Mr. Chairman, may I claim the privilege of the half hour? The Department of Industries, Commerce and Tourism, like the Departments of Agriculture and Mineral and Energy Affairs, deals with the wealth-producing functions of the economy. It is in a sense a line function. However important to the whole interrelated system the Departments of Health, Constitutional Development, Defence and the rest are, they deal with service aspects of the economy. They regulate the quality of our lives and service the wealth-producing sectors. However, we must never forget that these are in essence spending functions and not producing functions. If members believe as I do that society obeys some natural law, then the leaders have very little discretion for enlightened action as the herd presses closely on their heels. Under these circumstances, even while we pray for wise leadership, we must keep the economy healthy and growing or we shall lose all control during the turbulent transition change to some new social order. The Department’s purpose is to promote sound industrial structure, to develop external trade relations, to promote tourism and competitive conditions locally, to encourage free enterprise and to protect the consumer. We have to ask ourselves whether the Department of Industries, Commerce and Tourism is in a fit state to carry out this extremely onerous responsibility. I would suggest that it cannot be. The approved complement of the Department is 1 233 posts. Twenty percent of them are vacant and 25% we are told are unsatisfactorily filled. Most worrying of all is the fact that in those sections charged with providing a specialist service, there is a shortage of over 30% of suitable staff. The turnover is described as high and the staff situation is described as unsatisfactory. It is hardly surprising that the private sector complains of the service it receives. There are delays in handling tariff applications. The Board of Trade and Industries has not the staff to deal with them expeditiously. Abnormal applications involving interim tariff protection can take six months or longer. The Board of Trade and Industries confirms that it has a serious shortage of professional staff, over 30% in the case of economists. We note with grave concern that the budget allocation for the competition board has dropped by 11%, 19% in real terms, over the budget of last year. The private sector regards an effective Competition Board as necessary for the long-term acceptance by the public at large of the free enterprise system. It rejects the hon. the Minister’s explanation that there is a shortage of staff and I would be pleased if the hon. the Minister would tell us what he intends doing about it.

What do you suggest?

I can make a suggestion. We shall come to that. What the business community wants to know is whether in these circumstances the intention is just to continue as before with much of the work being carried out by unqualified staff with standards dropping or is there an imaginative plan to break out of this impasse. What is, for example, being saved as a result of the rationalization programme that was introduced? The private sector was impressed that the position of Director-General was advertised. What was the result of that advertisement? We should also like to know what the strength is of the succession to top posts in that Department. The suggestion was made that the Board of Trade and Industries would be more effective if it were perhaps divorced from the Civil Service. It could then employ the staff it needed at market-orientated rates. Would the hon. the Minister tell us whether this matter is still being considered and whether it is a possibility? Has any attempt been made to second staff from the private sector for various aspects of the Department’s work?

I have started with a review of the Department’s personnel position because whatever vision one has of what one wants to do, unless one has the people with which to do it one cannot achieve anything. If one looks at the manner in which the Department will allocate its money over the next 12 months it becomes clear how the hon. the Minister sees his priorities. The total budget is R505 million, a 42% increase on the previous budget. Excluding Tourism, we are left with a budget of R490 million. In round rigures this is made up as follows: For decentralization 38%, export promotion 22%, and associated services 31%. This makes a total of 91% and we can ignore the remaining 9% for the purposes of this discussion. Whereas export promotion and associated services did not even increase by the inflation rate, decentralization expenditure jumped by a total of 58%. This is a signal, taken in conjunction with various statements that have been made by spokesmen for the National Party, that we are involved in an immense new programme. It will account for about 40% of this hon. Minister’s 1983-’84 budget. This is not a little border industry jaunt that we are involved in; it is the beginning of a scheme of social engineering of Russian proportions. It is designed to keep the population of the independent Black states anchored where they are and it will depend on the decentralization of industry to take the jobs to the people and not vice versa. The Department of Information states that by 1985 R650 million will be spent on this and by 1990 over R1 000 million. In the past 11 months there have been 700 applications involving an outlay of nearly R1,5 000 million.

I do not want to concern myself in this debate with the political philosophy behind this vision. I want to focus the attention of the Committee, if I can, on its probable costs and put the question: Can South Africa afford to pay those costs? I started by describing how survival in any acceptable condition depends on the vigour and health of the economy. We cannot allow politicians to destroy this economic machine because they fail to understand its nature and vulnerability and wish to use it for an ideological purpose. Many non-political reasons for decentralization have been given and very few of them can stand up to a close analysis. In 1958 the Viljoen Commission gave us a rationale, i.e. the economic and social cost of industrial concentration in the form of traffic congestion, subsidized housing, etc. These arguments are recognized as having little validity. Investment per job will not be less, but several times higher in decentralized areas than in urban areas. By creating a job in a remote region one does not solve the unemployment problem by creating a vacancy in an urban area. One does not avoid the problem of housing because people have to be housed in decentralized areas as well. The social cost of urbanization, overcrowding, immorality and the breakdown of traditional structures are things individuals are able to assess themselves and they have decided in their millions that opportunities for them lie in the urban areas. To quote Mr. Leon Louw: “Highly industrialized countries with higher urbanization rates generally have lower crime rates than less concentrated countries”. It is admitted when one probes for the motivation behind decentralization, that it is political or ideological. There are many statements one can quote in support of this. Probably the best one and the most recent is that of the Director-General of the Department of Co-operation and Development who said before the President’s Council just the other day that South Africa’s economic system will have to support the political policy. South African industry has to be able to compete in the market place with the products of other countries, locally and abroad. There is no such thing as a protected market. Economic laws are relentless and if one discriminates against the product of somebody else, one must know that one’s product is in turn going to be discriminated against. An objective analysis of our strengths and weaknesses shows that we are at a serious disadvantage in relation to our overseas competitors. The economics of large-scale production, their scientific resources and skills, their technology and capital strength are examples. In circumstances like these, instead of husbanding our strengths, we launch ourselves on an ideological junket which carries with it the direct dangers for our economy. This is being done with a messianic fervour by people who have seen the vision. However, as far as I know, there has never been a hard-headed cost benefit analysis of this policy at all. I have never heard of one.

The decentralization of industry to remote and unsuitable regions will raise the cost of production not only of those industries, but all production. There will be a fragmentation of scarce capital resources, management, agglomeration advantages and markets. Increased costs will be compensated for by massive subsidies just as they were in Brazil until it dawns on the Government that it cannot forever swim against an economic tide. This Government must realize that it has no money. It handles other people’s money. Incentives paid for unobtainable objectives are a misallocation of somebody’s else’s resources. Decentralized industrial production will be expensive. It will tend to have some or all of the following characteristics: It will be remote from management, it will have a shortage of skilled labour, it will lack agglomeration advantages, it will have high transport and service charges, it will have no special advantages like ports or being adjacent to a market…

What about East London?

That is an area which I believe should get all the support it can. I shall come to that. I am now talking about remote areas like Butterworth. [Interjections.]

What about the prosperity it will bring to those remote areas?

At whose cost? It is an absolute childish argument. It will be remote from training facilities, it will have extended line of communication. There seems to be that naive belief that because the new Development Bank of Southern Africa is going to borrow the money abroad, we shall in some way solve the financing problem. Those loans will still have to be financed. Somebody has to pay interest and redemption. If they do not, who is the borrower of last resort? Here are the borrowers of last resort. Every person in this country is ultimately carrying the load of that loan if it is not correctly and remuneratively invested. The Government’s decentralization policy is the pursuit of a will-o’-the-wisp. Decentralization was discussed by the Hendry Commission in 1940, the Fagan Commission in 1948 and the Tomlinson Commission in 1954 and the present policy is an implementation of those aspects of the Tomlinson Commission which the Government failed to implement all those years ago. It is grounded in the belief that through decentralization one would be able to stop Black influx to White urban areas.

However, let us accept for a moment the advisability for various reasons, including the water supply, that industrial expansion should take place away from the PWV area. How should one look at South Africa and decide on regional priorities for Government assisted development? Firstly, one must establish what one wants to achieve. I would suggest that a good Japanese businessman would have no difficulty in answering that question. His first achievement would be to put himself in a competitive position. Secondly, the ranking of development regions must then be in accordance with their suitability as industrial areas rather than their perceived needs. Thirdly, the allocation of decentralization incentives should be exactly the opposite to that which this Government has used. Those areas with the most natural advantages should get the highest incentives. This is after all the way all sensible business decisions are made. The farmer does not pour fertilizer on a stony “koppie”. He puts it on his fertile ground. A father does not spend a lot of money to send his dumb daughter to university. He spends it on a clever son from whom he expects a return. This is the way in which to get the maximum return on investments and to make capital resources go the furthest. Decentralization must therefore concentrate on the next most suitable areas. These will be few, probably not more than two or three in each province. In the Cape, for example, East London, Berlin and King William’s Town, the Cape Peninsula as well as Port Elizabeth and Uitenhage. I would say that there can only be three in the Cape. If this policy were adopted…

You are beginning to support the policy now.

I am saying that it should be redirected to the most suitable areas. That is one’s best chance. To quote Mr. Penny: “The location of industry is dependent on the principle of comparative advantage.” If an industry is located in an area other than that in which it has the greatest competitive advantage, the resultant misallocation of national resources will be detrimental to the whole community. I have a conviction that this Government’s policy makers have no understanding of what the country can afford. We are told that 700 applications have been received during the past 11 months. A total of R1 452 million will create 56 000 jobs. Can we afford to allocate resources of this magnitude to create jobs in decentralized areas when job opportunities in urban areas can be created for a fraction of the cost?

The main issue, however, is that decentralized industries will need help permanently. Just contrast the progress made by Rosslyn, which is 12 miles from Pretoria, with what is happening in Kimberley, Bloemfontein, the Western Cape, Port Elizabeth and East London. Even now these places, established 150 years ago, need support. The Government is making the private sector an offer it cannot refuse, but it involves a wrong allocation of resources that we cannot afford. We shall see the result in the inability to compete on export markets and uncontrollable inflation. Dr. De Kock says: “Ek is bekommerd oor inflasie soos nooit tevore nie.” Mr. Engelbrecht, chief economist of Volkskas, said that if we did not solve this problem “gaan ekonomiese en seifs politieke onstabiliteit in Suid-Afrika ondervind word”. Sake Rapport commments “Een van die faktore wat kommer wek, is die feit dat die uitvoerders kla dat hulle nie in die buiteland kan meeding nie weens ons hoë inflasiekoers”. The result of what we are doing now will be unbridled long-term inflation which we cannot control. Let us ask the hon. the Minister and all the hon. members on that side to use their influence to change the thrust of the decentralization plan away from remote development regions…

What is a remote area? What is in a remote area?

I can name Umtata as a remote area. I would also say that Butter-worth is a remote area. Some of the areas near Queenstown are remote areas. One has to concentrate on places like the Peninsula, Port Elizabeth/Uitenhage…

Surely that is not a “remote area”.

Definitely! Otherwise one would not be able to control inflation. I worked out the other day that for a factory which moves from Benoni to an area of maximum incentives, the Government would, in the space of 10 years, spend more than 9 million and two-thirds of it will be tax free in the hands of the recipient in the form of incentives. Instead of making a profit of 25% on the capital employed, of which the Government gets half, the Government is now going to pay out R9 million, two-thirds of which is tax free.

Put your facts into a computer and try again.

We shall discuss that with the hon. member if he wishes. I know the factory and I have worked out the complete costs. It is getting benefits now. I think that the hon. the Minister must attempt to change the thrust of the decentralization policy away from remote regions towards those which should logically be next in line for development, where much of the investment has already been made, and which have the infrastructure and other advantages.

Mr. Chairman, may I take this opportunity of conveying my sincere congratulations, and that of other hon. members, to the hon. the Deputy Minister on his appointment, particularly with regard to the successful way he has already shown he will be coping with this Vote. We should like to convey our sincere congratulations and also assure him of the fact that we on this side of the House will give him every possible support.

†Mr. Chairman, may I then congratulate the hon. member for Walmer as the new Chairman of the PFP study group on economics. In the past we listened to his predecessor and we thought that a change was needed. After his speech this afternoon I am not yet sure, but we shall see what happens.

While listening to the hon. member, it seemed to me that he made certain logical mathematical deductions. However, unfortunately his premises were wrong in the first instance and that is why he came to the wrong conclusions.

That is your speciality!

No, I normally stick to the general facts of the matter. What it amounted to, as far as I am concerned, was that the hon. member unfortunately did not understand the Government’s policy of decentralization, because the whole concept is firstly, as he quite rightly remarked, not purely political, but then it is not purely economic either. It is an intertwining of social, political and economic elements, because one must view the total spectrum of the future of the populations concerned, including the vitality of the whole population structure and the development of the country as a whole. For that reason one cannot isolate any one fact. One has to take the complement, viewing it in the overall structure. If one were to look at other developing countries like South Africa, one would notice immediately that because they did not do this, they landed themselves up in situations from which there is no turning back. We have, for example, the experience of the South American states which reached stages of development comparable to ours, with 64% to 75% of the population herded together in one city, with the rest, i.e. 24% to 34% of the population, spread out across the rest of the country. Impossible social, economic and structural problems arise there. I then just want to make the statement—I think the hon. the Minister and/or the hon. the Deputy Minister will go into that in detail, and I also think that the hon. member for Walmer will agree with me—that since this programme came into operation last year, South Africa has been one of the few countries that has really had any success with it. In the very short time that we have seen it in operation, the decentralization programme has already been proved to have been successful, in spite of the cost. As far as the cost aspect is concerned, I just briefly want to point out to the hon. member that he will agree with me that the initial cost for this type of exercise is always higher than would be the case at a later stage, when the programme has already got off the ground. So in this case we can also expect the initial cost to decrease as the programme gets off the ground. In any case, one must ask oneself whether South Africa—as in the case of costs involving the Defence Force—can afford not to do this. If we look at the problems involved in not doing this, my answer is that South Africa cannot afford not to go ahead with this decentralization programme, because the consequences of not doing so would be worse than if we were to proceed at the initial cost.

I should like to take this opportunity today of sincerely congratulating the hon. the Minister and his department on the first appearance of the annual report of the Department of Industries, Commerce and Tourism, 1982. As far as I have been able to ascertain, from the inquiries I have made, it seems as if this first report covers the department as a whole. I want to state that this carefully produced work, with its overwhelming factual content, only gives us a basic impression of the wide-ranging nature and extent of the activities of the department. We see that there is virtually no single aspect of South African life that is not influenced by the activities of the department. Apart from the department’s own activities, some of which—for example having trade offices and representatives abroad—could form part of a department in itself, and the 38 laws it administers, the list of 18 of the principal boards appearing in Schedule B is really a formidable one. Some of these would, in nature and extent, in their own right be able to take their proper place in the private sector, indeed occupying one of the foremost positions. Some of these institutions have their own annual reports, which we must read in conjunction with this annual report to get a true idea of the extent of the department’s activities. Since this report is making its appearance for the first time this year, one would be inclined to excuse the fact that it has been somewhat late in arriving. I should like to ask the hon. the Minister, however, whether it is not possible for it to appear a little earlier in future so that one can go into it in greater detail. These are very valuable facts and one would very much like to examine the report more thoroughly.

If one looks at these 18 boards, one sees that the department not only focuses on the regulation and co-ordination of commerce and industry, but that a very important aspect of the department’s activities also centres around the protection of the public. This protection granted to John Citizen is wide in extent and comprehensive in nature, whether by way of the Co-ordinating Consumer Council protecting the individual against exploitation, or whether it is a question of protecting the individual from being exploited by an agglomeration of various large companies, to such an extent that free competition cannot prevail. In the report of the Co-ordinating Consumer Council one sees that up to 500 individual complaints are dealt with each month. What one is even happier about, however, is the fact that more than 90% of them are dealt with successfully. If one looks at the protection of the overall consumer by the determination of fixing of prices, standards laid down by the South African Bureau of Standards, ethical standards in regard to business practices and the protection of public funds, i.e. by the establishment of trust funds for estate agents and, amongst other things, the new industrial legislation for travel agents, one sees that this Government focuses its attention on the protection of the individual and the public. I want to invite the public, however, to make greater use of these channels and to ascertain for themselves how they can gain even more benefit from their use. The result of the abovementioned protection, including State support by way of the subsidizing of essential items such as bread, is that South African citizens have always been amongst the most privileged in the world, being able, as they are, to live in one of the cheapest countries in the world. We can compare figures in this regard. According to a report issued recently by the Union Bank of Switzerland, comparing 25 countries and their commercial centres at the beginning of 1982, it appears that South Africa pays less than any other country in the world for consumer goods. It is perhaps interesting to just highlight a few of these aspects. Let me quote from the Ekonomiese Oorsig of the Afrikaanse Handelsinstituut (March 1983, p. 45)—

As far as accommodation is concerned, only Tel Aviv is cheaper. As far as fuel is concerned, there are twelve countries in which it is more expensive than in South Africa, among others the Netherlands, Spain, Italy, France, Sweden and Japan. Except for Brazil, our telephone services are the cheapest in the world. Only Madrid, Rio de Janeiro and Tel Aviv have cheaper hotel accommodation than we do. Then one encounters further fantastic statistics. An employee in Singapore must work seven times longer than the average worker in South Africa to buy the same parcel of goods. This indicates to us that in spite of increasing prices and the economic recession, we are still one of the cheapest countries to live in, South Africa having one of the highest standards of living in the world. One could possibly look at this again some day and ask people to grumble less about, and get more enjoyment from, what is given to us.

It is only true for one of the population groups, though.

That may be so, but even if one were to take any of the other groups and compare it with a comparable group, for example in Africa, one would also see that it was one of the best-off groups in Africa.

*Over and above this protection of the individual, the Government has also achieved a great deal of success with the redistribution of wealth.

I now want to point out a few facts, particularly for the attention of the rest of Africa—and this brings me to the point to which the hon. member has just referred—and our liberal friends in the communist world who are so eager to bring up the question of our people of colour. What I am going to say now is not something that was said by a Minister or a National Party supporter, but by somebody who himself admitted: “I am not a National Party supporter.” He mentioned the fact that from 1924 to 1977 the distribution of general income was 75% in favour of the Whites and 25% in favour of the Blacks. [Time expired.]

Mr. Chairman, I merely rise to afford the hon. member the opportunity to complete his speech.

Mr. Chairman, I thank the hon. Whip. [Interjections.] I was worried. As I was saying, 25% went to the Blacks, including the Coloureds and the Indians. By 1980 the division was 60% to 40%, 60% for the Whites and 40% for the Blacks.

As far as the market for consumer goods is concerned, the picture is even rosier. From 1960 to 1970 the Black contribution to the market for consumer goods was 26%, being increased to 35% between 1970 and 1973, with a further increase to 41% between 1973 and 1975. From 1975 to 1980 it increased to 48% and is now, he says, apparently far in excess of 50%. He went on to say—

The person who said that is definitely not a National Party supporter. It was Mr. Harry Oppenheimer who said it.

He is the father of the new National Party.

The only new National Party that I am aware of is the CP that broke away from the old National Party, which still exists.

In spite of this favourable picture, in reality South Africa finds itself in a disquieting position as far as the future is concerned. We are on the threshold of a crisis period with our inflation rate of approximately 14%, twice that of our chief trading partners, an above average birth rate that is higher than that of the rest of the Western World, lower productivity, a lack of a trained workers corps, a large housing shortage and defence expenditure which is too high but cannot, in any case, be reduced. Pointing out these factors, which are all inflationary factors, let me make it clear that nothing can be done about it. It is a reality we must accept.

If one looks at this, however, one is delighted at the fact that recently, with the publication of the Kleu Report, the department put the seal on seven years of planning. The nature and extent of this will be dealt with by other hon. members who have yet to speak. I believe that this blueprint for future development in South Africa will receive the positive attention of the hon. the Minister and his department. That is why I should like to ask the hon. the Minister whether it is possible for him to issue a statement on the Government’s standpoint, so that we can hear what the future view in regard to this report is going to be.

In view of the six abnormal inflationary problems South Africa, in contrast to other Western countries, is faced with, let me just make a few remarks and recommendations to the hon. the Minister.

Firstly I want to say that inflation is so easily—and by preference—blamed on the Government, sometimes to hide the lack of productivity, effectiveness and competitiveness among private bodies and to draw attention away from this aspect. I am not saying this in order to criticize, but specifically because I shall be returning to this question at a later stage to indicate that it can only be solved if we all co-operate.

Secondly, when mention is made of low productivity, one is only thinking of, or is only referring to, the labourer or the production worker, forgetting as one does about the question of management, method, process, the employment of capital and the executive officers. Here I just happen to be thinking, in passing, of some economists and professors who doubt the Government’s sincerity in the struggle against inflation.

As far as universities are concerned, let me ask whether it is not possible to add an extra semester to the university calendar. Some students leave our institutions on 18 November and only return on 16 February. Can we not employ this high-level intelligentsia more productively?

If one thinks of businessmen, one sometimes asks oneself…

Kleppies, what is that you are saying?

I mean it realistically. If one looks at the highly paid business executive, one asks oneself whether such long lunch-hours are always necessary. Must we not think of having some or other system, at one of the larger institutions, whereby a bell is rung at two o’clock to indicate that everyone should return. Those are the people who are sometimes inclined to blame the Government for its lack of sincerity in dealing with inflation. I want to put it to hon. members that unless we regard inflation as a matter involving the population as a whole, we shall not succeed in our aim. We shall simply have to accept these factors which, as far as we are concerned, are abnormal if compared with those of our trading partners. We shall not be able to get away from that. We shall have to accept the fact that basically speaking we have a certain built-in inflation rate in our economy that they do not have. I therefore want to ask for this to be made a national effort in which we all participate. In instances where, eventually, no greater productivity can be achieved, attention should be given to greater saving. I therefore want to ask that television, the classroom, the public and private sectors and the media in general be employed to involve the general public, including each and every child, in combating the dangers of inflation, and to promote this by means of effecting savings or cutting down on expenditure. We must take note of the fact—and we must teach our children this lesson—that every cent we save today can generate R1 over a period of 10 years. These are facts that are not brought to the attention of the public every day. If we are not merely obsessed by productivity, but also take cognizance of saving and make this a national effort…

Every R1 one saves today will be worth 10 cents in ten years’ time.

No, not normally, because the hon. member is not taking the accumulative effect into consideration. It is merely a simplistic calculation the hon. member is trying to make. If one does an overall calculation and takes generation into account, one arrives at an increased value.

In 1961 we had the old story of Decimal Dan. What I actually want to ask the hon. the Minister is to have us launch such a comprehensive nation-wide programme or project as to guarantee success.

I should like to draw the hon. the Minister’s attention to a report on page 10 of The Citizen of 30 April 1982, according to which Mr. Costis Gontikas, a member of the budgetary study group of the European Parliament, said that he did not know why South Africa had not tried to make contact with his fact-finding mission. On the basis of this item, read in conjunction with paragraph 1.4.1(iii)(a) to (d) on page 34 of the department’s report, I should like to ask the hon. the Minister to have us think along the lines of strengthening our representation in Brussels at the European Parliament, particularly with a view to the continual negotiations with the European Parliament and in view of the GATT agreement. Sometimes one consistently gets the idea or the impression that we should place more emphasis on foreign trade, instead of on foreign affairs with its political slant.

In this connection I should therefore like to put forward an idea which I regard as an important and practical one. I should like to advocate the establishment of a fourth world bloc with economics, trade and finance as the binding priority factors. Politics must have a very low rating so that political manoeuvreability is not curtailed by economic co-operation. I think we would all agree that this is desirable and beneficial. If someone were to ask me whether it were possible in practice, I would tell him that it was indeed possible. Here I am thinking, in particular, of merging the interests of countries such as Chile, Paraguay, Uruguay, Argentinia, Israel, Taiwan, Malawi, Oman and especially Southern African States such as Zambia and Zaire. The last-mentioned two have already partly got the realistic economic message. It would be of economic benefit; if anyone were to ask me whether it would be possible in practice, I would say that I judged it on the basis of personal experience, in the sense that I had advocated it in some of these countries and had found support for it in economic circles.

Thirdly I should like to refer to the investigation by the Competition Board into the concentration of economic power by way of take-overs. This creation of agglomerates is one of the unhealthiest trends in our national economy and should be controlled before it is too late and this House is perhaps forced to say that monopolies must simply be accepted because there is nothing we can do about it. I strongly want to support the aforementioned investigation, and if there is not going to be one, I want to ask for one to be instituted.

Mr. Chairman, I should like to associate myself with the hon. member for Vasco by congratulating the hon. the Deputy Minister and wishing him everything of the best. At the same time, I also just want to tell him to uphold the good name of the Western Transvaal.

The hon. the Minister has given me reasons for the report being a little late, and I accept them. On behalf of our party, I also want to express our gratitude and appreciation particularly to the Director-General and his staff who compiled this report. I want to congratulate them. It is a valuable document which one would not simply discard after this debate; it is something that could be displayed on one’s desk. It contains a great deal of information, and it is a sound and valuable publication. We thank them most sincerely for it, as well as for the explanatory memorandum. I think the memorandum we received is a most satisfactory and concise one.

It is true that this department is a very comprehensive one with many facets—very important facets, in my opinion. A few of these we could single out are, for example, the IDC, the CSIR, which does research and a tremendous amount of work, standardisation in South Africa, which is dealt with by the South African Bureau of Standards and about which I want to say a few words at a later stage if I have the time, small business undertakings, an important facet which, in my opinion, is not afforded sufficient emphasis or recognition, and, in addition to all this, tourism. Tourism is one of the major attractions in the world. It is a department which covers a wide field and which has many facets, and we consequently regard it as very important.

However, I think that industrial development in general is most certainly the most important task of the entire department. This year’s budget amounts to R504,6 million, as against last year’s R383,8 million, an increase of approximately R120 million. Paragraph 2.2 “Programme 2—Industrial Services” inter alia, reads as follows—

I should very much like to support this and express our gratitude for the fact that so much support is being given to decentralization. I think that in the past the Government has perhaps been too slow in further implementing decentralization. Very well, there may be reasons for this, but nothing should stand in the way of further expansion in this field. Basically, industrial development should be extended on the basis of efficiency and a low cost structure. These are two aspects one should not lose sight of. It is very important that they be looked at.

A second aspect I want to raise, is that strategic industries should be subsidized rather than implementing higher tariff protection. This is a very important factor we should look at.

What should this department’s objective be as regards our economy in general? I want to mention five points. The first is economic stability, which we should always strive for. Not only the Government, but also the private sector and everyone in this country should strive towards this. The second is a healthy real economic growthrate. Thirdly, there is the combating of inflation and preventing increasing input costs. Previous speakers, like the hon. member for Vasco, said that this was not only the task of the Government, but of all of us—and we agree. What is the position, however? The department and the hon. the Minister are most certainly the obvious people to look into this. In January this year, the Republic’s rate of inflation was 14,4%, whereas those of our trading partners, the USA, France, the United Kingdom, Japan and West Germany were 3,9%, 9,7%, 5,4%, 1,8% and 3,9% respectively.

We are an exporting country, and the increase in the gross domestic product with an accompanying inflation rate higher than that of our trading partners must surely mean that South Africa is going to price itself out of the international market. Today I want to say that we cannot permit something of this nature. Our inflation rate is too high, and this will have to be given more urgent attention.

The fourth is the promotion of exports. Considerable reference is made to this in the Annual Report. Aid to exporters was increased by R11,2 million to R27,2 million this year, and I want to express our gratitude for this. I quote from paragraph 2.2.3 on page 37 of the report—

I should like to say that this should be greatly emphasized. More attention must be given to this. We must export more; we have no other choice. Giving this aid is definitely the right thing.

