is at my disposal. The first point to which I should like to refer is the question of staff which was mentioned in the Budget speech. The hon. the Minister referred to the staff position and to certain re-organization which he intended to make with a view to increasing efficiency and to cope better with the terrific increase which has taken place in the Railways in the way of increased traffic and increased administration. In referring to that, he said—
This is something that I find most difficult to understand, following as it does so hard on the heels of a statement made by the retiring General Manager in his report on page 7. He seems to have had completely different views on this matter, and you will find there that he says as short a time ago as 1959—
I seem to remember that there was a question which was eventually made the subject of a resolution by the Select Committee concerning the huge amount which Stores had grown to and the necessity for some financial control in the acquisition of these Stores, in the keeping of these Stores and in general handling them and keeping them in a state which would ensure that they would not be such a big burden to the Railways. I have a feeling that the retiring General Manager, in dealing with this specific subject, felt that it was good to coordinate these two positions so that finance and planning could be brought together under one head in order to be able to exercise better control. Well, Sir, so shortly after that, we had the hon. Minister coming along here and making a statement that he is now making this change, and I find it very difficult to understand that on the one hand, the General Manager has made that statement placing these two departments under one head for better control, and now the Minister coming along and splitting them apart to achieve the same object. I would like him please to deal with that in his reply to this debate, to ensure that we can at least see whether he is right or whether the former General Manager was right in assessing the position. I think it is very important that we should know, because the amount that we require to be controlled here is a very large amount indeed. We are not dealing in pennies and shillings, but in very large sums of money concerned with Railway administration, and when one finds a position so contradictory, I think a little enlightenment would do us a lot of good.
I want to deal with one or two other matters for a moment. The first one I want to deal with is a statement which I have seen recently to the effect that, in respect of the Airway Service, the Department intends to charge passengers travelling by airways for fares to and from the airports on the buses. Whilst I appreciate that overseas this seems to be fairly common practice, it is certainly quite new in our set-up here, and I feel that it is not a good step for the Department to have taken. I think it is going to cause quite a lot of resentment amongst people who are using airways, and I think it is quite a petty thing which the Minister could quite well have done without.
The next thing I want to deal with is the increase on internal services. The point I want to deal with here won’t take many minutes, but in travelling myself recently on the internal services. I have noticed that the number of passengers travelling on the Viscounts seems to have increased considerably during the current financial year. For that I am very pleased. The service, generally speaking, is excellent, but I do think that the Department has failed quite considerably in planning ground staff arrangements to keep up with the increased traffic which is being operated. I think this is particularly noticeable on the coastal run between here and Durban, where you have an aircraft which is capable of covering the distance in a very short time, but, on the last two occasions when I have travelled, the aircraft has been very, very late indeed, due largely to the cargo which is carried on these aircraft. I feel that far, far better arrangements can be made for the loading of this cargo into the aircraft, so that it will cause far less delay and inconvenience to the passengers using the service. On the one occasion when we arrived at Port Elizabeth, all the cargo from the aircraft had to be unloaded because cargo of a particular nature had been offered, and that had to go into one hold, so all the cargo had to come out of that hold and had to be packed elsewhere. As a result, instead of some 20 minutes or so being spent on the ground at Port Elizabeth, we were there for 40-odd minutes. The same process was repeated at East London, where two Viscounts were in at the same time, and the facilities there were quite insufficient to handle two aircraft of that size at the same time. I would put it to the hon. the Minister that there is no sense in giving an efficient service if you can’t match it on the ground. It is bad enough for the average air traveller having to take some considerable time to get to and from our airports to the cities, without having to be delayed on the way. We use air services for speed and, when all this time is wasted on the ground, I think it is time that the hon. the Minister should go into it and speed up the handling of the aircraft on the ground, so that there are not these long delays, which are very irritating to the people using the service.
The next point I want to come to is one concerning Durban harbour. The hon. the Minister will remember that a year or so ago, I asked him if he would make available to us a copy of the Moffat Commission Report, especially in so far as it applied to the proposed alterations to the Durban harbour. The hon. the Minister replied to me then that he felt it was not in the public interest to make that report available to either ourselves or the public. I accepted that and I felt that if the Minister was going to keep that report purely as a departmental matter, that would be fair enough. But there are so many people outside of the parliamentary circle who seem to have all the information contained in the commission’s report. I myself have some of it. I do not know whether it is right or wrong. Therefore the picture which I have had to try and build up about the future development of the harbour in my own mind is gathered from bits and pieces, and I fear that it is very, very wrong indeed that Members of Parliament who represent an area in which a harbour falls, m respect of which a commission has sat and reported to the Minister, should not have that report made available to them. At the moment I think I have a fair picture of what the Moffat Commission recommended for Durban harbour, but I am not sure. As I have indicated, there are a lot of people in Durban and elsewhere who do know the contents of the report as far as it concerns Durban harbour, and the only time when I am sure as to what the Moffat Commission recommended and what action the Department has taken about it, is when the work is completed or pretty well on the way. I think that is a position which is an unfair position. As a member of this House representing that area, I feel that it should be fairer if the Minister would make available to us a copy of that report. I believe other people are less entitled to have a copy of that report, but they seem to have got hold of copies and to know all the information contained therein. I would make another appeal to the hon. the Minister to make copies of that report available to us so that we at least can know what is contemplated in the areas which we represent.
