I move—

In this Bill an amount of R375,000,000 is being asked for, viz. R278,000,000 for revenue services, R7,000,000 for Bantu education and R90,000,000 for loan services, to defray expenditure on approved services as from 1 April until the promulgation of the Appropriation Act towards the end of the Session.

This amount is R50,000,000 more than the amount asked for last year, but hon. members should not infer that expenditure during 1965-6 will increase to the same extent.

The Appropriation Act is always one of the last measures to be passed, and in view of the fact that possibly its promulgation may be delayed, I consider it essential that sufficient funds to cover that situation be voted.

Parliament usually prorogues towards the end of June and therefore I regard it as essential that an amount should be provided which is sufficient to cover the expenditures for the first 3½ months (i.e. 1 April to 15 July). As usual, this Bill covers only items of expenditure on services already approved by Parliament.

It is not customary for a Minister of Finance to make a long speech on this occasion. When I deliver my Budget speech on 24 March, I shall deal in detail with the economic situation. There are, however, a few aspects to which I should like to refer now.

Firstly, I want to mention certain loans we entered into recently overseas. Already in December 1963 we entered into a revolving credit of DM40,000,000 (about R7,000,000) with a group of German banks under the leadership of the Deutsche Bank. In November 1964 a further credit for the same amount was arranged with these banks. This credit is for two years and the rate of interest was 5⅛ per cent, with a commitment fee of ⅜ per cent. We have not yet drawn on this credit, but we expect to do so shortly.

Hon. members will remember that for many years already we have had a revolving credit with a group of American banks. This credit is usually arranged for a period of two years, and the present credit of $40,000,000 (approximately R28,000,000) expires in January 1966. The American Interest Equalization Tax does not at present apply to this credit, but in order to afford us greater protection against the possible application of this tax in future I arranged last month for the extension of this credit to January 1967. The amount and the conditions remain the same, except that, owing to the upward tendency of rates of interest, the rate of interest was increased by ¼ per cent to 5¼ per cent in respect of amounts drawn after January 1966. At the moment we have drawn only $10,000,000 of this credit, but we expect to use the rest during this year.

At the same time I arranged a period loan of $20,000,000 (approximately R14,000,000) with a group of American banks—mainly the same banks as those which had granted the revolving credit. Of this $20,000,000 $6,000,000 is repayable in three years, $7,000,000 in four years and $7,000,000 in five years. The rate of interest is 5¾ per cent. The full amount of this loan has already been drawn.

Lastly, I arranged a loan of $18,000,000 (approximately R13,000,000) with the Morgan Guaranty Trust Company of America, partially to cover the cost of the new Boeing aircraft which the S.A. Airways has ordered. The loan is repayable in equal half-yearly payments from 30 June 1966 to 31 December 1971. There is a commitment fee of ½ per cent on undrawn amounts, then a rate of interest of 5 per cent on amounts drawn to 31 December 1965, and thereafter rates of interest of between 5¼ per cent and 5.6 per cent on every instalment according to the date of repayment; the average rate of interest works out at approximately 5.45 per cent.

I should also like to mention our internal loans. Old internal loans to an amount of R37,700,000 became repayable on 15 January and 1 February, and conversion was offered in a new 15-year loan at 5 per cent, issued at par. Apart from the Public Debt Commissioners, who held R2,000,000, the major portion of the old loans were, however, held by financial institutions which normally are not interested in long-term loans. We consequently decided also to issue three-year and four-year bonds at 4⅛ per cent and 4¼ per cent respectively. In order to comply with the requirements of the money market, it was further provided that these bonds would be transferable by endorsement, and that they would be available in denominations of R100,000, R50,000, R10,000 and R1,000; in this way they ought to be easily negotiable in the money market. Subscriptions by the public (i.e. exclusive of the Public Debt Commissioners) for the new loans amounted altogether to R42,200,000, of which R2,900,000 was for the 15-year loan, R9,600,000 for the 4-year, and R29,700,00 for the 3-year obligations. The net amount of new loan funds received from the public is therefore R6,500,000.

Finally, I want to mention certain financial measures we are considering at the moment in order to reduce the danger of inflation. The great increase in both investment and consumption in recent months was to some extent made possible by a fairly extensive extension of credit by the commercial banks as well as other financial institutions, and it may be necessary shortly, if this extension is not stopped, to take special steps to stop it. In the case of the commercial banks supplementary reserves may be prescribed by the Reserve Bank, which will compel the commercial banks to keep a greater portion of their assets in the form of Treasury bills or other liquid assets; in this way the capacity of the commercial banks to extend credit will be limited. The authorities will not hesitate to make use of this power if necessary.

This measure is not applicable to the acceptance banks, but the Reserve Bank is able to exercise comparatively effective discipline on these institutions by applying a penalty rate in respect of discounting, or by simply refusing to discount.

When the new Banking Act is in full operation in a year’s time, the hire purchase banks and other banking institutions will also be subject to all the provisions of the Act, including the supplementary reserves. In the meantime I expect to get the co-operation of some of the most important institutions in curbing the excessive extension of credit. I feel, however, that it may be necessary to take more deliberate steps in order to limit the unsound extension of credit by these institutions. It would in any case be unfair to apply restrictions to the commercial banks without to some extent restricting the other institutions also. The only way seems to be by regulating the flow of funds to these institutions by prescribing maximum rates of interest on deposits.

In a period when inflationary pressure starts it is often necessary to allow rates of interest to rise in order to combat the excessive extension of credit. The increase in the bank rate and in the Reserve Bank’s pattern of rates of interest for Government stocks two months ago should be regarded in this light.

Some increases in interest rates recently, however, create the impression that they should be ascribed to unsound competition between financial institutions for the limited amount of deposit funds available in the market. Competition between financial institutions is sometimes incomplete due to the fact that their rates of interest on loans vary according to the nature, the period and the risk of the loan, and it is sometimes also due to conventions, such as, e.g. the conventional ratio between the bank rate and the minimum rates of interest of commercial banks on overdrafts, whilst the public does not always realize that higher raes of interest on deposits usually mean greater risks.

Official control over rates of interest is applied in many countries such as, e.g., the U.S.A. and Canada. It is nevertheless a direct interference with the market mechanism under our system of free initiative, and ought to be applied only in special circumstances, and then only to a limited section of the market when it appears necessary, and only by way of fixing maximum rates—otherwise the whole pattern of savings, investment, consumption and production may be disrupted.

If the existing interest rate war between financial institutions in respect of their rates on deposits continues in this way, it may give rise to unjustified increases in the rates charged on loans, such as e.g. mortgage rates, which would not be in the national interest. Such increases would reflect abnormal market conditions which cannot be restored by the ordinary effect of supply and demand or by conventional official action taken against the underlying factors. Under such circumstances a measure of control over maximum rates of interest on deposits may be justifiable and desirable.

Regulations in terms of the Currency and Exchanges Act will be promulgated within the near future to empower the Reserve Bank, with the approval of the Minister of Finance, to prescribe maximum rates on deposits for the various categories of deposits such as e.g. savings deposits, fixed deposits for 12 months, etc. These powers, however, will not be used unless the authorities are convinced that it is necessary in the national interest to take action. I want to make an appeal to all financial institutions to curb the unsound increase in deposit rates as well as loan rates in the national interest.

I want to state clearly that the measures to which I have just referred are not being put into operation immediately, but the authorities will carefully watch the position and apply the aforementioned measures of control, if necessary, without further warning.

Sir, I wish to move the following amendment—

The hon. the Minister, in introducing his Bill, has more or less indicated that he has arranged to continue the arrangements that he has for the revolving credits in West Germany and America. He has also told us that he has arranged two other loans from the United States, one for several years. He did not tell us what that was for. I imagine it is in respect of Government material and so forth because in the case of the second loan, which is a short-term loan, he told us that that was to pay for the Boeings. The first loan which is to be repaid over a period of five years, I think, we do not know what it is for. I presume it is in respect of railway material or something similar.

I do not think the hon. the Minister expects me to comment at any length on what he has said on those subjects except that I do not think the warning he has just issued in respect of undue credit being made available by banks or the competition which has been taking place between financial institutions in regard to interest rates on deposits, will come as any surprise to the financial world. Because both those matters have been of concern in financial circles for some time and I do not think that the hon. Minister’s warning will come as any surprise to them. I can only hope that the warning he has issued will have the affect that he hopes and that it will not be necessary for him to take those steps and to exercise those powers which he undoubtedly has. Last year in this debate we asked the Government, we asked the hon. the Minister, what rate of development the Government would regard as being a satisfactory rate to maintain in the future. We also asked, whatever that rate was, whether the Government thought that it could be maintained. Both those questions remained unanswered in the course of the debate because the hon. the Minister was not in a position to give us a reply. Since then we have had this economic development programme which was issued quite recently but which has on the whole been kept very quiet. I do not know how many members of this House have had copies of it or have had an opportunity of studying it. I think it is a major document. I had to make quite a number of inquiries before I discovered that by sending 55 cents to the Government Printer I could obtain a copy—which I did. But I do think, Sir, that this document is of sufficient importance to have been made available to all members at least at the beginning of this Session. It has been published, it has been mentioned in the Press, and I think every member should have had the opportunity of studying it before the financial debates began in this House.

This programme makes it clear that the Government, in 1961, instructed the office of the economic adviser to investigate (I am paraphrasing)—

Arising from that, in August 1962—

This report is the first instalment as a result of that decision. The report recommends tentatively to the Cabinet Committee that the target for the next five years should be a rate of 5½ per cent in the gross domestic product. I say “tentative” because there are so many provisos in the report that its conclusions cannot be anything but tentative; indeed, the report which is couched, I think, in very modest terms, makes it perfectly clear that it is not intended to be anything else but tentative. Indeed, Sir, in the face of world affairs and our own affairs in this country it is difficult to see how anyone could possibly forecast with any certainty at all what may happen in five years’ time. The most the Committee can hope to do is to do what is outlined in the first paragraph, the introduction, of this report where they point out that the idea is that—

Listen to this, Mr. Speaker—

To me the important thing in this report is that after all these years in power the Government is at last reverting to the United Party policy in trying to plan for future economic development. [Interjections.] I could develop on that, Sir, but time does not permit me.

This council hopes to produce an annual forecast which can prove to be a very useful barometer for everybody as well as for the Government, always providing, of course, that the Government takes notice of it. I do not know whether the Government has accepted this target of 5½ per cent. It does not matter so much whether it has or not because it is so tentative. But I think the immediately important thing in this report is the conditions outlined at some length under which a rate of growth can be maintained and which conditions, if not observed, can stunt that growth and prevent it from developing.

The first proviso is that net capital outflow must be controlled. Between April and August last year there was a net outflow of capital. I imagine there has been a net outflow since. How big, I cannot tell. But the gold and foreign exchange assets in the Reserve Bank have fallen and very considerably. Between April and August of last year they fell by some R64,000,000. Between April last year and last Friday they had fallen by some R122,000,000—from R567,000,000 down to R445,000,000. So quite clearly this question of the outflow of capital is one which will have to be carefully watched. This report refers to a question which has often been asked as to what the Government would consider to be a satisfactory figure at which the gold and foreign exchange reserves should be maintained. This report suggests that the figure should be, tentatively again, an amount equal to five months’ merchandise imports. I do not know whether the hon. the Minister has given consideration to this question but it would be interesting to know whether he and his Department are inclined to accept that as a general indication when considering the state of our foreign reserves.

The next proviso is that the manpower shortage must be overcome. The next proviso is that net savings must remain—they have increased slightly—at about 14 per cent to 15 per cent; that real private consumption must not increase by more than 2.94 per cent; that merchandise exports must increase over all over the five years by 25 per cent; that productivity must increase by 3 per cent per annum and that, what they call the strategic sectors, i.e. coal, iron, steel. Escom, power and transport services, must be expanded to keep pace with the needs of the country. Lastly: Price increases must be curbed. Well, Sir, you can see from that list of principal conditions what a chancy business it is to try to forecast what is going to happen in the coming years.

I want to refer this afternoon to two of those provisos because I think they are of immediate concern. They could upset the whole forecast, if the Government is not careful, and they do affect the other provisos, as well, because they are inter-locked and have an affect on one another. The first one is this question of the manpower shortage. The Committee suggests, on the basis of a 5½ per cent average increase over the five years and allowing for a figure of 20,000 immigrants per year, that there will be a shortage at the end of five years of some 47,000 White workers. They hope that increased immigration and increased technical education will make up that leeway over the period and that by then the demand for labour will be met by the supply. We all hope that will happen, Sir. But at the moment, as we know, immigration is being hampered by a shortage of housing. The hon. the Minister of Immigration has pointed that out. There are other factors as well which hamper immigration but we shall get another opportunity to discuss immigration. Housing is a limiting factor at the moment in encouraging immigration. Housing, in turn, is also hampered by a shortage of labour and a shortage of material. The hon. Minister of Housing gave some figures to this House yesterday indicating what the State itself hoped to do in the next year or two in the way of building houses. He also referred to the houses which he hoped the local authorities would provide but he did not—I suppose he was not in a position to do so—indicate what he hoped the private sector would provide. In his speech the State President talked about the State building 15,000 houses, I think, in the next two or three years for those people who could not afford economic rents. But, Sir, if we are going to take the figure of immigrants at 20,000 per annum, and if we are going to make up the backlog which now exists, while at the same time providing for our own people who are increasing every year and making greater demands, I should say that the need for housing in this country was somewhere in the vicinity of between 30,0 and 40,000 per annum—houses to be provided by the State and local authorities and private enterprise.

I only put that forward as a feeler. If the hon. the Minister of Housing could give us an idea in the near future, or now, of how many houses are required with a view to the country’s needs as a whole, I think it would be helpful. Because housing is going to hamper immigration and immigration in turn is going to hamper the shortage of manpower question.

As far as technical education and training is concerned, which the Committee hopes will be extended to both Whites and non-Whites, valuable as it is, it cannot produce results overnight. Whilst I accept that the Government is alive to the problem which confronts it—I hope we shall get more concrete evidence in the near future from the Government as to what is being done—it is going to take time. It is going to be some years before immigration, training and so on, are going to bring about the balance we would like to see. The question therefore arises what we are going to do meanwhile to ease the demand on the labour market? And I use the term “labour market”in its widest possible sense; from the highest executive to the lowest. If you cannot meet the demand, if there are no means of meeting the demand and if there is not going to be any way of meeting the demand, say, for the next two or three years, it seems to me that the only alternative is to reduce the demand; we have to ease the pressure on the labour market. Is there any other alternative? I think that is a question which has got to be faced. The Government has appointed a manpower board. It is a very large board with very wide terms of reference. Broadly speaking its function is going to be to go into the manpower position, to make recommendations and so forth. If I know how committees of that size work, Sir, it is going to be many months before anybody is going to get any constructive proposals from it. It should have been appointed two or three years ago in order to have been of any use in the present state of affairs. However, it is a widely constituted body; we get all interests represented on it and I hope the Minister responsible will get busy and see that this committee get down to work without delay.

At the present moment I think it falls under the Minister of Education, Arts and Science. I am not quite sure why. I should have thought it should be under the Minister of Planning. But whoever the Minister is, I do hope he will see to it that the committee starts its work without delay because I do believe that we have to be realistic about this matter. We have to face facts. I think the Government has got to take the lead. After all, Sir, they landed us into this predicament and they must get us out of it or get out themselves. Because if you examine the position, they have contributed very largely themselves to the present manpower shortage. In the first place we have the defence programme . Large numbers of men are, and have been, employed for the building of factories, equipping them, manning them for purposes which, whilst they are necessary, do not contribute anything whatever to the productivity of the country and are in fact consuming material and power, transport and manpower.

