I wish to commence by expressing my gratitude for the fact that both the hon. the Prime Minister and the Leader of the Opposition are present in the House this afternoon, because I wish to deal with a matter that might be of interest to both the hon. the Prime Minister and the hon. the Leader of the Opposition. To begin with, I wish to congratulate the hon. the Prime Minister on his actions over the past few months, especially last year, in what is generally known as “the Buccaneer issue”. We were faced with the position that South Africa, depending for its safety and security on the armaments that we buy from Great Britain, was sadly let down. Mr. Wilson—and I hope he will be the temporary Prime Minister of Great Britain—from his soap-box in Trafalgar Square and right through the British Isles in the General Election, was most vociferous in his vituperations against South Africa, culminating in a public statement in the House of Commons to the effect that he would abrogate the agreement, or rather, that he would commit a breach of contract with South Africa on the delivery of the Buccaneer aircraft. In my own opinion, the hon. the Prime Minister retaliated by speaking to Mr. Wilson in the language that he would best understand. My own fear as a South African citizen—and the fear of many of those to whom I spoke—was this “What is the Government going to do; what are we going to do in this case? We have already paid half of the purchase price and here we are being let down after entering into an honourable agreement.” I wish to say here, Sir, on behalf of South Africa, that we are grateful that the Prime Minister acted correctly and gave the answer he did. It proves that having spoken to him in the language which that gentleman understands, he was able to think the matter over clearly and reply accordingly.

Sir, I wish to say here that in past years when the Minister of Justice has come to this House and asked for drastic powers to enable him to deal with internal security there have been fears and apprehensions, fears and apprehensions which I shared, but I had little information as to what the country was facing. I did not have insight, I was not a prophet, but to-day I am glad that I did not vote against those measures but abstained. I think I can say that the Minister of Justice has completely vindicated himself and proved what a service he has rendered to this country. I think that the House is grateful and the country is grateful to him—and I say this unequivocally on behalf of my constituents—for having exercised the powers at his disposal. Sometimes his actions may have been open to criticism, but subversive communists and sabotaging intellectual ducktails have been apprehended and brought to justice. Whether we like to admit it or not, we all feel that we now have a greater sense of safety than we had when these things were taking place in our country.

I have spoken to many hundreds of people over the past months, in the Transvaal, Natal, the Cape Province, not only my constituents but the Coloured people in other constituencies, and they feel that South Africa is grateful to the Government and to the Minister of Justice for the way in which this matter was handled, in spite of what has been said.

Sir, this is a very good record and I think we can be proud of the actions of our Prime Minister and we can also be proud of the way in which the Minister of Justice, under very difficult circumstances, in the face of recrimination and a great deal of criticism handled this matter. But, Sir, one feels bitterly disappointed, utterly frustrated, when in a trivial matter such as this matter of mixed audiences a mountain is made out of a molehill. Here we had a straw-headed “pop-singer” by the name of Dusty Springfield coming to South Africa and, as was admitted by the person responsible for her coming here and by many others, the enemies of South Africa were using her and others as agents to come to South Africa to look for some putrid political tripe to dish up against South Africa overseas. This is admitted, Sir. But then why in Heaven’s name must the Government through their ham-handed and lame actions hand a weapon over to them on a platter? Sir, I can only make a plea here to the Prime Minister, to the responsible members of the Cabinet, to avoid this sort of thing in future. It can be avoided. We have the position so far that in this very trivial issue three Departments have been involved—the Department of Planning, where a statement has been issued by the Minister concerned; the Department of Community Development where a statement has been issued by the Minister concerned, and, of course, the first statement which was issued by the Minister of the Interior, and his Department. It seems to me that as far as the Department of Planning was concerned the thing was never planned at all and as far as the Department of Community Development is concerned it is contributing to the disintegration of a community rather than the building-up of a community. As far as the Department of the Interior is concerned, it seems to me that the statement of the hon. the Minister and his actions during that time were concerned only with the interior of the Transvaal and its outlook, and that he overlooked completely the traditions that have evolved and developed in the Cape over 300 years. I hope that sense will prevail in future and that we will not allow a repetition of this ham-handed bungling in the future.It is an insult to the Coloured people; it is confusing to the Whites and it is fuel for the fires of the enemies of South Africa overseas.

I want to come to another issue, Mr. Speaker. I have never in this House pretended to be an authority on foreign affairs, although I have taken a very keen interest and have done a great deal of reading and studying and I have listened to a lot of so-called experts talking, to put it plainly, a lot of balderdash in this House on that subject. But, Sir, to my mind South Africa vis-à-vis the outside world has come to the cross-roads, and from the international point of view there is at this moment one matter of absolutely vital importance to South Africa. In international affairs it is the Achilles heel of South Africa, and judging by what has happened in the past it is an issue of tremendous importance. I refer to the issue of South West Africa. Sir, we have a tragic history as far as crises in international affairs are concerned. At the turn of the century a war took place in this country which tore the White population asunder, dividing it into two groups, and to this very day we have not seen the end of the bitterness and the recriminations caused by that war. Shortly on the heels of that war followed another international crisis, namely the 1914-8 war. We started that war with a rebellion. Shortly after that within a generation came the 1939-45 Second World War.

We entered that war with the utmost dissension. Sir, a further international test is coming for us as far as the South West Africa issue is concerned. I witnessed in this House last year the Tabling of the Odendaal Report. The Odendaal Report—you will pardon me, Sir, if I am brief; my time is short—was rejected by the Opposition. It is not as though I agreed with everything contained in it. I sit in this House as an independent, but it was significant to me that the alternative proposition put forward by the Leader of the Opposition when he rejected the Odendaal Report was tantamount to the creation of a Bantustan for the whole of the north of South West Africa. Sir, anything of the kind that he envisaged there must inevitably lead to some form of self-government or independence in the end. The dangers involved in Bantustans, dangers such as creating launching pads for Communism, a danger which in any case is inherent as far as Basutoland, Bechuanaland and Swaziland are concerned, are also inherent in the proposition put forward by the hon. the Leader of the Opposition. I came to the conclusion that to a certain extent the Bantustan principle in South West Africa was accepted on both sides of the House, and I wonder whether that could not be a basis of compromise or understanding between the Leader of the Opposition and the hon. the Prime Minister. Is it not time that we in South Africa, in this very vital issue, this Achilles heel of South Africa in international affairs, arrive at a compromise which will enable us to face the outside world, whether it be the disintegrated decadent Commonwealth, or whether it be the United Nations dominated by the Afro-Asian states, with a common front. Sir, I feel that the onus is on the hon. the Prime Minister and the hon. the Leader of the Opposition to find some common ground, to find a working understanding, to find a basis of agreement so that we can put it to the United Nations or any international organization, clearly and unequivocally, that as far as the legally constituted government of South Africa is concerned, we stand united on that issue and that we have the whole population, White and Coloured, and everybody else concerned, behind us. As far as this issue is concerned, my contention is that posterity will judge. This is the time to decide whether on this vital issue we are going to play politics or whether we are going to come to some sensible understanding in the interests of South Africa, in the interests of our children and our very survival here. We are now is the month of February 1965; the Odendaal Report was Tabled; there was discussion in this House; there was dissension and disagreement; alternative proposals were put forward and no basis of understanding could be found. Let us assume that in the ensuing year the International Court gives judgment in the case which is presently before it; what is our attitude going to be in the month of February 1966 if that judgment should go against us? Are we still going to play politics and refuse to co-operate with one another? Sir, if thereafter the United Nations decide to implement the judgment of the International Court, what is our attitude going to be in the month of February 1967? Are we still not going to have unity? Sir, I am the only member of this House who is a member of no party at all; I am not tied to a certain line and I wish to quote here the words of Edmund Burk, a British Parliamentarian, who said, “I was elected by the electorate of Bristol to represent the people of England.” I was elected to this House by the Coloured electorate of the Outeniqua Constituency of South Africa and I feel it my duty in the interests of South Africa to make an appeal here in all honesty and sincerity to the hon. the Prime Minister and the hon. the Leader of the Opposition to find some basis of understanding on this issue which is a very vital one, so that the Republic of South Africa can confront the outside world with a united front and a unanimous attitude as to the destiny of South West Africa linked with South Africa. Sir we need not know what methods they employ to arrive at that understanding; that is not a matter with which the parties need be concerned, but that is my appeal to the hon. the Prime Minister and the Leader of the Opposition.

The hon. member who has just sat down will forgive me if I do not follow him in his remarks, except to express the hope that the bread he has cast upon the waters in the form of the attitude he has adopted and goodwill he has expressed, will return in due course.

I want to ask the hon. the Minister and the House to listen patiently to what I have to say in regard to a specific matter and that is the function of the Select Committee on Public Accounts. I am raising this matter as a former member of that committee and as someone who got to know the limitations and the frustrations of that Committee as well as its possibilities and the work it does. I raise this matter following upon the fortunate experience we have had of having the Rules of this House revised under the chairmanship of the doyen of this House, ex Minister Paul Sauer. The fact that the Rules of this House have been smartened up and improved is undoubtedly to the benefit of everybody. I wonder whether the time has not arrived for us once again to focus the searchlight carefully on the Select Committee on Public Accounts. We have the hon. member for Middelland (Mr. van der Merwe) in our midst who is making an academic study of certain aspects of our parliamentary life and he gave me the interesting news that it was customary during the period 1911 to 1919 for the Opposition party to provide the chairman of the Select Committee on Public Accounts. There was a time when the Minister of Finance served on the Select Committee on Public Accounts. This committee, as we have known it over the last number of years, is not the alpha and omega of all times. I raise this matter because financial control is the very core of parliamentary democracy and it is becoming more and more difficult to exercise the financial control envisaged by democracy ever since its inception. Because State expenditure is increasing more and more we cannot specify precisely in the Estimates how every cent has to be spent. General heads are used and the Minister concerned and his officials are given a great deal of administrative discretion, but even that is not the most important. This Select Committee on Public Accounts is a fallacy; it is a committee of this House, which, after the event, carefully goes into the question of whether the money voted by this House was indeed spent as the House intended it to be spent. I think there are two aspects of this process in particular where this core of parliamentary democracy has become slightly diseased, two aspects in regard to which we have to nurse it back to good health again. The first is that in its task of going into the question as to how the funds voted by Parliament have been spent the Select Committee on Public Accounts has to rely more and more on Treasury regulations and a feeling has developed in our administration that the way in which any money has been spent is holy and sacrosanct if it was spent in accordance with the formal letter of the law of Treasury regulations, no matter how unwisely that money was spent, no matter how differently it was spent from what both sides of this House had in mind when they passed the Vote concerned. Over the years the formal observance of Treasury regulations has become a limiting factor as far as parliamentary control is concerned, on the one hand, and as far as the smooth functioning of our Public Service in which the prime object of the public servant has become, not to do his work and to get it done but to see that he does not make a misstep, that he does not contravene the Treasury regulations, is concerned, on the other hand.

The second related matter is the fact that since Union and since the Republic the Auditor-General, the chief official of this House who reports to it whether the money has been spent as the House intended it to be spent when the Votes were approved, has been submitting an increasingly formal report to this House. I think the time has arrived for the Auditor-General to submit to this House an efficiency report. In this connection I just want to refer to two countries. In the first place I want to refer to the 1964 report of the Public Account Committee of Australia where the Committee permit themselves a royal extent of volubility. In his introductory speech the Chairman of the Committee said—

I also want to refer to Canada where it is a well-known fact that the Auditor-General exercises an efficiency audit. When addressing a conference of Commonwealth auditors-general in London in 1960 the Auditor-General of Canada described his function in Canada as follows—

The Auditor reports on the extent to which there has been a constructive appraisal of the administrative task for which the money was voted and on which the money was spent. I quote further from the same address—

The normal objection to an efficiency audit and a functional audit is the fact that it is not the function of the Public Accounts Committee to sit in judgment on the work of Parliament. What Parliament does it does within its own discretion and we can criticize the Government in this House. But surely there is a big difference between the deliberate decisions of the Government and the administrative procedures which take place as a matter of course. In many departments powers have been delegated over a wide field and the Minister himself is often surprised to hear what is being done, allegedly in his name. A functional audit will assist the Minister to learn what an expert from outside thinks about the things which are done in his name.

That is why I want to leave these two simple thoughts in the midst of hon. members: Firstly, whether the time has not arrived for us to appoint a Select Committee, consisting as is customary, of representatives from the two sides of the House, once again to consider the legislation, rules and customs governing the functions of the Public Accounts Committee, and, if necessary, to revise them and make recommendations in this connection to this House. Secondly, that this Select Committee be instructed to consider specific reforms to the Public Accounts Committee, those instructions, amongst others, to embrace the following four thoughts: Firstly, whether any administrative stumbling blocks have developed because of the existing Treasury regulations, administrative stumbling blocks in the way of the smooth, imaginative and creative functioning of the Public Service. The second thought we can transfer to this Select Committee, I think, is whether it is not desirable that the Auditor-General of this House should conduct an efficiency or functional audit; thirdly, whether we should not, like in Australia, permit our Public Accounts Committee to sit outside sessions of this House. In this regard I want to emphasize that what I have in mind is not that the Public Accounts Committee should! sit year in and year out, but what I do have in mind is that where it has now become customary for this House to commence its sittings a week later in January than in previous years the Public Accounts Committee should meet and commence work in Cape Town 14 days prior to the opening of Parliament with the object of submitting its final report at the time of the April recess so that it will be in he hands of hon. members of this House after the April recess when the Budget debate takes place and one department after the other comes under discussion.

Then I come to the final thought. The subject of remuneration and increases, etc., is perhaps not so popular but I think the Select Committee must consider whether the chairman and members of the Public Accounts Committee should not receive some remuneration. I found it somewhat comical a few years ago, when the question of parliamentary emoluments was very adequately disposed of, that the Whips who fulfill a very important function in this Parliament, were recognized in terms of emoluments, but that the Public Accounts Committee which is the core of parliamentary democracy, a committee which has to see to it that what we intended should be done has been done, was really not considered at all.

We have heard a number of speakers on the Government side in this third-reading debate. Yesterday we heard the hon. member for Pietersburg (Mr. Niemand) who gave us a most interesting historical review; we heard the hon. member for Christiana (Mr. Wentzel) who spoke yesterday and who, I feel, was an apologist for the agricultural policy of the Government. I am sure the hon. member is aware that 2,400 farmers leave the land annually, and if this rate of farmer wastage continues, then 2,400 families annually will be testifying against the Government’s agricultural policy. Finally, we have just heard the hon. member for Kempton Park (Mr. F. S. Steyn), who has not raised a controversial matter but who has made certain interesting suggestions with regard to the Public Accounts Committee and the strict adherence to Treasury regulations.

Sir, this third-reading debate offers an opportunity to members on this side of the House to give the necessary warnings both to the public and to the Minister of Finance. I feel that the suave mastership of the Minister has lately been faltering in the bogs of certain financial-insurance difficulties and of rapid inflation. The public has to realize that the policy of gross over-taxation which is practiced by the Government on the advice of the Minister of Finance, makes milch cows of the public of South Africa for no useful purpose. It must be indeed a very docile public which allows itself to be over-taxed by the Minister of Finance to the extent last year of R128,000,000. Furthermore, this overtaxation has now become a regular feature of the Minister’s Budget. In private enterprise, if this type of practice, whereby the profits and the dividends in a company are withheld knowingly and intentionally by over-estimating the expenditure, were followed by the board of directors it would be termed unbusinesslike and intolerable and would lead to the dismissal of the management by the shareholders, and I cannot refrain from suggesting that perhaps the hon. the Minister and the Government deserve a similar fate. The public should realize that by unnecessarily collecting R128,000,000 from their pockets without any real justification, they (the public) have been deprived of the fruits of their labours, to which in a free country every citizen is entitled, and yet there is no redress against this over-taxation, which in fact is a form of financial dictatorship. The supporters of the Government outside, the voters, should realize that they are themselves deprived of moneys which belong to them and which should have been left in their own possession. Sir, I would like to ask the following question: What does the Government do with these large sums which are left over, after having provided funds to defray all justifiable expenditure to meet the needs of the nation? Does the Minister use such moneys for the alleviation of hardship? Does he use such moneys to alleviate the hardships suffered by 200,000 pensioners, by the aged? Does he use it to make it possible to give the well-deserved increase of salaries to nurses, medical staff, postmen, rail-waymen and policemen to bring their salaries up to realistic levels comparable with the salaries paid in industry and commerce? Sir, the answer to these questions is an emphatic “no”. What is the reason behind this systematic over-taxation as applied by the hon. the Minister? I suggest that the Minister has been forced to adopt these measures by the dangers of the tide of galloping inflation. It is a measure aimed at takings hundreds of millions of rand out of circulation, thus reducing the purchasing power of the population as well as reducing the accumulation of capital which could and would be used in commerce and industry.

The gist of inflation is that the prices of commodities are rapidly increasing because the production of commodities is not in step with the moneys in circulation. Too much money is chasing too few goods. From this it follows that the cause of inflation is lack of high productivity. Inflation brings down the purchasing power of money through pushing up prices. It is all very well for people whose incomes rise, but for people with fixed incomes it is a great disadvantage, and the people with fixed incomes are the ones who are suffering. This fixed income group include all private and Government employees. Whilst private enterprise is forced by competition to adjust its wage and salary scales, the Government, as announced by the hon. the Prime Minister, stubbornly refuses to give just consideration to the demands of such lowly-paid employees as postal and railway workers. Sir, the way to prevent this runaway increase of prices is not ad hoc measures such as over-taxation applied by the hon. the Minister. The fundamental solution can only be achieved by increased productivity and such increased productivity demands more efficient use of manpower and the training of manpower and the modernization of methods of production. Furthermore, it must be understood that the change-over from cheap, unskilled and semi-skilled labour to the modern methods of automation and computer techniques in industrial production, takes years. This change-over has already reached the stage of a new industrial revolution in overseas countries such as the U.S.A., the United Kingdom, France, Germany, Russia, Holland and Belgium, Switzerland and the Scandinavian nations. We have to face the fact that we in South Africa will be lagging behind other industrialized nations if the Government neglects its duty by delaying preparation for the change-over to modern productivity. Because in this change-over one of the first steps is and should be improved education. Sir, before I dwell on the problems of training or education of the Europeans, I would like to remind the other side of the House of the existence in the Republic of South Africa of at least 13,000,000 non-Europeans.

Are you practising your election speech now?

These people are integrated in the economic structure of the country and the unity of their economic interests and that of the White population is an undeniable fact. Admittedly the vast majority of the non-Europeans lack cultural and technical training, but nevertheless there are amongst them important sources of skill and knowledge which could and should be used in a modern manner for the benefit of the whole country. There are masses of very important potential and actual consumers of the products of industry and commerce amongst the non-Europeans and strategically, in the face of the position in which we find ourselves to-day, in the face of the hostility of the outside world, it is vitally important that these people must realize the truth, that their standards of living and their future opportunities are much better in the Republic of South Africa than in any other country on the African continent …

Thanks to the National Government.

For all these potent reasons it is our duty to alleviate this burden of racial discrimination in creative employment and training. Instead of fragmentation of the Republic into various Bantustans, which in fact is an effort to thrust them back to their own Native territories, to condemn them to their own meagre intellectual and material resources, we should demonstrate by our own efforts our concern for their well-being and their future, not in separate territories but within the unity of the Republic of South Africa. We have to create a common loyalty amongst all our peoples. Sir, I noticed with interest three weeks ago that the hon. member for Vereeniging (Mr. B. Coetzee) used words to this effect that the policy of the Nationalist Party meant the gradual removal of racial discrimination. He also said in effect that South Africa would be able to convince the Western world of the correctness of the policy of apartheid through slowly moving away from racial discrimination. Sir, I hope that this policy is not only the wish of the hon. member and that he does not find himself isolated in the midst of the reactionary attitude of his own party.

Sir, during this last year the Government broke the back of the communist organization in South Africa, but the Government’s propaganda and statements hide every sign of dissatisfaction amongst non-Europeans. It is no use ignoring the fact that a large proportion of the non-Europeans are still poorly educated, poorly paid and poorly housed, hence the dissatisfaction amongst them. The eminent industrialist, Dr. Anton Rupert, much respected in Government circles, gave the lead in bringing about an improvement in non-European wages; at the opposite end of the scale we have seen the suspension of the 90-day detention clause by the Government, accompanied by a warning that it may be reintroduced if it sees fit to do so. In other words, the Government fears and foresees a resurgence of revolutionary conspiracies. As long as such conspiracies are confined to a small number of agitators they can easily be nipped in the bud, but if the revolutionary mood should ever spread to large masses, measures of this kind may become ineffectual. Our own safety demands that we should increase the bonds of unity between the European and the non-European sections of South Africa by means of better education, by better distribution of wealth, by better distribution of wages and by better treatment of non-European South Africans.

More integration!

Education is the only way to make civilized men and women out of Black and White.

Coming back now to the question of the education and training of Europeans, we have to face the fact as Europeans that South Africa only spends about half the amount on university education per student that in spent by the U.S.A. and the United Kingdom and other Western European countries. In South Africa tuition and training is of a lower standard: there is a need to improve the standards of university teachers; we need more and better qualified university staff who should be employed, and the whole curricula of our scientific and technological training must be reorganized and brought up to date. Sir, we must recognize that it takes 10 years to produce a highly trained scientist or technologist and that the training of a skilled artisan takes at least five years. It follows that even if the Government does not continue to ignore the demands of the industrial revolution of our age, we are going to reach the years 1970 to 1975 before we will have the skilled workers and scientists and technologists to introduce modern productivity on a sufficiently large scale. Measures should be taken immediately to provide free university education for all talented youth who are prevented from entering university because of the lack of funds. And in this the Ministers must realize that they are not practising charity when they ensure the training of talented youth. On the contrary, by refusing it, by refusing to offer better opportunities for higher education to under-privileged capable young men, they are deliberately sacrificing the future of such youth and the future of our country, South Africa, for a blind, purposeless, mean attitude. Sir, it is impossible to understand that the Government should refuse help for the better education of young men and women in need of it when a large section of these young people come from parents who support the Government side of the House.

The beginning of the galloping inflation we are now facing shows that the country cannot depend on the foresight of the Government. It shows that the Government has not been planning during the past years. Even now, instead of planning for increased productivity, which is what they should be doing, they are exercising a policy of stop-go, trek-halt. Unfortunately at the moment, Sir, it is a “halt” and not a “go”. And the Minister of Finance is frantically grasping at all available means to withhold money from circulation. It is now a time of “halt” but you cannot have your cake and eat it. By over-taxing individuals and business concerns, by threatening with regulations to reduce credits given by banks and institutions to the public, to industries and business enterprises, the Minister and the Government are halting the modernization of productivity in the Republic. Because how can private enterprise invest in modern equipment, how can industry change over to modern methods, to automation and to modern competitive productivity, when the Minister and the Government stop the accumulation and flow of capital in the private sector, when at the same time vast sums of money are spent on armaments and other non-productive Government schemes? The public has to realize that if this process were to continue a larger and larger portion of available capital would be syphoned off into Government-sponsored ventures which are either non-productive or have a very low productivity, and that the next step which threatens us would be protective tariffs which the Government may have to introduce to shelter the lack of competitiveness of backward, inefficient productivity of the Republic against the modern competitiveness of modern overseas productions. The cost of the Government’s misconceived policy will be borne by the citizen taxpayer who will have to pay higher prices for a lower grade product. Because the Government is not taking action now to ensure the sound economy of the nation.

