I move as an unopposed motion—

1. (1) Friday, 2nd September, adjourn until Tuesday, 6th September, at 2.15 p.m.; and
2. (2) Friday, 7th October, adjourn until Tuesday, 11th October, at 2.15 p.m.

Agreed to.

I move as an unopposed motion—

Agreed to.

I move as an unopposed motion—

Agreed to.

I should just like to repeat what I said briefly yesterday afternoon, namely that the matter I want to bring to the hon. the Minister’s attention here, is the eventual development of Mossel Bay’s Harbour as a deep-sea harbour. It is a matter which in the past has been brought to his attention on more than one occasion. We find that it also appears regularly on the agendas of agricultural congresses, but to my knowledge it has not yet been advocated in this House. In the past the matter was actually approached from the viewpoint of the Southern Cape, namely that region’s urgent need for an export harbour, and the undeniable benefits the Southern Cape would gain if that harbour were in fact developed. This afternoon I want to adopt a different point of view for a moment, and deal with this matter primarily from the more general national viewpoint and try to underline the broader national interests involved.

The Republic has four deep-sea harbours, i.e. Durban, East London, Port Elizabeth and Cape Town, and for imports to and exports from the Transvaal Lourenco Ma ques is used to a large extent. A very superficial study makes it clear that our four harbours cannot cope with all our imports and exports; they are frequently overtaxed. In fact, if one kept one’s eyes open, one would sometimes see as many as ten or more freighters queueing up in the roadstead outside one of our harbours and waiting because there is a shortage of wharf space. That is an expensive wait, a wait which costs a great deal of money and which is quite likely a source of nuisance and frustration to those involved.

We are aware of the fact that our harbours are in fact being expanded in order to meet the requirements of those ships, but there are nevertheless limits to the potential capacity of every harbour, and sooner or later we shall have to make a new start somewhere else. Although there is certainly the closest and most cordial co-operation between us and the Portuguese territories, we cannot rely on the Lourengo Marques Harbour facilities as though they were our own, and as though we have been guaranteed their use. Nowadays relations change with the speed of lightning in the international field. Those who are your friends and even your protectors to-day, may not be kindly disposed towards you to-morrow, or may even become actively hostile. What has befallen Rhodesia, our neighbouring state in the north, in this respect, is indeed an object lesson to us. In international relations there seem to be only two conclusive motives—one’s own advantage and one’s own interests. Those come first, and if one can, one helps one’s neighbour afterwards.

In view of the fact that Portugal is linked to the Continent of Europe, the position may easily arise that we are denied the use of Louren?o Marques Harbour. As we know, disasters tend to descend upon one simultaneously: it never rains but it pours. Add to that possibility the closing of the Suez Canal, which in time of war is not only conceivable but highly probable, and we would be in a position where all the ships of friendly nations would be compelled to ply the route around the Cape. We would have to admit them to our harbours; we would have to accommodate them, and locally a situation would arise in which we would not be able to give those friendly ships the assistance they would expect of us in an emergency and at the same time be able to maintain our own export trade. It is, therefore, in the national interest that we should develop at least one further harbour, and in that process of long-term planning we cannot overlook Mossel Bay. Situated halfway between Cape Town and Port Elizabeth on a coastal strip of 500 miles which has no other harbour facilities, Mossel Bay is the obvious choice for further development.

To fill the picture, we may also mention the adjoining hinterland of the Little Karoo, with its great capacity for production. Think only of Oudtshoorn, Calitzdorp, and Vanwyksdorp, and of their great potential as regards export fruit. Take a look at what has already been achieved in that field in the Longkloof, which is their neighbour. The canning of fruit for export purposes, which has just been started at George and which is still in its infancy, is also experiencing great difficulties. One could continue along these lines, and one could probably increase this list tenfold. In this respect I also want to express the hope that Mossel Bay will be selected in future as one of the places where we can establish light industries. In view of its central situation and the fact that it is a coastal town, I believe it can play a role in the decentralization of our industries. If we establish light industries there, there will surely be no need to advocate the essentiality of a harbour close at hand. It would also be of great assistance to us in combating the rapid and disquieting process of the White depopulation in the Southern Cape. In recent times this process has gathered momentum so rapidly that it is causing grave concern, and that region which is historically a White region is rapidly becoming Coloured, and can be restored to its rightful place by means of the necessary development.

Even to the uninitiated it should be quite clear that the development of a deep-sea harbour demands a great deal of money, and unfortunately money is a commodity with which our Railways are not too bountifully supplied at the moment. I suppose the hon. the Minister could quote so many expense figures it would set one’s head spinning, but what we have in mind here is surely not a full-scale deep-sea harbour from the outset, but in fact a humble beginning which we could later develop and expand according to the dictates of growing requirements. We also believe that it cannot be economic at the outset. After all, no business project is economic right at the beginning, but as we are here dealing with a development project in which the entire country has an interest, particularly in emergencies, we certainly cannot expect the Railways to achieve that development all on its own. I am therefore of the opinion that we are entitled to look to the Central Government also for some aid and assistance with that development. I think in this case it would be comparable to a farmer who diverts only the surplus water, which he cannot use.

In conclusion I should like to say that the progress and prosperity of my constituency and in particular of my major town, are closely bound up with the indispensable services rendered there by the Railways, and with the many Railway workers who live there. We believe that in future that will be even more so than in the past, and that there too the Railways will do their share as they are doing it throughout the country.

When this debate was adjourned last night, I had expressed my criticism of the hon. the Minister’s approach to the new super tankers and bulk carriers which were being put into service in the world today, and I had made the suggestion that the hon. the Minister might well open his mind a little and investigate the possibilities. The first possibility was perhaps the use of buoys at sea which would enable the ships with big draughts to discharge their cargo. This would most likely necessitate buoys off Isipingo and perhaps buoys off Milnerton. The other suggestion I had put forward to the hon. the Minister was the possibility of developing parts of harbours and in that particular connection I referred to Durban Harbour. I believe it would be a comparatively small engineering job to develop that portion of Durban Harbour which serves Island View because it would involve the deepening only of the channel from the sea and the channel which leads to Island View. In addition to serving the two huge refineries which we have in Durban, this of course, would be of added value in that it would enable bigger ore carriers to use that channel. At the moment they load and discharge on the edge of that channel, as the hon. the Minister knows. The bulk of the iron ore exports goes from the wharves bordering that channel.

The hon. the Minister knows that some of the ore carriers, the bulk carriers, which carry our manganese and other ores away from South Africa load at Congella. They have to complete their loading on the very edge of this channel because there is not sufficient depth for them to get out of the port from the Congella loading wharf when fully laden. Sir, I put these two particular aspects to the hon. the Minister for his consideration. I believe that the time is coming when, whether he likes it or not. he will in fact have to consider making provision somewhere within the Republic—and I suggest that Durban is the best place—not only for the discharge and loading of cargo into ships of this kind but also for the servicing of these ships. We have so much to say about turning South Africa into a shipbuilding country; we are making provision in Durban harbour for that purpose but we know that the mainstay of our connection with shipping has been the servicing and the repair of ships in the past and we have proved to be a good country for those repairs and for that servicing. If the hon. the Minister wants to keep us in the forefront and to uphold the wonderful name that we have built up, then obviously he has to make provision for the servicing and repair of these ships. When these ships bring these huge cargoes to our coasts, some provision has to be made for them, to service the engines and things of that nature, and that is not an easy task to perform, as the Minister knows, when they are anchored even at a buoy at sea discharging their cargo.

Now, Sir, I want to come to another subject, and this subject is one which, I notice, is being raised again by commerce and industry and the shipping interests throughout the country, and that is the question of establishing a separate harbour authority for the working and the planning of our ports. The hon. the Minister knows that I have always supported this line of thinking and I will continue to do so because I do not subscribe to this present belief of Johannesburg ruling the waves. At the moment, as the hon. the Minister knows, our ports are run on the thinking of a railway system and, as you know, Sir, the thinking in regard to railways and in regard to ships is so divorced and so far apart that the two lines of thought will always clash. I believe the time has come now when the Minister must really apply his mind to this. He has dismissed it in light fashion in the past, but I would remind him that in overseas ports this idea of port authorities has held sway for many years and it has proved to be most satisfactory, so much so that it has been extended to the extent that the shipping companies own their own whanes and warehouses and work their own cargoes. I am not asking the Minister to go so far. but I do believe that a little thinking along these lines, to allow free enterprise, the shipping company, to develop, would lend itself to the more efficient working of our harbours and of the cargoes in our harbours. That does not mean that I want to take the whole working of the ports out of the hands of the Minister. Things like cold storage facilities and the overall control of the ports must obviously remain with him because the harbours on the whole have done a good job in the past. But I am looking to the future and I am asking the Minister to plan for the future and not to keep our harbours a jump behind instead of a jump in front. I should like to hear the Minister’s views on this. He has expressed them in the past, but he has been so critical that it is obvious that he has not applied his mind to it properly.

Now I want to come to another aspect in regard to Durban Harbour. We have now, almost as a panic measure, had to embark on the development of the new part of the harbour, Pier No. 1. I must say that I for one am most impressed with the speed with which that work is being conducted. A terrific job is being done. I was critical during a previous part of this debate about the lack of provision of roads and I want to repeat that here, because I think the planning within the harbour area itself has been very bad and is far behind the development of the harbour itself. But I want to come now to the question of Pier No. 2 and to ask the Minister what his policy is going to be there. I think this is an opportune moment for the Minister to make a statement in regard to his policy affecting Pier No. 2. I personally would like this to be continued immediately upon the completion of Pier No. 1. In fact, I should like to go further. I should like to see Pier No. 2 built in conjunction with Pier No. 1. Some of the reasons why I say this are quite simple.

When one looks at the fantastic amount of auxiliary work which goes with such a job as building a pier, the provision of cement silos and the provision of the ancillary works necessary to carry out the job, one realises that if the Minister does not make a decision now all those works will have to be broken down on the completion of this first job, and in the very near future will have to be reerected for Pier No. 2. I think the Minister will agree that it is very necessary in Durban Harbour to make provision for the immediate erection of the second pier. I understand that three piers are planned. I will not go so far at this stage to say that he should be looking to the construction of the third pier new. That would be going too far ahead, but I think the Minister should keep it in mind. In talking to him about this, I would sincerely ask him to ensure that the planning for the approach roads, not only to service the wharves when the pier itself is completed, should take place now. In the handling of shipping to-day great stress is placed on the use of road transport and I think the Minister must apply himself to that more and more, because the roads in that area are already overcrowded. But all the Minister can tell me is that it is because the local authority is a bit jittery about its share of providing the proper roads. [Time limit.]

Among other things, the hon. member for Umlazi asked for separate control over the Harbours, separated from the control over the Railways and the Airways. I do not think that would work. The interests of the national transport services, the Railways, the Harbours and Airways, are at present so closely intertwined that I simply cannot see how divided control over those services can hold any good for South Africa’s transport. But I think the hon. the Minister will reply conclusively to the hon. member.

I should like to express my appreciation of two matters in the Estimates which relate to our harbours, and in particular to Table Bay Harbour. In last year’s Estimates the Minister said that shipping had been delayed in certain harbours as a result of congestion, and that various factors had been responsible for that, and then he mentioned among other things the influx of foreign trawlers which occupied commercial berths in the harbour to a considerable extent for the purpose of trans-shipping catches. This year the Minister brought up that matter again, and then announced that the levy for the trans-shipment of fish at our quays was to be increased from 20 cents per ton to R14 per ton. I should like to commend these measures taken by the Minister, in the first place because they will make more quay space available for commercial shippping space of which there is frequently an acute shortage. But secondly I want to commend it because it will probably discourage the foreign trawlers which have been decimating the fish along our West Coast so ruthlessly during the past years, and will make matters slightly more difficult for them. Indirectly we have in the past actually encouraged this pirate trawling in our waters, because we had created those facilities for foreign trawlers in our harbour.

Secondly, I want to express my appreciation of the tremendous expansion in the development programme, and of the improvements which have been undertaken in our harbours in recent years by the Administration. In this respect I want to refer in particular to Table Bay Harbour. I am sure exporters of deciduous fruit in the Boland will acclaim the erection of additional pre-cooling facilities in Table Bay Harbour at a cost of R3.2 million. In the past it has sometimes happened that at the height of the grape-packing season for export, the Deciduous Fruit Board had to step in and restrict packers to a lower production of fruit because there was not enough pre-cooling space in the harbour. Once these facilities have been erected, they will be of great value to the Boland.

I also want to mention the work on the Eastern Mole which will cost R1 million. That will also mean a great step forward for the harbour in Table Bay. Table Bay and Durban are our two major harbours. Table Bay handles the greatest volume of shipping traffic, whereas Durban handles more harbour traffic. It is nevertheless interesting to note that whereas the volume of harbour traffic in Durban—the tonnage of goods shipped from our harbours—has decreased by 1,000,000 tons during the past financial year, the tonnage of goods shipped from Cape Town has remained virtually the same. In Cape Town we also have the largest of the four dry docks, the Sturrock Dry Dock, which is one of the largest in the world. Through their dry dock facilities our harbours, which are situated thousands of miles from the European ports, render a tremendous service to the world’s shipping, and in particular to the great tankers plying the Cape route. During the past years harbour planning and development have enjoyed high priority with the Administration. Large sums of money have been spent on our harbours for capital development, and the reason for that is primarily that harbour traffic, and in particular the freight discharged in the harbours, forms one of the main sources of high tariff traffic, and it is therefore in respect of the revenue from these combined services that the harbour revenue plays such an important part. As an example, I want to mention that notwithstanding the small decrease in harbour traffic of .7 million tons during the past year, particularly as a result of the decrease in imports. the revenue from our harbours during this year has nevertheless exceeded that of the previous year by R1,000,000. That is an outstanding achievement, particularly if we take into account that we are also experiencing an acute shortage of labour in our harbours. As a further illustration of the effect of the harbour revenue on the joint revenue from the services, I want to mention that during the past financial year the harbour industry has yielded a surplus of R9.6 million, as compared with a surplus of R.6 million on the part of the Airways—and we know that at present everybody is impressed by the tremendous achievements of our Airways—while at the same time the losses on the Railways amounted to R16,000,000. Similarly, it is estimated that in the coming year there will again be a business profit of no less than R10,000,000 in respect of our harbours, compared with a profit of R2.7 million on the air services, and a loss of R23.4 million on the Railways.

Another reason why the Administration gives such high priority to the development and planning of our harbours, is the important part played by the harbours in respect of our import and export trade. It is absolutely essential to our commerce that our harbour services should maintain the maximum efficiency, and if one only considered that during the past year our harbours handled no fewer than 30,000,000 tons of goods, one gains an impression of the colossal traffic handled by our harbours at present. I maintain that it is of the greatest importance to our export trade that our harbours should keep abreast of the demand for export, because the export trade is essential to us and South Africa is becoming an export country more and more.

I want to conclude by saying that in discussing our harbours and the facilities created there, we cannot but mention the increasing activity of our own commercial shipping. Today we can be proud of this new section of our new industry. We can be proud of what has been achieved by a firm like Safmarine in recent years, and we want to praise their activities. [Time limit.]

Before dealing with some matters relating to Table Bay Harbour, I want to raise with the Minister some questions which arise from the recent wreck of the Seafarer at Green Point. The city has already honoured adequately those who were responsible for the safe landing of the crew and passengers, and whilst there has been no suggestion at any stage that the lighthouses and other warnings for sea traffic using Table Bay Harbour are anything but adequate there has been a suggestion that the charting of the underwater features of the approaches to the harbour may be inaccurate. I wonder whether the Minister will be good enough to tell us to what extent that query has been followed up.

That is not my responsibility.

Can the Minister tell us that he is satisfied that the charts available to vessels using the harbour are sufficiently up to date and accurate? If that is not the Minister’s responsibility, perhaps the matter may be raised under the Vote of one of his colleagues.

That matter can be raised under the Transport Vote.

I want to refer to one aspect of Table Bay Harbour, and that is to the duties performed there by the wharf foremen and the wharf inspectors. The hon. member for Parow has just commented on the successful manner in which these harbours are operated, and I think a good deal of credit for the expeditious way in which the traffic is handled, as well as the cargoes, in the harbour is due to these wharf foremen. Until 1952 the senior wharf inspector at Table Bay Docks enjoyed a seniority equal to that of a senior clerk or a senior station-master. After 1952, certain grades were considered redundant and in the process of adjustment the senior wharf inspector had his grade reduced below that of a clerk or station-master Grade 1, with the result that at present the wharf inspectors are not in a position to compete for promotion in various departments of the Railways and Harbours because of their lower grading as compared with the clerical staff. Over the years, I understand, the Administration has been asked to remedy this because it was regarded as unfair treatment of the wharf foremen. Sir, not only does the wharf foreman accept responsibility for the speedy handling, the loading and unloading of ships, but he is the one who is really the king-pin in the operating of the large goods sheds attached to our installations. After 30 years of service he can only attain the status equal to that of a junior clerk on the Railways, a second grade clerk. The duties of the wharf foreman are manifold. He is expected not only to be able to handle ships and their officers, and to be able to understand and discuss the ship’s plan, the ship’s engagement list, etc. with the ship’s chief officer, but he must also know the harbour regulations; he must know the port health regulations and the immigration regulations. I find it difficult to understand why this type of man should be so restricted in the promotion available to him. In the new arrangement now being made in regard to salaries, the progression equated to that of a clerk, as far as salary is concerned, is something less than that of a first-grade clerk.

The only post above that of a senior wharf inspector which these wharf foremen can aim at is that of a co-ordinating labour inspector. There are only two such posts in the whole of the Republic, namely one at Durban and one at Cape Town. I also feel that the salary position should be looked into. Whereas a junior clerk in the Railways can earn R200 per month within seven years, a checker with a standard eight certificate progresses from R120 to R178 per month and then he stays at that notch for some 25 years before going up to the R200 per month notch. Harbour staff can advance from the rank of senior wharf inspector carrying a salary of R2,700 per annum to that of labour inspector carrying R3,000 per annum and as I said, there are only two such posts in the Republic. But a ticket inspector who has reached the R2,700 notch can progress to first-grade clerk with a salary notch of R2,775, then to a senior clerk or senior station master at R3,150, and then to a principal clerk earning R3,450. Those high salary notches are not within the reach of a loyal wharf foreman or wharf inspector who has over the years performed his duties with great efficiency. Before this change took place, it was possible for a wharf inspector to strive for appointment as a port goods superintendent, the equivalent of a senior clerk. But now a senior station master can be appointed to Table Bay docks without having had any experience in dealing with goods transported by ship. In the result such official has to be carried by his wharf foremen and wharf inspectors, men who are experienced in and fully conversant with the handling of harbour goods.

I believe, Mr. Chairman, that SALSTAFF has been approached by this group of employees of the Administration, but nothing has been done for them. I understand that representations have now been made through the General Manager’s office to try and remedy the unfair position in which this group of employees find themselves. I hope the Minister will at some convenient time indicate whether he is prepared to assist these men in the difficulty in which they find themselves.

Mr. Chairman, I should like to reply to two points raised by the hon. member for Durban (Point). I undertook last night to obtain certain information for him, and this information has now come to hand. The hon. member alleged lack of foresight when d.c. current colour-light signalling was installed between Duff’s Road and Darnall, because when the section was later electrified the signalling system had to be changed to a.c. current. The facts are the following: In 1958 colour-light signalling operating on low-voltage track circuits was installed on that particular section.

Order! The hon. the Minister is now replying to something which has already been disposed of.

In that case I will go on to answering the points raised by the hon. member for Umlazi concerning Durban Harbour. The hon. member again pleaded for the deepening of our harbours so that we can accommodate super tankers. I have dealt with that matter on several occasions in the past. As a matter of fact, I dealt with the whole matter when I addressed the Chambers of Industries in Durban on 18th November, 1965. I quote from my speech on that occasion—

And that is still my opinion.

You made one mistake, if I may say so.

What is that?

That one of these supertankers is equal to four or five of the smaller tankers.

That makes no difference.

It does, you know.

I have further information on this matter as well, and I am sure the hon. member would like to hear about it. The width of the entrance to Durban Harbour is 430 feet, and in order to accommodate super-tankers it would be necessary to widen the entrance. This will entail the moving of the north breakwater, Shed No. 17, etc., and will involve enormous expenditure. The deepening of the channel will not present serious difficulty. As the hon. member knows, it has a sandy bottom. The number of world ports capable of handling supertankers of approximately 200,000 tons is very limited. According to information, the only port in Europe capable of accommodating a tanker of this size is Rotterdam. Antwerp, for instance, can only accommodate tankers of up to 40,000 tons. Now, Mr. Chairman, surely it would be most unrealistic to spend millions of rands on providing accommodation for a few super-tankers, when that money can be spent much more profitably. Surely it is better to provide a second pier in Durban Harbour than to spend millions on widening the entrance, deepening the entrance and the channel, and providing additional berths for super-tankers. Even if super-tankers are accommodated in Durban Harbour, they will not be able to be serviced because the graving dock is much too small. In other words, they will have to discharge there and then come to Cane Town in order to be serviced in the dry dock here. The hon. member must realize that such a procedure is quite unrealistic. That disposes of Durban Harbour. Cape Town Harbour is out of the question. It has a rocky bottom which will require a large amount of blasting, costing even more millions of rands, if the dock here is to be deepened in order to accommodate supertankers. So what the hon. member suggests is quite unrealistic. My successor might have to decide in ten or 12 years’ time to deepen the harbours. It all depends on the number of super-tankers that will be built in the future. But my policy is that I am not going to deepen existing harbours.

I am looking at the situation in ten or 12 years’ time.

I do not think either of us will be here in ten or 12 years’ time. As I said, Sir, it is not my policy to spend millions of rands on deepening existing harbours. I can spend that money much more fruitfully. Richard’s Bay Harbour is going to be developed to the fullest extent possible. Richard’s Bay Harbour will be developed to sufficient depth to accommodate any super-tanker. In the case of Richard’s Bay we are starting our construction work with the advantage of having the necessary wide entrance to the harbour. It is only 100 mi’es from Durban and the oil refineries. Pipelines can be laid between the refineries and Richard’s Bay Harbour. I say it is better to develop existing harbours and retain the existing depth of water, and to develop Richard’s Bay in order to be able to accommodate the super-tankers. That is my policy, and I hope we will not have an argument about it again.

When are you going to develop Richard’s Bay?

We are going to start planning very soon. The hon. member also wanted to know whether we are going to start immediately with pier No. 2. It all depends. If we start with the development of Richard’s Bay in the meantime, pier No. 2 will not be built in Durban Harbour.

Did you say it will not be built at all?

When it becomes necessary, it will be built. It might not be built immediately. I have tentatively decided that No. 2 pier will be commenced directly pier No. 1 is finished. Of course, it all depends on the funds available. The position is somewhat fluid. We might decide in the meantime to accelerate the development of Richard’s Bay Harbour, which I think is one of the finest natural harbours in the whole of South Africa.

The hon. member also complained about lack of foresight when he alleged that no inquiries had been made regarding the laying of submarine pipelines. Well, Mr. Chairman, I think the hon. member has not kept up to date with developments. This matter was already inquired into and investigated some years ago. Before the tanker dock in Cape Town was built the Caltex organization—they have built a refinery in this area—made a full-scale evaluation of the possibility of using an ocean terminal discharge point in Table Bay. The company conducted tests with a tanker in June, 1961, that is five years ago. The hon. member only raises the matter now.

That information was not available to me.

But nobody ever asked me for the information. As I said, the company conducted actual tests with a tanker in June, 1961, but abandoned the proposition because (a) the holding ground for moorings was found unsuitable, and (b) the swell was in excess of the six feet height which could be tolerated when other conditions were favourable, such as swell and wind being virtually in the same direction. Further inquiry also revealed that swells in excess of the maximum safety margin of six feet occur during more than 50 per cent of the time off the Natal coast. In other words, according to the available information the Natal coast is unsuitable for the laying of submarine pipelines. This all took place a long time ago.

Sam Collins is finding that out at the moment.