There was a peculiar phenomenon in this House to-day. You know, Sir, the appointment of a new General Manager of Railways does not happen every day but despite the fact that the chief critic of the Opposition spoke first to-day and that various other speakers of the United Party spoke thereafter, not a single one of them up to this stage has directed a word of welcome or congratulation to the new General Manager One wonders whether they are keeping the way clear again to make unsavoury attacks on the General Manager during the debate on the next Budget, which they hope will perhaps be less favourable. Sir, this Budget has knocked out the United Party to such an extent that this time they are very moderate in their criticism. They are definitely not the same United Party we saw here last year. But one thing emerges very clearly from their criticism viz. that the United Party wants to kill the Railways as a State undertaking. The hon. member for Wynberg (Mr. Russell), their chief critic, went so far to-day—I could not believe my ears and later imagined that I was sitting in the Provincial Council—as to plead in a debate on the Railway Budget for the building of roads. He became quite confused between Railways and Transport. The hon. members for Jeppes (Dr. Cronje) again wants to deprive the Railways of high-rated traffic. If that does not indicate that they want to kill the Railways as a State undertaking, I do not know what it means and what the United Party has in mind. You know, Sir, that the United Party since 1958 has had a complete volte face in regard to its criticism of the Railways. Up to that stage the United Party was on the defensive. They could not get going. They tried to defend the policy or lack of policy they had before 1948, but after the 1958 election they came to the realization that to defend that old policy only landed them in trouble more deeply. There was of course the amusing episode when they tried to play off a former Nationalist Minister of Transport against the present Nationalist Minister of Transport, but they did not derive dividends from that either. They tried to do that ever since 1954 until the election of 1958, when the Nationalist Party increased its majority and won constituencies from the United Party in which the railwayman was the decisive factor. They then realized that also that gain did not pay them. Then ever since 1959 the General Manager was dragged in as the scapegoat. We on this side see quite clearly what the object of that attack is. I want to predict that very soon the new General Manager will also be used as the scapegoat, because they are opposed to the Railways as a State undertaking—that is what is behind this disguised attack. The attacks are no longer directed against the Government or the Minister, but also against the General Manager who cannot defend himself in this House.
Where do you get that from?
Just read the speech of the hon. member for Wynberg which he made last year. What is the object? Make these people suspect in the minds of the railwaymen, make the General Manager suspect, break his confidence. That is the political object, Sir. We should not forget that one-eighth of the population is dependent on the Railways. Win the sympathy of those people and it is possible that your party may win an election. What methods are now being followed? The hon. the Minister and the General Manager are being accused not only of inefficiency but also of dishonesty. Last year the hon. member for Wynberg used these words: “ The Minister’s alleged surplus of R3,000,000 is in fact an appreciable deficit. The surplus is an irregular bookkeeping transaction. The Minister tampered with the books.” When one makes these wild statements one should at least furnish the proof, but up to this stage neither United Party nor the hon. member for Wynberg have furnished a single iota of proof. But one may well ask whether those hon. members are standing behind the door. I think it behoves them to ask the hon. member for Johannesburg (North) (Mr. Plewman) what the position is if the books are tampered with, because the hon. member was the Auditor-General and in 1948 he gave evidence before a Special Select Committee and there he revealed that there had been tampering with no less than £13,300,000. Hon. members therefore ought to know quite well what it is to tamper with the books, and the old adage has it that one should not judge others by oneself. But, as I have said, there has been a change in the course of action of the United Party. Ever since 1958 they have been doing their best to woo the vote of the railwayman, and now again, as in the past, they are trying to make use of the trade union leaders. There is a certain Mr. Liebenberg who is the leader of a trade union in the Railways. Last year the hon. member for Wynberg mentioned the name of Mr. Liebenberg no fewer than twelve times.
What do you think of him
I think the United Party has an object in referring to Mr. Liebenberg. We know that during the war years they also had a certain object, and to get a certain Mr. Solly Sachs to favour their policy they made a large number of concessions to the communists, and, inter alia, they delivered the White workers of South Africa into the hands of Mr. Solly Sachs.
Order! The hon. member is now deviating too far.
Sir, I abide by your ruling but I am drawing a comparison between trade union leaders and I am showing what happened in the past and what is happening again now. The railwaymen have experience of this type of thing and will not allow themselves to be misled. The railwaymen at this stage are quite aware of the object with which the United Party is training Mr. Liebenberg. I have said that the United Party wants to destroy the Railways as a State undertaking. United Party wants the Railways to be taken over by private initiative.