The Minister of Economic Affairs said that all countries with an expanding economy had problems of inflation. Unfortunately the problem of inflation is also faced by countries which have no expanding economies at all. This is the case in the United Kingdom to-day which has the lowest expansion of productivity in Western Europe. It is facing both inflation and the threat of a devaluation of its currency. The Minister of Economic Affairs’ catchword to the South African population is “Spaar vir die voorspoed van more”. I would like to ask how can the majority of the people, the railway and the postal workers, the lower income grade Government officials, the pensioners, save. They have not enough income to live on. How can they save? I can foretell now that the time is rapidly approaching when wealthier sections of the community and companies could be heavily taxed so that the national savings in the private sector, and thereby the accumulation of capital, would dangerously decrease. The Government is advocating the freezing of wages. It will not be long before they are forced to freeze profits and dividends of companies. That would be a second phase of financial dictatorship. And this “stop-go” policy is the policy that ended in Britain with a £800,000,000 deficit. It also ended in Britain with the defeat of the Conservative Party, and may one hope, Mr. Speaker, for a similar fate to befall this Government.

The day before yesterday the hon. Minister talked to us of measures which are only ad hoc measures. The only means of avoiding inflation is increased productivity. With due respect, Sir, the Minister either does not know a simple economic principle or he avoids it intentionally, because the Minister admits that there is a serious shortage of skilled manpower, yet his statement that the shortage of manpower acts as a self-regulatory corrective force is a statement that could only originate from the Minister’s unawareness of the economic principles or from the Minister’s intentional evasion of them. Because if inflation has to be corrected this can only be done by producing more consumer goods. This would stabilize the cost of living. Productivity can be increased either by improved technology or by increased manpower and wage demands can only be satisfied if the wage earners produce more. So that out of this increased productivity increased wages can be paid. There is no question of self-regulation in economics by a shortage of manpower. The Government should take immediate steps to introduce improvements in productivity by automation in industry.

On a point of order, Mr. Speaker, may an hon. member read his speech?

She is not.

Order! Who replied? The hon. member may continue.

I was saying that the Government should take immediate steps to introduce improvements in productivity. The should do it in two ways: They should introduce these improvements by automation in industry and also be training manpower in modern technical processes.

The day before yesterday the Minister stated words to the effect that the shortage of skilled manpower was serving as a corrective force in counter-acting inflation, which, according to the Minister, is caused by prosperity. Sir, once again one does not know if the Minister is unaware of the economic principles or whether his statements are based on assuming that this House is also unaware of them? For the truth is that the shortage of skilled labour forces the employer to compete with such labour by attracting them away from old employment to new employment, by offering higher wages. This has the affect on the labour force, which is conscious of its own shortage on the labour market, that it itself demands higher wages. These factors produce a rising spiral of wage increases, without any increase in productivity. So that instead of being a corrective factor, as stated by the Minister, the shortage of labour is one of the potent causes of inflation. We on this side of the House believe that until and unless the hon. the Minister of Finance and the Government take into account the very real demands of the wage earners this side of the House will continue to oppose budgets that bypass the man in the street, “die volk daar buite”, Mr. John Citizen, on whose labours the prosperity and the economy of South Africa depend.

I listened attentively to the previous speaker. I must admit that she covered such a wide field that it will be difficult to traverse it entirely in my reply. During the course of my speech I shall touch upon a few points raised by her. She has emerged here as the new prophetess of the United Party.

In view of the fact that this debate is mainly concerned with financial matters I wish to point out that the general economic position of the Republic is particularly good and that the gross income has risen. The economy has been stimulated by the big Government and semi-Government schemes which have been tackled. We have schemes such as the Orange River scheme, for example. That scheme will pour R450,000,000 into our economy. Iscor wants to increase its steel production by 92 per cent and that will require a further capital investment of R560,000,000.The Railways and Harbours have expanded which will inject another R530,000,000 into the economy. There is Escom with R400,000,000; Sasol, Phalaborwa, large housing schemes and numerous other schemes. All these projects have played an important part in the general economic prosperity of the Republic.

As against this picture we have the picture of the United Party. There is a sharp contrast between ours and the said picture painted to us by the Jeremiahs and prophets of doom of the United Party. The contrast between these two pictures is too sharp that even the hon. member for Constantia (Mr. Waterson) has had to change his tune. He always told us that we were on the brink of a precipice but now he says “we are on top of a boom”. Had the former member for Wynberg (Mr. Russell) who said South Africa was a land of milk and honey but that it had become a land of castor oil, still been in this House, I wonder whether he too would have changed his tune. I must admit the new member they have in this House is a great improvement.

We viewed with attention the dramatic gestures of the hon. member for Drakensburg (Mrs. S. M. van Niekerk). She hurled accusations at the Government and said the Government had made a big mistake in 1948 not to follow the policy of the United Party of bringing immigrants on a large scale into this country. When we think what the conditions were in 1948, Sir, I really think hon. members opposite should remember that every immigrant they brought into this country in 1948 in the first place took the bread out of the mouths of our own people, and, in the second place, took the houses which were still available for our people. Those houses were given to the immigrants. That also happened as far as employment was concerned. There was unemployment in those days. Our people lived in hovels, backyards, garages. Housing conditions were extremely poor.

The United Party who says we should have brought them in on a large scale forgets that there was no building material available in those days. Conditions were such that we could not bring immigrants into the country. To-day they reproach us and tell us we are carrying out their policy! Circumstances are totally different to-day. Circumstances are such that we can provide every immigrant who comes into this country with a proper house. We can offer him proper employment. It is not necessary for him to-day to take the bread out of somebody else’s mouth. We remember how in those days our wives had to queue outside the butcher shops to buy meat. There was a food shortage. There was a housing shortage; there was not enough work. To-day the United Party tell us we made a big mistake in not carrying out their immigration policy. To-day they reproach us because we are bringing immigrants in. Surely the basic principle is that when you bring an immigrant into the country you should be able to provide him with a proper house, a good job and a good salary. We could not observe this basic principle at the time.

Another reproach the United Party hurls at our head is that the farmers are struggling and that they do not share in the prosperity of the country. They even say that the farmers are getting less for their products to-day. It was the hon. members for East London (City) (Dr. Moolman) and Drankensberg in particular who accused us of that. It also became evident from their speeches that they were no longer satisfied with the Marketing Act. That is a very serious matter and we must find out what the position is. They allege that our Ministers were not prepared to accept the recommendations of the Marketing boards. In the first place I want to put this very specific question to the United Party: Are they beginning to run away from our Marketing Act? Do they still accept that the Marketing Act is the instrument to bring about orderly marketing? Do they realize that 73 per cent of our products are handled under the marketing Act, 17 per cent under special legislation and that only 10 per cent of our products are not controlled? Do hon. members opposite realize that the mouthpiece behind these control boards about which they are complaining today is organized agriculture? Do they realize that the majority of those serving on those boards are farmers? It is a serious accusation to make that the Government is not prepared to accept the prices recommended by the control board. We remember the days when the United Party was in power. We remember the days when Minister Strauss, as Minister of Agriculture, refused in all respects to accept the recommendations of the Marketing Board. In 1948, when we came into power, there was a difference of 1s. 3d. per bag in the case of mealies. We then eliminated that difference and paid the farmers the price recommended by the control board.

I want to return to these Marketing Boards. We have these Marketing Boards to ensure stability to the farmer. We have built up our stabilization fund to such an extent that it stands at R82,000,000 to-day, together with the wool stabilization fund. This is a good nest egg to ensure the stability of the farmer as far as his products are concerned. Another accusation is that large numbers of farmers are leaving the land. We have just again been told that 2,400 farmers leave the land annually. This matter was very effectively dealt with yesterday by the hon. member for Christiana (Mr. Went-zel). He pointed out that only 300 units had disappeared in a year and that the figure of the United Party was not correct. Special reference has been made to the small farmer who was leaving the land and that the Government was not sympathetic towards him. What are the real facts, Sir? Let me take the Land Board for example. I have the figures here for the period 1948 when the National Party came into power up to 1960. During that period only 4.1 per cent of the farmers who had been given land could not carry on and had to leave the land. What is the record of the United Party? During the years 1929 to 1939 33¼ per cent of the farmers who were given land had to leave; they could not make a success of it. During the years 1939 to 1948 12.3 per cent had to leave the land. Over 20 per cent of those farmers left their farms and moved away as against the 4.1 per cent during the regime of the National Party. Then they point the finger at us! Last year extraordinary measures were taken. For example, whereas in the past a farmer could not acquire land under Section 20 if he had a small piece of uneconomic land—because he was a landowner he was discriminated against—the law has now been changed to provide that any person who has an uneconomic piece of land can utilize that land to purchase a larger piece and the Land Board can take a bond over the whole property. The Land Board takes over all his liabilities on mortgage at a low rate of interest. This amendment was so popular that the Land Board ran out of funds this year and could not assist any more people. That shows you, Mr. Speaker, that this Government is sympathetically inclined towards those people. The Government wants to help in particular those people who are on uneconomic pieces of land.

Instead of expressing their gratitude for the assistance given the United Party went further and alleged that the farmers were not getting their fair share of the prosperity in the country. I am sorry that I have to quote a few figures but I have to do so. We have been told that the production of the farmers has not increased and that the prices are still the same, or lower. I took the trouble of going into the prices. I want to give the total production in respect of various commodities. Take the case of our dairy production. We have heard such a great deal about dairy production. In 1947-8 the butter production was 55,000,000 lbs. It rose to 92,000,000 lbs. in 1963-4. In 1947-8 the price was 24.2 cent. This year the price is 37 cent. We had the accusation that the Minister was not accepting the recommendations; that he was not accepting the prices recommended by the control boards. Of the last ten recommendations only one was not accepted. In October 1961 the Dairy Board recommended 30 cent and the Minister fixed the price at 29 cent. That is the only exception.

I want to go further. I know the United Party do not like hearing these facts. Take cheese. In 1947-8 the cheese production was 20,000,000 lbs. and in 1963-4 it was 31,000,000. I also want to mention the price. In 1948 the price was 95.8 cent per 100 lb. This year it is 168 cent per 100 lb.

May I ask a question?

No, Mr.Speaker, time unfortunately does not allow me to reply to question. I want to deal with the production of maize. In 1947-8 the maize production was 26,000,000. In 1964-5 it was 46,000,000. That was a bad year because it was 67,000,000 the previous year. In 1947-8 the price was 212.5 cent and to-day it is 300 cent. Take wheat. In 1948 the production was 5,384,000 … [Interjections.] I realize that hon. members opposite are not anxious to hear these statistics because they refute their entire argument that production has not increased and that the prices of the farmer have not been increased. Last year the wheat production was 10,309,000 bags. The price was 410 cent and was increased to 557 cent. Let us go into the meat position.

And the production costs?

I could deal with that but time unfortunately does not permit me to do so. The total production was 985,000 lb. in 1948. It rose to 1,156,000 lb. in 1964. It has also been stated that the meat prices to the farmer have not been increased and that is why I want to give the prices as well. In 1948 the price of meat was R6.09 per 100 lb. and to-day it is R12.61. It has more than doubled. So I can go on, Mr. Speaker. I can go on to prove that in every case prices have increased tremendously. In each case production has increased tremendously. The United Party to-day wants to make the world believe that so far this Government has done nothing in respect of the farmer, the small farmer, and all these various commodities. Then they also criticize our Marketing Act which is the guardian of the farmer. It ensures a stable price to the farmer. All this, Sir, point to only one thing, as far as I am concerned, and that is that the United Party has completely lost touch with the platteland. The members who speak on farming matters on that side of the House do not represent agricultural constituencies. I think, for instance, of the hon. member for East London (City) (Dr. Moolman), the hon. member for Gardens (Mr. Connan), and others. Where we are on the eve of an election it is clear to me that the United Party have suddenly developed a love for the farmers, the workers and those groups. Time does not permit me to deal with all the various commodities. I do not even have time to deal with all the various groups of workers. But those people know the National Party Government. They also know what the record of the United Party is. They know, for example, that the United Party is trying to exploit the unfortunate position of some farmers, a position which has been brought about by natural disasters, by creating dissatisfaction amongst those farmers in order to catch votes. The electorate, however, remember the black record of the United Party. They remember that during the regime of the United Party there was a shortage of food, of money and employment facilities. That is the record of the United Party. As against that the regime of the National Party over the past 16 years has been characterized by economic progress, full employment and stable prices. It has been a challenge to every producer.

Business interrupted in accordance with Standing Order No. 99 (c).

The hon. member for Johannesburg (North) (Mrs. Weiss) at least admitted here to-day that to have distributed the whole surplus of last year would have caused a stronger inflationary pressure. I am grateful for that admission. I am not quite aware why she said, when I stated that a labour shortage is often a self-regulatory factor, that that does not reveal sound economic knowledge. I think she should rather lay her objection at the door of the Bureau for Economic Research of Stellenbosch, which has a very high reputation, and if the hon. member had been here she would have known that I was quoting what they had said in regard to the matter, and I am somewhat disappointed in what she said. It is of course quite true that increased productivity can combat inflation. That is almost an economic commonplace. But that is a long-term policy. And the Government has not sat still in that regard. The Government showed that it was very active in that regard by, for example, to mention only one matter, tremendously increasing State expenditure on vocational training. In 1948 it was R2,300,000, in 1961 it was R9,100,000, and in 1963 it was R11,100,000. But that still does not solve the short-term problem, and for that short-term problem of course other classic steps have to be taken, economically classic steps. The hon. member did not go into it very deeply, and perhaps this is not the time to do so. The hon. member also spoke about the modernization of industries. The Government does much to encourage that. That is all it can do. It encourages it, for example, by means of very liberal investment and initial allowances, which are such that they act as encouragement to any industry to modernize its machinery. It also does so by means of reducing the taxation on undistributed profits. Therefore the other aspects mentioned by the hon. member are things which in fact thoroughly enjoy the attention of the Government and will continue to receive it.

The hon. member for Kempton Park (Mr. F. S. Steyn) raised the possibility here of an efficiency budget. That whole matter was thoroughly investigated by the Treasury a few years ago, but it was found that many difficulties and implications were connected with it and we could not take it further. The same probably applies in respect of the suggestion in regard to a functional audit. But both suggestions, as also the one in regard to a reform of the Select Committee on Public Accounts, merit consideration and we shall probably in the course of time have to devote attention to it.

Then I come to yesterday’s debate. The hon. member for Yeoville (Mr. F. S. Steyn) was the leading actor in the scene. He blew through this Chamber like a whirlwind. He tried to mow what nobody had ever sowed. He tried to criticize and to controvert what nobody had actually ever said—at least not in this debate. We know the hon. member for Yeoville. After all these years we should know him, and we know that he can talk very entertainingly, and with a little bit of reticence here and a little bit of exaggeration there he can tell a very interesting story, but his reliability is quite a different matter. We have already learnt to take what the hon. member tells us here with a little pinch of salt.

It is of course a very good electioneering speech, and we know the hon. member is at his best when there is an election in the offing and he gets the opportunity to speak here. The trouble with the hon. member is that he always over-states his case; he exaggerates it with his blatant vote-catching and his application of the vulture policy of scavenging for a few votes everywhere, and that lowers the value of his contributions. I want to tell him something which I learnt in my younger days when we still learnt Nederlands, which can act as a warning for him—

That is very applicable to the hon. member. I want to pause to deal for a moment now with one example of what I have mentioned here. The hon. member had much to say about how the Government is now “penalizing wage earners”, and particularly the Public Service, the poor post office officials and the railway officials and all the other officials.

Hear, hear!

The hon. member has not said enough. He said that they alone, those wage-earners and salaried people, have to bear the full burden of anti-inflationary steps while the other people bear no burden at all.

The others are not reprimanded and warned. That was my argument.

If the hon. member had been listening, he would have heard me say very clearly in my reply to the second reading debate that the Government “will check, when necessary, excessive or unjustified increases, not only in wages but also in prices”. The hon. member conveniently forgets my reference to prices, because he knows very well that when prices are controlled there is also indirect control of profits. And you see, Sir, his great attack was on the big companies which make the big profits. But if what we have said here is implemented, it will not be only the public servants and other wage-earners who will bear the heavy burden of combating inflation, but then everybody comes into the picture, and it is in the universal interest. The hon. member ought to know—and if he does not know he ought to ask the hon. member for Jeppes (Dr. Cronje)—that wage and price control are not among the first of the anti-inflationary measures which are effected. Monetary and fiscal measures, where we are dealing with demand inflation, such as we now have in South Africa, are classically the first measures effected. The others are only used whenever necessary. The hon. member remains silent about “whenever necessary” too, because it would controvert his whole argument if he were to quote here what I actually said and if he dealt with it on that basis.

The hon. member spoke about planning. He said that I had said that this economic development programme was something new. He says it is as old as Noah. He says look, for example, at the five-year plans in Russia, look at the plans of the old Social and Economic Advisory Council. It is not something new, says he. But the hon. member does not realize that there is a great difference between this type of unsystematic general planning and a detailed, scientific planning such as that which forms the basis of the economic development programme. It is quite a different type of planning. For example, under the Russian scheme it is quite possible that the planned production of steel could be far too low to supply Russia’s requirements, but with the second type, the type of planning we envisage, an attempt is made to bring production and the country’s requirements into line in a scientific manner and that, I say, is quite a new idea, and it is not the type of planning to which the hon. member referred. We know that the planning to which he referred is very old, but again, if he were not in such a hurry to think that he had a debating point here, he would not have stepped into this trap.

The hon. member also said: If the Government had planned the expansion (as I had said in my speech), then what about the bottlenecks in respect of manpower, railway transportation, the postal services and housing, and what about the rise in prices? That is the question which the hon. member posed. Let me tell him immediately that surely the most important thing is the economic growth, and the bottle-necks he mentioned here are coincidental; they emanate from the degree of prosperity we have.

If one had not had that economic growth, one would not have had these bottle-necks. But one is not going to abandon the objective one strives for just because here and there there may be a few uncomfortable consequences. One strives to achieve that objective and then one tries as far as possible, according to the need that arises, to combat the coincidental deleterious effects. It is inevitable that if there is prosperity there must be bottlenecks, and it is quite possible that if we have sufficient manpower there would have been a bottle-neck in connection with the provision of capital or our balance of payments. It is quite possible that if one has fast development bottle-necks arise, and as I said yesterday those bottle-necks are often a self-regulatory factor to ensure that the economy does not become over-heated.

“Planning for prosperity” is what I said and that is what we did, and in the first place that comprises—because it really rests on two pillars—the establishment of a sound financial basis; one needs a currency which is sound. In the second place one must ensure that there is a favourable economic climate so that the private sector can set to work to produce that prosperity. Those are the two foundations for prosperity, viz. a sound financial basis and a favourable economic climate, which the Government has tried to achieve, and if the Government has done it so successfully that bottle-necks now arise then that is not a matter for tears. It may be that “we builded better than we know”, that the prosperity is greater than even we expected, but that is not a cause for regret. We must now see to it that from time to time, as the need arises, the various bottle-necks are removed, and in that regard we have had very little assistance from hon. members opposite.

I must say that when I listened to what the hon. member said about the bottle-necks and about the Minister of this and the Minister of that, I immediately made a note about Oom Boy de Villiers. Oom Boy de Villiers was the coach of the Cape Town University Rugby Team. Often there was criticism of his players and his pattern of play; they said, “That is not the right way, they are playing in the wrong style”. Oom Boy always said: “What counts is what appears in the Argus on Saturday night”. That is what counts. And if the hon. member for Yeoville now criticizes the bottle-necks and blames the relevant departments, then I also want to tell him: What counts is the prosperity and the rising standard of living which everybody in South Africa enjoys to-day. That is what appears in the Argus, that is what appears in the statistics, and that is all that counts.

Ask the Post Office workers.

I want to apologize to the hon. member for Constan-tia (Mr. Waterson) for not having dealt with this question as to what is a desirable level for our reserves. Well, it is very difficult; it depends on the vulnerability of one’s economy. I have often said that my objective is that it should cover six months’ imports. The hon. member said that somebody else had spoken about five months.

The Economic Planning Council.

Yes, I am a little cautious. That is what I am striving for. But even if one has achieved it, it does not mean that one must always remain that level. The whole object of reserves surely is to help the economy through difficult times. The reserves are not there just for the sake of having reserves. They must be there with an object, in order to combat temporary difficulties which the economy may experience. In that regard there need not really be any concern now. If the reserves fall below the level I have mentioned, there need be no concern. It is just unfortunate, but not necessarily fatal.

The other point I should also like to mention here is the one raised by the hon. member for Boland (Mr. Barnett). He asked that I should please be a Santa Claus this year. There is no role I should like to play more than that of Santa Claus. But I would not be a Minister of Finance if I were to seek the popularity of a Santa Claus and thereby endanger the economy of the country. Whenever it has been possible, I have always generously and gladly given what the finances of the country allowed me to give. But I cannot promise that I shall play Santa Claus. I would thereby admit, if I wanted to play Santa Claus under all circumstances, that I am not a good Minister of Finance.

For the rest, we have had very little here that is new, except for the point dealt with by the hon. member for Kensington (Mr. Moore). He complained about the scheme we now have for blocked rands, the non-residents’ bonds. He says that the first plan I had, which was evolved in 1961 or 1962, was a good one and that we should return to that scheme. The hon. member said that thereafter there was another scheme which was not so bad either, but the one we have now is very bad. That was more or less what the hon. member said. He says we should return to the first system, because that was a very good one. If I were to return to the first system it would be very popular among speculators, both here and abroad, and I will tell the hon. member why. It is because the hon. member for Kensington criticized that first scheme on the grounds that the interest obtained there was far too high. He made a little sum for us. Perhaps I may just refresh hon. members’ memory. On 26 March 1962 he said—

Then the hon. member works out what the result is now. In the first year the hon. member does not give a percentage, but he says during the second year he will receive 11 per cent, during the third year 12.6 per cent and in the third year 16 per cent, and for the last year he will still have invested his £200, but in this country he will have £240. What does he receive in return? He receives the £200 in capital, plus £12 interest and £40 in bonus. And the hon. member adds that on that bonus he does not have to pay income-tax overseas, so that in total he receives 26 per cent interest. The hon. member criticized me, and it was largely as the result of his criticism that I said that I would now abandon that scheme which did not quite comply with the object we had in mind because it only encouraged speculators not only here but also abroad.

It was only R13,500,000 in 12 months, therefore it was not very popular.

It was so popular that we felt that it was too popular. It paid that man, but it did not pay South Africa. That is what the hon. member for Kensington said, and then we came along with another scheme, and that also worked out very liberally. Then we announced in 1964 that we would get a more realistic rate of interest which would not encourage speculators, because our original object was to meet people in London who had South African shares which were purchased in 1961, so that they would not lose money. Now there is not a single share in London whose price is not higher than the 1961 basis. Therefore the object of protecting people who were affected when we took steps for the first time in 1961 in connection with the balance of payments prices was achieved, and those people are now safe. The only people who could benefit from this are the speculators. We have said that we are not working on the large basis of R20,000,000 as at that time. In the first place we said that the question of a loan for South Africa is no longer so important. It is still important, but not so important that we are prepared to sacrifice some of our reserves for that, for repatriation. Therefore we gave preference to the tender system. That produced comparatively little, but I allege that it produced little because there was no longer the same encouragement for people who had invested in South African shares to take the money out to the outside world; there is no longer the same spirit which still existed in 1961 and in 1962. There is now such confidence that many of these people prefer to keep their money invested in South Africa rather than to take it across out to England. They feel it is safer here, and they are correct. As I say, we made the minimum price fairly high, but we took into consideration that these people get a discount, as the hon. member has said. They buy there for £100 and sell here for £120. If one now fixes the floor price at £90, they receive an average of 6 per cent for those five years, because they receive the full benefit of that £20 and also of the £10. They receive it for below par. We said that that was reasonable. It is not that extravagant 11.16 per cent and 26 per cent which the hon. member referred to. It is a fair rate of interest. But the people are no longer inclined to make use of it for the simple reason that they know it is safe in South Africa.