Fifthly, I want to refer to productivity. We in South Africa are not productive enough. The National Productivity Institute falls under the Department of Manpower. I think the hon. the Minister should have much closer contact with the hon. the Minister of Manpower and see to it that this matter receives more attention and that more is done.

We in this country cannot pay more for the same or even less work; more work must be done for the same remuneration. This is the most important thing in South Africa.

There is another matter I should like to discuss with the hon. the Minister and bring to his attention. This concerns matters arising from the task of the department and the hon. the Minister. I want to refer to Die Kouter of 9 May 1983. Perhaps the hon. the Minister has seen it. The headlines reads: “Minister oneties, sê Wilkens”. I want to quote from this article and ask the hon. the Minister to make a statement on the situation being focused on here when he replies. Throughout the country people are unhappy, they are encounting problems and there is a lot of talk but the hon. the Minister has given us no real answer which would make this clear to the world at large. If this could be recorded in Hansard, everyone could see it and it could be made known. I quote what Mr. Jaap Wilkens said according to the report—

The report goes on to say—

That is what it says here. Today we want to tell the hon. the Minister that if there is one thing that is important in South Africa—and this does not only apply to the Government, the opposition, the private sector or whomever—it is that there must be a very clear guideline as to how certain industries could be protected, what we are going to do, how much we are going to do and why certain things have to be protected.

What do you say should be done?

The hon. member can make his speech on another occasion. I am discussing a serious matter with the hon. the Minister. Perhaps the hon. member could shed more light on the matter when he enters the debate. I think this is in South Africa’s own interests. It seems as though the hon. member does not think that the hon. the Minister is competent enough to handle his post or to reply.

We should like to hear your party’s standpoint.

I should like to bring this situation to the attention of the hon. the Minister. I wish to state very clearly that this is of great importance to us all.

I now want to refer to standardization, which is dealt with by the South African Bureau of Standards. I want to ask whether more standardization could not be implemented. I am thinking of canned fruit, meat, fish, etc. in the chain stores, where one finds the absurd situation that cans with the same contents vary between 250g, 260g and 270g, sizes which the housewife cannot compare satisfactorily. Why can drastic action not be taken to ensure that certain foodstufis are only canned according to certain weights? This would assist the consumer and all of us. I think this is something that should receive the attention of the hon. the Minister and the hon. the Deputy Minister. We have spoken about this in the past, but I want to reiterate that I think this is imperative.

Mr. Chairman, I should like to speak about the Kleu Report. I find it a great pity that hon. members of the Conservative Party, particularly the hon. member for Sunnyside, have not made an in-depth study of this report, since they would then have seen that in any case their policy is impractical and impossible to implement.

Which policy are you talking about?

I am coming to that.

The Kleu Report states that at present we find ourselves at a crossroads. A start was made in 1932 to afford South African industries protection, and since 1948, after the publication of the report of the Planning Council, most of which was written by Prof. C. G. W. Schumann, and also when the Viljoen Report appeared, later the Nationalist Government has always furnished guidance as regards industrial development.

If we look at the Kleu Report, which states that we are at a crossroads, we must recognize the same problems that were identified as far back as 1932, and later in the Viljoen Report, as well as in the recent Kleu Report, viz. the problems we are experiencing as regards both supply and demand.

The problems we are experiencing as regards supply, are a shortage of capital, a shortage of skilled labour and too large a concentration of industries. If we look at the demand aspect, we have the problem of a restricted market that is too fragmented. While experiencing these structural problems, we are, however, simultaneously pursuing a more market-orientated monetary policy. The same applies with regard to our fiscal policy. Consequently, we have fluctuating exchange rates and interest rates and, at the same time, we find that our industrialists are having to contend with much more aggressive trade unions. It seems to me that at present there is a battle being waged between agriculture and industry, a battle which I find completely unnecessary. We are encountering the problems relating to the development of strategic industries. I agree in this regard with the hon. member for Sunnyside that we should subsidize many of these industries rather than protecting tariffs.

The Kleu Report contains a very interesting standpoint with regard to the principles we in this country have always believed in, viz. the principles of capitalism, i.e. free enterprise, consumer freedom and private ownership. The Kleu Report bases its main objectives on these three principles, viz. economic growth, a more equitable distribution of income, better distribution of our industries and greater self-sufficiency. These are the objectives we are striving towards. This Government believes that in our case, profit is still the basic directive for our market mechanism. Perhaps we disagree to a certain extent on that score with the PFP, with its idea of socialist democracy or democratic socialism—I am not always sure which one of the two their party adheres to.

The Kleu Report believes that we…

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

Please, I only have 10 minutes. The Kleu Report believes in industrial development as a basic premise for better and more employment, as well as the promotion of exports, which will have to replace the exporting of gold at a later stage. The Kleu Report wants to achieve this with minimum interference by the State.

We now come to the interesting feature of the Kleu Report. It begins by saying that we are experiencing a shortage of capital. It is in this respect that I want to refer to the hon. member for Sunnyside. We have a shortage of capital and we must save more. We are more dependent on overseas capital. We will not acquire overseas capital by pursuing the policy of the Conservative Party.

Shame.

Never mind, go and sell plots. I want to continue. The PFP regularly launches attacks on indirect taxation. The Kleu Report states that we must not impede saving and they consequently support the idea of more indirect taxation. The Kleu Report requires better control with regard to the question of the investments of public corporations. There is perhaps a point on which I disagree slightly with the Kleu Report. I am linking this to the criticism of the productivity of our capital-intensive industries in South Africa. We must be careful. Our Sasols, which cost us a great deal, will probably only begin to produce at full capacity at the end of next year and consequently one must be careful not to measure capital investments by production at the outset. I was a commissioner of Escom for four years. Escom, with its vast investments, is continually improving its productivity and its cost per unit is also declining, relatively speaking.

I want to take a further look at what the Kleu Report has to say. I want to tell hon. members on that side of the Committee that the Kleu Report states that we should be careful not to place too much emphasis on social costs and expenditure, since this could adversely affect our competition capacity. The Harry Schwarz-Boraine report wants to distribute everything. We must be careful not to allow a young, growing economy to become too socialistic. We must be careful with our costs that have a social origin.

Another supply side problem we are experiencing, is the shortage of skilled labour. The Kleu Report states that we must continue with immigration. We will not get immigrants by pursuing the CP’s policy; we can forget about that.

We have been getting them all the years.

The Kleu Report states that we should have labour stability. I cannot see how we can have labour stability by pursuing the policy of the CP, which wants to send all the Blacks back to the homelands. We must continue with the training and improvement of our Black labour. As the Kleu Report says, we must have more vertical mobility. We cannot go back to work reservation, which the CP wants to do. We must take into account the fact that we do not have sufficient Whites to fill our top posts. We must train our Blacks, Coloureds and Indians so that we can have a better occupational structure in South Africa.

One of the solutions the Kleu Report provides, which, in my opinion, is tremendously important, is the whole question of technological development. An orderly transmission of technology must take place. One will never have transmission of technology from overseas with the policy of the CP; one can forget about that.

On the demand side, there is the problem of the fragmentation of the market. We must take into account that fortunately our non-White market is growing rapidly. This creates a larger market for us. Of course, if they went to their homelands, we would not have such a market, since they would have to go and purchase everything in the homelands. The Kleu Report emphasizes State purchases and the promotion of exports. We have been speaking about State purchases for a long time. We must rationalize this and give more attention to it.

You do not have a clue what Kleu had to say.

Oh, man, you cannot even read. Why do you not ask Koos to kick something again. We must take the monetary and fiscal policies into account and see how they have been affecting small business undertakings, particularly recently, with the high interest rates and tremendous costs these people have to contend with. They are experiencing problems in increasing their savings. We should consider—and the Kleu Report did not emphasize this—an anti-cyclical policy. Perhaps the State should now give attention to further developing our infrastructure so that we will be prepared for the next boom period South Africa will be entering within the next year.

Something that has come to the fore in all our reports during the past 20 or 30 years, has been the question of co-ordination. We must try to bring about better co-ordination. I think we should urgently consider a Cabinet Committee, as well as appointing a group of people to the President’s Council…

[Inaudible.]

Man, you do not understand the President’s Council in any case. We should consider appointing people to the President’s Council who can give attention to a strategy for industrial development in South Africa.

Mr. Chairman, before I comment on the contribution of the hon. member for Waterkloof to this debate, I would first like to also associate myself with the best wishes that have been expressed to the hon. the Deputy Minister. I am sure he is enjoying his new post and we wish him well with all his endeavours. The second thing I want to comment on, is the number of reports that have been issued by the Department. I spent a weekend reading most of these reports. I feel that those hon. members who have not read them, for example the hon. member Mr. Aronson, would find, if they read them, just how wide-spread the activities of this Department are. I believe that this is probably one of the most interesting Departments to be involved in.

I am surprised by the fact that you have read all these.

Well, you will be impressed by a lot of things that the NRP does over the years. I am sure you are now beginning to realize that.

Mr. Chairman, the hon. member for Waterkloof mentioned the Kleu Report and he stressed that the shortage of capital and the shortage of trained men were mentioned in that report as being structural problems which had to be overcome in order to obtain the type of growth that we require in this country to meet the rising aspirations of our people. I agree with most of what that hon. member said. However, he raised the point about the correct attitude that is required in order to achieve these objectives. He said that the objectives should be to move towards self-sufficiency of the people, if I heard him correctly.

Self-sufficiency of the economy.

Self-sufficiency of the economy. I would like to say to that hon. member that I think that, in order for the economy to be self-sufficient, people who make up the economy, should have—what I call—the fire in the belly that will cause them to want to be self-sufficient. I think this is an important aspect which is possibly lacking in many quarters today. I do not believe that a lot of our people really appreciate what it takes, what is required of them, in order to be part of a self-sufficient economy.

Mr. Chairman, the hon. member for Vasco referred to subsidies and I am very pleased to see that that hon. member has raised this matter of subsidies in many debates so far this session. I am inclined to agree with what he says, and that is that we must be very careful when it comes to subsidizing things. There are two ways of using money in the form of subsidies. Firstly, one can subsidize our economy in certain directions in order to get it geared up and in order to achieve certain objectives. I think that type of subsidizing is really productive in that it starts the wheels of industry, agriculture, etc. rolling so that we can all become self-sufficient and that the nation can become self-sufficient. Secondly, there is the concept of using subsidies in a sort of a social welfare context, where you take money from the wealth generating sectors and channel it to those sections of the community that are not productive. This, I believe can result in the economy going into a downward spiral which can result in bankruptcy. When one thinks that the total transport subsidy in South Africa today is close to R900 000 000 and that R190 000 000 is spent on subsidizing the consumers of bread, one begins to realize what vast sums of money we, the tax-payers of South Africa, are spending in—I would say—a non-productive way. One wonders what we could have achieved had we used that kind of money to subsidize or to promote development in the wealth generating sectors of our economy as a whole. Recently I was reading about Switzerland and about the reasons why Switzerland is such an economically powerful and stable country. The person who wrote the article, said that the attitude in Switzerland is that, firstly, you have to work. Secondly, you must save. Thirdly, you must invest. And only when you have done that, you can afford to spend on the luxuries of life. I think this is a very good philosophy.

Mr. Chairman, I want to refer to the report of the Corporation for Economic Development and I specifically want to refer to the report in regard to development in the National States. The objective of this development in the National States is, primarily to create as many job opportunities as possible. However, a major consideration is the cost of creating those job opportunities. It was very interesting to read that, over the years, this Corporation has invested something like R112 800 000 in agriculture and it has created 32 000 jobs in the process. This works out at an investment of R3 525 per job opportunity created. As far as the industrial development in those States is concerned, one then finds that, during 1982 alone, some R51 800 000 was invested, both by the CED and the private sector. This created 2 894 job opportunities at a unit cost of R17 890 per job opportunity. This is more than five times that which is required to create a job opportunity in agriculture.

How many job opportunities?

It was 2 894. That was in a single year. To date, something like R285 million has been invested in creating 18 900 job opportunities at an average cost, over the years, of R15 000 per job opportunity. From these figures, it is clear that one gets a better pay-back in terms of jobs created per rand invested in agriculture in the National States than one would get by investing in the industrial sector. I believe that it is here that the Corporation should possibly liaise with the Governments of the National States and the self-governing homelands, inanalysing the problems that they have in best utilizing the agricultural potential of those States. There is the matter of land use, there is the matter of land tenure and there is also the matter of land abuse. I believe that any of the hon. members, who have been into the national States and who have studied this or have seen the position, will appreciate what I am trying to get at. And that is that I think that, if the Black peoples of South Africa—and, in fact, of Africa as a whole—want to achieve the best utilization of the greatest and second greatest assets that they have, namely their land and their people, they have, to my way of thinking, to have a rethink on these basic concepts of land tenure and land use. I sincerely hope that the hon. the Minister will give consideration to this, especially as far as the Corporation for Economic Development is concerned.

Talking about job opportunities, I think that this is something that we have to give a lot of attention to at this time, because of the economic recession we are presently experiencing. I want to speak briefly about the shipbuilding industry. I want to ask the hon. the Minister whether it is not a case of us not being able to see the wood for the trees. We have lost some very important contracts in recent times which would have employed many men, mainly as a result of decisions taken by the hon. the Minister’s Department, and that of the hon. the Minister of Transport Affairs. I shall give a case in point. But before I do so, I wish to tell the hon. Minister that at the present time, there are something like 200 highly skilled artisans—some of whom were brought to South Africa from overseas—in the shipbuilding industry in Durban whose jobs are now at stake, because there are no new ship-building or repair contracts. I was phoned late last year—this is recorded in the Hansard of the Budget Debate on the South African Transport Services Vote—by a man who is employed by one of the big shipbuilding firms in Durban. He informed me that his firm had the opportunity of obtaining a ship repair job on a vessel which was to pass by Durban on its way to Europe. However, they lost the contract because of the high tariff charged for the use of the Durban dry-dock. In this particular case there was a request to the S.A. Transport Services to consider reducing the dry-dock charges, because the tariff being charged was uncompetitive with those of European ports. Unfortunately the SATS refused to lower the cost and the ship owners sent the ship to a European port where the repair job was done. The point that I want to make, is that the harbour costs—and this includes the dry-dock—have been increased considerably in recent years, primarily as a result of the method of costing the Railways and Harbours operations. This includes the depreciation allowance which is based on a higher replacement cost formula. I want to say to the hon. the Minister that, if we continue with this method of inflation accounting, we shall not have to worry about replacing the dry-docks, because we are just not going to attract any business at all. What I am saying, is that the theoretical cost of operating the dry-docks has been—to my mind—unrealistically increased and this was done purely as a result of applying an inflation accounting measure, and not because of an increase in the actual operating costs. Had the SATS, for this particular case, costed the dry-docks on the basis of what industry would call marginal costing, they would have not only increased their own revenue but also brought several hundreds of thousands of rands worth of ship repair work to South Africa—which I believe we can ill afford to lose this at the present time. [Time expired.]

Mr. Chairman, I was interested in what the hon. member for Amanzimtoti had to say. He intimated that, economically, the creation of job opportunities is perhaps the most important thing in South Africa today. I agree with him in this regard and I will be reacting further to this during the course of my speech. There are two brief points that, in the beginning, I would also like to touch on. Firstly, the report that has been tabled by the Department, is only in one language. It is in Afrikaans. I want to remind the hon. the Minister that there are two official languages in this country. I regret deeply that it has not been tabled in English before the commencement of this debate and I want to urge the hon. the Minister to see that this does not happen again. Secondly, I want to refer to an article which appeared in the Sunday Express on 17 April 1983, which indicated that there was to be a probe into the money spent by this Government in terms of stockpiling. According to this report, the hon. the Minister is “…to launch a major investigation into the administration of its strategic stockpiles…”. I believe that the hon. the Minister should utilize this debate as the proper place in which to tell the taxpayers of this country precisely what the situation is and how far this investigation has gone, because nasty things have been said in this article. I do not know whether they are true or not. I quote—

Is that re-assessment being made? What is going to happen as a result of it? I noticed what was said in answer to a question only last week. It goes on to say—

Apparently the person in charge of these stockpile loans said—and I deplore this statement—and I quote from the article—

Mr. Chairman, I would ask for comment of the hon. the Minister on this.

To get to the main subject of the speech that I want to make today, there can be no doubt that in these economic times and the consequent unemployment in South Africa, times are harder than they have been for many years. This is true, regardless of the drought. However, the drought has aggravated the situation enormously. In many of our country areas, there is deprivation, want and even starvation. In 1980, the Quail Commission noted that malnutrition diseases were endemic in Ciskei and 27% of infants between 6 and 23 months had kwashiorkor—more than one in four. I shudder to think what the present situation must be. The result of this is going to be an influx into the cities and escalating unemployment. This is the position that I want to clarify. I believe that many more people could be employed informally, were it not for many regulations, edicts and decrees that this Government has created. I refer not only to apartheid regulations, but to the many tangles of red tape which affect the businessman in South Africa. To sum it up in a phrase, the “Did you got a licence?” mentality. There are a plethora of licensing regulations which interfere with commercial operations which are expensive, irritating and unnecessary to protect public interest.

Give an example.

I will. Many of these regulations are incompatible with—and I quote from the Republic of South Africa Constitution Bill before the House at the moment—“Private initiative and effective competition”. Sometimes I wonder whether the hon. the Minister and some of his advisers would recognize these two basics of free enterprise if they fell over them.

Mr. Chairman, I believe that the hon. the Minister’s decision regarding the liquor industry is a case in point. I have a small business in Uitenhage.

Are you advertising?

No, I am not advertising. When you have genuinely won a seat in this House, then you should be entitled to interject. My staff have seen policemen loading fruit and vegetable vendors into vans, while their produce is left rolling in the street. My hon. colleague for Walmer witnessed the same thing only the other day in Rink Street in Port Elizabeth, which is in fact in my constituency. Yet, what these people are trying to do, is to earn an honest living. We have heard the hon. member for Amanzimtoti telling us of costs. He said that R17 890 is necessary to create one job opportunity. To create 1 000 jobs, R18 million are obviously necessary. And yet we have these regulations preventing people employing themselves and earning that honest living.

Mr. Chairman, let me quote what Louis Rive said at the Assocom Congress last year. I quote from a newspaper article—

And then, relating to these very people that I have mentioned, these fruit and vegetable vendors, he said—

Mr. Chairman, these instances refer mainly to Blacks. Let us now look at a case of a White who happens to live in George, the hon. the Prime Minister’s constituency. He wants to peddle fruit, vegetables and firewood. I have here a document from the Outeniqua Divisional Council. It says here—

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

No, I do not have the time. Mr. Chairman, there are no less than 18 requirements by this Divisional Council which have to be met before one can become a “smous” in the George area, including “Fotos van die applikant en al sy agente moet die aansoek vergesel”.

Mr. Chairman, can anyone doubt that we are overcontrolled? Blacks, Coloureds and Indians are controlled by all the mechanisms that control Whites, but, in addition, have to contend with influx control, job reservation, the Group Areas Act, etc. Finally, to administer these controls takes a vast amount of time, money and effort. I want to ask the hon. the Minister whether he acknowledges that there is a need for a reduction of regulations?

I have said that.

He does. Then I ask him to take action in this regard. Why does he not set up an investigation into all the State laws and regulations for which his Department is responsible?

There is one.

I am very glad to hear that. The next question is: Who serves on that particular body? I ask this, because I believe that at least 50% of the investigating committee should be from the private sector and 25% should be from State bodies such as IDC or Iscor or, perhaps, Escom. I believe that this should be a task that would be equivalent to be clearing out of the Aegaen Stables, the labours of Hercules.

Mr. Chairman, in the small time that remains to me, I want to mention two points. I want to say that I have been told that people who qualify for decentralization benefits in terms of the subsidization of wages of staff, have been told that up to 23 months could elapse before they are actually paid out those incentives. I want to ask the hon. the Minister what is the position in regard to paying out incentives to the decentralized industries who claim a wage rebate. Lastly, I have here the Chancellors’ proposals in this year’s budget in Britain. I want to draw the attention of the hon. the Minister to the fact that the rate of corporation tax is 52% in Britain, but they have a special category for small businesses. Small businesses fall under this hon. Minister. In Britain, the small companies’ rate has been reduced from 40% to 38%, and the maximum profit level has been increased from £90 000 to £100 000. [Time expired.]

Mr. Chairman, the hon. member who has just resumed his seat, in stating his case, asked the hon. the Minister certain questions, and I think he will be given satisfactory replies.

On this occasion I want to bring up a matter about which there has recently been a continuous debate in agricultural circles. This is the debate on the question regarding to what extent the protection of domestic industries has affected the competitive position of agriculture, particularly in respect of the export market. There are strong indications that this vexed question is giving rise to a growing feeling of frustration in agricultural ranks. I therefore believe that it is timeous to state a few general standpoints here in order to obtain greater clarity and to give this whole matter perspective.

Mr. Chairman, the first and foremost question is: What is the standpoint of the South African Agricultural Union on domestic industries and on the protection of domestic industries? The standpoint of the SAAU on this whole matter is set out in full in a document numbered 282/82 which was drawn up by an internal study committee. This study committee was set up in March 1982 as a result of decisions taken by Congress in October 1981. The terms of reference of this study committee underlines two basic premises very clearly. The first is that the SAAU endorses in principle the protection of local industries on a selective and merit basis. The second standpoint is that the SAAU is deeply concerned about the continual rapid increase in the prices of production inputs, which undermines the competitive position of agriculture in general, and the export market in particular. In this regard, the Union is particularly concerned about the degree to which the protection of industry gives rise to the increase in production inputs in agriculture.

What are the main features of the SAAU’s standpoint with regard to this whole matter? As a point of departure, the Union sets its objective, and that is continued and extended agricultural exports on a competitive basis as a high priority of national importance. Secondly, the Union posits certain given realities which also influence the attainment of this objective. I want to mention only three of these findings. Firstly, the competitive position of agriculture in the Republic’s economy weakened considerably between 1970 and 1981. For example, producers’ prices increased by only 272%, as opposed to an increase of 317% in farming requisites. The second finding was that the competitive position of South African agriculture has also weakened considerably vis-a-vis the outside world. This finding is emphasized strongly and supported by a study of the Export Advisory Committee of the private sector, as well as by a study carried out by Prof. J. A. Groenewald with regard to the position of parity of South African agriculture during the period 1973 to 1981. The third finding was that the analysis of statistics between 1970 and 1981 indicates that the effectiveness of agriculture in terms of various criteria is continuing to increase.

Mr. Chairman, the deterioration in the competitive position of agriculture cannot therefore be ascribed to a decline in the effectiveness of this sector. The SAAU ultimately reached one conclusion, and that was that the increase in agricultural inputs in South Africa is significantly higher than in the agricultural sectors of most of South Africa’s trading partners. According to estimates and submissions made by various agricultural industries, the protection of industry makes a substantial contribution to the increase in agricultural inputs in South Africa.

The SAAU then made one important recommendation to the Government, and that was that when existing protective measures adversely affect agriculture in general, an exigent programme should be introduced in consultation with the SAAU to alleviate the effect of these measures, particularly in respect of the exporters, for example, the introduction of an adapted export incentive scheme for agriculture, in which all agricultural products will have a full share.

Mr. Chairman, the second key question is what the Government’s standpoint as regards the protection of industry is. The hon. the Minister gave a clear reply to this question in his opening address before the Cape Branch of the NWGA in Port Elizabeth on 19 April this year. I should like to quote only a few key thoughts from the hon. the Minister’s speech. Firstly—

Secondly—

Although the hon. the Minister admitted that the prices of production inputs in agriculture were rising more rapidly than producers’ prices, and that consequently this was creating a problem situation, the hon. the Minister stated clearly that one would not be justified in saying that the protection of industry is the sole, major contributor to this problem situation. However, he entrusted the whole matter of the protection of industry to the University of Pretoria for an in-depth investigation. The hon. the Minister repeatedly gave the assurance, however, that the Government would continue with the selective protection of local industries. However, this does not mean that inefficiency in industry will enjoy protection.

Mr. Chairman, I wish to conclude with a few unrelated statements. The first is that the debate surrounding the protection of industry is a complex and sensitive one, to which satisfactory answers cannot easily be given. To support this statement, I should like to read a single quotation from the recent Kleu Report to hon. member—

With reference to this meaningful approach, I wish to make a further statement, and that is that a rapidly growing agricultural sector must necessarily play a decisive role in any development strategy for South Africa. To support this statement, I quote further from the Kleu Report—

In view of this, I shall make my final statement: One can only speak of a rapidly growing agricultural sector if we can maintain an acceptable level of profitability in this sector.

To achieve this objective will demand circumspect planning from all concerned, the Government as well. I therefore ask the hon. the Minister, that when evaluating the protection of local industries, he give careful and scrupulous attention to what effect this will have on the growth potential of agriculture.

Mr. Chairman, I do not want to react to what the hon. member for Waterkloof said about having been on the board of Escom for four years, and that during that time he did not realize that Escom was experiencing problems. At present the Government is investigating what is happening in Escom. In 1974 I told the then Minister of Economic Affairs, once I had had the opportunity of reading Escom’s programme and looking at its loan capital, that this organization had to go under. The method of obtaining capital and loans could not work.

Did you say that in a debate?

I told him personally, and you can ask him about that. I never slandered the National Party when I was still a member of that party. I just want to say the following today. In 1933, when there were still poor whites in this country, the following headlines appeared in a newspaper: “Die ekonomiese insinking en die afdanking van broodwinners het reeds verwoesting in die gemeenskap gesaai. Kindermishandeling, depressie en selfmoordpogings neem toe. Mense bly sonder kos om hulle skuld te betaal en vroue wat nog nooit gewerk het nie skrop vloere om kop bo water te hou”. This appeared in Die Vaderland, a newspaper that usually has reliable sources.

What was the date?

The date was 17 March 1983. Even if it is a waste of time, I am giving the hon. member the date, otherwise he will say that these were headlines in 1933. I would not be surprised if people like the National Party, who live so far from the people and who are so far removed, thought that these were headlines in 1933. What is the truth of the matter? After having been hit by adverse circumstances and a decline in the economy, one goes to a chain store and there one comes into contact with the most underhanded practices in the history of any country. What is worse, the foodstuffs one purchases there, while being exploited, could be detrimental to one. There were headlines which read: “Name the cereal”. For more than a year, a breakfast cereal which causes cancer of the liver has been selling from the shelves of chain stores. It has been selling for more than a year, and as far as I am able to determine, neither this hon. Minister nor the hon. the Minister of Health have given any instructions for these breakfast cereals to be removed from the shelves. Day after day there were headlines in the newspapers such as: “Name the cereal” and “Name please”. They appeared approximately a week after the first reports about this were published. A further headline read: “A cover-up sparks a panic”. The Sunday Express went on to say: “The secret cast over the toxic breakfast cereals by the Government’s health officials has sparked off exactly what the silence was meant to prevent—widespread panic and speculation. Government health officials refused to budge this week despite a nationwide clamour by supermarkets and rival cereal manufacturers that the product should be named”. Why has an advertisement not yet been placed to say that from 7 June—or whatever date—the toxic substance present in this breakfast cereal… [Interjections.] Yes, it is a toxic substance. What does the word toxic mean? This is a breakfast cereal that can give you liver cancer. I see that the hon. the Deputy Minister is laughing about this. I am speaking here about a foodstuff that could cause people to have liver cancer.

Surely this is not a debate on health.

No, it is not, but this product is being sold in chain stores controlled by this department. I am asking this hon. Minister to take drastic action to remove this foodstuff from the stores and, in addition, to place an advertisement to say that if people purchased this foodstuff between certain dates, they must remove it from their homes.

What does one do if one has already eaten it?