Yes. He wanted to lay such a pipeline. The hon. member also wanted to know whether anything had been done regarding containerization. Again this is not something new. I do not know whether the hon. member is aware of the fact that there seems to be a considerable conflict of opinion amongst shippers as to the desirability and the economics of containerization. The reason for that is this. You cannot place bulk commodities into containers. Our imports of manufactured goods are considerably in excess of our exports of manufactured goods. It would be quite uneconomic to receive the containers and return them empty. However, there are certain possibilities. Some containers are already being shipped to South Africa. The hon. member can rest assured that if commerce and industry accept containerization I will make the necessary provision. We have decided to appoint a joint committee with commerce and industry to go into the whole matter of containerization.

It cuts costs and time.

Costs will not be cut if they have to go back empty. That is the trouble. We do not have a two-way traffic in commodities which can be placed in containers.

It will influence the design of ships, will it?

Not necessarily. They will have to have bigger hatches. But they have their derricks, and we have our cranes in our harbours. Other countries are already making use of containerization on a large scale, but they have a two-way traffic which we do not have. That is our main difficulty.

Then the hon. member pleaded for a separate harbour authority. Now, Sir, that is a hardy annual. I think that matter has been before this House, year after year, for donkey’s years. The hon. member’s predecessor—Mr. Butcher—made the establishment of separate harbour authorities the theme of his main speech year after year. And year after year I replied to his speeches. I told the House, and I told Durban, that I do not see how any additional benefit can be derived from the establishment of a separate harbour authority. I can see no benefit at all. You have to coordinate the rail take-off with your harbour development. Moreover, the General Manager of Railways and other officials dealing with harbours are experts in that line. I cannot see any benefit in the establishment of a separate harbour authority. The harbours will not be run more efficiently. As a matter of fact, right now an inquiry into the desirability of continuing with the Port of London Authority is being undertaken in Britain. I do not think there will be any benefit to the harbour, to the public of Durban, or to the shippers—importers and exporters—if we were to establish a separate harbour authority. At present there is no conflict, but I think that there will be many conflicts between the proposed harbour authority and the Railway Management. These conflicts will not be beneficial to the smooth running of the harbour.

Will you advise us of any information you may receive regarding the inquiry into the discontinuation of the Port of London Authority?

Certainly. I will do so with pleasure.

Then, Mr. Chairman, the hon. member alleged that the building of pier No. 1 was really a panic measure. Well, I think the hon. member should rather have congratulated me on the foresight displayed by me, because according to the recommendations of the Moffatt Commission, construction work on that pier should only have started in two years’ time.

Yes, but circumstances change.

In other words, Sir, we started building that pier two years before the recommended date. It will be finished by 1968. Therefore, Mr. Chairman, instead of criticizing me the hon. member should rather have “thanked the Minister”.

*The hon. member for Mossel Bay made a sound plea here for the development of Mossel Bay as a deep-sea harbour. As he said, this matter has been mentioned before and representations have been made in this connection. Deputations have also been sent in the past in an attempt to promote this matter. But, Mr. Chairman, certain insurmountable difficulties stand in the way of developing Mossel Bay as a deep-sea harbour. In the first instance there is no hinterland with a sufficient production to justify a harbour in the vicinity. In the second instance the development of the harbour as a deep-sea harbour will necessitate the construction of a railway line to link up with the Johannesburg-Cape Town main line. Such a railway line will be a necessity because otherwise the exporters in the North will not use Mossel Bay but would rather use Cape Town or Port Elizabeth. The third difficulty is the costs involved in the construction of a deep-sea harbour. Does the hon. member know that the cost of building one pier with seven berths in Durban harbour exceeds R20,000,000? That is without building a breakwater and without very difficult dredging work. The construction of the tanker-dock, which is only a breakwater which has been converted, without any berths, costs more than R12,000,000. At Mossel Bay harbour a new breakwater will be necessary. New wharfs will also have to be constructed. It will be necessary to deepen the seabed. All those things will cost much more than R20,000,000. And then the harbour will be run at a tremendous loss because the necessary traffic simply is not there. Because of the facts I have just mentioned, it is simply impossible to develop Mossel Bay harbour as a deep-sea harbour, however desirable that may be from a strategic point of view.

Lastly I wish to deal with a matter raised by the hon. member for Green Point. Mr. Chairman, there are 230,000 employees on the Railways and over 600 different grades. Therefore it is quite impracticable to discuss the grading of the wages of any particular grade across the floor of the House. These matters are determined on the basis of job evaluation. The wages of one grade is not necessarily fixed by taking into consideration the wages of some other grade. In certain grades you do not find the same opportunities for promotion as in other grades. These matters are generally raised by the relevant staff organizations with the Management and eventually with the Minister. And I think that is the best procedure to adopt in matters of this kind. Anyway, the hon. member has done his duty, and he can at least go back and claim that he did raise this matter.

Heads put and agreed to.

Heads Nos. 28 to 30,—“Airways,

R42,758,000”.

Under this Head I would like to draw the attention of the Minister to an article which appeared in the magazine Trade and Travel in July, 1966. In this article it is pointed out that South African Airways and both Durban and Cape Town would benefit considerably if these airports were extended to permit them to be used for international travel.

Order! The hon. member cannot discuss airports under this Head.

It falls under Transport.

It is indeed a pleasure to be talking about an aspect in regard to which hon. members on the opposite side are in agreement with us, and that is the South African Airways which is a symbol of pride. We can all be proud of the services rendered by the S.A. Airways. These services do not only meet all requirements, but they are also among the most modern services in the world. The services rendered by the S.A. Airways compare favourably with those of any air-line in the world, not only the foreign services of the S.A. Airways, but even our internal services. I think that the increase in the number of passengers is proof of that. Neither can one argue away the fact that in the future air transport will play a very important part in the development of this country. It can be accepted that in the future air transport and air traffic will be developed to a very large extent and that it will absorb a much greater percentage of the normal passenger traffic. During the past two years passenger traffic increased by as much as 37 per cent, and we can accept that it will increase a great deal more in the future. We find that air traffic tariffs compare favourably with those of other forms of transport, and where the time factor is a very important aspect, it virtually eliminates the small difference in cost, and, taking into consideration the time factor, we actually find that it is cheaper in the long run to make use of air transport rather than other forms of transport. At present the sky-coach service compares very favourably with train transport and use is being made of this air service to an increasing extent. At present we have as many as nine overseas flights and we want to congratulate the S.A. Airways on the efficiency of these overseas flights. They were even capable of overcoming international problems which cropped up and to meet the demands made upon them.

Another outstanding aspect of the S.A. Airways, is the safety factor. We are constantly reading about accidents in which other air lines are involved, and we must admit that with the small number of accidents which occur here, the record of the S.A. Airways is outstanding in this respect. Another aspect in which rapid progress is being made is goods or freight transport. There is an ever-increasing tendency at present to make use of air transport. In South West Africa we are very conscious of what the S.A. Airways means to us. The S.A. Airways, as I have said on a previous occasion, has enabled us to reach any major city in the Republic within a matter of hours.

But I should like to address a small request to the hon. the Minister in regard to the air line in South West Africa, and that deals with the air service of Keetmanshoop. The air service to and from Keetmanshoop was introduced in 1932, and under very difficult and unfavourable circumstances it has persevered and rendered a valuable service in the development of that part of South West Africa. The Skymaster service was discontinued on 1st October, 1956, and the Viscount service was then introduced, but this Viscount could not call at Keetmanshoop. A twice-weekly Dakota service from Kimberley was then introduced. Ever since that time there have been negotiations in regard to this very unsatisfactory service. Whereas progress has been made and more flights have been introduced as regards the rest of the S.A. Airways, this particular service has actually deteriorated. Keetmanshoop was served four times a week by the previous service and at present there are only two services a week. Twice a week would still have been sufficient if it had been an efficient service, but problems are being experienced in getting connections from Kimberley. This service is in actual fact an inconvenient one, and owing to the inconvenience and inefficiency of this service we find that there has in fact been a decrease in passenger traffic from Keetmanshoop, while passenger traffic in general is increasing tremendously from South West Africa. For the past two years it has increased by approximately 2,000 or 3,000 passengers per annum. In contrast to that we find that the number of passengers is decreasing as far as Keetmanshoop is concerned. If one wants to travel by air from Cape Town to Keetmanshoop, it means that one has to stay overnight at either Johannesburg or Kimberley. It goes without saying that that entirely excludes all the advantages the fast service has to offer. According to the figures it appears that there was a reasonably extensive passenger traffic to and from Keetmanshoop until 1965, namely 63. The freight and goods traffic was also reasonably extensive; it amounted to between R2,000 and R3,000 per month.

Since the connection from Kimberley gives rise to problems and since there are much better connections from Windhoek either to the Cape or to Johannesburg, we should like to hear whether it will be possible to extend that route to Windhoek, because from Windhoek we have seven flights a week to Johannesburg and three flights a week to and from Cape Town. That is my first request. We understand that the S.A. Airways has entered into negotiations with private companies with a view to establishing an improved internal service. We should like to hear what the position is in this regard and whether it will be possible to extend the route to Windhoek in order to make it more efficient. It will decidedly result in more extensive passenger as well as goods traffic. It is felt that in regard to this service which was introduced 34 years ago, a retrogressive instead of a progressive step has been taken. With the development of the southern part of South West and owing to the fact that Keetmanshoop is the capital of the southern part of South West, it is felt that there is justification for such an extension of the route, particularly in view of the fact that in the near future tremendous development is going to take place there as a result of the recommendations of the Odendaal Commission.

Sir, this is one of the responsibilities of the Minister in regard to which I think he and the Administration deserve the highest praise. The South African Airways have always had a good reputation. At the moment the service which is being given, both internally and externally, is one of which we and the country can well be proud. There are, however, problems which flow from the present situation. We cannot deal with certain problems which arise in connection with the internal route at the moment but will deal with them with the Minister’s alter ego when the right time comes. But there are other problems which have arisen from the improvement in the internal services with the introduction of the Boeing 727—problems of staff and problems of responsibility, mainly due to the much higher speed of these new planes. I do not want to raise petty matters of detail here but I would like to ask the Minister to give an assurance that he and the Department are fully aware of the changes which have come about in the weight of responsibility, both on pilots and the cabin crew, as a result of the introduction of the 727 services. I think the cabin crews particularly carry a much heavier load to-day and I personally do not feel that there has been full recognition of that additional burden, with the result that unless attention is given to it, I believe there will be a falling off of the service which is rendered because of failure to recognize the problems. But with the present catching-up comes the problem of how far ahead we are looking to ensure that both internally and externally we do not experience the gap which we had when the Viscounts were operating. They gave an excellent service but, due to wrong timing or lack of appreciation of the speed of development of air traffic, there came a stage when they could not cope with the traffic offered, when it took days and sometimes even weeks to accommodate all those on the waiting lists, and we were unable to handle our internal passenger traffic. At the moment we are able to handle it. I would be grateful if the Minister would take this opportunity to tell the House and the country something about his plans in regard to future purchases of aircraft for both internal and external services. At the same time I should be glad if he could give us some indication as to his thinking in respect of the suggested service to South America which the Minister of Foreign Affairs mentioned after his recent trip there. In seeking foreign services there is one danger which I think the Minister will have to take into account and that is the danger of placing prestige before profit when contemplating new services. I think the hon. the Minister should tell us the extent to which possible flights to South America would be prestige flights at this stage and to what extent they will be economic propositions justified by the possible demand.

The proposed introduction of jets on the Australian run also brings new problems and new possibilities into the external runs, and I hope that the hon. the Minister will deal with that as well and give us a picture of what he plans on both the internal routes and the external routes and also tell us whether he foresees any change in the regional pattern of S.A. Airways at the moment. Sir, that brings me to what I believe is an essential adjunct to our present S.A. Airways service. Year after year we talk about it and yet it seems to be one of those things that just does not develop as it should, and that is the linking of our national air routes to the smaller towns with feeder services, completing a national network covering the whole of South Africa.

I know that this is a matter on which the Minister is very obstinate in fact very stubborn. He has always stated that he is not prepared to consider subsidization. But it is not enough to say: “I am not prepared to help them; we will let it slide.” The Airways run certain uneconomic flights at the moment. It runs those flights with Dakotas which at this stage must be considered to be nearing the end of their useful service life. The Minister will very shortly have to consider the question of new craft for the small airfields, the unsurfaced airfields, and the position of the smaller towns. Is this not the time when the Minister should consider a real national plan to link up all our towns in South Africa with our national service? Particularly with traffic increasing as it is on our national roads, I believe that a proper service to the small towns would be extremely popular. It does not have to be an elaborate one and it does not have to be one calling for large craft, but there must be regularity. The extent to which civil aviation or private aircraft companies can be brought into this and linked with the S.A. Airways services should, I believe, be examined. I believe that that is the field in which we are falling down. The Minister is considering them as two completely separate problems whereas I believe that they are inter-woven problems.

I spoke a moment ago of the fact that the Dakotas must now be nearing the end of their useful service lives. Could the Minister tell us what the position is with regard to the other old planes, the Constellations and the Skymasters; whether they are now going to be used for charter work or whether he has any specific plans in regard to these old planes? If not, I feel that the time has come when the Minister should discuss with his colleague, the Minister of Defence, the possibility of transferring planes which are redundant to the Airways service to the Department of Defence. I recognize the strategic need for retaining aircraft which may not be economic in commercial service against the possibility of their being needed for Defence, but I believe that the Railways are carrying an artificial burden by carrying assets on which capital calculations must be brought into account but which in fact are not the responsibility of Airways but a question of strategy and national security. I hope the hon. the Minister will let us have his views on that subject.

While dealing with that, I may also raise the question of charter flights which have led now to the stopping of South Africans from flying on the cheap services from Louren?o Marques. I realize that this is a matter of international policy; I realize that airlines protect their agreements, but there are many people in South Africa who cannot afford the normal commercial rates and who have taken advantage of the cheap service, particularly young people who have saved up for an overseas holiday and who would not be able to go overseas if it were not for the cheap flight. I would be grateful if the Minister would tell us whether he feels that these flights had in fact reached a magnitude or volume where they were a threat or where they were adversely affecting the regular flights of S.A. Airways; whether it was a matter of urgent moment that action had to be taken. If the Minister’s answer is that it was essential to take action, could he not then consider using some of his old planes, which are not in regular service, for running similar flights on a charter basis, particularly for the younger people who cannot afford the full normal fares.

The last point I wish to raise is that of the new pool agreements. Will the hon. the Minister indicate whether he is satisfied that these were economically wise, whether South African Airways will benefit from them or whether we are not getting ourselves involved in a little bit too much as far as pool arrangements with the national lines of other countries are concerned.

I should like to draw the Minister’s attention to the air service between Windhoek and overseas countries. As the hon. the Minister knows, we now have in Windhoek that enormous new airport, the J. G. Strijdom Airport, which falls in my constituency. But I do not want to discuss that now, because it does not fall under this head. I want to refer to the services provided to passengers between Windhoek and overseas countries. That air service is being used to an increasing extent by the large German population group we have in South West Africa. As the hon. the Minister knows, approximately 22 per cent of the population of South West Africa is German speaking and there is an increasing volume of traffic between Windhoek and Germany. As the hon. the Minister will notice from the figures, more and more German passengers are making use of this particular air service. Recently, however, there have been various complaints. For example, one complaint has been that the air hostesses on those flights cannot speak German. Of course, we in South West, who are all more or less trilingual, find it strange that an air hostess who cannot speak German is used on an overseas run. It causes a great deal of inconvenience.

As you know, Sir, German is a third official language in South West Africa and we make provision in the Administration for every person being able to speak German when dealing with official matters in the offices and so forth. We find that air hostesses who cannot speak German are used on these overseas flights and that causes a great deal of inconvenience to the German-speaking passengers, who are making use of these services to an increasing extent.

There is another complaint as well, this time in connection with the currency system used on aircraft on these overseas flights. One can understand that the Minister of Railways will not be greatly concerned about economic matters such as currency, but after all that is a service rendered to passengers on aircraft. Cannot arrangements be made for the German mark to be exchanged for our rand, and vice versa, on those flights from Windhoek to Frankfurt and back? One finds that facilities for exchanging the various currencies are not always available overseas and that people discover only during the flight that they will have to get rands. These two matters have caused so much inconvenience that the publicity section of South West Africa has received quite a number of complaints in this regard. I believe that they have already approached the Minister in this connection, and I shall be glad if the hon. the Minister will give this matter his attention.

The air service to Keetmanshoop is not very satisfactory, to reply to the hon. member for Karas, but the real difficulty is that Keetmanshoop does not have a hardened runway. The result is that the Viscounts cannot land there. The jet aircraft and the turbo-jet aircraft cannot land on an ordinary gravel runway because the gravel and sand are sucked into the motors and damage them. The real solution is that a hard runway should be constructed at Keetmanshoop. The Department has negotiated with a private air service to take over the feeder service, but they want a fairly large subsidy. It is felt that the South-West Administration should accept responsibility for that, but those negotiations have not yet been finalized. I recently discussed the construction of a hardened runway at Keetmanshoop with the Administrator of South-West Africa and he too realized the necessity of having an efficient service to and from Keetmanshoop. He is very sympathetic as regards that and has promised to raise the matter with his Executive Committee. There is a possibility that the South-West Administration will construct a hardened runway at Keetmanshoop. If that is done, it will of course be possible for the Viscounts to land there again.

The hon. member for Durban (Point) wanted to know whether we were aware of the additional responsibility of the crews of the Boeing 727. I can assure him that the Management has close contact with the staff organization representing these Airways servants. In regard to the Boeing 727 pilots, I gave them a special Boeing allowance, over and above the usual allowances after I had received representations from them. The Management keeps in touch with the crews and they are fully aware of the additional responsibilities especially in the case of the flying crews, not so much the cabin crews.

The hon. member wanted to know whether we were making provision for an extension of our air services in the future. If he looks at the Brown Book he will see that there are two 727s on order for the internal services and these will be delivered early in the new year. There are two 737s which have just been ordered. They will probably be delivered in eighteen months’ time.

I said “long-term”.

Well, this is long-term already. It will mean four additional planes for our internal services. We have five Boeing 727s at the moment, in addition to the eight Viscounts, and with four additional Boeings for our internal services, we think we should be able to cope with passenger traffic for a considerable number of years. The 737s are also convertible planes. They can be converted into freight carriers, from passenger carriers, within 20 minutes, and they are two-engined planes, with the result that although they take rather fewer passengers than the 727, they are much more economical and they have the same speed. There is one 707 on order which is to be delivered towards the end of this year, and an order has been placed for two additional 707s. That will enable us not only to increase our services to Europe and Britain but it will enable us to introduce Boeings on the route to Australia. Of course, it is my policy to extend our international services where it is justified on economic grounds. It is not a question of prestige. It must be economically justified. The South American service is being investigated at the moment and in any case nothing will be done before 1968 when these additional 707s are delivered.

Are you thinking of supersonic transports too?

Yes, I am thinking of them; we are all thinking of them, but no decision has been taken yet that South African Airways will buy these supersonic transport planes. I might inform the hon. member that it is estimated that the cost will be about R11,000,000 for one plane, and I do not think that our passenger potential would justify an expenditure of that order. A further consideration is that we would like to see them in the air first so that if there are teething and other troubles, they will be experienced by other air lines before we buy. Hon. members will remember what happened to the Comets. They were the first jet planes actually introduced to fly at an altitude of over 35,000 feet. Fortunately we did not buy any Comets at that time; we merely hired them from B.O.A.C. and we lost two of them. It was only after further experiments and tests and after keeping them down for a period of almost two years, that Comets were put into service again. All the indications point to the fact that supersonic jets will become an every-day thing, possibly in ten or 12 years’ time.

The hon. member wanted to know whether we could not link our national services with the small towns. I have said before that I would like to see private enterprise do that. As a matter of fact, we have some private airline companies to-day which are expanding considerably and some of these private companies have already introduced services between small towns and the major towns. For instance, there is a private service to Margate.

It has stopped operating.

Then it must have been uneconomical. I informed the House on previous occasions that I thought these intermediate services should be taken over by private enterprise. In fact, I was quite prepared to hand over the service to a private company, from Cape Town to George, Oudtshoorn, Grahamstown, Queenstown, Mossel Bay and Plettenberg Bay. There were negotiations with private companies, and I was prepared to pay a certain subsidy, but eventually when everything was calculated it appeared that it would cost me more to have a private company operating that particular service than the amount we are losing on that service at present, and so the matter was left.

So is the Minister prepared to subsidize now?

No, not on feeder services. It was only on that particular service, which I was prepared to hand over to private enterprise. My standpoint was that if I could subsidize at less the amount of my loss on those services I would do it. But I would certainly not subsidize for a greater amount than what I am losing on those services. Then we also have the passenger resistance. People want the S.A. Airways to serve them and not private airlines, Private companies should be able to do it much cheaper, because they can use smaller planes with smaller crews and their capital outlay and overheads are much less than those of S.A. Airways. Except in South-West Africa, we find that private enterprise in the Republic is not very anxious to introduce these feeder services from the small towns to the terminal points of the national airlines.

The hon. member wanted to know whether we had disposed of the Constellations and the Skymasters. We have disposed of all the Constellations. I wanted to give them to the Defence Department, but they had no use for them. Four of the Skymasters were taken over by Defence, and I still have one, and I have to retain that Skymaster for flying spare parts or spare engines if one of my D.C.7’s breaks down. The hon. member suggested that I should use these old planes for charter flights, but I am precluded from doing that by the international organization, I.A.T.A. A Scheduled airline is not allowed to operate cheaper flights. We are a scheduled airline and being a member of the international organization we must conform to their rules and regulations.

In regard to the international airline which has been stopped from carrying South African passengers from Lourenço Marques, that is in terms of an air agreement which was entered into between South Africa and Portugal and it is applicable to both sides. The Portuguese have now decided to put that part of the agreement into operation, and I have no objection to that because they are taking passengers away, and if people want to travel cheaper overseas they can do it by Trek Airways, which is a non-scheduled airline and also flies people overseas at lower fares than those charged by S.A. Airways.

The pool agreements are of course advantageous to S.A. Airways. We have had a pool agreement with B.O.A.C. for the last 20 years, and it has worked very satisfactorily to both airlines. We have now entered into a pool agreement with Lufthansa, Alitalia and with U.A.T., and of course these agreements are always entered into on the basis that they must benefit both airlines; and it does benefit both airlines because the cut-throat competition is eliminated by entering into a pool agreement. Hon. members can be assured that these pool agreements are to the advantage not only of S.A. Airways but also of the airline with which they are entered into.

*The hon. member for Middelland asked that the air-hostesses on the service between Windhoek and Frankfurt should be able to speak German. If I can get ladies who can speak German I shall employ them immediately, but that is precisely the difficulty. I shall be glad if attractive and suitable South West girls who can speak German apply to be employed as air-hostesses. The hon. member should encourage them to apply. The problem, as I have said, is to find girls who can speak German.

As regards the currency system and the exchange of currency on planes, I do not know whether that is really a function of the S.A. Airways, but I shall ask the Management to go into the matter.

Heads put and agreed to.

Heads Nos. 31 to 33,—Pipelines, R2,975,000:

I should like to say a few words about pipelines, especially the pipeline established between Durban and the Free State and Johannesburg. I refer to the Annual Report of the General Manager, in which we are told that the pipeline from Durban to Johannesburg has now been opened at a cost of R23,000,000. He also tells us that the work was accomplished in 14 months, and I am sure we are all very pleased and ready to congratulate one another. But there is one fly in the ointment and it is a very big fly. I should like to quote from the General Manager’s Report where he says—

In other words, whether we have a pipeline or not, the people in the interior, in the Free State and the Transvaal, will have to pay just as much as if there were no pipeline. The Minister is a Transvaler and the Deputy Minister is a Freestater, so perhaps we can reason this thing out together. The Minister will remember the history of this pipeline. For 16 years we asked for a pipeline from Durban to Johannesburg, and in 1955, after five years of agitation, the Minister agreed that a pipeline commission should be appointed. That commission reported in December, 1958. They went into labour and produced a mouse. They gave us the Pipeline Commission Report. This commission, which was established to tell us how to transport petrol from Durban to the Free State and the Transvaal, wrote a report telling us how not to do it; they recommended strongly against it and went so far as to say it should not be considered again until 1968, i.e. for ten years. Then we might get a pipeline in 1971, they said. Sir, we now have the pipeline. It was in operation in 1965, not in 1971, and I understand from the report that it is very successful.