As the hon. Minister himself admitted last year the defence programme is in itself, per se, an inflationary move. But, Sir, we are all agreed that defence is priority Number One. But at the same time, although it is priority Number One, it is a fact which cannot be ignored when you are trying to assess the position of manpower. Because of it X men and X material are withdrawn from the normal economic market. Priority Number Two are what the Committee calls essential services: Iron, steel, coal, transport, power, basic services which are essential if the country’s economy is to continue. Well, Sir, if you take the manpower required for our defence programme plus the fact that 10,000 men are called up every year and taken out of the labour market—if you take the defence programme and the manpower required for training, you will see that we have willy-nilly made a fairly big bite into our available manpower. But meanwhile, in spite of those things, the Government will go on straight ahead with its industrial policy, it is encouraging expansion in every direction; it is controlling and encouraging and in some ways actually compelling for instance the motor industry to spend a very large amount of money and a large amount of labour in an attempt to increase the local content in motor vehicles. I am not querying that policy. It is the right policy. But when I see a luxury motor-car industrialist announcing that he is coming here to build a factory, to build a luxury car out here, it is obvious that he is going to require more manpower to do it, and I wonder whether, however desirable it may be, having regard to the facts, whether this particular action on the part of the Government is a wise one at the present time, because normal Government expenditure continues. The hon. Minister tells us that it is about 2 per cent per annum, about R20,000,000 a year. The Government requires at least 4,000 new recruits in the Civil Service every year—another bite out of the cherry. In addition to that, of course, last but by no means least, the Government is going straight ahead with its major schemes, of which we all approve: The Orange River, South West Africa and the development of the Transkei.

To come nearer home and to be practical, for the last eight months we have had a small army of workmen walking about this place, Parliament. The work they have done here is most acceptable to all of us and very desirable, but I cannot help thinking that this small army could possibly in the present state of affairs be better employed by the hon. Minister of Housing to build houses. I think we would have been prepared to make our sacrifice as well as the rest of the country by waiting a couple of years, if necessary, for the amenities which we want and are going to have. I only mention that as a case in point. I think this work could have been put off and would have been put off if the Government had thought further ahead.

Sir, last year in the Budget debate we asked: Is it humanly possible (nobody questioned the desirability) with our available manpower to go full-steam ahead arming ourselves to the teeth, spending on essential services, developing major Government schemes, and at the same time to maintain our rate of economic growth and our standard of living? We asked that question, Sir, and it was just ignored last year. I think the question is more pertinent now than it was a year ago, and I think we are entitled to ask that the Government should answer that question, because it must be answered. If it is not, well then I think there is little prospect of dealing successfully with what is a crucial problem at the present moment: The best use of our manpower at the present juncture.

The next proviso to which I wish to refer is that “price increases must be curbed”. The State President in his speech referred to the beginning of demand inflation and the necessity for curbing it. He said that if it was necessary direct control measures would be introduced to prevent extraordinary and unjustified price and wage increases. Well, the whole country is waiting to see what the Government meant by that statement. There have been dark hints as to what is intended, but it is a statement that may mean anything, and I think the sooner the Government clarifies its own mind and that of the country and tells us exactly what steps it proposed to take in the light of that statement, the better it would be for everybody concerned.

Meanwhile the cost of living continues to rise. In recent months it has tended to rise more rapidly and wage demands are multiplying. The Government is resisting wage demands from bodies of public servants. That kind of demand can be dealt with, in any rate can be negotiated about. But as far as the private sector is concerned, I want to tell the hon. Minister, if he does not know it, that the private sector is meeting these demands every day. There are many members in this House who are employers and they will agree with me that not a month goes by that they are not having to increase the salaries and the wages of one or other employee or one or other group of employees in order to retain their services where as a result of the existing shortage better pay is offered elsewhere. That is going on without any wage agreements between employer and employee. Food prices went up last year by nearly 10 per cent. The over-all cost of living went up by over 4 per cent. Other members on this side of the House will deal more fully with these trends.

The question is: Why are we in this position to-day? It seems to me that it all started in 1962. You will remember that in August 1962 the Government suddenly decided, after a year of thinking over the matter, that systematic economic planning was desirable. As we see now, immediately after they decided that this economic planning was necessary in order to check bottle-necks that might occur, immediately after that, in October 1962 the Government issued a clarion call to the country to start spending. On 15 October the Government through its spokesman, the Minister of Economic Affairs, gave a Press interview. The gist of it was that the country must start spending, and the next morning the Press all over the country, English and Afrikaans had headlines like this: “Spend now to start the boom.” Dr. Diederichs said that South Africa’s economy would boom in spite of any United Nations trade boycott and so on. All that was required, he said, to set the boom in action and to get the millions of rand in banks and building societies moving, was a willingness to spend by everyone, the big industrialist to the man in the street. If the public can afford it, he said, they should buy now, and they should buy South African. Those who intended building houses should also build now. Then he went on talking about other things and he ended up by saying—

And then the cream is this—

Why do you not rather tell us about all the unemployment you prophesied?

Talk about chickens

coming home to roost, Mr. Speaker. Did not the hon. Minister, or his Government, when he gave that interview, foresee or consider what would happen if the public took him at his word, which they did? Let us consider the position. Just over two years ago, the hon. Minister appealed to us to help the building industry. Two years later interest rates for those people who followed his advice and who borrowed money at 6 per cent to build have now gone up to 7 and 7½ per cent. The cost of building has nearly doubled. Rents soared in sympathy. Building control has been re-imposed. We hear talk of the freezing of wages. We are being appealed to to save more. That has happened within two years, all the result of the country taking the Government’s advice in 1962, advice which was given without proper forethought and without proper planning. The hon. the Minister who is a most pleasant person, said: “Help yourself boys!” The boys did help themselves and as a consequence the country’s economy has become unbalanced, and the Government is scratching its head as to what on earth to do about it. You have this extraordinary paradoxical situation: The country is prosperous, the Minister will have a dropsical surplus again this year, I suppose; the economy is expanding—we are told the rate of expansion was about 6.7 last year, which is very high, and yet, Sir, in spite of all that, we are threatened with almost wartime restrictions, all due to a lack of forward planning by the Government.

I have never seen a man so sad about prosperity.

It is the hon. member for Vereeniging (Mr. B. Coetzee) who does not believe in prosperity. He is the gentleman who told this House that if you gave people more money than they needed for the bare necessities of life, they would only waste and spend it.

Why do you not repeat what I did say? Do you now agree with me?

A propos of what the hon. member for Vereeniging is saying, we have a further paradox; we have the paradox that many large sections of the population, many thousands of whom are in the hon. member for Vereeniging’s constituency …

They have never been happier.

They have not alone not benefited by the boom, but they have actually suffered by it. I know it is no good talking to the hon. member for Vereeniging who is quite incorrigible, but I would appeal to all responsible members in this House who are really seriously concerned about the problems of the country. I do not want to anticipate the Budget in any way, but I would say this: Let us remember that hundreds of thousands of people during the last 12 months have found their money buying less and less, people who for the most part cannot afford many luxuries even at the best of times and who are now getting to the stage where they even find it difficult to buy the necessities of life, bare necessities. I wonder if the hon. member for Vereeniging has any idea of how many people in his constituency cannot afford to buy meat more than once a week? He might make inquiries.

Absolute nonsense!

Sir, we have pleaded these people’s case repeatedly. The hon. Minister has turned a very nearly deaf ear to our pleas. We pleaded their case last year and I hope the Minister will listen this time. In regard to the rising cost of living and inflation, price-rising, or whatever you want to call it, the hon. Minister is facing a two-fold problem. He is faced with its effect on the whole cost structure of the country, the effect on prices, on personal savings, the effect on our export trade; quite obviously if the cost structure does increase, as it is increasing at the moment, our export trade becomes less competitive, unless the Government increases its subsidies, and on the other hand the hon. Minister has a special duty to protect the lower income groups, the pensioners, people with small fixed incomes, from a steadily lowering standard of living due to the erosion of the value of their money. That is his twofold problem. I would be the last person to minimize the very heavy task which this Minister has to perform. So, Sir, the purpose of my amendment is first of all to show that a problem such as manpower shortage should have been foreseen by the Government before it unleashed the whole country into a boom. Secondly, that it was only at the end of 1961 that it realized the necessity of systematic economic planning, and thirdly, that in the violent economic upsurge that has taken place since 1962, it is inevitable that a certain rise in the cost-of-living took place, and that the Government has inflicted unnecessary hardships on large sections of the population by neglecting their appeal for protection and for relief in the circumstances over which they had no control.

The hon. member for Constantia (Mr. Waterson) is the same person, unless I am mistaken, who only three years ago, and even more recently, told the House that as long as the National Party was in power and as long as we had an apartheid government there would never be any opportunity for progress in South Africa. He predicted poverty and unemployment in the country. He has stood up here to-day and has told us that there is so much prosperity in the country that we do not know what to do with it! He makes me think of the farmer who always complained so vociferously about how badly things were going with him. One year when he had had a really good crop, and somebody pointed out to him that this was indeed the case, he said: “Yes, but just think how such a heavy crop is exhausting my soil”! And he added: “And just think how the heavy rains have caused my iron poles to rust under the ground”! That is the mentality revealed by that hon. member.

The hon. member spoke about planning, in connection with which the hon. the Minister of Planning has published a document which we have not yet received. I am as sorry as the hon. member is that we have not yet received it because the hon. the Minister gave instructions a few weeks ago that this document should be sent to Members of Parliament. I myself am sorry that we have not yet received it. I should prefer to discuss this matter in more detail once we have all had the opportunity of studying that document.

The hon. member has told us that it is now being said that we must concentrate upon a 5½ per cent annual growth, but that we must also comply with certain requirements; for example, we must ensure that not too much money leaves the country. He also told us that we already have a difficulty to overcome because last year an amount of R122,000,000 left the country. This was our unfavourable balance. But if the hon. member had read the document—I have not yet studied it; I have merely noticed one or two points in it—he would have realized that this document states very clearly that if there is a growth in excess of 5½ per cent, one runs a risk whereby one’s foreign exchange position may deteriorate and deteriorate rapidly. Over the past year or two we have had a growth of from 8 per cent to 10 per cent. This is far more than per cent and therefore it is to be expected that our foreign exchange position would have deteriorated. This is in complete conformity with what appears in the document. If this growth is stabilized at 5½ per cent per annum, we will not have the problem which he has pointed out to us because it will disappear of itself.

The hon. member spoke about the manpower shortage. I was surprised to hear him speak about the manpower shortage because he expected a manpower surplus, a permanent one, as long as we were in government.

The hon. member went on to say that we cannot build sufficient houses to accommodate 20,000 immigrants. I say that at the scale at which we are building now we will be able to accommodate more than 20,000 immigrants per annum, considerably more. I want the hon. member to look for a moment at the building industry in the country. It is far busier than he realizes. The hon. member says that we will have to budget for less in this regard because we do not have the necessary labour forces. We agree that the growth at the moment is from 8 per cent to 10 per cent per annum and according to the plan which has been set out in this document, we must stabilize it at 5½ per cent. According to the plan therefore it will decrease of itself so it was not necessary for the hon. member to raise that matter here. I say that the hon. member gives one the impression that he is very sorry that things are going so well with South Africa. I think he would have preferred conditions to have developed in conformity with his predictions over the past few years. That would have suited him because then he would have had something to criticize. Mr. Speaker, during the past 16 years the hon. member has forgotten completely the meaning of praise. He cannot praise the Government; that is beyond his capabilities. Under present-day conditions one cannot on the other hand make a speech about conditions in the country without praising the Government. One need only look at the Argus of yesterday in order to have a word picture of conditions in the country. What do we find there? The report deals with the latest monthly report of the Bureau of Statistics and states, inter alia—

They go on to give other figures all of which I do not want to mention; an increase of 8.7 per cent in wool production in comparison with the previous year; an increase of 11.5 per cent in iron ore and 4.5 per cent in coal production. Then they deal with building plans and they say that in December there was an increase of 63.3 per cent in building plans over the figure for December of the previous year; the Railways conveyed 7 per cent more goods than during the previous year; the retail turnover was 10.3 per cent higher than during the previous year; unemployment dropped by 69 per cent. In other words, there was virtually no unemployment. Notwithstanding the fact that money became tighter and dividends rose, the prices of industrial shares rose by 13.4 per cent. As far as exports were concerned, there was an increase of only 4.3 per cent, and here I want to mention that there was at the same time an increased local consumption because the public of South Africa themselves enjoy what is produced here instead of those products being exported to other countries. Consumers’ prices rose by 4.1 per cent and wholesale prices by 4¼ per cent. That is the picture that is painted for us here. We have reached this position, as they say here, “with a tremendous amount of growth yet to come”, notwithstanding the fact that we have had this prosperity now for three and a half years—conditions which one could call boom conditions. [Interjection.] For some years now we have had a position of full employment in South Africa and notwithstanding this fact we have had a tremendous growth in our economy over the past 6 months and that growth has resulted in the fact that a bottleneck has occurred in our economy. No person can deny the fact that bottlenecks have occurred over the past few months, but I want to say this: No country has ever enjoyed boom conditions during which bottlenecks have not arisen. In England the average period of upsurge is 18 months and then bottlenecks occur again. At that stage they have to reconsolidate. We have been experiencing these conditions for more than 3 years now and they are continuing. We are removing those bottlenecks. As a result of these conditions, there was a curtailment in the liquidity sphere of the banks after June, when we already had more than full employment. The position of the banks was that their liquidity was 44 per cent a year ago and in December it was slightly more than 30 per cent. The liquidity position deteriorated and a curb had of necessity to be imposed on finances. But this was to be expected because our tempo of growth has been abnormally high. I am pleased that the planning which has been submitted to us mentions the figure of 5½ per cent, we cannot maintain a swifter growth than this on a long-term basis without bottlenecks. The inflationary tendency is not so strong, notwithstanding these bottlenecks. The increase in consumer prices has only been 4.1 per cent over the past year and this appears to me to be quite normal.

But there is one respect in which this growth does not appear to me to have been too healthy. This is a matter which I raised here last year. The hon. the Minister of Finance will remember that I asked him whether the provisions of the Usuary Act should not be applied to hire-purchase transactions or similar transactions of that nature. He said that he would investigate the matter and see what could be done. I am very pleased that the hon. the Minister has made a statement here this afternoon in connection with interest rates which financial bodies may pay on funds which they in their turn make available for loans. But I feel that that step alone does not cover the whole field of our difficulty, and I should like to sketch that field this afternoon.

There are certain institutions which concentrate more specifically upon hire-purchase transactions and personal loans, such as those which the Standard Bank brought into operation last year in terms of which a person can obtain a personal loan and repay that loan by instalments. This money is loaned at a very high rate of interest and that rate of interest enables these institutions to pay a far higher rate of interest to a depositor than another institution can afford to pay. They also make the public pay far more than they ought to pay for the money they borrow. Let me tell the House what happens.

The first thing these institutions do is to borrow money from the public, and they then lend this money to borrowers again. They tell a borrower that he will have to pay, let us say, 10 per cent on his loan which must be repaid over 24 months; in other words, he must pay 24 monthly instalments of l/24th of the amount plus interest. But they calculate the interest on the full amount over the full period of 24 months.

Do you say that the Standard Bank does this sort of thing?

I do not know what the practice of the Standard Bank is in this regard; I am speaking about the general practice on the part of these institutions. But I am informed that the Standard Bank has also operated in this way. Now, what does this mean? I want to take the figure of 10 per cent because it is a round figure. It means that the institution is not asking 10 per cent; if one works it out, one finds that it is asking about 20 per cent in interest. I have taken one case at random and worked it out. I want to point out the loophole in the Usuary Act in this regard. I have worked out one case of a loan of R2,400 repayable over 24 months at R120 per month. A borrower would repay R2,880 while at 10 per cent that amount should be R2,650. The interest rate is an effective 19.5 per cent, while on the document one signs it is only given as 10 per cent. Let me take another case. I have taken 16 cases at random, perused the contracts and worked out the figures. These are all loans repayable over 24 months. The average interest rate is 10.714 per cent, according to the contract, but the actual interest which a person pays is 20.63 per cent. I have omitted a further point which I have not even brought into my calculations and that is the finance charges which are required to be paid. They say that the finance charges do not form part of the interest and in this way they evade the provisions of the Usuary Act on this point. The position becomes even worse when one borrows a sum of money over, let us say, two years and, after three months, one has the money to repay that loan. I have here a particular case which happened recently. The interest which this man had to pay amounted to 47 per cent per annum! He repaid his loan of R1,000 after three months and he had to repay an amount of R1,120.

Mr. Speaker, not only do these undertakings receive high rates of interest but they receive interest on the same money from more than one person over the same period. This makes it so much easier for them to pay high interest rates to the public because they are lending that money to a number of people at the same time. Let me explain how this is done. One borrows money and repays it over 24 months. The institution receives an instalment after the first month and for the remaining 23 months it continues to receive interest on that amount from the borrower. The institution immediately lends the amount repaid to another person. That person pays his instalment at the end of the first month but he continues to pay interest on that amount for the full period of 24 months. The whole thing has a cumulative effect and theoretically, these institutions can receive 24 times the interest on the same amount over 24 months.