That is a very good question. The hon. the Deputy Minister asked—and they are splitting their sides with laughter about this—what one does if someone has already eaten it. One then treats them for cancer in 10 years’ time. I also ask the hon. the Deputy Minister to accept responsibility in 10 years’ time if people have contracted cancer. It is either blatant neglect on the part of the hon. the Minister of Health, or on the part of the hon. the Minister of this department that this matter has not been discussed and this foodstuff has not been removed from the shelves.

It has been removed.

It has been removed, but has it been removed from people’s homes?

The Minister has made an announcement on that score.

On what date did the Minister make such a statement?

The hon. the Minister of Health made a statement about that.

I am asking on what date. Do not talk nonsense. Some of us have children who have been eating this cereal for years, and it is absolutely unheard of that the public was not notified about such a foodstuff and that an advertisement stating that this foodstuff purchased between date A and date B should be returned to the shops, did not appear. Who is protecting us? The hon. the Minister of Agriculture said that there were toxic substances in milk and that page was removed from the health journal? Why? [Interjections.] Every item I have just mentioned is bought and sold, and this falls under the hon. the Minister of Industries, Commerce and Tourism. I want to ask the hon. the Minister a question this afternoon and I am asking it as a result of a recent experience I had, and as a result of the fact that recently a man was sent to prison because he altered a price in a chain store. This person was given a fine of R120, as well as a possible prison sentence. The chain stores alter their prices daily. Often there are three of four different prices stamped on top of each other, and sometimes the same price is stamped on even more than once. When I mentioned this on a previous occasion, the owner of a chain store replied through a newspaper that one should pay the lowest price and remove the higher price. Hon. members will recall that. Day after day undesirable practices are taking place in chain stores, and I ask the hon. the Minister to set up a commission of inquiry into the practices in chain stores in this country. That commission should consist of Members of Parliament and other experts…

Not the CP!

The CP are experts. The point I want to make is that the time has come to end the exploitation of the public. In this country there is a law for a purchaser, as well as for a seller, and the scales are being tipped in favour of the seller at the expense of the purchaser because there is no proper supervision of these matters. [Time expired.]

Mr. Chairman, the hon. member for Langlaagte has touched on so many things so quickly that I am afraid it will take me a minute to know what I want to say. I should like to refer to the utilization of technology in the economy. Last year I made a plea for the establishment of a department of technology and research in South Africa, and today I want to raise this topic with the hon. the Minister again.

All the problems raised by the various hon. members today are intercepted in the new technological world we are entering. The economic problem of growth and inflation and the economic problems relating to manpower utilization are all intercepted by the technological revolution sweeping all over the world. We have not only the technological revolution in connection with the microcomputer, but also the so-called genetical engineering and technological marvels in several other fields, such as the space research which is being undertaken and the consequences of their research for mankind, and several other kinds of technological results which man can put to good use. Today I want to plead with the hon. the Minister that we should appoint a standing interdepartmental committee on technology and research, inter alia, to enable us to take the lead in collecting data on international technological breakthroughs and research results. Another goal in establishing such a committee could be to correlate the fine research results achieved in South Africa by the CSIR, the private sector, universities and all manner of other organizations so that these may be exploited in South Africa. There are few other countries in the world where the resources of the economy, namely enterprise, manpower, capital and raw materials, must be utilized as effectively and as purposefully as in the case of South Africa. I believe that the new technological world in which we find ourselves enables us, in every new sphere in which we operate, to utilize the basic elements of the economy much more effectively.

I believe, if we took a close look, we would see that this technological world affords us the opportunity of, for example, increasing productivity in South Africa dramatically. If we consider what is being said in Europe and the USA, it has already become apparent that, because people are receiving such tremendously high salaries in comparison with the inputs they render as members of the labour force, the robots installed in factories have already afforded those people a solution to the productivity problem. I am quite convinced that we shall not be able to escape the technological revolution in South Africa, and that in time to come we shall have to ask ourselves the question whether we want to compete with certain products in the international world. As far as many of our products are concerned we find ourselves in the position that we cannot compete owing to the high cost of our labour. I am convinced that if we in South Africa were to decide, for example, that we want to export motor vehicles and we are not prepared to make use of world technology in regard to the manufacture of vehicles by robots, we shall simply have to accept that we shall not be a country that will be able to export motor vehicles competitively.

It is frequently said that the technological revolution has led to millions of people throughout the world being unemployed. In certain respects this is true, but in other respects the technological revolution has led to a dramatic movement of people from one facet of industry and the economy to another. In the same way as the industrial revolution caused people to move from agriculture to the industrial sector and factories, so today, as a result of the technological revolution, many workers are moving from the industrial sector to the service sector and the so-called information sector. In South Africa 12,2% of the labour force is in the mining industry, 24% in the manufacturing industry, 1,3% in the electricity, gas and water supply sector, 8,5% in the building and construction industry, 14,7% in commerce, 9,3% in the transport industry and 29,4% in the service sector. I want to state categorically that as this technological revolution advances gradually—and I hope that it will rapidly gain ground in the South African economy—we shall see a dramatic shift taking place in this labour ratio, namely in regard to the number of people working in the various sectors of the economy.

I simply believe that we in South Africa should not concentrate too much on industrial development and that we should take cognizance of the fact that the informal sector in our economy is a major supplier of jobs. We should take cognizance of the fact that the service sector is also a major supplier of jobs. For that reason I also believe that, in considering decentralization in South Africa, we should not only concentrate on industries as such, but view economic development in its entirety. For that reason I can by no means agree with the hon. member for Walmer who said that remote areas do not have the potential for economic development. I should like to say today that we can deal dramatically with all the major problems we currently have in South Africa by means of the world technology at our disposal. As regards the inflation problem, I believe that we can bring about higher production by making greater use of technological aids, particularly in those areas where we have the so-called bottlenecks to which reference has already been made. Here I am thinking specifically of the building industry. In the technological world in which we are living I do not think one need talk of a future shortage of bricks or a future shortage of cement or other materials that are required. World technology makes it possible for one to intercept many of these problems. I believe that in South Africa some of the biggest problems, such as the energy problem, liquid energy and electrical energy or energy in whatever form, the food problem, the housing problem, the education problem, the decentralization problem, the infrastructure problem and the problem of family planning can be intercepted in a specific way by utilizing more effectively the technology which can be of assistance to us. As regards South Africa as a developing country and the tremendous advances made in the so-called applied technology—the sort of technology one can put to good use in underdeveloped countries, such as the use of solar energy to boil water and wind energy for other purposes—I believe that even in underdeveloped South Africa we have a tremendous potential provided we can develop technology more effectively.

Unfortunately time will not allow me to elaborate further on this topic, and for that reason I want to finish by referring to a few matters. We are living in a world in which the technological revolution is going to cause total change in the way of life of mankind during the next few decades. People will be coming back to their homes. The other day I read in an article in which the Japanese contended that in a few years’ time business in the nature of hypermarkets would no longer be erected in Japan. This would no longer be necessary, and with their technological means of communication it would be possible to get everything without leaving one’s home. I also want to refer to the field of transport, particularly to the wonderful underground train project which was built a few months ago in the city of Lille at a cost of only $320 million. There they are transporting people over a distance of 20 kilometres by way of one of the most wonderful modes of transport there has ever been. They have there a compact underground train which is far smaller than the conventional train and which runs in a smaller tunnel, and this has enabled them to save tremendously on costs. We can therefore utilize technology. There has also been a great deal of progress through office automation. I therefore maintain that we must utilize technology fully. By means of a standing interdepartmental committee we must make sure that we co-ordinate the research being done in South Africa and the rest of the world, and we must see how we can best utilize this research in every sphere in a co-ordinated manner so that we may use our capital and manpower to the maximum because, in the light of the technological advances made in the world, some of the manpower problems which we have in South Africa need no longer be regarded as major ones. We also talk about training a great deal. If one considers how technology has made a great deal of work which required a great many trained people totally unnecessary as a result of the use of machinery, one sees a solution to specific problems. If we consider how a small entrepreneur can generate tremendous economic activity with the technological aids at his disposal, I maintain that the solution to many of our problems lies in technology, and I want to ask the Minister and his Department to continue the good work they have already done and to bring about co-ordinating and action in South Africa in this field.

Mr. Chairman, we have come to rely on interesting contributions from the hon. member for Innesdal. We know from his past contributions that he has always stressed the need for improving our technology, and in studying the report of the CSIR, we find that they have an annual operating budget of R119,8 million and a capital budget of R27,2 million. This means they are spending approximately R146 million per annum much of which is in the form of a subsidy from the State. One must appreciate that this is not the only research institute we have in South Africa. There are many others such as universities and private institutions. Thus, the money being spent on research in South Africa is far in excess of the amount of R146 million. An interesting statement in this report however, is that the world’s annual budget for research is 142 billion dollars. On the other hand, South Africa’s total research budget only amount to 0,22% of this huge amount. I wish to ask the hon. the Minister whether he and the CSIR are satisfied that South Africa is investing sufficient money in research to ensure that we maintain our place in the world. Mr. Chairman, I would like to put it to the hon. member for Innesdal that research does not necessarily have to be conducted in the field of the so-called high technology such as computerization, etc., which was referred to today. While I agree that we need to maintain our position in the world when it comes to research in the field of high technology, I still believe that there is a lot of scope in South Africa for what can be termed “intermediate technology”, that is to say, research into the methods of performing certain tasks in South Africa which will result in better utilization of our manpower. Research should be done into the methods of doing jobs, the training of people and the motivation of our labour so that we can achieve greater productivity from our work force. This brings to mind—and the hon. member may be interested to know this—that exactly 20 years ago this year, I was a member of a four-man team which toured the world looking at mechanical suger-cane harvesters, because it was said at that time, that if South Africa did not mechanize the cutting of sugar-cane within a period of five years, we would not be able to harvest our annual cane crop. We visited Australia, Hawaii, Louisiana and Florida in 1963, and in later years the West Indies and Taiwan. We eventually came to the conclusion that we should partially mechanize the harvesting of sugarcane, by using machinery to load cane onto vehicles which is an arduous and back-breaking task, but should retain the manual cane cutter to actually cut the cane because it was more economical to do so. We researched new improved methods of cutting cane by hand, and it is interesting to note that it was White cane cutters in Australia who introduced us to a new system of cutting sugarcane which greatly increased our cutters’ daily output. This required introducing the Australian designed cane-knife, yet it is interesting to note that a mere two weeks ago I was informed that one of South Africa’s largest sugar companies is researching a new shape and design of cane knife so as to improve still further the output of a manual cane cutter. They believe that productivity can be increased by changing the balance and the weight distribution of the existing cane knife. The result of these developments is that instead of spending up to R100 000 on a mechanical harvester to harvest, on average, 20 000 tons per machine per year, we are still cutting by hand the 20 million tons of sugar-cane, produced annually in South Africa. Not only have we saved tens of millions in capital expenditure, but we have also retained thousands of jobs in our industry. The productivity of the labour cutting the cane has risen because of method study, training and motivation with incentive bonuses. Their wages, when one includes food and housing provided by their employers, is almost competitive with industrial labour employed in nearby industrial areas in Zululand and elsewhere. I submit, therefore, that research need not only be conducted in the high technology field but also into what I would term the field of intermediate technology.

I would like to come back to the shipbuilding industry. Earlier this afternoon, I told the hon. the Minister of a ship building company in Durban which lost a ship repair contract, which would have brought in several hundred thousand rands of income, because of the high tariff charged for the use of the dry-dock. The cost of using the Durban dry-dock had been increased because of a change in the rate of depreciation based on higher replacement cost formula. It had little to do with the actual operational costs of the dry-dock. It had to do with putting money into the reserve fund of the South African Transport Services which I estimate is growing today at a rate of R500 million per year. The point I wish to make is that this pricing policy resulted in South Africa losing the contract. We also read in the Press that Iscor was taken to task in the United States because the American steel producers said Iscor was dumping subsidized steel on the American market. I believe an investigation showed that when selling steel to the United States, Iscor did not include this higher replacement cost depreciation component in the price formula which I believe, when applied to other administered prices, is a major cause of the spiralling inflation we have today. I ask the Minister why Iscor cannot offer its steel to our shipbuilders at the same price they are offering it to people overseas. Surely if they did this, along with a more realistic tariff for our harbour facilities, we could attract to South Africa more contracts for building and repairing ships. A few years ago the SATS put out to tender a contract to build a dredger which the marine surveyor said would cost between R20 million and R23 million. The Japanese tender was R25 million, a local shipbuilder tendered R21 million, however, the contract was given to a Dutch firm at R11 million because the Dutch Government subsidizes the shipbuilding industry in the Netherlands. Could we not have assisted our local shipbuilding industry by cutting out of our cost formulas—whether it be for steel or for harbour tariffs—that component which uses the so-called “inflation accounting’ method to form capital for those two organizations? I believe the hon. the Minister should have a look at this. I would also like to ask the hon. the Minister why Soekor had two oil drilling rigs built in Japan by Japanese shipbuilders, a contract worth R160 million? Why was neither of the two local shipbuilders in Durban asked to tender, when we know that one of these, Dorbyl, has built oil rigs in the past? One might also ask why were these two oil rigs built at all, at a time when there was a surplus of drilling facilities available around the world. We know that only one rig is now drilling off the South African coast at Umhlanga, while the other is drilling off the Australian coast, but it cost South Africa R160 million in foreign exchange to have them built in Japan. I believe this needs to be looked at and answers to these questions are required.

I want to come back to the subject of job creation and the cost per job created. A copy of a very interesting speech was recently sent to members by the Textile and Clothing Advisory Council. The chairman of that council made a speech last year on the growth prospects for the clothing and textile industry. If one studies this speech, one finds that the job potential in the both textile and clothing manufacturing industries in South Africa is considerable. At the present time, the clothing industry employs 135 000 employees and it is estimated that by the year 2000 the consumption demand of textiles for the manufacture of clothing will increase from 5 kilogram to 8,5 kilogram per capita per annum. By the year 2000 this will require 382 000 employees in the clothing manufacturing industry. The interesting fact is that when one takes into consideration both the increase in productivity of the labour per kilogram of clothing produced on the one hand, and the drop-out of trained people in the industry on the other, it is estimated that between now and the year 2000 the startling figure of 700 000 people need to be trained in the clothing industry in order to meet the demand that will exists at that time. The other interesting fact is that when one studies the capital inverted per employee, one finds that the average cost will be in the order of R4 000 per job opportunity create in the clothing industry. [Time expired.]

Mr. Chairman, I should like to make use of this opportunity to deal with a few matters, and I wish to react specifically to questions asked by members and arguments which were raised here. Before referring to a few matters, I should also like to avail myself of this opportunity to welcome the Deputy Minister to this department during the discussion of his first Vote. The Deputy Minister has, in a very short while, entrenched himself in our department, and I am grateful that we are able to have the services of a full Deputy Minister. The hon. the Deputy Minister very soon made himself at home, and he is already a pillar of strength. I think the experience which he acquired as chairman of the group contributed a great deal to this. I thank him for the support in the department and for the fruitful work which he is doing there.

In the second place I also wish to avail myself of this opportunity to thank Dr. Tjaart du Plessis and the senior officials of the department very sincerely for their support and for the very thorough way in which they are managing the department. Refernece was made here this afternoon to the extensive area for which the department is responsible. Consequently it is all the more difficult a task for the top management to remain abreast of developments over such an extensive area, particularly in a time in which we, like all the departments, are under pressure in respect of personnel. My sincere thanks go to them too, on behalf of all the members of the House.

A few speakers referred briefly to the reports of the study group on the strategy for industrial development, the so-called Kleu Report. I think that further speakers in this debate will return to this interesting report. The hon. member for Waterkloof—and it does me a lot of good to call him the hon. member for Waterkloof—in a very competent way emphasized various important aspects of the report in what I would not like to call his maiden speech, but in an important contribution in this debate. When this report was submitted earlier this year, I held out the prospect of a further investigation being instituted into the implementation of the report. This must not be a report which simply gathers dust on a shelf. The report covers a wide area. It entails an exhaustive and comprehensive study of various aspects of industrial development and even covers a wider area than industrial development only. However, the recommendations made in the report are not in policy form. In many cases they are of a broader general nature. It will still be necessary to establish in detail to what extent recommendations are practicable and applicable. I want to congratulate Dr. Kleu and his various co-workers on a most excellent report. The material, the arguments, the considerations contained therein are of such a nature that I have no doubt that the report will for many years serve as a basic document for any person who wishes to acquaint himself with the history of industrial development in South Africa and the course which should be embarked upon in future. It is an important and an authoritative contribution to the available scientific material on this subject.

From the Government’s point of view it is important to note that the report of the study group to a large extent supports the Government’s present policies and confirms and recommends that they continue to be applied. The report is a confirmation that we are on the right road as far as industrial development is concerned. From time to time voices are heard saying that South Africa lacks an industrial strategy. Such a person need only read the report from front to back to realize that we are to a large extent implementing the recommendations of the Kleu Report. Of course it is always necessary to revise a policy strategy and there is always room for improvement. The committee does not hesitate to make recommendations in this connection. In order to consider the recommendations with a view to practical implementation of policy, I indicated that I should like to revive the idea of an industrial advisory committee. A committee of this nature used to exist to enable industry to discuss matters of importance with the Minister concerned. The Minister himself acts as chairman of the committee. I approached organized industry, which is rather fragmented, for proposals in respect of members of an industrial advisory committee. The members are not going to be appointed as representatives of the various industrial organizations, but in their personal capacity. Since I consider it essential that the committee be given time to make an exhaustive study of the report, and also in view of the extensive nature of the report, I think that the members should be appointed for a period of approximately two years. For the purpose of discussing the Kleu report, we were also of the opinion that it would be a good thing to constitute the committee along somewhat broader lines and consequently representatives of related sectors will also serve on the committee. In addition it will also be possible to co-opt members from time to time and we can also have discussions with members from other industrial sectors—here I am thinking of representatives of the Agricultural Union and representatives from the mining industry.

Against this background it is a pleasure for me to announce that the persons who have been invited to serve on the industrial committee with a view to studying the Kleu Report are as follows: Messrs. F. F. de V. Stockenström, H. J. Terblanche, R. J. Ironside, Dr. J. C. van Zyl, Messrs. D. L. van Coller, J. W. Nelson, M. E. de Jager, S. K. Ash, M. T. de Waal and Drs. T. A. du Plessis and S. J. Kleu.

Various speakers also referred to the question of the protection of local industries. The hon. member for Ceres pointed out that it was an intricate, complex subject. These days, however, it has become a popular subject and constant references are made to the Government’s protective policy when cost increases are being discussed, particularly those in agriculture. Since this subject is not always debated with the necessary perspective, I consider it important to deal with this subject in some detail on this occasion.

Let me first make it very clear that the Government, too, is extremely concerned about the cost increases which are occurring in all sectors of the economy, including agriculture. The fight against cost increases, the fight against inflation is therefore a top priority for the Government. This has been stated repeatedly by Government spokesmen. Various steps have been taken, which, I believe, are forcing down the inflation rate to lower and more acceptable levels. The big problem is therefore not so much the increased costs brought about by the policy of the protection of industries, the problem is inflation. These are general cost increases which push up all prices, not only those of agricultural produce. The rising costs of agricultural produce in fact have a very important effect on the cost spiral in South Africa. It is a cause for concern that the present drought conditions may also, as a result of shortages later this year, contribute towards a further negative effect on the inflation rate.

I should like to make a few general observations on the protection policy. Firstly, people talk so readily about the protective policy in respect of domestic industries, but surely the Government does not protect domestic industries only. The Government also protects other sectors of the economy. The Government also protects agriculture. I can enumerate a whole series of agricultural products which can at present be imported at lower prices than the domestic price. However, the Government does not allow this to happen, because it would be a shortsighted policy to import products at a time of international surpluses which could harm our own industry, our own agriculture and ultimately damage it permanently. In the same way it would be shortsighted to leave internal industries completely unprotected, particularly at a time when world-wide surpluses of a large diversity of commodities exist. A policy which is aimed at purchasing abroad when prices are attractive without taking into consideration the position of domestic producers or manufacturers may appear to be very attractive in the short term, but has considerable long-term disadvantages, also for the economy as a whole. The general aim of protection is after all, to promote economic growth. Its purpose is to create job opportunities; to utilize the country’s resources as productively as possible and in addition to make a contribution to the balance of payments. The protection policy is aimed at increasing the national product, thereby enhancing the welfare and prosperity of everyone. The reports of the study group on industrial strategy, the so-called Kleu Report, also recommends that for the sake of growth, the provision of work, balance of payments considerations and in order to bring about a more acceptable distribution of economic activities in South Africa, the policy of industrial protection by means of import duties should be continued.

†The dismantling of protection to industry would not only stifle growth and be detrimental to job creation, but it would certainly lead to the demise of many industries in this country. It is a fact that the relatively limited market of South Africa as well as a number of other unavoidable restraints make it difficult for local industries to compete equally with low cost, mass producing giants in the world.

Are you advocating free enterprise?

Yes, this is free enterprise. Every country in the world, including the giant of free enterprise, the United States, is developing its local industries by way of protective duties or other protective measures. The hon. member for Yeoville is shaking his head. What is the position in terms of steel? What about the multifibre agreement for textiles? One can carry on like that. All these measures are protective measures and agreements to protect local industries. What is true of the United States, is true of European countries. I should therefore like to emphasize that the Government does not intend to deviate from the policy of granting moderate, and I repeat moderate, and selective protection to industry.

What about the percentages?

I shall come to the percentages. However, I was astonished to hear that both the members of the NRP and the PFP are apparently not supporting this policy. The hon. members for South Coast and Albany—I am grateful that they could be present here—both referred to this policy during the budget debate. In speeches during that debate they criticized the protection policy. The member for South Coast, for instance, said—

The hon. member for Albany in an interesting speech nevertheless said—

I should like to know whether it is the policies of these two parties to do away with protection. Industry would like to know and I think we all should like to know whether the PFP and the NRP are advocating the dismantling of protection.

Are you advocating free enterprise?

The hon. member for Yeoville has got all the answers. I should like to ask him whether they are advocating free and unrestricted importation of goods. [Interjections.] I should also like to know whether they also believe that protection is necessary and that protection of local industry is important to growth and development in this country. It is very easy to criticise if one has nothing to offer and has no policy. I am sad to say that the one-sided, unfounded and often exaggerated suspicion-casting about protection is having a detrimental effect on industry in South Africa. I know what I am talking about. I am concerned—and I should like to stress this point—about the fact that it is discouraging industrialists to make further investments in important industrial sectors of the economy. This development could create problems in terms of the long-term supply of goods in South Africa also in the agricultural sector.

It is not the Government’s policy to protect inefficiency or to discourage or eliminate competition. On the contrary, the fact is we advocate a policy of protection through tariffs, not permits, not quantitative control, but tariffs. It is precisely through tariffs that one would like to encourage competition with imported products. Tariff protection is, as the hon. members know, a market related form of protection and allows competition and importation without serious disruption of local products.

*Mr. Chairman, it is correct that excessive protection may have a detrimental effect on the cost structure in the country. I readily admit that. That is why it is the policy of the Government to approve of moderate import duties. These are applied on a selective basis only, in order to utilize South Africa’s resources as effectively as possible. The hon. members of the PFP, who apparently do not agree with a policy of protection, should simply indicate to us whether it is their standpoint that protection should be completely abolished. I can give hon. members the assurance, however, that we shall receive no reply to that question. The industries in South Africa will not receive a reply either.

As strongly as I wish to make out a case, on the one hand, for the need for moderate protection, I also wish to warn against a tendency to keep on insisting upon higher levels of protection. The level of excise duties on capital goods and intermediary goods has shown a gradual upward tendency during the past few years. This is a tendency which gives cause for concern. The way in which some industrialists take it for granted that they can approach the Government or the Board of Trade and Industries to insist on ever-higher levels of protection, is not a sound approach. The argument with which the Government is usually confronted is that if no further protection is granted, the danger exists that employment opportunities will disappear and that unemployment will be caused because that particular company or group or undertaking will then no longer be able to compete against imported products. It is a short-sighted argument if what it amounts to is that employment opportunities should be created by excessive protection. The cost effect of excessive protection does not create employment opportunities, but destroys them. Employment opportunities in South Africa will only be created as markets for the various products are expanded. Excessive protection contributes to a cost structure which weakens the competitiveness of the South African product on the markets for those products. It does not expand our market, it contracts our market and in particular makes it impossible for the local producer or manufacturer to compete on the overseas market. Consequently the way of excessive protection does not lead to the creation of employment opportunities but ultimately, in the long run, to greater unemployment. It is against this background that the Kleu Report sees justification in a process of tariff revision with a view to making the necessary upward as well as downward adjustments. According to the report protection should only be afforded to industries which, with moderate assistance, can justify their own economic existence. For example the study group recommends that industries which require an effective protection rate not exceeding 30% should be afforded protection. The study group is of the opinion that 30 to 50% protection should only be recommended in cases where the protected industry’s contribution to the economy by way of growth, provision of work, etc., is considerable. The encouragement of industries requiring more than 50% effective protection should, as far as possible, be avoided. As an industry becomes established, the level of protection should in due course recede. It should not be maintained indefinitely, nor should it necessarily be raised further. I think these are sensible guidelines which the committee will have to consider. Tariff protection should remain moderate and selective in order to prevent the cost-in-creasing effect of such protection becoming what is virtually an obstacle to future growth in that inflation is increased further. Protection should however continue to be assessed in its correct prospective.

In this connection I should like to react to a number of allegations which were made with reference to the speech I made before the Cape Wool Growers’ Association in Port Elizabeth. I warned against excessive protection and its detrimental cost effect on the economy as a whole. I also want to warn against the one-sided, generalized and unscientific comparisons which are drawn between the prices of locally manufactured products and those of imported products. Figures and statistics in this connection can be very easily quoted and very easily quoted out of context. These days figures are very frequently bandied about without the necessary scientific justification. Consequently I asked BEPA, the Bureau for Economic Policy and Analysis of the University of Pretoria, to establish scientifically what the costs of protection amounted to for the farmer, the industrialist and the consumer respectively. The assignment given to BEPA was specifically to quantify the costs. I want to emphasize clearly that BEPA’s assignment was not to revise the protection policy of the Government, but to calculate the costs involved. Such a study will enable us to determine scientifically how the costs are distributed, who is burdened by such costs and to what extent the costs are beginning to assume excessive proportions. Some of the calculations which are at present being dished up to us are definitely out of all proportion and totally unscientific. As an example I wish to make only two references to prices. It is definitely not scientific and responsible to make price comparisons at one specific juncture and then to present these as being generally valid. It is definitely not valid to make a price comparison at a stage at which there are surpluses and an over-supply in the world while in South Africa there is an inflation rate which is higher than that of most of our trading partners. One has to make price comparisons over a period. The fact of the matter is that internationally, prices fluctuate considerably. If a responsible comparison is to be made between prices in South Africa and those abroad, it must at least be done over a period. In the second place it is unscientific to compare prices on the world market with South African prices without taking into consideration that those prices are quoted without the inclusion of the transportation costs, landing duties, finance charges, marketing costs, etc. The difference between a quoted price overseas and the domestic price cannot simply be regarded as the premium which the consumer has to pay for it. It is wild price comparisons of this kind which I should like to discourage, and it is with a view to a responsible discussion of price comparisons that I asked BEPA to undertake such an inquiry.

The hon. member for South Coast drew comparisons between fertilizer prices and arrived at all kinds of conclusions. I do not want to take up the Committee’s time by going into all the allegations which the hon. member made in his budget debate speech in detail. For example, he elaborated at length on the so-called R17 million profit which a specific fertilizer company had allegedly made. On two occasions I issued Press statements on the misinterpretation that the R17 million was allegedly a profit which had been allocated to a specific fertilizer group. The so-called R17 million profit was deposited in the pool account. The pool account was in fact established to offer the internal consumers a constant price so that fluctuations in the price of imported fertilizer would not dramatically affect the domestic price. If the pool account shows a profit, that profit is passed on to the consumer. If a loss accumulates in the pool account over a period, the consumer will ultimately have to make good that loss. I have dealt with this matter of the R17 million on various occasions and the matter was very well covered in the agricultural magazines. Consequently I shall leave that aspect at that and request the hon. member to acquaint himself with the facts so that he does not perpetuate this untruth further.