It is not only shares. What about fixed properties?

South Africa’s prosperity is such that other people have confidence in it; our own people have confidence and others have confidence, and if difficulties arise along the way then those are difficulties which exist in any country which experiences prosperity. We have it to-day in Japan, in France and in Italy and all the countries which have had great prosperity. Problems arise but none of those countries, nor South Africa, will prefer to go back to the position we had three or four years ago and say that we should rather not have the prosperity we have to-day because certain difficulties arise.

Motion put and agreed to.

Bill read a third time.

It appears that the suggestion made on Monday by the hon. member for Houghton (Mrs. Suzman) met with the approval of the Minister: in fact, the Press commented on the fact that he moved nearer to the hon. member in order to hear the suggestion of “a social measure for third party insurance in the form of a State Corporation or Public Utility Company”. He appeared to be very interested in it, and showed his appreciation by moving down to this end of the Chamber—and next day the Cape Argus commented and said that this was a token of the Minister’s esteem for the suggestion. I should like to point out to the Minister that they have common ground, not only in regard to this suggestion, but that the common ground was larger in area than either of them appeared to know—because it seems they were both unaware that this is by no means a new suggestion; I want to ask the hon. the Minister whether he is not aware of the fact that both in 1963 and in 1964 this very subject was canvassed by the Select Committee on the subject of the Motor Vehicle Insurance Amendment Bill.

Order! Is the hon. member not going beyond the scope of the clause now?

Sir, I doubt it, because the clause, in sub-section (a) line 10 incorporates compulsory third party insurance business, and I want to deal with compulsory third party insurance business, which is now added to this clause. I hope I am not out of order.

The hon. member may continue, but only in so far as it deals with this clause.

Yes, I want to deal with compulsory third party insurance in the light of this clause, and with the principle of including compulsory third party insurance in this clause.

Order! The hon. member cannot discuss the principle. That has been accepted already.

Not the inclusion of compulsory third party insurance in this clause.

On a point of order, the principle of third party insurance is being incorporated as a new provision in this Bill. In the past third party insurance did not form part of this Bill; it formed a separate part of insurance and I submit that the hon. member should be heard because this is a new principle. You will find that in line 10 it adds these words, “and compulsory third party insurance business”. That is a new provision in this clause.

The principle was approved in the second reading and the hon. member must confine himself to the clause.

May I ask whether I can deal with the necessity for the amendment, the inclusion in line 10 of the words “and compulsory third party insurance business”?

The hon. member cannot deal with the principle.

On a point of order, does your ruling mean that we would be out of order if we discussed the deletion of the words in line 10?

No.

Then are we not allowed to give our reasons for wishing to delete those words?

The hon. member may discuss this but he may not attack the principle.

I do not intend to do more than draw attention to the fact that there is really no need for the inclusion of these words in line 10, being the amendment of this clause, for the reason that in the principal Act of 1942, which is almost a generation ago—and it appears that the hon. the Minister of Finance is not aware of this—provision was made for dealing with compulsory third party insurance in such a way as to detach it completely from the provisions of the amendment to this clause. I point to Section 24 of the Motor Vehicle Insurance Act, in terms of which the Governor-General was given the power—and this has never been revoked—amongst other things to enter into an agreement with a particular insurance company and empower it to insure in terms of this Act to the exclusion of all other insurers—there are two pages of this, but this is the interesting section—and to establish a corporation if he so desires called the South African Motor Vehicle Insurance Corporation which alone shall be able to deal in third party compulsory insurance. For that reason I suggest that in considering this amendment in line 10, and against the background of what has already been said on the subject of compulsory third party insurance, it should be remembered that 23 years ago a foundation was laid—and it still exists—for dealing with compulsory third party insurance in a manner which apparently comes as a great surprise to the Minister of Finance. Therefore I want to ask him whether in view of the existence of this provision, which incidentally was the work of a United Party Government in 1942—for the setting up of a separate entity, being the S.A. Motor Insurance Corporation, which alone would be competent and legally entitled to deal with third party insurance—the Minister will not reconsider the need for coming forward with this amendment.

I see no need for not coming forward with this amendment. Compulsory third party insurance was always carried out under the general term of short-term insurance under the 1943 Act. What we are now doing is to say that the term “short-term insurance” is too wide. It covers the same subject but there must be separate registrations and separate accounts and statements for guarantee business and for third party insurance. That is all we are doing now.

I wish to move the amendment standing in my name to Clause 1—

(q) by the insertion after sub-section (1) of the following new sub-section:

This amendment is necessary because the Motor Vehicle Insurance Act which deals with the business of insuring motor vehicles requires a registered insurer under that Act to be registered for motor insurance business under the Insurance Act of 1943. The latter Act now provides, however, that an insurer who insures motor vehicles in terms of the former Act shall be registered for compulsory third party insurance business, while the class, motor business, now comprises mainly the comprehensive insurance of motor vehicles. The amendment I am now proposing clarifies the position in this regard.

Clause put and agreed to.

On Clause 2,

I move the amendment standing in my name—

To add the following sub-section at the

end of the proposed new Section 3ter:

1. (4) An insurer who is a registered company within the meaning of the Motor Vehicle Insurance Act, 1942 (Act No. 29 of 1942), shall not by reason only of the provisions of this section be deemed to have become incompetent to carry on motor insurance business for the purposes of sub-section (3) of Section 2 of that Act, and the provisions of Sections 3 and 5 of the said Act shall not apply in respect of such an insurer not registered under this Act.

I have already anticipated this amendment in my second-reading speech. It will regulate the position of an insurer who may not be registered under the Insurance Act to conduct compulsory third-party insurance business and who may still be a registered company in terms of the Motor Vehicle Insurance Act. The proposed arrangement provided for in this amendment is that such a company will cease issuing new third-party policies, but will not become incompetent to carry, until expiry, its existing third-party risks. That is really consequential to the first amendment.

Amendment put and agreed to.

Clause, as amended, put and agreed to.

On Clause 3,

Again I move the amendment standing in my name—

To add the following paragraph at the end of the proposed new sub-section (3)bis:

1. (h) if the direct or indirect control over its affairs by virtue of shareholding, voting power, power to appoint directors, or otherwise, may, in the opinion of the registrar, react to the detriment of its policyholders.

The object of this Amendment, as I have already explained, is to empower the Registrar to take into consideration the control over its affairs and the quality and experience of its management when considering the application of an applicant for a new registration under the Insurance Act. This provision I consider very important. It will certainly give additional security, and a similar provision already exists in the Banking Act.

I wonder whether the Minister will be good enough to tell the Committee how he proposes that this particular clause can operate in the way he wants it to operate? It refers in sub-section (3) to the satisfaction of the Registrar about the manner in which a person or company carries on a class of insurance, and it goes on to say in (3)bis that no person shall be registered under this section in terms of this amendment if the direct or indirect control over its affairs by virtue of shareholding, voting power, the power to appoint directors or otherwise may in the opinion of the Registrar act to the detriment of the policyholder. This arises clearly out of the recent situation in the insurance industry, and certain events which overtook certain insurer, matters to which we on this side of the House were obliged to draw the attention of the Minister. In most cases his reaction was one of pooh-poohing any suggestion that the existing position was unsatisfactory or that anything need be done.

Now I must say that some good has come out of the protest that we made about the existing position, which is borne out by this amendment. But how far can this amendment go towards curing an evil which has been known to exist in the past, if it should arise again in future? How will the Minister or the Registrar know whether or not company A or person A happens to hold the direct or indirect control over the affairs of the insurer by virtue of a shareholding, voting power, etc. We have had the example of what I have named the Parity family tree. I do not want to harp on it, but the fact is that it was clearly demonstrated that some 20 companies were involved, all of them under the direction literally of one person, who only now, after the event, after the fall, makes public statements to the Press saying that he was never a director of the Parity company, but through a company in which his daughters were the shareholders he owned 70 per cent of the shares, and if it should turn out that his claim that Parity is not insolvent is correct he will get 70 per cent of whatever is left of the R9,000,000 assets! Now, I want to ask the Minister whether he thinks that merely putting this rather pious and well-intentioned amendment on the Statute Book is going to cure the position? After all, he is not naive. Is he not aware of the fact that companies are owned and controlled by people who never figure as “front”, but who are in fact the beneficial owners and who control the shareholding in the company? Has he never heard of a man controlling a company through his wife or his daughter, although he himself is not a shareholder? In the case of Parity it was done through daughters and brothers-in-law. How will the Minister determine this position? I think he should tell the Committee how he envisages that this particular clause, as amended, will work in practice. I do not want to labour the point, but I hope the Minister will take this opportunity to tell us how he thinks this can cure the major evil that has arisen in the insurance industry in the last few years.

In the first place, I want to tell the hon. member for Hospital (Mr. Gorshel) that this clause is not a sudden awakening to the position. This Bill has been in the process of being drafted for the last 2½ years. In 1962 the first Bill was drafted to meet the position that came to a climax, and which had started in 1961, and then we immediately put our heads together and the first thing we did was to pass the Inspection Act, in 1962. But at the same time we started work on this Bill, which is a comprehensive one. Another measure was passed in 1964. So that is the one reply. It is not only now that our attention has been drawn to the matter. Long before our attention was drawn to it in the House, we were aware of the evil and we were trying to find means of dealing with it, and this is one way. It may be that it is difficult to find out whether there is direct or indirect control by virtue of shareholding. But the point is that even if we know what the position was, we were not in a position to act as we could be in terms of this clause. This will now enable the Registrar to act when these things come to his attention. How it will come to his attention is a question of inspection or the auditor or through other means. I cannot go into details now. All we are asking here is that the Registrar shall have that power to act if he is of opinion that such shareholding is to the detriment of policyholders. The new Clause 27bis will also help the Registrar. There we deal with the position where control passes over to an undesirable person, and in that event too we are trying to control the position. The main point is that the Registrar must be in a position to act if these things come to his notice.

I have no doubt that the Minister intends to give the Registrar the power to act, but, with respect, that does not answer my question. He says he does not want to go into details. Unless I have misunderstood Committee procedure, that is precisely what we are supposed to do, to go into details. I ask him to tell the Committee how he thinks this will work, but he does not tell us at all. He merely says it will give the Registrar the power to act. I may have one interpretation of how this power or weapon can be used, but clearly that will not be an official interpretation. Surely the Minister must be in possession of all the facts.

Look at the Act, itself, and at the 1962 and 1964 Acts. That contains all the details which I cannot repeat now. I can only tell you the reason for it. We want the power to act.

I have stared myself blind at these Acts. I have looked at this Act probably more than the Minister has looked at the Motor Vehicle Insurance Act of 1942. The point I am trying to make is this—the Minister, I presume, is well advised and therefore he has some clue, to put it at its lowest, as to how this, the greatest evil, the biggest loophole, is going to be closed—but he does not give the Committee a clue! The Minister should be able to tell us in what way the Registrar will use this power—but he says this is not the time to go into detail. Therefore, I just want to put this to the Minister, in the light of what I have just referred to, in the light of what he knows has happened in a dozen different insurance companies. In the case of four of them, being the major insurance rackets, the real controlling shareholder was only known to people in the industry, to a few intimate friends and members of the family, and it was made common knowledge by certain financial papers, but apparently it was never known to the Minister or the Registrar. The Minister did not know that a certain Heller was involved in Parity, but it was referred to in the Press three years before the crash. Since I desire to protect the public, I am entitled to ask the Minister how he will set about using this power. I do not want to enter into a dispute with the Minister, but I want him to give us some idea whether he thinks and why he thinks this particular power will do away with the situation in which a person who ostensibly has nothing to do with an insurance company, is the only one who controls its activities and its assets, and can be responsible for its financial downfall, to the detriment of the public. Surely the Minister must tell the country, now that he does know what has happened, that he now has a new weapon in his armoury. He says he has considered it for 2½ years, but I have not had 2½ years to study it.

Obviously.

I am prepared to sit down and let the Minister, with the benefit of his two years of study, which up to now is not obvious, tell the House exactly what this power means and how it will be used. I shall be very grateful to him—and so will many hundreds of thousands of people, particularly the 450,000 Parity “monkevs”, because then they will know that they will not fall into the same trap again.

The hon. member for Hospital wanted to know how we would discover this, and I said it was difficult for me to say how the Registrar, with all the machinery at his disposal, could discover it. But what the hon. member has failed to observe is that Clause 3 deals only with new registrations, and the form in which the Registrar will exercise this power is by refusing registration. That is the sanction he will have in order to enforce this clause. There is a new registration: he must be satisfied in certain respects, and if in his opinion the control is not to the benefit of the policy-holders he can refuse to register it. As far as existing companies are concerned, where the control or the indirect control has passed into other hands than those originally provided for, the new Clause 27bis attempts to give protection to the shareholders. At present if one-quarter of the shareholding passes to another insurer, the Registrar must be notified, but if it passes to a person who is not an insurer, there is no means of knowing, and that is why we are now providing in the new Clause 27bis that when any person other than a registered, insurer acquires directly or indirectly or through a nominee or a holding company shares or any other interest in the business of a domestic insurer amounting to one-quarter or more of the value of all the shares or other interest in that business, such person and, if he has knowledge thereof, also such insurer, shall within a period of 30 days as from the date upon which the acquisition was completed, report the acquisition and the particulars thereof to the Registrar. That is what we do in the case of existing companies if more than a quarter of their shares go over into the hands of a non-insurer. That provision is contained in the new Clause 27bis. This particular clause deals only with new registrations.

I appreciate the explanation the Minister has given me, and I am aware that this deals only with new insurers, but I want to give the Minister an analogy. Certain persons who are notorious to-day because they have swindled and robbed the public blind in insurance companies, now sit on the sidelines waiting for an opportunity to go into business again. I happen to know of at least one. Now such a person obviously is not going to register himself as a shareholder—not even for one share, let alone a controlling interest—in a new company, which will satisfy all the other requirements of the Act, as amended. But there sits this gentleman in the background, and he in fact owns this company. It has been known to happen that unwittingly hon. members of this House have acted as the directors of companies, not owning shares in the company, but as nominees. That is a perfectly normal business procedure. So I put this to the Minister—when a person, in the case of a new insurance company, is registered as a shareholder, is he prepared that the Registrar shall demand and receive from such a shareholder—every shareholder—a written undertaking that the shareholding is in fact “beneficial” to that shareholder? In other words, that he holds the shares in his own right, in an unfettered way? With such a sworn declaration you will at least put the onus on someone—not the person who is sitting in the background and hopes to manipulate the company to the detriment of the public, but the person who acts as his front, as his tool. Such a person, having to swear that he alone owns whatever shares are registered in his name in that company, will then hesitate before he becomes a nominee or a tool in the hands of some of these gentlemen who, as I said before, are only waiting to see how this Act stands in its final form before coming back into the insurance business. Is the Minister prepared to say that that is one remedy that he sees in this particular amendment, one which he intends the Registrar to use?

I think that is a possible remedy.

Then why is it not in the Bill?

Amendment put and agreed to.

Clause, as amended, put and agreed to.

On Clause 6,

I move the amendment standing in my name—

The reason for my amendment which I dealt with during the second reading is (a) to allow a reasonable flexibility as to the period in which the existing insurer shall be obliged to deposit money or approved securities with the Treasury in terms of this clause, and (b) to leave the final discretion with the Minister in the event of the insurer wanting extension beyond the statutory period of three months which is allowed in the clause itself, plus a further two months.

The period is stated in the clause—three months—and it then allows an arbitrary power in the hands of the Registrar to extend that period by a considerable margin. Sir, the extension of the period beyond three months is obviously a privilege and not a right, and I submit that it is a privilege which should not be left to the arbitrary discretion of an official without limitation and without some sort of safeguard. My amendment will permit an extension beyond the three plus two months, i.e. beyond five months in all; that will be left in the hands of the official, the Registrar, but if the privilege, the extension, is to go beyond five months, then the matter should be in the hands of the Minister and be subject to his prior consent. This safeguard of invoking the consent of the Minister to a type of administrative leniency is already a part of the pattern in the Bill and I need only refer to Clause 14 on page 24 and to Clause 22 on page 34. Sir, I am aware that this provision relates to long-term insurance and that special provision is being made in regard to short-term insurance. But in regard to long-term insurance time is of the essence in complying with the requirements; time is of the essence there to give the security to the pubic which the draughtsman and the Legislature, when this clause is passed, intend should be granted. I suggest that where the extension goes beyond what I call a reasonable flexibility, the discretion should then vest in the hands of the Minister who alone, in the whole scheme of things, is accountable to this House. I am quite aware that the hon. the Minister has suggested in his reply to the second-reading debate that the matter is taken care of somewhere else in the Bill. I think he had in mind the new Sections 17 and 18. Sir, I do not see why it should affect the operation of the scheme itself if the discretion to extend periods, to give a privilege, is vested in the Minister instead of in the Registrar. Under Clause 17, once the deposit is made, it ceases to be an asset which is taken into account in satisfying the requirements of the law so far as long-term insurance is concerned and it is obvious that the longer the delay in complying with the provisions of Clause 6, the longer the delay in the complete fulfillment of the objects of Clause 17. But I cannot see how it can affect the carrying out of the scheme merely to vest the discretionary power of extension in the hands of the Minister instead of in the hands of the Registrar. It is true that in short-term insurance much greater latitude is going to be allowed; it runs up to five years in some cases, but even there the Legislature lays down the period of five years and extensions beyond that period are subject to ministerial control. My suggestion is that it will strengthen the provisions of the legislation, that it will give greater confidence to the public, if extensions of this nature have to have the approval of the Minister, who, as I say, is the only person in the whole scheme of things who is accountable to this House.

I have considered this amendment of the hon. member for Port Elizabeth (South) (Mr. Plewman) very carefully. I am rather loath to interfere with a measure such as this which has so specifically been negotiated with the insurance industry. They have accepted it as it stands. I think it would be undesirable to make a distinction between long-term and short-term insurers in regard to the same point, namely the additional assets which they have to provide, the increased deposit with the Treasury in the one case and 10 per cent of the previous year’s premiums in the case of the other. Section 18bis now governs the position in respect of both long-term and short-term insurance. It provides for the two to be brought up to strength. If the long-term assets are reduced on account of the deposit and they are insufficient to cover the liabilities, they have to be made up. These insurers must be given an opportunity of bringing up their assets to comply with the new standard of strictness. As I have said before, if there is any possibility of this not being done immediately then the proposed new Section 18bis which provides that the Registrar may approve of extensions of time not exceeding five years as from the commencement of the Amendment Act, or, with the approval of the Minister a period not exceeding ten years in all, will cover the case of long-term insurers as well as short-term insurers. I can see no reason why we should differentiate between the two forms of insurance. I asked the Registrar to discuss this matter with the hon. member and to meet him as far as possible. There was a suggested amendment but the hon. member said that he did not like that either. That is all I can do in the matter.

I hope the fact that this is a measure which has been discussed with the insurance industry and that it is an agreed measure as far as the insurance industry is concerned, will not preclude the Minister from accepting amendments if they will improve the Bill. We all agree that it is correct and in the interests of legislation that interested parties should be consulted, but I do not think that that should ever bind hon. members of this House and preclude them from moving amendments.

Sir, I want to raise a question under Clause 6 on page 12 where it is provided that the Treasury shall return deposits under certain circumstances. The circumstances here are where the company has been in existence for not less than 20 years and has been in a sound financial position for ten years. The interpretation of the phrase “sound financial position” can be very vague and embarrassing. I think the hon. the Minister will know that in the English Act there is a definition of “sound financial position” and I wonder whether he will consider the question of incorporating such a definition in the Act.

I am perfectly willing to accept the suggestion that I should give further consideration to this matter but, of course it will have to be done during the recess.

Amendment put and negatived.

Clause, as printed, put and agreed to.

On Clause 7,

I move the amendment as printed in my name—

This is a very simple amendment. Clause 7 provides for the statement of assets which has to be certified by the auditor. The present provision (I read only the last portion of the sentence) reads—

The amendment amounts to this, that the words “whether he is satisfied” will be substituted by the words “in which way he has satisfied himself”. Sir, if you look at paragraph (c) of the same Clause 7 you will see that an amendment is made there. There the words which were there previously, viz. “to what extent he is satisfied as to” are now being replaced by the words “how he has satisfied himself of”. This paragraph (c) also provides for the statement which the auditor has to attest, and in this case provision is now being made for the insertion of the words “how he has satisfied himself”, and I think it is right that the same words should also apply in the previous paragraph of Clause 7 to which I have just referred.

I am considerably surprised to see this amendment on the Order Paper, and also to hear the plea which the hon. member for Ceres (Mr. S. L. Muller) has made in favour of it. It may be remembered that in the second-reading debate I raised the fact that there had been three firms of auditors appointed to investigate the soundness of Parity—1 do not want to go into all the details again—where apparently the two-to-one majority determined, and the Registrar accepted the view, that they were sound. I said in effect that they did not adduce any evidence, in the first place, to show that their estimate of the liabilities was better than of the resident auditor, as it were, the firm engaged by Parity, which had something to lose by condemning its own client and saying, “you are insolvent”, and that therefore there must be some means of determining whether there is any substance in something which I realize is not easy to determine and that is an estimate of, for example, the liabilities. At that time, although the hon. the Minister appeared, in a rather generalized way, to nod his agreement with this point of view, it was the hon. member for Ceres who got up that same day and damped every point of view that I had expressed in regard to the Parity situation. He did not agree with anything I said. I want to take this opportunity, Sir, of thanking the Minister for his courtesy in sending an official to me yesterday to explain two clauses in the Bill. In the one case, it appeared that the Bill was satisfactory; and in the other case I was given to understand that the Minister accepted my argument for the need to amend, exactly as has been done now, this particular clause to ensure that the person responsible for giving the information in regard to the estimates had to show how he had arrived at his conclusions; in other words, that he had to adduce evidence. When I, quite naturally, said that in that case I would put that amendment on the Order Paper, I was told that an amendment would be moved by a member on the Government side. Sir, I do not want to claim any credit for this. The other day again, the hon. the Minister referred to two members on this side and said that they were the only two oases in a desert of nonsense; and although he did not say that I was part of the desert of nonsense, at least one newspaper coupled me, as it were, with the desert, and said that I was part of the desert. In view of the fact that in the second-reading debate, whatever I nut forward in regard to certain improvements in the Bill appeared to be a “desert of nonsense”—in fact, the hon. the Minister did not even reply to me, not by name, he did not even flatter me with an insult—I am, of course, gratified to see this amendment on the Order Paper, because I believe that this will go quite a long way towards curing a position which can be cured to some extent, at any rate. Now, Sir, if, in making their report on the estimate of the liabilities of an insurer, the persons responsible for making that report on the estimates are legally compelled to say how they have satisfied themselves or how he (the auditor) has satisfied himself about the reasonableness of the estimate, I would say that a very different, and, in fact a better, position will arise. For that reason, and in a rather vicarious way, I have very great pleasure in supporting the very amendment that I put to the Minister in the second-reading debate, which now stands, in the name of the hon. member for Ceres.