When one considers this matter, one cannot but feel that there is something gravely wrong and that this system operates in a manner which can disrupt our entire economic structure. The hon. the Minister was quite right when he called it a war which was being waged, because it is a war. But one cannot win that war simply by means of the measures mentioned by the hon. the Minister. I want to ask him to give his earnest attention to this matter, apart from the measures which he has already taken. I want to suggest that the Reserve Bank be given the power to be able to fix maximum rates of interest on deposits, and I am very pleased that the hon. the Minister has announced this step. This is the first step, but a second, third and fourth steps are necessary. The second step is this: It is contended that the money advanced on behalf of a person under a hire-purchase contract is not a loan and that therefore it does not fall under the Usuary Act. If it is not a loan, then I say that we must make it a loan in terms of that Act. I have the Usuary Act here. I think that we could insert a definition of “loan” in Section 1 which will cover the matter. All we need is a provision whereby all forms of loans will fall under the Usuary Act. That is the one step which I think must be taken.

The next step is that the Usury Act itself has a defect which must be remedied. The Act states that on a financial loan a moneylender may not demand or receive interest from a borrower at a rate of more than 12 per cent per annum when the total sum borrowed exceeds the sum of £50. In other words, one can demand 12 per cent when the loan is R100 or more but the Act does not provide that one can only make that money available for loan at a maximum of 12 per cent on the outstanding balance. What is the result of this? It is that one may lend it at an effective rate of interest not of 12 per cent but of 23.4 per cent. I say that it was never the intention of the Act to permit such a high rate of interest.

That is poor administration.

It is still a law which originated in your time.

One can rectify the matter simply by providing that the rate of interest must be 12 per cent per annum, calculated on the outstanding balance from month to month. If that is done, the matter will be rectified.

There is of course another facter—the so-called finance charges which are added. They can say: We are increasing it in order to make up for any loss of interest but we are still complying with the provisions of the Usuary Act. This sort of thing must be prevented at all costs. I want to suggest here that a further provision be inserted in the Usuary Act to provide that finance charges be calculated as part of the interest for the purposes of the Usuary Act. If this is done, we will close these loopholes and then action can be taken to prevent this exploitation which is going on in the country to-day. Mr. Speaker, I think that I have put this matter as briefly and succinctly as possible.

I have one or two further remarks to make about the economy of the country. The hon. member for Constantia referred to the speech which the hon. Prime Minister made the other day in connection with wage increases. He said that the hon. the Prime Minister gave the impression that wages should be pegged. I did not gain the impression that the hon. the Prime Minister was advocating wage-pegging. The hon. the Prime Minister is too realistic to advocate anything of that nature. The Government itself granted a considerable increase to railway workers in October last year in the form of a vacation bonus. The police were given a good increase in January of this year—those in the lower income group. I do not think that it was the hon. the Prime Minister’s intention to advocate wage-pegging. Last year the hon. the Minister of Social Welfare and Pensions promised that we could expect a new deal this year for our old people and civil pensioners. These are all matters held out in prospect and matters for which we expect provision to be made in the Estimates. This is not expenditure that will promote inflation; we have not experienced difficulty with and we have not granted these deliberate and organized increases to the salaried people. If they see that their employers are making a very big profit, the salaried workers have the right to say that they also want something extra. The fault lies with the factories and the dealers. I have always thought that there is competition in the furniture industry, for example, but I read in the newspaper that last year all the furniture manufacturers in the Cape came together and decided to increase all factory prices by 10 per cent. This was not something which had to be done; a group of people simply came together and said that they were going to increase prices. We noticed last week that the people in the liquor trade said that they were going to increase the price of liquor by 15 cents per bottle. That sort of thing the worker sees, and he says to himself: My place of employment showed great profits this year so I also want an increase in salary. He notices that the prices of industrial shares have risen by 13.4 per cent over the past year. He sees his employer becoming rich and he wonders why he cannot share in it.

When we give due consideration to this matter we feel that the first thing to be done is that the Government should start with the producer and the middleman. The worker must not be expected to bear the burden of preventing inflation on his own; the people who produce these goods must be prepared to make a little less profit and they must stop acting in an organized way in order to increase prices. We will then have stability in our economy and we will be able to curb inflation without hurting the small man. But we cannot simply allow the income of everyone to increase and ignore the salaried man. I agree that we must try to stabilize matters and that wage increases must be avoided as far as possible. But we must not simply try to avoid wage increases; the person who makes really large profits must also be curbed.

Mr. Speaker, it is a refreshing change to find a front-bencher on the opposite side supporting our amendment. His criticism of the effect of the spiralling rates of interest and costs has, I think, supported the remarks made by the hon. member for Constantia (Mr. Waterson). But the hon. member. in his remarks about the Government’s plan, omitted to say that the 5½ per cent growth predicted was based on the assumption that the bottle-neck would be removed. It is essential that if that vital 5½ per cent growth is to be maintained, the bottle-necks must be removed. Last year the Minister warned the country against the dangers of inflation and told us that the Government was watching the position. I submit that the Minister has done nothing or very little, since last year except to watch the situation. Inflation is here and any salaried man or pensioner or wage-earner will tell the Minister that his cost of living has gone up. But I want to deal particularly with one commodity over which the Minister has some control, and that is the cost of money. Is the Minister satisfied with the rapid growth of credit over the last year? I draw the Minister’s attention to an article which appeared in last night’s Argus, and which said the following—

Now this afternoon the Minister has given an indication that he appreciates the position and he has issued a warning. Is he satisfied with the rate offered by the commercial banks, namely 6 per cent, on 12 months—fixed deposits. We see the creation of credit and the increase of interest rates to the extent where one building society is now charging 7½ per cent and most of the others are charging 7 per cent. Interest charges on furniture and similar articles have gone up, and I am ably supported in that by the hon. member for Pretoria (Central) (Mr. van den Heever). A house costing some R6,000 involves the salaried man in R420 in interest charges alone at the rate of 7 per cent, without even counting capital redemption, and he cannot get much for R6,000. The question is whether the Minister will allow money rates to spiral, or does he intend to put the brake on? The Minister has indicated this afternoon that he has issued a warning that he would put the brake on. Does he think that a warning is enough? Does the Minister agree with the Financial Times of January this year, when it said this—

Those remarks were made by the Financial Times in January. Does the Minister agree with them, or does he think that the measure of discipline which he intends to introduce is just the warning he has given this afternoon? We should like to know whether the Minister intends to act, or is he satisfied just to give a warning? Because one of our criticisms of the Minister is that he is hesitant to act, and we fear that he may act too late. I submit that high cost economy is not anti-inflationary, and the Minister has failed to follow his own advice. I would remind him of his last Budget, when he said this—

Those are very fine words, Sir, but what has the Minister done in the way of positive action to achieve these ideals he set before us in the last Budget speech? The Governor of the Reserve Bank in his statement in October of last year said this—

Those are very fine words by the Governor of the Reserve Bank, but can we see avaricious profit-makers accepting the advice of the Reserve Bank, or must we ask the Minister of Finance to take some control of the money market? I think the Minister’s warning this afternoon may have some effect, but I suggest that the Minister should take advantage of this because I suggest that things are getting out of hand. The indication of this vast amount of credit that has been created and the inflationary position which obtains in the country is affecting the man least able to bear the burden, namely the ordinary working man, the pensioner and the person with a fixed income. We have found repeatedly when we have pleaded for these people that the Government turns a deaf ear. The advice the Minister gives now is the direct opposite of the advice given by the Minister of Economic Affairs, as quoted by the hon. member for Constantia. Does the Minister now counsel caution? Does he counsel restraint in borrowing? Does he counsel deterrents on spending on essential goods? The Prime Minister the other day counselled caution so far as the wage-earner is concerned. He suggested to them that they should not ask for higher wages but that they should make sacrifices. Sir, how dare the Prime Minister get up in this House and ask the ordinary man to make sacrifices and to bear the burden for the whole country? It seems to me that much of our inflation has been caused because too much money has been chasing too few jobs. The manpower situation is aggravated by money spent on non-essentials, and this drains away manpower needed for essentials. I am sorry the Minister of Defence is not here, because last year we passed a Bill giving him certain powers in regard to defence requirements. The hon. member for Constantia has already referred to the manpower taken up in producing the requirements of the Defence Department. I would like to know from the Minister of Finance whether his colleague the Minister of Defence has taken any steps to introduce cost control and efficiency in so far as the production of defence items is concerned. The Minister of Defence admitted last year that the cost of defence requirements had spiralled, and I would like to know from the Minister whether any control has been introduced. It seems to me that the key economic question in South Africa to-day is how to maintain rapid growth in 1965 with price stability. It is interesting to find that the Federated Chamber of Industries conducted a survey recently when industrialists all over South Africa were asked what they thought 1965 would hold. Their estimate was that the market demand for their products would increase by 13 per cent. That is for the internal market. But at the same time they expect their exports to rise by less than 2 per cent. But the question is whether the carrying capacity will be there? One factor which is militating against the development of our export market is increased costs, and part of the increased costs are due to increased transport costs, largely due to transport delays, which are a continual worry and a burden to industrialists throughout the country. I wish to give an example: a manufacturer in Durban in the clothing industry last year required certain raw materials. He placed one order for raw material with a firm on the Reef and he placed an order for similar material with a firm in Japan. The material from the Reef arrived 21 days after being placed on rail in Johannesburg, while the goods from Japan were received in his factory after having been shipped from Japan. That is the kind of experience industrialists are having. Another example concerns the Ixopo district, where the Railways to-day are refusing to load timber. The Railways have told the timber-growers in my constituency that they cannot accept all the timber offered for transport, and they must take it by road. This leads to increased costs, which have to be borne by the public, and those costs affect the export price.

The Government has indicated, and there were hints in the Prime Minister’s speech, that they want to peg wages. I want to put this specific question to the Minister of Finance. Is it the intention of the Government to peg the salaries and wages of civil servants? There were hints in the hon. the Prime Minister’s speech that they intended to control the rise in wages. I want to put a specific question to the hon. the Minister of Finance. Is it the intention of the Government to peg the wages and salaries of the civil servants? And if it is the intention of the Government to peg the wages and salaries of civil servants, is it the intention to peg other wages and salaries? Is it intended to peg profits or to peg interest? Is it the intention of the Government to invoke the machinery of the Price Control Act? You see, Sir, once there is a hint about pegging wages—and the Prime Minister has suggested that people will have to make sacrifices—where does it stop? We have people complaining in to-day’s Press about the increase in the price of brandy. I am not a brandy drinker so the increase does not worry me very much. Is it the intention of the Minister to invoke the machinery of the Price Control Act as far as liquor is concerned? It is all very well for the hon. the Prime Minister to make these pious calls on the people—his people, as he calls them—to make sacrifices.

Who talked about pegging wages? You are talking nonsense.

What did he say then?

The hon. the Prime Minister said quite clearly—

He does not talk there about pegging wages.

They do not understand Afrikaans.

That member does not even understand English.

It is quite clear that the Prime Minister was calling upon people to make sacrifices as far as wages were concerned. Sir, if it is not the intention to peg the wages of civil servants I hope the Minister will encourage his colleague, the Minister of Posts and Telegraphs to allay the anxiety of all the postal workers and that he will also tell the Minister of Railways to ease the worries of the railway employees.

Sir, this is a small Budget day and this concerns the finances of the country, and the Minister has been called upon to answer certain questions and we expect answers. It is all very well for the Prime Minister to call upon people to make sacrifices. We want an answer from the Minister of Finance …

The Provincial election.

… we do not want him to skate over this issue by saying “Provincial elections”. We want him to answer our questions. Sir, I can assure the Minister that the suggestion to peg wages at various levels is not the ultimate answer. The only way to resolve this difficulty is to increase productivity, to cut out unessential work, to train manpower at all levels, to increase the efficiency of all labour in order to make it more productive, to embark on a vigorous State-aided immigration scheme, and thus ensure that there is greater productivity than there is at the present time. Sir, I have dealt very briefly with the short-term remedies, but when considering long-term remedies I want to refer to the Government’s proposals as set out in this economic development programme which has already been referred to by the hon. member for Constantia (Mr. Waterson) and the hon. member for Pretoria (Central) (Mr. van Heerden). I want to refer the Minister to page 77. It is quite impossible to go through the whole report, but I want to draw the Minister’s attention to this: We are considering the question of spiralling costs and long-term remedies. On page 77, under the caption “Bantu”, it is stated—

Is that the object of Border industries? Is the object of Border industries that the Bantu can be trained to become entrepreneurs and key workers in their own areas in time? Sir, this is a disturbing suggestion. Is it the function of the Border industries to be used as a training ground for Bantu entrepreneurs and key workers? Does the industrialist who is asked to establish his industry in the Border areas do so with the knowledge that his employees will only be there for a short time and that the ultimate object of the Government is to see that they go into the Bantu areas as entrepreneurs, in competition with the owners of industries in the Border areas. Is their wage structure, their cost structure to be higher or lower than in the White areas? If higher, then how are they to subsist without Government assistance? If they are to be lower, what happens to the White entrepreneurs in the White Border areas? At present the taxpayer is indirectly subsidizing Border industries as the cost of establishment is done on a preferential basis. I have here a list of the concessions to Border industries, as published in the latest report of the Industrial Development Corporation. Sir, I do not criticize the I.D.C.; they are carrying out Government policy. But these are some of the concessions which are given to Border industries, “the cost of power may be subsidized in selected areas; supplying the authorities with lower tariffs”. If they are supplying them with lower tariffs surely their competitors elsewhere have to pay higher tariffs—

Loan funds at an interest rate of 1½ per cent lower in Border areas than elsewhere—

Sir, this is a summary—

Sir, long-term the whole of this has to be carried by the taxpayer of this country. These higher costs connected with the establishment of these industries have to be carried and here we have the Minister telling us that long-term industry must plan for growth, but how can industry plan for long-term growth if it knows that in the Border areas they are going to compete with labour paid at a lower rate and that ultimately that labour will go to the Bantu areas where Bantu entrepreneurs will compete with the White industrialists. Sir, I submit that the Government and the Minister particularly have a great deal to answer for as far as economic planning for this country is concerned. The economic plans which we have seen so far give us no reason to have confidence in the future of this country. The Minister has told us that he expects growth and that he expects stability. He has admitted this afternoon that the interest position has got out of hand and he has issued a warning. The hon. member for Pretoria (Central) admits that the interest pattern has got out of hand, and in fact he supports our amendment by criticizing the interest pattern. All over the country people who have fixed incomes are concerned about the increase in the cost of living. All over the country people with fixed incomes are concerned about the reduction in the purchasing power of the rand, and we have this strange position that in boom conditions we have high interest rates, we have competition for money, we have advertising for money, we have extensive credit being created, and at the same time we have the Minister issuing a warning, as he has done this afternoon, about the necessity for taking steps. The Minister has piously enjoined us to maintain growth and stability whereas the Government’s policy, I submit, is limiting growth and endangering stability.

I listened very attentively to the hon. members for Constantia (Mr. Waterson) and Pinetown (Mr. Hopewell). The hon. member for Pinetown made a major point of the preferences granted to border industries. I just want to tell him this. He should not now be sorry about the preferences granted to them, because that is the price we have to pay for the preservation both of the Whites and the Black people. That is the alternative we offer, so that Black people should not live in slums among the Whites as happened in the past under the United Party policy. That is the price we have to pay and we are prepared to pay it. That is all I want to say about this subject.

I notice, as far as both speakers are concerned, that they do not really understand, or want to understand, the essence of the country’s economy at this stage, and therefore they both made speeches which they might have been able to make in five years’ time if the measures effected by the Government to-day against a threatening inflation had proved to be unsuccessful. They immediately accept that these measures which the Government will apply will fail. They even go as far as to say that the Government has done nothing. They allege that the measures the Government is still going to apply are doomed, and they make their speeches on that premise.