The hon. member then compared the prices of the local and overseas nitrogenous fertilizers. He then generalized by saying that they constituted the total requirement of the farmer. The fact of the matter is that there are other fertilizers as well, which also form part of the farmer’s requirements. I do not wish to go into this matter either, but once again I wish to warn against generalizations of this nature. The fact is however, that the Republic has a real problem in regard to the supply of ammonia, the source of our nitrogenous fertilizers. This is a problem which the South African Agricultural Union is also aware of and which they are seriously concerned about because a country can be very vulnerable if it cannot meet its own ammonia needs. As a result of the feelings aroused and the climate created by one-sided reporting or allegations in regard to this matter, I want to tell you that no investor is at present prepared to make an investment of more than R600 million in order to establish a new ammonia plant. South Africa has to follow the coal route as far as our ammonia is concerned. We have to manufacture ammonia from coal, or from refinery gas and naphtha, and these are far more expensive than the cheaper raw materials such as natural gas which can be used in overseas plants. If the hon. member wishes to argue on this basis—and I do not think that that is his intention—then we should not even have established an industry such as Sasol. Let us consequently leave the matter at that.

I also wanted to discuss the sulphur requirements. The hon. member told us that we were totally dependent on the outside world for our sulphur requirements. That is not true either. I can tell you that in 1983 56% of our sulphur requirements are being met locally. Consequently we are not totally dependent upon the outside world, even as far as our sulphur is concerned.

†The hon. member said that the aspect of protection went hand in hand with secrecy. I was most surprised when I read that remark. Is it possible that the hon. member sits in this House where all these reports of the Board of Trade and Industries on protective duties and rebates are published annually? I would like to advise the hon. member to take a good look at the Board of Trade’s annual report. He will find all the duties on which the board advises the Government in that report.

So there is no secrecy?

There is no secrecy, Mr. Chairman. Secrecy is in the mind of the hon. member.

What is protection costing us? That is the point.

The university will give you all the answers on that if you want to analyse it. What I am warning against is the kind of allegation which amounts only to a casting of suspicion on industries in that particular field.

*Mr. Chairman, the long-term supply position should also be constantly borne in mind. It is very easy to draw emotional price comparisons at a time when there are big price differences. Let us come back to fertilizer. Hon. members must not lose sight of the fact that in 1974 considerable quantities of fertilizer were imported, which were more expensive than the domestic product. The Government had to subsidize the imported fertilizer so as not to pass the higher price on to the farmer. Furthermore it is important to note that up to 1980 firms were still able to export fertilizer, which meant that the South African product was able to compete very favourably in the outside world. We must therefore consider the supply position in the long term. We must ask ourselves whether the South African consumer is prepared to deliver himself up to and make himself dependent on suppliers who are not always reliable. Dependence upon a supplier which officially advocates a boycott policy against South Africa is extremely risky. I must warn against that. We must not lose sight of the need for reliability of supply and availability of the product under all economic circumstances. We are all aware that at present there are countries which will enter into any transaction to earn exchange at this stage, but the situation could change overnight and I hope that we shall take cognizance of this. South Africa has a vulnerability—we need not debate this with one another—which constantly compels us to maintain our self-sufficiency in many spheres as a top priority. Therefore I wish to caution against promoting an import dependence upon countries which are not prepared to trade openly with us.

Mr. Chairman, may I ask the hon. the Minister whether the Government is prepared to guarantee the debts of certain agricultural industries which are being forced into debt as a result of a protective policy in respect of local manufacture? I refer in particular to the sugar industry which is now borrowing yet another R140 million. It is now going into debt to the tune of R230 million. Will the hon. the Minister guarantee those debts?

Mr. Chairman, I shall deal with that. I do not think the hon. member is correct in simply assuming that the debt incurred by certain industries like the sugar industry has anything to do with the protection of local industries. That is certainly not the case but I shall deal with that.

Mr. Chairman, maybe the hon. the Minister misunderstood me. The cost of producing any agricultural product has increased considerably as a result of import costs being incurred in ensuring the viability of industries such as Atlantis Diesel Engines, the fertilizer industry, etc.

Mr. Chairman, the hon. member is referring to matters with which I will deal later on. If there is another question he would like to put to me in this respect I shall gladly answer him. I shall come to the question of Atlantis Dieself Engines and some of the other remarks made by the hon. member.

*The fact remains, Sir, that cost increases in general terms and in general debate are too readily linked to the Government’s protection policy. The hon. member for Amanzimtoti has fallen right into that trap now. The increased costs are simply attributed to the Government’s policy of protecting local industries. The price increases of inputs over the past 10 years indicate indisputably that the increase in cost of petroleum products lie at the root of the problem. Since 1973—ie. over the past 10 years—the price of petrol has gone up from 10,9 cents per litre to 65,2 cents per litre, and the price of diesel fuel for agriculture from 5,9 cents per litre to 48,2 cents per litre. This indicates an increase over the 10 years of 498%—almost 500%—in the case of petrol and 717% in the case of diesel fuel. Not only did these increases result in a tremendous rise in the cost of inputs in all sectors of the economy but they also forced South Africa’s as well as the entire world’s economy into an inflationary spiral, from which we are still reeling today. If price increases over this period are compared it appears that the industrial products rose by an average of 153%. The same increases did not of course occur in all industrial products. Some of them increased less. Clothing, for example, increased by 87% during this period, while petroleum products increased by 258%. Over the same period agricultural produce increased by 123%. It therefore appears that agriculture is correct in its allegation that the inputs costs in agriculture rose more rapidly than producer prices. However, this cannot simply be attributed to the protection policy of the Government. An analysis of the respective inputs indicates that the largest single increases occurred in fuels—237%; and in stock feeds—117,8%. Neither of these two commodities are affected by the protection policy of the Government.

But allow me, Sir, to refer briefly to tractors, because the debate on protection is never conducted to completion or reference is also made to ADE and tractor engines and the prices which had supposedly risen so markedly as a result.

Massey Ferguson!

I am not going to promote any more advertisements here! Sir, during this period, from 1973 to 1983, tractor prices rose by 97,9%, and this is during the period before ADE could have had any effect on tractor prices. I think it is misleading to blame the local manufacture of diesel engines and tractors for the present high costs of agricultural inputs. Agricultural tractors purchased for the 1982-’83 season were almost exclusively tractors with imported engines. The ADE engines and the prices of those engines could therefore have had no effect on the prices of agricultural tractors for the 1982-’83 season. The fact is this: Tractor prices according to all statistics showed considerable increases prior to and during the 1982-’83 season, and these were not tractors that were equipped with the ADE engine. The increases were attributable to other factors such as the exchange rate. As you know, the rand weakened by almost 30% against the dollar during this period. Hon. members know, however, that in anticipation of ADE pushing up the prices, importers placed excessive import orders. They themselves know all about the tactics employed by salesmen to get rid of these tractors because the advent of the ADE engine would supposedly herald a tremendous price increase. The result is that it will take some time before the quantity of tractors which are still in stock today will have been worked out of the system. It is therefore unfair to stir up emotions about ADE and tractor prices. The ADE engine is proving itself. It is the first engine specifically designed for South African conditions. The cost effectiveness of the engine is exceptionally high. The result up to now have been very favourable. In addition the consumer must never lose sight of the major cost benefits of maintenance as a result of rationalization. The immediate availability of spares also entails major capital savings for co-operatives and suppliers. In the long run I have no doubt that the ADE engine will prove itself—from a cost point of view as well.

It is easy to talk about tractors which can be imported at considerably cheaper prices. Sir, I want to caution farmers: Do not draw comparisons with tractors which have not been thoroughly tested in South African conditions. Also calculate the costs which the carrying of additional spares are going to entail for co-operatives and suppliers, and what about after-sales service and maintenance of those tractors—particularly if the seller does not wish to identify openly with his client? All these things must be taken into account. Sir, the Government does not stand in the way of trade with any country in the world. If organizations wish to import tractors with the payment of duty, they may do so—of course on the condition which has already been spelt out, viz. that the requirements of the Department of Agriculture in respect of the availability of spares, aftersales service, maintenance, etc., will have to be complied with. The tractors will also have to be thoroughly tested first by the agricultural engineering sector.

The Government also has a responsibility to protect the interests of the consumer in this connection. I really do not think that many tractors will be imported, yet I want to make an appeal to our farmers and also to the representatives of farming constituencies to speak to our farming community in this connection so that they will all throw in their weight behind the ADE engine. Here we have our own South African engine which is proving itself, and of which we indeed have reason to be proud. It is a quality product and I have no doubt that if the engine is given an opportunity it will probably prove itself from a cost point of view as well.

Now, Sir, I come to the hon. member for Amanzimtoti’s question. In so far as the protection of domestic industries does exert an influence on the production of goods in South Africa, which affects them detrimentally on overseas markets, the Government is prepared to compensate for this by means of export incentives. As a result, criticism on the effect of the protection policy falls away to a large extent. In his very responsible speech on this matter, the hon. member for Ceres pointed out that the effect of protection was ultimately detrimental to the farmer as far as the export of his produce was concerned, because the primary producer’s valid objection did not apply in respect of the domestic market, but in respect of the foreign markets. After all, the farmer or the industrialist does not compete on the domestic market against products which are produced with local inputs and which consequently have a detrimental effect on their product. The valid objection of the farmer as well as the industrialist applies in respect of the foreign market. I want to tell you that the Government and the department have a great deal of sympathy in this respect. Indeed, the importance of exports cannot be over-emphasized. To my way of thinking this is one of the exceptionally important points made in the Kleu Report, which points out that economic growth, industrial growth in South Africa, has up to now in particular been made possible by means of import replacement, but the potential for further import replacement has declined considerably since our further growth will depend upon our ability to export. Consequently it is also essential that we accommodate our industrialists and our farmers, the exporting community in general, in so far as their competitiveness on overseas markets is negatively affected by a policy of protection. Promotion of exports is an essential condition for the expansion of our market, which in turn is an essential condition for the economic growth and the creation of employment.

On page 181 the Kleu Report makes the following observation—

Since South Africa has up to now relied primarily on import replacement, it is particularly important that we should expand our markets by means of an export drive. This requires the negative implication of protection, which discriminates against exports, to be rectified. In order to compensate for this, the Government announced a series of export incentive measures as long ago as 1 September 1980, of which the most important are the category A incentive measures. These are measures which are specifically aimed at compensating the local producer or manufacturer for the higher costs brought about as a result of a protection policy.

The application of this category A aid neutralizes the cost effect of protection. What is also important, is that these category A incentives were not only introduced for the industrialist, the exporter of industrial goods, but for all producers, i.e. for agriculture as well. The cost disadvantage which local production experiences as a result of protection can be eliminated in that way, and the producer or industrialist can compete on an equal basis with his rival on the world market. The concession also provides that exporters may claim a tax concession of 50% of what the import duties on inputs would have been if all the inputs had been imported. In reality what this means, because it is a tax concession, is that the manufacturer or the producer can recover 90% of the costs. As I said, the concession applies to all exporters, with the exception of the gold and diamond mining industries.

Now it is true that the implementation of this policy is still causing problems in certain sectors of our agriculture. The Export Incentive Advisory Committee, on which the South African Agricultural Union is also represented, is inquiring into these problems, and trying to find formulas by means of which this benefit can also be granted to all sectors of agriculture.

One of the problems is for example that the concession was introduced in the form of a tax concession. In the case of maize, the Maize Board is the exporter and the Maize Board is not liable to taxation. It is also difficult to find a formula in terms of which this benefit can be passed on by the Maize Board to the respective farmers.

In view of the importance of this form of export assistance, I requested that the possibility be examined of not granting this assistance in the form of a tax concession, but rather in the form of a cash payment. The Kleu Report also recommends that the concession be increased in order to cover the full percentage of the increased costs of the input. I think that this is also a positive recommendation which we will consider favourably. However, it will not be possible to implement either of these two measures, if they can be implemented, this year, because provision will have to be made for them in the ensuing financial year.

Sir, the hon. member for Ceres specifically requested that the Government should be sympathetically disposed towards the cost increases experienced by the exporting community, and particularly the agricultural exporting community. I also wish to point out that various sectors in agriculture have already received the benefit of this incentive and of other assistance. Thus the canning industry, the deciduous fruit industry and other industries already qualify and have already made use of this input with good results.

Finally, in respect of this subject, I wish to emphasize this one fact again: The Government is sympathetically disposed towards cost increases, but I think it is in the interests of all of us to discuss this aspect in a balanced and responsible way. The economy cannot be divided up into segments and compartments. The economy is a unit, a whole, and one branch is particularly dependent upon the other. If I mention only one figure to you, you will understand to what extent industry and agriculture are intertwined. It is a fact that more than 55% of all agricultural produce is processed further. These are products which are consequently absorbed by industry to be further processed. The interdependence of these sectors in the creation of employment opportunities and in the expansion of the national product, and with it the promotion of the prosperity of South Africa, is of great importance. If we start a debate in which the one sector accuses the other, we are not going to derive the benefit of economic growth and progress which we are all endeavouring to achieve. I therefore caution everyone involved to act in a responsible way in regard to these subjects in this sphere. I have no doubt, Sir, that where problems exist—and problems do exist—we will be able to solve these problems if the goodwill is there (and you may accept that the goodwill on the Government’s part does exist). We shall ensure that in the industrial as well as the agricultural sphere, we shall continue to repeat the successful years we have already had so that the graphs in all these spheres will always show an upward tendency.

Mr. Chairman, I claim the privilege of the half hour. Unfortunately I do not have half an hour because I would have loved to have time to deal with the statements which the hon. the Minister has now made.

Are you going to give us an answer?

I am going to give you quite a few answers. What I want to say right at the outset is that I find this a most remarkable speech, because it demonstrates how this Government is in fact on the defensive. There was not a single positive new aspect that came out of the Minister’s almost hour-long speech. The whole of it displayed a defensive attitude in order to deal with criticism which has been directed against the Government, particularly by the farming community of South Africa, and the fear which is apparently shown by the Nationalist Party of the Conservative Party making progress in the farming areas of South Africa. I want to warn the hon. the Minister that if he is going to allow the economic policies of South Africa to be dictated by his fear of losing votes to the Conservative Party, the NP is heading for trouble, and real trouble.

The other thing I find remarkable is that the hon. newly elected member for Waterkloof made the suggestion earlier on in the debate about people being social democrats. Sir, I thought that I was listening to Michael Foot when I listened to the hon. the Minister speak here, because there could be nothing more calculated to interfere with the free market mechanism than the statement which the hon. the Minister has made. I think it was a most remarkable performance, and if you look at the Vote of this hon. Minister, nothing is more demonstrative of an interference with the free market mechanism than the budget itself. This is the Minister who is in charge of the State-owned industries, of the companies, one after the other, which are owned by the State. When you look at this Minister’s budget you find one rebate, one concession, one interference with the free market mechanism after another. And this is the Minister who claims that—it is stated in the annual report—he propagates a system of free enterprise. One of the problems that this Government has is that in trying to sell an economic policy, it is trying to sell free enterprise while it practises the very opposite.

Sir, I am not one who has ever said that there should be no regulation or no planning of any kind. I have never said that, but when we say it, we are said to be the socialists, whereas that Government which practises it, pretends to be the capitalists. That is the joke, Sir. They are not free marketeers. They have never been free marketeers in practice. It is a hoax and a bluff and it is not reality.

I am certainly not a free marketeer.

Then why, in your annual report, do I read what you claim to be? Maybe the hon. the Minister did not write this report, but it says here—

“Soos dit in Suid-Afrika toegepas word”!

Is that your policy?

Yes; it is qualified, it is there.

Sir, this is in fact the contradiction one finds with this hon. Minister. Now, let us deal with the issue of protection. As far as we are concerned and as far as this party is concerned, we have never said that there should be no protection for industry. We have never said that. [Interjections.] No, we have never said so. However, Sir, we believe that a protective policy needs to be correctly and properly applied. When you apply it, one of the things which you have to bear in mind is who is paying the price for that policy when you apply it. One of the things that you have to bear in mind is that when you apply rebates or give export concessions, those have tax implications and income redistribution implications. That Minister knows it. One of the factors you have to bear in mind is that there is a conflict between the revenue requirements in respect of rebates and the protective objectives which are aimed at. When you look at the protective objectives you have to ensure two things, namely strategic objectives and import substitution objectives. In many cases these aspects conflict. One of the things you have to look at, is the most cost-effective means which can be applied to those particular circumstances. Let us take, again, the issue of ADE engines. Who paid for ADE? Who paid the R415 million that ADE has cost so far?—only the taxpayer, Sir, and in that respect, the consumer. Who pays in the end when higher agricultural prices are demanded because of the higher costs of the inputs into that?—again, Sir, it is the consumer. And when the hon. the Minister says to agriculture: “Don’t worry; we will give you export incentives.” who is paying?—again it is the consumer, because the taxpayer has to bear the burden. When you give tax relief in one respect, you have to bear in mind that you have to raise the revenue in another. So, Sir, in all of this, what is happening is that there is a high degree of income redistribution which, is at the root of this whole matter. In those circumstances, it has to be handled most delicately, in the most cost-effective way, and in a manner in which it is not only the farmer who has to be protected and not only the industrialist who has to be protected, but also the consumer who has to be protected, because in the end the high costs of taxation are paid by the consumer and nobody else. That is the problem.

In the meantime they make you fat cats fatter.

I was waiting for an interjection by that hon. Minister because he is your worst customer for Atlantis Diesel. There he sits, the worst example one can get in order to deal with this. The hon. the Minister calls me a fat cat, but let him get up and speak in this debate and say that people should now support ADE and buy these tractors. We need people like him to buy these tractors. Why do I say that? I say that because I am concerned about employment. I put a question to the hon. the Minister—it is a matter that is disconcerting—and in his reply I read that a loss of R22 million in respect of the current financial year is expected for Atlantis Diesel. What is more, if you ask the question, as I did, what the present plant utilization is, the answer is 28%. This can only be regarded as a disaster, because how do you justify the investment of R415 million and a loss of R22 million for the current financial year, without allowing for the interest factor on the capital invested, which is not on loan but on capital?

What about the drought?

It is not the drought, because they all bought the tractors beforehand. As the hon. the Minister himself said, all these great patriots bought all the tractors they needed so that they did not have to buy the hon. the Minister’s tractors. That is the truth of the matter and the hon. the Minister knows it. That is why he is sitting today with a 28% capacity. It is the fault of all the paper patriots who made sure that they bought their tractors from goodness knows where, in the Eastern Bloc and elsewhere, so that they did not have to buy these tractors. That is the result of it.

Did you buy one?

Let me tell the hon. member in Yeoville there is very little use for tractors.

I want to tackle the hon. the Minister about something else. He is the Minister of Industries, Commerce and Tourism. Not even in the name of this Department is the term “consumer” used. If you look in the programmes relating to this Vote you find that not even in these programmes is the word “consumer” used. You have to turn until you eventually come to programme No. 3 and if you look in that programme you find under “Internal Trade and Consumer Affairs” a reference to consumer affairs. What is remarkable is that in this budget the total amount that is devoted to consumer affairs is R601 900. According to this budget that is all that is voted for consumer affairs. If you look at the budget as a whole you will find in the first programme that that amount is spent on consumer affairs out of a total amount of R504 million. I want to say to the hon. the Minister that the consumers of South Africa want a Minister of Consumer Affairs. The consumers of South Africa want more attention paid to their interests. They want more attention paid to the fact that in the end, when all these incentives are given, when all these concessions are given, the person who pays is the consumer. That is why that protection is needed.

Let us for example look at the existing mechanism for the protection of the consumer. We have the consumer council which submits an annual report. It is most remarkable to read the following about the thing of which they are so proud—

It is actually in Bellville.

I thought Bellville is not Cape Town, but I may be wrong.

It is part of Cape Town, it is a suburb of Cape Town.

Okay. We are now in 1983 and the first regional office of this body has only now been established. If you go through this report you find the most remarkable situation, namely that with one office and a budget of over R600 000 these people are dealing with 6 000 complaints a year. That is in one office. Those are not reflective of the problems of the consumers in South Africa. Just open the newspapers of South Africa. I want to thank the newspapers and the media for a service that they are providing to the consumers. People go to the newspapers with their complaints. The newspapers provide special columns and employ people to see to it that consumers are looked after. That is actually a function of this council and of this department. Instead of this we now have private enterprise looking after what is primarily a State function. That is the reality. Thank goodness that they are doing it, because without them the consumer does not have the protection he needs.

I want to raise one last matter. I am greatly disappointed in the hon. the Minister because my colleague the hon. member for Port Elizabeth Central raised the issue of the National Supplies Procurement fund and the hon. the Minister did not reply to him. I thought the hon. the Minister would reply to him so that we would know where we stand in relation to this matter.

I have indicated that I will reply to the question later.

I am very concerned about this, more than concerned. Let me tell this Committee why. Firstly, I believe that if nothing else comes out of this debate, from now on anybody who has to furnish a certificate in respect of what has happened to supplies, it should be an auditor’s certificate and not a director’s certificate.

It is an auditor’s certificate.

It is not. Just look at what it says. It says: “The breakdown came when we were allowed to certify our own stocks.” That cannot be expected to be accepted. I now come to the second matter that I think needs to be dealt with. It is no use saying that we are not allowed to know what sort of stocks are in fact being kept because we accept that we should not have information about the real strategic stocks that are being kept. It is in the national interest that we should not be debating this across the floor. What is said here is said by quite a well-known individual. I do not need to mention his name. He says that the association’s attitude has been that you could not negotiate a benefit for only some of its members. He goes on to say that those are imported strategic materials and it had to persuade the Government to give such loans to all its members who held imported stocks whether they were strategic or not. That is where the issue comes in, whether you are entitled to stockpile cosmetics and things of that sort because they are imported and because it is said those are good for morale. With great respect, what we want is that strategic stocks are stockpiled and not things which can put in the category of things which we can do without if we are in trouble.

Mr. Chairman, the hon. member for Yeoville is an acknowledge social democrat; consequently we accept that, as soon as free enterprise is mentioned, he will vent his spleen about it. In fact, he referred to ADE’s expected shortfall in the current financial year and afterwards to the fact that ADE was not working at full capacity at present. I should like to know how many other industries and business enterprises are not working at full capacity or have even gone bankrupt in these items of economic recession.

The hon. member also referred contemptuously to the Consumer Council. For his benefit I want to prove that the opposite of what he said is true, because I think that he did not make a careful study of that report.

He is a cheap politician.

You are for sale.

You are a liar.

Mr. Chairman, on a point of order…

Order! Who said the hon. member was a liar?

I did, Mr. Chairman.

The hon. member must withdraw that.

Mr. Chairman, I withdraw it. On a point of order: Is it admissible for an hon. member to say that another hon. member is for sale?

Mr. Chairman, I said he was for sale.

I think that for the purposes of the promotion of order the hon. member had better also withdraw that.

I withdraw it.

The Consumer Council owes its inception to the Consumer Union because it was established as a result of a request put to the Government by the Consumer Union for there to be an organization to serve the interests of consumers. Through the union’s 26 affiliated organizations such as trade unions, staff associations and numerous women’s organizations this council reaches more than 2 million consumers. And then the hon. member says here that the Consumer Council serves no purpose. The Consumer Union is continually growing in its own sphere and it remains, as far as the council is concerned, a source of information and co-operation. Because the Consumer Union has the power to nominate people for appointment to the council by the hon. the Minister, it continues to be a feeder organization for the Consumer Council. For that reason existing and new consumer groups and organizations and even individuals ought to be encouraged continually to affiliate with the Consumer Union. The Consumer Council’s activities cover a very wide range. Because of insufficient time I should just like to refer briefly to three important matters, namely the complaints section, to which the hon. member referred, the research section and the “Buy South African” campaign.

As regards research, I want to say that the permanent consumer panel has been extended during the past year to 800 members throughout the country, representing all population and income groups. The hon. member referred only to the regional office in the Western Cape and ignored all the others. The purpose of the panel is to enable the Consumer Council to determine the needs of consumers and then to serve them as best it can. An invitation is extended to every consumer to become a panel member and assist the council by completing questionnaires on consumer affairs from time to time. The research section is approached daily by members of the public and also business firms for figures relating to various matters. The figures to which the hon. member referred are, in many cases, figures of the kind this Consumer Council supplies to newspapers and magazines. Every second month, for example, a survey is made of the prices of 101 products at 24 supermarkets to obtain indications of price trends. The list includes goods such as foodstuffs, groceries, toilet requisites and cleaning and other agents. The purpose is to determine which goods are constantly subject to steep price increases. The hon. member for Langlaagte is not here now, but he spoke of how frequently prices changed. The Consumer Council specifically devotes attention to the elimination of such anomalies. Changes in the consumer price index and the inflation rate receive a great deal of attention.

As regards complaints, the council strives to create by way of its constant consumer guidance, a knowledgeable consumer corps so that complaints may be restricted to the minimum. In spite of the constant guidance, the number of complaints keeps rising as more and more consumers become aware of the council’s service. It is true that some dealers sometimes exploit consumers, but most of the complaints originate as a result of ignorance on the part of consumers or poor communication when goods or services are purchased. As far as the council is concerned consumers’ complaints remain an extremely important source of information, for in this way cognizance is taken of and attention is focused on their problems. In some months as many as 500 complaints are lodged with the council, and then the hon. member says the Consumer Council is doing nothing. More than 90% of the complaints lodged last year were resolved. It is clear that the hon. member did not read this report. The complaints section should, in my view, be extended further, for it is through this section that the council serves consumers in the most practical way.

The final phase of the “Buy South African” campaign, in which the object was to create an awareness amongst consumers of this emblem and to enable them to recognize and remember it, was also most successful. A promotion campaign to acquaint consumers with the emblem and the new slogan “We have made our mark”, was launched from June to September 1982. Close to 1 000 retailers participated in this promotion. In fact, some of the organizations have been carrying on this promotion work on their own. The aim of the campaign was to make consumers aware that articles on which this emblem appeared were manufactured in South Africa. The emblem, irrespective of whether it appears on the article, on the wrapping or even in an advertisement, is the purchaser’s guarantee that the product was manufactured in South Africa. Whenever the consumer, the retailer, the factory owner or whoever has to buy something, various factors are taken into account, for example the price, the quality, the appearance of the product, the after-sales service and a number of other factors. A locally manufactured product is a product manufactured in South Africa by South Africans. That does not mean that the product must be manufactured from South African raw materials or parts only. Other factors such as labour, capital and entrepreneurship also play a qualifying role. Today the self-supporting family no longer exists; we have, instead, manufacturers and enterprises manufacturing goods and providing services. The manufacturers and enterprises employ people and, as goods are sold or a greater use is made of services, more and more people are employed. When more people are employed, more people earn money with which they can then buy more goods. By supporting our South African industries those industries and the purchasers are increasingly assisted, albeit in different ways. As purchasers require greater quantities of goods, manufacturers produce more. By producing more, the manufacturer’s potential to employ labour and his potential in other fields are fully utilized. This results in production costs dropping and, consequently, in a drop in the unit cost of the product as well.