We in the Transvaal and the Free State are asking: What are we going to get out of it? I hope hon. members representing the Free State and the Transvaal are all asking the same question. Who uses petrol in South Africa? Now, I have seen research work. We had some nonsense spoken here yesterday about the users of petrol, but in this research I found that the users of petrol are: Private use of petrol, 37 per cent; 5 per cent by the Government itself, and the remaining 58 per cent is used by commerce, agriculture, industry and public transport. Therefore, when I speak of the price of petrol and an increase in that price, I am speaking for the whole community. Now, what does it cost the Administration to bring a gallon of petrol from Durban to Johannesburg in this pipeline? I have seen estimates of .7 cent and .8 cent. The Pipeline Commission said .8 cent. The Minister, in reply to a question of mine some years ago, said it was .9 cent. Well, let us accept the .9 cent. What did it cost the Railways when they transported it by rail? The Minister told us it was 1.56 cent. In other words, with the pipeline you already save .66 cent. What is he charging us for the transport of the petrol? Not .9 cent, but over 7 cents. Those are the figures. That is the profit he is making. He has this clean, modern and efficient system of transporting petrol and we are being fleeced in the interior to pay for the Railways.

I want to come to the Minister’s own figures that we have been given here. I want to give round figures because it is easier. The capital cost of this enterprise was R23,000,000. The income is R16,000,000, and the total cost, interest, services and depreciation, amounts to R3,000. So there is a R13,000,000 profit on a R23,000,000 proposition. In other words, if private enterprise had done it, it would have paid off all the capital in less than two years. Some years ago, when the Minister found himself in difficulties and tried to justify his charges, he said that Sasol must be protected. That is a bit of sophistry, is it not? Sasol has to be protected more than it is now—and it is protected now because the difference between the excise for Sasol and the customs duty on petrol is 4.5 cents. So Sasol is now protected by 4.5 cents a gallon. If Sasol has to be protected, I do not agree that it should be protected by the Railways; if it has to be protected more than it is to-day it should obviously be protected by the Minister of Finance, through customs. In other words, the whole of South Africa should pay, and not just the people in the interior. We have been told by some of our friends over here that the United Party was against the establishment of Sasol. What utter nonsense!

Of course you were.

Anyone who is in any doubt as to the attitude of the United Party on Sasol should read the debate of 1951. Everybody in the world knows that producing petrol from coal cannot compete with tanker petrol, because obviously petrol is cheap in the world. But we were in favour of it for strategic reasons, and not because it is a payable proposition. We were not against having this strategic Sasol, because, being isolated in the world as we are to-day, we may find ourselves in the position of Rhodesia. I was going to refer to the Prime Minister of Great Britain, but that might make me speechless. There are no words in my language to describe what I think of him. But it is possible in the future that we may need more than one Sasol, and it may be possible that we shall have to pay for it through the Minister of Finance. But see what you have done to the Transvaal and the Free State now. The Minister shears us and no one comes along to temper the wind to the shorn lamb. Then along comes the Minister of Finance and puts up the price of petrol but I cannot discuss that now. However, between the two of them, the terrible twins, they have left the poor Transvaal and the Free State in the unfavourable position they are in now in regard to petrol. I should like the Minister to tell us why we cannot have petrol, instead of being transported for 7 cents, transported for 4 cents, which would give him over 300 per cent profit. How much profit does he want? He uses this expression of taking in profits what the traffic can bear. What does that mean? What does it mean in Rhodesia? If a man wants to buy a gallon of petrol in Rhodesia, he is prepared to pay 10s. for it. [Time limit.]

I do not want to engage in an argument with the hon. member for Kensington about the establishment of Sasol, but as far as I can remember the United Party was fairly derisive about the establishment of Sasol at that time, even though they did not oppose it. I want to leave it to the Minister to reply to the allegations and the requests and the calculations of the hon. member for Kensington. He was a very good teacher in mathematics, but I am afraid he is much less successful as a politician.

As regards the pipeline, I do not want to ask the Minister for an extension to Pretoria, because the transport facilities for petrol to Pretoria are very good, but I should like to bring something to the Minister’s attention. There is a misconception among the public as regards the pipeline and the recent leakage in it, which caused some delay in the conveying of petroleum products. The public is of the opinion that that leakage may have been caused by poor work on the part of the contractors. I just want to ask the Minister to make a statement in this regard. As far as I know, the pipeline is no longer under guarantee, nor is it the result of poor work on the part of the contractors, but is caused by other factors. In this regard I should like to ask the Minister to give us an explanation.

I agree with the hon. member for Kensington that the pipeline is a very profitable undertaking. In fact, I think it is the most profitable undertaking that the Railway Administration is responsible for. But the hon. member also quite rightly states that tariff-making is based on a very important principle, and that is to cover direct costs on the one hand and what the traffic can bear on the other hand. I find that petrol can bear quite a lot, and if I have to reduce the transport charges on oil and petrol from Durban to Johannesburg I will simply have to increase the tariffs on some other commodities, because the money must be got from somewhere. I think the hon. member cannot suggest any commodity which can bear an additional increase after the latest tariff increases I have announced. There are many other commodities conveyed by the Railways at a loss. Take the example of the transport of coal from the Transvaal to the Cape. That is quite uneconomic. Before the recent tariff increase we were transporting that coal for over 300 miles free of charge. If I have to reduce the tariff on petrol and increase the tariff on coal to Cape Town, the hon. member knows what the economic consequences will be. So in spite of making an excellent profit on the pipeline, I am afraid I cannot hold out any hope for a reduction in that tariff in the near future.

*The hon. member for Koedoespoort asked me to explain the position as regards the leakage in the pipeline. I said on a previous occasion that it was due to electrolytic currents; in other words, power currents that get lost in the ground and then try to find metal, and which then follow the pipe for some distance and try to find an outlet, thus causing a hole in the pipe. We do not detect that before the surrounding ground has been soaked with oil, and it costs a considerable amount, not only as a result of the repairs that have to be carried out continually, but also as a result of the loss of oil for which the Railways is responsible. However, a special research team is trying to find out what can be done to prevent that. We have made inquiries overseas, but as far as we have been able to ascertain that does not happen overseas. They suggest that in South Africa the reason is probably that we use direct current for the electrification of our Railways, instead of alternating current. They maintain that the direct current flows from the cables through the locomotives and into the rails, and then gets lost in the ground, where it tries to find metal and eventually lands up in the pipeline. But I hope it will be possible to find something to prevent that in the near future.

Heads put and agreed to.

Heads 34 to 36,—Net Revenue Appropriation Account, put and agreed to.

Capital and Betterment Works.

Heads 1 to 9,—R 134,219,000:

The first point I should like to ask the Minister is this. Last year, when we dealt with the Capital Estimates, we had lengthy debates on the revival of the Hex River Tunnel Scheme. There was some R14,000,000 to be spent. At the time we felt that the building of this line would be of great advantage to the Cape because it would speed up traffic and diminish costs of operation. The Minister is trying to double lines wherever he can. and we were pleased to note that he was going to do something about the Hex River Tunnel. He has put this particular scheme on ice and has only a few hundred rand on his Estimates this year. We would not like to see this item disappear from the Brown Book entirely. We know he has his capital difficulties, but I think this line of communication is essential to the Western Cape and I am disappointed to find that there is no progress being made in regard to this scheme.

Now I would like to refer to the Salt River Works. I had the pleasure of going through that shop recently, and I would like to congratulate the Minister and his Department on the operation of this particular shop. It is going through a period of change, through Railway policy, in that coaches are now being constructed by outside concerns and only repairs are being done there, although they produce freight wagons, which are produced at the rate of three a day, they also rebuild steam locos, but there is a change taking place over to electrical repairs in this workshop, and I am pleased to see that this workshop is at last going to have some money spent on it to bring it up to date. There is one snag in this workshop. On the one side of a very busy main and suburban line and a main road you have the electrical running sheds and on the other side you have the main workshops. I was informed that to get vehicles over from the electrical running shed to the main shop took them up to a day. I feel that the Minister should give consideration to having some form of direct communication between this large workshop and the electrical running sheds.

What is the number of the shop?

It is the main shop. There is no direct communication between the electrical running shops and the main shop, because you have a main and suburban line and a very busy main road in between, and it takes up to a day to bring one coach from one shop to the other. I believe it is possible to run a line under the bridge that exists at present and so have a direct communication.

Do you want to have a rail connection between the two?

Yes. There is a bridge at present where the suburban line goes through. I understand it is possible to use the same bridge. It is only just a short line, but I think it will lead to a considerable saving.

I was pleased to see the establishment of a basic training centre for the training of artisans in this workshop. I think everybody should be commended for the good work done in that training shop.

I should now like to come to the equipment of harbours. In the Table Bay Harbour we find that the Minister is replacing radar equipment on a fairly new tug. Why is that?

What item are you referring to?

Item 1215 on page 105. On the same page there is reference to a police launch in the docks which is pretty ancient and which is necessary for police patrol work. It has been on the replacement list for a number of years, but there is still no money being spent on it this year. That is the replacement of the launch Gemsbok, Item 1214. There is another disappointment. Commerce’s reports on the Table Bay Harbour and the recommendations that have been made from time to time to increase the floating-dock facilities for the smaller craft, have received a set back—last year the Minister had an item for the building of a pontoon floating-dock. which was Item 1178 in the 1965 Estimates. In these Estimates this year this item has been dropped completely. In Cape Town Docks to-day you have the one pontoon which was damaged recently and has now been repaired, but the need for building a new pontoon floating-dock is urgent. It is a matter which should have been attended to long ago. I am sorry to see that the Minister has drooped it this year. There must be some reason for it. Commerce and industry would like to know why they are not going ahead with the building of this particular pontoon.

We have four tugs in Cape Town Harbour, two oil-burners and two coal-burners. I would like to ask the Minister, when he talks about building tugs, whether he cannot give consideration to reducing the smoke nuisance by converting these two coal-burners to oil-burners. The Minister shakes his head, but these two tugs have become a nuisance in so far as smoke is concerned and I would like the Minister to consider converting them.

Then there is an item here for a new crane repair workshop. I think that is very welcome in Cape Town because the repair of cranes is like scraping and painting the Forth Bridge in Scotland; when you get to the one end you start all over again at the other end. You never seem to get to the end of repairing these cranes. They are a very valuable asset and I hope the shop that the hon. the Minister is going to build will be able to expedite this work and allow his Department to catch up with the outstanding repairs to cranes. I should like the hon. the Minister to give his attention to these items and we would like to hear his reply.

Mr. Chairman, I should like to know if the hon. the Minister can give us any information in regard to the new goods yard at Pinetown, which is mentioned in Item 126 of the Brown Book. During the year the Minister’s Department has served notice of expropriation on the Municipality of Pinetown and certain owners of private land for a considerable portion of land in the centre of Pinetown. It is understood that this is either for a new marshalling yard or a new goods yard. It is not clear whether any provision has been made in these estimates. I should like to ask the Minister whether provision has been included in the Brown Book, or what explanation he can give, having regard to the fact that notice of expropriation has already been served on the local authority. We should also like to know whether it is intended to have a goods yard, a marshalling yard or a new station, because it is not clear from the estimates. I do know for a fact that the Department, prior to the preparation of these estimates, had already served notice of expropriation. I should like the hon. the Minister to give us some information in this regard.

Mr. Chairman, in regard to Item 954—Re-union-Kelso: Electrify section—it seems to me that the hon. the Minister has not spent very much of the money we have given him for this purpose. I should like to know what progress has been made and when he expects this work to be completed. We know that this work is going to be done in sections, but this amount voted is for the section from Reunion to Kelso. We have seen certain signs of work, but they do not seem to be progressing at a rate which the people of the South Coast of Natal would like to see. I should like some information on this matter.

Mr. Chairman, I should like to ask the Minister a question in connection with Item 733—Koedoespoort: Additional Accommodation at Existing Hostel. I presume that this refers to the Albert Kuyt Hostel. I should like to know how many people will be accommodated there after those extensions have been made. On behalf of the inmates of that hostel, I should like to express gratitude and appreciation for the good services and the fine discipline they enjoy there. I am also thinking of people like the married men who as a result of the drought conditions had to leave their farms to work in the workshops at Koedoespoort, and who are accommodated there. They speak with great appreciation of the accommodation there, and of the discipline among those young people.

Mr. Chairman. I am glad to note that the Minister is still spending money on stations and work in the Transkei. I notice that they are building a new goods shed at Qamata for R54,000. I see from Item 567—Umtata: New station building and remodel station entrance—that a new station is to be built at Umtata costing R253,000. Of this amount R3,247 was to have been spent by the 31st March this year. I see that the balance, R249,553, has been placed under the heading “Estimated Expenditure during subsequent years”. I should like to know from the hon. the Minister when the work is due to start, because, although I see that R3,247 was to have been spent by the 31st March, whatever work has been done there must be very small. I should like to know when the remodelling of the station entrance is expected to start and when that work is likely to be completed.

Mr. Chairman, I get up to thank the Minister [Interjections] for having responded to the representations I made to him a few years ago regarding electrification of the section from Kroonstad to Harrismith. As I said then, and as the Minister himself is aware, that section was completely overloaded. The electrification of that section will, I am convinced, bring about a tremendous improvement in the transport of goods to Durban. But the actual reason why I get up, is to thank the Railways on behalf of the farmers in my constituency for the accommodating way in which they acted towards those of the farmers who had to make sacrifices. The line which is now being electrified and straightened goes over their land, and some of the farmers have to make tremendous sacrifices. I therefore want to express my gratitude for the way they are treated by the Railways and compensated for the loss of land and improvements which are being expropriated. From several farmers in my constituency I have heard nothing but appreciation and gratitude for the treatment they have received. In the case of the pipeline, which passes through Bethlehem and over my own land, it was also really noticeable that the Minister appointed special officials to supervise the companies holding the tenders, so that the farmers would be treated with due justice. We appreciate that, and I felt that it was my duty to communicate that to the Minister.

Mr. Chairman, the hon. member for Salt River wanted to know when the work on the Hex River tunnel is going to commence. The work was kept in abeyance for a very good technical reason. Experiments were made in regard to the laying out of the foundation with concrete instead of with the ordinary rail bed of stone which covers the sleepers. It will be a very long tunnel and it will of course be very uncongenial for gangers to work in that tunnel. It is believed that if you have a concrete rail bed, it will require very little maintenance. Experiments had to be conducted in this regard, because that method has not been used before, especially over such a long distance. That is why the work has been kept in abeyance.

The hon. member also asked that direct communication be provided between the main shop and the electrical running shed at Salt River. I shall ask the Management to go into the matter. In regard to why the pontoon has not been proceeded with, I shall obtain the information and give it to the hon. member. In regard to Items 1,214 and 1,215, the hon. member wanted some information. Item 1,214 deals with the replacement of the launch Gemsbok. The hon. member said that practically no money is being spent this year. The additional amount required in this regard is R1,200. The price that was tendered was higher than we had anticipated. If the hon. member looks under the heading “Renewals Fund and Working Vote”, he will see that the whole amount of R48,200 is being spent this year. In regard to Item 1,215 the replacement of the radar equipment is necessary. More modern equipment is required. I cannot hold out any hope of converting the coal-burning tugs to oil-burning tugs. The expense involved would not be economically justifiable.

The hon. member for Pinetown was actually referring to Item 605 and not Item 126. If he looks at Item 605, he will see that a considerable amount of money is being provided to be spent this year. I believe that negotiations are still taking place with certain interests in regard to the expropriation of certain land.

The hon. member for Umlazi wanted to know what progress was being made in regard to Item 954. I do not know whether the hon. member knows this, but three departments are concerned in the electrification of a line, namely the Civil Department, the Signalling Department and the Electrical Department. It might be necessary to flatten curves or reduce gradients before electrification is commenced. That is the job of the Civil Department. Then, of course, the foundations of the masts have to be laid. That work is progressing satisfactorily. The indications at the moment are that the work will be completed by the target date.

What is the target date?

I cannot give the hon. member the target date at the moment. I think it is in about two years’ time, if I remember correctly.

*The hon. member for Koedoespoort spoke about Item 733. Additional accommodation has to be provided there, mainly for apprentices and learner welders. I cannot say at this stage how many additional rooms are going to be built.

The hon. member for Transkei wanted to know when we are going to start building the new station at Umtata. That has been kept in abeyance as a result of certain measures which the Government took to curb inflation last year. I was asked to hold in abeyance for at least 12 months very big building schemes, and this is one of those which was axed. I hope that it will be possible to commence that work next year.

Mr. Chairman, I should like to thank the hon. the Minister [Interjections] … on behalf of the former member for Danskraal. With regard to Item 583 I notice that the new workshops, etc., for which that former hon. member pleaded so eloquently all those years are at last going to be built. I think it will do her heart good to know that now that she is no longer here, the Minister has at last relented.

Tell her I appreciate her thanks which you have conveyed to me.

I hope the new member for Danskraal will not claim the credit for this work.

Heads put and agreed to.

Estimates adopted.

I move as an unopposed motion—

Mr. Speaker, we have completed a Committee Stage which, I think you will be interested to know, was a peaceful portion of our discussion. The Minister answered the questions we put to him with great courtesy and patience. We appreciate that very much. But, Sir, nothing happened in the Committee Stage to change our fundamental attitude to the most unfortunate Budget which the Minister presented to the House last week. I am afraid that it is necessary for us at this stage of the proceedings to re-emphasize our objection to the Budget and the likely consequences of the Minister’s actions, and also to protest against the Minister’s personal attitude towards criticism of the Budget. I want to say at once that we enjoyed debating against the Minister, except when he becomes personal. I take exception to the fact that on a previous occasion the Minister said that he would be willing to help members of the Opposition with information. I do not want to go into that, but that is just not true. The Minister will remember that very recently, perhaps for very good reasons, he had to refuse to give the Opposition certain assistance for which they asked, legitimately I believe. But that is by the way. I do not accept that the Minister is always so willing to give us information and to help us. I think that he is very courteous and where he can help us, he probably will do so. There are, however, cases on record where he has refused to do so. As I have said, that is by the way. What I do take exception to is, according to the Minister’s Hansard, a condition he made, namely that he would assist us with information provided I would try to speak the truth. I think, with respect to the Minister that it was a scandalous suggestion. As a result of that accusation, I have gone through my own speeches very carefully and I cannot find anything where it could justifiably be said that I did not try to speak the truth or that I deliberately told an untruth, which is the converse of the Minister’s suggestion. I do not think it helps us, or the interests that we are all trying to serve in this House, to conduct a debate at that level. I went through my speeches very carefully …

You looked at it through “Sap” spectacles.

Mr. Speaker, I have known that young hon. member for many years, and he is confirming what I expected from him, i.e. very little courtesy. From my past experience in this House, I do not expect any courtesy from that hon. member. I have gone through my speeches very carefully and I challenge the Minister to substantiate any of the allegations he made that I had spoken untruths in the prepared part of my-speech which I delivered last Monday. In fairness, I should like to say that in the spontaneous part of my speech, which I delivered immediately after the Minister had sat down, I did make one statement which is subject to criticism. I suggested that in 1962 the Minister, after having granted a 10 per cent increase in salaries, had immediately come and imposed increases in rates which were double that amount. I will admit that. I have the interests of truth as much at heart as hon. members opposite. But, I want to say that the Minister can derive very poor comfort from that because, even if I stated it badly, my criticism remains. That was the year when the Minister budgeted for a deficit of R2,750,000. Then, after he had given the increases, and after he had raised the rates, he came with a surplus of over R12,000,000—almost R13,000,000. That does not seem to be very careful budgeting. There was no great concern about taking more out of the pockets of the Railway users than was necessary. I want to point out that I have an authority for what I said extemporaneously and in immediate reply to the Minister in an unprepared speech. This authority is a paper prepared by Dr. Van Waasdyk of the Commerce Department of the University of the Witwatersrand. Some months ago he published a study on Prices, Profits and Controls. Amongst many things, and this stuck in my memory, he referred to the increase in rates in 1962 and said:

I think that Dr. Van Waasdyk made a mistake. He calculated the 10 per cent on the income of the Railways at the time, which was over R400,000,000 and assumed that it would be R40,000,000. This stuck in my memory because this matter was widely discussed in the South African Press. It was discussed in the daily Press and in the week-end Press, in the English Press and the Afrikaans Press. It was summarized in The Financial Mail of the 1st April, 1966. It was commented upon and summarized in Barclay’s Bank Trade Review for July, 1966, and that very statement was repeated. Other banks published it in their reviews. But, although the South African Railways maintain a very expensive publicity department, the relevant statement was never denied. How often has it not happened to us that if we make a statement and we are challenged about it, it is alleged that we stand by that statement because we never denied it. Perhaps, Sir, I was misled by the fact that the statement was made in a serious study and was never denied or corrected by the Railways with its vast resources, with special departments that exist to prevent such a wrong image being created about the South African Railways. I admit that, but again I challenge the Minister to find anything in the prepared part of my speech which will justify such an accusation as he made. If I make a mistake, I am always willing to stand corrected and to admit the mistake as I have done now. But look at the Minister’s other charges. He made a long charge against me about what I had said about railway passengers. When I drew his attention to the fact that I had dealt only with long-distance passengers—and I substantiated every point I made about long-distance passengers—the Minister dropped his charge. His charge was based on a misunderstanding about what I had said. I can quote another example. He alleged that I had referred to the gross increase in rates of R49,000,000 but that I did not mention the fact that there was a saving of a few million rand which reduced the increase in rates to R46.3 million. But I pointed out that in the quotations of my own speech, which he made on the occasion when he made that charge against me, on several occasions he referred to the fact that I did mention that the net increase was R46,000,000. I looked through my Hansard, and on every page of the speech I made here last Monday, where I referred to it at all, I referred to R46,000,000, I think that was a most unfair and unjust charge of the Minister. I made a statement that the Schumann Commission’s report had been used as an excuse for putting up rates generally. I stand by that, Sir. It is my opinion and I am entitled to my opinion and I can justify my opinion. If the Minister will look at my Hansard he will see that I took the trouble to read out a list of recommendations favourable to the user which the Minister did carry out. I even mentioned the fact that the recommendation in regard to the motor car tourist concession was not taken over. I mentioned practically all of them. But the Minister did not take that into account. My main charge stands, and I shall repeat it now. In his main recommendations, in his changing of the tariff structure of the South African Railways and in making the fourteen tariffs more progressive in accordance with this report of the Schumann Commission, the hon. the Minister did not implement those recommendations of the Commission that were intended to soften the impact of higher rates on the railway user. He did not even deign to justify his ignoring those recommendations. Mr. Speaker, they recommended that certain increases should take place over 10 years. The Minister ignored that. They recommended that if the tariffs are adjusted to make the progression from rates 14 to 1 more even, some should be reduced. Every one was increased. That was my main argument. I read out the major increases in the top tariffs to the Minister. He ignored that. He did not justify that at all. I then raised the point that the Commission had suggested, because these increases high bear too heavily or unjustly on particular industries or interests, that a Rates Appeal Committee inside the South African Railways be appointed. That was not implemented, and no explanation was given by the Minister as to why he intended not to implement it. I think that I am entitled to stand by my accusation, and I do. The Schumann Commission’s report was used by the hon. the Minister in order to raise all the 14 tariffs on the South African Railways in an upward direction only and at a time when it was most inopportune in the interests of South Africa as a whole to have another cost push in the economy of the country. That is my charge, Sir, and I stand by it because I happen to know that it is justifiable and correct.