I regret that I cannot-follow the hon. member on that basis. I would rather rely on the opinions of people who know something about this subject. The first one I wish to mention is the Reserve Bank itself. I quote from the Quarterly of the Reserve Bank, December 1964, the first paragraph on the first page (translation)—

That is a very important point to bear in mind at this time when we judge of the economy of the country. I make bold to say, in spite of what has been said on both sides of the House, that we are not experiencing a general inflation at all yet, and again I rely on the Reserve Bank. I again quote from the same publication, point 6 on the same page (translation)—

We are not in it yet; it is only beginning. But the Reserve Bank says this with great caution. A little further on, on page 8 of the same publication, it says—

Therefore I make bold to say that what has been held out in prospect to-day by the hon. the Minister of Finance is not because we are in difficulties now but because he foresees, like a wise and sober father of a family, that it may perhaps be necessary to do something in future.

The hon. member for Constantia and also the hon. the Leader of the Opposition mentioned during the no-confidence debate that the cost-of-living index had risen so much, and from that they inferred that we were living in an inflationary period. If we look at that cost-of-living index and analyze it, we will know what we are talking about. Let us do so. If we take the basis of 1958 as 100, then we find that there was a constant rise of 1 per cent per annum from 1958 to 1963. That is normal. But we find that in the first nine months of 1964 there was a rise of 2.08. That is not an extraordinary rise. When we study that figure and see how it is constituted we arrive at a very surprising result; we find that in the case of food (one of the components constituting the cost-of-living index) there was a rise of 3.42 in those nine months of 1964. Well, that is abnormal. The previous year it was still 1.1. But when we study the same components of food, we find another bit of surprising information. We find that the only two components which rose in price are meat and dairy products. The price of meat, as we all know—and if we do not know it we need only ask our wives—increased as the result of climatic conditions.

No.

Of course. Perhaps they always have rain in Natal. Perhaps it is so “wet” there now that the hon. member does not feel at home there. The other component is dairy products, and those prices rose, but why? Because it is the policy of the Government to increase the prices of dairy products. That was done because all of us, including the hon. the Leader of the Opposition, asked for it last year. I must say that this is an important component of the cost of living. The proportion allocated for food in the calculations by the Department of Census and Statistics is 28 per cent. That is fairly high. When we come to domestic requirements, in regard to which the hon. member for Pinetown made a major point, we find that the increased cost to the householders was only 1.1 per cent. That is normal. The increase during the previous year as compared with the year before, i.e. between 1962 and 1963, was 2 per cent. Last year the hon. member for Pinetown did not notice that. And do you know why not? Simply because last year there was no provincial election in the offing, and because he knows that every person must have a house.

When we look at the other components, it is absolutely ridiculous to allege that the price index indicates a general inflationary tendency. Take fuel and light. There we had an increase of 1.1; but what weight is given to fuel and light in the index figure? It is only 2.6 per cent—not even 3 per cent. It is a mere bagatelle in the expenditure of the householder. When we look at these figures and find that it is only food which increased extraordinarily in price, I should like to know from hon. members opposite whether they are in favour of the Government effecting measures to reduce the prices of agricultural products. I should like to know what the hon. member for Drakensberg (Mrs. S. M. van Niekerk) has to say about that.

Sir, in the case of transport, which is a fairly important item in the budget of the ordinary man, there was an increase of only .7 per cent between 1963 and 1964. The weight given to that is 11 per cent, which is not very much, but is in fact important. As compared with the previous year there was a much greater increase. Then it was 1.8, i.e. 1 per cent more than now, but then hon. members of the Opposition did not talk about it, probably because they had not studied the index figure. What is most interesting of all is this, that when we come to the index figure and the components, in the case of clothes and footwear we find that there was actually a decrease on the figure for 1958. In 1958 it was 100 and in 1964 it was 99.1.

I therefore make bold to say that when the hon. the Minister of Finance speaks about inflationary tendencies he speaks only of tendencies and, of course, as a wise Minister of Finance and a good father, he will think of the measures which may have to be effected.

That brings me to the point made by the hon. members for Constantia and Pinelands, that the Government has done nothing. The fact that the Reserve Bank rate was increased from 4 per cent to 4½ per cent has had far-reaching effects on the economy of the country. Firstly, the bank itself has adopted a restrictive attitude in regard to the re-discounting of bills. That immediately reduces the amount of money chasing the goods, and it must necessarily limit an increase in prices. The hon. the Minister knows that, and he also knows why he does it, because if we look at the capital expenditure of the country we find a capital expenditure of over R300,000,000 in respect of buildings, almost one-third of what the Orange River Scheme will cost us over a period of over 30 years.

When one has incurred such a large capital expenditure the rate of interest must rise at some time or other—and then I am not even referring to the capital investments in the mines and similar industries. When I refer to mines I have in mind coal, which the hon. member for Constantia emphasized so much out of that big book from which he quoted and which we would all like to have; I also have in mind iron production, particularly the production of cast iron, and I also have in mind all the other investments in the mining industry, all long-term investments. That must result in the rate of interest rising, and that is what happened. But he says the hon. the Minister has done nothing. He did not study the statistics to see to what extent the Treasury has withdrawn liquid funds from the ordinary money market by not allowing it to remain with the banks, but with the Reserve Bank. The credits which the Treasury has with the banks were reduced and deposits with the Reserve Bank were increased. But there are still many other things the Government can do, and not only the Minister of Finance. The Minister of Economic Affairs can also do something.

Last year already he made his move in order to be able to do it. Last year already he said that he would do it, because this is a good Government, Sir; it knows what it is doing. The hon. the Minister of Economic Affairs can export a large part of the inflation, if it comes one day. He can adopt a less restrictive attitude towards the imports of goods. If a lot of money chases too few goods, he will reduce prices if he brings more goods on to the market; i.e. if the demand is complied with to a greater extent. The question is only whether our foreign currency position can bear it. The hon. the Minister said last year already that it was difficult to determine that, but the pattern we have seen just recently makes it quite clear that he can relax import control. He has already done so, and he can do so to an increasing extent.

There are other things which the Minister of Economic Affairs can do, and last year already he adopted measures. I refer to the institution of price control. I do not think that price control is a good means of combating inflation, but as a short-term measure to frighten many people, who really want to derive profit from this period of high conjuncture, it is an excellent measure. We passed an Act last year giving the Minister of Economic Affairs such powers.

There is still another thing we can do. We can resist demand for wage increases. I want to give the assurance that if the Government were to resist wage increases outside—it does not matter in what industry or in what section of commercial life it is—it will be the Opposition who will voice the first objection to such a step. They want to have the best of all worlds. In the first place, they do not want the Government to apply measures to prevent inflation, but they do want to have the privilege of reproaching the Government if it applies measures to ensure that there cannot be inflation. Well, this is perhaps talking politics, but I do question the morality of it. There are other things that can also be done, and I think hon. members of the Opposition are beseeching the Government to take this step, namely to increase taxation! The fact is that a large section of the population which pays the taxation has not derived so much advantage from this period of high conjuncture in which we are living. There is, however, a very important section of our commercial people who have in fact derived advantage, and they have not passed it on, or at least, very little of it. When we look at the dividends paid by companies we find a surprising fact. We find that over the past ten years dividends have consistently increased, in some cases by as much as five or six times. I think that when it really comes to applying strict measures the hon. the Minister of Finance should look at that side of the picture also.

Finally, the Government can do something else. The Government can itself apply the brake to its capital expenditure. That is probably what the Opposition would also like us to do so that they can reproach us for proceeding more slowly with the Orange River project, and reproaches for not building the public buildings which the country urgently needs. That is what they would like. We may do that, but that does mean that it will be necessary to do so. We have already applied restrictive measures to the building industry; that ought to result in a saving of several millions, and as the result of that there should also be a reduced demand in the labour market. But hon. members opposite who have discussed this subject have this problem: They see that the Government intends to effect measures which will have a great measure of success in combating inflation. They foresee the possibility that their chances of criticizing the Government next year will be very small, and now they are in anticipation voicing that criticism for lack of better arguments.

I wish to move as a further amendment—

I move this amendment in order to enable the Government to declare in this House, once and for all, and with absolute clarity, what its policy is with regard to public entertainment performances being held before mixed audiences in the Cape Province. I think it is high time that an authoritative and coherent declaration of Government policy should be made in this House and not on a public platform. I think it is high time that the unfortunate incidents, like those that have taken place recently at the Luxurama Theatre at Cape Town, should be avoided. There is no gainsaying the fact that these unfortunate incidents have created a great deal of indignation on the part of a large section of our White population and, what is worse, a great deal of bitterness and frustration on the part of a large and responsible section of our Coloured population. Surely the Government realizes that incidents, such as our police removing three innocent children from a threatre, are incidents which are bringing our country into contumely and ridicule. Surely the Government realizes that the turning away of something like 200 responsible, decent, law-abiding, Coloured men and women from a theatre to which they were legally entitled to go—and I emphasize this—a theatre to which they were legally entitled to go, is something which should not be tolerated in a civilized country.

Mr. Speaker, as I say. these incidents have created a tremendous amount of consternation and indignation on the part of a very large section of our White population on the one hand, and a great deal of unnecessary bitterness on the part of our Coloured population, on the other. Sir, one can understand the resentment which these law-abiding citizens feel about this unwarranted action, this unwarranted action in their being turned away, without any prior warning, merely because of the colour of their skin. That was the only reason.

May I ask a question: Would the hon. member say there was no legal or statutory authority for turning those Coloured people away from the Luxurama theatre?

I can say immediately—and I shall deal with it more fully at a later stage—that there does not exist any legal ground whatsoever, on our Statute Book or under common law, on which these people were turned away. I say this absolutely advisedly and I challenge the hon. the Minister to produce any legal proof in this House justifying the action of having these people turned away.

As I was saying, without any prior warning, these people were turned away. I have spoken to several of these unfortunate Coloured people who were treated in this cavalier manner and I can assure the Government that it will take a long time for them to forget the indignity, the humiliation and the insult which was unnecessarily inflicted upon them. As though that was not bad enough for them to have been turned away from this theatre, to add insult to injury, these people had to wait outside the theatre for several hours before they were able to extricate their motor-cars from the parking areas, attached to the theatre, which had become jammed in. This unfortunate incident, was unfortunately reported in the overseas Press. This has resulted in our country once again being made a laughing stock. I say that the Government is entirely to blame for this most inept handling of a situation which could really have been avoided by a human approach and by a little common sense.

The hon. the Minister of the Interior, in one of his usual involved statements in this House, in response to a very simple request to make a statement to serve as a guiding principle for the future, made this statement. I am quoting from Hansard of 26 January 1965, col. 19. The hon. the Minister said this—

Then he goes on—

This was the answer which the hon. the Minister gave in his so-called guiding statement in regard to the policy for the future. In this case to which I am referring, in compliance with this so-called guiding statement by the hon. the Minister, a separate section of the hall, with separate entrances and with separate other facilities, was reserved for the non-White group. All necessary arrangements were made to eliminate friction between national groups. This theatre has been serving the White and non-White sections of the community for many, many months and there has not been a single instance of any friction between the two communities. The theatre concerned complied in every way with the principles enumerated by the hon. the Minister in his reply which I have now read. The theatre has complied with them in every possible respect. Yet we find that some 200 responsible Coloured citizens were treated in this undignified manner.

As a representative of the Coloured people in this House I wish to protest against this anti-humanism of Government policy, a policy which prohibits, merely because of the colour of their skin, decent, respectable and law-abiding citizens from attending public entertainments in the Cape which are attended, perhaps, by some less worthy White people. What moral justification, I ask, Sir, can there be for such a policy? I want to make a special appeal to our Cape Nationalists because this is a matter which affects the Cape. We in the Cape have always prided ourselves on the moral principles upon which our traditional outlook towards our Coloured citizens was founded. What has happened to those old Cape traditions? We have been submerged in recent years by politicians from the Transvaal, some of them unfortunately professional. [Interjections.] I am not saying this off the cuff, Sir. Chapter and verse can be produced. We have been submerged in recent years by these politicians from the Transvaal, some of whom are unfortunately professional politicians. They have virtually run rough-shod over everything which we in the Cape cherished, guarded and endeavoured to protect. Sir, the Cape has virtually been stripped of all moral principles. Our Cape Coloured citizens, who, hitherto, have lived in the closest harmony and friendship with their fellow White citizens have gradually been deprived of every human dignity. They have been stripped, not only of their political rights—I do not want to enter into a discussion on that to-day—but of their freedom to occupy their own traditional homes, of their freedom to work and to follow an occupation of their own choice, of their freedom to attend our normal universities in their own country and of many other rights and privileges. Now comes this stupid—I say “stupid”—policy of prohibiting them from attending any functions at which their fellow White South African citizens may be present. Sir, how far can this anti-humanism go? What more can these Transvaal politicians do, these Transvaal politicians who run this country, to our Coloured citizens? What further indignities and insults can they inflict upon those unfortunate human beings? How madder—I ask this seriously—can racialism in this country go? What crimes have these poor Coloured people committed other than being of the wrong colour? That is the only crime they have committed, namely, that they are of the wrong colour. I would ask the hon. Minister responsible for the Department who made this stupid error, to remember that but for the Grace of God he and I might have been in the position of these poor unfortunate Coloured people. How would he and I feel if such indignities and insults had been cast on us and our people. What has happened to our national conscience? Does the Government really think—and I want to use a term used by the hon. the Minister of Finance last session—that stupid acts of this sort are likely to make 5,000,000 hearts beat as one when the time comes, as well it may in the foreseeable future? Does the hon. Minister think that the expression of “5,000,000 hearts beating like one” is likely to come about if we continue to deal with the Coloured people in the way in which they are being dealt with? Does the hon. the Minister really think that his racialistic decrees—after all, they are only that—against the Coloured people will help to encourage them to join the Whites of this country in our fight against Communism? Does the Government consider that this anti-humanism against our Coloured citizens is likely to encourage our Coloured population to fight against the Black nationalism with which our country is being threatened? All these acts of petty apartheid can only widen the unfortunate gulf which already exists between the Whites and the Coloured people in this country. They can only exacerbate the feelings between the Whites and the Coloureds.

The point I wish to raise to-day is the very question that was put to me by many of these unfortunate Coloured men and women who were affected by this incident: They want to know, as indeed I want to know to-day, what law, either statutory or common law, have they contravened. In terms of what law were they treated in this most unseemly manner? I want the hon. the Minister, in the course of this debate, to tell us what law did they contravene—either statutory or common law—and what law justified his Department in acting in the manner in which it did? As I have mentioned to the hon. member who asked a question a few moments ago, I personally have spent much time in an endeavour to find out what law these Coloured citizens have contravened. I tried to ascertain by what legal authority the Department of the Interior acted in the manner in which it did. I would like the Government to explain to this House and to the country what justification it had for making this last-minute exclusion, without warning, of Coloured citizens from a theatre which stands in a predominantly non-White area and to which they had been permitted to go for many, many months; a theatre which, up to now, had been permitted to accommodate mixed audiences?

Sir, the Government must not shelter behind the statement which we have heard so often from the Minister and others, that they will not tolerate entertainers from abroad dictating to them the type of audience before whom they will appear. I agree, Sir, that it is quite wrong for any visiting artists to this country to dictate terms as to which audiences they will or will not appear before. I think that is quite wrong and I think the Government is quite right not to tolerate any such dictation on the part of visiting arists. But the incident which I have mentioned here today was not brought about by any dictation on the part of visiting artists. The Government cannot claim that the inept handling of this situation was in any way influenced by anything which was done or said by visiting artists. The artiste concerned at this particular show took no part whatsoever in determining whether she would appear before a White or non-White or a mixed audience. It was completely indifferent to her. This artiste made no claim at all in that regard. She laid down no conditions and certainly did not attempt to dictate to the Government. So the Government cannot shelter behind the statement that they will not tolerate any dictation on the part of visiting artists. It did not apply in this case. The theatre, as I pointed out, took every step to comply with the Minister’s requirements. I say the Minister has a duty to this House to explain this unfortunate incident which his Department allowed to take place. Apparently the Minister and his Department claim that performances before mixed audiences is contrary to the traditional policy of this country. What astounds most of us is who determines what the traditional policy is? Surely the term “traditional policy” is something that is derived from the custom which has prevailed in this country over many, many years. That is “traditional policy.” The custom which has obtained for many years becomes the traditional policy of the country. Surely it does not lie in the mouth of the Government or the Minister to declare what that traditional policy is.

It lies in your mouth.