Another reason why South Africans should buy South African lies in the possibility of revenue being earned on exports. It is essential for us to support South African products because that leads to the manufacturer having a good market so that products of good quality can be manufactured at a lower price and can possibly be exported. In this way, therefore, we can earn valuable foreign exchange. It is for this reason that the hon. the Minister stressed export promotion. I have now pointed to one of the best ways of effecting exports. The trade balance consists of revenue from exports and obligations in respect of imports. By earning more through exports than we pay for imports, we can maintain a favourable balance of payments. By buying South African products, consumers are protected. In terms of our law consumers enjoy more protection in the event of transactions going wrong, because, if consumers should experience problems with the imported goods they buy, the Consumer Council would not be able to help them as easily as they could if the goods were manufactured locally. [Time expired.]

Mr. Chairman, I should like to thank the hon. member for Smithfield for his finely balanced speech in which he put in perspective certain matters raised by the hon. member for Yeoville. In a few moments I shall also express some ideas about the question of consumer protection and the role of the Consumer Council.

In the first instance I should like to extend my sincere thanks to the hon. the Minister for the friendly comments he directed at me this afternoon. I should also like to thank him and express my appreciation for the manner in which he made me part of his team. For my part, it gives me pleasure to say that I consider it a privilege to be able to serve under him in the department.

In the second place I should like to express my appreciation for the way in which the Director-General, Dr. Du Plessis, and the staff of the department have made me feel at home in the department. I also want to record my appreciation for the work they do and for the co-operation I receive from them.

Then I should also like to express my sincere thanks to my colleagues and especially the hon. member for Vasco, the chairman of the NP’s study group on Industries, Commerce and Tourism, for their friendly words to me. I also want to thank the hon. member for Sunnyside and the hon. member for Amanzimtoti. Then I should also like to thank the hon. member for Walmer for the note he sent me.

I should like to express a few thoughts on consumer protection, because it would appear that certain hon. members and also members of the public are of opinion that the Government is actually leaving consumers defenceless. That was also apparent from the speech of the hon. member for Yeoville and the speech of the hon. member for Langlaagte, who is not here at the moment.

He is speaking in the Other Place.

Then the hon. member for Sunnyside should be so kind as to tell the hon. member for Langlaagte to read my comments on his speech later on. The hon. member for Langlaagte made the statement that the public in South Africa are subjected to the most cunning practices in the world. Surely that is simply not true. The hon. member for Smithfield mentioned that, if we look at the report of the Consumer Council, we see that 90% of the complaints received last year, of which there were nearly 500 per month, were satisfactorily resolved. Surely that indicates that business ethics in respect of consumers in South Africa differ from what the hon. member for Langlaagte is trying to suggest. I really think that the hon. member should take the opportunity to place his own speech in the right perspective. I just cannot accept that the hon. member is convinced of what he said in his speech this afternoon.

The hon. member for Yeoville referred to the sum of money allocated to the Consumer Council in the Estimates. I want to say that the sum of R602 000 is not a negligible amount. I suppose all of us would like to see a larger amount being allocated to the Consumer Council, but it goes without saying that we do not have an over-abundance of funds and that is why I think that with this year’s allocation to the Consumer Council it will best be able to promote its interests. I trust that in the future it will be possible to make more funds available to the Consumer Council. I believe it is necessary for me to say that the most important function of the council is in fact to watch over consumer interests, to serve as spokesman on consumer affairs and to co-ordinate all activities in the interests of consumers amongst all groups. This council has already reached important milestones in regard to its activities. The guide to personal money management is used throughout the country in schools and colleges and also by the Defence Force. The magazine The South African Consumer and a large variety of useful pamphlets and brochures on a wide range of subjects of importance to consumers are regularly made available.

I concede—the hon. member for Yeoville also referred to this—that the council’s efforts to promote activities on a regional basis have unfortunately failed so far owing to, inter alia, a lack of sustained interest locally. In the light of the great need for consumer guidance, particularly amongst consumers of colour, the council has now proceeded to setting up a regional office in Bellville. That regional office will be opened officially later this year. I want to state unambiguriously that I trust that other regional offices will follow as soon as the necessary funds are available. I trust that it will be possible to launch this project successfully because in my opinion it is an essential development. In fact, I shall do my best to bring this about. In this connection I also welcome the point of view expressed by the hon. member for Yeoville.

As it is, the council has a say in a wide varriety of organizations in which it is represented. On its part it also contributes to seminars and meetings organized throughout the country for the benefit of consumers.

The council also deals with numerous complaints covering a wide range of consumer affairs. The freqency of such complaints points to shortcomings in the market for goods and services and forms a basis for steps be taken about the matters concerned, as the hon. member for Smithfield has in fact rightly said.

Apart from the financial and other assistance by the State to the Consumer Council, the authorities also continually look after the interests of consumers in general. I think that the hon. member for Yeoville should this afternoon have put matters in that perspective as well because, surely, this allocation to the Consumer Council is not the only way in which the interests of the consumers are looked after. The Internal Trade and Consumer Affairs Branch is responsible for drafting legislation. In that process the interests of consumers are continually borne in mind. Hon. members can refer to page 51 and following pages in the department’s annual report. The activities of that branch are largely concerned with the resolution of consumers’ complaints. Our consumer legislation includes the Trade Practices Act, the Alienation of Land Act, the Credit Agreements Act and the Share Blocks Control Act. Then we have the Property Time-sharing Control Bill is before Parliament at present, which is another measure aimed at protecting the interests of consumers. We must therefore guard against telling consumers that they only receive a limited service from the State.

I should like to take this opportunity to thank the council, the director of the council and his staff for the work they do and to wish them well. The Government has the interests of consumers at heart. In fact, the Government wants the free-market system to be maintained and perpetuated. The private sector must in the first instance ensure economic growth. A great onus also rests on the private sector in that it has to ensure that it makes its contribution in the fight against rising prices and in opposing practices that may be detrimental to consumers, or else consumers may put pressure on the free-market system for the introduction of controls and an intervention which will be undesirable.

The hon. member for Sunnyside referred to the question of standardization. I want to say that the Bureau of Standards, as is the case with various other institutions, is continually looking after aspects of consumer interests. That is indeed quite clear from the objectives of the SABS. I should also like to say to the hon. member for Sunnyside that the Metrication Board has over a period of many years concerned itself with the standardization of the size and capacity of containers in accordance with practices adopted in most of the important countries in the Western World. Exceptions were made in the past by way of allowing people to defer meeting requirements for a certain time. Such exceptions were considered in consultation with organized commerce and industry. Today virtually no concessions are granted any more. I hope that what I have said will satisfy the hon. member.

Because my time is restricted, I shall just touch on a few aspects of the activities of the SABS in order to demonstrate that the interests of consumers are indeed being looked after. Especially in the present economic climate manufacturers are increasingly recognizing the importance of quality and quality control. For that reason the SABS is experiencing an unprecedented demand for assistance with the introduction of quality control. Some of the matters being investigated by the SABS are the question of unsafe safety belts—because there are many of these—and related products on the market which place the lives of children in particular at risk. Compulsory safety specifications were issued in respect of those products in the past year, and I believe that consumers must make use of them. Another interesting aspect of the activities of the SABS is that the South African Rugby Board recently requested the bureau to assist with the standardization of materials, colours, etc., used for Springbok rugby togs. It is interesting to note that only rugby balls have not yet been standardized. The bureau has also been asked to lend a hand in this respect. The hon. member referred to Western Transvaal, and I want to say that I am convinced that as soon as rugby balls have been standardized Western Transvaal will again become a force to be reckoned with in South African rugby.

Another aspect to which I should like to refer—this also links up with the hon. member’s representations—is the fact that educational authorities have their own divergent requirements as regards school books. This is a very real problem at present. A large variety of books must be produced and that leads to increased costs. The bureau is engaged at present in compiling standard specifications which will rationalize the requirements of educational authorities and bring costs down.

I want to conclude by saying that a variety of choices is one of the advantages a free-market economy has for consumers. In many cases, however, that is a luxury South Africa can hardly afford. It is, consequently, the duty of the authorities as well as the private sector to be consciously on the look-out for possibilities of standardization at all times. The personal preferences of manufacturers and others cannot simply be foisted on taxpayers and consumers. Undesirable conditions have already developed in for instance, the building industry. We are, in any event, mindful of the need to prevent undesirable practices developing.

I should like to congratulate the hon. the Deputy Minister on his appointment to his post. He is particularly well-equipped for this post and we are sure that, together with the hon. the Minister, he will make a great success of this portfolio.

I should like to exchange a few ideas with the hon. the Minister about certain aspects of Government policy relating to regional development and decentralization, and more particularly development region D in the Port Elizabeth-East London area. We are fortunate in having a Minister who is already well-informed about conditions there and who has already proven that he lends a sympathetic ear to representations in this connection.

When the Government’s regional development policy was announced, it was stated that the aim was to canalize part of the economic growth away from the PWV area to regions where the rate of development was slower. The Government has approved certain guidelines for the consideration of decentralization concessions. For the purposes of my argument I want to refer to two of those guidelines. The first is the availability of the necessary infrastructure. The second is the need for the creation of additional job opportunities based on the existing unemployment figure and also what contribution any proposed development can make to the creation of job opportunities in a specific area.

On the basis of these criteria, the metropolitan area of Port Elizabeth/Uitenhage was classified as a metropole in which the establishment of industries would be most advantageous for private concerns, specifically in the light of the existing infrastructural benefits. It is also accepted that the key to the solution of the economic problems in that area is the fact that the available manpower will be absorbed more rapidly, that is to say through the creation of more job opportunities.

The unemployment position in that area can only be described as a matter of grave concern. The hon. the Minister is well aware of that. Since 1982 no official figures have been available any more because compulsory registration was abolished but, based on the figures that are available, i.e. those for 1980 and 1981, it is authoritatively estimated that we are today faced with an unemployment figure of approximately 30 000: 24 000 Black men and 6 000 Black women. The figures available for 1980 are the following: 20 139 men and 2 852 women. That gives a total of 25 991. The figures for 1981 are: 21 401 men and 3 541 women, which gives a total of 24 942. That represents nearly 40% of all the unemployed Blacks in the country, whilst a minimal 6% of the country’s economic activities are located here. These statistics definitely reflect a potentially explosive situation. It therefore goes without saying that, in the consideration of incentives, the greatest possible weight should be attached to projects in sectors in which the cost-benefit ratio in respect of the creation of new job opportunities is high. In this connection there are two sectors of the economy in the Eastern Cape which I should specifically like to bring to the attention of the hon. the Minister and his department once again. They are firstly, the motor industry and related industries and, secondly, the intensive agriculture in the Sundays River valley.

As regards the former, I do not think it is necessary for me to go into that in any detail. Other hon. members, more closely concerned with that, will probably have more to say about it. I can just mention, however, that the motor industry and related industries represent more than 60% of the 6% of the country’s economic activities located in the Port Elizabeth-Uitenhage area. As far as combating unemployment is concerned, the motor industry claims that with the same capital expenditure it can create four times as many new job opportunities as any other entrepreneur by means of a new plant elsewhere. Also in the light of the availability of the necessary infrastructure, it is clearly in the interests of the motor industry in particular, but also of the economy in general, for the present industry to be in a position to continue to exist and to extend its activities. We do not want to imply that the Government is doing nothing about this, but we should just like to re-emphasize how vitally important this is for the industry.

Then I should also like the hon. the Minister to give attention to, and assist in meeting the needs of, the intensive agriculture in the Sundays River valley. That is part of region D. As that is primarily an irrigation matter, I shall discuss it in greater detail under the Vote of the hon. the Minister of Environment Affairs and Fisheries. This is exclusively a question of the completion of the Fish River/Sundays River phase of the Orange River project. However, this also deserves the attention of this hon. Minister and his department, particularly in view of two considerations related to the input by his department, from time to time, in determining priorities in connection with the capital budget for development projects. In the first place we are not concerned here with agricultural development as merely a primary industry. The farming activities in the valley are of such a nature that exclusively high-value agricultural products such as citrus and lucerne are cultivated there on a large scale. What is more, in respect of most of the major products there is some or other form of added value before they leave the valley to be marketed. The farming activities in the valley therefore to some extent qualify to be thought of as constituting a semi-secondary industry or so-called agro-industry. The part of the scheme which has become critical for the valley is the weir which it is intended to build at Wellington Grove on the Little Fish River. It is estimated that the cost will be R16 million. The volume of water from the Orange River to the valley will thereby be increased from the present 4 cumecs to nearly 26 cumecs.

One of the most important grounds for claiming high priority for this scheme is, as in the case of the motor industry, the large number of job opportunities it will create. According to expert calculations in the Heyl report, the cost-benefit ratio of this scheme will compare very favourably with that of other schemes supported by State incentives. I am referring to the statistics provided by the hon. the Prime Minister earlier this year during the no-confidence debate.

Another important consideration here is that the necessary infrastructure is already in existence. The same canal system can provide a much greater volume of water for the already scheduled properties, and approximately 1 500 hectares more can be irrigated.

Another important consideration which ought to carry a great deal of weight with the Decentralization Board is the fact that the increased production of the valley, which will result from the completion of the project, never can or will contribute to the problem of over-production manifesting itself. On the contrary, in view of the large overseas demand, particularly for the citrus products of that area, a large amount of vital foreign exchange can thus be earned.

The valley’s potential as one of the country’s foremost lucerne-producing areas should also carry a great deal of weight in the light of the increasing, and apparently insatiable, local demand for this essential agricultural product.

My time has nearly expired, but I should still like to refer the hon. the Minister to another matter which concerns the differentiation that still exists in respect of incentives between the Port Elizabeth area and the East London area, differentiation favouring the latter. The question is whether that is justified. I assume it is based on the fact that the East London area borders on a homeland. I maintain that that is purely a technical distinction. For all practical purposes the position in the Port Elizabeth area is exactly the same as that in East London. The only technical difference is that East London lies close to a homeland, but the over-concentration of Black people in or on the outskirts of Port Elizabeth and Uitenhage places us in exactly the same position as in the case of East London. I think that that aspect should be looked at again. [Time expired.]

Mr. Chairman, the hon. member for Sundays River will no doubt pardon me for not following up on what he said. I should like to draw the attention of this Committee to the hon. the Minister’s policy in connection with liquor affairs and the Competition Board.

On page 69 of the recent Annual Report of the Department one reads under the heading “Drankaangeleenthede” that it is the Department’s endeavour to maintain the public interest as its highest priority. The hon. the Minister’s reaction to the recommendations of the Competition Board in connection with the CWD defeated this praiseworthy objective altogether. I regard the hon. the Minister’s recent statement on this matter as being highly unsatisfactory and virtually contrary to the public interest. In my opinion the public interest can be served only by means of a system of free competition, but now the Government has created exactly the opposite situation.

†Let us just consider the record. On 13 November 1979 the hon. the Minister of Justice announced the Cabinet’s approval for a restructuring of the liquor industry which envisaged the setting up of Cape Wine. Two principles of that deal were important to the present situation. One principle was that Rembrandt and SAB should divest themselves of their bottlestores at a rate of 7½% in the first year and 10% per year subsequently and be completely divested in a period of 11 to 12 years. Another principle was that a restriction of five outlets would apply per person or controlling interest. This deal caused a major public outcry, as is well known, about a totally monopolistic situation that was created, but at least that deal envisaged a split between wholesale/producer interest and retail interest. Within days of that announcement, incidentally, in early December 1979, the Government made a change and actually made a concession to Union Wine. A major concession was made which, instead of reducing their outlets, allowed them to increase from 54 by a further 75. That in itself was a departure from the Cabinet’s decision. I fail to see the logic and equity of that sudden departure. Another interesting fact at that time was that the restructuring of the industry took place in spite of the fact that six months earlier, on 21 March 1969, the Board of Trade and Industries had been given an instruction to analyse the liquor industry in view of the monopolistic situation which applied. Therefore, in spite of the Government’s brief to the board, the Government itself worsened the situation with this deal and created a greater monopolistic situation. However, the new Competition Board took office on 1 January 1980 and took over the study from the BTI which became defunct, and reported two and a half years later, last June. The final recommendation amounted to a complete condemnation of the stranglehold which KWV and Oudemeester have established over the wine and spirit industry. There were three main recommendations. The first was that Cape Wine should be dismantled. The second was that there should be no limitation of the number of outlets which an individual retailer could have in a chain. The third main recommendation was that retail interests should be kept free and separate from producer and wholesale interests. All these recommendations are consistent with the free market philosophy to which this Government piously pays lip service, although I noticed that the hon. the Minister tonight said that he is not a freemarketeer. With this Cape Wine issue in mind I am not surprised that he said that. I hope the business community takes note of what he said.

They are not freemarketeers either.

But the principles are embodied in the NP’s proposed new constitution, in the preamble. That is how much the preamble of the NP’s new constitution is worth. What was the Government’s response to the Competition Board’s recommendations? After twiddling their thumbs for nine months the hon. the Minister finally, on 25 March this year, announced the astonishing decision that, instead of accepting the Board’s recommendations, which took three years to formulate, he had totally rejected them and, in fact, was moving in precisely the opposite direction in permitting a further entrenchment of the monopolistic power of KWV through Cape Wine. Instead of agreeing to dismantle Cape Wine, the hon. the Minister declared that it should be left intact. In this regard he advanced three main arguments. The first argument that strikes me, is that he says that he has agreed not to dismantle it because the original situation came about with “the concurrence and approval of the Cabinet”, as if…

Read the whole statement.

… as if a four year old Cabinet decision, which was changed within days, cannot be changed again.

It can be changed.

Thank you. The hon. the Minister says that it can be changed. The second argument the hon. the Minister advanced was that “the situation probably brought greater stability to the liquor trade to the benefit of the wine industry”.

Sure.

No mention is made of the public interest there, only that it has been to the benefit of the wine industry. I am only quoting from the hon. the Minister’s statement.

And the whole region of the Western Cape.

We are talking about this specific situation. The third argument the hon. the Minister advanced, was that the reorganization of the industry could hardly be undone without detrimental and disruptive consequences. This was an unpersuasive assertion and was offered without any form of motivation or supporting evidence.

Instead of agreeing to open up the number of retail outlets that could be held by an independent retailer, the hon. the Minister limited it to a maximum of 12. That was a departure from the so-called status quo of 1979, but it still deliberately maintains the retail sector in a weak and divided state and therefore prevents the formation of large discount chains. I say that that is against the public interest. The hon. the Minister further confirms his anti-freemarket attitude when he says: “The alleged practice of using liquor as a loss leader, does not meet with the Government’s approval.” He said that he would take steps to stop it. Why should he prevent the public from enjoying the benefit of low prices on occasion?

The third recommendation of the Competition Board is that it must be ensured that retail interests are kept separate from wholesaler and producer interests. Instead the hon. the Minister upheld the right of Union Wine to 103 outlets, and permitted Cape Wine to acquire a total of 300 outlets, which is a major departure. The producer wine monopoly is now permitted to own 473 retail liquor outlets, if you include Gilbey’s 70, which is a major slice of the retail liquor industry.

How can you include Gilbeys?

It is part of the structure…

You are talking nonsense.

The major point is that the hon. the Minister justifies this entire step he has taken on the basis that he wishes to “maintain the status quo of 1979”. I find this on page 5 of his statement. But this statement is simply not true. He is not maintaining the status quo of 1979. I would say that the hon. the Minister is guilty of misleading the public on this point. The so-called status quo of 1979 was that Cape Wine as such was not going to have any retail outlets. The retail outlets they had at that time, were owned by Remgro subsidiaries. Remgro was supposed to divest in terms of the 1979 status quo. They had to divest by 1990.

That would be the status quo in 1990.

Is the hon. the Minister now telling me that Cape Wine must divest by 1990?

By 1990 the whole group would have divested.

Is the Minister saying that that must be the situation now?

We were talking about the 1979 agreement.

That is right. By 1990 there would be a separation between retail and wholesale producers, but under this deal the hon. the Minister has announced Cape Wine will have 300 outlets, with no obligation to divest, and this is a major departure in principle from the 1979 status quo. It is tantamount to saying that Cape Wine can buy the outlets from itself through Remgro. But it does not say that SA Breweries can hold onto its outlets, which I do not think they should be able to. I agree with the original principle. However, I say it totally defeats the original objective of separating retail and producer/wholesale interests. It is flagrantly favourable to the wine industry as opposed to the beer industry. The so-called status quo of 1979 is only partially maintained in so far as it suits the Government’s friends. I would go further. This episode is an example of this ruling party’s use of its power to make rules and regulations in a way which is financially favourable to its supporters. This is a sort of soft corruption that goes on all the time as if it was standard practice and that no-one should query it. I say it is not acceptable and I call on the Government to review and to rescind this decision.

Mr. Chairman, the hon. member for Constantia began his speech in a reasonably level-headed way. He discussed the liquor industry and the Competition Board, but then made the ridiculous statement that the hon. the Minister and the Government are opposed to the free market system. This is, of course, absolute nonsense. The hon. member would be well-advised to read again what the hon. the Minister said. Perhaps he will learn a few things. [Interjections.] I shall get to the hon. member for Walmer in a moment.

The NP will not be dictated to by the PFP to as to how the interests of the public should be taken care of. The hon. member should go and read again the speech made by my colleague the hon. member for Vasco. In his speech the hon. member for Vasco spelt out how cheap things were in South Africa in comparison with other countries in the world. However, that is all I have to say to the hon. member, because the hon. the Minister will probably deal further with what he said.

Today I want to discuss a certain aspect of industrial development. Last week we conducted an intensive debate on the proposed new constitution for Whites, Coloureds and Asians. We discussed the political rights of these groups. We have made a great deal of progress as far as the political dispensation for the Black peoples of South Africa is concerned. However, one aspect which I consider to be one of the most important problems and which we have to go into far more intensively, is the decentralization of industries at regional level. Industrial decentralization is the key to the success of regional development, of deconcentration, of decentralization and of a balanced distribution of development throughout South Africa. The success of industrial decentralization at regional level will determine whether we shall solve most of our vexed problems in South Africa. This Government has absolutely committed itself in respect of the distribution and more balanced development of South Africa. I represent a constituency in one of the major metropolises and I want to say that we are being suffocated by urbanization. Urbanization leads to traffic problems, housing problems, water supply problems, etc.

Why industrial development? Industrial development is the precursor to any development. Our mining industry and our agricultural sector which over the years have generated this development process are levelling off, whereas industrial development, particularly on a regional basis, remains the only auxilliary to development at regional level. As soon as industries have been established, commerce follows and development gains momentum. The fundamental problem we have to solve in South Africa is that of creating job opportunities.

The hon. member for Walmer said, “We must take the jobs to the people.”

I never said so!

Then we must not take the jobs to the people, we must take the people to the jobs. Is that what the hon. member said?

That is correct.

Certain active steps have been taken, and when one looks at the latest annual report of the department one is most surprised by the successes which have been achieved by means of certain decentralization measures. In this report we read that during the past 21 years 192 000 job opportunities were created in a regional context at a total capital investment of R1 805 000 000. I want to point out at once that, viewed in the light of the total needs of South Africa, these figures are still inadequate; however, this is at least a step in the right direction. That is why it is so essential, and this is also the Government’s standpoint, that a master regional development strategy be worked out in conjunction with the TBVC countries. The new package of incentive measures really makes this worthwhile. Statistics appearing in the department’s annual report show that during the nine months from 1 April 1982 to 31 December 1982, 612 applications for concessions for the establishment of industries and decentralization points were dealt with. Of these applications 559 were approved, 19 were held over and only 34 failed to qualify. The 559 applications represent a total investment of R843 million. The projection has been made that in the coming year this will cause 45 000 job opportunities to be created. In order to see this in perspective one has to look at the 1981 figures. There one finds that instead of a mere 28 000 job opportunities in 1981, these few concessions provide job opportunities for 45 000 people. It is also significant that 46 of these applications were from foreign entrepreneurs. Once again this is an example of the confidence foreign investors have in South Africa.

It is also illuminating to note that the expected number of job opportunities being created are specifically being created in areas where they are needed most and not so much in the PWV area, for example. In the PWV area only 2,8% of the total number of job opportunities were created.

In the report of the Industrial Development Corporation we find—as indeed we know—that this corporation has been giving preference to decentralization programmes since its establishment. In this report many interesting facts come to the fore concerning the percentage financing per identified region. The percentage of IDC financing for the Western Cape is 24,5%, 14,5% for the Eastern Cape, 20,0% for Natal, 12,1% for the Eastern Transvaal and 4,8% for the Northern Transvaal. For the PWV area, which includes the areas of Rosslyn and Brits, 22,7% IDC financing is used. The aid programme being followed here by the IDC is a commendably balanced one. It is also estimated that, between 1940 and 1982, 300 000 job opportunities were created by industries partially financed by the IDC. Of these 300 000 job opportunities 118 000 were created during the past 21 years.

What is interesting in this connection is which areas have been earmarked as identified regions. However, the hon. member for Walmer now says, “We must take the people to the jobs.” Surely this is a philosophy which will lead to absolute chaos in South Africa. The hon. member criticized the Government and said, “We must stop developing remote areas.” I want to point out to the hon. member that there are certain identified growth-points. In the Cape Province there are Upington, De Aar, George and Saldanha. I now want to ask the hon. the member whether these are “remote areas”?

Yes.

That is the philosophy one gets from that side of the House. In the Eastern Cape there are places such as Queenstown, King William’s Town and East London. Are these “remote areas”?

Queenstown, yes; East London and King William’s Town, fine.

This is the difficulty I have with this hon. member. There is a minimum of identified areas for development.

*Let us consider Natal. Here we have Newcastle, Ladysmith and Richards Bay. Are these “remote areas”? Let us consider the Eastern Transvaal. There we have Nelspruit. I want to know from the hon. member whether that is a “remote area”. In the Northern Transvaal there are Pietersburg, Tzaneen and Louis Trichardt. Are they “remote areas”? Surely this proves to us how ridiculous hon. members on that side of the House are.

The Economic Development Corporation is responsible for the creation of job opportunities in the national states in South Africa. In this connection one notices a fine improvement. In 1978, and this excludes the TBVC countries, 6 500 job opportunities were created and in 1983 the figure was 17 800. If we consider EDC investments in industrial development, we find that in 1978 an amount of R56 million was spent, whereas the figure for 1983 was R191 million.

These are the efforts being made by the Government “to take the jobs to the people”. This is the philosophy of the Government. However, the PFP says, “Take the people to the jobs.” This is the basic difference between this side of the House and that side of the House. [Time expired.]

Business suspended at 18h30 and resumed at 20h00.

Mr. Chairman, I want to compliment the hon. member for Turffontein on a very effective contribution. The hon. member is of course correct when he says that the hon. member for Walmer is not a Pretoria Prog, but a Houghton Prog, one of the mink and manure set who think that they can live on the touchlines of South Africa and not put their heads into the scrum. The hon. member for Walmer does not accept decentralization because he is out of touch with the realities of South Africa.

The Government has done its best to establish the right climate for industry and commerce to expand to its maximum potential. Organized commerce and industry thought that the new reform proposals were a step in the right direction and that free enterprise was enshrined in the new constitution. The hon. member for Walmer according to a Press report dated 20 May 1983 said—

The hon. member went on to refer to “a cynical manipulation to reinforce autocratic sectional power so that an unjust regime can be perpetuated”. The hon. member for Walmer reflects his arrogance and ignorance, and seeks to encourage commerce and industry to boycott genuine moves for reform in South Africa. Commerce and industry according to statements support the reform moves. Thus the hon. member and his party are out in the cold and are totally rejected.

Will you fight Walmer?

I will fight Walmer any time.