I would like to know whether the hon. the Minister is going to accept this amendment and, if he is going to accept it, whether he would accept a further amendment. I suggest that the words used in the suggested amendment are inelegant. The words proposed to be inserted read, “how he has satisfied himself of.” The hon. member for Ceres (Mr. S. L. Muller) has moved that those words should be substituted for the words “whether he is satisfied as to.” May I suggest to the hon. the member for Ceres and the Minister that it would be preferable to use the words, “how he has satisfied himself as to …” I suggest that that is a better form. If the Minister is prepared to accept that then I suggest that in line 44 he should also substitute the words “how he has satisfied himself as to,” for the words “how he has satisfied himself of.” That is a more elegant way of expressing the same phrase.

I am very gratified that the hon. member for Hospital (Mr. Gorshel) is gratified. The hon. member for Ceres (Mr. S. L. Muller) provided the gratification. Everybody is agreed therefore and I can see no reason for refusing this amendment. As a matter of fact I think it is almost a case of a slip when one considers subsection (c) where we use the words, “how he has satisfied himself”. This is to a certain extent a drafting error.

As far as the hon. member for Pinetown is concerned I am inclined to think that the words suggested by him improve the language, and since that is the only effect of it I can see no valid objection to his proposal. I think both phrases are correct, but if the hon. member prefers the wording suggested by him I am prepared to bow to his superior knowledge as an auditor.

Amendment proposed by Mr. S. L. Muller put and agreed to.

I move—

In line 45, to omit “of” where it occurs for the first time and to substitute “as to”

Agreed to.

Clause, as amended, put and agreed to.

On Clause 14,

This clause amends a section of the Act which deals with the insurer’s assets. I say this just in case the Minister still has a lingering doubt that I have read the Bill. Paragraph (a) reads—

There are certain stringent requirements in regard to the insurer’s assets. The Registrar has the power—

Point No. 1 is that the Registrar apparently has a discretion to allow an insurer a period of five years during which the insurer can organize himself, as it were, so that he will then comply with the fairly stringent requirements in regard to his assets. But then (b) says—

and I am not sure that I know what “every endeavour” means in this context—

I say, again, that I do not know what the definition of “a reasonable prospect” is—

Sir, what does that mean? In (a) provision is made for five years; under (b) the Registrar has the right to give a further period of five years. Surely the aggregate of the period of the first part, (a) which is five years, and one period of the second part, (b), which is five years, already makes ten years. My first question then is: What does that mean? My second point—and I would like the Minister to consider this—is whether this leniency—I know he has already told us that this is an agreed measure apparently as far as the insurance industry is concerned, so that they probably have a favourable point of view about it—whether this leniency is desirable in the public interest. I would accept that the insurance industry as such—I am referring to those companies which are already established—would have no reason for objecting to this kind of leniency, or laxity, being extended to one of their numbers, although it could also be extended to a newcomer. But, Sir, is it in the public interest, first to allow the Registrar to say to an insurer, “I can give you five years in which to fill-up the coffers, in which to comply with the asset requirements,” and then, if he thinks it is reasonable—give the same insurer who has not complied with the requirements in the first five years but who says, “this is why I could not do it,”—“I will give you another five years and a further period of five years.” Sir, I do not want to dilate on this until the hon. the Minister has given us some explanation of the point I have raised, and has told us how this “aggregate” of five years comes about in line 21 on page 24 of the Bill.

As I read this clause, it gives the Registrar the power, after the first five years, with the Minister’s consent, to extend the said period of five years, which he can give under the previous paragraph, for further periods, that is to say, one year or two years or three or four years but not exceeding five years. I think that is the answer to the first part of the question of the hon. member. I do not know whether he agrees with my reading.

It is clear in (a).

In other words, the total time is not more than ten years. This refers to all those who were registered at the date of commencement of this Act. Any new applicant for registration will have to satisfy those requirements now. He will know what they are and he will have to comply with them when he applies for registration.

The other point raised by the hon. member is whether this is not undue leniency. The circumstances may differ from case to case but naturally this is the maximum by which the Registrar will be able to extend the period during which they have to comply with very much stricter requirements than they have to do at present. We acted on the same principles in the Banking Act. There the period was shorter but the principle was the same, namely that they had to have time to adjust their financial affairs to the new position under that Act. That is all that we are providing for here.

I accept the hon. the Minister’s explanation in regard to paragraph (a). It is perfectly clear that this compliance period can go up to five years but it may not exceed five years. But in (b) in lines 18 to 21 we read—

Sir, bear in mind that up to the word “said” the only period referred to is the period which may not exceed five years in (a). We start therefore with five years—

Sir, I do not understand that even now, because if you take period (a), which is five years, on the assumption that five years’ grace has been given, and you then extend it in any way, as you propose to do under (b), by, say, one year, it seems that you have an aggregate of six. I do not see how this will be read as the hon. the Minister has read it, unless he changes some of the words in the last two lines by saying, for example, “a period not exceeding, in the aggregate, a period of ten years.” Is it in fact the Minister’s intention that if the insurer has not been able to comply with the requirements during the first five years of his extended period of grace, and he is then able to show the Registrar that he can do so in the next year or in succeeding years, that the Registrar shall be in a position to have given him, at the end of the period of grace, a total period of ten years, a maximum of ten years? Is that the intention? If it is, then I think it should read “not exceeding ten years.”

The hon. member will see that paragraph (a) deals with the period of grace which may be given by the Registrar himself. Then you come to paragraph (b) which reads—

where authority has been granted by the Registrar as provided in paragraph (a) …

That is only at the end of five years—

He may with the consent of the Minister from time to time extend the said period of five years (in (a)) for further periods (under (b)) not exceeding in the aggregate, a period of five years.

Surely that is quite plain. The effect will be that there is a maximum of ten years.

That is exactly what I thought it was.

Clause put and agreed to.

On Clause 21,

I move the amendment as printed in my name—

In line 59, after “court” to insert “(a)” in line 63 after “thirty” to add “or” and to add the following as a paragraph (b) at the end of the proposed new sub-section (3):

(b) for the appointment of a curator to take control of and to manage the business of any party to the transaction, and thereupon the provisions of the Financial Institutions (Investment of Funds) Act, 1964 (Act No. 56 of 1964), shall apply as if the application were an application under Section 6 of that Act.

I have already explained the contents of it briefly in my second-reading speech. I think the amendment speaks for itself.

Sir, I have some difficulty because this clause, as amended, is very similar to the previous one, about the controlling shareholding, which the Committee has already passed. The amendment provides that “when any person other than a registered insurer acquires directly or indirectly, or through a nominee or a holding company, shares or any other interest in the business of a domestic insurer, amounting to one-quarter or more of the value of all the shares … and if he has knowledge thereof, also such insurer shall within a period of 30 days as from the date upon which the acquisition was complete, report the acquisition and the particulars thereof to the Registrar.” This puts an obligation on any person, other than a registered insurer. The Minister made that clear. In other words, an insurance company or a person registered as an insurer does not come within the ambit of this clause, as amended, but a new individual does, and will. If he should disclose that he has acquired one-quarter of the value of the shares in an insurance company, then the position is very simple. But now I put it to the Minister again, that it is common practice for persons who acquire any interest, or a controlling interest in a company, not to figure themselves in the transaction at all, to have the acquisition, as it is called here, registered in the name of another person or a company. I ask the Minister again, in view of the fact that we have seen what has happened when the person who acquired a controlling interest in more than one company, and more than 25 per cent, was able to conceal that fact quite lawfully; since that can easily be done by registering those shares in the name of a brother-in-law, a father, a daughter, a cousin or whoever it might be, how does the hon. the Minister propose to operate this clause? How does he think the Registrar is going to use this weapon? This clearly arises out of the recent insurance crashes such as Auto Protection, Parity and others. What is more, Sir, the moment a man acquires only 24 per cent which is a very substantial part of the shareholding in any large company, at any rate, he is not at all obliged to do anything as far as this clause is concerned. For 24 per cent he does exactly as he likes. So that if he has 24 per cent—I think it is common cause that in many companies the controlling interest need not even by 24 per cent; 18 per cent has been known to be enough to control a company; 32 per cent is certainly enough—and his brother-in-law who lives in a different city in South Africa, fortuitously—it would appear—acquires another 24 per cent—neither of them has to disclose anything under this clause—although they then own 48 per cent of the shareholding in this company. That is certainly a controlling interest, as most companies are operated. Will the hon. the Minister be good enough to tell the House how this clause is going to arm the Registrar? Again, Sir, I do not want to pursue this until the hon. the Minister has given us some idea of how this restriction is going to work.

Before the hon. the Minister replies I wonder if he could also deal with another point. It seems that this clause can be completely useless in practice because it applies only in limited circumstances. It applies where the person obtains a certain interest and then it says—

It is obvious that if a person is acquiring a nominee the last person he will tell about it is the company itself. Surely this clause will be quite ineffective in respect of persons acting through nominees. There is a further provision to make it obligatory on persons who acquire on behalf of nominees to make that fact known to the company so that it can be reported.

As far as both hon. members are concerned this, of course, refers to the case where 25 per cent of the shares in one registered insurer is acquired by another registered insurer. There are therefore two ways of discovering this—either from the books of the one insurer who takes the interest in the other insurer or from the books of the other insurer. To prevent any nominee shareholding is a matter which comes under the Company law. I wish hon. members could find some way of preventing that. Hon. members will realize that a great deal of our business is based on nominee shareholding. You cannot exclude it altogether. If they know of any way of helping the Registrar to discover it then I shall be very glad to hear it. This 25 per cent is in the old Act. We are only now giving the Registrar a weapon. If there is an objection to such shareholding the Registrar may apply to court for an order placing any party to the transaction under judicial management. We now add “and/or under curatorship”. That is the new amendment we are proposing here. But the provision as to the 25 per cent is already in the existing law. All we are now doing is to give the Registrar certain powers if that does come to his knowledge by means of one of the various means he has at his disposal. I willingly confess that it cannot be 100 per cent fool proof. It is very difficult to discover these things. We know how business is conducted. But here we are in a stronger position, at any rate, than where an outsider acquires a 25 per cent interest in a registered insurer. The Registrar is given certain powers to act in that event he can appoint a curator to take control of and to manage the business of any party to the transaction—either of the two—and thereupon the provisions of the Financial Institutions Investment of Funds Act shall apply as if the application were an application under Section 6 of that Act. That is also the broad principle of preventing an acquisition by one registered insurer in the business of another. That is contained in the existing law. The only new provision is that the Registrar can apply for either judicial management or a curatorship. If the position does come to the notice of the Registrar he can now act. It is also to a certain extent a deterrent. If people realize this is the penalty they may have to pay if they are discovered, they are much less likely to proceed than they would have been had there not been a proper sanction.

I think I said earlier that we know it is common business practice for a person to act as nominee-shareholder or director, on behalf of the real shareholder or controlling shareholder, as the case may be. The Minister says in effect, this being the case, “How can I deal with this position in any other way?” I want to suggest to him that somehow the insurance company must be dealt with as a company somewhat different from companies as such. It should be controlled in a rather special way. I am not so much concerned with the fact that nominee directors and nominee shareholders are the order of the day in hundreds and thousands of companies. But I am concerned with the fact that it is still possible, apparently, in terms of the amended Insurance Act, for the reason that an insurance company stands in a somewhat different relationship to the public than the ordinary commercial company where people take a commercial risk. The insurance company, in regard to third party business, acts as the collector of money which members of the public are compelled by law to pay. In other cases insurance companies are the trustees of many hundreds of thousands of people who have entrusted their life’s savings to insurance companies by way of policies—endowment policies, annuities and so forth. Surely the Minister recognizes—there is a mass of legislation to show it—that such companies must be dealt with in a way different from the way in which other companies are dealt with. I cannot sufficiently emphasize that there must be a better method of control than this. So I ask the hon. the Minister again, in this context, will he consider the suggestion I made a little earlier? Will he provide that in the case of a person other than a registered insurer such a person, on acquiring this 25 per cent interest, or for that matter any shares in a new company—or a company registered at the time this amended Act comes into force, shall be obliged to swear that he or she is in fact the owner of the shares registered in his or her name, that he or she is not acting as a nominee for any person or company, that he or she holds those shares, unpledged, unencumbered. I can think of a number of similar provisions, Sir. Then, I say, this clause will act as a real sanction. You can persuade many people—I say again, inside or outside this House—to act as nominee shareholders and directors, because it may be profitable from their personal point of view, but you will persuade very few people to become the nominee shareholders or directors of an insurance company on behalf of certain individuals, when he or she who becomes such a nominee knows full well that if anything goes wrong with that company, he or she can be called to account because that sworn affidavit is there—that the shares in fact belong to the person registered as the shareholder. For the life of me, Mr. Chairman, I cannot see why that should be impossible in the case of insurance companies, however undesirable it may be in the case of ordinary companies registered under the Companies Act. I say again that with all the legislation that has been provided for the special protection of the public vis-à-vis insurance companies, it should be possible to close this loophole. As I see it the Bill as it stands now leaves at least three loopholes through which any unscrupulous individual could drive a truck, let alone find his way. I would like the hon. Minister to comment on this view.

I support the hon. member for Hospital (Mr. Gorshel). The hon. the Minister is obviously inserting this clause because he believes there is a possibility of abuse. He is trying to make that possibility at least more difficult. I should like to support the view put up by the hon. member for Hospital that the clause in its present form is almost useless. I do suggest to the hon. Minister that he should give this clause further consideration. It would obviously be almost impossible, across the floor of the House, to so amend the clause as to cover all possibilities which exist in cases which this clause is proposed to deal with. But I do not think it is beyond the whit of the Minister’s advisers to recast this clause in a form which would provide an effective safeguard. In its present form it certainly does not. I hope the hon. the Minister will be prepared to agree, as requested by the hon. member for Hospital, to this clause being strengthened, if the Minister thinks the amendment necessary. It is in his hands; he can quite easily do it. I can assure him that I can already see half a dozen ways of escaping this clause without any breach of the provision.

As I said in the other case to the hon. member for Hospital (Mr. Gorshel); I am quite prepared to consider whether this is a possible approach to this very serious question. I must confess, however, that I have serious doubt as to its efficacy in the case of gentlemen of this ilk. I do not know whether people like that will be deterred by the fact that they have to make a sworn declaration. Our experience is that has not been a complete deterrent. But I shall consider the matter as I have promised the hon. member.

Might I suggest to the hon. Minister, that in addition to this provision, he should call for affidavits to be lodged with the company as to who the beneficial holder of those shares are in cases where shares are registered. That might help.

Amendments put and agreed to.

Clause, as amended, put and agreed to.

On new clause to follow Clause 21,

I move—

That the following be a new clause to follow Clause 21:

22. The following section is hereby inserted in the principal Act after Section 27:

The clause inserts a new Section, 27bis, which applies the principle of Section 27 also to cases where a person other than an insurer acquires an interest in a registered business. We have already discussed that matter and I promised to consider this matter if time permitted.

Agreed to.

On Clause 22,

I want to deal with subsection (3) which reads—

This question of prohibition and incompetence is one about which we have had a great deal to say, and with which I think the House is fairly, if not thoroughly, familiar. I cite the Parity case. A prohibition was placed on that company in regard to the movement of its assets. I do not want to deal with the merits of the lifting of that embargo, but that prohibition was then removed and certain things happened. In regard to the question of incompetence, it is interesting to recall that whereas curatorship of Parity was granted on 19 November 1964 the hon. the Minister of Transport only declared that company incompetent on 18 December 1964. In other words, a whole month elapsed between the condition of curatorship and the condition of the declaration of incompetence. The point should be borne in mind that while in that gap, during that hiatus, the company continued to trade as though there was no problem as far as they were concerned. And as the books will show they took a considerable amount of money from the public during that time—the public which now has some reason to complain about the fact that although the company was known to be in difficulties on 19 November, they were nevertheless allowed to continue for another month before the other Minister concerned, the Minister of Transport, bestirred himself, and Gazetted the incompetence of the Company. I think this difficulty is to some extent being perpetuated in sub-section (3) of this clause because it says that “no insurer shall, by reason only of such a prohibition, be deemed for the purposes of Section 2 of the said Act to be incompetent …”

What I am trying to get at, Sir, is that the moment there is a prohibition on the company there should surely also be a declaration of incompetence. You can call it by any name you like, but the moment the Registrar sees fit to place a prohibition on a company that is the moment that company must be prevented from collecting another cent from the public. Surely that must be the position. How else are you going to regard the matter, in the situation which has arisen, Sir? If we do not look at it that way, then I can only say we are not prepared to face unpalatable facts. They stare us in the face. I cite again the hiatus of one month between a prohibition, in the sense that a curator was appointed, and a declaration of incompetence, as recently as November and December of last year, in the case of Parity. A lot of money went down the drain because of that time lag. I put it to the Minister that it would be extremely desirable, since he is tightening up certain provisions of this Act, to rule out any possibility of any advantage being taken because the machine functions in such a way as there is a certain time lag between the prohibition and the declaration of incompetence. This clause goes even beyond that position, because it says that regardless of the prohibition, the insurer shall not be deemed … In other words, regardless of the prohibition, the insurer shall be deemed competent to trade under the Act, which means that he can continue to trade during the period during which the prohibition is in force. I hope the hon. the Minister will be good enough to clarify this.

Perhaps I had better deal with the whole background of the Clause before I come to sub-section (3). As hon. members will observe it inserts an entirely new Section 29bis. This empowers the Registrar, with the consent of the Minister, to prohibit an insurer from issuing any new policies if he does not comply with the following very important provisions of the Act, namely, Section 6, sub-section 7, the making of a new deposit if considered necessary, or Section 11, the submission of regular accounts and returns and 12, the rendering of regular statements of liabilities; 14, the rendering of regular statements of assets; and 17 and 18, maintaining assets to cover liabilities. Now if the insurer does not rectify any failure in any one of these respects within 60 days, he shall be guilty of an offence and it shall, in addition, be sufficient cause for the Registrar to make an application to Court in terms of Section 30 which provides for judicial management or liquidation proceedings. The new provision represents a very important strengthening of the Act’s supervisory provisions. We now come to sub-section (3). In terms of this sub-section a prohibition shall apply in respect of compulsory third-party insurance business notwithstanding the provisions of the Motor Vehicles Insurance Act but the insurer concerned shall not be deemed to be incompetent under that Act to carry his existing motor vehicle insurance risks during the period that the prohibition is in force. In other words, he will not be able to carry on new third-party insurance business but he will be able to carry on with his existing risks. He will not be able to take on new business and that is the evil the hon. member had in mind.

If the hon. Minister is satisfied, as he appears to be, that the clause, as worded, will give the necessary protection, and that no undesirable consequences will flow from the fact that the insurer is entitled to trade, as it were, regardless of the prohibition—in other words, if there will be no prejudice to the policyholders—then I have no objection to this at all. I thank the Minister for the explanation.

On Clause 29,

I move the amendment standing in my name on the Order Paper-

With my previous amendment there was complete agreement and I sincerely hope that the hon. member for Hospital (Mr. Gorshel) and other hon. members will also agree with me on this amendment. As a matter of fact. I have a suspicion that the hon. members for Hospital, Pinetown (Mr. Hopewell) and Park-town (Mr. Emdin) will agree with me on this amendment. As Clause 29 reads at the moment it provides for the payment of 50 cent inspection fee. In (c) it provides for a fee of 50 cents for providing photostatic or typewritten copies of any document—50 cents for a double spaced typewritten copy. I personally think that is excessive and I think it could competently be reduced to 25 cents. I feel that the office of the Registrar should provide a service to the public as well. In the keeping of statistics and papers it should also provide a service to the public. I feel we should not create the possibility of the office of the Registrar making a profit on the services it provides to the public. For that reason I regard 25 cents as reasonable and I move accordingly.

If only to make the hon. member for Ceres (Mr. S. L. Muller) feel completely at home, I am going to disagree with him and his amendment. I think that 25 cents is still too high. We make far too much of a thing, as it were of photostats in this country. Photostat copies are very cheap. In America, for example, you see these machines in railway stations, at airports—the hon. member for Ceres has seen them for himself—and their use cost you next to nothing. People even use them just for the fun of it. Here it becomes something which requires the payment of 50 cents or 25 cents, as the case may be, and for the very reason that the hon. member for Ceres has advanced, which is to make it as easy as possible for members of the public, in fact to encourage them, to investigate the records and to obtain copies, the fee should be fixed as low as possible. I therefore hope that he will, in the same spirit that moved him this afternoon when he accepted an amendment to his amendment from this side of the House, accept my amendment to his amendment, and thus make it 10 cents instead of 25 cents. I think it will be a very good thing that the public should know that at any time they like they can go and pay 10 cents in order to get a photostat copy of a document. Then we will show that we do intend the public to know what they are doing when they hand over their money to an insurance company, good, bad or indifferent.

Does the hon. member move his amendment?

No, Sir, if the hon. member for Ceres is not prepared to play ball, I am not moving an amendment.

I leave it to the hon. member for Ceres and the hon. member for Hospital to decide whether it should be 25 cents or 10 cents and the Minister to decide whether it should be 50 cents. What I am concerned with in this clause is that the word “certified” has been left out. I think what is far more important than the price, is that one should be able to have a certified copy of these documents, but the word “certified” has specifically been taken out of the clause. Would the hon. Minister tell us why it has been removed?

I understand that it is not usual to certify a photostatic copy. That is why it was omitted. If the hon. member wants the clause to read that the Registrar shall furnish the applicant with a “photostatic or certified double-spaced-written copy”, I am prepared to accept such an amendment.

Yes, Sir, and I move—

Amendments put and agreed to.

Clause, as amended, put and agreed to.

Remaining Clauses and Title of the Bill put and agreed to.

House Resumed:

Bill reported with amendments.

I move—

It will be noted from the documents tabled on Monday that the Estimates of additional expenditure to be defrayed from REVENUE FUNDS for the year ending 31 March 1965 require an additional amount of R30,347,200 to be voted.

The Administration’s wage bill increased considerably during the current financial year, mainly as a result of improved salary scales for engineering staff; payment of a holiday bonus at the end of November, 1964; and increased Sunday and overtime rates introduced with effect from January, 1965. In the nature of things these items account for increases under all heads of expenditure, namely Railways. Harbours and Airways.

The following brief explanations are furnished in regard to the main increases under the various heads.

Dealing firstly with the head RAILWAYS, the increase under Head No. 1—General Charges—has been brought about, inter alia by the establishment as an efficiency measure of Timing and Coding offices in the Accounting Department and the transfer to that department of the remainder of the accounting staff formerly attached to the Stores Department.

Under Head No. 2—Maintenance of Permanent Way and Works—the additional appropriation arises also from the greater number of heavy ballast tampers in service and the use of mechanized equipment, the intensification of systematic maintenance of buildings and increased bonus-work payments.

The greatly increased volume of rail traffic being conveyed is causing greater wear and tear on both track and rolling stock generally. This in turn has resulted in higher maintenance costs for which provision is made under Heads Nos. 2 and 3.

Apart from the considerable increase in the wage bill under Head No. 4—Running Expenses—the following items are mainly responsible for the rise under this head: the conveyance, in chartered ships, of locomotive coal from Lourenço Marques; greater consumption of coal and diesel fuel oil to meet traffic requirements; and electric current for the newly commissioned electrified section between Klerksdorp and Beaconsfield.

Traffic Expenses—Head No. 5—have risen as a result of the provision of more stores and equipment at stations in order to cope with increased traffic demands; the introduction of a shunter’s allowance with effect from July 1964; and increased Sunday and overtime payments.