The Minister and I have known each other for many years. I had the privilege of knowing the hon. Minister when he belonged to the United Party. He was quite a fine chap then, Sir. But he has changed. It is strange how he has changed. I should like to tell you that it is an old technique of the Minister’s. He had used it from the United Party side too sometimes, very effectively. That technique is that when he is charged with certain specific things, he comes back with sweeping accusations against the Opposition that have really nothing to do with the charge, and he distracts attention from his own guilt and the weakness of his own case. That is why we have heard no reply to this question of a cost push in our economy. We have had no reply to our charge. Looking at the future of the South African Railways, which is pretty dismal according to the Minister’s statements to us, there is no sign of any long-term or alternative plan to avoid these repeated major increases in rates every few years. There is nothing to deal with that. We, in our weakness, without the benefit of a mighty, and well-informed and highly trained staff, because we are interested in South Africa, at least make suggestions which may be criticized and torn to pieces, but which I believe are fundamentally sound and which are worthy of investigation. We at least make those suggestions. But there is nothing similar from the Minister. We did suggest that the Rates Equalization Fund should have been used in order to avoid the increases that this very bad Budget has brought, and in order to avoid a cost push in our economy. We did suggest that the Minister should have waited to see whether this drought is going to last indefinitely. It cannot, humanly speaking, last indefinitely, and the consequences of it cannot be with the Minister for ever. We did suggest that the Minister should have watched the economic trends in South Africa, especially the trends which will follow upon the deflationary steps the Government is now taking, so that he could have avoided the cost push while those steps were taking effect. It does not help much if deflationary action is taken to limit demand inflation while the Minister is responsible for policies pushing up costs to the public. It is a contradiction. It shows that there is a lack of correlation and a lack of clear thinking on the part of the Minister and on the part of the Government.

We have made suggestions to the hon. the Minister to take steps for the improvement of efficiency on the S.A. Railways. I put the onus for improving the efficiency on the S.A. Railways on the Management and Administration.

I queried with the Minister the correctness of the policy of coming with tremendous increases in rates every few years, increases necessitated by unconscionable delays in doing justice to the Railway staff and to adjust their incomes to the economic position of South Africa. This was delayed for years until it had become necessary to give them major increases. This moreover happens so often on the eve of an election. That then acts as an economic trigger and as an excuse for commerce of industries to adjust their prices not only to cope with the increases in the rates but also at the same time to relieve themselves of an accumulated burden of growing inflation resulting from cost rises due to other causes. So these increases often act as a trigger. Commerce can tell the hon. Minister that but he himself knows it. This then is what we should try and avoid. We suggested to the hon. the Minister that he should consider adjusting the salaries of Railway servants more regularly. But we got no reply from him. [Interjections.] The hon. the Minister was previously Minister of Labour and he knows that that is being done. Under the national industrial agreement of the motor industry a special clause has been provided for this purpose. They take the 1963 index of the cost of living as their norm. This clause provides that if there is an increase in the cost-of-living index of 2.32 points the weekly salaries of their employees are automatically adjusted. On the other hand, if there is a decrease in the index of the cost of living salaries are accordingly decreased. But the point is that these adjustments are automatic. And each adjustment is pensionable. It is not a cost-of-living allowance as somebody has suggested. A cost-of-living allowance is not part of the basic salary and is not pensionable. It is being done and I do believe that in order to avoid, in the national interests, these mighty explosions in the cost structure of our South African economy by these delayed adjustments of wages and salaries, this is one of the long-term matters the Minister and his administration should investigate. The Minister, however, has up to now shown no sign of any constructive thinking.

The Minister also had other things to say. He and some of the other hon. members who spoke in support of him tried to indicate that we in the United Party were dependent for our criticism only upon the Financial Mail and the Rand Daily Mail. Of course, these two are great institutions and are very helpful to all of us who are concerned with public opinion and events in South Africa. But now I want to assist the hon. the Minister. In support of our allegation that this is a cost push Budget which will probably lead to an increase in the cost of living of all South Africans, I am not going to quote either the Rand Daily Mail or the Star or the Financial Mail or for that matter, any English newspaper, but from the Transvaler. Some comment on the Railway Budget appeared in the Transvaler of the 11th August. I have a summary here of those comments. It reported—

It was not the Transvaler who said that.

May I point out to that hon. member that I myself was a journalist. This was the Transvaler’s own editorial summary at the beginning of the article of comment on the Budget. I do not say it is the Transvaler’s own point of view, but it is comment on the Budget from various bodies and persons summarized above in the Transvale's own words. The Transvaler reported Dr. M. D. Marais, who was a member of the Schumann Commission, as having said the following—

Then we come to Dr. M. van den Berg, director of the Afrikaanse Handelsinstituut. He said—

This is exactly what we from this side of the House have said. However, Dr. van den Berg went on—

Prices, he said, would of necessity have to rise. Dr. F. J. van Biljon, president of the Association of Chambers of Commerce had this to say—

This is what Mr. L. Lulofs. president of the Federated Chamber of Industries said—

These are exactly the arguments we from this side of the House have used. Mr. Lulofs went on—

You see, Sir, the arguments of this side of the House are supported by leaders of commerce and industries and by financial experts in South Africa. These views have not been brought to us by either the Rand Daily Mail or the Financial Mail but have been sorted out and published by the Transvaler itself.

It is quite clear, Sir, that the Minister seems to be helpless.

No, hopeless.

No, I will not say he is hopeless although he is without hope. When he took a look into the future he was most pessimistic. What he saw was a growing deficit on the working of the S.A. Railways. But yet he has no long-term plans. In any event, he has given us no indication that he has such plans, except that he has run away from the suggestions made by this side of the House, suggestions which we find are being supported by the economic thinkers of South Africa. What must we do with the hon. the Minister? Mind you, I can understand his plight. After all, one of the keys to the financial situation of the S.A. Railways is this question of high-rated traffic derived from imports. One would have thought that a wise Government, concerned with the cost structure in a period of inflation would have taken steps, if not to encourage then at least not to discourage imports now that our reserves are strong enough to justify a relaxation of import control. But what do we find? While the hon. the Minister of Transport is struggling with deficits and has to increase rates and thereby cost and prices in South Africa, the Minister of Finance comes along and increases import duties on a list of high-rated import articles, a list three printed pages long. Thereby he made it less easy for us to export some of the inflationary pressure in South Africa and embarrassed his colleague, the hon. the Minister of Transport.

What must one do with a Government like this? What must one do with this Government with its inflated majority, derived from the fact that it is a nationalistic chauvinistic movement, and from its Colour policies, while failing every elementary test in economics and finance? Furthermore, it is a Government that is unable even to correlate the work of the Minister of Transport and of the Minister of Finance and that at a time when the problem facing every South African household is the problem of rising prices.

I think the Minister should think again. He will not be losing face thereby but he will do South Africa a service. I think he should again look at some of the suggestions which have been put forward in a constructive spirit by this side of the House, supported as they are by economic experts. He should again look at this question of imports and talk to his colleague the Minister of Finance who, as a cook, compares I think in many ways with the three witches of Shakespeare and the interesting brew they concocted. He should talk to the Minister of Finance about imports, because high-rated traffic constitutes the key to the problems of the S.A. Railways.

Secondly he should have a look to see what can be done to improve efficiency on the S.A. Railways, Of course, the Administration deserves much for what it has already done to improve efficiency, but more can still be done. With this in view I want to make a few fleeting suggestions. First of all, I think the hon. the Minister should have a look to see whether his Administration is not becoming top heavy. His predecessors could manage with one General Manager. To-day we have a General Manager, two Deputy General Managers and quite a number of Assistant General Managers and other high officials. I wonder whether the Minister should not investigate to what extent Parkinson’s Law has been operating in the S.A. Railways.

Another example, and an interesting example at that, of what he should look into is the question of bilingualism. The other day I learnt of a case in Johannesburg of a man who received a query requiring a lengthy investigation. It concerned Railway rates and involved quite a lot of figures. In order to get this information he had to deal with clients of the S.A. Railways using one of the two official languages. After having collated all the information he returned it to his colleague in the other town in the language the client used. It took him days to get this information. However, after some time he got the letter back with a reprimand. He was told that he was written to in a certain language and that he should reply in the same language. For that he had to do the letter over. So some more hours had to be spent. Either this information was not urgently required or someone was inefficient, and that for the sake of self-assertion or sectional assertion! That took place inside the Administration. Surely, Sir, we should accept that in a large organization like the S.A. Railways people are entitled to use either of the languages. In negotiations with the public it is of course quite another matter. I think there should be an investigation to what extent there is arbitrary bureaucracy on the part of some people in the S.A. Railways. Why, for instance, when using these automatic machines in the bureau accounting system and somebody omits to insert in its proper place a piece of paper or something which changes the code—this can happen, because the human element is always present—why is the machine stopped, the matter referred to the person who does the processing for him to do it all over again and also to submit an explanation? Why does the inspector not there and then change the code and then ask for an explanation? There has been this tremendous mechanization on the S.A. Railways and I think the question whether the S.A. Railways derives the maximum benefit from it should be investigated. I say this because I have heard from many sources that costs have increased in some cases in spite of mechanization.

Furthermore, the system of disciplinary superintendents should be investigated. Those appointed are mostly staff clerks who are supposed to apply discipline throughout South Africa but who are still dependent upon the people in the section where the offence is supposed to have been committed, for all the necessary information, for the formulation of charges, but who have to supervise the work of the people immediately responsible for discipline on the spot. Some investigation should, I think, be made into this aspect.

Our time at this particular stage of this legislation is limited. But I should like to urge upon the Minister not to sit with folded arms,, as he is doing now. He should sit up and be alive, alive to the fact that according to his own expectations, expectations to which I cannot attach great importance because his expectations have often been proved wrong, he is pessimistic about the future. The hon. the Minister is scared of the future. Let him then for heaven’s sake get up and think hard about alternatives, and not only increase rates as the only possible solution of the problems of the S.A. Railways.

In conclusion I want to say that the ordinary man and his wife in South Africa deserve to be given a chance. Experts, for whom I have respect, tell me that one of the features of inflation is that purchasing power shifts from those with fixed incomes, i.e. the wage and salary earners, the pensioners, the annuitants and those living upon the interest on their investments, into the hands of the minority who can pass on by price adjustments and by other ways the effects of higher costs. I was also told that one of the objects of deflation should be to bring relief to those with fixed incomes and to stop the erosion of the purchasing power of their earnings. But what is there in the Budgets of these two Ministers to bring such relief to the people? What is there except higher costs. The hon. the Minister must please not delude himself into believing that price control is going to stop increases in the prices which the ordinary man and his family will have to pay as a result of his Budget. It is not always possible to pinpoint increases due to rate increases. They are not the only cause of price increases, but they are often the occasion used for an increase of prices. Most price increases could be justified on other accounts as well. The Minister knows that I am speaking the truth when I say this. The time has come that this Government should think of the ordinary man and his wife and heaven knows that this week and last week have been a dreary and tragic chapter in the lot of the ordinary man and his wife in South Africa. It is because we feel this very strongly that I want to move an amendment—

1. (1) to convince the House that the proposals to increase tariffs will not cause prices to rise, especially at the present inappropriate time; and
2. (2) to indicate that it has any long-term plans to extricate the South African Railways and Harbours from its financial difficulties”.

Mr. Speaker, the hon. member for Yeoville would make much more of an impression if he did not exaggerate his case to such an extent. It is exaggeration which brings him to the untruths. According to him that side still has the same objections it had during the Budget debate. But how many of those objections were not inconsistent? To-day the hon. member once again made accusations which were simply not true. He repeated that the railwaymen were given an increase in salaries with a view to the election which was to follow shortly. And that, Mr. Speaker, certainly is not true. I now want to ask the hon. member to read the amendment which he moved to last year’s Budget. At that time he requested this House not to pass the Railway Estimates until the Minister had consented to increases for the railway staff. But was that not prior to the election? Did the hon. member and his party act in that way with a view to the then approaching election? Sir, you should not judge others by yourself.

Were increases not necessary?

The hon. member repeated that allegation here to-day.

Reply to the question.

Yesterday during the Committee Stage the hon. member made the statement that if the United Party had been in power, it would never have given increases to railwaymen prior to the election. But apparently it may ask for such increases prior to an election!

What nonsense. Are you not ashamed of yourself?

The hon. member should read the Hansard report, then he will see that he said in reply to an interjection from his own side that the increases would never have been granted by a United Party government shortly before an election.

Nonsense.

He also alleged that he had received no satisfactory reply from the hon. the Minister in regard to the effect of the higher tariffs on the cost of living. Certainly that is not true? Because the hon. the Deputy Minister devoted virtually his entire speech to explaining what rises would in fact be caused. The hon. the Minister said subsequently that he would not deal with that aspect as it had been dealt with conclusively by the Deputy Minister. And now the hon. member comes along and says that there has been no reply from the hon. the Minister to the United Party’s allegations. Again that is an untruth. Then the hon. member objects if the hon. the Minister accuses him of untruthfulness. I do not want to accuse the hon. member of that. But I want to tell him not to present his case in such an exaggerated fashion. If the hon. member thinks that he has some matter which he can use in an attack on the Minister or the Government or the National Party, he must express the necessary criticism. After all, we are only human. But the hon. member is in the habit of exaggerating his case to such an extent that he usually goes too far.

In his amendment to the Railway Budget last year—and hon. members must bear in mind that it was shortly before the election—the hon. member asked for increases for the Railway staff and he also asked that the Minister should say what he intended doing in connection with the Schumann Report. Since that time the hon. member’s requests have been complied with. He asked for the increases in March and the hon. the Minister granted them in October. Then why is the hon. member so upset now? After all he did get what he had asked for, did he not, Mr. Speaker? Really, I have never come across anybody who gets so upset when he gets something for which he has asked. The hon. member has been crying in this House like a small child who has asked for sweets but did not get them whereas he did in fact get them! I am inclined to think that the hon. member has been crying here because he was given a spanking by the hon. the Minister just like a naughty child is given a spanking when he has been given sweets and is still naughty. Sir, we reject the accusation that we have granted the increases with a view to the election, with the contempt it deserves.

You know that that is true.

Now listen to that. In that case I say that that side asked for the increases with a view to the election. If this side had been dishonest, Mr. Speaker, then the United Party had been even more dishonest. The increases were granted because we had a surplus of R13,000,000. It was a legitimate claim by the Railwayman. For that reason the increases were granted when there was a surplus.

The other leg of the hon. member’s amendment last year was the question to the Minister as to what he was going to do about the Schumann Report. Now, Mr. Speaker, with a surplus of R13,000,000 in March last year, there would have been no sense in implementing the recommendations of the Schumann Commission. The recommendations could not be implemented when there was such a surplus. The recommendations are only implemented when there is a deficit. And the hon. the Minister did not wait until after the election before saying what steps he was going to take in connection with tariff increases as has been maintained by the hon. member as well as other hon. members opposite. In February of this year, still prior to the election—the election was held on 30th March—the hon. the Minister gave a warning in this House during the Part Appropriation debate that increased tariffs would have to be introduced at the time of the next Budget. The hon. member can check on that warning by the hon. the Minister in the Hansard reports. He said that at the beginning of February which was prior to the election. The hon. the Minister gave the hon. member for Yeoville something on which he could have attacked the Minister during the election.

Where have I mentioned that? I challenge you to say where I have mentioned that.

Because the hon. member levels similar charges at this side of the House, I say that he has requested the increases with a view to the election. He asked for higher wages but when we granted them, he made a volte-face and said that it had been done with a view to the election. The hon. member asked what steps would be taken regarding tariffs and the hon. the Minister told him that they would be increased.

That is not my question. Do not run away. When did I say before the election that tariffs would be increased?

I can understand the difficulty of the Opposition and of the hon. member for Yeoville. They are sitting here as a group of embittered and disappointed people after the election. The Railwayman too has left them in the lurch. And now it seems to me they begrudge the Railwayman his increase—that is after the election! But they do not want to admit that straight out. And the reason for that is the knowledge that further elections will be held.

The accusation has also been made, Mr. Speaker, that the Budget has been further proof of the Government’s indifference to and disinterest in the interests of the man in the street. We reject this accusation too. Who can be called the man in the street? Any one of us may also be called the man in the street. Here we have no class distinction. But there was a time—and not many years ago—when the United Party was in power, Sir, when it was the fashion in this country and also in this House to speak of the workers class. But since this party has been in power, those words no longer exist in our vocabulary. Each one of us is a man in the street. And the increased tariffs will affect all of us. AU Railway users will be affected. The entire nation will be affected. And, as in the past, we shall demonstrate here by word and deed what we want to do and what our object is. We on this side regard the Railways as an essential institution for the development of the South African economy. Were it not for the Railways we would never have stood where we are standing today. Where would we have been to-day if we had listened to the United Party in the past? On every occasion in the past when a Budget was presented during difficult times, the United Party suggested that private initiative should be given more opportunity. What would have happened to the development of our country if we had listened to them? Sir, private initiative is interested in high-rated transport and not in the conveyance of coal and iron-ore. And these two commodities are the basic raw materials for industrial development. But who provided transport for these raw materials to where they were required. This year, of course, is not the first time that the Railways have had a deficit, Mr. Speaker. As a matter of fact, there have been even larger deficits in the past. In the past there have also been increases in tariffs.

In 1922 there were the Jagger cuts.

If his books do not balance, surely those are the means any Minister resorts to to assist him over his difficulty. We should remember, Mr. Speaker, that the people who use the Railways naturally have to pay for that. After all, to a large extent it is a business undertaking. This will not be the end. It will happen again in the future. And it will happen for as long as we regard the Railways as a Government institution which must render service to South Africa. There is quite a number of factors which contributes to the difficulty and there is a number of factors which causes these deficits from time to time. In my opinion the most important factor is the tremendous expansion we are experiencing in the field of industry in South Africa. I do not want to go into that any further. Hon. members may look at the hon. the Minister’s Budget Speech. How much rolling stock has not been put into service this year? Just look at what is contemplated in this connection for the coming year. No one will deny that those are impressive figures. Mr. Speaker, the hon. member for Yeoville said a few interesting things the other day, one of which he repeated to-day. He said, inter alia, that two factors in particular had to be blamed for the financial difficulties the Railways were now experiencing. He said one factor was the drought. Well, Sir, we on this side want to thank the hon. member for having said that. Because when agricultural affairs are discussed here and someone on this side mentions the drought as a factor contributing to the poor position in which the agricultural industry finds itself, then there is laughter from that side of this House. For that reason I want to thank the hon. member for Yeoville for having admitted that the drought is in fact one of the causes of the Railway’s difficulties.

The other factor, according to the hon. member, is the application of import control. Well, Sir, import control must have an effect on Railway matters, of course. But we on this side are very thankful that the Minister has acted in time and has introduced import control. This remedy has often been used in the past to come to the rescue of our economy and to keep it sound. I want to predict that now, as in the past, import control measures will once more straighten out our national economy.

Now, Mr. Speaker, the hon. member could only produce one solution. He recognized the existing difficulties and he mentioned two factors responsible for that. But he could offer only one solution. And his solution was that the Rates Equalization Fund should be used. But that would help us in no way because it is no solution at all. It would only lead to increasing deficits. If the hon. the Minister should follow the advice of the hon. member for Yeoville, then the hon. member will be able to have a great time in this House during the Budget debate next year. Because then the Fund would have been drained. No, Sir, what the hon. member proposed is no solution to the problem. The obvious solution—a solution which has often been used in the past, also by the United Party Government—is to increase tariffs.

The hon. member as well as other hon. members on that side complained a great deal about our cost of living. Well, of course it is true that the cost of living is high. But that is a problem which is not only found in South Africa but all over the world. In most of the other countries in the world the cost of living is higher than in South Africa. Cost of living is in fact also a problem in South Africa, but Mr. Speaker, I believe that we have a much more serious problem in South Africa. That is that our standard of living is too high. As a nation our standard of living is too high. We are not living carefully enough. We need only go to the garages and furniture stores to see how extravagantly many people are living. One really feels ashamed, Sir, if one sees what cars pass for second-hand vehicles at garages. Cars with a lower mileage than 10,000 miles, often not even 6,000 miles, pass for second-hand cars. But even for those cars there is no real market in South Africa because we prefer to buy shiny new cars. Go to the furniture dealers and you will discover what is happening at these dealers in second-hand furniture. It seems to me that that, just like women’s clothing, has virtually become a fashion with us as a nation. I am referring to the rate at which new furniture is acquired. We shall have to go slowly and we shall have to spend less. And we shall have to save more. The hon. member for Yeoville said during the Budget debate that the Management would have to see to it that Railwaymen worked more. It is not necessary to single out the Railwaymen for that. It is really an admonition which should be addressed to all of us in South Africa. We are not working enough and we are not doing enough productive work. A nation which does not work does not continue to exist. We have really inherited a type of colonial complex. Originally ours was a colony which was exploited. Those who came here came to get rich quickly and came as administrative officers and certain work was simply not done. We as a nation cannot afford that. Instead of hurling accusations to and fro we as Government as well as Opposition can rather put our shoulders to the wheel and encourage all our people in South Africa to do more productive work.

Mr. Speaker, the hon. member for Malmesbury took exception to the suggestion made by the hon. member for Yeoville when he criticized the hon. the Minister for using the Schumann Committee’s recommendation as an excuse for his proposals. He suggested that we on this side of the House on previous occasions had asked for the implementation of the recommendations of this Committee and that that was all that was being done. I should like to remind the hon. member for Malmesbury of a passage from the hon. the Minister’s speech when he presented his Budget. This is what he said:

That was the recommendation. But what has the hon. the Minister done? He has increased suburban first and second class passenger fares by 20 per cent in one year. Is that the carrying out of the gradual increase over ten years as recommended by this Committee? When one goes a little bit further one finds that this passenger traffic—the suburban and train passenger traffic—in accordance with the Minister’s own estimate, is to provide an additional R7.9 million of taxation. I therefore fail to see how the hon. member for Malmesbury can say and suggest to us that there is not a section of the community that has been asked to bear a very heavy burden. R7.9 million represents 15 per cent of the total additional income which the Minister is wanting this year and which he hopes to get by way of increased tariffs. When the hon. member says to me and to this House that we are exaggerating in so far as the question of cost of living is concerned—that the people are living too lavishly—I want to ask him who are these people that are being loaded with 15 per cent of this additional tax burden. Who are the users of the passenger trains? They are not the people who have official motor cars or firm motor cars to travel around in. They are not the people who have tax-free travelling allowances that are paid to them by their employers. They are the ordinary people of this country of ours. They are the people who are travelling in the trains. And when the hon. member goes further and accuses us of trying to introduce a class distinction, I agree with him. There is no class distinction, we are all South Africans. But there certainly is a distinction in income brackets. I should like to ask him whether he listened to the speech of the hon. member for Vasco when he pleaded with the hon. the Minister and supported what we were asking, namely for some help and some alleviation of the plight of pensioners. I am sure that this vast body of people who have served this country and the Administration over a number of years, will be deeply disappointed at what has emerged from this Budget debate in so far as their position is concerned. The hon. the Minister, despite requests, has refused to remove the restraint on pensioners who wish to seek employment in order to augment their incomes. We have in this House, from both sides, offered high praise to the servants of the Railways for what they have done in the past and for what they are doing. But when it comes to meeting them in the evening of their years on pension and when they want to do a little bit of hard earning—not to live in luxury but in order to make ends meet—they have restrictions placed upon their liberty so to earn.