The hon. member for Walmer used the term “unjust society”. Words like that stoke the fires of discontent in this country. It is statements like those that make it more difficult for the free enterprise system to flourish in South Africa. It is hardly surprising that the hon. member for Walmer adopts the attitude he does when his MPC, Mrs. Molly Blackburn, is in favour of the African National Congress being allowed to operate legally in South Africa if they forswear violence. Where would the free enterprise system and commerce and industry be if it were up to the ANC? We saw over the weekend the sort of blood-bath they can create. I asked the hon. member for Walmer on 11 April 1983 in the House of Assembly whether he agreed with Mrs. Blackburn, his MPC, on the question of the ANC and he did not answer. The hon. member for Port Elizabeth Central on that occasion interjected: “He will reply when he participates in the debate just now”. The hon. member for Walmer then followed me in the debate but did not say a word about whether he agreed with his MPC or not. Now he is pretending to be reading some notes because he does not want to reply. I want to put it to the hon. member for Walmer that as he did not repudiate his MPC we are entitled to believe that he supports the call that the ANC should be allowed to operate legally in South Africa and be part of the free enterprise system.

If they forswear violence. Do not forget about the “if". Come on, do not quote selectively.

The hon. member for Walmer said “if they forswear violence”, but as we saw over the last week, there is no way on this earth that they would forswear violence. It is part of their constitution. They can say that they will forswear violence, but we should not be naïve.

I would like to say that I strongly support the appeal by the hon. member for Sundays River in regard to the development in Port Elizabeth and its environs. We have made representations to the hon. the Minister and the department and I am very pleased to be able to tell the hon. member for Walmer for his knowledge, because I am sure he does not know it, that the chairman of the Decentralization Board will be in Port Elizabeth on Thursday to discuss further matters with industry in Port Elizabeth.

It is a pity that the official Opposition does not recognize the importance of decentralization in creating job opportunities. I cannot recall the official Opposition having said a single word of encouragement after the historical decentralization document was tabled in Parliament. This document was signed by South Africa and the sovereign independent states. I want to point out to the hon. member for Walmer that not only is there a very real strategy about decentralization concessions, but that there is also proof of such and of job creation.

Let us look at the facts. The concessions were announced on 1 April 1982. Between 1 April 1982 and 28 February 1983, i.e. in 11 months, the Decentralization Board has approved applications totalling R1 454 million. This would create nearly 56 000 jobs. Bear in mind that these applications were approved at the time when the economy was going through a very difficult time. When the economy improves it means that thousands of millions of rand will be approved and hundreds of thousands of jobs will be created in the years to come. Surely the hon. member for Walmer and his colleagues should encourage this development and admit that their reservations last year were unfounded. If one looks at the 56 000 people for whom jobs will be created and one takes five to six people per family, one finds that approximately 300 000 people will benefit by the creation of these extra jobs. Development will take place in areas where unemployment is at its greatest. These new industries will create viable towns and cities throughout the Republic of South Africa. It will in many cases assist poverty-stricken areas to participate in the wealth, growth and development of South Africa. The Government made the concessions available and the private sector has combined in order to ensure that South Africa and the independent States can develop to their maximum potential. These industrialists are to be congratulated on their foresight in building a bigger and better Southern Africa for all its people. Peace and stability will be determined to a large extent by the measure of success that we have with our decentralization programme. I would like to see the big institutions who have not yet participated in decentralization to seriously consider participating in one way or another, either in the financing aspect, by way of lease-back, bonds, etc. or by direct participation in equity or lending money to the Development Bank. I noticed that the hon. member for Walmer was very disparaging towards the Development Bank. I should like to hear whether he is against the establishment of the Development Bank of Southern Africa.

We are very fortunate to have a man like Mr. Dougie de Beer as the head of the Decentralization Board. He and his staff must be congratulated on their outstanding achievements over the last 11 months. We are sure they will do even better work in the years to come.

The fact that the States who had obtained their independence have concluded the significant and historial agreement with South Africa on industrial concessions is an example to the rest of the world of what can be achieved in Africa if participating States are prepared to solve the problems of their people. The success of this partnership will, I believe, act as a source of encouragement to other States of Africa. Further, the Western World will realize that their investments channelled through decentralization concessions will yield them among the best returns in the world. In fact, it would be appropriate if the official Opposition and the media who support them would do their best to encourage this industrial development.

I believe that with the Carlton and Good Hope Conferences, together with the present decentralization concessions, the Government and the private sector have laid the foundations for the greatest industrial development that this country will ever know. A climate of confidence is essential to local and foreign capital. The Government has a responsibility in this regard, but then so does every political and business leader. Despite political differences, all leaders have a duty to encourage economic expansion and prosperity if we are to improve the quality of life of all South Africans and ensure stability in this country. Southern Africa has unlimited potential, but many leaders have failed their people in different countries by concerning themselves with matters other than the maximum development of their countries.

It is absolutely vital that with the next upswing in the economy many of our industries will have increased their productivity if we are to compete in the world markets and even if we are to compete on the local market against imports. There is no doubt that in certain industries there is not the required efficiency and productivity.

Having said that, there is also the other side of the coin, namely that because of the world recession certain countries are selling goods virtually at any price in order that they can maintain their production and sales. Where other countries are selling at prices which could be classified as dumping, our industrialists have recourse to the Board of Trade. [Time expired.]

Mr. Chairman, it is always a pleasure to follow up on what the hon. member Mr. Aronson had to say. In doing so again tonight, I should like to associate myself with what he had say by reacting to certain statements of the hon. member for Walmer on decentralization. In particular I want to point, this evening, to the very great danger involved—especially in our country—in the over-concentration of economic activities in certain metropolitan areas. Over-concentration can, of course, come about very easily.

First I want to deal with the hon. member for Walmer’s statements about decentralization. If I understood him correctly, he is not opposed to the principle of decentralization. What he is opposed to is decentralization taking place in the so-called “remote areas” to which he referred. I would just like to know from him what a “remote area” is. Is it some distance away from Port Elizabeth? He also mentioned Queenstown as being a “remote area” way out in the bundu where no development or economic activity may take place there. The activities must be restricted to the metropolitan areas.

Mr. Chairman, may I ask the hon. member whether he would agree with Dr. Kleu when he says—I refer to paragraph 11.51.3—that a policy directed at a more even geographic distribution of economic activity should not be taken so far as to harm the position of the metropolitan areas.

Exactly. I agree wholeheartedly with what Dr. Kleu said there. In that short piece the hon. member has just quoted there is no reference whatsoever, by Dr. Kleu, to these so-called “remote areas”. In regard to markets, and PWV area, Port Elizabeth is just as “remote” as any other area in South Africa. As regards its geographical location in South Africa, the Cape Peninsula is absolutely “remote” from the rest of the country. Does the hon. member mean by “remote areas”, that the areas are not centrally situated in the country as a whole, or is he referring to metropolitan areas or the availability of markets? That, is after, all what it is all about. It is a question of the optimum utilization of the economic development potential of South Africa. Over-concentration cannot be allowed. I emphasize over-concentration, because concentration naturally entails conglomeration benefits for a metropolitan area. We are therefore concerned about over-concentration and the disadvantages that entails. Then we are also concerned about the economic potential of South Africa not being fully utilized. Now that hon. member wants to tell us that what Dr. Kleu is saying is that development must only take place in the metropolitan areas. Surely that is not the meaning behind what the hon. member has just quoted. That is not the issue at all.

Decentralization in South Africa is undoubtedly politically inspired. I use “politically” in the broadest sense of the word. Naturally it is also constitutionally motivated. It is also socio-economically motivated in order to utilize the maximum development potential of South Africa and to prevent stagnation—instead of development—setting in as a result of over-concentration. That is what decentralization is all about and that is what the economic policy in South Africa is about. The hon. member for Walmer is shaking his head, but it is very clear that he does not understand it. I do not expect the hon. member to understand it either, as long as he does not tell us that places such as Queenstown are “remote areas”.

The hon. member for Walmer also referred to certain disadvantages attached to the over-concentration of economic activities and the social problems caused by too many people settling too rapidly in one area, the massing together of people then creating tremendous problems. Then the hon. member also came and told us a story about its being cheaper to create job opportunities in the metropolitan areas. He also quoted figures in this regard, but he does not take into consideration what it costs to establish infrastructures in such densely-populated metropolitan areas. He does not take that into consideration at all. According to him it is not a relevant cost-factor. The State must just pay up. Does he know what it costs nowadays to build one kilometre of freeway in the PWV area? With all due respect, the hon. member is a road-builder, a very well-qualified road-builder. He is a civil engineer and should therefore know exactly what these roads cost and what huge amounts must be spent on them in densely-populated metropolitan areas. What the infrastructure in those areas costs, however, is of no importance to him. It might nevertheless be taken into account when the cost of creating job opportunities is determined.

What is also of great importance in regard to over-concentration—in our country this year the particular dangers have again become apparent—is the question of the resources available in metropolitan areas. I should like to refer to one such resource, namely water. Water is an extremely important resource for economic growth. We have the problems that have developed around the PWV area and the East Rand as a result of the extreme drought conditions we are experiencing there at the moment. It is also true that in the Durban/Pinetown complex problems are being experienced with the availability of water. The question now is: How is this situation to be dealt with? When talking of decentralization and handling economic growth in South Africa as a whole, economists frequently make use of the carrot-and-stick method. The carrot used in this instance are the decenstralization incentive measures. The limited resources in South Africa are the stick which I think deserves our very serious attention. In the PWV area there again appears to have been a problem with the provision of water. This is the stick our industrialists will have to give attention to, because it will create problems in the further expansion of economic and industrial activities in the area. It is very easy to argue that we can bring water to the PWV area from other places which fortunately have a very good water supply. Allow me to do a little advertising. In the area I come from, the central Free State and the Bloemfontein area, we had not water restrictions whatsoever this year as a result of the fact that we fortunately have the necessary water resources, and also because we made timely provision so as not to end up with a problem situation. If the water of the Caledon River, for example, were taken away from us in order to stimulate further economic growth in the PWV area, I think it would be an injustice not only to other parts of South Africa, but very definitely also to our area. Rest assured that we, like other parts of South Africa that are fortunate enough to have good water resources, jealously guard our valuable resources with a view to the future development potential of our area.

Mr. Chairman, the hon. member Dr. Odendaal will forgive me if I do not follow his line of thought because he was talking about concentration and deconcentration of economic activity. I want to come back to something which the hon. the Minister raised a little earlier, namely the free enterprise system.

*If one looks at the annual report of the department one sees that it is stated that the aim of the Internal Trade and Consumer Affairs Branch is to maintain and to promote orderly and competitive conditions in the market and to look after the interests of consumers. If one looks at the functions of this branch, one sees that one of its functions is to promote positive attitudes towards the free market system and to propagate the advantages and obligations it entails for the producer, distributors and consumers. A further function of this branch is to apply price control in terms of the Price Control Act, 1964.

†If one looks at this, one finds that there is a conflict in the situation because while we are talking of attempts to promote the free market system we at the same time talk about things like price control. It is this point that I want to look at, namely the question of the conflict which is inherent in a free enterprise system. From that flow certain consequences with regard to the role of the Government and the question of consumer protection. I think it would be a fallacy to say that businessmen are in favour of a free market system. That is not quite true. One of the things that surprises me is that some of the businessmen who argue so eloquently for the free enterprise system are also those who will argue for tariff protection for their own particular industries. Then you have those businessmen who argue in favour of the free enterprise system but at the same time are members of cartels or price-fixing arrangements or at the least unofficial price-fixing arrangements. Let us look at what businessmen actually want. Looking at it as an economist, to some extent competition is in many cases the last thing the businessman wants. What is the objective of business? It is to become so successful that you in fact put your competitors out of business. This is one of the illogicalities of economic theory in regard to this whole question of free competition and free enterprise. One of the consequences of free competition is that the more efficient producer will force the more inefficient producers out of the market. In many ways the logical consequence of the free enterprise system is therefore a system that tends towards monopolies.

Now you are talking nonsense.

No, not at all.

†What is the prime objective of a business? It is in fact to make profits. I want to ask whether businessmen actually welcome competition.

Of course.

Mr. Chairman, the hon. member for Turffontein actually believes they welcome competition. I would argue that many businessmen would like to eliminate their competition. Is this not why they go into mergers? Is this not why we have operations like Rocco and so forth? That hon. member was in banking like me. Can he tell me whether he thinks that that was the free market system in operation?

Our organization was involved in competition.

Your organization was involved in competition.

Of course, and it welcomed it.

But at that time there was in fact a cartel, a price-fixing arrangement amongst a lot of the banks. A similar position obtained amongst building societies. The point I want to make is that if you look at the economy you find that there is a conflict between the position of the producer or the manufacturer and that of the consumer because whereas the producer might like to be in a situation where he is dominant in a particular market because there are economic advantages to being dominant in a particular market, the consumer welcomes competition because competition often brings lower prices. We get this in the banking community at the present moment. With the abolition of the Rocco agreement you are now getting things like interest being paid on cheque accounts and cheaper banking services.

Are you not in favour of that?

I am very much in favour of competition. I think the big problem in South Africa is that there is insufficient competition. Looking at this battle between the producer and the consumer, one finds that the dice is in fact loaded against the consumer. The reasons for this are obvious. He might not have a choice. I am not talking only of monopolistic situations. If you are a fruit canner in the Western Cape, from how many people can you buy your fruit cans? You have a choice of one. This is a very dangerous position. The point I want to make is that the consumer may not have a choice at all.

A newcomer is welcome. We welcome competition.

Well, the newcomer is not coming into that field. Let me come back to the question I was discussing. The hon. the Minister is like an economist and people say economists are two-handed. They say on the one hand but in the same breath they say on the other hand. What he is in fact saying is that on the one hand they are in favour of free enterprise but on the other hand there are aspects of free enterprise that they do not really like. Is this an unfair summary of the hon. the Minister’s attitude in regard to competition and so forth?

You are better on pensions.

I am very good on pensions. One often hears the expression caveat emptor, but in many areas the consumer does not have a second choice. The hon. the Deputy Minister and I served together on a commission of inquiry into the tourism industry. He will know that if you have booked for an overseas holiday and you go on that overseas holiday and do not get what you ordered not many people can afford a second holiday. That happens with any expensive item purchased. You could argue that the purchaser should be entitled to legal redress. I agree that the purchaser should have legal redress, but how much does it cost? It you are looking at the real world, what sort of legal redress does the consumer have? Therefore I ask: What is the role of the Government in this? I think one of the important roles of the Government in the economy is to establish the rules of the game between the producer and the consumer. When looking at the real world it is no good merely to mouth concepts like “free enterprise” because as became apparent today there is a fair amount of difference between this side of the House and that side of the House as to what we mean by free enterprise. To me free enterprise is an economic system—the hon. member for Waterkloof can tell me whether he disagrees—in which the individual worker can decide what work he wants to do and where he wants to do it.

Are you against it?

No, I am not against it. It is a system in which the individual can own his own home outright and spend his income as he sees fit and in which he has a choice between various producers. He has a choice as to where he wants to shop. From the businessman’s point of view it is a system in which he can decide what to produce, what method he will apply in the production and in which he can choose where he will sell his services or his product. It also means that he is free to leave or to enter a particular industry. Is the hon. member for Waterkloof in agreement with me on these issues? I want to know that because then we can start arguing from the same basis.

I am.

The hon. member is happy with that. In South Africa we have a lot of monopolies. One just has to look at the report of the Mouton Commission. In this regard I should like to quote something that appeared in Barclays Bank Review. It reads as follows—

This was the 1977 report. [Time expired.]

Mr. Chairman, the hon. member for Eden-vale started off with a good speech, but, with respect, later on he confused himself. It would appear to me that the hon. member is not in the same category as the hon. member for Yeoville as far as the approach to the question of a free economy is concerned. He addressed himself to the hon. the Minister from whom he will get a reply.

*I should also like to thank the hon. member for Sundays River for his friendly remarks earlier this afternoon.

Hon. members referred to the question of the small businessman. I have therefore deemed it fit to express a few thoughts about the promotion of the small businessman and to put certain matters into perspective. For the very reason of the rise of the large chain stores during the 1960s the small businessman found himself in a difficult situation and turned to the Government to ensure that he would have a future. The problems of the small businessman could be divided into two categories: Firstly, the problem of obtaining finance and, secondly, the need to develop his managerial skills. The outcome of this matter was that the Small Business Advisory Bureau was established with State funds in Potchefstroom in 1970. At present this advisory bureau is still the most important organ in the sphere of training and consultation services for small businessmen and its meritorious work is known all over the country.

After the Brand-De Waal panel had completed its investigation into the question of decentralization and the rationalization of development corporations, the hon. the Prime Minister announced the Government’s new regional development initiatives at the Carlton Conference with prominent businessmen in November 1979. The legs of this plan were the new package of industrial decentralization incentives, the promotion of the small business sector and the establishment of the multinational development bank. In the industrial decentralization incentives which became operative on 1 April 1982, specific provision is made to accommodate the needs of the small business undertaking in the informal sector.

On 3 February 1981 the Small Business Development Corporation was established as a partnership between the State and the private sector. It was established as a company with a share capital of R150 million, an amount to which the Government and the private sector contributed in equal measure. The most important functions of the SBDC are to provide for the financial needs of small business undertakings, to provide business infrastructure where necessary and to render aftercare services. It is a profit-seeking company but at the same time it is also strongly development oriented and as such has also to meet the requirements of the infant undertaking and launch projects in neglected areas. As hon. members will realize, these are very often also non-profitable services. Firstly, the non-client oriented training and consultation activities of the SBDC are subsidized in this year’s budget in an amount of R360 000. Secondly, the loans taken over from the other corporations and which cannot forthwith be adapted to market-related interest rates, are also subsidized, this year in an amount of R1,6 million. Thirdly, the difference between the rental yield costs of business premises in neglected areas is being subsidized in an amount of R1,3 million in this year’s budget. Apart from this, a special grant of R5 million to the SBDC has been approved during this financial year to be used at their discretion.

In February 1981 the Council for the Promotion of Small Business was also established to meet the needs of the small businessman in respect of training and consulting services. The functions of this council are basically to advise the Government in respect of a comprehensive policy for the promotion of small businesses, to allocate available funds to institutions working towards the provision of training and consultation services to small businessmen, and to co-ordinate all activities in this regard. The Council for the Promotion of Small Business has already launched a threefold plan of action, namely firstly a subsidy scheme for institutes attached to universities, secondly, a rebate scheme for private consultants and, thirdly, the small business information services.

Subsidies have been and are again this year being given to a wide range of institutions. Inter alia, an amount of R90 000 has been allocated to the Unit for Entrepreneurship and Small Business Management at Stellenbosch, an amount of R90 000 to the Small Business Foundation at the University of the Western Cape in Bellville and R60 000 to the Advisory Bureau for Black Businessmen in Pietersburg. These subsidies total an amount of R1 470 000.

In 1982 alone 3 328 consultation services were rendered to small businessmen by the SBAB, while still another 50 courses and seminars were held countrywide which were attended by 1 846 people.

As regards the rebate scheme for private consultants, I can say that on 15 April this year 387 private consultants had already been registered in terms of this scheme and that 57 consultation services had already been completed, while 92 cases were still receiving attention. In the 1983-’84 financial year provision has also been made for an amount of R825 000 for this purpose.

Small Business Information Centres were established by the Council for the Promotion of Small Business to give information and advice to small businessmen on a regional basis. Apart from the headquarters in Potchefstroom, eight regional offices were opened, namely in Bellville, Durban, Port Elizabeth, Nelspruit, Pietersburg, Pretoria, Johannesburg and Bloemfontein. An amount of R1 025 000 has been voted for these services in the 1983-’84 budget.

The information officers, as well as officers in the regional offices, have already made great efforts to make known the various services offered under the banner of the CPSB to small businessmen and to direct inquiries along the right channels. The rebate scheme is also administered by the Small Business Information Centres.

Apart from this, the monthly magazine Entrepreneur has been appearing now since last year. This is a monthly magazine for the small businessman and a magazine which, in my opinion, is not only of a very high standard but also offers the businessman a service by way of on-going, informative and advisory articles beneficial to the businessman.

†I should like to say also to hon. members on the other side of the Committee that the objective of the new initiatives towards the promotion of small businesses is to reach down to the grassroots level and to help existing entrepreneurs by means of training, advice and guidance to improve their management know-how and expertise in order to remain viable in a competitive business environment. Furthermore, it is intended that potential entrpreneurial talent should be identified at an early stage and cultivated to the point where new business ventures can be started successfully. This also includes the informal business sector that needs to be taught, trained and assisted towards improving their business management principles and methods so that they can eventually join the ranks of the formal business sector.

*An amount of R40 000 has been voted for research this year and an amount of R56 000 for donations to the Bureau for Financial Analysis.

Together with certain administrative expenditure of the council, the total amount voted in the 1983-’84 budget for the various programmes of the council is R3 844 000 as against R2 200 000 during the previous year.

Attention is also being given to factors that may hamper the promotion of small business. Draft legislation is being prepared, inter alia, by the Registrar of Companies in terms of which efforts will be made to establish a new legislative dispensation that will reduce the problems of the small businessman considerably. The investigation into restrictive legislation that has already been completed by a sub-committee of the National Manpower Commission and that will shortly be submitted to all parties concerned for comment, is yet another factor that was looked at.

The CPSB has now reached the stage where it needs the services of a full-time executive officer with a headquarters. Proposals which include the financial implications involved will be submitted to the Government in due course.

In conclusion I should like to say that, from above, it is clear that a magnificent effort is being made to promote and especially to develop the small business sector so as to render a special service to the small businessman and ensure a continuous flow of new entrants to the business world who will be able to do so with managerial skill, financial discipline and polish because of the advice and guidance they have received. There are actually many countries where the private sector and the individual would give anything to have received the same advantages and assistance. Foreign businessmen are often astounded at the exceptionally positive steps that are being taken in the interests of the small businessman. I want therefore to ask everyone who wishes to enter the business world or who is already a part of it to make use of the services offered in this sphere.

Mr. Chairman, it is a privilege to speak after the hon. the Deputy Minister. He was a fine chairman of the Industries caucus group and I think the hon. the Minister is very fortunate to have such a Deputy Minister to work with him.

The success of the Small Business Development Corporation to which the hon. the Deputy Minister referred is largely going to determine the success of the whole system of deconcentration in the future. We have no other option but to ensure that that effort is successful.

I want very much to come to a subject to which the hon. member for Yeoville as well as other hon. members referred and that is the question of the free market mechanism on the one hand versus the question of protection on the other hand. I want particularly to apply this to a specific industry which provides employment opportunities to a very large extent especially in the Western Cape.

We talk so glibly about the free market mechanism being the solution to the economic problems of the world. On the other hand, protection is often blamed for giving rise to depressions and recessions.

I want very much to discuss the effect of a healthy balance between protection on the one hand and the free market mechanism on the other hand and the effect that this has on the protection of existing business and industries, especially the effect that it has on the creation of new employment opportunities. I must truly say that the whole discussion of this Vote can have only one end result for me and that is the creation of employment opportunities because this will determine the success or failure of the economy of a country.

I find it very interesting that the development of the Third World and the industries of the Third World were aimed primarily at exporting to First World countries. The export of many of the products of Third World countries to First World countries did not really have a great influence on the internal markets of the First World countries because they were sophisticated and tremendously large markets on which the small volume of imports, which was large to those Third World countries, did not really have a great influence. In South Africa, which is a combination of the First and the Third Worlds and which is in reality a developing country, the effect was, of course, completely different because our per capita consumption in South Africa is so much lower than that in the rest of the world. I just want to mention two examples.

It is Third World country.

South Africa is a combination of the two. I just want to mention one example because my time is so limited. I want to refer to the textile industry in America. In America the per capita consumption of textiles is 25 kilograms per annum. In South Africa it is only 5 kilograms per person per annum. I can mention many similar examples. All I can say now is that South Africa does not have any choice but, on the one hand, to support the principle of the free market mechanism and on the other hand, also to apply selective protection, as the hon. the Minister has already said earlier this afternoon, in order to ensure industrial growth. I want to agree 200% with the hon. the Minister that protection should never be applied to protect unproductive and badly managed industries. This is not a problem which is unique to South Africa. Even in mighty America many people are asking for precisely the same thing. I want to quote what a very well known economist said recently in a paper of the Heritage Foundation in Washington which I visited recently. He said—

One can continue in this vein to quote examples in this regard.

The hon. member for Amanzimtoti also referred in the discussion of this Vote this afternoon to the question of the creation of employment opportunities. I want specifically to highlight one of the industries in South Africa which to my mind, in all sectors and at all levels, the primary, secondary and tertiary levels, is probably the most labour-intensive industry in South Africa, namely the textile industry. Let us take the production of cotton, which is probably one of the most labour-intensive crop production industries. I can also refer to the textile industry. The garment industry is tremendously labour intensive. In fact, at this moment there are an estimated 500 000 people involved in this industry in South Africa. If we apply the right protective measures and if we can maintain a healthy balance between the expansion of the local industry and imports where absolutely necessary, we can double the provision of employment opportunities in this industry by the end of this century. One can therefore create an additional 500 000 employment opportunities.

I want to start with the cultivation of cotton itself. In the past year we only produced about 140 000 bales of cotton while our actual consumption in South Africa is 340 000. It is estimated that one and a half people are required for every 1 hectare of cotton cultivated. If we can grow all the cotton we need for the industry in South Africa, one can imagine the enormous number of job opportunities we will be able to create.

Let us look at the industry itself. The industry is experiencing the serious problem that the demand for textiles has decreased sharply over the past year or two. This has resulted in production having to be reduced considerably. The main problem at the moment is that quite a number of workers, especially in the Western Cape, have had to be dismissed. What are the reasons for the decrease in the industry? There has been a recession—there is no doubt about that—and higher interest rates have resulted in the wholesale and retail trades cutting their stock to the bone. In my view the biggest problem, whether we admit it or not, is the fact that large-scale dumping has taken place, especially from the East. This has caused great concern on the part of our industrialists. Hon. members will realize all too well that once employment opportunities are lost it is very difficult to create those opportunities again in the future.

I want to quote from a telex message I received from one of our industrialists in the textile industry. He says the following—

We simply have to do something about this matter. In 1981 textile products to the value of R2 271 million were produced locally, while goods valued at R782 million, i.e. 34% of the aforementioned figure, were imported. How do we overcome this problem? In the past the hon. the Minister has stated very clearly that it is the declared policy of the authorities to move away from a system of import control and import permits—and from the nature of things one cannot find any fault with that—and that we must seek protection in the form of appropriate import tariffs. One is very grateful for that. I want very much to appeal to the hon. the Minister, the hon. the Deputy Minister and the department in respect of these import tariffs to see whether some means cannot be found to achieve more quickly the results one is seeking to achieve. I want to say very clearly that the industry is not asking for overprotection or guaranteed growth but that in the light of its labour-intensive nature, it regards it as essential that the correct balance in respect of imports will be considered with great discretion. The problem is that when imported textiles enjoying large subsidies from foreign governments are dumped on the South African market, as has happened in the past, we are in fact importing the unemployment of those countries and causing far more unemployment locally. [Time expired.]

Mr. Chairman, it is a privilege to follow the hon. member for Paarl. I want to agree with him that the creation of job opportunities remains one of the major priorities in this country.

The hon. member for Amanzimtoti discussed shipyards and shipbuilding in the Republic. I agree with him in regard to the idea that we should also think in the direction of creating job opportunities for the building of ships for coastal shipping, international shipping and also for defence. I want to deal now with the hon. member for Walmer. The hon. member said by way of an interjection that he was not in favour of these things being built in the “bundu”. The point I want to make here is that we should not see these things in isolation. At the moment the entire decentralization effort is being made on a regional basis. The Office of the Prime Minister spelt this out to us quite clearly last year in a White Paper which was tabled and which dealt with the entire decentralization effort and the eight regions into which the Republic has been divided. The incentives are set out at the moment by the Department in accordance with the eight sectors or regions in the Republic. That is the way the Decentralization Board is handling this. I cannot therefore see how he can differentiate.