Expenditure in respect of Cartage Services—Head No. 7—is greater because of the hire of private plant, with drivers, to assist in the delivery of cartage traffic at Kaserne; the cost of repairs to departmental vehicles has also increased.

In regard to Head No. 8—Depreciation—the rates of depreciation applicable to rolling stock have been reviewed with due regard to the technical and economic factors involved—including obsolescence. The conclusion has been reached that the depreciation period of steam locomotives and passenger coaches should be reduced from 33⅓ years to 25 years, and that the life of a goods wagon should be based on 33⅓ years instead of 40 years.

As the revised rates of depreciation are being introduced with effect from 1 April 1964 and involve increased contributions to the Renewals Fund, provision is made in the Estimates for the additional amount of R3,756,000 for this purpose.

The increase reflected against Road Transport Service—Head No. 12—is due to extensive repairs to older road vehicles to meet traffic demands.

In the case of Pre-cooling Services—Head No. 13A—expenditure has risen as a result of staff requirements and a rise in the consumption of electric current.

On Net Revenue Account, R250,000 is required for Interest on Capital—Head No. 14—due mainly to additional Loan Fund drawings and an increase from 4¾ per cent to 5 per cent in the interest rate on stocks with effect from 15 January 1965.

Of the R2,153,000 required under Head No.17—Miscellaneous Expenditure—R1,500,000 is necessary to cover special contributions to the Benevolent Fund to provide for the enhanced temporary allowances and the increase in the minimum income limit of pensioners.

The nominal provision of R2,000 made in the original Estimates in respect of losses on the realization of investments requires to be increased by R250,000 in relation to stocks actually sold during the year.

As a result of the increased tempo of stores stock verifications by the Department’s auditors, an additional amount of R172,900 has been provided for stores stock adjustments.

Arising from the assessment of a claim against the South West Africa Administration, in terms of the guarantee agreement concerning the broadening of the narrow-gauge lines, it came to notice that an amount of R90,407, representing compensation paid after the First World War for material, stocks and hire charges in respect of these lines, is still appearing in the Administration’s books. Since this amount cannot be related to any specific line or tangible asset, and as all South West narrow-gauge equipment has now been withdrawn, the amount requires to be removed from the Administration’s books.

The remaining items under this head are mainly ex gratia payments as listed.

Of the amount to be written off against Bad Debts and Sundry Items, the largest single item is in respect of a theft which was committed in one of the Department’s bookstalls towards the end of 1961. The party responsible was convicted but the Court refused to order that the loss of R2,169 be made good to the Administration.

The additional amounts required in respect of HARBOURS total R722,200. Expenditure on Maintenance of Assets—Head No. 18—is expected to increase by R189,000, mainly as a result of repair and maintenance requirements of the ore-handling plant at Port Elizabeth.

Operating Expenditure—Head No. 19—will increase by R485,000 owing to increased activities at the harbours, whilst R37,500 is required in respect of General Charges—Head No. 20—and R10,700 for Lighthouses, Beacons, Bells and Signal Stations—Head No. 23.

Airways Transportation Services—Head No. 28—are expected to absorb an additional amount of R408,000, whilst an increase of R60,000 is anticipated under the Net Revenue Account—Miscellaneous Expenditure. The former amount relates partly to the improved staff Benefits to which I have referred earlier. Of the latter amount R52,784 is required for writing off redundant and obsolete stock; the balance represents overclaims rebilled by South African Airways to certain carriers outside the I.A.T.A. time limit which were rejected.

Pipeline

Head No. 30a refers to the pipeline for the conveyance of petroleum products being constructed from Durban to the Witwatersrand. The pipeline is expected to come on stream during the latter part of the ensuing financial year; having regard to the time required for the training of staff in a completely strange sphere of operations, it is deemed advisable to commence with the appointment of certain staff in the current year. An amount of R5,000 is provided for this purpose.

This concludes the items of additional expenditure to be defrayed from Revenue Funds.

Next to be dealt with are the Brown Book items.

After allowing for savings under the existing appropriation which can be utilized to finance increased costs on certain other items, additional Loan Funds in the amount of R30,000,000 are required during the current financial year.

Under Head No. 1—Construction of Railways—an amount of R317,900 requires to be provided as a result of faster progress than anticipated having been made with the work on the new Langa-Bellville line, as well as on the one from Delmas which was officially opened a few days ago.

R12,000,000 requires to be voted under Head No. 2—New Works on Open Lines. Approximately R900,000 is made up of individual items of delayed charges exceeding R10,000 which have to be authorized in terms of a Resolution of the Select Committee on Railways and Harbours. A total of R224,000 has to be financed from the Betterment Fund in connection with certain relaying works.

Included under the items for which Parliamentary approval is sought for the first time is an amount of R22,690 required to defray expenditure on additions and improvements to the yard at Paulpietersburg to facilitate the handling of coal traffic.

R50,000 is needed for the erection of two bridges to eliminate level crossings between Potchefstroom and Fochville.

An additional R260,000 requires to be appropriated from the Level Crossings Elimination Fund in connection with the elimination of certain level crossings scheduled for completion during the previous financial year but carried over to the current year.

An amount of R28,240 is provided to open up a station on the line to Saldanha to meet traffic requirements.

R40,000 is required to erect a building at Germiston to house a new compressed-air plant for departmental requirements.

Arising from the decision to introduce diesel traction on the Cape Eastern System, it is necessary to provide funds for machinery to be installed in the diesel locomotive shed at East London; R80,000 is required for this purpose.

Additional tonnages of ore carried on the section between Kamfersdam and Postmasburg necessitate an improvement in the carrying capacity of that section of line. After careful investigation it has been decided that the line should be electrified; an amount of R100,000 is expected to be spent during the current financial year.

In view of the heavy future commitments against the goods stock section of the General Renewals Fund, involving an anticipated excess in expenditure over receipts during the current financial year, it is proposed to finance the cost of certain goods vehicles from Loan Funds instead of from the Renewals Fund as originally intended; this accounts for R7,699,000 of the provision under Head No. 3—Rolling Stock. Accelerated deliveries of goods and coaching stock account for an increase of R2,386,180. The balance is required to cover price variation payments and delayed charges on items expected to have been completed in the previous financial year.

Because of earlier deliveries of garage equipment and vehicles, the cash provision under Head No. 4—Road Transport Services—requires to be increased by R102,900.

Of the total amount of R429,400 required for Harbours—Head No. 5—R245,000 represents anticipated expenditure on improvements to Luderitz harbour. R140,000 is required to meet increased expenditure incurred as a result of accelerated progress with the construction of two berths at Dom Pedro Jetty, Port Elizabeth. The balance comprises belated debits exceeding R10,000 on individual items.

The amount of R73,600 provided for under Airways—Head No. 6—arises mainly from items omitted from the original Estimates in anticipation of the work being completed during the previous financial year.

Working Capital—Head No. 8—requires to be increased by R9,000,000 due to the substantial expansion of the Administration’s activities, inter alia, the acquisition of additional Boeing aircraft, coupled with the progressive increase in the price of various commodities held in stores.

This completes the brief resume of the Capital and Betterment items.

In summing up the position, appropriations from Revenue Funds require to be increased by R30,347,200 to a net figure of R570,659,200, and those on Capital and Betterment Works by R32,473,900 to R138,441,300. As is customary, no comment is at this stage furnished on the revenue aspects for the current year. I shall deal with the whole matter when I present my main estimates to the House in a fortnight’s time on 3 March.

The hon. Minister has given us a very sketchy outline of the reasons why the additional amounts are required on Loan and Revenue Account. It is true that it is not customary to go into great detail on these matters in view of the fact that the hon. Minister will introduce his Budget at an early date.

It is not our intention to hold the Minister up for any length of time at this stage. There are just one or two things which, I think, we should mention so that we get the picture in clear perspective of what has happened since the hon. Minister introduced his Budget a year ago. The Minister’s Budget for 1964-5 anticipated a surplus of R10,000,000 as at the end of next month. The Minister now asks Parliament to vote an additional R30,000,000 on Revenue Account to meet various heads of expenditure. This means, in fact, that the hon. Minister is asking for R40,000,000 to be appropriated to meet expenditure not envisaged a year ago—the R10,000,000 which he has anticipated was of course a surplus not allocated to any particular head, so that in fact we are now dealing with some R40,000,000 which was not anticipated to be expended a year ago. The R9,500,000 that the hon. Minister has referred to is to meet the holiday bonus paid out last year and this is the first opportunity we have had of dealing with this matter, and I think we should say to the Minister that the decision to pay out a holiday bonus, in view of what has been said by the hon. Prime Minister recently, was timely, and I think the railway personnel were very fortunate and happy to get in before the ban which now appears to have been imposed by the Government on any further increases in wages, etc., to railway servants or to civil servants. So I consider that they were lucky to get in when they did.

The balance is to meet mainly the additional expenditure on transportation services, namely some R26,000,000. It is true that the considerable increase in the traffic moved could, I should imagine, be mainly responsible for the fact that we are now being asked to vote a further R26,000,000 for transportation services. A little later I shall deal with another aspect that is tied up with this. This all means, Mr. Speaker, that the Minister estimates that expenditure for the year ending 31 March 1965 will be in the vicinity of R570,000,000, including the holiday bonus of R9,500,000. In spite of the additional expenditure and the holiday bonus, I think from the figures which we have got it would appear that the Minister will still finish with a surplus at the end of this financial year. I am not going to hazard any guess as to the magnitude of the surplus. We have all been proved wrong in the past, including the Minister, when we have attempted to estimate in advance what the surplus or deficit was likely to be at this stage of the working of the Railways. So I am not going to fall into the error of suggesting that the Minister will have a small or a large surplus, but I think that I can indicate that the Minister will still finish up with a surplus.

I know that the Minister will have more accurate figures than we have got available to us, and perhaps he will be tempted to indicate when he replies to this debate what he anticipates the position will be at the end of the financial year.

I am not easily tempted.

Well, that means in fact that we have to contain our patience until Budget day to discover what he estimates the position will be. But I think it is evident from the evidence we have that but for the manpower shortage the Minister would have been able to move practically all the traffic offered. The Minister has the tractive power and has most of the rolling stock he requires and obviously he has the goods to convey. The shortage is in manpower mainly. May I suggest to the hon. Minister that he should appeal to pensioners to come and assist him by offering as an inducement that they will not lose their pension or allowances if they do so. I mention this point, Mr. Speaker, because of an item which appears in the Additional Expenditure from Revenue under Head No. 17. “Miscellaneous Expenditure”, a special contribution to the Benevolent Fund of R1,580,740. In the General-Manager’s Report for the year ending December 1964 the following statement appears on page 92—

You will remember, Sir, that prior to the last Budget debate, we had appealed for assistance to pensioners and I am glad that this assistance was forthcoming, although at the time the Minister was not able to indicate in his Budget statement that he was in fact going to give this relief for fear of being accused of anticipating the main Budget introduced by his colleague, the Minister of Finance, later. Nevertheless, this opportunity now occurs to say on behalf of those thousands of pensioners that this action was very much appreciated and is very welcome indeed. Unfortunately events since then tend to dissipate what benefit they received—I am thinking now of the effects of inflation.

But there are two items which have arisen as a result of the change-over in the system of payments to pensioners of a special allowance and a special supplementary allowance. Does the hon. Minister realize that the railway pensioners who have received the special supplementary allowance and have lost the war veterans pension or the old age pension now find that they are liable to income-tax—some of them, not all of them, a great many of them, and …

Order! The hon. member cannot argue that point now.

No, Sir, I do not intend to argue that, but I just want to state the case in outline so that the Minister can deal with it when he presents his Budget. The point I want to make is that because they are liable for income-tax, they are now also liable for provincial tax. I only hope that the Minister will bear this in mind when he confers with his Cabinet colleagues on any change in the present means test. I leave it at that. Pensioners feel that it has rather taken the edge off the benefits which they have received.

The second point is also tied up with this matter and that is that railway pensioners who are employed for a part of the year and whose earnings over the period of employment exceed the means test of R1,800 and R900 respectively do lose the special allowance in respect of the month or months that they are employed. I am sure that this was never the intention and I mention it here so that the Minister can consider the matter when he is framing his Budget, that where it does happen that a pensioner is employed for a short while in the year that the total earnings for the whole year if they do not exceed the figures laid down, will then in fact entitle them to receive the special supplementary allowance or special allowance for the full year. In respect of the manpower shortage I am quite convinced that the Minister has this problem to face, and I am not going to suggest what he should do other than what I have already indicated by way of inducing those experienced railway men who are now on pension to come back into the service and to give a hand during this period of crisis. I feel that an inducement is necessary, and I think the type of inducement I have suggested will bear good results. But of course this problem affects not only the Railways but every section of our economy and we will look forward with great interest to the Minister’s Budget speech to see what he intends doing to bring about an improvement, which he must bring about if he is going to continue to meet the challenge presented to him as the result of the conditions prevailing to-day and which are likely to prevail during the next financial year.

In respect of the additional expenditure on Capital and Betterment Works, the three main items the Minister has mentioned, the new works on open lines amounting to R11,750,000 and rolling stock, R10,500,000, and store stock to the amount of R9,000,000, means that the Minister is now asking for an additional R30,000,000 to finance the Capital and Betterment Works. I think this is the largest additional amount to be voted during the last five years, and the question which arises and which I now put to the Minister is this: Is he satisfied that he will be in a position to spend this extra R30,000,000 during this financial year? I do not know, but it does appear to me to be a large sum of money to bring into account at this stage in view of the manpower position generally. If the Minister would elaborate on this aspect a little more than he has done, it will give us an opportunity of estimating whether this amount of R30,000,000 can be spent before the end of the financial year, or perhaps there is some factor which is not visible to us which shows why this money is needed, and perhaps it may also have already been partly spent and the Minister is now asking for parliamentary sanction to put the stamp of authority upon it.

We intend to raise other queries in the Committee Stage. I think we have one other speaker who will deal with certain other aspects of the proposals before us, and with these few remarks I wish to conclude.

Mr. Speaker, I should like to confine my remarks mainly to the Estimates of Additional Expenditure on Capital and Betterment Works for the current financial year. It is interesting to note that the Minister is asking for an amount of some R30,000,000, which represents roughly one-third of his Budget figure of R108,000,000. I think it is one of the highest percentages of expenditure on the Capital Account that has been presented to us for quite a long time. These items of expenditure fall broadly into three categories. They are those which will provide for belated debits that have been brought to charge in the current financial year, for which no provision was made in the original Estimates or in the Brown Book. Those items of expenditure are in excess of R10,000,000, and the Minister has indicated that they are presented in these Estimates as the result of a Select Committee resolution.

Then there is the second class of item, those items which are authorized from the Unforeseen Works Vote, where a greater amount of work was undertaken by the Administration than was originally anticipated when the original Estimates were presented. Then there is the third category which the Minister dealt with at some length, and those are the items of capital expenditure of a new nature for which the Minister is not only seeking approval from this House. Apart from these, there are two main, single items which constitute more than half the expenditure that the Minister is asking for in these Estimates. I want to deal with those two items separately, but before doing so I want to say a word about the new items.

It is clear that if there had been any planning—and let me say that there are some 14 items in these Estimates, in regard to which the House is asked to vote not only, as the Minister indicated, some R570,000, but the Minister is seeking also authority to spend some R9,500,000. which these new works will entail. So we must get our perspective correct in order to deal with the matter. If the Minister comes forward with a request for parliamentary approval for these new items—I am presuming that he is doing so not in a hasty manner, but because certain items involve certain important work such as, e.g., electrification of the Postmasburg - Kamfersdam line, which is one of the largest items on the Estimates—then one is entitled to presume that there was some planning and that these items hardly fall into the category of work that was not anticipated when the original Estimates were prepared, or fall into the category of being entirely unforeseen expenditure.

We on this side of the House, as the Minister well knows, have continually raised the question of including in these additional Estimates major items of construction and seeking parliamentary approval for them, and we have objected for one very good reason, that we in this House are entitled to know the overall plan and picture of the Railway Administration’s development in the forthcoming year. Presenting the picture of these new items in this manner merely presents to the House and to the country a piecemeal picture of Railway developments as a whole. We have continuously maintained, as the Minister knows—and I make no excuse for making the point again to-day because we know it takes a little persistence before the Minister begins to see one’s point of view—that we feel that these major items should be properly reflected in the Brown Book and should be discussed when the Budget is presented as part of the ability of the Administration to be able to meet the demands made on it by the economy of South Africa, so that we can have the whole picture and not merely this piecemeal picture. There are obvious reasons for the development of the Postmasburg-Kamfersdam line due to the export of ore, etc., but that line, if one looks at the amount of money spent in the past, is becoming one of the most expensive pieces of railway line in the whole of South Africa, because we still have another item of expenditure of something like R3,000,000 on the Estimates for signaling. So the total cost of this line is not only what we are being called upon to approve here as a new item of R8,000,000, but it is already in excess of R12,000,000, quite apart from the cost of building that extra line. I repeat that we on this side do not regard it as a desirable practice to present major items of expenditure of this nature in the additional Estimates.

Now, turning to those items, of which there are a large number, and in which the footnote states that they are either unforeseen expenditure or expenditure that was not anticipated by the Minister when he presented his Budget, we are asking to approve items in excess of R1,000,000, and on this occasion we are asked to vote some R285,000. There is a list of these items and I am not going to enumerate them, but this is the interesting aspect of it. When the Minister presented his Budget he asked, under the Unforeseen Works Vote, for some R650,000 to be approved from the Loan and Betterment Fund. The Unforeseen Works Vote is there to take care specifically of a case where it is too late for the Minister to make financial provision in the original Estimates for any expenditure to be incurred during the current financial year. One may again ask what sort of planning is taking place by the Railway Administration when you get items such as Item 95 on these Estimates, where we are asked to vote the amount of R80,000 towards a total cost of some R203,000 for the building of a new diesel running shed at East London. The policy of dieselization of the line to East London was not a new one. It is referred to in the General Manager’s Report for the year ended 1964.

If I recall correctly, the Minister made policy statements about dieselization in this House some two years ago. One would therefore have thought that a new item of this nature, if there was adequate planning, would have appeared in the original Estimates when the Brown Book was first presented to the House. You can hardly describe the building of a diesel workshop at East London as unforeseen work or work that was not anticipated, because if it was not anticipated there could not have been proper planning.

One may take Item 137 where provision is made for the purchase of training apparatus for the Boeing 727, and where we are now asked to vote the amount of R2,000 to purchase what is, I presume, a simulator for the training of air crew. But the question of the purchase of Boeings has been on the books for quite a long time. Why should items of this nature fall into the category of unforeseen and unanticipated expenditure? Surely if there were proper planning provision would have been made in the original Estimates for the purchase of a simulator. It is our view that with this type of item being included in the Estimates there is no reason why, with adequate planning, if there had been adequate planning and foresight, those items should not have been included in the original Estimates.

Read the Schumann Report.

We will deal with that in its proper place. Now, turning to the two major items of expenditure, viz. store stock, R9,000,000, and Item 114, rolling stock, referring to the purchase of 1,000 bogie grain wagons, the note at the bottom of the Estimates states that this is a reallocation of expenditure originally proposed to be financed from the Renewals Fund. The Minister dealt with it in his speech and indicated that because of the heavy demands being made on the Renewals Fund it was decided to finance the purchase of these trucks from Loan Account.

Now, it is interesting to look at the history of this item. It first appeared on the Estimates in 1963, as an estimated expenditure of some R 5,000,000. We in this House were advised when the Estimates for 1963 were presented that R1,000,000 of this estimated R5,000,000 would be expended on the purchase of these trucks in 1963 from the Renewals Fund. In 1964 the same item appeared in the Brown Book, but it was indicated to us then that another further expenditure of R200,000 would be used from the Renewals Fund for the acquisition of these trucks, making a total of R1,200,000. And in 1965 these 1,000 bogie trucks again appeared in the Brown Book, with no indication as to whether they had been delivered or whether there was a delay in their construction. But we are told in the last year’s Estimates by the Minister that the purchase price of these trucks was no longer R5,000,000, but that Parliament would be called upon to approve a further amount of R2,500,000 and that the Renewals Fund, in the 1965 Brown Book, would be drawn upon to pay for the entire amount, to the extent of R7,500,000.

I have the Brown Book here and the current year’s Estimates and the item is clearly listed there showing an amount expended already in the past years of R185,000, but in the current year the amount would be met from the Renewals Fund to the extent of R7,401,000. The Minister also stated in his Budget speech that of his surplus he was allocating R6,000,000 to the Renewals Fund, to the rolling stock section, in order to replace current assets and to reduce the interest burden presently placed on the Administration. Sir, the Renewals Fund is primarily intended to replace existing assets and also to be used to purchase new assets, including rolling stock, up to the amount of depreciation on similar assets still in service. Where new rolling stock is required to be financed from the Renewals Fund to the amount of the depreciation, a certificate must also be obtained from the chief mechanical engineer. Now, for three years Parliament has been told that the purchase of these 1,000 trucks would be financed from the Renewals Fund.

The Minister now says that because he does not want to overload the Renewals Fund, to which Parliament has been voting money during the past three years, he now wants to pay for these trucks out of the Loan Account. One must therefore ask what is the value of the Estimates that are placed before Parliament? When we are expected to have an appreciation of the financial commitments of the Railways and of the manner in which its finances are being organized, what on earth is the value of placing items on the Estimates year after year for three years and then in the fourth year the Minister tells Parliament that the Renewals Fund cannot pay the money and he now wants the Loan Fund to pay it. Of course then his argument in the Budget speech falls away entirely, because in the Budget speech the Minister said he did not want to load the interest burden of the Administration. You see, Sir, what the Minister has in fact done is that by putting the item of these trucks on the Brown Book for three years, indicating that payment will be effected out of the Renewals Fund, he has accommodated temporarily the estimated expenditure on 1,000 trucks to relieve the Capital Account of excess expenditure. I am not aware of any provision in the principles of the Renewals Fund which permits temporary financing of a transaction of this nature. It brings into question the whole basis of the Estimates presented to this House. I want to ask the Minister to tell us whether the trucks in fact have been delivered, because a similar case of such methods of financing appeared before the Select Committee last year. In order to make my point quite clear as to what the Minister proposes in these Additional Estimates, I want to read the conclusion of the Select Committee’s resolution in regard to the practice the Minister is adopting here. I quote—

By drawing attention to the history of this item and the manner in which the Minister now seeks to finance it, I wish to indicate that a practice is being followed here which is quite contrary to the resolution adopted by the Select Committee and which I do not think is in the interest of the House or of railway finances in general, because members do not get a clear picture of what is contemplated as far as railway finances are concerned, when it comes to capital expenditure of such large sums as the Minister has asked for here.

Mr. Speaker, the matter to which the hon. member for Turffontein (Mr. Durrant) devoted so much time should really be discussed on the appropriate occasion.

It is relevant.

We are now concerned only with the additional expenditure, and not with the principle of financing certain expenditure from the Renewals Fund or from the Capital Account. Accordingly the House is only concerned with the reasons for the additional expenditure. The hon. member can discuss that matter during the Budget debate. Then I can reply to it fully.