General disappointment will be felt also that not one member on that side of the House of the Select Committee on Railways and Harbours—and for instance the hon. member for Langlaagte and the hon. the Deputy Minister of Transport—not one of them stood up in this House and tried to find some formula whereby these pensioners could be assisted. This matter has been raised over and over again and I make no apology for raising it again to-day. During the Committee Stage of the Railway debate during last year this question was raised and the hon. the Minister with very great agility passed it over and said that it was not his responsibility. He said that it was the responsibility of the hon. the Minister for Social Welfare and Pensions. It was raised again at the beginning of this year in the Part Appropriation Debate. It was raised on the motion to go into Committee. And I raise it again to-day, Sir, and I want to quote to the House a case by way of illustration. There is a certain gentleman in this town who served the Administration for 41 years. He started as a youngster on the tugs and he eventually qualified as a tug master. After 41 years he went on pension. His eyesight has deteriorated. Both he and his wife are now of advanced age. Their six children are grown up. He receives a pension of R83.22 per month plus a temporary allowance of R35, which gives him a gross income before taxation of R118. He is a man who wants to live in a normal type of flat and his flat rent in itself is R44 per month. Presently he finds that on what remains he is unable to maintain his standard of living. He does not want charity. He wants to take employment to augment his income. I know he can rejoin the Railways if there is a job for him. But I think we all heard with some surprise that the Minister cannot guarantee that these men will be taken back into the Railways. They may not all be re-employable. But he does not want to go back to the South African Railways. As a result of his state of health and his eyesight he is a man who is nevertheless eminently suited to take on a job as a superintendent of a block of flats. But what happens? If he takes a job in which he gets free accommodation and some remuneration, totalling in value say R70 per month, what will happen? The means test is immediately applied to him. He has now gone over the R150 per month mark. The Administration will cut the temporary allowance to nil and as a result of his endeavours to supplement his pension by earning R70, he will have to pay R35 to the Government and is left with 50 per cent of such earnings in his pocket. When this matter was raised in the Part Appropriation Debate earlier this year the Minister made this statement:

Surely the time has come when one should think of a person who has served the Administration for 41 years. If this man wants to just sit at home and be idle, he still gets his R35 from the State. But suppose he wants to be active and to do some work? He must immediately be penalized and he loses 50 per cent of a salary of R70 by way of taxation because he is an energetic man. I do not think the Minister of Pensions can be an impediment in the way of the Minister granting some relief in this regard any longer. During this sitting the Minister of Pensions has at least tacitly in his capacity of Minister of Housing indicated that he feels the time has come when some relief should be given to these people. What has the hon. the Minister done? He has now regarded R150 for a married couple and R75 for a single person as quite inadequate to place them out in the open market as far as housing is concerned. On the 5th August the hon. the Minister set the limits on those entitled to be subsidized by the Government on a subeconomic and economic basis. He raised the qualifying limits substantially. The existing R80 limit is increased by 25 per cent to R100 per month. In respect of the man with a small family of two children, the limit is increased from R180 by 25 per cent to R225. In respect of a large family the limit has been raised from R250 by 20 per cent to R300. If those are the assessments when assistance must be given to people in housing, how can it be said that there is any justification for pensioners still being penalized if they wish to augment their pensions and the small temporary allowances which they receive. Granting this relief will not have cost the Administration one cent more than it will pay if every one of these pensioners were to just sit at home and do nothing. It will not mean more expenditure on behalf of the State and the Administration, but it will remove the penalty on those who want to go out and work and augment their incomes in their last years so as not to be a burden on relatives or friends.

A matter in respect of which there apparently has been no indication of planning, has reference to the suburban line of Cape Town. Figures which have just been released in the monthly bulletin of statistics indicate that during February to March this year there was an increase of 1,000,000 additional journeys in the course of the one month. From 1964 to 1966 the annual increase had been at the same pace. It is a great disappointment to find that there is nothing in the Estimates and that nothing has been placed before Parliament in regard to the introduction of a third line on this Cape suburban main line. I believe that the hon. the Minister and other members of this House drive over De Waal Drive coming into the city. If they would look down to the foreshore on a sunny day, they would see the glint of motor cars parked by the thousand. One must visualize that in the very near future that foreshore will be developed, and these motorists will not be able to bring their cars into the city and they will in increasing numbers be using and be compelled to use the suburban lines to get to and from their work. That is definitely going to happen. All that I am pleading for now, is that the Railway Administration will realize that it will be impossible, in a city geographically constructed as Cape Town is, to be able to take that motor traffic into the city and to house it in parking garages or other places. I want to record my disappointment that nothing has so far been done to establish a third line that will provide for fast traffic not being delayed by slow traffic on the suburban lines. A further problem is the provision of facilities for people driving to a suburban station to leave their motor car at the station during the day while they use the public transport system. I know the hon. the Minister will tell me that I must talk to his colleague, the Minister of Transport about this. I wonder whether the hon. the Minister of Railways, who will be looking for this additional traffic, could perhaps consult with the hon. the Minister of Transport in regard to the provision through local authorities of more adequate parking facilities at suburban railway stations. I regard this as an important matter that needs attention.

Another matter which has come to me as a considerable surprise, was the disclosure made by the hon. the Minister in reply to the hon. member for Orange Grove on Friday the 5th August, when he was asked certain questions about where we were acquiring the steel rails used by the South African Railways Administration. The reply of the hon. the Minister was an interesting one, although at the same time rather a startling one. In 1960-1 the Railways required 46,140 tons of rail. There were no imports and the rails were bought locally from the South African Iron and Steel Industry. In 1961-2 89,991 tons were required. Again there were no imports for the same reason. In 1962-3, 53,428 tons were required. In 1963-4, 79,000 were required and also purchased locally. However, in regard to 1964-5 we find some incredible change. Of a requirement of 121,600 tons 56.600 were imported.

Iscor could not supply it.

If that is the case, I want to know the following. Whereas Iscor supplied in the past as much as 89,000 tons per year, why could it supply in 1965-6 only 16,000 tons of the required 142,000 tons?

The general demand for steel was so high that they could not supply it.

126,000 tons had to be imported. If Iscor could supply only 16,000 tons, it indicates a rather staggering reduction in the production of previous years.

With these remarks I want to associate myself with the amendment moved by the hon. member for Yeoville. I say that this Budget which we have had from the hon. the Minister is cold, cold comfort to the ordinary man in the street. I have pointed out that it is the passenger train user who is going to be burdened with 15 per cent of the taxation; that is directly as a train user, and how much more is that unfortunate person going to bear indirectly, through increased costs, of this additional burden of taxation? Sir, in those circumstances, the circumstances which have moved the Minister of Housing to make the concession which he has made, I think it is most regrettable that the Minister of Railways is unable to see his way clear to make a concession to those loyal pensioners—and there are some 20,000 of them in this country—who have served and built up our Railways. They are now deprived of the opportunity of earning a supplementary salary without loss of all or part of their temporary allowances because the means test has not been removed.

One thing is very clear from the debate up to now and that is that the United Party is on the run. I will tell you why I think the United Party is on the run. The United Party is on the run because in the two speeches which we have thus far had in this second-reading debate the United Party had nothing whatsoever to say about the Rates Equalization Fund, except for one single mention in the speech made by the hon. member for Yeoville. I would like therefore to return for a moment to that very point which the United Party are running away from. It is very clear why they are running away. No mention whatsoever was made of it in the motion which was introduced here either. The position is that the United Party does not regard the railway worker in the same light as the National Party regards the railway worker and the working man in South Africa. I shall tell you in what light we regard the railway worker and the working man in South Africa.

As voting cattle.

We regard him and his family as the salt of the earth in this nation and that is why we have had these Estimates. This entire debate is proof that this Nationalist Government wants to look after its railway people and its working people and that the United Party does not want to do so because the United Party only seeks that which is popular for the moment. Let us put that very clearly and positively.

May I ask you a question?

My time is limited.

Who is running away now?

This debate and these Railway Estimates are in fact proof that the Nationalist Government wants to look after its railway people and that the United Party does not want to do so. The Nationalist Government is not seeking popularity. The Nationalist Government is seeking only one thing in the interests of the worker in South Africa and that is to do that which is right and fair and is in fact in the interests of the worker. What have we had in this debate? Once again the United Party, as it has so often done, tried to run with the hare and hunt with the hounds. As it has so often done the United Party again blew hot and cold in this debate and I shall furnish proof in support of my statement. If there is no money in the Rates Equalization Fund, as was almost always the position under the United Party rule when the Rates Equalization Fund was almost always bankrupt, then they accuse the hon. the Minister of not being able to see to it that there is money in the Fund and that he cannot therefore look after the interests of the railway workers. If the hon. the Minister builds up that Fund in order to see to it that it does not become insolvent and if in consequence it becomes inevitable that railway tariffs must be increased, then we hear the accusation, as we did once more in this debate, that the hon. the Minister and the Government are not looking after the interests of the man in the street and that they are forcing up the cost of living. If the Nationalist Government does the one thing, it is wrong; if it does the other, it is also wrong. However, the United Party cannot come forward with a really positive plan for how this should be done under present circumstances, a plan which can withstand logical arguments. That is something which the United Party are simply not capable of doing. How the United Party has blown hot and cold on the Rates Equalization Fund and the increasing of tariffs appears from the following examples which I want to quote. In 1962, before the tariffs were increased on 1st September, the principal speaker on the United Party’s side made the following statement in this House—

It should have been R100,000,000, it was said. But what did the hon. member for Yeoville say in this House the other day when the Budget debate began? He said—

One United Party member after the other stood up and accused the hon. the Minister of lack of confidence. In 1962 the first speaker on the United Party side, when the same matter was being discussed and the hon. the Minister asked him across the floor of the House, “Where must I obtain the money for wage increases from—by increasing tariffs?”, gave the following reply—

But when the hon. the Minister did do so, when the tariffs were increased by 10 per cent on the 1st September, 1962, what did the United Party then do? The United Party then came along and kicked up just as great a fuss in this House about the increasing cost of living as they are doing here now. I have read through those debates very carefully; that is just about all the Opposition spoke on in that debate. Precisely the same arguments were raised then as the United Party is raising now. At that time it was also said that—

The former member for Wynberg, who was the principal speaker on the United Party side, said the following—and note how they said exactly the same thing then as they are saying now—

Just listen to how dramatically he carried on here in the House about the same thing, just as the hon. member for Yeoville did here. It was of no avail, just as it was of no avail when the hon. member for Yeoville stormed in here the other day, huffing and puffing, pushing and barging, and made the kind of speech he usually makes here, a speech not entirely without its merits as far as eloquence was concerned, and to which the hon. the Minister made such a devastating reply so soon afterwards. In his speech the hon. member labelled the hon. the Minister’s speech as “the funniest that he has listened to in this House for years—a comic speech.” The hon. member for Yeoville’s speech put me in mind of a cow which had yielded a fine bucket of milk which Uncle Ben had then sent flying with one kick. It then became clear to us who was comical and who was funny! But listen to what the hon. member for Wynberg had had to say in 1963 in a similar debate—

What happened then? The great trouble with the United Party, as the hon. member for Swellendam suggested here this afternoon, is that it always exaggerates so tremendously. What were the practical results of the tariff increases in 1962? Precisely what they are going to be now. Let me refresh hon. members’ memories a little. A few months after the tariff increases on the 1st September, 1962, the Cape Argus (on the 28th February, 1963) wrote as follows—

They go on to mention a long list of articles, just a few months after the tariffs were increased. Instead of the tariff increases having a devastating effect on our economy, the Cape Argus wrote as follows on the 22nd January, 1963, a few months after the increases—

That proves two things. That proves how wrong the United Party had been in that debate, as they usually are, and it proves that other factors besides the Railway estimates, have an effect on the increasing of prices.

May I ask you a question?

My time is limited and the hon. member is holding me up. It is extremely irresponsible of the United Party to plead here that wage increases should be recovered out of the Rates Equalization Fund. We are living in a hostile world; we do not know what the future holds for us. We could be affected economically and we must see to it that we are safeguarded against any possible shocks. It would be foolish of this Government, indeed of any government, not to take those possibilities into account. Is that what the United Party expects of us? It is most essential in the interests of the railway worker that this Fund be kept strong in case of unforseen circumstances. There was a time when they agreed 100 per cent with that view. This afternoon they are running away from it. They said again in this debate that the money for wage increases should be taken out of the Rates Equalization Fund. I take it that there are successful businessmen in the United Party. Would they in their businesses, exhaust the only reserve in their businesses entirely in order to grant wage increases to their staff, without making any provision for the future? Would they rely entirely on good fortune instead of planning for to-morrow? And then it is the United Party who is accusing the hon. the Minister of lack of planning and insight! That is precisely why the United Party is so bankrupt and that is why they look as they do in the Opposition benches. The Nationalist and the Nationalist Government, as has been proved again in this debate, are people who look to the future. The United Party are people who harp back to the past, because they do not plan ahead and because they want to rely on good fortune, also as far as the railwayman and his interests are concerned. We refuse to do that. We are building the Rates Equalization Fund up because we have a responsibility towards our workers; because we know them as people who are the salt of the earth in this country, people whom we shall have to look full in the face again, people on whose behalf we cannot act irresponsibly, as the United Party has again proved in this debate it wants to do. That is why the United Party is not politically serviceable; that is why the United Party are political opportunists, also as far as the railwayman and the ordinary worker in South Africa are concerned. Once more in this debate, as they have done in the past, they want to be everything to everybody at the same time and that is why they are always falling between two or even more stools. As long as the United Party does not want to learn that it must adopt an attitude, and adhere to and persist in that attitude if it really has the interests and the worker and the ordinary man in the street at heart, the ordinary working man will know whom he can trust, and it is not the United Party.

Mr. Speaker, I want to approach this matter from another angle. Since the Opposition have so stubbornly opposed the tariff increases in this debate and since it is realized that the R35,000,000 for wage increases could have come from no other source than from tariff increases unless one were to take it out of the Rates Equalization Fund, the Opposition is in reality opposing the wage increases granted to railwaymen. One can come to no other conclusion from the attitude of the United Party. Wage increases could not have taken place without tariff increases. The hon. the Minister warned repeatedly that, if wage increases were granted the tariffs would have had to be increased. I say that the only conclusion one can come to from the United Party’s attitude is that they do not have the interests of the railwayman at heart, because what they are saying in actual fact is that the wage increases should not have been granted because it would not then have been necessary to increase the tariffs, and we shall tell this to the Railway worker. That is why, in their arguments in this debate, the United Party is jumping around like a cat on hot bricks, from one brick to another. That is why they are running away from the Rates Equalization Fund in the Second Reading debate. They only referred to it in one or two sentences.

Mr. Speaker, these tariff increases are unpleasant at the moment, but they are absolutely unavoidable. The hon. the Deputy Minister pointed out yesterday that the tariff increases are being introduced on a very selective basis; I do not want to go into that. I do not want to go into the negligable effect the tariff increases will have on people; we accept that it will have an affect on them, but these tariff increases are a double blessing in two respects. In the first place it is a blessing that the recommendations of the Schumann Commission in regard to tariff increases are now going to be applied. In this way a foundation is being laid on which the Railways will be able to build successfully for many years. And who is going to benefit by that? In the first place it will be the railwayman and in the second place the user, the ordinary man and woman in the street, whom this Government is looking after since they are our people and we accept responsibility for them. We are not governing for the economic liquidation of the ordinary man and woman in the street. We are governing with planning, not for what is popular for the moment only, but for what is in the best interests of the country and particularly the ordinary man and woman in the street, as well as with a view to the future so that they will continually be able to improve their standards of living and so that their circumstances and way of life in South Africa will continually improve.

I now want to come to another point and that is the achievements of the S.A. Railways, which has been omitted in this debate as a result of that attitude of thé United Party to blow hot and cold and merely criticize. The other day I read a book entitled “’n Eeu van Vervoer: 1860 tot 1960”, in which is described how remarkable and unprecedented the achievements of the S.A. Railways have been. In that book, which was written by an objective person, R. van Lingen, one finds that in the chapter “glanspunte in Honderd-jaar” a mere three quarters of a column, less than half a page, has been devoted to the highlights under United Party rule, but that four whole columns, two full pages, have been devoted to the highlights under National Party rule from 1948 to 1960. six years ago. I wish I had time this afternoon to point out more of these achievements, to point out how hard work, with enterprise, deeds and planning on the part of men who with vision and with remarkable exertion kept the Railways in our country on the go. has led to the unparallelled progress and development of the Railways. The development of the Railways under National Party rule has gripped even the imagination of those people inside and outside South Africa who are not favourably disposed towards the Government. In support of that statement I just want to read a quotation, and I shall mention my source after I have read the quotation (translation)—

And do you know where that comes from? My source is the Standard Bank Survey of May, 1966. By analogy I want to suggest it be considered whether the Railways does actually receive adequate publicity for the great development in the economy of this country for which it has been, and still is, responsible. The hon. the Minister stated in the Railway Estimate’s debate at the beginning of the year that we now had a new national sport in South Africa, which was criticising the Railways and blaming it even for things for which it had not been to blame. That is what we are getting again in this debate from the part of the Opposition, and it is something which we get year after year.

In this connection I want to focus the attention on the following particulars. Capital investment in the Railways has increased on an enormous scale. In 1948 the amount stood at R508,000,000, and to-day it is more than R1,900,000,000, an increase of more than R1,400,000,000. When the hon. member for Yeoville speaks here of increased efficiency in the Railways and of the increased numbers of high officials, etc., and of a top-heavy structure in the Railways, does he not comprehend this simple fact of the enormous growth of the Railways since 1948, which has entailed an increase of more than R1,400,000,000 in only 18 years? That is the money which the National Party Government has found for the Railways. I think that before the hon. member again makes a remark such as the one he made this afternoon about the high officials of the Railways, he must bear this fact in mind. He must also bear in mind how those people are working themselves to the bone in the interests of the Railways and of the country. Then he will not so lightly undertake to insult those people. The revenue of the industry has kept pace with the capital investment and I am now coming to that question which the hon. member for Yeoville raised in this very debate. In 1948 the revenue was R165,000,000, but to-day it is R616,000,000 and it is being estimated at R672,000,000 for the year ending March, 1967, and then the hon. member speaks as he did in respect of high and greatly respected officials in the Railway Service. The additional annual capital investment proves that everything possible is being done to increase the carrying capacity of the Railways. The ratio of revenue to capital investment has displayed a constant improvement. In 1961 the percentage ratio was 27.40, while in 1965 it was no less than 32.21, a proof of good management of high production on the part of diligent workers and of a steady strengthening of the financial position of the Railways. Against this background it is no wonder that the hon. member for Yeoville in his speech this afternoon puts me in mind of a man who is full of aches and pains and who tries quite inaffectively to relieve those pains but does not succeed because he does not take into consideration this tremendous growth of the S.A. Railways under the National Party rule. The Railways Administration is to-day one of the country’s major money-lenders and investor of funds. At the end of March, 1967, the total interest bearing capital of the Railways will run into the total of R2,000,000,000, and may even exceed that amount. New works for the following year only, total more than R21,000,000. As tremendous an amount is being appropriated for further electrification works, i.e. R26,280,000. Hundreds of miles of railway lines have been doubled since 1948. Sections which have been electrified include Cape Town to Beaufort West, 320 route miles, and from Durban to Postmasburg via Johannesburg and Kimberley up to Hotazel which will be a distance of plus-minus 1,000 miles when completed. 4,300 single track miles have already been electrified. New railway lines are being constructed every day. This oil pipeline which has also been criticized to a certain extent by the Opposition, the purpose of which is to pump petroleum products from Durban to the Witwatersrand, is an enormous undertaking which is costing more than R20,000,000, and it represents an entirely new development in this sphere in South Africa. The S. A. Railways has kept pace with the economic development of the country in a brilliant way, and what a splendid achievement this is in itself! It must be understood that if the Railways had not been able to keep pace with the tremendous economic development of the country—which has been described as fantastic and unparallelled by people outside this House—it would have had a tremendous retarding effect on the economy of the country, and the ordinary man and woman in the street, the ordinary workers, would have been seriously affected economically and would have found themselves in a very unfortunate position, which would have been much worse than these tariff increases could ever cause.

To-day the Railways and Harbours Administration handles all the traffic coming into the Republic and all the passengers and freight entering the country by air. It handles the greater portion of all goods and coal, and a large percentage of all passengers using land transport in South Africa. Surely this is a tremendous undertaking which testifies to a growth and development which has been almost unprecedented. This is being done with an extremely minimal accident figure on the Railways, and in this regard we want to pay tribute to the railway people in particular for it having been possible to carry all this freightage and passengers with so few accidents. The Railways to-day is the safest means of transport, even including going by foot.

The success of South Africa’s industrialization may just as well be attributed to those two steel rails criss-crossing the country as to any other factor, and that is why we say thank you very much to the men who are devoting their lives with remarkable dedication to it, from the hon. the Minister right up to his most junior official. That is why we on this side of the House are paying grateful tribute to what they are doing. The deserve it, and they also deserve more publicity for these exceptional achievements of the Railways. What the railwayman deserves least of all is this criticism on the part of the Opposition when it is this Government which is trying to look after their interests, not only for to-day but for to-morrow and the day after that as well. That is why the working man and the working woman will not only understand these minor tariff increases and the selective way in which they are being applied, but will also cooperate in order to ensure that they function smoothly. I think we can also assume that the industrialists will contribute their share because they will know, better than the Opposition speakers, that, by contributing their share, they will counteract inflation. It will place South Africa on an economically stabilized road once more, and as a result the ordinary worker, the very person we are looking after, will benefit greatly through these Estimates having been submitted. Instead of the Estimates being a red letter day in the lives of the ordinary man and woman in South Africa, as the hon. member for Yeoville said, I can tell him that it will be for them that very day on which they will be able to combat inflation which has cropped out of our control here in South Africa as a result of the influx of capital from overseas, which nobody could have foreseen, least of all the Opposition. That was the most important reason for it. This inflation is the result of growth in South Africa, of a period of prosperity. That is why the working man and woman, particularly the Railway workers, know whom to trust and in whose hands they must put their future—those of the National Party Government. [Time limit.]

This tirade we have just had from the hon. member who has just sat down is proof and confirmation to us of the knock that the Nationalist Government has had to take in these last two weeks. They are still reeling. If this is the effect it has on the members of this House, Sir, just imagine what it will be on their supporters outside. I have never seen the Government benches so confused, bewildered, bemused and embarrassed as they have been in this debate. The country was advancing and we have had a boom. The country was flourishing and more and more industries were being opened, and salaries were being increased. We were on the crest of the wave. They had a wonderful election victory, but the people did not know what was in store for them. They were not warned and when we warned we were not listened to, but now has come the anti-climax. The hon. member who has just sat down said that the Nationalist Party is “môre se mense” and we are “gister se mense”. What has this Government offered them for to-morrow? What has this Minister of Transport offered them for to-morrow? He gives them no hope at all. What is the Equalization Fund for, if it is not to tide us over in times like these? But it cannot be used because the Minister sees no hope for the future. He is afraid of what lies ahead in the future. That is “more se mense”.

Tell us about “gister se mense”.

I will tell the hon. member about “gister se mense”. This member is trying to brighten up the position for his fellow members and he has read the statistics showing the growth of the S.A. Railways. All he can tell the country is how the Railways have grown. Surely nobody expected the Railways to stand still in the 18 years of Nationalist rule. Surely the Railways had to go forward with the growth of the rest of the country. I suppose we should be thankful that under a Nationalist Government there has been any progress at all. But I would like to remind them. They talk about yesterday. Do they remember the plans that Mr. Sturrock had for the Railways when the United Party went out in 1948? What about the Hex River Scheme? They haven’t even started on it yet. They are only carrying out experiments now to see whether they can put down a cement floor, and that after 18 years! What about the rest of Mr. Sturrock’s plans? They were all set aside, the same as the Orange River Scheme. If only “gister se mense” could have kept control of the Government at the time, what great prospects there would not have been for us, and what great progress would not have been made! There is no doubt that the incompetence of the Administration over the last two years is now bearing fruit. The chickens are now coming home to roost, and just see how unhappy the hens look. They have to rear these chickens. We will not allow them to forget the warnings we gave them. Were these warnings not all ripe? What we forecast has all come true. Could the position be worse than it is now? Everything we forecast has come true. What hope does that hon. member offer to the Railwaymen? Take the increase in the cost of living. In this Railway Budget one had hoped that something would be done to reduce the cost of living, but it will just have the opposite effect. I am not going to go into all the details. Members on this side have already mentioned how it will affect the cost of living, but I want to give just one example of what will happen to the people in my area. We know that the Africans are coming out of the Transkei in increasing numbers because they are wanted by industry and by the mines. In fact, the position is so bad that private farmers are now allowed to go and recruit labour on their own in the Transkei. With the increase in the rail fares, all the industries and the municipalities will find that the cost of their labour will go up merely because the rail fares they have to pay have been increased. That is another example of how the cost of running the country will go up as the result of the increased fares. But I am surprised that we have not heard from Government members any plea for the Railwayman. The hon. member for Green Point dealt at length with the question of the pensioner and other members here have done so, but what hope have hon. members opposite offered to the pensioners? What appeals have been made on their behalf? In the last election my majority was bigger than I thought it was going to be, and do you know why, Sir? It was because the Railwaymen voted for me, and they said they were going to vote for me, and they said it quite openly. They even said it to the Nationalist canvassers. They asked what any Nationalist Member of Parliament had ever done for the Railwaymen in the Transkei. In the Committee Stage I raised the position of the Railwaymen again with this Minister and I dealt with the grievances those people have, that they are being discriminated against in favour of other public servants in the Transkei. I pointed out that the Railwaymen are not getting the allowances which are paid to other Government workers in the Transkei, and I pointed out to the Minister that the excuse he had given for this discrimination was that the Railwaymen were not seconded to the Transkeian Government and therefore they were not entitled to the allowances, whereas the civil servants who got the allowances received them because they were seconded to another Government. I want to remind the House also that these allowances paid to civil servants are almost equal, and in some cases are more, than the salaries paid to the lower-grade Railwaymen. They get up to R80 a month in extra allowances. But the Minister gave the reason that these men were not seconded. When I pointed out that there were Government officials who were not seconded to the Transkeian Government getting allowances, whereas Railwaymen were not, the Minister said that he had checked up after I had spoken. It was unnecessary to check up, because he knows my facts are always right, but he checked up and he found I was right. He took the matter up with the Minister of Finance and he was told that the people in the Audit Department were getting the allowance because they came into such close contact with the Transkei Government.