No, it does not; it lies in the people’s mouth. And I say that in the case of the Cape the traditional policy was always to accept mixed audiences. I am referring only to the Cape. It does not lie in the mouth of any dictator, whether he be the Prime Minister or the Minister of the Interior, to lay down arbitrarily what the traditional policy of the Cape is. Our history speaks for itself. [Interjections.] Do not sidetrack this issue; we are dealing with a specific thing—mixed audiences. As I say, Sir, that tradition is determined by the customary habits of our citizens spread over generations and it is not for the hon. the Minister to declare what the Cape’s traditional policy is. Our traditions speak for themselves. I would say that those traditions, in so far as the Cape is concerned, never excluded Coloured people from public entertainment. From time immemorial we in the Cape never excluded our Coloured ratepayers from attending any public entertainment or functions held in any of our municipal halls. The hon. Minister knows that is correct. His Department knows that is correct. Our experience has proved that at no time have the Coloured people abused that right. They have never at any time obtruded themselves upon the White people present at any of these functions. They would invariably gather together in a section of the hall, often at the back of the hall, and would not in any way cause any friction or unpleasantness to the White people present. I repeat, therefore, that traditionally in the Cape, generally speaking, the Coloureds were not excluded from public entertainment.

Mr. Speaker, multi-racial, but voluntarily segregated audiences were the general pattern of public entertainment in the Cape. If the hon. Minister would take the trouble of looking back into our history he would find that that is correct. But the Government now wishes to break down that tradition. If the Government now wishes to depart from what is the traditional history of the Cape in regard to mixed audiences then the Government must do so by introducing new legislation. I hope seriously, I pray, for the sake of our country that the Government will not be so petty as even to contemplate such a course of introducing new legislation.

After all, Sir, whom will they be trying to protect from the continuance of our system of multi-racial, but segregated audiences in the Cape? They will be protecting merely a handful of narrow-minded White people who may object, for reasons best known to themselves, to some Coloureds being present in the same hall at the same time as they are. My answer to that small couterie of small-minded people is that they are not forced to go to these mixed gatherings. There are thousands of places of entertainment which are exclusively for Whites only. This small couterie of narrow-minded people, who for fear of contamination object to Coloureds being present in the same hall as themselves, are free to go to these exclusive White places of entertainment. Surely, Sir, the Government will not lend itself to legislate against segregated multi-racial audiences merely to pacify these selfish people. Sir, I therefore make an appeal to the Government not, in any form whatsoever, to give any thought to legislation prohibiting segregated multi-racial gatherings in the Cape. The small number of objectors in this country cannot truthfully claim that there has been a departure from the Cape’s traditional policy.

What about St. George’s Grammar School?

Sir, I shall deal with St. George’s Grammar school in a moment; not in my own words, but in the words of one of South Africa’s great Afrikaans poets. I am glad the hon. Minister made that interjection. That small number of objectors cannot truthfully claim that we have broken from the Cape’s traditional policy. If they do claim this my answer to them is that their so-called tradition has been broken and is being broken every day and has been broken for many, many years, not by visitors to this country but by our South African citizens themselves. At our circuses, at the traditional Coon Carnivals at the Cape, at those magnificent presentations of the Eoan Group, at the Shakespearian presentations at Maynardville, at the University ballet productions, we have always had mixed audiences. What objection has there been? All those performances have been before mixed audiences. It may be claimed by some members opposite that this only applies to Cape Town. Let us see what is happening in some of our country towns in the Cape. From time immemorial mixed segregated audiences daily attended cinemas in our country towns in the Cape. What harm did they do? Has anyone objected to it? It has been going on for decades. Now it is claimed that we are breaking with tradition! Sir, I ask: How can it be claimed that any traditional policy has been broken by allowing a handful of Coloured people to attend the Luxurama theatre?

I want to cite only as one example the serious position which confronts us here in the Cape unless the Government does something immediately to remove this uncertainty. As the House will know we in the Cape have the Eoan Group consisting of highly talented Coloured men and women. They present outstanding performances to South Africa of opera, ballet, music and drama. These performances have been proclaimed throughout the whole of the country by English- and Afrikaans-speaking South Africans. This Eoan Group has been in existence since 1933. In the course of time more than 50,000 musically talented Coloured men, women and children have passed through the hands of the group and benefited considerably by its teachings. Their performances have always been before mixed audiences. As I say, they have been praised by all sections of the community for their achievements. With a view to ensuring the continuance of this outstanding contribution to our South African culture a body of responsible citizens has established a trust fund to enable the Eoan Group to continue functioning. What is to happen to this important cultural group if the Government does not permit mixed audiences? Apart from the fact that the White people of the country will be deprived of the privilege of seeing and hearing these outstanding artists, it will mean that the Eoan Group will have to fold up because the Coloured community, by reason of their economic position, are not in a position to finance the continuance of this group. They can only continue by White financial help. No promotors can afford to import artists or present even our South African talent to exclusive Coloured audiences because, generally speaking, the Coloured people are not in a position to afford to pay an economic admission charge. I need hardly emphasize to this House what a tragedy it would be if, because of Government policy, this most laudable endeavour on the part of several responsible and highly respected South African citizens, with party affiliations to both sides of the House, had to be abandoned. I trust the Government will not do anything to prevent this most praiseworthy object from being brought to fruition.

In conclusion I would like to pay a tribute to those Afrikaners throughout our country who have condemned most vehemently the narrow-minded and politically motivated threat against our Coloured people. Certain highly respected, responsible Afrikaners in our country have expressed their grave concern, not only their concern but their utmost condemnation, about the Department’s recent action. This condemnation is growing day by day. We hear it privately, unfortunately privately, from several members even on that side of the House. Decent-minded people are sick and tired of these “klein apartheid” measures. They realize only too well the harm that it is doing to South Africa’s image. As an illustration of this condemnation I want to commend to the hon. the Minister recent statements made, firstly, by a namesake of his, Mr. W. A. de Klerk, popularly known as Mr. Bill de Klerk and Mr. Jan Rabie—two of our leading Afrikaans poets. Both these gentlemen blamed the Transvaal imperialists for getting in the ban and they hit out most strongly at those responsible for this type of treatment of the Coloured people. I want to deal very briefly with what Mr. de Klerk has said. He said—

The hon. member for Peninsula (Mr. Bloomberg) had a great deal to say about the traditions of the Western Cape. He also referred to a “foreign” tradition, namely, that of the Transvaal. As a Cape Nationalist (because he referred to the standpoint of the Cape Nationalist and made an appeal to them) I want to assure him that there is also another tradition in the Cape, not one of integration, but of segregation, of apartheid, and that that tradition is as strong as the one he advocated today. It is this tradition which is becoming stronger and stronger to-day. We need only go back into history: Whereas there was a great measure of integration in practically every field to start with, it is practically limited to-day to that small group to which he has referred where there are still opportunities of art. Let him cast his mind back. In earlier days non-Whites even attended our D.R. churches, but that is something of the past. Let me remind the hon. member of our schools. Even in the English schools you found non-Whites on the school benches, but that is something of the past. The hon. member said he would deal with St. George’s Grammar School but I do not blame him for not having done so; perhaps the hon. member for Boland (Mr. Barnett) or the hon. member for Wynberg (Mrs. Taylor) will do so. I just want to say this that the attitude adopted by the St. George’s Grammar School merely illustrates how strong that tradition is, even in those ranks which are closed to others. The hon. member may perhaps advance the excuse that he has no influence (I mean good influence) over the Anglican Church School but I am equally convinced that S.A.C.S. maintains the same attitude.

May I ask the hon. Minister a question. If a White private school were to admit a Coloured child would the Government approve of it?

It is precisely a private school that we are dealing with here—it is the only example before us to-day—and that private school refused. That is the only case I know of. The fact of the matter is that that is also the traditional attitude here. The traditional attitude to which the hon. member has referred is only maintained in a very limited circle.

This Luxurama incident has given rise to unpleasantness. What happened there is in conflict with certain traditions but it is typical of the attitude of those people who still advocate a large measure of integration and that is why this incident has been exaggerated to such an extent. The hon. member says an end should be put to that. The Government has stated its attitude very clearly in the statement issued by the hon. the Minister of the Interior. But the hon. member is not satisfied with that. He now pleads for a greater measure of certainty and advances a host of legal arguments. Let me tell the hon. member that we heartily agree with him that the type of incident which took place at the Luxurama theatre is undesirable, that it ought not to happen and that an end should be put to it. There we agree fully with him. But we differ fundamentally as far as the solution is concerned. His solution is to let the existing position continue. But this type of gathering only gives rise to problems. We can give numerous examples but let us confine ourselves to this one. The hon. member advanced a number of legal arguments but I can assure him that as a result of certain action the hon. the Minister of Community Development and I have decided to take there will be certainty as far as this matter is concerned even before the end of this week so that we will not have a repetition of this sort of incident at the Luxurama theatre. That is all I want to say. I agree with the hon. member, however, that this sort of incident should not take place. The Government will also in future do everything in its power to prevent this sort of racial friction, racial friction which might perhaps not have arisen there, but which arose as a result of what occurred there, the affect of which was felt by a far greater circle of people than the 200 non-Whites who went to the Luxurama. I hope it will lead to a greater measure of certainty.

I want to refer to the economic programme about which much has been said here to-day. It has been alleged that the Government does not take sufficient precautionary measures. It is remarkable how the Opposition have changed their basis of attack. For a few years the basis of their attack was this: There is a depression, there is no progress, that we cannot lead South Africa on the road to prosperity. Until recently hon. members opposite have tried to make political capital out of that. They have now suddenly changed the basis of their attack. Now that there is prosperity, in spite of the attacks on the part of the Opposition, they adopt a new standpoint, namely, that the Government is not in a position to handle that prosperity. The hon. the Leader of the Opposition now says: “The Nats cannot handle the boom.” They have now tried both sides. During times of recession they have exploited the position in an attempt to make political capital out of it. Now that there is prosperity they are trying to exploit certain implications which flow from it to make political capital. They have in the past tried to do so but without success. I remember how the previous Leader of the Opposition, after the Provincial Election of 1954, or 1959, came to the conclusion that “The country’s prosperity has lulled the Opposition into a false sense of security”. But even then their attacks did not help them at all. The hon. member for Constantia must admit that there is a measure of prosperity, a great measure of prosperity. He even quoted the hon. Minister of Economic Affairs when he said people must spend in order to promote that prosperity. We all agree that that was good advice on the part of the Minister of Economic Affairs and that was the first time that that hon. member has given this Government or the Minister credit for having been responsible for the flourishing economic conditions which obtain in this country. Now that they are attacking us to-day it is fitting that I remind the House of the attitude the Opposition adopted up to a short while ago. The hon. the Leader of the Opposition himself said: “The Nats are helpless against the bogy of depression.” But we have overcome it. It was only in 1962 that he said: “I warned that apartheid would lead to planned poverty.” That was what the Leader of the Opposition said two years ago. He also said—

That was what he predicted. The other mouthpiece, the hon. member for Jeppe (Dr. Cronje) said—

That was precisely two years ago, in March 1963. But it was only last year that he said—

That was how the hon. member for Jeppe expressed himself only last year but even the hon. member for Constantia himself expressed his doubts and said: “The question is whether this is merely a temporary wave that will pass away.” He still had his doubts then. The fact is that, after Sharpeville and after South Africa became a republic outside the Commonwealth, the United Party hoped we would struggle and that they would be able to make political capital out of it. To-day the position is different. But what the Opposition forget is the affect the standpoint they adopted so consistently had on many concerns. Their predictions in connection with South Africa have had an effect on overseas investments in our country; they have had an adverse affect on industrialists who wanted to establish new undertakings here. But apart from that they have also influenced many local industrialists, most of whom probably supported the United Party and received their political guidance from the United Party, to withhold their investments or to go slowly, because they must surely have believed what their political leaders told them. They frightened people away, but apart from that they also discouraged people from gaining efficiency in certain directions. I refer in particular to people who had to undergo technical and vocational training. What encouragement is it to people who have to undergo such training when it is predicted that South Africa has no future and that it is heading for planned poverty. But the fact of the matter is that in spite of that attitude of the Opposition, the National Party had confidence in the future and when the private sector hesitated and doubted the Government stepped in. At that stage already it took certain steps to stimulate the economy. Those steps included, inter alia, the expansion of Iscor to double our steel production and to increase the generating capacity of Escom. to increase the production of Sasol and to tackle the Orange River scheme and so forth.

Reference has also been made this afternoon to the policy of increasing the South African content of motor cars which are manufactured and assembled locally. There is expansion in the textile industry, There is expansion in the timber industry and in the chemical industry. All those were recommendations made by the Board of Trade and Industry but they had a stimulating affect on the entrepreneurs of the day and set private enterprise in motion. I am justified in saying therefore that the Government is responsible for the prosperity we are experiencing to-day. And the Government has brought it about in spite of all the sombre predictions by and expectations of the Opposition. That is also why we are to-day experiencing the longest sustained period of economic growth we have ever had and the Government, with the means at its disposal, is determined to see to it that that economic growth continues. That was why it was decided two or three years ago to embark upon a system of economic planning so that economic development would take place more systematically and also in the hope that that programme, which would keep count of the consequences (the disadvantages of severe fluctuations and of depression and boom conditions in our economy) would eliminate the adverse ones. It was at the end of 1961 that the hon. the Prime Minister instructed that possibility to be investigated. Those recommendations were ultimately accepted and an economic programme was drawn up and published. I am sorry hon. members did not receive copies of it. At the time of my departure from Pretoria in December that programme had not yet been printed but the Government Printer was asked to send a copy to every Member of Parliament, as happens in the case of similar documents. It was only recently that I noticed that it had not been done and I immediately asked that the necessary arrangements be made. It appeared that the Government Printer included this document in the list of documents which were not sent automatically to members. I am sorry that hon. members do not have it but it is on its way and they will receive it shortly. Various growth points are examined in this economic programme, growth points of 4½ per cent, 5½ per cent and 6 per cent. As you would have noticed, Sir, it was also dealt with by the Economic Advisory Council and they recommended that a growth rate of 5½ per cent should be accepted. This programme has now been accepted by the Government. The attitude of the Government is as follows:

As recommended by the Economic Advisory Council it was decided to accept the economic development programme which has recently been published and drawn up by the Department of Planning in co-operation with the economic adviser and the public and private sectors for the period 1964-9. That means that the Government is aiming at a 5½ per cent growth at constant prices and that the affects of such a development rate on Government policy will be taken into account. The private sector have already promised their co-operation in the implementation of this programme.

The acceptance of the programme with its objects and implications as far as policy is concerned does not mean, however, that the Government intends forcing it on any sector or that the course of the country’s development is in advance being forced into planned channels.

We shall strive to attain our object in the same spirit of voluntary co-operation between the Government and the private sector in which the programme was drawn up. If it were possible to widen existing bottlenecks to such an extent that a higher growth rate is possible, or if unforeseen new ones should develop which make it impossible to attain the objects in view, it is obvious that we shall have to aim higher or lower as the case may be.

In order to ensure that the economic development programme will be of real benefit to the country and not hang in the air. we shall as we go along endeavour to ascertain to what extent the actual development of the economy bears relation to the aims we have set ourselves. Because of the great amount of statistical information and breaking down necessary for this it will probably not be possible at the beginning to work out in detail, more than once a year, what control there should be, over the separate sectors. That can be done when the programme is revised annually. As far as the programme as a whole is concerned it will probably be possible and also desirable to test it quarterly against the real economic development. When that position is thus controlled it will naturally always have to be borne in mind that the programme does not represent an estimate of the economic growth for a year or five years ahead but that it indicates the maximum potential of which the economy, in the light of existing resources, is capable, provided the aims we have set ourselves are reached. Such a control will indicate timeously which aims are not being reached and threatening to become new bottlenecks. The Government and that portion of the private sector concerned will be able to determine from that information to what extent the aims have not been achieved, try to ascertain the reasons and take steps to eliminate them. If such a joint effort does not succeed in enabling those aims to be reached the only alternative would be not to aim so high.