I should like to refer the hon. member to the Business Times section of yesterday’s Sunday Times. A report appeared in this section under the headline—“Decentralization programme has paid dividends”. This was said by a newspaper that does not have much praise for the NP. There is a reasonable chance…

Read the article.

They admit it. The hon. member must read the entire article in the context in which it is written. He must not read it from the critical viewpoint that nothing is good enough. We admit that there are still many problems and that is why we are again starting from scratch and decentralization is again being introduced in those areas that have not developed satisfactorily. I think this is now being done in a more co-ordinated manner. With all due respect for the efforts made in the past, I want to say that I think that the new effort of the past two or three years has been successful. When the new report of the Decentralization Board is published we shall find that the new effort has been successful. The figures available for the past 11 months prove that this effort has been more successful. This newspaper is not always favourably disposed towards the Government and, if it can criticize, it will do so in the strongest language possible, but this should prove to the hon. the Minister that we are on the right track.

I want to associate myself with previous speakers who discussed the Kleu study group. I think this is a balanced report in which common sense won the day. I think it is satisfying to be able to say that this report showed what was wrong. It was quite honest about this and did not simply concentrate on being critical. I take it amiss of the hon. member for Walmer in that he only referred to the criticism. These people also made proposals which to date have not come from that side.

Mr. Chairman, may I ask the hon. member whether that is not the article which states that it can cost up to five times the amount to create a job in a rural area as compared to an urban area?

It states that as a possibility. I shall return to the figures; just give me a chance.

I want to congratulate the people who have been appointed to the advisory body. I think this will make a major contribution not only towards speeding up the implementation of this report’s proposals but also ensuring that what is implemented will be implemented in the spirit of the success that has been achieved thus far in the entire decentralization effort. I should like to ask the hon. the Minister to request these gentlemen to work faster. I agree that two years is a very short period in the life of any country or in a development process in the long term but, because these proposals are of cardinal importance with regard to future development and the spending of money, I want to request the hon. the Minister to ask these people not to bind themselves to a period and to put forward suggestions as soon as possible, even if this is done by way of interim reports on specific problems or specific geographic areas. For this reason I am asking the hon. the Minister to get these people to start working as soon as possible so that we shall be able to vote money for this purpose in the next budget in order to implement this industrial development strategy more rapidly.

I come now to a request in connection with transport. At the moment there are quite a number of transport incentives or railways rebates as we call them, as far as the railways are concerned. They are subject to certain conditions which are laid down in the Road Transportation Act. I want to ask that the Decentralization Board should also investigate the question of shipping and air transport. I think the provision should be extended to all forms of transport. I feel that the present restriction to those two forms of transport only and the exclusion of other forms of transport is deterring certain industrialists. For example, I want to point out that not all industrialists are able to make use of water or air transport. If an industrialist considers setting himself up in a certain place, he is faced with all the variables. I should very much like to see him make use of water transport, which remains one of the cheapest forms of transport available. I am thinking here of places which could benefit greatly from this, places like Walvis Bay, Atlantis, Saldanha, Mdantsane, Isithebe and Richard’s Bay, and places situated near airports, not only national airports like Bloemfontein, Cape Town and so on but also those airports serving other areas which could benefit greatly. Here I am thinking of places like George, Kimberley, Walvis Bay, Madadeni, Osizweni near Newcastle, Richard’s Bay and Seshego near Pietersburg. I want to ask that this should not merely be extended to include SAA but that those people providing the regional services should also benefit if my request is considered favourably. I am asking therefore that the regional carrier at the smaller regional airports should also benefit.

I should like to refer briefly to the export effort to which reference is made in Chapter 7, particularly items 5 and 7. Item 7.99 in particular goes into the question of the export of services. I want to ask the South African industrialists and dealers importing and exporting goods to pay more attention to the free-on-board basis as far as imports are concerned and to the cost, insurance and freight basis as far as exports are concerned. The cost, insurance and freight basis and the free-on-board basis, as they are generally called, afford us the opportunity to specify the transport. This gives us the right to make use of the shipping companies registered in South Africa, which has the further advantage that money is earned because people from abroad make use of our shipping companies and local people keep the money in the country. This in turn has an effect on the balance of payments which presents us with major problems from time to time.

A number of hon. members were the guests of Safmarine recently at a function where this problem was explained. I should like to make an appeal here for people to support Conference Shipping Lines, because at some stage in the future these fly-by-night shipping companies will have disappeared and then we shall have to rely on Conference Shipping Lines again. I am worried that they will have to increase their tariffs too much in order to cover losses which at present total in the vicinity of R60 million per annum on the northern routes. For this reason I want to appeal to the Department of Industries, Commerce and Tourism and organized trade and industry to encourage agricultural and mining undertakings in the RSA to make use of Conference Shipping Lines as far as it is possible and economical for the importer and exporter to do so.

Mr. Chairman, it is a pleasant privilege to follow the hon. member Dr. Welgemoed. I should like to broach a rather different subject which may be somewhat unusual in this debate. I want to do so in consequence of all that has been written recently in the media and elsewhere in connection with the dried fruit industry which has aroused considerable suspicion among people.

It is true that a number of producers have begun to market dried fruit on their own as a so-called home industry. There are basically two principles at issue, namely the principle of free competition or free trade as such and the principle of monopoly. The question is whether or not we are dealing here with a monopoly.

For the sake of perspective I should like to sketch a little of the background. The Dried Fruit Board was established in 1938. This was after a great many problems had been experienced in this industry which, like many other agricultural industries, has also had its ups and downs. At its first meeting one of the points of discussion was the large number of packers operating in the industry who were pricing each other out of the market. They also had to take a look at the uncontrolled importation of dried fruit at that time and the total lack of quality control. One of the first duties of this board was to register the packers and so create a little order. Owing to the fact that they were eliminating each other, of the initial 24 packers eventually only one remained. This deadly undermining, and the competition which can be beneficial, actually hampered this industry. That is why there was eventually only one packer left. In 1956 the Dried Fruit Board reached the pinnacle in that it could refuse registration with an appeal to the Minister. The board had to ensure that the packing function did not become over-manned. I want to repeat that competition is a good thing but, if one has too much of it, one experiences these problems. The board had also to ensure the stabilization of the industry, the promotion of production, the good quality of the fruit, inspection and quality control and the promotion of the consumption of dried fruit. It also had to ensure that the distribution of the product was satisfactory throughout the country. The so-called South African Dried Fruit Corporation—abbreviated to SAD—was established. At that stage the corporation bought out and took over all the other packing facilities at great expense. This had the immediate advantage—this was also mentioned a while ago in this debate—of being able to operate at low unit costs. In this way the corporation was also able to establish cold storage facilities and it gave the public the assurance that they could obtain the product throughout the year. A further advantage was that through the Dried Fruit Board the SAD could lay down quality norms. It is a fact that South African dried fruit is known throughout the world today as being of the best possible quality. Over and above all this, the policy of the Dried Fruit Board and the SAD was first to supply the local market adequately before anything was exported.

Mr. Chairman, the only complaint that can really be made against this system is the question of monopolism. Does the SAD have a monopoly? I maintain that it does not have a monopoly on the strength of the fact that a co-operative does not operate for gain. Any profits it generates are paid out to its members; in other words, this is not a monopoly in the true sense of the word. It is not a monopoly which concentrates on making large profits. In addition, the Dried Fruit Board as a statutory body has in any case to ensure that the general interests of the industry are served, viz. from the producer through the packer to the consumer. I challenge any monopoly to do that.

As a result of this reorganization the industry has achieved a great deal of success abroad with regard to prices and quality. I want to say that many countries in the world envy our system. As recently as in the April issue of Commodity Week the South African industry was again complimented. It was stated there—

As a result of all this the industry grew. There was more confidence among producers. Production increased from 9 000 tons to 34 000 tons. The turnover rose to almost 60 million tons. There are also other benefits one can mention. In association with the hon. member for Paarl, however, I want to say that this industry at present provides a livelihood for 27 000 people with the result that one can say that we have a rationalized, effective, efficient and organized industry today which on the one hand makes a positive contribution to the South African economy and on the other earns as much as R32 million in foreign exchange. This is the background. Within this framework a certain number of producers have started marketing direct to the consumer. However, they can only do so because there is this umbrella, this orderliness. If this orderliness did not exist everyone would have to compete with everyone else. After all, one cannot say that one has a home industry while one is marketing almost 1 000 tons of dried peaches. If everyone were to enter this so-called home industry, where would this long-term industry find itself? After all, these people are not manufacturing ploughshares and they are not planting cabbages either. This is a long-term industry.

Mr. Chairman, the industry is organized and I can give hon. members the assurance that 3 000 farmers who produce dried fruit are not going to allow certain individuals to destabilize their industry. There is orderliness. We can perhaps argue about free marketing. However, if free marketing is taken to extremes the entire industry will be wrecked. That is why the long-term policy is most important. One may believe in free marketing but one cannot break down an industry like this. One cannot allow a small group of people to operate under this umbrella and to earn extra money whereas order was established in the industry so that things would be easier for them and so that they could do well for themselves. For that reason I want to tell hon. members that in order to keep the industry stable and orderly, we shall have to keep things as they are and not allow these people to break away and in actual fact make uncontrolled and unfair use of other people.

Mr. Chairman, I have listened with great interest to the hon. member for Wellington speak about monopolies. It is an amazing thing that as soon as that monopoly becomes a complete monopoly, it wants to run to the Government for help if somebody else interferes with it. I want to tell the hon. the Minister and warn him about what I heard Reagan say when he addressed a congress of businessmen in America about two years ago, before he became President. He said—

I just want to warn the dried fruit industry that if they try to appeal to the Government and ask them for help, they should not expect to have a restful night.

Mr. Chairman, in contrast to the other hon. members in this Committee, I want to reserve my remarks about the hon. the Deputy Minister until the end of my speech.

Programme 5 of Vote 18 on Industries, Commerce and Tourism blandly states that the aim is to promote tourism to and in the Republic of South Africa. A more vague and ineffective statement on the future of tourism in South Africa would be hard to find. The time has now arrived for the ministry to come forward with a definitive policy, which will produce tangible results and put the whole industry on a firm base, instead of its present wallowing in waves of uncertainty.

Now what should be the objectives of the Department of Tourism? The objectives of the department, in order to develop a strong and growing tourist industry for South Africa, involving both foreign and domestic tourism on an on-going and co-ordinated basis, should be: Firstly, to identify all the opportunities available for tourism in South Africa; secondly, to investigate in depth the barriers to their achievement; thirdly, to assess the costs involved and by whom such costs should be borne; and fourthly, to state a policy of the methods to be adopted for their achievement. All connected with tourism in South Africa have a feeling of uneasiness and disappointment. The rate of growth of foreign tourism is very unsatisfactory, and by foreign, I exclude our neighbouring countries from whom we get about one quarter of a million visitors every year. From 1972 to 1981, the number of overseas travellers per annum only rose from 300 000 to 440 000. That is 50%. In the same period, the capacity of airlines offering seats to South Africa rose by more than 100%. Bluntly, we are not getting our share of world tourism.

On the other hand, what do we offer South Africans on the domestic front to tour their own country? There are three main issues: Firstly, there is the problem of congestion during school and industrial holidays. Secondly, there is inadequate and insufficient supply of tourist information and there is a lack of promotion for the domestic market. And thirdly, there is a lack of provision or planning to cater for a vast new and fast developing sector of the market, namely for Asians, Coloureds and Blacks.

Mr. Chairman, these are the four problems which I wish to discuss. The first one is the problems in the marketing and promotion of tourism, the second is the transportation problem, the third one is the accommodation problem and the fourth and most important one is the policy problem. One of the basic problems in the marketing and promotion of tourism, is the high costs of tourism experienced in South Africa. One of the major problems which affects our foreign tourism, is the high cost, particularly of air fares which affect most of the incoming foreign tourists. For instance, a firm called Neckermans, which is one of the biggest travel agencies in Germany, have a brochure for an inclusive tour of the Far East for some $2 000. The same tour at the same time to South Africa costs more than $4 000. In the Transport Vote, the question of high fares was put to the hon. the Minister of Transport Affairs, but scant satisfaction was obtained. Discount fares from Europe to all parts of the world are available, but not to South Africa. I can show the hon. members a book that I have that shows the discount fares which the other foreign countries have. The Department of Transport prohibits chartered flights to South Africa in order to protect the monopoly of the Airline pool. Another major problem is that the operators, both local and overseas, overload the net rates so that the package tours reach the consumer with a loading of 30% to 40%.

Mr. Chairman, there are different attitudes and policies towards tourism. It would seem that the present attitude of our main governmental agencies, influencing marketing policies, investments and fare structures, is that they are catering almost exclusively for the upper income group only who stay at luxury hotels. We are neglecting and discouraging the large possible influx of middle income tourists who make up the bulk of the Europeans and Americans. These are the people for massive tourism. With a proper policy and if the problem is tackled properly, it is not inconceivable to raise the present R600 million earnings from foreign tourism to R2 billion in a few years.

Now I come to marketing and promotion performance. Our limited effectiveness can be attributed to the paltry allocation of R15 million in this budget for actual promotional and marketing campaigns overseas and for South Africa as well. It is paltry. Such a budget means that the campaign is on an isolated and sporadic basis and is ineffectual. There is little or no involvement on the part of the pool partners of the South African Airways, who share monopoly flights to and from South Africa, in promoting South Africa. They should be made to play a more substantial role in promoting South Africa. Furthermore, our campaigns are far too fragmented. While it is true that, in the words of Satour, South Africa is a world in one country, we must promote our unique and competetive attraction and, in particular, we must promote the game viewing of our wildlife, which is our greatest attraction. What an opportunity we are throwing away by not utilising this asset, particularly as it is at its best in the low season of the domestic tourist market, namely from April to September. In addition we have the attraction of our gold and diamond mines as well as our tribal Blacks, many of whom are living under such circumstances as to be excellent tourist attractions.

Mr. Chairman, I now come to the consideration of incentives for tourism. In Programme 4 of Vote 18, it can be seen that we are allocating some R108 million for export trade promotions. The basic purpose is to obtain foreign currency. Surely tourism can be responsible for an influx of foreign capital. More tourists go to Spain every year than there are Spaniards in Spain. Even on a foreign exchange income of R600 million, the 6% G.S.T. gives a revenue of R36 million to the fiscus. Surely the Department of Tourism is entitled to a budget at least equal to the amount that it earns in G.S.T. and just think what a difference that would make. Surely incentives could then be given to the various sectors of the industry, either in direct subsidies or taxation relief. Domestic tourism is sadly affected by the bottlenecks that are brought about when school and industrial holidays converge and overlap. Something must be done to stagger holidays so that the tourist infrastructure can be better utilized on an all round the year basis. The promotion of domestic tourism has been sadly neglected, although it represents, at this stage, the bulk of tourism in this country. Our policy must be derived to make our homefront tourism more effective. There is a complete lack of provision and planning for the emerging Black tourist market. One touring company in South Africa is already carrying 2 500 Black tourists on domestic tours by road and rail per annum. Soweto, which has, according to the Black mayor, 2½million inhabitants, is an excellent market for tourism. This market requires the use of one to two star hotels but our crazy hotel laws bar their use by Blacks, because they cannot be internationalized. There are no beaches, no caravan parks and not real facilities of any sort for Asians, Coloureds and Blacks, and I would well advise the hon. the Minister to start planning for this sector, which will reach explosive tourist proportions by the turn of the century, which is only 18 years to go.

Mr. Chairman, what about our transportation problems? I have dealt with costly airfares in the opening part of my speech. Is there any truth in the statement made by firms in the tourist industry that high airfares to Europe are helping to subsidize the presence of the South African Airways on the North Atlantic route to the USA? This dilemma of airfares is a policy decision by the Ministry of Transport. What do we want? Do we want to maximize our returns by advocating expansion, large turnovers and full use of our tourist infrastructure? Or do we merely want selective growth requiring less investment with more control? [Time expired.]

Mr. Chairman, I rise to give the hon. member the opportunity to complete his speech.

Thank you. It is true that the railways are facing a struggle to make their passenger services into a more viable proposition. There is no reason why train travel cannot become an active and successful subsidiary for tourist travel and gain financially as a result. The novelty of our Blue Train for the higher income group bears testimony to this. Coach travel is probably the most sophisticated form of travel, but much has still to be done. The Road Transportation Act, Act No. 74 of 1977, makes the issuing of permits difficult and much has to be done to facilitate these procedures. Even the railways must play a bigger role in expanding its fleet. Private enterprise must play a bigger role as well. I would like to ask the hon. the Minister what has happened to the Report of the Committee on Tourist Transport, under Mr. Knobel. When can this report be expected?

Mr. Chairman, there is also the question of more sophisticated tourist itineraries. Most South African tours offered today are unimaginative and characterless. South Africa has more to offer than the usual “beaten track” tours. There are one or two very small companies that are offering fabulous tours to the most exciting places, but these tours required a tremendous amount of research and travel on the part of the owners thereof. The basic reason for this is that far too many people in the industry are unprepared and unprofessional. I trust that the new Travel Agents Board will rectify this deficiency. Far too many travel agents, instead of being travel and leasure time consultants, are merely airticket sellers to overseas destinations. The Tour Guides Act, Act No. 29 of 1978, has been on the Statute Book for five years, but decent and informed guides are South Africa’s rare species in the travel industry.

Mr. Chairman, I would now like to deal with accommodation problems. Hotels which have three to five stars, represent heavy capital investment with high maintenance costs. Such large-scale investments require a steady flow of business, guaranteed for a sufficiently long period of time, to make up for the huge capital outlays. Unless a clear cut and co-ordinated policy in which the private sector is joined, is defined by the Government, few hotels will be built in the future. Therefore, what they would require for expansion, would be a definite commitment to the development of a sizeable and steady flow of tourists to South Africa. Now I come to one and two star hotels. A lack of policy has not helped the development of what could be the supply of the most important sector of accommodation for the tourist industry. Some 70% to 80% of them depend on liquor sales for their income. Small hotels have little or no incentive and there are few exceptions. The problem is not only one of money, but also one of attitude and training. The easier revenues of liquor sales have introduced a degree of sluggishness, blunting this section of the accommodation industry. The opening of these hotels to non-Whites, Indians, Coloureds and Asians may be a stimulation, although there are certain social problems among conservative South Africans. However, irrespective of this attitude, this will have to come. I believe that Fedhasa has undertaken a survey of one to two star hotels in so far as their attitude towards tourism is concerned and I would like to see that report as soon as possible.

It is up to the tour operators to create an interest in tourism by means of these hotels. So far, the star system in respect of the hotels has not really encouraged the development of small hotels with a good image and specialized service, which could appeal to both local holidaymakers and overseas foreign visitors.

Mr. Chairman, I want to deal with the impersonal sector. This includes hutted camps in our various national parks and nature reserves and in the many camping and caravan parks scattered throughout the country. Europe and the United States have developed this market enormously. Fortunately, the State and Provincial Administrations have fully utilized their systems of parks for creation of tourism. It is up to the National Parks Board to develop these further. Caravan parks as well will still need a lot of developing, because many are far too primitive for the tourist industry. Now I come to the national hiking ways. From the Limpopo down to Cape Point, we have the most wonderful hiking route which is comparable to any in the world. These routes are a cheaper way for young tourists from overseas to see our lovely country. Here is an impersonal sector that needs rapid development, particularly as it is so underutilized by our own South Africans. Just think of mountain climbing. Our mountains are for wonderful and cheap tours for the young and the adventurous.

Mr. Chairman, now I come to the question of the problem of providing a policy. How necessary is a Department of Tourism? Far too many believe, rightfully or wrongly, that the hon. the Minister of Transport is the director of policy to the Department of Tourism and that the Department of Transport makes the decisions. Most of the problems that we have discussed, centre around railways, roads, airlines and such facilities which fall under the Department of Transport. What we need, is an effective organization. And I trust and pray that the new body, the South African Tourism Board, will be in a position to define a new policy in co-ordination with the various tourist bodies. This body must act like a tourist industry marketing group, drawing assistance from an ever widening range of organizations, for example, the tour operators, airlines, car hire, publicity associations, travel agents and even the Department of Transport on an ongoing basis. In effect, it must actually incorporate a federation of tourist organizations or a tourist council, which can define a new sound policy. Mr. Chairman, I would like to say that tourism in South Africa is at the crossroads. The problem is that no-one in the tourism industry appears to have any idea where the crossroads really are. In the short time that I have paid attention to this portfolio, I found that there are not only more problems than solutions, but, without exception, the components of which the industry is comprised, compound the problems by insisting that their narrow interest is of the greatest importance. This is aggravated by the complete lack of a definitive policy, as well as a lack of a definition of objectives. I repeat what I said at the commencement of my speech: We are in need of a policy.

The objective in order to develop a strong and growing tourist industry for South Africa, involving both foreign and domestic tourism on an on-going and co-ordinated basis, shall be: Firstly, to identify the opportunities available for tourism in South Africa. Secondly, to investigate in depth the barriers to its achievements. Thirdly, to assess the costs involved and by whom such costs should be borne. And fourthly, to state a policy of the methods to be adopted.

Mr. Chairman, in conclusion I would like to say that the hon. the Prime Minister, in his speech on his Vote, drew attention to how important the tourist industry is to develop a good image for South Africa and he expressed the hope that it would develop into our best means of telling the world exactly how we are living. I would like to make an earnest appeal to the hon. the Minister to release the hon. the Deputy Minister from his other duties in his portfolio and to let him concentrate on tourism until the end of the year. My short experience of the hon. the Deputy Minister has shown me that he is a man of action, and that he is keen, decisive, courteous and particularly tolerant. I am sure that in the short period that the hon. the Minister will be allowing him to concentrate on the Department of Tourism, he will devise a policy which will be lasting and which will be to the benefit of all of us in South Africa.

Mr. Chairman, I want to agree, in particular, with the last remark made by the hon. member for Bezuidenhout. There are, however, other aspects with which I can also agree. Unfortunately time does not permit me to go into that in more detail. In the course of my speech I shall, however, be referring to some aspects.

Mr. Chairman, I want to start off by saying that I welcome the hon. the Minister’s recent announcement about the Government having decided to rationalize its involvement in tourism. This results from an investigation by the Commission for Administration which carried out a thorough investigation into the whole question. After consultation with the private sector, it was decided to incorporate the Department of Tourism, the South African Tourist Corporation and the Hotel Board in one organization and to centralize their functions and activities. This new South African Tourist Board, which is to be established by law, will fulfil all these functions. This step must be seen as another step towards more effective administration. It must also be seen as another step towards allowing the private sector greater involvement in expanding tourism. The object is greater coordination and less fragmentation. The Government is hereby confirming the importance and significance of tourism in our South African economy. I hope the private sector will, in the interests of tourism, grasp this opportunity resolutely and with enthusiasm. Before abandoning this subject, I should like to ask the hon. the Minister to take to heart the interests of the staff who are to be involved in this new dispensation and to en sure that they are not the losers, that they have the necessary security and that all of them feel that they are going to benefit from this new dispensation.

Mr. Chairman, unfortunately I do not have the time to refer to all the wonderful aspects elucidated in the annual report. I am just going to refer, here and there, to some of them. One can judge the importance of the tourist industry to South Africa, to some extent, by the fact that in 1981 South Africa received 708 710 foreign tourists. During the period from 1 July 1981 to 30 June 1982 foreign tourists provided South Africa with R630 million in revenue, and that does not even include the travelling expenses of the overseas flights. Another interesting fact is that the average length of the visit of foreign tourists was 18 days. Surveys have also proved—and this is of great importance to us in South Africa—that 82% of the persons questioned said that South Africa was pre-eminently suitable for winter holidays.

For a moment, however, I want to dwell on some of the problems involved in tourism. The first problem, to which the hon. member also referred, relates to the long distances and the high travel costs. I want to point out, however, that if we had cheaper fares, this would definitely promote tourism, but at the same time we must also be fair and say thank you to the SAA which has already made several concessions such as excursion rates for overseas travellers to South Africa. Travel agencies and other people involved in tourism in South Africa, however, must be careful not to load their prices. If we want to bring about a growth in tourism, it will be necessary for the tourist industry to do everything in its power to keep prices as low as possible. If we are not careful we shall be pricing ourselves out of the market. We must realize that a high degree of professionalism and service is required to maintain our position on the world market. Up to now we have, for the most part, focused our attention on the higher income tourist group. Seven hundred thousand tourists brought in foreign exchange earnings of more than R600 million. This amount can definitely be increased, and there I also agree with the hon. member about our having to give more attention to the middle-income tourist group. A greater influx of such tourists can contribute a great deal to the full utilization of our tourist infrastructure. If more tourists came to South Africa and acquaint themselves with what is going on here, they would return with favourable opinions about our country and its problems, even though they did not agree with everything.

I am definitely not one to advocate large-scale “take-what-you-get tourists”. My plea to those involved in tourism is to resolve that aspect and to ensure that we also draw the other kinds of tourists to South Africa. We must spend more to draw more visitors to South Africa. Satour’s budget has, in the past, always been too small, and although it has been increased considerably, it is still too small for the effective marketing of our country overseas. The present increase is very welcome. Our country has a tremendous potential that has to be fully marketed. We have the scenic beauty, the sunshine and the climate, and we are relatively cheap in comparison with other countries. We know that people say—I have recently spoken to several people about this—that we get good value for our money. Our fauna and flora is unique and people want to see our game. They are interested in our national parks, and these we must fully develop. Ours is also a country of gold and diamonds, and it is with that in view that people come here. I think we make too little use of this. We must make it easier for the overseas tourists to have access with our gold and diamonds. We must make it easier for them to buy our gold and diamonds, thus further promoting our tourism. Today South Africa is spending a great deal of money to decentralize its industries. Industries that are decentralized obtain considerable financial benefits. The State also gives a great deal of attention to export promotion, and there are also benefits involved in this. Tourism must also be seen as an industry. If we had the same attitude towards tourism, we would rapidly be picking the fruits of our endeavours. In addition to that, tourism is a very labour-intensive industry providing work across the whole spectrum of our labour market. From the person who cleans the huts at Skukuza to the hotel-owner, the whole spectrum is covered. It has been calculated that from sales tax alone the Government will be earning between R30 million and R40 million this year. Add to this the money earned from international fares and one sees the importance of tourism and the fact that we can give it more attention that we do at present. Tourism therefore remains one of the most important investments the Government can make. I know of no better investment than tourism.

In the same period, 1981-’82, a total amount of R1 000 million was spent on local tourism. The first bottleneck we encounter here—as the hon. member has said—lies in the overlapping school holidays. This must be seen as a major bottleneck from the tourism point of view. There is also the problem of the holiday periods in the industrial sector. From the beginning of December hundreds of thousands of people converge on holiday resorts. It is a known fact that in December and January South Africa literally comes to a standstill because everyone is on holiday. Our local authorities also gaily contribute towards inculcating this holiday spirit in people. An interesting fact that I have noticed is that less than 50% of the South African White population are limited to school holidays, but that a large percentage of them also go on holiday during the school holidays, even though they could go on holiday at other times. The events during the recent Easter holidays prove this point. I believe that our provincial authorities and schools should get together, some time or other, and that the AHI and Assocom, which always want to teach us so much, should take this opportunity of talking to these people with a view to solving this holiday problem. We cannot keep going in this way.

Another very important matter involves the growing tourism amongst the Black and Coloured populations. The hon. member also referred to this, and I want to support him wholeheartedly. These people are asking for increasingly more luxurious facilities, but at the moment there is virtually nothing available for them. The dormant tourism potential is so great that one company, for example, has already succeeded in transporting 25 000 Black tourists by road each year. They expect a growth in this figure of between 15% and 20% per annum. [Time expired.]