The hon. member also used the argument that he has used for several years, that major items of expenditure should not be included in the Additional Estimates. I have replied to that before. The hon. member also complained about the amounts spent under the Unforeseen Works Vote. Parliament has for many years accepted the principle that a certain amount of money must be allocated for the purpose of financing unforeseen work. The Railways is a dynamic organization; it does not stand still. It is not a question of lack of planning. It is merely a question that sometimes it is anticipated that work will start at a certain time, but it is started later, and therefore provision is not made when the Estimates are drawn up in the beginning of the year, which is included in the Brown Book. But planning is on a long-term basis as well as a short-term basis. Planning is not only for five or ten years ahead, but it is continually going on. It depends on the increase in traffic. With the increased activities of the Railways new works must be embarked upon. There is no lack of planning. It makes no earthly difference whether these large amounts are included in the Additional Estimates or in the Main Estimates. They can be discussed fully there, just as well as they can be discussed when the Brown Book is before the House. I have also said before that the practice is that very little attention is given to the Brown Book during a debate. Sometimes the Brown Book is not discussed at all. On other occasions an hour might be devoted to discussing the items in it.

The hon. member for Umhlatuzana (Mr. Eaton) said I should give an inducement to pensioners to accept re-employment and that this will probably relieve the staff shortage. I can assure the hon. member that a large number of pensioners are being employed, but there are certain grades in which they cannot be employed. For instance, you cannot employ a pensioner as a fireman, and the arduous work of a shunter is quite unsuitable to an elderly man. Those are the grades in which the greatest shortage of manpower exists. I do not think that by eliminating or raising the means test it would be a very great inducement for pensioners to be reemployed. If you raise the means test there will always be those who fall either inside or outside it. As the hon. member also knows, either raising or lowering the means test is a matter for joint action between the Minister of Finance and myself, and that can only result from a Cabinet decision. The hon. member also wanted to know whether I am satisfied that we can spend the additional R30,000,000 asked for. I can give him the assurance that it will be spent.

Motion put and agreed to.

House in Committee:

Estimates of Additional Expenditure from Railways and Harbours Revenue Funds:

On Head No. 1,—“General Charges—Railways”,—R1,710,000,

The Minister indicated that the additional expenditure here was due to the timing and coding staff being transferred to the General Manager’s Office.

Which item are you discussing?

I am speaking on the total item.

That is quite a different thing.

I do not want to burden the Minister by going through each item, because the Minister made a general statement.

Item 205 is the one you have in mind.

Then will the Minister tell us what staff was transferred and from where?

Order! The hon. member must confine himself to the reasons for the increase.

The increase was mainly due to the transfer to the Accounting Department of Accounts Office staff previously attached to the Stores Department, and staff from other departments in connection with the decision that the Accounting Department should be responsible for the compilation of pay-sheets.

Head put and agreed to.

On Head No. 5.—“Traffic Expenses—Railways”—R6,285,000,

There are two items referring to shunters. Will the Minister indicate the nature of the additional allowance paid to shunters?

This amount also provides for overtime and Sunday time, but in regard to the allowance I can give the hon. member the information. Last year I decided to pay to all shunters an allowance of 50c a day, mainly as an inducement for shunters to remain in the service, and secondly as an inducement for new entrants to the service, to assist in the recruiting. I felt that the allowance was perfectly justified, taking into consideration the nature of the work a shunter has to do and the element of risk. Most of them work 12 hours a day and they work on Sundays and at nights. That was the allowance decided upon at the request of their staff association.

What is a shunter paid?

It is a graded scale. They now start at about R100 a month, i.e., for a Class 2 shunter on probation. I am speaking from memory.

Business suspended at 6.30 p.m. and resumed at 8 p.m.

Evening Sitting

On Head No. 17.—“Miscellaneous Expenditure—Railways”—R2,153,000,

Mr. Chairman, I should like to direct the Minister’s attention to item (i) “Ex gratia award to former Road Transport Agent in recognition of services rendered over a long period”. Could the Minister please give the committee further information on this item?

This item concerns Mrs. E. M. Timms who had been road transport agent at Flagstaff for the last 23 years and at the age of nearly 83 years had been compelled to relinquish this agency on account of ill-health. In view of her long and outstanding service it was decided to make an ex gratia payment of R200.

May I draw the Minister’s attention to item (d) “Loss on the realization of investments”. I notice that the increase here has been from R2,000 o R252,000. Could the hon. the Minister please give the committee an explanation of this fact?

As the hon. member probably knows—because it has occurred before—stocks which have been invested at a very low rate of interest are often realized in order to be invested at a higher rate of interest. This item is in respect of a loss on realization of low interest-bearing stocks. However, the proceeds from a reinvestment of these stocks at a higher rate of interest will completely compensate for this loss, and that within a short time.

I should like to have some further information in connection with item (k) “Ex gratia award being Administration’s contribution towards the cost of a public swimming bath at Komatipoort”. Could the Minister indicate whether a precedent is being established here or whether there are special circumstances surrounding this contribution made by the Railway Administration towards the cost of building this swimming bath at Komatipoort.

I should like to inform the hon. member that the Railway Administration decided to contribute 50 per cent of the cost of the building of this swimming bath, which is a public one, such contribution being subject to a maximum of R20,000. This decision was based on the fact that railway servants and their families comprise more than three-quarters of the White population of 950 at Komatipoort. I should also like to point out that railway servants and their families will at all times retain the right to make use of this swimming bath. It is not a precedent that is being created here. Before agreeing to this expenditure I received a deputation from Komatipoort. As the hon. member knows, the climatic conditions at Komatipoort are such that the provision of this facility can be fully justified.

From the item “(a) Exchange on remittances to the Ambassador, London” I notice that there has been an increase of 150 per cent. What are the reasons for this considerable increase?

This increase is the result of increased remittances to London.

Head put and agreed to.

On Head No. 30A—“Working and Maintenance—Pipe-line”,—R5,000,

Mr. Chairman, first of all I should like to submit that this item represents the creation of a new head. Before discussing the item itself, however, I should like to know from the hon. the Minister why this item is being indicated as Head No. 30a—in other words, only as a sub-item of Head No. 30—and not as an independent Head. It would appear that all Estimates in future submitted in respect of this item, in the Brown Book as well as elsewhere, will be allocated to this Head. As I said, calling this Head 30a would appear to make it only an extension of Head No. 30 “Miscellaneous Expenditure”. I shall be pleased if the Minister would clarify this point.

Furthermore, I should also like to know what is envisaged in regard to the operation of this pipe-line. Will it be a completely separate section like the Road Motor Services where there are separate administrative facilities, as is also the case in regard to Airways and other services. In other words, will this pipe-line be administered as a separate entity falling under the general over-all control of the Management? Furthermore, what is the nature of the superintendence that is envisaged? On the motion to go into Committee of Supply the Minister indicated that certain personnel had to be trained for the operation of this pipe-line. Will the Minister please indicate whether the services of experts from other parts of the world are being made use of to assist in the training of these personnel for the operation of this pipe-line which, according to the plan, will have a number of pumping and distribution points en route to the Witwatersrand.

I think the Minister would be of great assistance to us if he could at this stage give us a fuller explanation of what is envisaged in regard to the general operation of this pipeline.

Let me, first of all, say that I do not think that the operation of this pipe-line is a very complicated job, especially in view of the fact that all that is retailed is the operation of the pumping stations. In the meantime, however, staff have to be trained. I do not think it is necessary for the Management to obtain expert advice from overseas for this purpose. But the staff must be trained as to the method of pumping so that they can take over whenever that becomes necessary.

In regard to the hon. member’s point about this item being shown as an extension of Head No. 30, I should say that this allocation is only a temporary one. I am told that we have a full classification of accounts and that this will in future be shown, the operation of this pipe-line will be shown separately to the rest of the Railway operations.

Head put and agreed to.

Estimates of Additional Expenditure on Capital and Betterment Works

On Head No. 2,—“New Works on Open Lines”, R12,060,400,

Mr. Chairman, we find that under this Head is included quite a number of new constructions. In the first instance I should like to refer to Item No. 98, page 13 “Kamfersdam-Postmasburg: Electrify section including connection line Macfarlane-Fieldsview”. This item indicates that parliamentary approval is being sought for the ultimate expenditure of a globular sum of R8,000,000 for this work, of which we are now being asked to vote R100,000. When I dealt with this matter during the discussions on the motion to go into Committee of Supply, the Minister replied that it was normal practice for items of this nature to appear on the Additional Estimates from time to time. Now, to me it is quite obvious that when expenditure of such vast proportions is envisaged in regard to what is quite a major undertaking, you would at least expect the Minister to state his policy in so far as the electrification of this line is concerned. There is, for instance, a proposal for the electrification of this line right through to Cape Town. We are aware of this because it is part of the over-all electrification scheme. But when one comes across an item of this nature being thrown on the Additional Estimates—and that in respect of a line which is in a process of becoming one of the most expensive sections of railway line in South Africa on account of the funds which have already been voted for reconstruction, signaling, etc.—one asks oneself by what process of planning the Administration has arrived at the decision to grant such high priority to the electrification of this line, especially if regard is had to the priority which has already been accorded to other electrification works. It must be remembered that the Railways are already embarking upon dieselization in certain directions and that it has been laid down as a policy not to increase the steam traction units of the S.A.R., the intention being to limit any further purchases to diesel or electric locomotives. This involves expenditure and it is no use building a line like this without there being the necessary traction force to haul traffic over the line.

The Minister has argued that eventually it will appear in the Brown Book, but the plain fact of the matter is that the Brown Book represents the planning of the Railway Administration for a particular year as presented by the Minister to this House. The Minister is aware of the limitation imposed by the rules of this House on the discussion of Railway matters and consequently one expects, when looking at the Brown Book, that one should get an overall picture of the planning in regard to the transportation services of the country …

Order! The hon. member should confine himself to this particular item.

With respect, Mr. Chairman, I am trying to do so. After all, we are discussing a major item, involving as it does expenditure of a globular sum of R8,000,000, on the general development of the S.A. Railways. Consequently I feel that before we proceed to give our approval to this expenditure, the Minister should take us into his confidence to a greater extent by giving us more information on the background of the planning which preceded the inclusion of this item in the Additional Estimates. We should have a more comprehensive picture of what is intended for the future.

The hon. member for Turffontein is quite within his rights to have asked the questions he did ask. As for me, I am quite prepared to reply to them. Firstly, in regard to the general question of planning. I said in my reply to the discussion on the motion to go into Committee of Supply that planning had to be undertaken not only on a long-term basis but also on a short-term basis. It is obviously necessary that we plan on a long-term basis but at the same time it is also necessary to plan on a day to day basis. Despite this planning, however, it sometimes happens that the Administration is placed before an accomplished fact leaving it with no other alternative but to provide a new work immediately. Let me give one example of the many instances of this nature.

Foskor some while ago entered into an agreement with a Japanese firm to sell millions of tons of magnetite to be delivered at the rate of about 900,000 tons per year, commencing next year. The first I heard about this was when I read about it in the newspaper. There were no prior discussions with the Railway Administration in regard to this matter. What happened was merely this announcement in the newspapers. The line from Foskor to Komatipoort is a light line with heavy gradings, and is worked by steam traction. But steam traction cannot move the proposed traffic because as I said it is a light line with only 60 lbs. rails. It runs through the Kruger National Park. Apart from these factors there is still another consideration, namely that the management cannot arrange for the crossing of trains in the Park during night time because the train staff is simply afraid to get off the trains for fear of being caught by lions. Consequently trains have to run through resulting in considerable delays. As I said before, the Railway Administration had no knowledge of this coming volume of traffic. No consultations were held with us. Consequently when I read about this in the newspapers I immediately had to decide on the purchase of 20 diesel locomotives in order to be able to move the coming traffic during the interim period. Furthermore, I had to decide to build a new line from somewhere near Acornhoek, bypassing the Kruger National Park and joining up with the Komatipoort line. All this could not have been foreseen.

Something similar happened in regard to the Postmasburg line, as a result of Iscor deciding to expand. Here, too, the Railway Administration were faced with the accomplished fact in that it was suddenly required to handle a large volume of additional traffic. This, too, was not a matter which could have been foreseen years ahead; so the Administration had to decide at short notice to increase the carrying capacity of this line. Now, I agree with the hon. member that this is a very expensive line. First of all, the Administration, in order to increase the carrying capacity of the line, had to install centralized traffic control so that we could be in a position to meet the demands of Iscor and exporters of manganese. However, after this system had been installed the traffic over the line increased to such an extent that we had to sub-divide the block sections by means of colour light signaling. But that was not sufficient and now we have to electrify that line in order to be able to move all the traffic that will be offering.

This is something which would, in the normal course of events, have been provided for in the Brown Book. However, the electrification of the Beaconsfield-Klerksdorp line was completed before the target date, and rather than move the construction gangs from this line to some other section it was decided to commence immediately with the electrification of the Postmasburg-Kamfersdam line which is in close vicinity. This is the reason for this particular work being undertaken immediately, instead of waiting until such time as the Brown Book had been submitted to and approved by Parliament. I am sure the hon. member will accept these reasons as being valid.

May I direct the hon. the Minister’s attention to item 22 “Jacobs: Exchange Yard—R158,950”. Could the Minister give us some further information about this item?

This item has become necessary in order to enable the Administration to cope with the industrial expansion in the harbour area and to provide some measure of relief for the bayhead yard. The work is being expedited, hence this additional expenditure.

Has the Administration acquired any extra land for the purpose?

I do not know.

Could the hon. Minister please indicate whether electrification of the line Kamfersdam-Postmasburg will include the extension to Lohatlha? Or is it intended that the extension from Postmasburg to Lohatlha will continue with steam traction?

It has been decided to electrify from Postmasburg to Kamfersdam. However, it is being considered whether to extend the electrification to Sishen. It will not be extended to Hotazel because for that there is no justification. Its extention to Sishen, is, however, under consideration.

Could the hon. the Minister give us further information in regard to the additional expenditure of R11,490 on item 20 “Durban Harbour: Additional staging roads at maize shed, Point”?

This work has become necessary in order to enable the Administration to handle the increased number of trucks in the harbour area. Delays in the delivery of material have prevented the completion of the work by 31 March, as was intended. In other words, this is not a new work. The additional expenditure has been caused by the use of new instead of secondhand material for turn-outs.

From item 57 “Cape Town: New passenger station” I observe that the committee is being asked to vote an additional R529,800. Could the Minister give us the reason for this increase? Is it due to a departure from what was originally contemplated?

This expenditure has been caused by the decision to expedite the work in connection with the new Cape Town station. It is the intention to complete the new Cape Town passenger station as soon as possible. With that I think the hon. member would agree.

So this expenditure is in addition to that which was originally contemplated?

No. The expenditure is due merely to the fact that it was decided to accelerate the work.

Let me say to the Minister that I appreciate the reasons that he has advanced in his reply to me. There are, however, certain aspects about which I am not yet satisfied. The Minister indicated that the electrification of the Kamfersdam-Postmasburg line became necessary as a result of a decision by Iscor to double its output, requiring the Administration to take the necessary steps to meet the situation. But the point I want to make, Sir, is hat the planning department of the Railway Administration must surely have been aware of these developments because the Minister has already told us on many occasions that there is complete liaison between his department and all important national industries. Moreover, quite a lot of publicity has been given to the expansion programme by Iscor, so much so that even I, who am not particularly interested in the steel industry, was aware of it. What I cannot understand is that items like these could not have been included in the Brown Book which will be presented to this House within a week or two.

Let me say that the Minister’s arguments are perfectly valid when it comes to items such as items 90 and 91, because there are small, new items. The work covered by these two items is something which could not have been foreseen and, moreover the amounts are relatively small. Against this let us refer to item 95 “East London: Machinery and equipment for new diesel running shed” involving an additional expenditure of R80,000. Surely the hon. the Minister cannot in respect of this item say that this expenditure became necessary in order to meet a crisis because the Minister announced the dieselization of the East London line two years ago already. Now, surely, this would not have been undertaken without making the necessary provision for the maintenance of the diesel locomotives. After all, these locomotives must be serviced and the Administration should have planned accordingly. That being so, the necessary item should have appeared in the Brown Book in good time to enable discussion in the House.

My point is that we are in these Additional Estimates being called upon to deal with these big development programmes as well as with policy in a piece-meal manner because we do not have before us the whole picture of railway transportation expansion. Such a picture is necessary in relation to items such as these for the reason that people are becoming concerned at the fact that the Railways to-day are struggling to handle all the traffic offering. Most of the items being dealt with here are most important developments being aimed at enabling the Administration to meet all the demands of commerce and industry. So I hope that when we get items of this nature in future, items involving large capital amounts, we will be presented with a fuller picture.

I already explained to the hon. member what the circumstances were in regard to the improvements on the Postmasburg line. Although it is not directly connected with this item of electrification, I referred to Iscor’s decision to expand its production. To meet the new situation central traffic control had to be installed on this line. However, it is not only iron ore that is being transported from Postmasburg. There are in addition a large number of producers of manganese and they cannot say three or four years ahead what contracts they will be entering into. This is of necessity a matter which has to be decided on a year to year basis. It is only at the end of a year that they know what contracts they can enter into for the sale of manganese for the ensuing year. In view of these circumstances it is impossible for the Administration to plan four or five years ahead. After all, there may be a slump in the manganese market. In any event, there is no assurance that there will be no such slump. Managnese is only one commodity amongst many others.

These are the reasons why it is impossible to plan four or five years ahead, especially when it comes to manganese which is a commodity entirely dependent on the outside market. When a producer comes along and tells us that his production of manganese for the ensuing year has been increased by 50 or 100 per cent the Railway Administration has ho option but to make the necessary provision for transport facilities immediately. Planning has nothing to do with a matter such as this. Planning is only possible when you know that there will be a definite increase in traffic over a specific section during a specific period. Planning can only be based on the general trend of the economic expansion of the country. This can be worked out statistically. It may occur, however, that the anticipated rate of expansion suddenly increases, as is happening this year when we are experiencing a boom which nobody could have foreseen two years ago.

I thought the Minister of Finance planned it!

He did plan it, but he never expected it to reach such large dimensions. [Laughter.]

Apparently the Minister of Finance never told you!

Nobody in this House expected at the beginning of 1963 that we would experience such a tremendous boom during 1965. We know that we would experience prosperity as a result of an expansion of our economy. But nobody could have foreseen that we would experience such a boom as we are in fact experiencing. Consequently it was impossible for the Railway Administration to plan ahead adequately. Traffic fluctuates from year to year and this is a factor which must be taken into account. Long-term planning can only be based on a statistically determined rate of increase. But a sudden upsurge in the traffic offering during a particular year requires of the Administration immediate steps.

In regard to the Postmasburg line, I told the hon. member why this item appears in the additional Estimates instead of in the Brown Book. The reason simply is that the electrification of the Beaconsfield-Klerksdorp line was completed ahead of schedule and it stands to reason that it is better business to employ your construction gang on another electrification project in the vicinity instead of sending them to a job 1,000 miles away, only to be brought back a few months later. This item would in the normal course of events have appeared in the Brown Book and work would then have commenced next year. But as it is work has already commenced and that is why provision has to be made for the necessary expenditure during this financial year. That is the only reason for this item appearing in these additional Estimates.

In regard to diesels I should like to point out that this House decided to approve funds for the purchase of diesel locomotives and the erection of a shed. I am now referring to item 95 of which the hon. member also made mention. But here a decision had urgently to be taken. At the time the Brown Book was placed before Parliament last year, there were no estimates available as to the cost of the machinery which would be required. As a matter of fact, the technical departments were still investigating what type of machinery to acquire and what it would cost. Then tenders still had to be called for. This could have been done only after the Brown Book had been placed before Parliament.

From item 76 “Reef Area: Loudspeaker systems for suburban stations” I notice that an additional amount of R10,320 is required. Could the Minister please indicate whether this item includes improvements to the loudspeaker system on the Johannesburg station or whether it is merely in respect of the installation of loudspeaker systems at suburban stations?

Order! The hon. member must confine himself to the reasons for the increase.

With reference to the reply of the hon. the Minister on the question of the electrification of the Kamfersdam-Postmasburg line, could he please indicate whether it is the ultimate intention to electrify the Beaconsfield-De Aar section?

That has nothing to do with this particular item As the hon. member is aware, there is a double line between Beaconsfield and De Aar. To increase the capacity of this line it is being sub-divided by colour light signaling. Consequently there is no intention to electrify that section in the immediate future. What is intended is that the section between Beaufort West and De Aar will probably be electrified first. That is on the books. In reply to the hon. member for Rosettenville on item 76, I should like to inform him that this item is in respect of work that has been held up due to delays in the delivery of imported material and due to the pressure of other work. These factors delayed the installation of permanent cables at other Reef stations and not Johannesburg.

Head put and agreed to.

On Head No. 3.—“R oiling Stock”, R10,489,700,

I should like to refer the hon. the Minister to items 114 and 121. I notice there is a foot-note in respect of these two items to the effect that the re-allocation of expenditure was originally proposed to be financed from the Renewals Fund. In respect of item 114, “1,000 Bogie grain wagons type FZ-7” an amount of R256,775 was voted on the original Estimates. This is therefore not a new item. Coming to item 121, however, this is a new item on these Estimates. This item concerns the purchase of twenty-five 5,000-gallon rubber lined tank wagons, type XF, for phosphoric acid traffic, and involves additional expenditure of R224,000. Could the Minister indicate whether this is also a re-allocation of expenditure from the Renewals Fund? If it is, I want to state that I do not accept the reason given by the Minister in reply to the points I made during the discussion on the motion to go into Committee of Supply. Surely the Minister should know that these items will not appear on the Estimates, especially Item 114, and when we come to the Committee Stage of the Budget we will not have this item before us.

If the hon. member desires to discuss the principle of allocating funds from the Renewals Fund to Capital Expenditure then he should do so during the Budget debate.

But surely the hon. the Minister must appreciate that the House can refuse to vote this amount he is asking for. Similarly I am entitled to move that these items be deleted from these estimates and I am entitled to give my reasons therefor in the same way as I am entitled to a reply from the Minister in this regard. I do not see why the Minister should be afraid to deal with the matter at this stage. Is he afraid to give us the facts? There is a matter of principle involved here. The way in which this House is being asked to vote these moneys formed the subject of prolonged consideration by the Select Committee on Railways and Harbours last year. The Controller and Auditor-General also had some strong comments to make on this method of financing.

The hon. member has completely missed the point.

Mr. Chairman, I am quite prepared to spend ten minutes and read the rather lengthy resolution adopted by the Select Committee on this matter. In any event, the facts stated in that resolution are entirely similar to the circumstances under which the Minister is asking for this re-allocation of moneys. The point I want to make is this, Sir, and I think it is a legitimate point, a point that warrants an explanation from the hon. the Minister. Because unless the Minister gives us a satisfactory explanation it makes a farce of these Estimates. The Minister is accountable to Parliament and Parliament is entitled to demand the Minister to account to it. If the Minister says this is a re-allocation he is, in fact, asking Parliament to rescind a decision it took before. In other words, instead of this money coming out of the Renewals Fund must now come out of Loan Account. My difficulty is this: If we are going to accept this principle where will it end? If this principle continues we on this side of the House will be placed in the position of having to assess Railway finances without knowing year from year whether the Minister is giving us a true picture of expenditure out of Loan Account. Surely the Minister knows what he wants to spend from the Renewals Fund. He has certain powers under the Renewals Fund. New assets and assets like this can be purchased from the Renewals Fund. There is no doubt about that. But where are we going to end if we adopt this principle? How does any member of this House know that this amount of R224,000 will in fact be spent and that the Minister will not come back next year and say: “I am putting this under Renewals Account; I ran short of my loan moneys; 1 over-spent.” How on earth can we make an adequate assessment of Railway finances? The Minister has an opportunity of replying to me on these points. It is an important issue, as the Minister well knows, and we would like an answer. I say quite frankly that if the Minister cannot give us a satisfactory explanation of this type of estimating, then I, for one, will attach no value whatsoever to the Estimates which are laid before us by the hon. the Minister. I cannot accept them at their face value as Parliament and the Audit and Exchequer Act demand they should be.