I want to point out that this aim of 5½ per cent is considerably higher than the average growth rate we have achieved over the last number of years. To draw a comparison I can tell members that from 1948 to 1963 the average annual increase in production was 4.9 per cent. The aim we have in mind, therefore, is a growth rate of 5½ per cent. But when we take into account the fact that the Economic Bureau of Stellenbosch estimates that the growth rate was 6.76 per cent in 1964 it means that if we want to maintain that growth rate of 5½ per cent it will only be necessary for us to maintain a growth rate of 5.26 per cent in the years to come. When we compare this achievement of 54 per cent with that of other countries, we find that we are not lagging behind at all. According to O.E.C.B. sources, recognized international sources, the average annual growth rate in South Africa was 4.3 per cent in the years 1956 to 1962 but that it was 5.3 per cent in the six countries of the European Common Market. The growth rate in those countries was particularly rapid because of the fact that there was practically an economic coalition between them. In France the growth rate was 5.2 per cent, in Germany, where the growth rate has also been rapid, it was 5.6 per cent: in Italy it was 5.8 per cent, in the United Kingdom it was 2 per cent, in the United States 2.8 per cent and in Canada 3.3 per cent. I mention this in order to show that with this growth rate we think is possible within the limits of our economy under given circumstances—many calculations may turn out differently—we are not lagging far behind other countries at all; on the contrary we are even ahead of them. When we look at what these countries are estimating for the future we find that in the case of Italy it is only 4.5 per cent and in the case of France 4 per cent. So I can go on to show that the average growth rate we envisage is higher than that of any of those countries, except that of Japan which is higher, namely 8.6 per cent.

When we analyze the growth rate of our economy it is clear that one of the main contributors to that growth rate has been the industrial sector. That will also have to be the position in future. There is no reason to believe that it will be impossible to maintain the growth rate envisaged in this economic programme. The average increase is taken to be 7 per cent and we know that as far as the increase in the industrial sector is concerned it was considerably higher in the last few years. It was 7 per cent in 1962 and 12.9 per cent in 1963. According to the latest figures of the Bureau of Statistics our industrial growth rate is 14.1 per cent in comparison with January-November of the previous year. There has been an exceptionally rapid growth rate in this sector. Sir, you will remember that in their latest publication which appeared this week the Federated Chamber of Industries expect their production for local consumption alone will increase by more than 13 per cent. All the indications are there therefore that as far as the industrial sector is concerned it will be possible to maintain this particularly rapid growth rate.

Reference has been made to immigration particularly because the figures indicate that there will be a shortage of White labour in 1969. But here too it must be pointed out that it is based on an immigration figure of 20,000. Our latest immigration figure is considerably higher than 20,000. Our net immigration figure was 30,000 for the 11 months and another 6,000 arrived during the last month of the previous year. It is expected that our net immigration figure will be 33,000.

That will radically change this picture. We must, however, take into account the fact that not all the immigrants can be used in the economic field. It appears from the returns that approximately 47 per cent can be used in the economic field. If we have a net immigration figure of 40,000, therefore, it will mean that over a period of five years there will be a net increase of 59,000 persons in the economic field. Such a higher immigration figure will therefore change the picture considerably.

When we compare our exports we find that under this 5½ per cent growth rate programme it is estimated that there will be an increase in our net exports of 3.6 per cent. Last year our exports increased by 3.2 per cent. We know, however, that recently our exports have been affected by the drop in the price of wool and there has also been a considerable decline in the amount of wool exported. As far as wool is concerned our exports have dropped by nearly 24 per cent in comparison with the preceding year. Also as far as sugar is concerned there has been a considerable change in the price. That means that the export of these articles will probably not reach a high level. As far as our productivity is concerned, which is another requirement laid down, it is expected that we shall increase it by 3 per cent, but in recent years that increase has been 3.5 per cent.

Reference has been made to the poor man and the hon. member for Vereeniging (Mr. B. Coetzee), in particular, was told that the workers were not getting their share, but as far as wages are concerned the indications are that there has been a considerable increase recently. As far as average wages are concerned there has been a monthly increase of 4.2 per cent up to the end of October, an increase of R8 per month. That was over a period of ten months. But the wages of the non-Whites have also increased. In their case the increase was 5 per cent. The average income of the Coloureds has also increased with 6 per cent. That indicates that there has also been a considerable increase in wages in the industrial sector to which reference has been made.

It is true, I admit, that there are certain bottlenecks. In view of the rapid expansion of our economy we must expect that. Take the building industry, for example, where, in comparison with the preceding year, there has been an increase in building plans to the value of nearly R100,000,000 according to the Chairman of the Master Builders Association. It is impossible to find so many additional workers immediately for the industry. Bottlenecks must develop in such a rapid expanding economy, but it is exactly because the Government expected such development that it took certain steps timeously, such steps as encouraging immigration; shortening the training period of artisans and expediting their training; encouraging increased productivity; arranging for women to be employed to a greater extent and for suitable people to be kept in service longer, in other words, raising the retiring age. Provision has been made for education. A great deal has been said about the possibility of employing non-Whites but they cannot be taken into employment immediately; they must first be trained. I do not want to tire hon. members with further data but there are enough figures to show how many schools have been equipped for the training of non-Whites, to what extent they have availed themselves of those facilities, and how those educational facilities have led them to higher education. As far as the Whites are concerned these facilities for higher education have also been greatly increased.

As far as the manpower position is concerned the Economic Advisory Council made a detailed survey in October 1962. It was then determined what the demand in each one of the sectors of our economy would be and steps were taken accordingly. A Manpower Board was appointed to guide the training of manpower in those directions in which it was most urgently needed. We accept, as the hon. member for Constantia has said, that the Government has been responsible for this economic development but it is equally the intention of the Government to place this economic development on a sound footing, to expand it and to make it continue to the advantage of the whole community we wish to serve.

Mr. Speaker, it would give me the greatest pleasure to deal with the parrot-like cries of hon. members opposite about St. George’s Grammar School straight away. It is quite simple. The answer is that we on this side of the House are not in favour of mixed schools and it does not form part of our policy. It is as simple as that. [Interjections.]

Order!

I wish to follow the hon. member for Peninsula (Mr. Bloomberg), and raise the question of the Government’s failure to deal with public relations, both overseas and at home, where the question, in the first place, of visiting artists is concerned, and in the second place, the situation in South Africa itself as the result of the Minister’s actions in this regard. My first point concerns the demand made by certain visiting artists as to the kind of audiences before whom they could perform in South Africa, and our reactions to impertinences of that sort. Now let me make it quite clear from the start that there is no difference of opinion between members on the Government benches and ourselves when it comes to repudiating the right of anyone to interfere, whether they are artists or anyone else, in our domestic affairs. We are unanimous on that point, and I would like that to go down on record straight away on behalf of this side of the House. Sir, it was surely for that very reason that the country was unanimous in its condemnation of that impertinent and foolish young woman called Dusty Springfield, who chose to make highly provocative political statements about South Africa before she even left the United Kingdom, and continued to make them after she had arrived in South Africa. What was the effect? It was that public opinion in South Africa was unanimous against her, both in our ranks and in the ranks of the Government. Nevertheless, we wish to charge the Minister in this instance with gross incompetence in his handling of this matter. (Hear, hear!) Sir, it is quite beyond our comprehension why the Minister should have found it necessary to take any notice at all of the immature political judgments of an empty-headed young woman like Dusty Springfield in the first place. Surely the wiser course would have been to ignore her completely, and I commend that course to the Minister next time. All that she succeeded in doing in South Africa was to put everybody’s back up. She got no sympathy at all from anybody here. But unfortunately for us, because of the Minister’s dramatic withdrawal of her visa, this young woman became an international heroine and a martyr overnight. All of that was meat and drink to South Africa’s enemies overseas, which pleases none of us in this House. The world Press was full of it for days on end, just because this foolish young woman had made these silly, provocative statements. Our charge is that the Minister’s actions amounted to what is known as very bad public relations work indeed. It is incidents of this kind that, within a matter of days, make the enormous expenditure of public money by our Department of Information in publications and advertisements overseas, in attempts to boost South Africa and to give a truer picture of conditions here, a dead loss. It needs just one incident of that kind. And, Sir, if you do not believe me, Nationalist members from the Cape Province will remember that this was precisely the view taken by the Burger on the subject. In fact, the Burger went even further and said that the Minister’s handling of the affair was enough to make our information attaches all over the world pack their bags and ask for extended and indefinite leave. I repeat, that in spite of the Minister’s clumsy handling of the affair, we will have no truck with people from overseas who attempt to dictate to us how we should manage our affairs. Now the hon. the Minister made much in his statement in reply to a question by the hon. member for Orange Grove (Mr. E. G. Malan) about the trade union that controls the activities of many of these artists—Equity. Now we all know that these trade unions wield great power over these people and I hold no brief for them at all, but I do think, in the interests of truth as opposed to distortion, as we have had it from certain quarters, that it should be made clear to this House exactly what Equity’s attitude towards the situation in South Africa was and is to-day, until such time as they issue a further statement, which we have not yet had. It is my intention to quote very briefly from a report in the Burger of 15 January 1965—

The report reads further—

In other words, they were perfectly content with the status quo and there was no demand at all that their members should play to multiracial audiences. I mention this only in order to get the record straight, in view of the reply given by the hon. the Minister in this House in January. Now, we are not concerned so much with overseas opinion, but we are concerned, as the hon. member for Peninsula has pointed out, with the damage that has been done to South Africa itself. I think it should be realized that there could be very unpleasant repercussions for our own artists if they wish to go overseas for training and to gain experience. Many of our people do that and they will suffer.

Now, the hon. the Minister, having already blundered over the Dusty Springfield incident, issued what we consider to be a very long-winded and rather belligerent statement in this House on the subject of mixed audiences on 25 January. I am not sure whether the hon. member for Peninsula made this point or not, but if we examine the Minister’s statement carefully we find that it is a contradiction in terms. On the one hand we are told by the Minister that the Government is not prepared to tolerate mixed audiences, and on the other hand we are given the circumstances under which they will be tolerated. The crux of the question seems to be who is to decide where the circumstances do or do not warrant mixed audiences. Now, in the past local authorities handled these matters competently and without friction, and their ruling, in turn, reflected the wishes of local communities in terms of the situation existing in their own particular areas; and there has been no fuss; there has been no friction between the races and no ministerial edicts to stir up unnecessary trouble. May I say that the undertakings which a number of South African promoters were recently asked to sign as the result of the Dusty Springfield incident are of no legal force or effect, as the hon. member for Peninsula correctly stated. The hon. the Minister has no statutory backing for his actions, and he admitted as much in replies to my questions in this House. In fact, may I say that the Minister is extremely lucky not to have a Supreme Court action on his hands. If I were a promoter, I would have taken him to court over this matter. The Minister merely quoted as policy a speech made at a National Party congress by the Prime Minister in justification for taking executive action in these matters and, what is much worse in our opinion, he invoked the aid of the Police Force for that purpose. It seems to us to be highly significant also that the Minister’s actions were calculated to cause harm, not to visiting artists from overseas, but to certain sections of the South African community itself, as the hon. member for Peninsula has pointed out. I just want to read the extract from the speech of the hon. the Prime Minister, which was made in Port Elizabeth on 27 August last year. This Press extract, which was flourished under the noses of South African promoters and on which the Minister relied in forcing them to sign that undertaking, reads as follows, and I am quoting from the Transvaler of 27/8/64—

Well, we have made our point of view perfectly clear on the subject of overseas artists. There is no difference of opinion between us on that. But what right has the hon. the Prime Minister to suggest that he can “formulate” South Africa’s policy? If we read that one sentence in the Minister’s reply to the question put to him by the hon. member for Orange Grove, it says—

I put it to hon. members that to spend two hours sitting under the same roof in a cinema or in the theatre or at a football match is not living or governing multi-racially. [Interjections.] But, Sir, the important aspect is this: I sometimes wonder where we are going to in South Africa under this Government. If every time the Prime Minister makes a speech at a party congress what he says becomes law, then what is the point of this Parliament? Why do we not all go home? Why do we not govern by edict? And in this instance, as I have already stated, the case was made very much worse because the assistance of the Police Force was invoked to give effect to the Prime Minister’s statement. That is a very dangerous precedent indeed. When I asked the Minister of Justice under what statutory authority his police were acting when they asked for the removal of three juveniles, who were only suspected of being Coloured, from the Luxurama Theatre in Wynberg on January 5th, he referred me to Section 5 of the Police Act. Now, Sir, Section 5 is very short; it deals with the functions of the Police Force and says that the functions of the S.A. Police shall be, inter alia, the preservation of internal security. Now, what that has to do with three Coloured youths being in a theatre I do not know. He said that their next function was the maintenance of law and order, and the other functions were the investigation of any offence or alleged offence, and the prevention of crime. These three youths were not breaking any law by being there, and there is no question of a crime being prevented. When I put a subsidiary question on the Order Paper asking the Minister of Justice under which of those four sections the police were given the instruction to intervene at the theatre, he must have scratched his head quite a lot. He eventually referred me to the function which deals with the maintenance of law and order. Sir, have you ever heard of anything quite so ridiculous? Apart from the fact that those children by being there were not breaking any law at all, were three juveniles likely to cause a disturbance of law and order? On the other hand, as the hon. member for Peninsula so ably pointed out, some degree of resentment might very well have been expected last Monday night when the owner of the Luxurama was obliged to turn away 200 respectable Coloured folk who were looking forward to seeing the show. One could scarcely have blamed those people if their feelings had erupted into anger at that state. I think it is an indication of the essential stability and of the civilized standards of our Coloured people that they behaved as well as they did and that there were no incidents at all. It was interesting to hear the hon. the Minister of Planning saying just now that with regard to this question of the Luxurama Theatre action would be taken and that there would be no more “rassewrywing”, as he called it, or race conflict in future. But there was no race conflict whatever, and if there had been any race conflict at the Luxurama last Monday the Government itself would have been directly responsible for it.

The word is not “conflict”.

No, I should have said “friction”. But race friction implies that there were difficulties now where there were never difficulties before, particularly at that theatre which has played to multi-racial audiences ever since it was opened.

Now hon. members know that the owner of that theatre was summoned or telephoned by the Secretary for the Interior at eight o’clock in the morning and asked to come in to his office. He was not threatened or anything of that kind but he was simply shown the Minister’s statement, and he was told that there might be repercussions if he was not careful. The owner of the Luxurama would have been perfectly within his rights if he had carried on with the Eve Boswell show, with 300 seats segregated for the Coloured people and the rest for the Whites, in defiance of that statement, and I find it a great pity that he did not do so. The Minister has no statute to back him up. Why should South Africans be pushed and bullied about like this? I think it is ridiculous.

The hon. the Minister, in his reply to the hon. member for Orange Grove, also made another astonishing statement when he said—

Well, I have never heard quite such an astonishing statement in my life. It is absolute rubbish. What footing does the Minister think that the Coloured people and the Asiatics and the Bantu have in show business in South Africa or overseas? How much capital and know-how does the Minister think would be required before they could achieve anything like that at all and have their own theatres and circuses, etc.?

If they do not make a start they will never have it.

The best answer I can give to the hon. member for Heilbron (Mr. Froneman) is to put him in a circus himself. I want to ask the hon. the Minister whether he realizes that as the result of his action the Luxurama Theatre, which is in a Coloured group area, is now obliged on his ruling, which is based on no authority whatever, to hold performances for Whites only, and not for the Coloured people living all around it? The Minister knows as well as I do that the owner of a theatre cannot afford to give separate shows for Coloureds the one night and for Whites the next night—not live shows, because very few people in the Coloured community can afford to pay an entrance fee of 50 cents or 75 cents, which is the minimum he would have to charge. It simply means that the Coloureds have now been excluded from that theatre by ministerial action, and that theatre is in their own group area. That has bitterly angered these people.