Where do you get that
The hon. member for Wynberg made the following statement last year. It should be remembered that this was at a stage when the United Party thought that the Railways were finished and that the Railways were also breaking the Minister of Transport and the whole of the Nationalist Government They thought that South Africa had now landed itself in the long desired economic crisis for which they had been waiting ever since 1939. The hon. member said: “Tariffs should be based on a scientific consideration of direct costs ”. That was what the hon. member for Wynberg said last year. The worker was first being prepared to be against the Railways as a State undertaking. Then the consumer has his turn, and he is told how big the deficit is. At first it was said that the workers alone had to make sacrifices as the result of the deficit, and that was repeated again in the debate to-day, and thereafter the consumers are included and they are told that it is they and the workers who have to bear the burden. But again, as in the past, the United Party is acting very stupidly. They are now trying to draw the worker nearer to them and to embrace him, but at the same time they slap the producer in the face. Because if tariffs have to be determined in a scientific way, based on actual costs, the producer will be hardest hit. But then the consumer, who also includes the railwayman, will have to pay more, because then the producer cannot produce at the same price at which he produces to-day. There will have to be higher prices for the producer as well as for the consumer, including the railwayman. If, for example, the farmer has to pay the direct costs of the transportation of agricultural products, then agriculture in South Africa will become quite impossible, and then the Railways will no longer be achieving their objective. Then the United Party would have its wishes fulfilled, but that would also be the end of all development in South Africa. I will tell you, Sir, why the Opposition will not get its own way. The worker, the producer and the consumer have no faith in the United Party. Last year the hon. member for Wynberg, on behalf of the United Party, asked for some consolidation of wages and C.O.L.A. Whilst he was fulminating against this Government and the Minister and whilst he was only asking for some consolidation, the Government came along and consolidated everything to an amount of between R11,000,000 and R12,000,000. The Railway workers are now getting even more than they expected. But that has always been the position since 1948. That is why the workers in general are prepared also to share periods of adversity with this Government. Since 1948 the railwayman has received concessions amounting to R96,997,138 plus this R11,000,000 to R12,000,000 this year. That means an average of between R8,000,000 and R9,000,000 per annum since 1948, which this Government has given to the railwaymen.
Where do you get those figures from?
You can get it in the White Paper, the memorandum tabled by the Minister. Let us take just one other item, departmental housing. During the Nationalist régime 10,264 departmental houses were built. That is apart from the home ownership scheme. The hon. member for Kimberley (South) (Dr. W. L. D. M. Venter) mentioned a whole series of concessions made to the railwaymen since 1958. It is obvious that the United Party will not succeed in sowing suspicion. The facts are incontrovertible. The workers trust the Government and have shown in a whole series of elections that they are prepared to make sacrifices when the Government asks them to do so, because the Railways during the past eleven years of Nationalist Government was very good to the railwayman, who trusts the Government and the Minister.
I shall tell you why the general public trusts the Government and the Minister of Railways. Since 1910 to 1950 £319,481,854 was invested in the Railways, but since 1950—I am not taking the first two years of the Nationalist régime, 1948 and 1949, into consideration, because the figures are given in five-yearly periods—since 1950 to 1960 £421,551,385 was invested in the Railways. In a period of ten years more capital was invested in the Railways than in the preceding 40 years. In South Africa we boast that the national income has more than doubled itself since 1948, and I want to say that in this doubling of our national income the Railways played a tremendous role. It was the Railways which brought the producer and the consumer nearer to each other. It is the Railways which made it increasingly possible to dispose of our raw materials. I find it remarkable that the Opposition never asks for any expansion of the Railways. Surely it is the task of the Opposition to act as the watchdog and to see where there are large areas which are not developing, but where there is the potential for development. But in its criticism the United Party is always looking for petty matters and trying to carry on a political debate, but they never look at the development of the country. Therefore I say that the reason for it is because the United Party wants to kill the Railways as a State undertaking. But it may also be that the United Party feels that the cities are very well served by the Railways, and let the platteland go hang! It seems to me as if it is a matter of reciprocity. The platteland has rejected the United Party, and now it seems that the United Party is also rejecting the platteland. But many large areas are lying fallow. We have the large area of Namaqualand which still has no railway service. There are large areas of the North-Western Cape which are still not well served by the Railways. There is in fact road transportation, but that is very expensive. The United Party has never asked for the extension of the railways to those areas which have great potentialities for the future.
I wish to conclude. There is only one point I would still like to put to the Minister, and that is in regard to the Bantu in the Western Cape. It is the general policy of the Government that the Bantu should be removed from the Western Cape. At the moment there are still 7,594 Bantu employed on the Railways in this area, as against 6,626 Coloureds. I think the Government Departments ought to take a lead in regard to the removal of the Bantu from the Western Cape. I know that the hon. the Minister has already greatly reduced the number of Bantu employed by the Railways in this area, but I think their numbers can be still further reduced. Now we know that there are not so many Coloureds available who like to do this work which is being done by the Bantu, but I still think that in the meantime the Minister should take these steps, because when once the Liquor Act is amended I think there will be enough Coloureds available in the Western Cape to do this work.
At 10.25 p.m. the business under consideration was interrupted by Mr. Speaker in accordance with Standing Order No. 26 (1), and the debate was adjourned until 14 March.
The House adjourned at