This hon. Minister said that he was not satisfied with that and was going to take the matter up at Cabinet level. Presumably he is going to see that the allowance is taken away from members of the audit staff. I see the Minister confirms that. When I asked, the Minister to right an injustice, what does he do? He says he is going to make that injustice of general application. When I asked him why Railwaymen and other civil servants qualify for an allowance while in South West Africa he replied that this allowance had been paid for such a long time, I think he said since 1924, that the servants concerned had now acquired a vested right in that allowance. But so has the audit staff in the Transkei acquired a vested right in the allowances and if the Minister is going to take away the allowances he will be taking away their vested rights because they have become used to the allowances. They went to the Transkei originally on the understanding that they would receive these allowances and they are, in fact, getting them. The Minister of Finance says that the reason why he pays his audit staff these allowances is because of the fact that they come in such close contact with the African Government. As far as that is concerned, I should like to point out that no servant comes into closer contact with the Africans in the Transkei than a Railway servant. So if close contact is sufficient reason for the hon. the Minister of Finance to pay his officials the allowances so much more is there reason for the hon. the Minister of Transport to do the same in the case of Railway officials.

We are therefore not asking too much if we ask the Minister to see that his officials are treated on the same basis. The Minister said that these allowances were not being paid on account of hardship or of the nature of their work. He added that they would not get such allowances in Zululand. In this connection I want to point out that the position in Zululand is not the same as that of the Transkei. Firstly, Zululand is not yet on its way to independence. Secondly, the White people of Zululand are not leaving. There is as yet no exodus of White people out of Zululand. The other day the hon. the Minister of Bantu Administration read out with glee the number of traders in the Transkei who were being compensated and was pleased to say that hundreds of them had been dealt with already. That means that hundreds are leaving. Another consideration is thatf in Zululand Railwaymen do not live in such isolated conditions as they do in the Transkei. In Zululand they have communities living close together. The position in this respect is entirely different in the Transkei.

If we must believe senior Government officials the exodus of White people from the Transkei is not just a trickle. Even the Commissioner General said the other day when he opened a school hall in the Transkei that “Die tweede groot trek” is on. “Die eerste groot trek was die boer en sy roer oor die groot rivier en nou is dit die tweede groot trek—die Engelssprekende en die Afrikaanssprekende uit die Transkei,” he said. Well, if that is so it means that the White communities in those villages are getting smaller and smaller. Some form of compensation must be given to those White people staying behind, some encouragement for them to remain there. As I pointed out the other day, a handful of people cannot keep tennis courts going nor golf courses and bowling greens. They must have social life. They are used to these amenities in the bigger towns outside the Transkei. Now they are losing their recreation facilities and therefore they must be given some form of compensation to encourage them to stay on.

If the hon. the Minister would like to see the Railwaymen in the Transkei playing their part in seeing that the goodwill between the Government of the Republic and the Government of the Transkei is maintained, he must see to it that they work under happy conditions. They must not be allowed to work under grievances. There must be no desire on their part to get away from the Transkei as soon as they can. But that desire is with them already. They should rather be placed in the position of the officials of the Department of Bantu Administration who want to stay there. And why do these officials want to stay there? Because it pays them to stay there and it pays them to do so on account of the allowances they are receiving. So I say Railwaymen should also be encouraged in the same way to remain there.

Conditions should be created for them where they can be happy in their work and where they can feel that they want to stay on of their own accord. But it is not only the White traders and the White villagers who are leaving but White officials too are leaving because Africans are already starting to take over lower grade jobs. When this process has been carried through there will be no White government official left in the Transkei. Also the Railwaymen see that some of their own colleagues are leaving because the Government has appointed Bantu drivers for some of the buses. The Railway buses used to be driven by White drivers. Now the Africans are taking over. I should like the hon. the Minister, as a matter of interest, to enlighten us as to the result of this experiment of handing over the buses to African drivers. Are they proving themselves as being satisfactory and is it intended to extend this policy even further?

I raise this particularly because it is not only bus drivers who are involved. There are engine drivers as well. There must be some long-term policy of the Government in this respect? Is it the policy also to take on African engine drivers? The Minister of Bantu Administration told us the other day that the interests of the White man were dominant in the White areas while in the Black areas the interests of the Black man were dominant. That is why I want to know whether it is the long-term policy of the Railway Administration to substitute Black men for the Whites at present employed. Will Bantu eventually take over engine driving, conducting and, in short, be allowed to run trains entirely on their own?

Returning to the question of allowances, I should like to say that I think the Minister is not treating this question with the importance that it deserves. He thinks he can dismiss the matter by a wave of the hand and by saying that these men are not seconded and are not working for a foreign government. I want to impress upon him that there is dissatisfaction amongst these people. Moreover, it is not fair that they should be discriminated against in: this manner. I know the Police are being treated in the same way, a matter which I am going to raise with the Minister of Justice. But take the railwaymen all out of the Transkei and bring the communication system thereby to a collapse and what will the future of the economy be there? These people are just as essential for the well-being of the Transkei and to maintaining our relations with the Transkeian Government and Transkeian people as are the other civil servants who are being paid these allowances. Therefore I should like the hon. the Minister to think again on this matter, to reconsider it and to-ensure that he has a contented staff. He should see to it that they are not being discriminated against as compared with the other civil servants in the Transkei.

The hon. member who has just sat down, objected to White bus drivers being substituted by Bantu. But that that does happen, is in accordance with the policy of this Government. The hon. member for Karoo, however, has previously pleaded in this debate that non-Whites should also be used as train staff in White areas. It is quite obvious to me that the Opposition does not have the vaguest notion as to what this debate is about. They are groping about in the dark and do not know what they want. If the hon. member for Transkei did not anticipate that White bus drivers would be replaced by Bantu in due course, he did not have the vaguest notion as to what the policy of the Government is.

I merely asked what the Government’s further policy was in this regard.

Another matter raised by the hon. member is the question of pensioners. He said, inter alia, that in many cases the allowances paid to pensioners were higher than their actual pension. But the fact that this is so, is due to the meagre wages and salaries they received during the United Party regime. It is therefore something we inherited from them. On a previous occasion I pointed out that certain railway workers, who retired in 1947, only received a pension of R8.70. That was a result of the extremely poor salaries which the United Party Government paid our railway workers. What is the position of that railway worker to-day? To-day he no longer receives a pension of R8.70, but one of R92, and to think that there is still an hon. member on their side who has the audacity to talk about this! Hon. members on the opposite side should rather pull their hats over their eyes and keep very quiet. They have such a black past that they should not talk about it.

The hon. member also spoke about the “Second Great Trek”. His argument is quite out of context here. Each of us knows what the intention was. We are grateful to-day that there are English-speaking as well as Afrikaans-speaking people who are joining forces on the road of South Africa. Then the hon. member also said that the things we are doing to-day are their policy. If that is the case, why are they sitting in the Opposition benches? Why do they not say that they are sincerely grateful that we are carrying out the policy? But the fact of the matter is that they are appropriating to themselves things which are not their due. They mention a series of things, such as the Orange River Scheme, Sasol, Iscor, and so on, and they are trying to claim for themselves the credit for these. They are the people who always referred to more white elephants which were being built. When the old National Party commenced building the steel works at that time, they experienced violent opposition from the Opposition of that time. In subsequent years when the United Party was in office, they did not as much as raise a finger to effect extensions. Further extensions were also effected after this party had come to power in 1948. We also caused a second Iscor to be built, and at present we are building a third steel works. The same applies in respect of Sasol. That side now wants to boast of and make out that this project was a brain-child of the United Party. That side is trying to have a say in the matter, but they have no say in it whatever.

Your train is running off the tracks.

The hon. member for Green Point said that Railway pensioners were being treated unjustly. According to him their pensions are being reduced. Well, Mr. Chairman, that is also not true. That is entirely a faulty statement. Under certain circumstances their temporary allowances are in fact being reduced. For instance, if a pensioner earns more than R1,800 per annum, his temporary allowance is reduced. But the pension as such is not being reduced at all. We are therefore very grateful to the hon. the Minister for listening to our pleas and granting the concessions. It is not necessary for us as Nationalists to ask things of this nature across the floor of the House. We produce actual results. Many pensioners return to the employ of the Railways. They are still strong enough to be an asset to the Administration. They have worked for the Railways all their lives, and they have been trained in that direction. They are capable of performing further very valuable work. For that reason the hon. the Minister decided that their allowances would remain unaffected should they, after having retired, work for the Railways Administration again. I think that it is a special concession which our people appreciate very highly.

Mr. Chairman, I listened attentively to everything the hon. members on the opposite side had to say, because I knew that I would have to reply to points touched upon by them. But they really did not mention a single matter to which I feel called upon to reply. That is why hon. members on this side of the House have to come forward with new points. I have a few points I want to mention now.

In the first place I want to exchange a few views on our level crossings. According to the report which covers the period 1964-5, 335 accidents occurred at level crossings. In these accidents, 94 persons were killed and 65 were injured. Of these accidents, 321 were caused by vehicles, and 85 persons were killed in these 321 accidents. Now, Mr. Chairman, we realize only too well that a tremendous amount is being done to eliminate these level crossings. Fly-over bridges are being constructed at a fairly rapid rate. A great deal has already been done in my constituency. I am very grateful that there is a programme of which the object is the gradual elimination of dangerous level crossings. But is it not perhaps possible to accelerate the implementation of this programme slightly, Sir? I feel that many precious lives will be saved by doing so. I do, of course, realize that the hon. the Minister has limits to which he must keep. For that reason I feel that interim measures may perhaps be suggested to remedy the position to a certain extent. For instance, I am thinking of the possibility that all trains should sound a danger warning at level crossings. Trains no longer make as much noise as they did in former years, and diesel and electric units do not make any smoke, of course. Oncoming vehicles are. therefore, no longer warned by the approach of a train to such a high degree as was the case previously. For that reason I feel that engine drivers should sound a compulsory warning whistle when they approach level crossings. Another point in this respect is the improvement of warning boards at level crossings. In many cases they can be made more obvious. I still remember very well that in the past there was nothing but a stop-sign at the Bloemfontein showgrounds on the way to town. Many human lives were lost as a result of vehicles which collided with trains at this crossing which only had a stop-sign. At present a fine fly-over bridge has been built there. Every time one drives over that fly over bridge one is filled with a feeling of gratitude towards the hon. the Minister and the Railways Administration for having helped to eliminate this danger point.

I should also like to say a few things about Railway housing. It so happens that we have a tremendous housing shortage in our country at present. We also see in the Brown Book that additional housing is to be provided. Our people are, of course, sincerely grateful for that. But it is also a fact that many of our people have to live in very old houses. Now, Mr. Chairman, the houses being built at present, are fine and solid, and in all respects they are better than those the United Party Government caused to be erected. For instance. these houses have been scattered all over in residential areas; consequently one does not find a complex of railway houses clustered in one spot, which creates the atmosphere of barracks and may perhaps to a larger or smaller extent cause the inhabitants of those houses to suffer from some kind of complex. Nowadays they live everywhere, even in the best residential areas of our cities. The houses are truly beautiful and they are a great advantage to those who inhabit them. But unfortunately there are still a considerable number of railway people who have to live in houses inherited from the United Party régime. For instance, I am thinking of a lot of “double-deckers” which were built in the olden days and simply had to be demolished subsequently. In reply to representations that owing to the housing shortage these housing units should rather be retained, the hon. the Minister nevertheless decided that they should be cleaned and restored so that they might still be used. We are also grateful to the hon. the Minister for that.

We know that use is being made of private tenders nowadays. We also know that many houses were not restored or done up because they were to be demolished within the foreseeable future. But in the recent past private entrepreneurs have been doing up and repairing such houses so that our Railway people might still make use of them. In the light of the housing shortage in our country, that was a wise decision.

To my mind, Mr. Chairman, the house building programme of the Railways is one of the factors which has contributed most to the efficiency of our Railways. There is no getting away from the fact that a contented worker, a person who does not have to endure anxieties and tensions, can render good service. The contented worker is pre-eminently that person who enjoys a happy homelife. For that reason the provision of good housing is so important, Mr. Chairman. This Government has already provided our Railway people with 30,000 houses, by means of auxiliary schemes and the provision of departmental houses. Those houses are of very great importance as regards the efficiency of our Railways. The inhabitants of those houses have a nest of their own. They have a healthy family life. They feel happy. They know that this Government is doing everything in its power to make them as happy and contented as possible. Therefore they realize only too well that it is encumbent on them to do their very best. They know that they are part of the Railways and that each of them, no matter how lowly his rank or how humble his work may be, is an important cog in the colossal machine which constitutes the Railways. The fact that the Railway man feels that he is regarded as an important person, inspires him to do his best—hence the efficiency of our Railways. That is why the efficiency is increasing from year to year. That is why the Railways are going from strength to strength, in spite of the labour shortage and numerous other problems with which the Administration has to cope. Every year more work is performed than during the previous year, in spite of an inadequate staff position.

Another advantage Railway houses have to offer is the following: We can expect that if the Railway man has a house, there will be an occupied cradle in that house. There is no getting away from the fact that good and pleasant housing conditions usually give rise to larger families, because when housing conditions are favourable, the man in the street is not reluctant to build up his family. The children are brought up in pleasant homes, something which is difficult to do in flats and hovels. Therefore these Railway houses are actually a long-term policy on the part of the Administration. The children are possible Railway staff of the future. They grow up in a Railway atmosphere. It will be possible to enhance the efficiency of these people in the years that lie ahead. I realize only too well that our financial position is such that one cannot ask for extra things. In spite of that I want to ask the hon. the Minister whether there are ways in which our Railwaymen can be given further encouragement to own their own houses. Is it not possible to base the monthly instalments for families with many children on the number of children a Railway man has? To my mind, Mr. Chairman, a scheme which will facilitate house-ownership is one of the best investments for the future.

Now, Mr. Chairman, it is of course essential that the finances of the Railways should be sound to the core. We realize that transport plays an important role—an indispensable role, really—in the development of our country. Some of the surpluses can be used to strengthen guarantee funds and to put them on a sounder basis. The Rates Equalization Fund can also be strengthened in this manner. This is virtually the only guarantee fund the Railways has. It was of course this Government which built up and strengthened the guarantee funds. To my mind, Mr. Chairman, any proposal aimed at weakening the funds is a crime against the Railway man. We realize that it is absolutely essential that they should not be weakened. I do not quite understand the position at present. Over the years the hon. Opposition has been pleading here for salary increases. We were quite prepared to grant increases provided that we could afford to do so.

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

I move—

Agreed to.

I will not attempt to follow the example of certain hon. members who quote various figures in order to try to prove all sorts of strange things. We even witnessed here yesterday afternoon that a certain hon. member quoted figures in connection with the 1962 increases and tried to prove that those increases had actually resulted in a reduction in the cost of living. Well, I will not attempt to do that, but I would like to plead with the hon. the Minister of Transport to give special consideration to the Western Cape. I think the case for the Western Cape has been put to him. The Western Cape is becoming the Cinderella of South Africa. You will recollect, Sir, that at the time when the Government decided to encourage the development of border industries, a special concession was granted to East London in the form of a 10 per cent rebate on goods railed from that particular port. One can understand this and quite obviously one can understand the Government’s reasons, having regard to its policy, for giving assistance to that particular area so that it could catch up industrially with other areas. But the Cape is in a strange position in that we have a reasonably big and more advanced Coloured community who today are rapidly rising to the standards of the White community, and you will notice therefore that the goods manufactured in the Western Cape are mainly goods which are conveyed at the higher rates, rates 1, 2 and 3, etc. Attention has been drawn by experts to the fact that the Cape will have to develop industrially reasonably rapidly in order to absorb the advancing Coloured community. It is a fact—and this is of great importance—that today Europeans are leaving the Cape because of lack of industrial employment opportunities and going to other areas such as the Transvaal and even the border areas. With the advancement of the Coloured man, it is only a matter of time before the Coloured man will leave the Cape area to look for employment in other more industrialized areas, and with the Bantu then replacing the Coloured man we may well find ourselves in the position that the better type of Coloured man is drawn away from the Cape to find better employment in other industrial areas because the Cape has been put in the position that it cannot compete industrially with areas such as Port Elizabeth and particularly East London. I understand that the Prime Minister appointed a committee some time ago to advise on this particular aspect and to see whether special treatment could not be given to the Cape—more or less on the lines of the treatment given to border area industries. I do not know whether that committee has reported to the hon. the Prime Minister, and I do not know what the Prime Minister has decided, but I have been given to understand that such a committee was appointed. As I said I do not know the outcome of its investigations but I do know that as a result of the tariff increases now proposed by the hon. the Minister of Transport, the Cape is going to be in a worse position than it was before.

Have you worked it out?

Yes, I have; I will give the hon. member the figures in a moment. I do not think that the Minister would deliberately have discriminated against the Western Cape but the proposed increases will have precisely that effect. Obviously where you start increasing percentages the cumulative effect eventually will be to hit hard the people who have been discriminated against right from the beginning. I suppose there must have been good reasons at the beginning why preferential treatment was given to the East London and Port Elizabeth areas, but I maintain that that treatment vis-à-vis the Western Cape will have to disappear so that the Western Cape can continue with its industrial development. It is rather interesting to notice that in the Western Cape various people, even Government officials, have drawn attention to the fact that the Cape is not advancing industrially as it should. I have a report here of a speech by a very prominent person in Government employ in which he draws attention to the fact that that is what is happening at the moment. Sir, may I just quote a few figures to you, and give you an analysis of the gap between railage costs from Cape Town to Johannesburg and from other main ports to Johannesburg, based on port rates.

The figures which I am about to quote will show the amounts by which the railage costs between Cape Town and Johannesburg are higher than the railage costs between the other main ports and Johannesburg. Take goods railed between Port Elizabeth and Johannesburg, for example. Under the old rates, under rate 1, for instance, in cents per 100 lbs., the railage was 90.2 cents per 100 lbs. whereas the new rate is 107 cents. The difference between the mileage rate and the port rate is 57 cents, an increase of 18.6 per cent. From East London—and that does not include the 10 per cent border development area rebate—the railage is 92.4 cents as against the new rate of 109 cents, a percentage increase of 17.9 per cent. Durban has a geographical advantage which, of course, we cannot deny. I think the Minister has been wise in accepting the principle of tapering rates over longer distances, but we in the Western Cape maintain that the Minister has not gone far enough and that he should have followed the example of Rhodesia, for instance, or the example of some oversea countries, although it is difficult to compare South Africa with oversea countries because we could not find a country overseas with the long distances that we have in South Africa.

In Europe, for example, we could not find a country with a distance of 1,000 miles between two centres, the distance between Cape Town and Johannesburg, for example. The hon. the Minister knows that in Rhodesia, for instance—he is a very hard-working Minister and he knows his facts—a far more favourable tapering of rates over long distances is being allowed than we allow in South Africa. We have the geographical disadvantage of being in the Cape and of being nearly a thousand miles away from the main industrial complex of South Africa, namely Johannesburg and the Reef complex, and that is now being aggravated by the fact that vis-à-vis the other two coastal ports—I am not referring to Durban here—we have an additional disadvantage as a result of the port rates that they enjoy there and, in the case of East London, a special 10 per cent rebate. I have been wondering whether the hon. the Minister would not reconsider the application of his tariff increases so that Cape Town and the Western Province will also enjoy their rightful place in the economic sun of South Africa. I believe that the Minister has not finally made up his mind in this matter, and I hope that before he comes to any final decision he will seriously reconsider the position of the Western Cape.

We in the Western Cape have a potential of water such as very few areas have at the moment. We have the potential of a good semi-skilled group of labourers here, the Coloured people, who are ready to be absorbed at a higher rate in industry if the hon. the Minister will only make it possible for us to compete. What I am afraid of is that this unequal treatment of the Cape may eventually result in Coloured people leaving this area and going even to the border areas and being replaced by Natives, in which case you will have this whole process all over again. I hope the hon. the Minister’s decision is not going to be unfavourable to us. I hope he will realize that we in the Cape are labouring under very difficult circumstances. Competition amongst manufacturers, as the Minister knows, is rather severe.

As a result of these unfair rates, a manufacturer in Johannesburg is able to manufacture there and deliver his goods at Port Elizabeth, notwithstanding his geographical disadvantage, and he is able to deliver in Port Elizabeth at lower prices than a manufacturer in Cape Town could deliver there, as a result of the preferential treatment on that particular line. Although I do not plead for the abolition of the preferential treatment afforded to Port Elizabeth and East London, I ask the Minister seriously to consider whether he should not bring Cape Town into line with those places as far as that preferential treatment is concerned. I think I have made my point now. I am sure the Minister will reconsider the application of his rates in regard to Cape Town. Summing up, I would again draw the attention of the House to the fact that the accumulative effect of any increase in fares is more than appears at first glance.

I understand that what I am going to say now is always accompanied by laughter from the Opposition side, but I would like to add my voice to those who have thanked the hon. the Minister for his Budget. There is one particular reason why I think the Opposition will not laugh when I convey my thanks to the hon. the Minister and his entire Department, and that is that a steady change in policy has been brought about over the years by the hon. the Minister in the Railways, and together with the Railways, to the approach in our country to Railwaymen. I am referring here in particular to the change in policy as regards the assimilation of Railway communities as a part of the larger community and not as a separate part. Previously it was the tendency to accommodate Railway people in what actually became known as Railway camps. These were blocks of houses, which all had the same shape. They formed sections of a town which subsequently developed into slum areas. They formed sections with social problems which assumed such grave proportions that at one stage the Railways found it necessary to have a large section of welfare workers in its employ. These conditions have improved exceptionally well during the years this Government has been in power, so much so that in recent times it is in many places no longer possible to speak of Railway camps. But having said this in gratitude, I nevertheless think there is still room for improvement and I also want to make a plea today, further to what has been said by the hon. member for Lang-laagte in his maiden speech. I want to ask for a more general application of the approach that our Railway people should not be treated as a separate group in the community, since they have already shown over the years, particularly in our larger towns, what a tremendous part they could play in the administration of the towns and how they could give the lead in cultural, religious and other spheres. I think it has in fact become necessary for local authorities and other bodies to co-operate in that work which is being done by the Railways Administration. I want to plead that whenever housing has to be supplied in future, this policy of recent years, i.e. that as few Railway people as possible be accommodated in separate townships, except in the most essential cases where they are placed together in small groups, be carried through to an even greater extent. In this connection I think it may even be possible to bring about an improvement in that section of the Railways which deals with housing. It is a fact that in recent years concessions were made which have made it possible for Railway officials to build their own houses. It is a fact that the 10 per cent and the 100 per cent loans which are being granted have relieved the situation tremendously. But I should also like to see the Housing Department of the Railways negotiate with the National Housing Commission in the first place and, if it is necessary, with Building Societies in the second, in order to ensure that the procedure which must be followed at present whenever Railway officials apply for loans be expedited. It has become an unfortunate fact that whenever a Railway man applies for a National Housing loan, there are so many channels which have to be gone through that it sometimes take months, and in exceptional cases, even years before approval can be obtained for such a loan. It is therefore my humble request that methods be considered of expediting in the Railways Administration in the first place and in conjunction with the National Housing Commission in the second, the building of houses for people. It is probably a truth which all people adhere to and which is as old as the hills, i.e. that one appreciates what is one’s own more than that which belongs to somebody else. If something was ever done which made for happy communities amongst our Railway people, then it was the fact that they were afforded the opportunity of acquiring their own homes. I think that the efficiency which the Opposition spoke of, which has always been emphasized by this Government as well and has probably been tremendously improved by the hon. the Minister, was due to the fact that people were able to know that they were working for their own future and that of their children, because it was their property. One understands that it was necessary to retain the system of rented properties, but I would like to see that the House Ownership Scheme be expanded as rapidly and as efficiently as possible, with particular emphasis on this aspect that the long delays which there have been with regard to applications should be eliminated as far as possible. I would appreciate it greatly, particularly if it could take place in the centres where there is a great concentration of Railway officials, such as Witbank. I also want to enter a plea on behalf of that community that what has been achieved by the Railway officials will receive recognition, that they will be assimilated into the greater community and will not be regarded as a separate part of the population, but will be able to erect a house amongst other people in the town which is to their taste and which is as they want it, because it is those houses which will make them even happier in their work.