I want to make one last point in regard to the Coloured people. The type of Coloured person who has been affected here in the Cape is mostly the professional and the educated man and his family—the better type of Coloured, the people we can least afford to antagonize. To-day there are plain-clothes detectives in the foyer of that theatre and of other theatres like the Labia, looking to see whether somebody who comes in might be Coloured, and the assessment as to whether a person is Coloured or not must necessarily be a purely arbitrary one. As the hon. member for Peninsula has correctly said, for the past 40 to 50 years we have had mixed but segregated audiences all over South Africa, in terms of local municipal regulations, and that has not bothered anyone. Hon. members from the platteland know what has happened in their country bioscopes. If the Coloured people are not to be allowed to sit in the gallery on Saturday nights, half the bioscopes in the platteland will have to close down. [Interjections.] The hon. member for Heilbron says that does not happen in the Free State. But we have no complaint about that. In Johannesburg the City Hall is controlled by a United Party City Council, and artists are only allowed to play to separate audiences, and not to mixed audiences at all. In Pretoria the same applies. In the Cape it is different. In Durban, in the City Hall, the non-Whites sit upstairs and the Whites sit downstairs. Let us leave it to the local community. What right has the Minister to interfere in these matters? That is the point of view of this side of the House. I have consulted with officials in the Cape Town City Hall on this issue, where all the municipal halls have multiracial audiences, and I have been reliably informed that not once in all the years of the history of the Cape Town Municipality has there been an objection to the better educated Coloured people attending theatres, symphony concerts and other entertainments, such as live shows. Sir, I do not want to go on talking about the number of occasions on which these people have attended shows in the Cape because the hon. member for Peninsula has dealt with it, except to say that I wonder very much whether the statement made by the Minister this afternoon will make the slightest difference to the whole situation. He has announced that by the end of the week there will be a statement from his colleague and that the whole thing will be settled. But in 1961 the area in which the Luxurama Theatre is situated was declared a Coloured Group Area.

In 1960 a special proclamation was published in the Government Gazette in terms of which all churches and theatres were specifically exempted from the provisions of the Act. The Luxurama has been playing to multiracial audiences ever since it was built in 1963. Nothing that the hon. the Minister of Planning or the Minister of Community Development may do at this stage can compensate the Coloured people in that area for the way they have been insulted, nor the owner of the theatre, who cannot afford to run a place that size, which holds 1,400 people, merely as a Coloured cinema. He would find it quite uneconomic to produce live shows for audiences in an area where only a small section of the Coloured community can afford to pay the entrance fees payable for that type of show. In other words, Mr. Speaker, the damage has been done. If the Minister decides to proclaim the Luxurama a theatre for Whites only, he will only add insult to injury. If he decides to declare it a theatre for Coloureds only, he will be imposing what I consider a thoroughly unwarranted and unfair penalty upon the owner, who built it when quite different conditions prevailed. So what has the Government achieved by all of this—here in South Africa, as well as overseas? The local people have been very badly upset. The Whites in Cape Town are just as annoyed about it as the Coloureds are. The Government has achieved another bad Press overseas. The Minister has left all South African promoters in a state of uncertainty and anxiety as to whom they can safely engage and whom not, and what the future of their theatres is going to be. The Government has succeeded in focusing the spotlight of world opinion upon show business in South Africa in such a way that we could be faced with a form of cultural isolation which we can ill afford; and they have embittered and alienated the best type of Coloured people in our midst. In addition, they may also have penalized some of our own artists and producers overseas. Sir, we accuse this Government of bungling and incompetence, and we accuse it of seriously abusing its executive power. I think this is a retrograde and a very sad step, not only for the Cape but for the whole country. It should be left to the local authorities to decide what they want. I only want to say this to the Minister, that if we expect a fair and just reaction from the rest of the people with whom we have to share South Africa, then we must be fair and just towards them. The Government has acted with arrogance and incompetence, something we are none of us able to afford in South Africa at this time.

Mr. Speaker, it is rightly expected of a new member who has the privilege of speaking in this House for the first time to be humble and modest, and I should like to do just that, inter alia, by raising a subject here which is simple and relatively unimportant.

I would like to discuss the postage stamps of South Africa but at the outset I want to make use of this opportunity to pay tribute to my predecessor, Dr. Piet van Nierop, who is at present a member of the Other Place, and who represented the constituency of Mossel Bay for more than 25 successive years in this House. During that time he made a great contribution towards the welfare of our railway workers throughout the country and we hope and trust that he will also have a very long period of useful service to our country in the Other Place.

To come back to my subject, if I may discuss the question of our South African stamps, I want to say that I do not want to weary the House with a long story about the old Cape triangular stamps which appeared as far back as 1857. Nor am I going to tell the House that their value has increased to such an extent over the course of time that by comparison even the Free State Geduld and Western Holdings shares seem to be trivial. May I just mention one example in this regard. One of those stamps was sold recently in England. It was a Penny Blue which should actually have been red, and when it was put up for auction it was knocked down for an amount in excess of R4,000. Comparisons are odious, but I am sure hon. members will be struck by the fact that in this case more was paid for a very thin scrap of paper, about one square inch in size, than a member of this House is paid for a year’s service. [Laughter.] I think there must be something wrong with our sense of values but I do not know who is to blame for it.

Even though our stamps are unpretentious and simple, they are by no means unimportant. Apart from their daily use, they are actually ambassadors, small message-carriers which carry a part of the country of their origin to the remote corners of the world. One finds them everywhere. There is no home, however humble it may be, there is no palace, however luxurious it may be, into which they do not make their way at some time or other. They are collected, handled, looked at and studied by crowned heads and schoolboys, and they tell the story of their country of origin and of its people to the great variety of people with whom they come into contact. It may interest hon. members to know that there are more than 10,000,000 collectors in the U.S.A. alone and their numbers are rapidly increasing throughout the length and breadth of the world because most people have come to realize that stamp-collecting in recent years has become a particularly sound investment, and in many respects a better investment than investment in the industrial shares of South Africa. It is necessary therefore that the necessary attention be given to the production of stamps and in this regard I want to mention two aspects. The first is the design of the stamp and the second is the technique which goes into the design.

Let me discuss our own stamps. When Union was established in 1910, commemorative stamps were still something completely new and yet a special 2½d. stamp was issued in order to commemorate that historic occasion. It redounds to the credit of our Post Office that to-day, after 55 years, that stamp is still a valid stamp on postal articles.

When Union was established each separate province had its own stamps and up to September 1913 all stamps of the various provinces were valid throughout the Union. We call this the inter-provincial period and it is probably the most interesting period in our entire postage stamp history.

In 1913 the Union received its first fixed series with values ranging from ½d. to 10s. The £1 value was to be added to the series later. This is called the King’s Head Series. Every value had precisely the same design, namely a profile of King George V. This resulted in a certain degree of sameness which was rather monotonous. Still, this series which was printed typographically by the firm De la Rue in England, was well and carefully looked after and to this day they are still particularly attractive. In 1926 we received a new picture series. With this series an attempt was made for the first time to give a comprehensive picture of our country and its people. Thus there appeared the Springbok, Jan van Riebeek’s ship, Groote Schuur, the Union Buildings, our Native life, the ox-wagon and Table Mountain. Originally, this series was also printed in England but at a later stage the dies of certain of the stamps were transferred to Pretoria and we started learning to print our own stamps. From a technical point of view, we certainly also reached a new low. As far as the designs of this series are concerned, they were rather disfigured by an attempt to cram too much fine detail into such a small space—a shortcoming which to this day we have not managed to overcome completely. But, Mr. Speaker, better times were to come for us. In the meantime, new printing machines were obtained and since 1930 all our stamps have been printed by the deep printing or the rotogravure process in which the image of the stamps is etched on to a copper cylinder which leaves the impression on the paper while it turns. Recently, a large Albertinia machine was purchased by the Government Printer. Besides the fact that it works fast, it can print simultaneously in as many as six colours.

Let us now look more closely and critically at our present-day products. I want to say at once that the printing of postage stamps is a highly specialized job which produces a multitude of problems and makes particularly high demands upon the artisan and his working conditions.

Our present fixed series gives a good and representative picture of our country and its activities and is a very great improvement upon our previous fixed series. Most of these stamps are real little works of art and here I want to mention particularly the ½c stamp, which carries the motif of a Kingfisher, and the R1 stamp on which a Strelitzia appears. But I do think that the stamps of the other denominations can be improved. Take as an example the 1½c stamp on which appears the head and shoulders of our proud Afrikander bull. Recently the State President said that we should make our Afrikander oxen better known to the outside world. I cannot imagine any easier, cheaper and better way of doing this than to print a picture of this bull in detail and in all its glory on one of our larger stamps. The propaganda value that we are getting at the moment by means of this stamp is worth absolutely nothing to us. The 2½c stamps too which advertises our grapes and our liquor—and we agree that these are very important items—is actually an unimaginative piece of work in which a bunch of grapes is shown against the background of Groot Constantia. The 50c stamp on which Table Mountain and a ship in the harbour are shown, is too much like a poster, the overpowering blue of the sea and sky being too sharp to allow justice to be done to our beloved Table Bay and Mountain.

As far as the technical finishing-off of the stamps is concerned, I feel that this leaves much to be desired. If we compare our own stamps in this sphere with those of our Black neighbouring States higher up in Africa, we find that ours are shown up in a very inferior light when compared with theirs. The reason for this is that those States have their stamps printed by experts overseas, particularly in England and Switzerland, where colour printing has reached a particularly high standard. Let us take for the purposes of comparison a weekly periodical like Die Huisgenoot or Sarie Marais and consider the wonderful colour printing work in the advertisements which appear in these periodicals. If we place a full sheet of our stamps next to one of these advertisements we are struck by the difference immediately. And that is what is so tragic about the whole thing; the advertisements which are printed so well are eventually either destroyed or thrown into the wastepaper basket while the inferior product, our stamps, are sent off to all parts of the world, are collected by philatelists and eventually handed down to posterity. The old and inadequate building of the Government Printer in Pretoria simply does not lend itself to the printing of attractive and expertly finished-off stamps; it may be too that the staff does not have at its disposal all the technical aids which are available to-day. I think that the necessary attention should be given to this aspect of the matter because it is certainly no credit to us that we compare so unfavourably with our Black neighbours in this regard.

In conclusion, Mr. Speaker, may I say something about our postage stamp policy. As far as new issues are concerned, South Africa, in contrast with most countries in the world, has always followed an extremely conservative policy and I want to express my appreciation in this regard to the present hon. Minister of Posts and Telegraphs as well as to his predecessors. We have resisted the temptation to issue long and expensive series of stamps at short intervals and in this way to increase State funds at the expense of the collector. South African stamps are consequently keenly sought after throughout the entire world. Our integrity has never ever been under suspicion in this regard. It is also the praiseworthy policy of the present hon. Minister to commemorate no more than three memorable occurrences each year by means of new postage stamp issues of low values. We trust that in the future this policy will be curtailed rather than extended.

Coupled with this, there is also the fact that it is our policy not to invalidate stamps which are no longer available for purchase. Our first stamp which appeared in 1910 is still valid, together with all its successors. To this day I can still use the King’s Head stamps of 1913 and this in spite of the fact that we have in the meantime changed over to a decimal system and that the old stamps are marked in sterling values. This also helps to strengthen confidence in our postage stamp policy throughout the world. I can assure you, Mr. Speaker, that when it comes to behaving correctly and honourably in this regard there is no country in the world which even approaches the record of the Republic of South Africa.

It is my privilege on behalf of members of this House to congratulate the hon. member for Mossel Bay (Mr. M. J. Rall) on his maiden speech. Sir, he has chosen a subject which is informative and he has chosen a subject which I am sure will be of great interest to most of us. I think it is a fair guess to say that the hon. member is interested in stamps and stamp collecting, but his contribution was an interesting one, and I feel sure that his contributions in future will be as interesting, as well considered and as well delivered. I therefore congratulate him, and if I may be permitted a little witticism, I would say that if he continues in that way he will certainly leave his stamp on this House.

Sir, I want to return to matters financial. The money side of stamp-dealing is of more concern to most of us. But before I go further let me introduce a pleasing interlude by saying that I was pleased to have observed at the commencement of this Session a gesture by the Government to acknowledge and respect once again the supremacy of this House over fiscal and money matters. The revival of the customary practice of giving manifest recognition to that constitutional principle in the State President’s opening address to Parliament and the restoration in that way of a salutary parliamentary tradition, calls, I think, for some commendation. I refer to that part of the address which asked for consideration by you, Sir, and by members of this House of the Government’s financial proposals during the course of this parliamentary Session. I believe that the revival of this traditional practice also places renewed emphasis on the importance of the office you occupy, Sir, as the upholder of the dignity and authority of this House, and I welcome its restoration in the opening proceedings of Parliament.

Sir, you will recollect that Ralph Kilpin, in his “Parliamentary Procedure in South Africa”, speaks of this practice as a healthy reminder to all concerned of the hard-won struggle by the people against the autocrats of old, beginning with the democratic demand of the representative house to control taxation and ending with the absolute control by that house of expenditure as well as taxation. Sir, there are some of us, I feel sure, who will doubt whether that hard-won control is still as absolutely vested in the House as democratic principle demands, but nonetheless, with the traditional practice restored at present, there is always hope of more factual control in the future.

Another reason for introducing this interlude is because it is a relief in the first financial debate of the Session to start with a commendation of that kind to the Government because one is obliged under the hon. the Minister’s regime to focus attention, in regard to all other matters, on a woeful disregard for fiscal propriety and for budgetary conventions in the handling of State finances. I think justification for my remarks in that regard is to be found very quickly in the fact that by the end of September 1964, that is to say half-way through the current financial year, it had already become clear that the hon. the Minister was heading for a huge surplus in 1964-5. By the end of December he had already collected R763,700,000 on Revenue Account against an estimated R965,300,000 for the full year. At that rate he is already almost R40,000,000 ahead of his estimate. State spending at that date was also well below scheduled appropriations on Revenue Account that is, after taking into account expenditure to be incurred in respect of the carry-over surplus of some R74,250,000 from the previous year. In those circumstances it is no wonder that already one finds Press headings like this: “Another large Budget surplus in oiling,” or still another one, which appeared in the Financial Mail, “Dr. Donges’ massive surplus: What to do with it.” Speaking for myself I think it would have been much more appropriate to have had this heading: “Dr. Donges’ massive blunder; what to do with him.” You see, Sir, an error in business circles of the order of 10 per cent or even 5 per cent in annual financial figures would be anough to make heads roll. Last year the hon. the Minister’s cash surplus on Revenue Account was almost 128,000 per cent in excess of his original estimate. In anybody’s money that error is an immense one. Whatever way one calculates it, factually it was a first-class blunder on the part of the hon. the Minister. [Interjections.] Sir, the hon. member for Cradock (Mr. G. F. H. Bekker) tries to advertise himself as what is known to the Americans as a “dumb-bum”. I do not wish to take that any further. But I say it was a colossal blunder on the part of the hon. the Minister of Finance.

It means that the public were being mulcted to the tune of R128,000,000 in a single year. After a blunder of that high order, surely the taxpayers were entitled to hope for some respite from being done down again by the same process in the current year—one can almost say “being humbugged”. As I have indicated however financial blundering goes on and the Minister holds on not only to his head but he also holds on to what is now a lost image of even semi-competency in matching income with expenditure on Revenue Account. If I may be permitted a Churchillian phrase: Never in the field of fiscal blundering has so much been taken away for so long from so many. Someone’s head must roll in circumstances of this kind, and I can only say that I think the Minister has himself made the selection for the rolling of heads quite obvious.

This surplus mania in Government circles does not end there. Unfortunately it seems to be infectious, and it has become quite evident that the Minister of Posts and Telegraphs is ailing in the same way. I am sorry he is not here at the moment.

The disease started with Havenga as Minister of Finance in the United Party Government.

I challenge the hon. member to bring any surplus as substantial in those days as we have had over the years since this Minister has been Minister of Finance. I am sorry the hon. the Minister of Posts and Telegraphs is not here because I say that the recent announcement that the telephone rate from public call boxes is to be doubled from 2½c to 5c in May is another bit of fiscal bungling. It is not only a case of tickey-snatching by the Minister’s Department, but it is a case of a capricious overcharging of the poorer members of the community under a form of duress. It is the poorer section of the community who will be paying this excess taxation and to them the Minister offers only this choice: Take it or leave it. It is noticeable in this regard that by December last, post and telegraph revenue was up R5,000,000 over that of the previous year. Moreover, last session a Select Committee on coinage was informed by the telephone authorities that better equipment was to be installed with a view to providing more efficient service in call boxes. If that had taken place then some justification might exist for this doubling of the rate for calls from public call boxes, but even at that date a change of equipment had only been made at two places. There has been significant silence on the part of the Department of Posts and Telegraphs and no statement that this improvement has been expanded anywhere else. The Select Committee was also told that after the introduction of better equipment and a more efficient service there would be justification for this increase but the increase is being made without these additional advantages. The method followed here is by no means justified and is to be deplored.