I do not agree with the hon. member at all. I don’t see anything wrong, when there is insufficient funds in the Renewals Fund to finance a certain asset, in using capital funds. Parliament is kept fully informed of the position. It is not something that is done behind the back of Parliament. As the hon. member said this is expenditure which was originally allocated from the Renewals Fund. But there is insufficient money in the Renewals Fund to finance this particular asset and that is why the money is taken from Loan Fund. What is wrong with that? Parliament is kept fully informed. I do not know why the hon. member is making a fuss about that.

It is not a question of making a fuss about it. Sir. As the Minister surely knows the Renewals Fund has money voted to it by this House. When the Minister presents his budget he indicates the amount by which the Renewals Fund should be replenished.

The Renewals Fund is based on the depreciation of assets.

Yes, but in the last budget the Minister asked this House to vote R6 million to the Renewals Fund for the replacement of rolling stock. That was a specific request on the part of the Minister.

What do you propose should be done when there is insufficient money in the Renewals Fund? Must the item be left out?

We want a budget presented to us. The Minister can’t play ducks and drakes from year to year. We want a complete picture of the Railway finances. If the Minister wants it I can quote the whole of the Audit and Exchequer Act to him. The Minister’s contention is virtually that the Select Committee wastes its time when it comes forward with the resolutions with which it has come forward; that the Auditor General is wrong when he makes very strong representations on matters of this nature and questions of parliamentary budgeting. Are they both wrong?

Sometimes, yes.

Then it would appear to me that I shall have to take this further on the appropriate occasion because I think it is a most important matter. I agree with the Minister; it should be raised when the budget is under discussion so that we can have a thorough discussion on it. I think we want a complete clarification, as far as the Minister’s attitude is concerned, as far as the capital requirements of the Railways are concerned.

The hon. member missed the point completely in regard to the remarks made by the Auditor General, as I indicated by way of interjection. The Auditor General complained of the fact that a certain amount originally financed out of the Renewals Fund was diverted to capital funds and again diverted to the Renewals Fund. That was the question which the Auditor General originally put. The Select Committee was not concerned with the fact that when the Renewals Fund had insufficient funds at a particular time to finance a new capital asset capital funds should not be used for that purpose. I see nothing wrong with that. I do not accept every resolution of the Select Committee on Railways. Resolutions have been taken in the past that I have not been prepared to accept. And the Auditor General is not always right; he can also be wrong. I am telling the hon. member I see nothing wrong, when there are insufficient funds in the Renewals Fund, to finance this particular asset out of capital funds. There is nothing wrong with that. Parliament is kept fully informed.

To help clear up the position can the hon. the Minister give us an illustration of why it is that items are placed as a debit against the Renewals Fund when it is possibly known that there will not be sufficient funds.

It is not known at that time.

The amount of money required in the Renewals Fund is not ascertainable in advance?

It is ascertainable. The expenditure is not ascertainable.

The expenditure is dealt with by way of appropriation. There is no other way. Somebody has to decide on what moneys are going to be expended.

There are early deliveries and late deliveries of rolling stock. It may be a very early payment. If you call upon the Renewals Fund it may be a very late payment. It is impossible to ascertain precisely what amount you are going to spend out of the Renewals Fund at any particular time.

So these items are really to avoid any inquiry by the Controller and Auditor-General in that you have over-spent on Renewals Fund.

Not to avoid the Auditor-General but we don’t want to deplete the Renewals Fund in that particular section.

Head put and agreed to.

On Head No. 4—“Road Transport Service”, R102,900,

I wonder if the hon. the Minister could give us some details in regard to Item No. 126. The additional amount is R89,000. Could the hon. the Minister give us some details concerning the vehicles that he intends purchasing.

It is to replace obsolete vehicles so as to meet the increased traffic requirements.

I wonder whether the hon. the Minister could give us further information in regard to Item 127 which is for the provision of chevron signs on vehicles and trailers. The amount approved by Parliament was R14,600 and an additional amount of R5,600 is now being asked. The note at the bottom of the page says “The additional provision is required to cover the greater amount of work undertaken during the year than was originally anticipated.” I shall be grateful if the hon. the Minister would give me further information as there appears to be a miscalculation as to the amount of R5,600. In comparison with the original estimate there seems to be a considerable difference.

There has not been a miscalculation. It is merely due to increased costs and those costs have to be met. That is the only explanation.

Head put and agreed to.

On Head No. 6.—“Airways”, R73,600,

I shall be glad if the hon. the Minister would give us further information in regard to item 135, “Replacing of seats in DC aircraft”. Could the Minister also indicate why, at this late stage, they are only obtaining a simulator now for the training of our pilots to pilot the Boeings. That is item 137. The approval of Parliament is sought for an amount of R320,600 but we are at this stage only asked to vote R2,000 for a simulator. Could the Minister please give us further details.

The item 135 is to convert aircraft to sky-coach configuration. The work resulted in accounting adjustments in working accounts and Better-mend Fund for which provision is required. The additional amount is to meet installation costs of seats not previously provided for and increased costs of seats. Item 137 is for training purposes thereby minimizing the use of aircraft for training. It was authorized originally against the Unforeseen Works Allotment. This refers to the purchase of the simulator.

Head put and agreed to.

On Head No. 8.—“Working Capital”, R 9,000,000,

This is a new item. There was no indication in the original Estimates of the purchase of store stocks. The Minister has explained in the debate on the motion that this was due to the expansion of the South African Airways in regard to Boeing aircraft. I have had occasion to refer to former Estimates and I could only find two other examples where this House, when discussing the Estimates, had been called upon to vote amounts of this nature for the store stocks account. If I remember correctly the one was in 1954 when the amount was some R3,000,000, and the other in 1956 when the amount was some R1,000,000. It may be vice versa. Those were the only other examples I could find. I make the point, Sir, because as the Minister well knows accumulation of vast stocks as far as the store stocks account is concerned is a matter of considerable concern. It has embarrassed him financially on one occasion and it has been the subject of two resolutions, I think, by the Railway Select Committee. We are now faced with an expenditure of R9,000,000 for store stocks. I take it that this is not for aircraft itself but only spares.

Not aircraft.

No, spares. I shall be glad, before taking the matter any further, if the hon. the Minister would give us some details of what is envisaged in this expenditure or R9,000,000. It is not a mere bagatelle. It is a large sum of money as far as the finances of the railways are concerned. I shall be pleased to have a full explanation of the amount from the hon. the Minister.

I agree with the hon. member that too much stock should not be carried because it represents unproductive capital. Efforts have been made in the past to reduce working capital as much as possible; to reduce the amount of stock. This is required in view of the continually increasing costs of spares, stores and one thing and another. The Administration has embarked on large works. Difficulty is sometimes experienced in obtaining the necessary stores. This is not merely spares for planes. An increase in the cost of spares for diesels, for instance, is expected, consumable stores, electric locomotive spares, wheel stocks, bogey stock and aircraft spares. In view of the increased consumer demand resulting from the expansion of various branches of the Administration’s activities and the progressive increase in the price of various commodities it is necessary to provide this additional capital.

I am glad the Minister agrees that it is inadvisable to carry large stocks because interest rates and other factors are involved as far as working capital is concerned. What disturbs me is the appearance of an item of this vast amount on the Additional Estimates. As we have it here it appears on the revenue account that we have just dealt with where, because of increased activity, it has been necessary to buy other stores and spares, etc. which are normally voted for on revenue account. What I cannot understand is why a very vast amount of this nature appears on the Additional Estimates. I have never during the time I have been in this House seen such a large sum appear on the Additional Estimates as far as the working capital account is concerned. Why should it now suddenly, out of the blue, be considered necessary to increase the spares the hon. Minister has just mentioned, such as spares for diesel engines, etc. May I ask the Minister this: Has it anything to do with regard to the production of the workshops at Koedoespoort. There has been a large overproduction and must that now be taken over by stores account?

No.

I am glad to hear that. But I shall be glad if the Minister could give us the reason why, at this stage, we are suddenly confronted by a sum of R9,000,000 under Working Capital Account in these Additional Estimates. This is Loan money which the Treasury has to find. It would appear to be a very large sum of money to be found at this particular stage. Why does it appear in these Additional Estimates? Why don’t we get the whole picture when we deal with the Budget in a week’s time? Surely there is no crying hurry about acquiring these spares at this particular stage.

I am quite prepared to tell the House. A certain amount of loan funds were allocated to the Railway Administration by Treasury. As the hon. member knows unspent loan funds must be returned to Treasury at the end of the financial year. Instead of returning those loan funds and applying for loan funds next year to meet the considerable amount of working capital required it was decided to utilize some of the loan funds allocated this year for working capital. Consequently the amount required next year in the Brown Book will be less than it would have been originally. Loan funds are limited and instead of repaying it to Treasury and not getting sufficient next year I thought it advisable to utilize these loan funds for working capital this year and obtaining a smaller amount from Treasury next year.

Head put and agreed to.

House Resumed:

Estimates of Additional Expenditure from Railways and Harbours Revenue Funds, and Estimates of Additional Expenditure on Capital and Bettermant Works, reported without amendment.

Estimates adopted.

The Minister of Transport brought up a Bill to give effect to the Estimates adopted by the House.

I move—

That the Bill be now read a second time.

Mr. Speaker, this is a particularly brief Bill. It is certainly the briefest I have ever handled. and I take it that it will be the briefest to be introduced in this House this Session. In my opinion there is not a single reason why the debate following the introduction of this Bill cannot be just as brief.

All that this Bill aims at doing is to amend Section 2 of the Justices of the Peace Act by the deletion of the words “but not exceeding six”. Hon. members are aware that the whole Republic is divided into areas for justices of the peace, and that in respect of each area six justices of the peace may be appointed. Hon. members also know that the demarcation of these areas took place many, many years ago. In most cases I am sure it took place before the rinderpest. Hon. members are also aware that the function of the justice of the peace is mainly to assist in the registration of births and deaths and in certain circumstances to sign warrants, etc. But in respect of elections justices of the peace in the past played a role because they, just like commissioners of oaths, had to perform certain duties in that regard. Hon. members are also aware—I do not want to enter into the merits of the matter; nor do I believe that it is relevant—of the fact that in terms of the new Electoral Act the commissioners of oaths as such disappear and that consequently they can no longer play a role in elections. Hon. members are also aware that Parliament has decided that, apart from certain officials specified in the Electoral Act, the function and the task of the justice of the peace have remained in respect of elections. We are now entering a new era in so far as the Electoral Act is concerned. I do not know whether the existing justices of the peace, i.e. the six appointed in respect of every area, will be sufficient in practice or not.

I shall tell hon. members why I have doubts in this respect. If it should appear that their number is not sufficient, and that the permanent officials mentioned in the Electoral Act are unable to deal with a number of postal votes, we will of course land in trouble. It is therefore my task and function—and that is what this Bill aims at doing—to ensure that there will be sufficient justices of the peace, if necessary. If a constituency or a magisterial district has sufficient such areas, I feel that it will not be necessary. Let me give hon. members two examples of which I have knowledge. The one is in Germiston. The magisterial district of Germiston practically comprises three constituencies. They are Germiston, Germiston District and Edenvale. They all have interests in this one magisterial district. But I am informed that the whole of the Germiston magisterial district also comprises only one justice of the peace area. That means that in respect of those three constituencies there will be six justices of the peace only.

I can give hon. members another example to illustrate the problem in this regard. The magisterial district of Brakpan is divided into two justices of the peace areas. In the one J.P. area there are. at the most, 350 to 500 people. In the other one there are approximately 29,000. You therefore see immediately, Sir, that in the urban areas where there are police stations, magistrates’ offices and other officials and where one does not actually foresee problems, there may, however, be circumstances necessitating the appointment of such people. Take the case of Mayfair, where it so happens that there will be an election. There is no magistrate’s office within the boundaries of the Mayfair constituency. As far as I know, there is not a post office either, nor a station master, and as far as I know at this moment there is not a single justice of the peace.

Nor a Member of Parliament.

As my hon. friend over there says, at the moment they do not even have a Member of Parliament, but one of these days they will have one again and he will be a Nationalist.

Order!

I am sorry, Sir, that I allowed myself to be tempted. I mention these cases to illustrate the problems which may arise. Having brought these problems to the notice of hon. members, they will have the fullest right, in view of the fact that I am responsible for the appointment of justices of the peace, to reproach me and to say: You should have foreseen that these problems could arise; you should have known that the Electoral Act provides that justices of the peace can handle postal votes, but you made no provision. Hon. members must now please not make the mistake which was made previously and quarrel with me because justices of the peace can handle postal votes. I am not the father of that provision. It is Parliament which decided that, and I am faced with a fait accompli.

Nor do I think hon. members should allow themselves to be misled or tempted to tell me that justices of the peace are political appointments. I want to make it very clear that they are not political appointees; these appointments are not made on the recommendations of political parties. The appointment of a justice of the peace is based on the fact that he is a man of status in the district who is appointed irrespective of which political party he belongs to.

Hon. members, particularly those who are concerned with party organizations, will know that in the past, where political parties appointed commissioners of oaths, or at least asked for the appointment of commissioners of oaths, every political party came along with a list of people whom it wanted appointed. It was a mere formality. The idea was not that one should approve or disapprove of those people. The idea was simply that they were the nominees of that political party, and one accepted it as such and appointed them. That does not apply in the case of the justice of the peace. The appointment of a justice of the peace is therefore not made or influenced by political parties. It is true that members of political parties on both sides of the House from time to time request the Minister—this happened with my predecessors and also with me—to appoint this or that person as a justice of the peace. Then it goes through the usual channels and he is either appointed or he is not. But that is not a political appointment in the sense in which the appointment of commissioners of oaths was in the past. It has not been the policy of this Government nor of my predecessors, otherwise than in the time of the previous regime, to appoint only our own people as justices of the peace. I am making no reproaches in this regard; I am just stating a fact. Because there is nobody who does not know it to be a fact. As I said, we appoint justices of the peace irrespective of the political party to which they belong. I can give numerous examples of that. I only draw the line at communists. They are the only people whom I am not prepared to appoint as justices of the peace.

This, Sir, is the reason why it is necessary to delete these words. I want to make it clear that this does not necessarily mean that more than six will be appointed. In fact. I would prefer to have to appoint no more than six persons in one area. All I want to provide for is that if circumstances demand it, and if political parties or candidates tell me that they are in difficulties in regard to postal votes because of the fact that there are not enough electoral officers for absent voters, then, if this Bill is passed, I shall have the necessary power to appoint additional justices of the peace. If it should appear in practice, in view of the large rural constituencies we have, that justices of the peace are almost unobtainable, then I shall make use of this power in any case. That will serve the purposes not only of this election but it will also serve the other normal purposes envisaged in the Justices of the Peace Act.

These are the principles of the Bill, and I move.

This is a measure before the House which should have an alternative title. I submit that the alternative title should be “The Evasion of the Electoral Act Bill”. The hon. the Minister shrugs his shoulders and says he is not responsible for the Electoral Act but has now only come with an innocent little measure to deal with an administrative problem of handling postal votes on the platteland and in the suburban areas. He referred specifically to urban areas. I wonder why this hon. Minister has been chosen to save the face of the hon. the Minister of the Interior.

You are talking nonsense.

I am not talking nonsense. I have quotations here from the Minister of the Interior who stated specifically, when we dealt with the problem of postal votes and who should be presiding officers for absent voters, that in his opinion there was no need for justices of the peace in the urban areas because there you had an ample number of officials but that it was in the far-flung rural areas where these persons were needed. He made that point so clearly and certainly and specifically that we on this side of the House went so far as to move an amendment saying we accepted his word in good faith. Based upon the word of the Minister of the Interior we moved an amendment that Justices of the Peace should only be permitted to handle postal votes in rural areas, because that was where they were needed.

If the Minister wants quotations, I can give him a number. I start with one from the debates in the Other Place last year, (Hansard. Col. 4089). The hon. Minister of the Interior said there—

Meaning justices of the peace. And then the hon. Minister said, dealing with the platte-land—

In Other words, the Minister of the Interior when he introduced the Electoral Act and when this question of justices of the peace was under debate, said himself that in the heavily populated areas he did not believe justices of the peace were necessary. But the hon. Minister of Justice now in his introductory remarks quotes the built-up area of Mayfair and he quotes another ward of 29,000 voters in one ward, an area, Mr. Speaker, where you have got government officials. The Minister of the Interior made it absolutely clear when we debated this measure that we were dealing with a practical problem affecting the platteland areas and we on both sides of the House discussed that matter very carefully and very thoroughly. I want to say to the hon. Minister of Justice that this House saw fit to appoint a Select Committee, a Select Committee which sat through one Session, the following Session it was-re-appointed, it was converted into a commission, and so for two years you had a commission of both sides of the House dealing with what was basically the problem of the abuse of postal votes, and both sides of the House were agreed, and the Minister of the Interior agreed (I have just quoted from his speech) that the abuses which did often exist in the handling of postal votes should be eliminated. We believed that when a person made a cross it should not be a double-cross, we believed that there should be no double-cross in regard to the honesty of postal votes. We believed that when we reached agreement on this matter, we were reaching an agreement in the interest of clean elections.

Ah!

Yes, Mr. Speaker, both sides of the House, and both political parties, and if the hon. Minister wants to dispute it, I have before me the report of the commission, I have the speeches of his colleague, the Minister of the Interior. The objective was to eliminate malpractice in the administration of our electoral system in South Africa. When the commission recommended who should deal with postal votes, who should be presiding officers for absent voters, a compromise was achieved, a compromise obtaining the support of the members of that Committee, and later of the commission, on both sides of the House, and the compromise was that we should recommend a new system whereunder only government officials should handle postal votes.

And M.P.s.

I was waiting for that. Come again, say it again. I want it on record. The hon. member for Parow was on the commission and the commission recommended a new system as an experiment, a system which would have as persons handling postal votes only officials of the State. The hon. member for Parow says “and M.P.s”.

I was not a member of the commission.

Well members of his party then. The member for Parow says “and M.P.s”.I say that is not true.

Oh yes.

Ah, there is the chairman of the commission saying “Oh yes”. I would refer him to page 61 of the original report, the roneoed report, paragraph 144 where we recommended as a commission, unanimously, two groups of presiding officers for postal votes, namely—

Now I am making the hon. member for Parow happy. But, Mr. Speaker, you see what they did. They stopped there, but that was subclause (1) of the recommendations. Sub-clause (2) says—

That is Senators, Members of Parliament and Members of the Provincial Councils, and so on—

And (3)—

And the recommendation was—I quote from the draft Bill—

In other words, Mr. Speaker, the Commission, of which the hon. member for Pretoria (Central) was chairman, recommended that whilst we were not prepared at that stage to recommend the complete abolition of the old system, Members of Parliament and appointees appointed by parties or by candidates should only handle votes within their own constituency and could not handle what were called “foreign votes”. And then we went on to recommend that for foreign votes only group (a)—State officials—should be used. Only State officials.

Also justices of the peace …

No, they were not included. In other words, we recommend as an experiment the introduction of the handling of foreign postal votes only by State officials. We went further with other recommendations for blank ballot papers and the filling in of constituencies by magistrates, etc., in connection with the handling of those votes, but we deliberately and consciously recommended the introduction of a system which would eliminate completely the handling of a postal vote by any person other than a State official.

*Mr. S. F. KOTZÉ:

What about M.P.s?

A draft measure was prepared which rejected that recommendation, but which did not include certain categories. But when it went before the Nationalist Party, we found in the final Bill which came before us that justices of the peace and station-masters had been added as presiding officers for absent voters.

What is wrong with that?

We contested that, because we said that with the exception of station-masters and justices of the peace every other presiding officer was a State official debarred from participation in politics.

What about Members of Parliament?

The Commission and the Minister and both sides of the House were agreed that the ballot paper of a voter should never get into the hands of a political party.

That is still the case now.

The hon. member says, “that is now still the case”. In other words, he accepts that principle. Now I want to challenge the hon. the Minister to state here in this House that in a by-election at present in progress in South Africa, a justice of the peace is not in fact an agent or sub-agent of a candidate and that ballot papers are not being sent to that justice of the peace, care of the National Party office. I ask him to deny that. I ask him to deny that that is not happening.

What is wrong with that?

There we have it. I feel that I do not need to debate this matter any further. We have now the admission of the Government that this measure makes it possible to evade the basic fundamental principle of the amendment to the Electoral Act which was to keep a ballot paper out of the hands of political parties. If the hon. Minister wants to know to which by-election I am referring, it is Kimberley (North). I ask him to deny that in Kimberley (North) that is not happening. But now we have it quite clearly, the admission from the other side that they regard it as a good thing, that the Government regards it as a good thing that a ballot paper should fall into the hands of a political party in conflict with the stated opinion of the Minister of the Interior when we dealt with this issue. He said clearly that a ballot paper must not fall into the hands of a political party. Mr. Speaker, they have had second thoughts on it. Why? Why should they have had second thoughs when a year ago we were at one—we were agreed that a ballot paper should never become the property of a political party? So I say again that we on this side of the House, and I believe at the time the Government, too, aimed at getting a fool-proof measure with no loopholes in it. For that reason we opposed the use as presiding officers for absent voters of any person who was entitled to participate in active politics. We opposed justices of the peace of either party, or of any political conviction, because they were entitled to participate in politics, and the Minister of the Interior at the time went to great trouble to point out that this was not something we need worry about. I quote now from Hansard, Vol. 11, Columns 5404 and 5405 where the Minister of the Interior went to great lengths to explain the difference between a justice of the peace and a commissioner of oaths. He quoted from the Justices of the Peace and Commissioners of Oath Act, Section 2. I do not want to repeat the whole quotation, the Minister himself has referred to it. He emphasized that a justice of the peace was not merely a commissioner of oaths, but he was a man who, inter alia—

And then in contradiction the Minister of the Interior defined a commissioner of oaths as a person who would only attest a declaration. Now I quote the words of the Minister of the Interior—

The same Minister of Justice—

And then the Minister of the Interior dealt with station-masters …

Am I correct that you don’t accept that?

I accept that.

What is your grouse then?

I will come to that. I want to prove that this measure goes against the stated policy of the Government as expressed a year ago in regard to the Electoral Act. The Minister of the Interior went further and he said not only were these people of high standing, which the law lays down they shall be, and which we accepted as the policy of any responsible Government to carry out, but he went further and said that he would retain this as an experiment for this coming provincial election. I think I should quote it—

The Minister of the Interior in his introductory speech directly and flatly contradicted his colleague.

You are talking nonsense now.

The Minister said that he was appointing more justices of the peace because there were not enough officials. That is what the Minister of Justice said. He referred to Mayfair with no justices of the peace, no station-master, and no magistrate.

I said that if it was proved the case I would appoint more.

I will come back to that point too. The Minister of the Interior said that he could not be accused of not having enough officials. Then he went on—

So what?

The hon. the Minister of the Interior himself did not believe that justices of the peace would be used in any number. Then he went on to say—

Then he said this—I skip the inbetween arguments of myself and other members, and I come back to the Minister’s reply to our further argument. He referred to our proposed elimination of urban justices of the peace and that only rural justices of the peace could take postal votes but not urban. The Minister said in reply to that—

Justices of the peace were being used “to achieve a certain object” and therefore they would be under suspicion, the object being to take postal votes. Now the Minister says that he is introducing this measure with the object of taking postal votes. In other words, in terms of the views of the Minister of the Interior, he is placing them under suspicion. And he says further—

In other words, the hon. Minister pleaded with us not to press for the elimination of justices of the peace. Because there will be very few of them. I quote from Col. 5412, Hansard, 4 May, last year. The reason given to us on this side of the House, the plea to us not to press for the elimination for justices of the peace was, in the words of the Minister, “There will be very few justices of the peace who will make themselves available for this type of work. Then the Minister went on to deal with the various responsibilities and the reasons why justices of the peace, except very few, would not make themselves available. But now, having accepted that assurance at its face value, we are now to be told that there are not going to be very few justices of the peace but that we must give the Minister authority to appoint an unlimited number.