I want to raise first a local matter concerning the marshalling-yards at Mutual, near Pinelands. That marshalling-yard is growing and growing, and it is serving an ever larger body of people. It is now feeding the Athlone Power Station and the Epping industrial area. As a result there has been a greatly increased amount of shunting at night and at other times, and this is becoming a growing nuisance to the people living there. They have, quite naturally, been patient about this: but they have made representations from time to time to the Railway authorities, and I am led to understand that they have from time to time in the past been told that something would be done about this in the not too distant future but unfortunately this future keeps receding. I was very sorry to hear from the Minister, in reply to the hon. member for Umbilo, that the same position obtains in Durban. I do hope the Minister will be able to take the matter a little further and indicate when he thinks he may move forward with his policy of switching over from steam locomotives, or coal-burning locomotives, to diesel electric units, as far as some of these shunting-yards are concerned. One appreciates that obviously the operation of trains inevitably means noise and soot and that this must be borne. But at the same time where there are marshalling-yards which are particularly unfortunately sited in relation to big residential areas, I think in those cases, particularly, the Minister will no doubt give special consideration to them. This is a factor which has very definitely reached the stage of being a nuisance at Pinelands.

There is another point which I am glad to have the opportunity of raising with the Minister personally in debate, where one is not confined as one would be by the rules in regard to questions. That concerns the report we have seen in the Press, in the Cape Times, a little while ago, where the whole question of the use of the two official languages alternately was raised. There were various complaints about this and I think it was stated by the complainers that in all their experience Afrikaans had invariably been used first, and there was a statement by the Cape Western System Manager that he would investigate the position. We are anxious to know whether that matter has in fact been investigated. The allegation was that Afrikaans was invariably used first.

In what way?

In making announcements of the arrival of trains, etc. Unfortunately I cannot speak with sufficient authority on the subject. It certainly does not apply to the Airways, on which I travel more often; but these were complaints made by people who appeared to study the position, and I appreciated the fact that the System Manager said that he would immediately investigate the matter. I should be glad to hear from the Minister whether that investigation has been made.

The policy is to have absolute equality.

I am glad to hear that, and we approve of it entirely. I wonder whether the Minister can tell us whether it was found that there were departures from that policy on a scale which can cause any concern. One fully appreciates that individuals may from time to time, quite naturally, start off with the language which comes most easily to them; but from the nature of the complaints it seems that this position had gone rather further than that. I think that while one certainly should not become unnecessarily agitated about this type of thing, it obviously causes unhappiness, and I think it is such an elementary matter that if it can possibly be avoided one should certainly do that.

Then there is another matter I should like to raise; and that concerns the harbour at Rietvlei. We are glad to hear that the Minister intends to go forward with plans for Richard’s Bay in Natal, and it is very good news that it is such a good harbour and may indeed become a very important harbour in due course. The Minister may have seen the remarks reported in this morning’s newspaper by a leading person in the shipping field in regard to Rietvlei. Cape Town is certainly anxious to know how that matter is progressing and what the Minister feels about it.

The Minister of Planning is responsible for it.

Is there any aspect which concerns the Minister?

None at all.

But I am sure the Minister must be in close contact with his colleague about it, because he is responsible for harbours in general.

All I am doing is to push them to get a move on.

That must be a difficult job.

We are confident that where the Minister has succeeded in pushing the Railways and heavy loads along, he should be able to shift the Minister of Planning along adequately.

I do not intend replying to the question raised by the hon. member for Pinelands, but I found it quite interesting when he mentioned this question of the languages which are being used on the Railways. It puts me in mind of the years when only one language was spoken on the Railways, i.e. English. I do not think the hon. member is very serious about what he has just said, because experience has always shown that whenever members of the public approach any Railway official and address that official in English, the official addresses that person in the same language. That has always been the policy throughout. On the contrary, I think it is in fact a characteristic of the Afrikaner that we are really a shade over-polite towards a person who cannot speak Afrikaans.

I was speaking about the loudspeaker system.

The hon. the Minister will probably reply to that, but as far as I know, there is an arrangement on the Railways that for one week all correspondence is done in English …

No, that is not so.

Then I shall leave the matter to the Minister and in the few minutes remaining I want to return to the hon. member for Yeoville. In regard to the Budget debates, if I now had to reply to the attack of the hon. member for Yeoville, I could do nothing else but say that nobody is so deaf as he who will not hear and nobody is so blind as he who will not see, and nobody is so dense as he who will not understand. That was precisely what the hon. member for Yeoville revealed throughout, at each stage of these debates. He attacked the Minister in the Budget debate on precisely the same subjects on which he attacked him in the Committee Stage when he spoke for half an hour. He attacked the Minister on precisely the same things in the Second Reading of the Railway Bill. On each occasion the Minister replied and told him why tariffs had to be increased and why he could not use the Rates Equalization Fund. I can still forgive the hon. member for Yeoville for doing that, but the hon. member said something yesterday evening which really surprised me, and I take it very amiss of him for having done so. One expects a responsible, senior member of the Opposition not to make such irresponsible statements. He returned once more to the subject that there should be more efficiency on the Railways, and then he made the sneering remark which I take very amiss of him, that previously there, had been only one General Manager, and that we now had a whole series of Deputy General Managers and Assistant General Managers who were all receiving large salaries.

I did not say that. Do they receive that?

The hon. member used that as an argument and said that it had been one of the causes of the financial difficulties and the reason why tariffs have now to be pushed up. Now I just want to ask the hon. member this. If he takes into consideration the fact that the Railways is the largest single industry in the entire Southern Hemisphere, with a capital investment of more than R200,000 million and with a staff, White and non-White, of almost 215,000, then I would like to ask the hon. member the following. Let him give me the name of any other industry of this tremendous size where the general manager has no assistants. It is true that there is only one General Manager, but each branch of any large business has a chief. There is a production chief, or a chief whose special concern it is to look after the staff. That is the very thing I find wonderful about the way in which the S.A. Railways is being administered to-day, i.e. that we have chiefs for every section, who collectively comprise the Management of the Railways. I am thinking for example of the minister of finance of the Railways. The official in that position is entrusted with the responsible task of keeping a watchful eye on the finances of the Railways. He is the person who must see to it that the money appropriated annually by Parliament, or the profits made by the Railways, is spent in the most effective way. I am thinking of the Deputy General Manager of the Railways wo is responsible for staff matters and who stands at the head of this vast multitude of staff members, with all their problems and various duties, and how it is his responsibility to look after them. I am thinking of the Assistant General Manager (Operating), and I wonder now whether the hon. member has ever thought of what a responsible task that person has to keep a watchful eye on the operations of the Railways throughout the Republic. I think that if the hon. member were to take a little more trouble and make a better study of how, particularly with the appointment of these various heads of departments and their assistants, special planning is being done in the most efficient way to make the Railways as effective as possible, he would realize that there has never been a time when the Railways has been so efficiently managed as it is being done at this very moment.

However, to return to the subject. I admit that there was a time when there was only one General Manager on the Railways, when it was a small undertaking and when the capital investment in the Railways was but small. But how can the hon. member be so irresponsible as to attack the hon. the Minister about the very attempts he is making to obtain efficiency?

You are talking nonsense. I did not make any such attack.

The hon. member spoke sneeringly about there having been only one General Manager previously and how there was now a whole series of Deputies and Assistants. In this sneering manner the officials were attacked, so that I really felt ashamed, because they are honourable men who work day and night practically to manage the Railways in the most efficient way for the people of South Africa.

Business interrupted in accordance with Standing Order No. 92.

All the attacks which have been made by the Opposition on the hon. the Minister and his administration of the Railways and all the attacks which have been made on the Estimates and the tariff increases, have achieved nothing, and there are a few facts which the Opposition cannot get away from and which are still as plain as day. They are, firstly, that the deficit which the Railways has, has nothing whatsoever to do with poor or incompetent administration on the part of the hon. the Minister or the Management; secondly, that the deficit was entirely due to the salary increases and to factors which were entirely beyond the control of the Railways Administration; thirdly, that the tariff increases were inevitable; and fourthly, that the tariff increases were drawn up in such a selective and judicious way that it will have a minimum effect on the cost of living and on commerce and industry in the country, as well as on agriculture and our economic growth. I say that these are facts which still remain unshaken after almost a week of debating, and stand out as the predominating image of these Railways Estimates.

As far as the cost-of-living argument is concerned, I would like to bring the following information to the attention of the hon. members. As regards the changes in the consumers’ price index during the periods shortly before the last tariff increases, and the changes shortly thereafter, I want to say the following. I am furnishing the average monthly percentage increase in the consumers’ price index during the six months before each of the relevant tariff increases, and in the six months immediately thereafter.

Before the tariff increases of 1950 the monthly increase in the consumers’ price index was 0.28 per cent, and subsequently it was 0.29 per cent. In 1953, before the tariff increase, it was 0.29 per cent, and subsequently it was .0. In 1958, before the tariff increases, it was .30, and subsequently it was .21. In 1962, before the tariff increases, it was .21, and subsequently it was .08. From this it is very clear that the consumers’ price index, except in 1950, when the increases before and after the tariff increases were more or less the same, has consistently increased more before the tariff increases than subsequent to them. That indicates that other factors have a much more important influence on the cost of living than tariff increases. I spoke of factors which were totally beyond the control of the Railways. There is the drought. Neither the Railways nor the Government can be blamed for that. Do you know, Sir, that Railway revenue, including that from harbours and grain elevators, has decreased by approximately R11,000,000 during the past 1965-6 financial year as a result of the drought, and has been lower than what it would have been in a normal year. The most important single factor responsible for that was the mealie crop. The saving in expenditure which the costs of transportation would otherwise have entailed, calculated at marginal costs, is estimated at R5.9 million, so that the net revenue loss amounted to R5.1 million. In other words, according to estimates, the Railways lost R5.1 million in revenue in 1965-6 as a result of the drought. A second factor which was beyond the control of the Railways was intensified import control. Intensified import control is estimated to have caused Railways and Harbours revenue to decrease by approximately R8.1 million in the 1965-6 financial year. Expenditure as a result of that was R2.9 million lower, so that the net revenue was R5.2 million lower than what it would normally have been.

A third factor which was beyond the conrol of the S.A. Railways was the credit restrictions. The weakening in the economy as a result of these restrictions and of other factors, caused Railway revenue to decrease by an estimated R8.9 million during the 1965-6 financial year. As opposed to a saving in expenditure of R4.5 million, the net loss of revenue for the S.A. Railways for that year was R4.4 million, which was mainly due to the credit restrictions. The total net loss of Railways and Harbours revenue as a result of drought, of intensified import control and of credit restrictions was R14.7 million in the 1965-6 financial year.

The hon. member for Yeoville made use of the first part of his speech to lick his wounds, wounds which he received in a skirmish with the hon. the Minister. He felt it necessary, for the umpteenth time to repeat that he still adhered to all his statements and all his assertions. Apparently the hon. member is of the opinion that if one repeats a statement often enough, one later believes it oneself. I do not therefore deem it necessary to go into his statement because the fact that he wept and wailed about it to such an extent is conclusive proof to me that the hon. the Minister hit home. But the hon. member has once more accused the hon. the Minister—he did it in his amendment as well—of there being no long-term planning for the S.A. Railways.

No long-term planning with which to overcome the Railways’ financial difficulties.

But is the exhaustion of the Rates Equalization Fund a sign of long-term planning to the hon. member? That is what the hon. member suggested, i.e. that the Rates Equalization Fund should be exhausted. The hon. member comes along and goes so far as to accuse the hon. the Minister that there is no long-term planning for the S.A. Railways. But surely what the hon. member is suggesting is not long-term planning! Surely it is nothing else than shortsightedness? Not only is the hon. member short-sighted, his memory also leaves him in the lurch. I regard the hon. member as the personification of an old and decrepit party, which although it is unfortunately still present in this House, has no longer any right to exist on the South African political stage. Time and again the hon. member referred to the report of the Schumann Commission to bear out his statements. In this connection I want to address a friendly request to the hon. member: He must either go and read that report and study it properly, or he must never again refer to it. He quoted at length from the Transvaler what had been said by leaders of commerce and industry in regard to these tariff increases. At the same time he accused the hon. the Minister of having no long-term planning for the S.A. Railways. But may I remind him of the fact that it was the very finding of the Schumann Commission that there had been the very best planning? May I also remind him of the fact that besides being signed by representatives of commerce, industry and agriculture, the Report of that Commission was also signed by one of the Provincial Council Members of the United Party, namely Mr. O.T. van der Merwe, M.P.C. for Johannesburg (North).

Yesterday the hon. member also made a new series of suggestions to further efficiency on the S.A. Railways. His first suggestion was that the hon. the Minister should see to it that the Administration of the S.A. Railways does not become top-heavy. Subsequently the hon. member said that the hon. the Minister’s predecessors had been able to manage with only one General Manager. To-day, he says, apart from one General Manager, there are also two Deputy General Managers and a number of Assistant General Managers. But as usual the hon. member’s facts in this regard are also not accurate. Now it is the hon. member who is objecting vehemently when the hon. the Minister points out to him that his facts are not accurate. Then he complains. But let me tell the hon. member why his facts are not accurate. On 31st March, 1945, the Management of the S.A. Railways consisted of: one General Manager, one Deputy General Manager, one Assistant General Manager (Technical), one Assistant General Manager (Commercial), one General Transport Manager and the Chairman of the Economic Bureau. The other day the hon. member spoke about the good old days of Mr. Claude Sturrock: but that is what the position was in those good old days. At that time there were 85,000 Whites and 64,000 non-Whites in service, i.e. approximately 150,000 altogether. The freight ton-miles for the year ending 31st March. 1945. amounted to 11,946,000,000. On 17th October, 1945, the Management of the S.A. Railways was made up as follows: one General Manager; one Deputy General Manager; the Chief Technical Manager; the Chief Operating Manager; the Chief Financial Manager; the Chief Staff Manager; the Chief Airways Manager; the Chief Harbour, Shipping and Development Manager and the Chief Commercial Manager. That reorganization was introduced by no other person than Mr. Claude Sturrock himself. At the end of that year there were 91,000 Whites and 73,000 non-Whites in the service of the S.A. Railways, i.e. a total of approximately 160,000. The freight-ton miles for that year was 12,147,000,000.

What is the situation at the moment? At present the Management is made up as follows: one General Manager, two Deputy General Managers, one Assistant General Manager (Commercial), one Assistant General Manager (Staff), one Assistant General Manager (Operating and Road Transport), one Assistant General Manager (Technical), and one Assistant General Manager (Airways), one Financial Manager and a Chief Planning and Productivity Manager. But since 1945 the extent of the activities of the S.A. Railways has increased tremendously. At the end of the 1965-6 financial year there were altogether 227,568 servants in service while the freight ton-miles amounted to 32,679,000,000. Now I hope and trust that the hon. member, before he compains again when the hon. the Minister accuses him of having his facts wrong, will be a little more careful before he makes another statement such as that one. He came along here and stated, just like that, that this hon. Minister now had a top-heavy organization, whereas previous Ministers had been able to get along with only one General Manager.

The incidents in regard to bilingualism and automization which the hon. member mentioned are incidents of an isolated nature. That is quite clear and I think the hon. member will agree. If the hon. member can give me further particulars of the incidents I shall gladly go into the matter further. The hon. member also asked whether the S.A. Railways was making the maximum use of mechanization. As a result of the shortage of staff in the various grades during the past few years the Administration has been concentrating on mechanization in various fields. In the case of signalling it has been done by installing central traffic control on the Hamilton-Springfontein and Kimberley-Kamfersdam-Postmasburg lines. In this way there has been a saving on altogether 56 station foremen. This system is at present being extended to the railway lines between Volksrust and Newcastle, and between Potchefstroom and Fochville. Furthermore shunting yards are being mechanized with the purpose of saving on shunters. In the same way the shunting yards at Kaserne and Bloemfontein have been mechanized, with a resultant saving on shunting units which has been considerable. However, mechanization is also being applied in other spheres as far as it is in any way possible. Railroad maintenance has already been mechanized to a great extent, as well as the handling of goods and stores accounts, the drawing up of pay sheets, the entering of leave and the processing of road transport statistics. By applying mechanization in all these spheres a saving of altogether 10,000 White and non-White units has been achieved. Therefore I do not believe that the inquiry which the hon. member desires is really necessary.

What about the accounts section?

There has been a saving here too, but I do not have the correct figures at my disposal at the moment. The Administration is continually expanding mechanization and improving mechanized methods. As progress is made in this direction it is hoped that even greater savings will be effected.

The hon. member also asked that an inquiry be made into the question of the supervision of disciplinary measures, a task which has been entrusted to the staff clerks who have been appointed in the place of Superintendents (Discipline). In regard to this matter I want to acquaint the hon. member with the actual state of affairs. As a result of serious complaints on the part of the staff about the dissimilarity and nature of the punishments which have been imposed by these officials for identical offences, it was decided with effect from January, 1963, to appoint a number of Superintendents (Discipline) in regard to execution of disciplinary powers, with exception of those in respect of certain less serious offences. These are specially selected officials, and are selected with due consideration of their backgrounds and experience. Subsequently they are trained with a view to equipping them for this particular task. Of the 12 Superintendents (Discipline) and two Assistant Superintendents (Discipline) ten are from the staff section, two from the operating section, one from the commerce section, one from the road transport section and one from the discipline appeal board. This reorganization has been introduced with the full approval of all the relevant staff associations.

In my speech on the motion to go into Committee of Supply, I admitted that the increases in the tariff on petrol as well as the increases in railway fares were the only increases which would have some effect on the cost of living, on commerce, industry and agriculture. But let me say again that in 1964, in a time of increasing costs and prices, it was the S.A. Railways who contributed an important share to the defrayal of the cost of living expenses when it was decided to reduce the tariff on petrol.

But it is now being wiped out.

No, I think the accommodation at that time meant a loss of revenue of R7,000,000 to the S.A. Railways while this increase in tariff will only bring the S.A. Railways R4.4 million additional revenue. As far as the increasing of railway fares is concerned, I want to point out the following. During the past 12 years the third class fares on main lines have not been increased and taking into consideration the relatively large increase in the buying power of the Bantu during this period of 12 years, this increase which we are now proposing, i.e. the increase of 10 per cent, cannot be regarded as being unreasonable. That increase will place this particular traffic on a paying basis.

Furthermore the hon. member for Yeoville again repeated his previous accusation that the hon. the Minister had ignored certain recommendations of the Schumann Commission to the effect that certain increases should be spread over a period of ten years. But once more the hon. members’ facts are not correct. In the case of fares for first and second class journeys on main lines the proposed increase is 15 per cent, as against a total loss of 60 per cent. The latest figures indicate that the revenue from suburban journeys, first and second class, will only cover approximately 34 per cent of the total expenditure. The corresponding percentage for third class, excluding resettlement areas, is 45. The proposed increases of 20 per cent and 10 per cent are. therefore, not at all sufficient to make this traffic paying traffic and if the recommendations of the Schumann Commission in this regard were to be carried out, subsequent increases would have to follow later.

It is, therefore, only the service for long distance third class passengers which is a paying one?

But the Schumann Commission made no recommendation in regard to that matter. You see, Mr. Speaker, that is exactly my difficulty with the hon. member: He never made a proper study of the report of the Schumann Commission. It is not regarded as being desirable that fares should be increased every year or even every second year. I think the hon. member will agree with me on this.

Yes, I agree with you.

Since the hon. member is now agreeing with me, there is another point to which I want to draw his attention. During the rule of this Government tariffs have been increased only every fourth year, something which is not at all as bad as what happened under the rule of the United Party when tariffs were increased every second year. But to return to train fares. It will take at least ten years before this traffic can be placed on a paying basis.

I also indicated in my speech the other day that the effect of the increases would be minimal. Now the hon. member for Yeoville comes along and reads out a number of quotations from Die Transvaler in order to prove that there is dissatisfaction in commerce and industry over the Estimates. But did it not strike the hon. member what it was they were dissatisfied about? They were dissatisfied because they were being expected to absorb the tariff increases. Now the hon. member for Yeoville comes along and sides with them in their objection to the fact that they can be expected to absorb those increases. On the other hand, it is also the hon. member who is concerned about the fate of the ordinary man in South Africa. I now want to test the hon. member’s concern in this regard. If he is really so concerned as he pretends to be about the fate of the ordinary man and the worker in the country, why did he not then support the hon. the Minister when he requested commerce and industry to absorb these increases? Why did he not welcome the fact that the Government had instructed the hon. the Minister of Economic Affairs to hold back the price increases which resulted from these increases?

I gave my reasons for that. I said that it was unpractical. Are they going to play the policeman in regard to each increase?

Order!

They cannot even control the price of cool drinks.

Order! The hon. member on the other hand cannot control his interjections.

The hon. member cannot act as the mouthpiece of commerce and industry and at the same time be concerned about the fate of the man in the street. He cannot sit on two stools. He must come down off the fence and adopt a point of view.

The hon. member for Transkei wants to know what the long-term policy of the Government is with regard to the replacement of White running staff in the Transkei by Bantu. This policy has already been explained on previous occasions and I can only repeat what has already been said. The policy is namely that the Bantu should be served by their own people as far as it is practicable. At the moment it is not yet practicable because there are not sufficient trained Bantu available who can serve as train drivers or station masters.

Are they being trained for that purpose?

Not yet.

The hon. member for Green Point complained about the importing of railway lines during the year 1964-5 and during the following year. The position in this regard is that while 56,600 tons of railway lines were imported during 1964-5, and 126,000 tons were imported during the year 1965-6, because Iscor could not meet the requirements of the S.A. Railways in full, this year’s requirements, i.e. 110,000 tons, have again been ordered from Iscor. I think, therefore, that it cannot be alleged with any degree of justification that the S.A. Railways is not fulfilling its function of promoting industrial development in South Africa. On the contrary. It has contributed a real share to the establishment of various industries, such as the provision of goods and passenger trucks, electrical units and vehicles, concrete sleepers, etc., for example. In fact, a total of R150,000,000 was spent by the S.A. Railways in South Africa last year for the purchasing of stock.