I am glad the hon. the Minister of Planning entered into the debate. I am sorry he is not here now, because although he expounded at some length on the document which was produced by the Economic Advisory Council, a document known as the Economic Development Programme, he left us very much in the dark about his own Department. I want to say something about this newly created Department, around which there is still an aura of mystery. This change in the departmental structure of State administration which was brought about by the creation of this new Department in August 1964 will have to be watched and I am sure will be watched with general interest because it has a number of novel features and it must inevitably be a matter of some concern to business in particular and at least to one Government Department. Thus far the Minister of Finance and the Treasury have occupied a special position in Executive Government and in the Public Service as a whole in that they have always been the central authority in the machinery of government, charged with the co-ordination and the control of all departmental activities of the Government. It is for that reason we find the Statute Book abounds with laws which impose duties upon the Minister and upon the Treasury and which grant powers to the Minister and the Treasury for the purpose of co-ordinating financial planning and administration throughout the services. With the creation of this special planning and co-ordinating department, as I see it, the hon. the Minister of Finance and the Treasury are in danger of losing that conventional status. Under this new arrangement they must inevitably forfeit to this new department some of their earlier responsibility. What is significant about this document, this economic development programme which is so vitally concerned with the finances of the country, both private and public, is that not a word has yet been heard about it from the hon. the Minister of Finance. It has been left entirely to the Minister of Planning to deal with. You see, Sir, in all spheres of administration, and also as far as Parliament’s own prerogatives are concerned, much has depended upon this long-established responsibility of the Minister of Finance and the Treasury which seems now to be breaking down. All of us in this House know that Central Government finance is one of those things which is always on the border between politics and economics, and when it comes to planning and spending public money, I should think that everybody’s choice would be, “Better the devil you know than the devil you don’t”. There is some mystery surrounding this new Department of Planning and Coordination. That is why I have said that this recent novelty introduced by the hon. the Prime Minister must be watched. It is also no doubt the reason why the Financial Mail in a recent issue asked these questions in a paragraph headed: “Super Ministry”. The paper asked—

There is, as I say, a veil of mystery surrounding this new Department, and I must say that I rather share the curiosity of the Financial Mail about a Department of Planning which five months after it has been created is still unable to plan its own staffing arrangements and to settle its staff establishment with the Public Service Commission. That, in effect, was the reply which I received from the hon. the Minister of Planning just a few days ago; when asked what the establishment was, I was informed—

I think five months is a long time and it increases one’s curiosity as to what is going to be the function and the responsibility of this novelty in State-administration. Moreover, Sir, as the matter now stands and as the reply of the Minister’s a few days ago indicates, one is now obliged to put a question in Parliament to get an insight into what the functions and responsibilities of this department are. Only by putting a question on the Order Paper of this House was I able to ascertain that certain ad hoc functions had been assigned to this department, some of considerable importance.

We already have evidence to indicate that this new cog in the mechanism of government is delaying and clogging up the works in respect, inter alia, of such matters as the administration of the Group Areas Act. But I think the most curious matter of all is the incongruous circumstances under which this recently prepared economic development programme, the E.P.D., as it is called—the five year plan—was announced almost simultaneously with the issue of a proclamation bringing into operation the Bantu Laws Amendment Act of 1964. That seems to me a most incongruous circumstance and that is why I am sorry the hon. the Minister of Planning is not here because I would have liked him to enlighten us on that aspect. You see, Sir, the two documents are indeed strange business bed-fellows. The first, the economic development programme, sets out to plan the economic development of the country for the next five years; whilst the second document, the Bantu Laws Amendment Act, has been described as the Government’s super-non-stop-operating brake on the country’s economy. But it is actually worse than that. This five year programme, according to an official Press release, is to depend for its implementation “upon the goodwill and co-operation of private industrialists”; while we know that the second document, by its very nature, can only be enforced in conflict with the goodwill and good intentions of private industrialists.

I accept that the economic development programme is technically a very admirable compilation. My colleague, the hon. member for Constantia (Mr. Waterson), has dealt with it and so has the Minister of Planning. Technically I think it is a very admirable document and I am pleased that it is now going to be circulated amongst members. The Minister now frankly admits that should have happened long ago and that not to do so was purely an error. But, we must be realistic in these matters. For all practical purposes the document is likely to be seen in enlightened business circles as an intellectual exercise by desk-chair economists. Because the fact is that when it comes to the practical side of the matter, when it comes to those who will be concerned with its implementation, they must inevitably be hampered, if not hamstrung, by having to work within the framework of this Government’s “apartheid” policy. I am not alone in saying this. The hon. the Minister of Planning himself confirmed this in October last when he addressed the Cape Chamber of Industries in Cape Town. He said this—

I do not want to expand on the problems connected with that. I have indicated how incongruous these two documents are which have emerged from the Government more or less simultaneously. But I do think from what we have heard thus far, from the Minister of Planning in particular, about this programming that the hon. member for Constantia is perfectly correct. What the Government is now doing is once again to try to simulate United Party policy. It would, of course, have been much wiser had it simply accepted quite boldly the planning scheme which was in operation prior to 1948 under the then Scientific and Industrial Planning Council the functions and responsibilities of which were quite clear. I commend that to the Government.

The hon. member who has just sat down made a speech in which he raised a few technical matters which I do not consider to be of a very serious nature. I do not want to follow up the hon. member’s reasoning except to make a few remarks in regard to two of the points which the hon. member raised. The first is the principle which has been mentioned on previous occasions in this House, of a larger surplus than was budgeted for. It has also been said previously—and I want to repeat it—that in a growing economy such as ours it is virtually impossible to foresee the precise scope of a surplus, which is what the hon. member expects us to do. Indeed, if our economy continues to grow as rapidly as it has done latterly, it is possible that we may have an even larger surplus than the estimated one. I leave it at that.

I just want to make one or two observations with regard to another point which the hon. member raised. The hon. member said that the new Department of Planning was actually interfering with the traditional responsibility of other Departments; he also warned the hon. the Minister of Finance to pay careful attention to this fact. I do not think the hon. member need be concerned in this regard. Indeed, this is a development which should be welcomed because this whole tendency towards a greater and more comprehensive planning for Departments and the activities of our national economy is nothing strange. All countries are moving in this direction; I do not think therefore that we need pay very much attention to that remark. We have a responsible Government and a responsible Minister. The aforementioned development is a necessity and, moreover, it is taking place within the framework of the machinery which has now been established and it certainly does not constitute a threat at this stage to the autonomy of Departments. I want to tell the hon. the Minister of Finance too that I am grateful—and I think I am speaking here on behalf of a large section of the House and also on behalf of the country—for the fact that he has come forward to-day with a timely warning in regard to the interest war which is being waged in South Africa at the moment, an interest war which can only have detrimental results for us. The hon. the Minister did a timely and necessary thing for which every responsible person will be very grateful to him. The hon. member for Pretoria (Central) (Mr. van den Heever) made a remark here in connection with the profits which are being made by one sector of our banking system; he referred to the excessive or apparently excessive profits which are being made by certain institutions. I want to agree with him and say that it seems to me that the time has come for this practice to be investigated, because just as excessive profits through high interest rates have a detrimental effect, those excessive profits may have a detrimental effect upon our national economy.

We noticed to-day that hon. members opposite were rather at a loss in the few speeches made here up to the present. They could not really get going in the debate; they had no central theme. They made remarks about all sorts of things but they had no main point on which to concentrate. The hon. member for Constantia (Mr. Waterson) had great difficulty in finding arguments to advance although he covered a great deal of ground, with the result that throughout this debate we have had no central theme from the Opposition. I want to say that the whole tone of what they said not only to-day but also previously indicates that the United Party opposition have considerably changed the basis of their attack; their criticism of the handling of our national economy by the Government has undergone a considerable change in recent years. It started with disbelief, then it swung over to obstruction against all economic and financial measures taken by the Government, and now we have reached the stage in this House—and we will probably hear more about this as we go on—where they belittle the Government’s share in the upsurge which has taken place in South Africa and also its share in the economic prosperity which exists in the country to-day. You will remember how it started years ago with the story that the banks would close—that the sources of money would dry up. Thereafter they tried to build up an image of a lack of confidence, a lack of confidence in the ability of the Government, a lack of confidence in the possibility that this country could flourish economically and could remain on its feet under a National Government. But in recent years South Africa has achieved miracles as far as her economic prosperity and growth is concerned—a fact which is testified to both in our country and overseas. Economy is regarded as a miracle in the world to-day. And since it has now become clear that that is the position occupied by the Republic of South Africa, the Opposition have started a campaign of disparagement.

Not only have they embarked upon this disparagement in recent years, but the latest thing now is that they want to make the public afraid of our prosperity because they say that bottlenecks will arise. I also dispute what they say about bottlenecks and I will deal with that matter in a moment. I want to say, however, that not only is the Government exclusively responsible for the prosperity which prevails in the Republic of South Africa, but that the prosperity which prevails in South Africa has been planned by this Government and has been brought about by the policy of this Government. This prosperity of the Republic of South Africa is due to the actions of the Government; indeed, it forms part of the plan of this Government and part of the policy of this Government in all spheres. If hon. members seek to attack the Government in connection with this prosperity, let me tell them that the Government also accepts full responsibility not only for the prosperity but also for the pattern of events in the future.

I want to enumerate a few points to indicate why our prosperity is due to the policy and the planning of this Government. Let me first say this: In this process of belittling the share of the present Government in the prosperity that we are experiencing it has been said that the gold-mining industry is actually responsible for our prosperity, and an excessive share has been attributed to the gold-mining industry in this regard. We admit that the gold-mining industry is important and has played an important role, but it played relatively the same role when those hon. members were in power. It is not a new industry which has arisen in our country. What is more, hon. members made a second point; they said that the private sector was responsible and that all the honour and credit for this development should be given to the private sector. We do not seek in any way to belittle the share of the private sector in this regard. It is a pity that the hon. member for Yeoville (Mr. S. J. M. Steyn) is not here because his new story is that the non-White is actually responsible for our present prosperity; an excessive share is attributed to the non-White in this regard.

The first point that I want to make is that this planning stimulates our entire national economy in that it initiates the establishment of large, central industrial sectors which in their turn have actually become the central points around which the entire economy of South Africa is developing to-day. This process is not one which has just started; it started a long time ago. The first part of the plan of the National Government was the establishment of Iscor. I just want to explain the cumulative effect of Iscor. Iscor has become a central point around which a whole series of industries has been built up. The entire construction industry in South Africa has been built up around it. All the developments which we have to-day in the metal industry and in the transport industry and in the processing of steel products in related industries centre around Iscor. But the important point is that with the tremendous amount of capital in South Africa it was only recently, so many years after the establishment of Iscor, that a start was made for the first time with the development of a second steel industry in South Africa in the private sector. This will cost R100,000,000, but that industry cannot come into being without technical advice for which they are dependent upon Iscor. It will take some years before they will be able to produce something in the neighbourhood of 600,000 tons of steel as against the planned 4,500,000 tons of steel produced by Iscor itself.

We can also take the case of Sasol. I do not want to mention too many examples; I just want to make this point clear. Sasol is the central point around which the entire scientific industry in South Africa has been and is being built up. That is why I say that in the first place this economic prosperity of ours is part of Government policy and planning.

The second example that I want to mention in order to support my proposition is this: This development is also the direct result of the incentive measures taken to encourage industries to occupy a particular place in South Africa and to fill gaps in the Republic. I want to mention an example. When the hon. the Minister of Economic Affairs sought to attract industries by giving them credit for the South African content of their products, industries were established which have since developed to a very large extent. If we had said this to hon. members ten years ago, they would have laughed at us. Take the transport and motor industries. As a result of the direct policy of the Government South Africa was able to start her own motorcar and heavy vehicle industry as well as to establish the basis for a tractor industry. This may also help form the basis of an aircraft industry. That is part of Government planning and policy but those hon. members have never made a positive contribution towards that planning and that policy. On the contrary, they have always belittled it.

The next example that I want to mention is the establishment of an infra-structure and the expansion of that structure as far as transport and power are concerned. The facts are known and I do not want to discuss them. I just wanted to mention this point.

A further example of prosperity achieved through planning and policy is the question of relationships which form part of the policy and the planning of the Government. I want to say immediately that South Africa is proud of its labour force because the relationship which exists between this Government and our labour force has laid the foundation for balanced and sound growth which is of vital importance to this country. I want to say that South Africa is probably also unique in this sense that its labour force differs from that of other countries because in other countries they have already become so imbued with socialism, and idealism and co-operation with the State are concepts which have become so foreign to them, that the workers in other countries have become pressure groups and things have become impossible. In this respect too the Republic differs from the outside world. I think that we must pay tribute to our labour force which has fitted in with our economic pattern and which is keeping that economic pattern at a level where we can compete with the outside world.

The last point that I want to make in regard to the part played by Government policy and planning in this economic upsurge is that this Government’s policy is to promote racial peace. It is the separate development of our peoples and the planned participation of the non-Whites in our economy that has promoted our economy. I want to reply to the interjection of the hon. member. Apart from the important influence which has been exerted by peaceful conditions in South Africa and which has made it possible for us to enjoy this development, it is the implementation of the apartheid policy which has resulted in the initiation of a building industry in South Africa on such a tremendous scale that this in itself has also stimulated the general economic development of the country. The 10,000 houses which have been built as part of our apartheid policy have also had their economic implications. They have also had this further economic implication that they have created an opportunity for the incorporation of the various race groups in their own areas and circles in the expansion of the building industry. All these things taken together entitle me, I think, to say here that the prosperity that we are now experiencing is one for which this Government must receive the credit, it is something for which the Government has planned and which the Government can claim is the outcome of its own actions in all respects. But still more important is the fact that in none of these cases have hon. members opposite either come forward with proposals or offered co-operation or assisted the Government in any way at all to bring these things about. In other words, I want to say as far as this matter is concerned that, just as much as it is true to say that the Government has a share in this prosperity, so it is also true to say that hon. members opposite have no share in it.

I want to go on to a second point and that is in connection with the establishment of a new department, a Department of Planning.

May I say this: Future development will revolve around this innovation. This new development is going to be responsible for the greater co-ordination and the greater planning of the economic activities of the Republic of South Africa. It is the State’s belief that the function of the public sector will be to provide the institutional, economic and legal machinery within which the market mechanism and free economy will have the opportunity to develop and to carry the Republic of South Africa towards the further economic prosperity that we anticipate. The hon. the Minister made his first speech here to-day as Minister of Planning. But this Department of Planning is also part of the plan of the Government to ensure the continuation of this present prosperity. This Department of Planning will be able to plan the physical, economic and scientific resources of the country and to plan and co-ordinate them in such a way as to consolidate economic activities in the future. The various boards are already in existence. I just want to make a remark in this connection which the hon. the Minister did not make. I want to say that the economic activities of the State are divided into the 31 most important industrial sectors and of these 31 sectors there are already 16 which are being planned in a manner which is calculated to foster co-operation between the industry concerned and its industrial leaders on the one hand and the State on the other.

Then there is also this important point… and in this respect the planning in the Republic of South Africa differs from that in the outside world—that with this development we have now reached the stage where the State, the public sector, is able to carry the private sector along with it and it is doing so by making use of the services of scientists and economists and industrial leaders and sociologists and whoever may be concerned in this matter; in other words, for the first time now to obtain the co-operation of our entire nation. It is no longer a State Department which is doing this, the whole of the planning is being co-ordinated under the guidance and initiation of the State but with this difference that while we continue to recognize free enterprise we now have the co-operation of our entire economy through all its leaders in the various spheres. This also gives us a guarantee in many respects, a guarantee that our development will be a balanced one because it carries with it certain elements—the elements of enthusiasm, confidence and maximum cooperation between all the elements, co-operation which is essential if one wishes to link up the private sector and the public sector in order to achieve success.

Let us now consider the next question—whether this particular development will enable us to foresee future bottlenecks and to overcome them satisfactorily during the next few years for the protection of the economy of our country. Sir, we have already had examples of possible bottlenecks. There was the threat of a bottleneck as far as our balance of payments position was concerned—to mention an example—that balance of payments position which is such an integral part of our entire economic development, and also with regard to interest patterns as indicated by the Reserve Bank, and all the things which may flow from it. But when one speaks of bottlenecks one must remember that this development, no matter how it may be planned, automatically brings about economic cycles.

Business interrupted in accordance with Standing Order No. 23 and debate adjourned.