Mr. Chairman, I should like to make a few remarks about foreign tourism to South Africa. Not that local tourism is unimportant, but I think that South Africa must have a look at the tourists who can be drawn to our shores. In programme 5 of the department’s report it is indicated that the overseas amount allocated is R13 781 000. This is chiefly for assistance allowances to Satour and Sartoc. For an export country like South Africa, tourism is an absolute must. We must ensure that the people coming to this country from overseas are not only holiday-makers, but also businessmen, industrialists, policy-makers and opinion-formers. They must be brought to this country so that they can see it and find out what there is here. In the same way we must also bring overseas political figures to this country. I would be inclined to say that if people overseas thought that we discriminated here, they might find out that the only discrimination was that directed against Opposition parties in Parliament. Our revenue from tourism—as hon. members have said—was about R630 million for the year 1981-’82. This is an insufficient amount which can be doubled or trebled, and that should be the aim. I want to say today that if we are fully bent on selling South Africa, in other words, on drawing tourists, this figure could very easily be achieved. In 1981 there were 441 717 visitors. They came chiefly from Europe and North America. Although there was generally an encouraging increase, it was not good enough for South Africa. The people in Europe and North America have money. Their travel costs to South Africa are possibly high, but their holidays in South Africa are much cheaper than in their own countries. We must see to it that many more international congresses and meetings are held in the Republic. I am not saying that this is not being done, but we must do much more to facilitate this.

We must fill the Skilpadsaal!

Yes, we must have gatherings of such magnitude as to fill the Skilpadsaal. When the CP convened, there were more than 10 000 people present, and that was wonderful! I want to thank the hon. member for Innesdal who is actually helping us as far as that is concerned. [Interjections.] By means of tourism we can market and sell our fatherland abroad, but then we must not make mistakes. I do, however, want to point out a few mistakes. It is no good our just wanting to recommend the finer aspects. People walk into an office of the Department of Foreign Affairs and Information overseas and they see what things look like there. Let me ask you to step into the local office of the Department of Foreign Affairs and Information tomorrow and see what we are busy selling there. As one enters the office, one sees a gigantic painting of a Coloured house that is probaly 100 or 150 years old. Surely that is not South Africa that one is selling. In our embassies overseas I saw paintings of donkey carts and other scenes of poverty. The fine things of South Africa, like the flora and fauna, are given no prominence. That is not the case at all the offices, but I have noticed this in certain places. Why must we advertise and sell this sort of things? South Africa has fine people and this is a beautiful country. I took exception to certain things and told those people that such things were simply not good enough for South Africa and ought to be replaced. We must look at the tourists visiting South Africa. What can they buy when they come to South Africa? When you and I go overseas we can, in each and every country, buy something related to that country’s culture, something reminiscent of the country concerned. The marketing of South Africa’s White culture to overseas visitors is being neglected. Tourists can buy many objects relating to Bantu culture. White culture is something we must encourage.

I also want to refer to hotels. I am not saying our hotels are poor, but when I take a room in a hotel overseas, I make a point of asking for a map of the town or city so that I can explore that town or city on my own. What, however, does one find in South African hotels? At the majority of hotels one cannot get a map of the town or city, and yet it is absolutely essential for a visitor to have something like that. If, on arriving at an overseas town at night, with a compass in one’s pocket—I never go without my compass—one obtains a map and starts walking down the street, whatever the street may be, one knows where north and south are. One does not have to walk two blocks this way or two blocks that way to find out where one is. It saves a tremendous amount of time. These small things are very important.

What more can we do in an effort to draw tourists to South Africa? We can hold various shows overseas and show more films to make South Africa better known. There must be much more and much better information available to visitors when they land in South Africa. That is something we have not yet given enough attention to. It takes time, money and manpower, but if we do not focus our attention on that, we shall not succeed in achieving our objectives. All possible aspiring visitors to South Africa must obtain information about South Africa overseas. In the publication Die Mynwerker of 27 April 1983 it is said “Kaapstad is bo”. There it is also stated that overseas visitors say there is no city as lovely as Cape Town. These visitors should, however, also visit the Eastern Transvaal and the Northern Transvaal with their beautiful scenic vistas, the Western Transvaal with its maize-fields and the Karoo. They would also fall in love with those areas. There is also the North Western Cape with its beautiful seasonal flowers. That is an unforgettable sight. Do we do enough, however, to tell the world about these things?

The route around the Cape is very important. 68% of all crude oil en route to Europe is transported around the Cape, including 30% of all crude oil en route to America. There are many other things South Africa can do to publicize this important route, and of course many other important things in South Africa. There are, for example, minerals obtainable only in South Africa. The people I mentioned a moment ago can see the importance of this country of ours and can carry out an in-depth investigation. Overseas tourists can be drawn to this country, and we can ensure that we double our income from overseas visitors. Then, however—and here I want to link up with the two previous speakers—something must be done about local tourism, and here I am thinking, in particular, of our hotels. This would not mean such a great increase in expenditure and manpower. If attention is not drawn to this, one simply accepts that everything is all right. Even though, in future, the hon. the Minister is not going to be involved with this aspect as much as he was previously, I nevertheless want to ask him to ensure that people realize that tourism is one of the most important things in the life of a people.

Mr. Chairman, I have very little time to reply at the end of this debate this evening. Probably I shall not be able to reply in full to the questions put by all hon. members. If any questions are left unreplied to I shall follow them up and shall try to answer them in writing.

Before replying briefly to some of the questions, I just want to rectify a misconception which apparently exists here concerning the free market system. The standpoint of the Government that the system of free enterprise is accepted and that we want to promote a market-orientated economy in South Africa, does not mean that we support the free market philosophy. The philosophy of a totally free market is championed by people who think that the function of the Government is purely to withdraw, and that the market alone is capable of guiding the economic activities in the country and of allocating resources, and that it is possible to establish an economic system in such a way. The standpoint of this side of the House and of the Government is very clear and I have mentioned it before in this House. The hon. member for Yeoville was present and at the time he welcomed it as an exceptional remark. I said that South Africa had a mixed system, and that is true. We recognize that the market has shortcomings, but the market also has a discipline that we should like to retain. We therefore believe that we must move as close as possible to the market and we must operate a market-related economy.

With these few remarks I should like to turn to the hon. member for Walmer. Now that various members, particularly the hon. member Dr. Odendaal, have dealt with the hon. member for Walmer, not much remains for me to say. I just want to refer to his first remark.

†The hon. member referred to export promotion incentives and made the statement that the budget does not make sufficient provision for increased exports. I want to remind him that the most important export categories, namely A and B, are given as tax concessions and are therefore not reflected in the budget. The hon. member also criticized the policy of decentralization and regional development to such an extent, in the beginning of his speech, that I thought he was rejecting it in toto. Afterwards, however, I realized that he does not disagree entirely with the Government, he only disagreed as far as some of the so-called remote areas were concerned. The hon. member Dr. Odendaal again asked him very aptly what he considered as remote. Let us therefore keep our disagreement but also agree that we both believe that it is important to have a policy of decentralization. We might disagree on some of the locations, but it is important to achieve a better spread of economic development. One must not only calculate the cost of decentralization, but also the cost of over-concentration with all the problems involved in housing, transport, and socio-economic problems, such as disease and crime. When we talk about the cost of creating a new job, I think it is not scientific just to quote figures. One must take into account, as the hon. member very correctly remarked, the cost of infrastructure which is much higher in the urban areas. The creation of new jobs in some of the regional areas was quite encouraging, also in terms of the cost of creating those jobs. Perhaps, while I am referring to it, I might as well give the House the latest statistics, one year after the new incentives were introduced. It is now possible to review a full year to see if these were successful.

*The figures for the first full year after the new incentive measures came into operation, i.e. from 1 April 1982, are known. The results are very encouraging. It is evident from an assessment of the figures that regional development and industrial incentive measures as contained in the new package have been exceptionally successful. Moreover, if one bears in mind in particular that the scheme was launched in 1982, at a time when the economy was already in a sharp downward phase, and that since 1982 the investment climate has been far from optimum, the wide interest in the decentralization campaign elicited from South African industrialists and from abroad, is very encouraging.

What about Pietermaritzburg?

I shall come to Pietermaritzburg. The Decentralization Board tackled this task with tremendous zeal under the chairmanship of Mr. De Beer, and has dealt with, and successfully disposed of, a large number of applications. The board has not only dealt with the large number of applications, but has also cleared up several aspects of policy, concerning the implementation of these measures, which were previously not very clear, and discussed them with the interested parties. Accordingly I, too, wish to convey my thanks and congratulations to those hon. members who congratulated the chairman and members of the board. Various sub-committees have been appointed by the Decentralization Board to carry out further investigations into specific problem areas, and I do not wish to elaborate further on that. From 1 April 1982 to 31 March 1983—in other words over a full year—the board assessed 861 applications for concessions from new undertakings or expansions of existing factories in decentralized areas in terms of the new scheme of incentives for regional development. Of the 861 applications, 777 were approved during the year, whereas 29 were held over while more information was obtained. Only 55 of the applications did not qualify for the criteria laid down for assistance. The 777 applications that were approved, involved a total capital investment of R2 459 million. If these projects are eventually established, they will create an estimated 65 342 job opportunities. The job opportunities will provide employment for 4 545 Whites, 50 049 Blacks, 6 435 Coloureds and 4 313 Indians. These figures only apply to the Republic of South Africa and to the self-governing national States—in other words, they do not include the developments in the TBVC countries. It appears that Isithebe in region E is the most popular point for industrial development. Out of the total of 777 approved industries, 105 applicants decided to establish themselves at Isithebe. That represents 13,5% of the total number of applications. East London, in region D, follows Isithebe with 52 applications, or 4,7% of the total. Apart from that it also seems evident, as an hon. member noted by way of interjection, that Pietermaritzburg, with 50 applications, Atlantis with 46 applications and Phuthaditjoba with 32 applications, also elicited great interest. It is interesting to note from a further analysis of the 777 approved applications that 42% were for less than R500 000. 42% of the new approved expansions or establishments were therefore for amounts smaller than R500 000, whereas the investment in respect of 23% was between R0,5 million and R1 million. What this signifies is that 65% of the applications are in respect of an expected investment of less than R1 million. In only 23 cases, or 3% of the total number of applications, was the capital expenditure higher than R7 million. It is therefore evident from this scheme that the incentive measures are indeed succeeding in encouraging labour-intensive industries on a regional basis.

An analysis further shows that this links up with the remark made by the hon. member for Paarl concerning the importance of the clothing and textile industry for employment purposes—that the clothing and textile industry embraces the majority of these new expansions, viz. 170 with a total capital investment of R345 million. The group of fabricated metal products, machinery and equipment, with 149 applications and a total expected capital investment of R192 million, is second on the list. Both of these categories also show once again that the non-capital-intensive industries draw special benefit from these incentive measures and that the reaction from that quarter is particularly encouraging.

The momentum that has already been afforded the programme of regional development must be followed through by way of greater involvement on the part of the inhabitants and interest group in the various regions. That is why the founding of the regional development advisory committees is of such importance and why the interest groups serve on these committees. It is also important that the interest groups should contribute, through the regional development advisory committees, to the identification of those things in a region that have a potential for growth. Hon. members such as the hon. member for Bezuidenhout referred to the fact that there is tourist potential in these regions. In this regard I could draw the attention of this House to the fact that a representative of the tourist industry has already been appointed to each of the regional development advisory committees. It has been said repeatedly that it will not be possible to develop regions by way of industrial development alone, but that the development of agriculture, services, mining and tourism is also necessary. There must be a joint effort whereby the potential of the entire region can be fully developed.

I also want to thank the hon. member for Vasco for his contribution and congratulate him on his having acted as chairman of the group for the first time. The hon. member asked that we strengthen our representation abroad and referred in particular to the European Common Market in Brussels. Apart from the Departments of Foreign Affairs and Information, Agriculture and other departments that have representatives there, my department, too, is represented by two officials, one of whom is a very senior official. GATT is in Geneva, of course, and we have two representatives there, too, one of whom is a very senior man.

The hon. member for Sunnyside made a few remarks about the economy and raised in particular the question of protected industries. I dealt with this matter earlier in my speech. This is something which was also raised by the hon. member for Waterkloof.

†The hon. member for Amanzimtoti discussed the shipbuilding industry and he referred to the question of the dry dock and the cost incurred by a company who lost a specific tender. First of all I would like to tell the hon. member that the principle of depreciation on replacement cost is not a new principle. It is quite a sound principle and he will realise that it is also applied in the sugar industry. If the S.A. Transport Services, an institution which is run on business lines, follows these principles, he should not criticize them for it. However, I would like to tell the hon. member that there is a Cabinet committee investigating the shipbuilding industry at the moment, and the hon. Minister of Transport Affairs is also a member of that committee. I will raise these points with him when we discuss the problems of the industry. He also referred to Iscor and the question whether Iscor cannot provide the shipbuilding industry with steel at a cheaper price since we are getting a lower price in the outside world. Here again I would like to reply in a positive way because Iscor is quite prepared to discuss with the industry a differential price as far as the export of their products are concerned. I would also like to inform hon. members that there is a very sound and attractive incentive scheme that the Government has for the shipbuilding industry. A subsidy of 25 and even up to 30 percent of the contract price is given to the industry and I think that is reasonably high. They must, however, realize that the ship building industry throughout the world is in a very depressed state. I have read an article the other day which stated that 40 to 50 percent of capacity is going to be scrapped. It is, therefore, a very competitive market and it is not easy to get tenders in that field.

*The hon. member asked me about Soekor’s two drilling platforms. I can obtain more information about those two contracts. I recognize that, like all State bodies, Soekor, too, is bound to award its contracts by way of tender. Although there is a State preference, apart from the fact that the Government has a subsidy scheme for the shipbuilders and also provides loan facilities, I assume that the South African shipbuilders were not in a position to compete successfully and that eventually Soekor had no option but to award the tenders elsewhere. However, I shall obtain more details about that specific matter for the hon. member.

†The hon. member for Port Elizabeth Central referred to the fact that the Department’s report was only tabled in Afrikaans. I must apologize for this. I have taken the trouble to phone the Chairmen of the various study groups to explain why we are tabling it at a very late stage. We have translated it and it was being printed in English as well. However, we could not finish it in time and to enable the hon. members to at least get something—bearing in mind that it is the first report—the Department, and the Director-General in particular, took great pains to see that we get it out this year. Next year we will table it in time, also in English. However, Mr. Chairman, I find it rather petty that the hon. member should raise this matter here. I think we have reached the stage of maturity where we can table a report in one language this year and change it to another language next year.

*The hon. member also asked certain questions about the National Supplies Procurement Fund, and the hon. member for Yeoville, too, asked certain questions in this regard. I want to point out to the hon. member that since certain allegations were made about the National Supplies Procurement Fund, I have instructed the department to carry out a thorough review of all procedures. By that we do not accept that the procedures are inadequate, but we are subjecting all procedures to a thorough review and, wherever it is possible to overhaul them, we shall do so.

†The hon. member asked me whether loans are given on total stock and the answer is no, as it is only given on strategic stocks. If there is any proof of abuse of the funds, it will certainly be investigated and if we get sufficient proof, we will report the matter to the Police as we have tried in the previous case.

What about the proof provided by the Sunday Express?

We could not. That was not sufficient. It was a vague allegation and we have written to the Sunday Express. We have written them a letter and asked them to substantiate their arguments as we would like to take the matter further. We are not going to allow anyone to abuse the scheme by getting cover or funds under this scheme.

*Mr. Chairman, it is not a question of the department being flooded with applications from bodies that would like to assist in the stockpiling of strategic materials. Do hon. members know that 95% of the firms that assist us, have to do so on request? In fact, several of them do so against their will. It is a service they render. I recognize that there are some that are involved in the programme at their own request. We try to keep as thorough a check as possible. Audited statements have to be submitted to the department annually. Apart from that, a quarterly statement must be made by, at least, a director, and a certificate handed in concerning the supplies. Physical investigations, too, are carried out on a regular basis at very short notice and inspections are performed by officials of the department. I also wish to issue the invitation to the hon. members for Yeoville and Port Elizabeth Central that if they have any proposals as to how this scheme can be tightened up further, we shall give such proposals favourable consideration. It is certainly our intention to impose the strictest control over stockkeeping, because the point at issue here is South Africa’s survival in a time of crisis. It is not the intention to benefit anyone in this way.

Can you tell us what the definition is of “strategic supplies”?

Certainly, Mr. Chairman. Strategic supplies do not include cosmetic goods. Strategic supplies are those supplies, those goods that we regard as essential and that we shall need in a time of crisis. For example, if these supplies include cleansing materials, the question must be asked whether the population can get by without any cleansing materials in a crisis situation. It is not always easy to make a clear-cut decision as to what will be essential at a time of crisis, but we should like to keep that definition as limited as possible. Therefore it is not a matter of a decision that is simply taken without further ado to store or stockpile for the sake of a specific crisis that may arise.

†The hon. member also referred to delays of up to 23 months on wage incentives. The wage incentives are, however, part of the new package and it has only been introduced 12 months ago. As far as we are concerned, there are no major delays, certainly not in the order of 23 months. If there is any particular problem, the hon. member is free to approach us and we will investigate it further.

Mr. Chairman, may I ask the hon. the Minister if anyone in Region D has as yet been paid wage subsidies in terms of the new decentralization scheme?

Mr. Chairman, I will have to get the hon. member that information, because I do not have it here. However, the delays can certainly not be in the order of 23 months.

*I replied to the speech by the hon. member for Ceres when I referred to protection and the assistance that the Government wants to accord our exporting community. The hon. member for Langlaagte is not present at the moment, but perhaps I should not react to that hon. member’s speech at too great length. When one listens to the tone adopted by the hon. member as regards how the consumer is supposedly exploited by the larger chain stores, one asks oneself why it is that the smaller traders often come and complain to us that they are unable to make a living because, as they contend, those people’s prices are simply too low. Therefore it is not as simple as that; one cannot just say that exploitation is taking place. I think that the hon. the Deputy Minister has provided a full reply in regard to this matter. As regards the complaint relating to breakfast food that allegedly contains a poison, I want to point out to the hon. member that it is the Medical Research Institute that identified and cleared up this matter. If it had not been for the thoroughness with which the Medical Research Institute monitors these matters, the matter would never have been raised. The hon. the Minister also made a statement in this regard.

The hon. member for Innesdal referred to the important aspect of scientific development. I wish there was more time to enable me to reply to him in greater length in this regard, but this is not possible. He called for an inter-departmental committee, but I want to point out to him that in fact the CSIR is inter-departmental in a special sense in that it correlates research relating to various departments and provided a scientific forum for various Government bodies. I fear that an inter-departmental committee would be unable to co-ordinate scientific research, but that existing bodies such as the CSIR and, in the field of human sciences, the HSRC, are best equipped for that.

Mr. Chairman, may I ask the hon. the Minister whether his department, or a different body, has submitted a comprehensive report to the Government on the implications of the technological revolution and technology for the economic sphere as a whole?

That is, of course, a very wide field, but I could point out to the hon. member that the Board of Trade and Industries was instructed last year to carry out a full investigation of the electronics industry, that covers a very wide field, with a view to standardization, rationalization and domestic manufacture and the extension of the electronics industry. The hon. the Deputy Minister has already replied in full to the speech by the hon. member for Yeoville. At the start of his speech that hon. member made out that the department hides its responsibilities to the consumer in a backroom, and that is untrue.

†I think the hon. member referred to page 34 where he eventually found an amount which was allocated for consumer protection. However, I wish he had only taken the trouble to read—if the hon. member for Yeoville will give me his attention—the aim of the Department which appears on page 1 of the Department’s Vote. It is only four or five lines but included in those lines appears the following—

It is part of the aim of the Department. To claim that we are not looking after the interests of the consumer, is simply not true and the hon. Deputy Minister has already explained that. It is interesting to note that on the one hand the hon. member is criticizing us for advocating free enterprise but not putting it into practice. However, on the other hand he is demanding more consumer protection. Certainly the private sector also has a role to play. We welcome the fact that the newspapers are also filling that position. As a matter of fact the Consumer Council is assisting newspapers by giving them information thus trying to assist them to inform the public.

* Above all, it is still a task of providing information and making the consumer aware of his rights and privileges and informing the consumer as to how he can derive the greatest benefit in a free enterprise system and a market-oriented system by making use of his considerable buying power.

The hon. member for Smithfield also spoke about consumer interests. I thank him for doing so. The hon. member for Constantia spoke about the Liquor Board. The hon. member for Walmer also made certain remarks in the course of the debate about the decision of the Government with regard to the Competition Board, and I have replied to that in full. Time is very limited but I do just wish to deal briefly with certain aspects to which the hon. member for Constantia referred.

In the first place, we make no secret of the fact that this Government takes an interest in the stability of the wine industry, because the wine and spirits industry is an important one, not only for specific groups, but for the economy of the Western Cape. Therefore we say this without hesitation. The hon. member spoke about the concentration of power that had come about in the wine and spirits industry, but he did not say a word about the concentration of power in the beer industry. The fact of the matter is that as far as the recommendations of the Competition Board are concerned, not one of the interest groups—with the possible exception of one of them—made any request that those recommendations be accepted. In a certain sense Fedhasa specially appreciated the Government’s decision, but this also applies to the other producer-wholesalers. They made representations to us to the effect that the acceptance of the recommendations of the Competition Board would mean the end of their existence. Therefore I just wish to point out to the hon. member that these very conflicting interests are involved here and the Government did its best to bring about a reconciliation among these interests. The only further remark I want to make in reply to the hon. member’s account is that he is wrong about the 75 licences for Union Wine. They were not awarded after the rationalization had taken place in 1979. They were approved by the Cabinet before the Cabinet agreed to the rationalization of 1979.

That is not what Pickard said.

It is a fact.

*The hon. member for Sundays River made representations about the regional development there and I shall come back later to the hon. member’s remarks. As far as agriculture is concerned, this matter will have to be taken further by the Regional Development Committee. As the hon. member probably realizes for himself, the Department of Environment Affairs has eventually to make provision for that.

The hon. member Mr. Aronson also made an important contribution about the need for development in the Eastern Cape, particularly in the Port Elizabeth region, and I thank him for that. I have already referred to the contribution of the hon. member Dr. Odendaal, and I thank him for the lucid way in which he dealt with the hon. member for Walmer. The importance of the provision of infrastructure, such as the provision of water, cannot be sufficiently emphasized. The hon. member provided a very important perspective with regard to decentralization and regional development in that regard. I thank him for that. The hon. member for Paarl made a balanced contribution on the textile industry and I do not wish to dwell on it for long. The fact is that in 1982 in particular the textile industry experienced an exceptionally lively demand, so that utilization of capacity was high. Therefore there was demand pressure and if, on the other hand, we also wish to contain inflation, one cannot simply exclude imports. Therefore there were imports on a considerable scale. The hon. member is also correct in saying that since the demand began to decline, the Department and the Board of Commerce and Industry have been bombarded with requests for further protection. However, the fact is that the industry must also accept the economic cycles as part of life. Since then the Board has introduced further protective measures, but what is interesting is that the latest import statistics that have just become available show that even before the board’s protective measures could have had any effect, there had been a considerable decline in our imports. In the first quarter of 1983, imports declined by 32%. It is important that this decline was particularly evident in a wide field of products, most important of which were textile wares. The importation of textile wares dropped by 40% in the first quarter. Moreover, I wish to point out once again to the hon. member that the Steenkamp Commission will complete its report on textiles before long.

Unfortunately time is running out and I also just want to refer in conclusion to the hon. members who spoke about tourism. In this regard I refer to the hon. member for Bezuidenhout and the hon. member for Kempton Park. The fact is that the Government regards tourism as a very important industry. The industry as such is important, the employment opportunities created thereby are important, the foreign exchange earned is important and I could refer to several other important advantages of tourism. In the account he gave, the hon. member for Bezuidenhout referred to several of these aspects.

†Although he said that there was a lack of policy he also made a number of very valuable suggestions. I thank him for his contributions in that respect. An indication of the importance attached to tourism is the fact that in our budget an increase of 29,5% occurred. It is not big money, but it is an increase at a time the Government is trying to reduce its expenditure in nearly all spheres.

*The funds are aimed at enabling Satour to perform its service as effectively as possible. Satour provides an outstanding service. For example, I might point out that our office in Spain, which was opened a little more than a year ago, was presented with an award from the tourist office of the Spanish Ministry, and that this award was presented to the office by the Spanish Minister himself. The hon. member for Kempton Park pointed out that to South Africa, tourism has the special additional advantage that in general, people leave South Africa with a more positive attitude. They obtain a better perspective of the country and its people and a better impression of what is happening here than is presented by the one-sided reports on South Africa that often appear in the overseas Press.

† As far as the provision of information regarding tourism is concerned, an aspect to which the hon. member also referred, the Department commissions regular surveys which are mainly aimed at obtaining reliable information on aspects such as the attitude towards the Republic, South Africa as a tourist destination, need of tourist accommodation, etc. The latest survey conducted by the firm Market and Opinion Surveys, raised a few interesting points which I would like to mention to hon. members. First of all, 57% of the sample of 6 706 visitors indicate that it was their first visit. Others were visiting South Africa for the second, third or fourth time and 12% indicated that they have visited South Africa more than five times. It is also interesting to know that 54% of the visitors were mainly or partly visiting friends or relatives. That is more than half. That is probably the reason why only 55% made exclusive use of hotel accommodation. The average length of stay of the visitors who departed during the survey period, is 21 days which compares very favourably with the five to six days in most European countries. The percentage of the various places visited indicated that Johannesburg scored 83,2%, Durban 47,6%, Cape Town 45,8%, the game reserve 48,3% and Pretoria 40,6%. Most visitors departed with a favourable impression of South Africa and more than 80% rated the country as an excellent or a good tourist destination. The major factor which persuaded foreign visitors to visit South Africa were given as friends or relatives. 38,5% of the visitors came to South Africa either on the recommendation of friends or relatives or for the purpose of visiting them. Travel agencies did not do too well, because they only persuaded, 2,7% while 2,3% came on account of advertisements or articles in newspapers or magazines. It is encouraging, Mr. Chairman, that 29,9% indicated that they have seen some promotional material of Satour before coming to South Africa. The respondents were asked the question: “On returning to your country, what would you tell people if you were asked to single out one aspect of your visit to South Africa that impressed you most favourably?” The responses can be summarized as follow: “The nature, the beautiful landscape, the vast country—24,5%; friendly, courteous, hospitable people—22,7%; weather, sunshine, climate—11,8%; game reserve, wild life—7,5%; cleanliness of towns and cities—5,2%. I will give the report to the hon. member for Bezuidenhout if he is interested to see some of the other recommendations.

*In conclusion, I just wish to point out again that the effort to establish a South African Tourism Board is specifically aimed at affording tourism a greater momentum. In the past the problem still related to the high degree of fragmentation of the services in the private sector, and in the public sector as well. The specific aim of the Tourism Board is to bring the public sector and the private sector together and in this way provide a new stimulus for our tourism industry. The hon. member referred to the high price of fares. It is true that if we are to promote our tourism in South Africa we shall have to give some thought to reducing our costs. I also refer to the cost of our accommodation institutions. South Africa is no longer a cheap destination, and this is also something that is brought out very clearly in the investigation. Therefore it is the intention to give our tourist industry new momentum by bringing the private and the public sectors together and also by creating the opportunity for this Tourism Board to investigate new and additional sources of financing in order to extend their financial resources. I should have liked to say far more about the matter of tourism, but we shall have the opportunity to discuss tourism in the debates on the Bill which was read a Second Time today.

In conclusion, I just wish to say that there are still one or two hon. members whose speeches I have not been able to deal with. Here I have in mind the hon. member Dr. Welgemoed and the hon. member for Wellington. I shall reply to their speeches at length at a later stage.

Vote agreed to.