He will appoint you too.

No, we on this side of the House have made our position very clear. We believe that in the interest of clean elections, state officials and not political parties should handle the postal vote, and that once a postal vote gets into the hands of a political party, whether with justification or not, there will be suspicion attached to the control of that ballot-paper. Whether anything is done to it or not, does not matter. What matters is that people must have confidence in the system, that people shall know that their ballot is secret and secure. That both sides of the House have maintained to be the position. We have said that justices of the peace appointed in terms of the spirit of the Justices of the Peace Act are people of high standing, people of integrity and people whom one can expect to trust. But now we find that political parties are being approached and asked to recommend people for appointment as justices of the peace.

What is wrong with that?

Both political parties can be approached by magistrates and asked to recommend people. When an organizer recommends a person as a justice of the peace and he knows that that person can handle postal votes, is he going to worry more about the spirit of the Justices of the Peace Act, or is he going to worry more about his postal votes? I have asked the hon. Minister of Justice to deny that in one instance already, according to my information, it is possible that postal votes are going to the address of a party office, and I also now ask him to deny publicly in this House that any political party official has been asked to recommend people for appointment as justices of the peace.

I do not know of a single instance.

I can tell the hon. Minister that it has happened. I can tell him that in one case the United Party official approached refused to recommend anyone, because he said “I do not need justices of the peace to handle postal votes”. I want to say to the hon. Minister of Justice, here in this House …

Are you prepared to tell me where that happened?

Yes, I am prepared to tell the hon. Minister. I do not want to drag the names of officials across the floor of the House, but I will tell the Minister. I have said this side of the House now says to the Minister that we are prepared to, and we are satisfied that we can, handle our postal votes, not only without additional justices of the peace, but without the assistance of any justices of the peace. We are prepared to handle our postal votes through state officials. As long as the law permits the use of justices of the peace we will use them, but we will not raise one voice of protest if the hon. Minister says, in consultation with his colleague, that justices of the peace should not handle postal votes. We do not believe it is necessary. If the Government uses them and that it the law, then they must not grouse if we make use of the same facilities, but we believe that it is unnecessary and undesirable. However, we have confidence in those justices of the peace who are appointed in terms of the law of the country to perform a semi-judicial duty in terms of the Act. But when we hear that people are being appointed to the high position of justice of the peace with the sole object of handling postal votes, then we start thinking again about the integrity of that high position for which people have always been respected in South Africa. When the Minister across the floor of the House tells this House that he is appointing justices of the peace for the purpose of handling postal votes, what does he think he is doing to the reputation of people who have always been looked upon as pillars of society? He is dragging down the position of a justice of the peace to the level of a campaign worker in an election.

You are really talking a lot of nonsense now. In your time you had justices of the peace.

No. When our party was in power we did not need justices of the peace for postal votes, because we had a different system. So whatever reason we may have had for appointments, it was not to misuse the position of justices of the peace for the purpose of votes. I want to ask the hon. the Minister of Justice: What was the value of the assurances of his colleague that the object of keeping postal votes out of the hands of political parties was to ensure that there should be no suspicion cast upon the system of voting. Now the Minister is prepared to change the law of this country in order to provide an unlimited number of people—that is what we are being asked to approve—for the sole purpose of handling postal votes. He has not said to us that he requires justices of the peace for other purposes, for the maintenance of peace and good order and the carrying out of responsibilities delegated to them by magistrates. He has said that he wants the power to increase the number, without limit and without control by any other person, simply because he is afraid that there would not be enough people to take postal votes. I ask the Minister of Justice: Is there any centre in South Africa where one of his own police stations is not within reasonable reach of a voter? Is there any centre in South Africa of which you can say that there is no magistrate, no postmaster, no railway station and no police station within reasonable reach of a person? Has he no confidence in the machinery of the state which is available? His colleague has. His colleague said that there would be no shortage of officials and that the justices of the peace were required only in far-flung areas. Why is it that the hon. Minister has no confidence in the machinery that is available? Why is it that in certain constituencies, where there is a magistrate, the magistrate is not being used to handle postal votes by the Minister’s party?

Where did you get that?

We have confidence in the state officials and we are using them, and I submit that the Government party is doing a disservice to the state officials of South Africa who are entitled to handle postal votes by saying “We have no faith in you, we are going to appoint our own nominees as people to handle the postal votes”.

What do you mean by “own nominees”?

Who is going to nominate the justices of the peace? The Minister …

What is your insinuation?

It is not an insinuation, it is a statement of fact. The Minister appoints them. Are they not then his own nominees? Does the hon. Minister appoint somebody else to nominate them? He nominates them. Therefore they are his nominees and whoever he appoints, he can appoint an United Party member, that person is his nominee.

And who recommends them?

The point is that the Minister appoints them. I say that this is a slap in the face of the officials who were appointed by this Parliament as the correct channel to handle our electoral machinery. I say further that we had a solemn assurance, in the name of the Government, not in the name of an individual, that the existing electoral procedure laid down for postal votes would be tested in the provincial elections, and after the provincial elections there would be an analysis to see where it fell short, which presiding officers were unnecessary, or where there were shortages.

What is your point actually?

The point is that we were misled by an appeal not to oppose the law but to accept it as a trial for the period of the provincial elections.

That is being done.

No, it is not. It is being amended by the backdoor. The Minister of the Interior has not come here with a case and now I want to tell the Minister this, and here I will not mention the name, but I can tell him that a senior official of long electoral experience said only this morning at a nomination court: I do not know what you wasted two years for with an Electoral Act, a Select Committee and a Commission, because with this new appointment of J.P.s and the way they are being used we might just as well have had the old Act and then you could have used your commissioner of oaths as well. That was said this morning in Natal and I got it by telephone this afternoon. [Interjection.] It happened in an unopposed seat, one of the many in Natal. [Laughter.] That is not only the opinion of an experienced official but also mine, that all we are doing, having pretended to close the door to abuse by abolishing commissioners of oaths, we are now creating just another grade of commissioners of oaths. We give them a higher title and status, but in fact by this measure, if we pass it, we are giving the Minister the power to do exactly what it took us 2½ years to do away with, the right to appoint persons to handle postal votes who would have a political interest in those votes. We went to all that trouble, after two years of study and taking evidence and of discussing the matter. We thought that we had eliminated that loophole. But I say to the Minister that he is recreating a new loophole which makes a mockery of our decision to eliminate political commissioners of oaths and persons with political interests from handling postal votes. And if the hon. the Minister of Coloured Affairs is crying, then he is crying for the good old days which his colleague next to him is trying to reinstate. We have no tears for the good old days. [Laughter.] They were bad days. [Laughter.] You notice, Sir, how the members of the Government react when we talk about postal votes. I say they were bad days and neither side, nor any Minister of this House, can be proud of the system we followed in handling postal votes. But we could have been proud of our attempts to ensure that not only would there be nothing wrong but that it would be clear that there was nothing wrong. I repeat that this measure is re-opening loopholes which we as a Parliament sought to close, re-opening them in a different form, at a higher level, but nevertheless re-opening them. So we on this side of the House will oppose this measure completely and totally. We are not prepared to go back to the old position. [Interjection.] Sir, it is only on about the twelfth occasion that you can get anything into the head of the hon. member for Heilbron (Mr. Froneman). The first ten times just do not ring a bell, but even that hon. member now understands that what we are doing is not in the interests of South Africa. I have watched the reaction from that side of the House and from whom it comes, and it has been interesting to note that those who have had experience as organizers have been the most vocal in their laughter and their attempt to pour ridicule on our opposition to this measure. But we will not be misled by that. We on this side sincerely want a clean postal vote system and we believe that this measure is not in the interest of such a system. I repeat that we want a cross and not a double-cross for the voter who makes his cross.

Can you believe it, Sir, that people can come here and quarrel about justices of the peace! After all, justices of the peace are people who preserve peace; they are people who are appointed to carry out their duties in a judicial capacity, but the hon. member suggests that justices of the peace do just the opposite; that they only quarrel. Sir, we had a wealth of words from the hon. member for Durban (Point) (Mr. Raw), but if he goes through the report of his speech and crosses out all the repetitions he will find that not a quarter of his speech remains.

The hon. member mentioned the case of Kimberley (North) where there is a by-election. What does his party do when these ballot papers come to, say, the office of the National Party at Kimberley? Does he not know that the electoral laws give him the right to have a representative in the office of the justice of the peace day and night?

Which clause is that?

The hon. member talks about an Act which is not before us at the moment and then he wants to know to which clause I am referring. It is provided in the Act and in the regulations that any person handling postal votes, whether it be a public servant or a justice of the peace or anybody else, must during those office hours have fixed office hours; secondly, that people may only vote there and, thirdly, that every candidate has the right, as long as that office is open, to have a representative there. If these ballot papers lie in the office of the National Party the hon. member can go and sit in that office for the whole of the next three weeks until the election takes place. [Laughter.] [Interjection.] I am just telling the hon. member what rights he has. Let me remind the hon. member that no justice of the peace or public servant in whose office votes are cast has the right to walk outside with a ballot paper and to vote outside his office. The regulations and the Act are perfectly clear; the hon. member ought to know that because he is the United Party expert in this field.

I want to deal with this whole process which is under discussion here this evening, but let me first put this question: What did the Postal Votes Commission recommend? It recommended in the first place that there should be a system of blank ballot papers; that those blank ballot papers may only lie in the office of the official and that the voter can then go to the office and cast his vote. Secondly, it recommended that immobile voters should be able to vote where they happen to be at the time; that sick people should be allowed to vote in the hospitals or at their homes; that for that purpose people must specially be appointed to visit them, and those people must be public servants. And in addition to that system—because we were of the opinion that there would be more people making use of blank postal votes than other forms—it recommended that there should be a system, for which provision is made in the Electoral Laws at the present time, whereby people can make application for postal votes which will then go to the persons before whom they are allowed to vote. The hon. member read out to us a list of the people concerned—apart from the numbers of public servants—but why did he not read out the whole list? Clause (b) of that recommendation reads—

But here comes the point—

That is what I said; look at my Hansard.

There are 12 persons appointed by each candidate, so that if there are three candidates in a constituency, 36 people can be appointed. That is what was recommended, a recommendation to which that hon. member subscribed because his signature appears at the end of the report, as well as the names of the hon. members for Yeoville and Maitland. They accepted this recommendation. Let me put this to hon. members: The candidate brings along his own people and asks that they be appointed; are they any better than a justice of the peace? Secondly, the justice of the peace has to remain in his office; he has to keep office hours and the candidates must be informed what those office hours are. They are entitled to have somebody present in the office throughout the day and when it is time to go to bed they have the right to demand that the postal votes be locked in a safe. That was not laid down, however, in the case of these 12 persons; they were able to go all over the constituency and get people to vote. I mention this just to show the hollowness of the hon. member’s argument.

Sir, I do not want to waste the time of the House by dealing with this matter. The Opposition want to start a quarrel here but I do not think the game is worth the candle. I just want to say that both parties are always at liberty to have their representative present whenever a postal vote is recorded. Let me add also that no person, whether he be a justice of the peace or not, may go anywhere outside his office to take a postal vote unless he first acquaints both candidates with his itinerary. That is how the Act, as amended, now reads. The position is entirely different from the old set-up under which every postal vote official was able to move about surreptitiously. To-day there is no such thing. To-day the system is that every justice of the peace who is prepared to take postal votes must have an office or he must set aside a room in his house as an office; he must keep office hours, and it is only during those hours that people can come and vote under his supervision. If a voter comes to him late in the evening and asks to be allowed to vote because that is the only time that he can come, then the justice of the peace must first notify both the political parties that there is a man who wishes to vote; he then tells them to come along because he can no longer wait. That is what the Act provides at the present time. The present set-up is entirely different from the old set-up where the commissioner of oaths could let people vote in his own presence only.

Where is that stated in the Act?

The hon. member read the Act last year—he has forgotten it now—but what he did not read is the regulations which have to be framed by the Minister. He must not tell me that that is untrue. He is at liberty to take legal opinion.

May I ask the hon. member whether he denies that at the end of the clause there is a proviso in connection with the notification of parties, a proviso which says that the parties shall be notified if the presiding officer deems it to be practicable?

No, I am not aware of such a proviso. Which clause is the hon. member talking about? If that is the case, however, then it must be an exceptional case for which provision is made there. The hon. member knows as well as I do, however, that every party has the right, at all times, to have its representatives present at the place where the voting takes place; that is the whole key to the Act. Every party is entitled to have its representative present when a person votes by post. If the hon. member has so few supporters in the country that he cannot even spare one to watch over a justice of the peace, then I wonder whether he will get sufficient people to vote for his party because he will still have to find people to watch over the magistrates.

I want to make an appeal to the hon. member. He knows that as far as I am concerned I like the idea of a blank ballot paper, and I think the time will come when we are still going to have that system. He himself knows that it will eliminate three-quarters of all the work in connection with postal votes. However, we all accepted this Act as a compromise, after the Cabinet had accepted our proposals, and we now find that in certain places there are perhaps too few justices of the peace or other postal vote officials. If six or eight or ten justices of the peace are appointed in a polling district and there are three constituencies, or even 20 are appointed, I cannot see why we cannot also appoint 20 men to be constantly present while those justices of the peace attend to postal votes. It will make no inroads upon our organization. Let the hon. member appoint supporters of his to watch over those justices of the peace. In my constituency we do not need justices of the peace because we have enough public servants, but where it is necessary to appoint them I cannot see why it should not be done. We can then say, “Vause Raw has been appointed as a justice of the peace; we must now appoint a person to watch him day and night.”

They will not succeed. [Interjections.]

I know that in Natal they will appoint a man who can watch him to see that he does not do queer things.

He will have to be very clever.

We must not place ourselves in a position where we may find a week before the election that postal votes have to be attended to and that there are no people to do so. Let us make the necessary provision now. I hope it will not be necessary for the Minister to appoint many of these people, but it is nonsense to come and tell us that we are going to hand over the handling of postal votes to rogues, to people who may meddle with them and that the Opposition will be able to do nothing about it, because you can always appoint a person to watch the justice of the peace and to see to it that he posts the completed ballot papers.

Mr. Speaker, the hon. member for Pretoria (Central) (Mr. Van den Heever) has advanced a very facile argument to justify this amendment. It amounts to this: You do not need to be afraid that postal votes can be tampered with because you can have your man present when the ballot is cast Sir, there are two answers to that, in my opinion. The first is: What check is there on what happens to that ballot after it has been used? That has been the whole trouble with postal votes in the past. It is not what happened at the time or before the person concerned has voted, but the whole trouble has arisen after that ballot has been used, after that cross has been made, after it has been put in a sealed envelope. That is when the ballot paper has been tampered with. [Interjections.]

Order!

The argument of the hon. member for Pretoria (Central) is no answer to the arguments on our side of the House that the present amendment to the Act merely re-introduces all the malpractices and all the abuses of the past, and I believe, Sir, that it is intended to do so by that side of the House.

Order! The hon. member must withdraw that.

I withdraw it, but I want to ask hon. members opposite this question.

If that is going to be your level of argument, I am going to have a cup of tea.

If the hon. member for Pretoria (Central) is too embarrassed at having his arguments destroyed, I am afraid I can do nothing about it. I want to ask hon. members opposite this question. The hon. the Minister of the Interior, when he introduced the Electoral Laws Amendment Bill last year, told us that it was the intention by that Bill to do away with the malpractices and the abuses which were frequent under the Electoral Act, particularly those in regard to postal votes. Now I want to know whether that side of the House was honest in that intention. [Interjections.]

On a point of order, I want to object because the hon. member by way of insinuation is intimating that this side of the House is dishonest.

Sir, I merely asked the question. I must say that I feel justified in believing that my question has been answered to the detriment of the Government by their silence.

Order! The hon. member must withdraw that.

I withdraw it. I think it is important to appreciate that that was in fact the stated object of the Minister of the Interior when he introduced that Bill last year; to do away with malpractices and abuses under the postal vote system, which, it was admitted before the Select Committee and the Commission of Inquiry, had come to a stage where it constituted an abuse of the whole system and brought about a situation where the vote of the person who was not able to vote in person was rendered completely null and void. [Interjections.]

Order!

It is perfectly clear from the speech of the Minister of the Interior when he introduced this Bill last year that the whole principle in the definition of “presiding officer for absent votes” is that the presiding officer should only be a State official. That was the principle stated by the Minister, and he specifically stated that there was only one exception to that principle, and that was in respect of justices of the peace. And the Minister went further than that. He pointed out that the object of that Bill was to remove from political parties any dealings with postal votes. This appears perfectly clearly in Col. 5404.

That point has been made before.

Yes, but it does not seem to have penetrated. [Interjections.]

Order!

This is precisely what this Bill does, to re-introduce the handling of postal votes by political parties in the sense that justices of the peace must inevitably be, not State officials, not persons divorced from politics, but on the contrary, persons who are involved daily in politics.

Order! I hope the hon. member will not try to make that point again.

The point that was made by this side of the House in opposing the appointment of justices of the peace for the purposes of postal vote administration was that they were in fact persons who were involved in politics. At that stage the argument used by the Minister of the Interior to justify the appointment of justices of the peace was that in certain areas it was impossible to find persons who comply with the definition of “presiding officer”, which I will refer to in more detail, and which is a very wide definition, including a large number of categories of persons. The Minister’s point was that it was impossible to find persons in that category in certain rural areas.

Why?

That was the point we asked about and the Minister did not make clear. Perhaps hon. members opposite might tell us. Now, we on this side of the House during that debate said that if that is the reason why he wants justices of the peace appointed, then why does he not limit it to areas other than the areas of jurisdiction of municipalities and local authorities, because in those areas there are plenty of people who fit into the category of presiding officer in terms of the definition. Sir, we still ask that question. Why is it necessary to take these wide powers in respect of areas which are within local authority areas and municipal areas, where there are plenty of persons who fit into the category of presiding officer?

Why?

Order! If that hon. member again asks why, I shall deal with him. He cannot make a mockery of Parliament. The hon. member may continue.

During that debate we on this side went so far as to propose an amendment to limit the appointment of justices of the peace to those areas, but that was not accepted by the Government. It is interesting to note the explanation given by the Minister of the Interior for refusing to accept it. Not only is it interesting, but the explanation is laughable because it is in my opinion ludicrous. The explanation was this—

And what is the Minister’s explanation? It is this—

Sir, what a ridiculous explanation!

Order! We are not dealing with the Minister of the Interior now, but with the Bill before the House.

The explanation given last year is presumably to be given again to justify the further powers taken in this Bill, and that is why I am dealing with the arguments advanced last year in regard to the appointment of justices of the peace.

Those points have been made before. The hon. member must come back to the Bill now.

I will certainly abide by your ruling, Sir. We ask the hon. members opposite once again why they require these powers, why they require an extension of the definition of “presiding officer” in this way to include persons who are not State officials, in the light of the statement made last year that the general principle is that presiding officers should be State officials subject to the control and discipline of the State. I ask this particularly in the light, firstly, of the statement made last year by the Minister of the Interior to which the hon. member for Durban (Point) has already referred, namely his statement that the list of presiding officers is so long that the Government cannot be accused in the House of having amended the Act in such a way that there will be too few officials to do the work. At that stage the Minister and the Government were satisfied that they had a sufficiently wide category of presiding officers. If one looks at the definition I find it very difficult to see how hon. members opposite can suggest that the definition is not wide enough to find a sufficient number of presiding officers in every constituency or ward. The definition reads as follows and provides the following very long list of people who can be called upon to act as presiding officers: An electoral officer, a returning officer, a magistrate, an additional, assistant or acting magistrate, a Bantu affairs commissioner or an additional, acting or assistant Bantu affairs commissioner. The following section is an interesting part of the definition: “or any officer acting on the direction and under control of any of the aforesaid officers.” In other words, the Government in appointing presiding officers does not have to limit itself to this category of persons. They can ask one of these people to appoint someone, who need not fall into this category at all, who will act under the control and direction of that person. It is very wide indeed. But the definition goes even further to include a special justice of the peace, a justice of the peace, a station master, a postmaster, any member of the South African Police of a rank not below that of sergeant or any such member of any rank who is in charge of a police station, or any member of the South African Railways and Harbours Police Force of the rank not below that of a second class sergeant, or any such member of any rank who is in charge of a station of that police force. As if that definition was not wide enough and provided a sufficient selection for the Government, there is yet a further category. Under the Justices of the Peace Act, Section 2, the Minister may appoint for any ward referred to in Section 1 so many justices of the peace not exceeding six as he may deem fit. So he can appoint a further six. Then in terms of Section 4, he can appoint the holder of any office specified in the First Schedule of this Act, and the persons referred to in the First Schedule are the Commandant-General of the South African Defence Force, the Commissioner of the Railways and Harbours Police Force, the Secretary or Deputy Secretary of the Senate, the Secretary or Deputy Secretary of the House of Assembly, the officers mentioned in Column 2 of the First Schedule of the Public Service Act. the Secretary or Deputy Secretary of any Department and any corresponding post in such a Department which is not designated by the word “Secretary” the Registrar of the Supreme Court, a magistrate, a Bantu affairs commissioner. Then in respect of the area over which they hold office: A commissioned officer of the South African Police, of the Permanent Force, or the Railways and Harbours Police Force. And in respect of magisterial districts, additional and assistant magistrates, etc. How can the Government possibly say that in this long list of people from whom they can appoint presiding officers they cannot find a sufficient number to act in this capacity? And so the Government must not be surprised if we say to them that we must believe that their motives are other than they state them to be. [Interjections.]

Order! I cannot allow the hon. member to insinuate that and he must withdraw it.

I withdraw the statement I made, but I say that, in my submission, the Government cannot justify in any way the further amendments to this Act which they are now asking this House to approve, in view of this extremely wide category, and therefore we cannot accept the reasons given by them for this amendment. In fact, I go further and say they have given no reason whatever to justify it, and I challenge that side of the House to give us their proper and acceptable reasons for doing so.

This debate has taken quite an interesting turn. It reminds me of the old example of the person who has no case and who then runs down the attorney or advocate on the other side and attacks his character. The hon. member for Durban (Point) (Mr. Raw) began saying that he wanted clean elections.

He said that the “cross” must not be a “double-cross”.

I said on both sides.

Yes, so do we. I can only infer from his statement that he insinuates that when we hold an election we like the idea of the “cross” becoming a “double-cross”. I think that is a despicable insinuation, an insinuation which is not worthy of this House and which is not worthy of the hon. member either. Let me say this to him.[Interjections.]

On a point of order, is the hon. member allowed to insinuate that this side of the House has ulterior motives?

Order! The hon. member may proceed.

The whole tone which was introduced into the debate by the hon. member for Durban (Point) and which was pathetically kept by the hon. member for Musgrave (Mr. Hourquebie), is one which is not worthy of this House. An attempt has been made here to create the feeling that the Government, by means of this innocent amendment to the Justices of the Peace Act, is now trying to circumvent a promise made by the Minister of the Interior and to make the Minister out to be a liar.

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