The hon. member for Sea Point—he excused himself for not being able to be present—requested that special consideration be given to the Western Cape. The harbour tariffs which apply to high tariff traffic between Port Elizabeth and East London and the Transvaal competitive area, have been in operation since 1909 with the purpose of obtaining a part of the import traffic for the said harbour cities, and thus ensuring better utilisation of harbour facilities. The present adjustment of tariffs has not altered this basic position in any way, although the tariffs between Cape Town and the Witwatersrand indicate a larger increase than those between Port Elizabeth, East London and the Rand, because the mileage between the Rand and Port Elizabeth has been considerably reduced, while the main line between Cape Town and Johannesburg has hardly been shortened at all. The hon. member also requested that the distance rebate be increased. The position here is that the tariff per ton mile is already decreasing so rapidly over long distances that traffic in general over distances of 300 and 400 miles is rapidly becoming unprofitable. The Schumann Commission recommended, on these specific grounds, that the distance rebate be reduced. I may just mention that the hon. member must remember that the increase in the tariff on petrol which will affect producers in the interior, will have no influence on the Western Cape.

The hon. member for Witbank asked that the Administration should not treat its workers as a separate group as far as housing is concerned. He does not want them to be concentrated in groups in cities and towns. As the hon. member knows another direction is already being taken, and will be continued with in the future. Furthermore the hon. member asked for regular negotiations between the Administration on the one hand and the was little enthusiasm on the part of the local authorities on the other. Now I want to tell the hon. member that the Administration began with such negotiations last year. There was little enthusiasm on the part of the local authorities, whereas the National Housing Commission were more helpful. However, the hon. member can take congizance of the fact that such negotiations will be conducted annually.

As far as the hon. member for Pinelands is concerned, I want to inform him that the yards near Mutual serve the industrial area in Epping and the power station at Athlone. There is no immediate intention of putting diesels into operation although that will probably become necessary one day.

Question put: That all the words after “That" stand part of the motion.

Upon which the House divided:

AYES—93: Bekker, M. J. H.; Bezuidenhout,

G. P. C.; Bodenstein, P.; Botha, H. J.; Botha, M. C.; Botha, M. W.; Botha, S. P.; Carr, D. M.; Coetzee, B.; Coetzee, J. A.; Cruywagen, W. A.; De Jager, P. R.; De Wet, J. M.; De Wet, M. W.; Diederichs, N.; Donges, T. E.; Du Plessis, H. R. H.; Erasmus, J. J. P.; Greyling, J. C.; Grobler, M. S. F.; Grobler, W. S. J.; Henning, J. M.; Hertzog, A.; Heystek, J.; Horn, J. W. L.; Janson, T. N. H.; Keyter, H. C. A.; Knobel, G. J.; Kotze, S. F.; Kruger, J. T.; Langley, T.; Le Grange, L.; Le Roux, J. P. C.; Loots, J. J.; Malan, J. J.; Malan, W. C.; Marais, J. A.; Marais, W. T.; Maree, W. A.; McLachlan, R.; Morrison, G. de V.; Mulder, C. P.; Muller, S. L.; Pansegrouw, J. S.; Pelser, P. C.; Potgieter, J. E.; Potgieter, S. P.; Rall, J. W.; Rall, M. J.; Raubenheimer, A. J.; Raubenheimer, A. L.; Reinecke, C. J.; Rossouw, W. J. C.; Roux, P. C.; Sadie, N. C. van R.; Schlebusch, A. L.; Schoeman, B. J.; Schoeman, H.; Schoeman, J. C. B.; Smit, H. H.; Smith, J. D.; Steyn, A. N.; Swanepoel, J. W. F.; Swiegers, J. G.; Torlage, P. H.; Treurnicht, N. F.; Uys, D. C. H.; Van Breda, A.; Van den Berg, G. P.; Van den Heever, D. J. G.; Van der Merwe, C. V.; Van der Merwe, H. D. K.; Van der Merwe, P. S.; Van der Merwe, S. W.; Van der Spuy, J. P.; Van der Walt, B. J.; Van der Wath, J. G. H.; Van Rensburg, M. C. G. J.; Van Staden, J. W.; Van Vuuren, P. Z. J.; Van Zyl, J. J. B.; Venter, M. J. de la R.; Venter, W. L. D. M.; Verwoerd, H. F.; Viljoen, M.; Vorster, B. J.; Vorster, L. P. J.; Vosloo, A. H.; Vosloo, W. L.; Wentzel, J. J.; Wentzel, J. J. G.

Tellers: H. J. van Wyk and J. H. Visse.

NOES—32: Barnett, C.; Basson, J. A. L.; Basson, J. D. du P.; Bennett, C.; Connan, J. M.; Eden, G. S.; Fisher, E. L.; Graaff, De V.; Higgerty, J. W.; Hughes, T. G.; Jacobs, G. F.; Lewis, H.; Lindsay, J. E.; Mitchell, M. L.; Moolman, J. H.; Moore, P. A.; Murray, L. G.; Oldfield, G. N.; Radford, A.; Raw, W. V.; Smith, W. J.

B.; Steyn, S. J. M.; Streicher, D. M.; Sutton, W. M.; Taylor, C. D.; Thompson, J. O. N.; Timoney, H. M.; Wainwright,

C.J. S.; Webber, W. T.; Wood, L. F.

Tellers: H. J. Bronkhorst and A. Hopewell.

Question affirmed and amendment dropped.

Motion accordingly agreed to and Bill read a Second Time.

I move as an unopposed motion—

The first task which the hon. the Minister of Transport obviously has to tackle is to start a training school for his Deputy Minister, who showed in his reply to the debate that, as happened when the Minister passed him a cutting in a former stage of this debate, he did not get the point. Now too, when he is given answers, he is able to quote them but he is not able to follow them up. I suggest that the hon. the Deputy Minister will have to do some homework before he can show the same efficiency in reply to questions which his tutor, the hon. the Minister always shows. But, Sir, there is one thing that he has learned from the Minister and that is that when you have a weak case, find a straw and clutch it; then try to build a case around some little point, as the Minister has so often done, year after year. He takes one point, a slip or a weakness in an argument, and he bases his whole reply on that. The hon. the Deputy Minister in this respect is trying to follow in his master’s footsteps. He made a violent attack on the hon. member for Yeoville this morning, as did the hon. member for Bethlehem, grabbing at the straw of an alleged attack on the Management of the Railways. It was so patent and so blatant that I am surprised that the Deputy Minister should stoop attempting to turn the attention of the House away from the real charges made by the Opposition. If he had listened to the debate he would have known that the hon. member for Yeoville did no more than warn the Minister and in fact asked the Minister to be careful to see that Parkinson’s law does not apply and create a top-heavy Administration. He did not attack the Management; he did not attack individuals. What he warned about was the danger of Parkinson’s law, as Parkinson’s law is applying to the Deputy Minister: There has always been one Minister and now we have one-and-a-half Ministers. Now the Deputy Minister is going to have his little empire around him, and so it builds up. When we have an example of it here in the case of the Minister and his own Deputy, then surely we are entitled to warn against the danger of Parkinson’s law creating a top-heavy Administration.

The hon. the Deputy Minister, in his reply to the second-reading debate, stated that certain facts stood out “soos ’n paal bo water”, and the first two of those facts were that the present situation had nothing at all to do with the Railways. In effect he said, “it is not our fault”. Sir, we do not blame the Railways for the drought, but for the rest the Railways cannot escape responsibility for their own financial administration. They may not cause some of the problems but they should be able to deal with them when they occur. After all, the Minister of Transport has collective responsibility with the Cabinet; he is just as responsible as any other member of the Cabinet for what happens under the administration of this Government, and for the Deputy Minister to shrug his shoulders, for him to say, “this has nothing to do with us”, is to my mind the weakest of weak arguments that he can advance in reply to our charges. In fact, by his reply he is accusing the Nationalist Party Government of being responsible for the mess in which the Railway Administration finds itself, because he quoted events which are due to his Government and then used them to excuse the Railways’ need to increase tariffs. He said: “We were faced with this situation; it was beyond our control; the Government forced it on us and we had no option but to take these steps.” In other words, the Deputy Minister accepts and admits Government responsibility. He is trying merely to pass it off his own shoulders on to the shoulders of the Government. We are not interested; we say that the Deputy Minister and the Minister share collective responsibility with the Government and they cannot escape the consequences and the blame for what South Africa is going to have to suffer by saying that the raising of rates was due to circumstances beyond their control.

But let us look at the third point made by the Deputy Minister, that these increases would not affect the cost of living. He said, “Of course, it will not make much difference; it is only going to be a tiny little fraction,” and he then quoted figures to show the effect of previous rail increases on the cost of living. Sir, they say that “figures cannot lie but liars sure can figure”. I am sure the hon. the Deputy Minister does not fall in that category but it is amazing what you can prove with figures; you can prove almost everything, and what the Deputy Minister succeeded in proving was that the Railway Administration had made a tremendous contribution (“ ’n aansien-like bydrae”), a considerable contribution, towards reducing the cost of living in 1954.

In 1964.

I did not catch the date. He said that the Railways had made a considerable contribution towards reducing the cost of living in South Africa; that this was something of which the Railways could be proud. They had contributed considerably towards reducing the cost of living because they had reduced the rail tariff on petrol by R7,000,000, and this reduction of R7,000,000 was a magnificent, a tremendous gesture in the interests of reducing the burden of the cost of living. But now, of course, that they increase tariffs by R46,000,000, that is going to make no difference, it is not going to affect the working man. R7,000,000 is a considerable contribution towards reducing the cost of living but R46,000,000 is going to make no difference to raising the cost of living! Sir, what utter tripe and nonsense. Out of the Deputy Minister’s own mouth he has condemned and destroyed his own argument. To say that an increase of tariffs amounting to R46,000,000 is not going to affect the ordinary man and to base that on an appeal to industry to absorb the increase and then to attack the hon. member for Yeoville for allegedly supporting big industry against the interests of the working man, is simply another attempt to find a chink and to camouflage the Deputy Minister’s failure to reply to the argument advanced by the hon. member for Yeoville. But, Sir, that camouflage is not going to work, just as the smokescreen which he tried to put up over a non-existent attack on the personnel is not going to work. This camouflage is not going to bluff anyone. What the hon. member for Yeoville said quite clearly was to point to the complete and utter unreality, the lack of realism, in pretending that an appeal to industry to absorb the increased rates, would stop an increase in the cost of living. All the hon. member for Yeoville did was to say that of course that is nonsense and that it is not going to work. The Deputy Minister knows that it is not going to work—or he should know at any rate. All he is doing is to put up the argument as a smokescreen here so that he can then say to the people, “Well, we appealed to commerce and industry to absorb the increases; ‘dit is die Hoggenheimers wat julle oorlaai met prysverhogings.’ ” But, Sir, what about the direct charges, the things which industry, even if it wanted to do so, could not absorb, things like the increase in passenger fares? That is a direct charge on the consumer. What about the other direct charges which cannot be absorbed by commerce and industry—things such as the increase in the price of petrol, which is subject to control? The price of petrol is controlled, so these are direct charges on the consumer. When one looks at the increases one finds that a large percentage consists of items which cannot be absorbed by commerce and industry, no matter what happens. But what happens in the case of the other increases? What the Minister and the Deputy Minister have failed to deal with is the cumulative, the trigger reaction which flows from tariff increases. It is not the amount that is put on to a specific item, it is the fact that this triggers off a chain reaction. It was put to the Minister clearly that if you take a can of canned fruit or canned peas, for example, it is not only the cost of railage in respect of the packed can of canned fruit which is going to affect the resale price, it is the railage on the tin transported to the factory, on the paper and ink to the printer, on the sugar and on every single item which makes it up. It is the cumulative increase on each of the components that matters, not just the increased railage on the final item. To try to pretend that there is going to be no extra burden on the ordinary man is simply to admit the Government’s inability to answer the charges of this side of the House. I am going to deal with that in a little more detail in a moment but I want to deal first with one other item on which the Deputy Minister failed to answer. When the hon. member for Yeoville spoke of mechanization he specifically mentioned accounting procedure; that was the query he raised. The Deputy Minister, when he replied, referred to all sorts of other mechanization and when asked about accounting he said, “I don’t know but there was a saving.” The question specifically concerned accounting procedure.

Coming back to this question of the effect of the increases on the ordinary man I want to deal with the speech of the hon. member for Malmesbury who unfortunately is not here at the moment. I hope that if he is in the precincts of the House he might care to come into the Chamber. I am surprised, in fact I am shocked, that the Deputy Minister in his reply did not repudiate the hon. member for Malmesbury. If the Deputy Minister had one shred of responsibility towards or interest in the welfare of the common man, then the first thing he would have done when he stood up in this House, would have been to repudiate and to deny the statement of the hon. member for Malmesbury. At this time, when we have just this week had a Budget designed to reduce inflation, when we have listened for hour after hour to warnings and appeals from Minister after Minister about the danger of inflation, about the hardships this imposed on the common man, now the Minister of a Department which employs 93,000 people earning less than R200 a month and 23,000 earning less than R100 a month, allows one of his speakers to get up and to say blatantly and flatly without any beating about the bush that the trouble with South Africa is that we are living too high; not that the cost of living is too high but that the standard of living is too high. I want to ask the hon. the Minister and the Deputy Minister to tell this House and South Africa whether they believe that a man earning R100 a month is enjoying too high a standard of living; whether a man earning R200 a month is enjoying too high a standard of living.

That is not what he said.

Let me quote what the Burger said—

And so he went on. What he said was that there was no longer a class difference in South Africa, that there was no distinction; we were all the same. That was said by the hon. member for Malmesbury, not by me. Having said that there was no distinction, he then went on to say that we were living too high; “look at the shining motorcars”. Sir, the Railwaymen has not got diamond concessions, crayfish concessions and businesses and factories and other benefits. 93,000 of them are earning less than R200 per month. The Railwayman has not got a shining motorcar that he sells when it has done 6,000 miles, but the measure of the sympathy of the Government, as the representatives of the Railwaymen, is to stand up and say that the standard of living is too high; that is the measure of sympathy which Government members have for the ordinary man and his problems. They themselves accept that there is no class distinction. If there is no class distinction then the hon. member cannot say that he was only referring to one class or one group because he himself has repudiated the existence of classes and groups. [Interjections.]

You see. Sir, now they are running away from it; of course they will run away from it. If the Deputy Minister had had any sense of responsibility he would have got up and repudiated the hon. member for Malmesbury and he would have said, “I do not believe that the working man of South Africa is living too high, that his standard of living is too high”. I now say publicly to the Minister and to the House and South Africa that we in the United Party do not believe that the standard of living of the working man is too high. We believe that hundreds of thousands of South Africans have a standard of living which is far too low, and I include amongst those whom we believe have too low a standard of living, the 93,000 railwaymen of this Minister’s Department who are earning less than R200 per month. And then this Deputy Minister says that these tariff increases are going to make no difference to their cost of living.

Sir, when you are earning R200 a month or less, you have to count every single cent. I have just received a survey of rentals in Durban (Point). What does it reveal? The average price of a single flat in Durban at the moment is anything from R40 to R60 per month—for a bachelor flat, for just one room. The rental for a flat with a bedroom and a lounge is R60 to R80 per month. This is the average in respect of all buildings completed in recent years, not just luxury flats, but the average flat. A man earning R100 a month, pays R40 per month of that towards rent, and then on top of it he has to send his children to school and buy them school uniforms plus the little extras. But, Sir, according to the hon. member for Malmesbury he is living too high. Here we have some indication, in the failure of the Deputy Minister to repudiate a statement made by a member on his own side, of what this Government thinks of the welfare of the common man. Here we have a repudiation by the Government side that the Railway Budget is going to affect the ordinary man and we have an acceptance, by tacit admission, of the statement that people are living too high. Sir, we fling that back in the face of the Government; we fling it back with contempt because we believe that this is the worst of all times to place an extra burden on the ordinary man, and that. Sir, is the kernel of the argument we have advanced over and over again and to which no hon. member on that side has replied and which the Minister and the Deputy Minister have evaded. We have not said that there can never be tariff increases. We have said that this of all times is the worst possible time to place an extra burden of R46,000,000 on the people; and when we appealed that the Rates Equalization Fund should be used we stated specifically that we regarded this as a time of financial emergency and that we should try to tide the Railways over until better times arrive so that if there must be tariff increases, let them come at a time when we are not fighting a life and death struggle against inflation. Not one attempt has been made to answer that claim. What we are charging the Government with is its timing, as much as for what it has done; its failure to see ahead, and to bring in wage increases when they were needed.

By now last year’s salary increases have gone with the wind; they are finished. The person who got an increase last year has already lost it by merely paving his debts which he incurred by waiting for it to come. That salary increase is of no value to-day. It has been absorbed by the cost of living. Now, at this time, when the effect of the increase has already gone, this extra burden is placed on us. Our appeal to use the Rates Equalization Fund was as a short-term emergency measure and not as a long-term solution. We gave the Minister suggestions on the long-term solution. I am not going to repeat them now, but dealing with the short term we said that this was the time when the fund established for a time of crisis should be used to deal with the crisis. But all we get is: Do not worry about this; it will not affect the position very much. In fact, if one had listened to the Deputy Minister and other hon. members opposite, and to the hon. member for Malmesbury, one would really believe that this Budget was going to help the ordinary man by reducing his cost of living. Yes, if you listen to this debate you would think you were living with Alice in Wonderland. According to those hon. members, is this Budget going to reduce the cost of living?

I want the hon. member for Malmesbury to come to my constituency and tell the pensioners and the Railwaymen there that they are living too high. I want the Minister and the Deputy Minister, who refused to repudiate that statement, to come and tell the pensioners, the Railway workers and the white-collar workers, the people living on fixed incomes and salaries, that they are living too high and that they are changing their furniture like a woman changes her dress. I tell you, Sir, that there are many who have no furniture other than a few sticks or a couple of boxes with curtains in front of it. I have been to many flats and rooms where there is a bed and almost nothing else, but this is called “living too high”. [Interjections.]

Hon. members say this is not so. I challenge the hon. member for Brakpan to deny that in his constituency there are people living with hardly a stick of furniture, people living in backyards on the smell of an oilrag. But he is not interested in the welfare of those people; let them live like pigs, as long as we, the hon. members for Malmesbury and Brakpan and their pals, can live so well that they can exchange their cars every 6,000 miles. That is all they are interested in. They do not care about the summonses these people get. because they are living too well themselves. I am not talking about them; I am talking about the people who are not living well, the people for whom this Government has not the slightest sympathy as long as it gets their votes. That is their sole interest, and I say that this Government has failed to answer our charges. It has failed to deal with our pleas and with our challenge to try to lift the burden off the ordinary people upon whom this Budget is going to inflict even greater burdens. But we say that even if the Government does not care we. the Opposition, care for these people who have been abandoned by their representatives on that side of the House.

What is interesting in this debate is the fact that as the debate progressed, the speakers on the opposite side became more and more angry for less and less reason. For every reason which they mentioned, they received a proper reply. But the further they went, the angrier they became—because they do not have any case. When I listened to the hon. member for Durban (Point) who made his wrath felt in such a dramatic way in this House, it put me very much in mind of the old man who was not happy unless he could be angry and kick up a row. Once when he came home and found that there was nothing amiss, he looked round and asked why the cats had not yet had their water. I think that is what we can say about that hon. member. He has no reason whatsoever for being angry, but now he says certain things here and wrests the statement of other hon. members entirely out of their context, and then opposes them. Surely we all know that if one talks of the standard of living of a country, one uses a specific term, a term which the economist or any sensible person can understand. One then talks of the mean. We know that there are rich as well as poor people in every country, and in every country with a high standard of living there are extremes of affluence and poverty. But if one brings the two together, one knows what the mean of that country is. Now there are ways of establishing whether a country’s standard of living is too high for its national product. What that hon. member meant was that there are probably people in the country who are living too well. Looking at the condition of that hon. member, I would not be at all surprised if he also fell into that category. There are people who, after the announcement of these Estimates, admitted openly that they thought there were ways in which they too could economize, and that is the message which the hon. member for Malmesbury tried to bring home.

But if we consider this debate which is now drawing to a close, then what the Deputy Minister said is true, i.e. that the whole essence of this debate is that there has been a deficit on the Railways. Now the Government owes it to the country to state what the cause of that deficit was, and then they must tell the country what steps they want to take to make good that deficit, and to furnish proof that they are doing so in a way which will not aggravate the major economic question of inflation. During this week of debating the Opposition has had the opportunity of going through everything which had been done by the Railways with a fine-tooth comb and showing us, after a careful analysis, whether the Railways Administration should bear the blame for what happened, or whether there are factors over which they had no control. If it was the Railways which had been responsible, surely they would have been able to indicate it clearly. They should have been able to say that there was proof of poor administration. They should have been able to furnish proof of poor planning which resulted in poor carrying capacity on the Railways. They should have been able to furnish proof that there was poor staff control, and that human relationships on the Railways were not all that they ought to have been and that all these things contributed to the productivity of the Railways being reduced. That is what every sensible person expected, i.e. that the Opposition would point out these things to us. But when we look at the Budget speech of the hon. the Minister and at the Annual Report of the Railways, and when we examine any particulars which we were able to obtain, such as this White Paper which was laid before us, we say that they will never succeed in proving these things. Talk about poor administration in the Railways! The hon. members for Yeoville and Durban (Point) talked about that, but they did not furnish any proof; they only insinuated it; they only aluded to it indirectly. But it is the same language we heard from a previous member of that party who came along here year after year in the days when the Railways were experiencing difficulties and attacked the hon. the Minister and his officials personally and spoke of “blundering Ben” and of “Ministerial inefficiency”. Those things were mentioned in the past, and they are continuing in the same vain to-day. When the facts gave the lie to what they had said and the hon. the Minister said that they would shortly have to swallow their own words and admit that he had done the right thing, it all happened as the Minister had said it would, but did one of them ever have the courage to say that he admitted that the Minister had been farsighted? And I want to predict that that is what will happen again. In a year or two we shall again draw their attention to it. [Interjection.] But that is the hon. member for Yeoville’s difficulty. He cannot think logically; he jumps about from one thing to another. If you want to corner him in one place, he jumps to another. There was allegedly conclusive proof that there had been no organization in the Railways. Surely we judge a tree from the fruit it bears. If we see that there has been an increase in practically every sphere, an increase in the revenue of the Railways, an increase in the goods traffic and in the passenger services and the transportation of lifestock, in airways and in every sphere, and if we take note of the fact that there was an increase as far as our goods traffic is concerned, then it is all very remarkable. The increase in goods traffic in particular is one of the clearest indications that there has been no poor administration, because the facts which the hon. the Minister made clear to us were that the goods traffic had increased by 1.6 per cent during the past year, whereas during the year before that it had increased by approximately 5 per cent. But if we were to analyse that figure further, we would find that there had been a remarkable increase until December of last year, and from January to March of this year there had been an exceptionally sharp decrease nowhere does one find that such a sharp decrease occurred in such a short time because of maladministration. There has to be factors which brought it about. If there are such factors which could bring about such a sharp decrease in a few months, then those factors will be so obvious that even the hon. members for Yeoville and Durban (Point) could discern them. They had a whole week in which to do so, but there was not the slightest indication of them having done so. That is why I say we can put the idea of inefficient organization and administration out of our minds completely. In fact, the hon. the Minister mentioned that, during the past financial year there had been no complaints of a shortage of coal during the winter months, there had been no delays or disruptions, and no congestion of goods anywhere. Is that not proof of efficiency? And how does it arise? Naturally as a result of thorough administration.

That was because private initiative transported the coal.

That member is once more talking about something he knows nothing about. Why did he not furnish his proofs for what he said? When he had the opportunity of speaking, why did he not then come forward with those facts? Now, however, he wants to raise suspicions, for which he has not the slightest proof. But instead of adopting that attitude, they ought to congratulate the Railways Administration on the efficient way in which they have administered the Railways.

A second factor which could possibly be mentioned whenever there is a decline, and when the Railways has to bear the blame, is poor planning. Previously this has been one of their principal complaints. They said the carrying capacity was inadequate, and they blamed the hon. the Minister for that on the last occasion when there was a deficit. The hon. the Minister then said that he was busy with large-scale long-term planning and that the Railways would shortly be able to transport anything which was offered, and he kept his promise. When we consider the evidence of that long-term planning haying taken place, the new railway lines and the improvements which have been made, the electrification on a large scale, centralized operations control, new grain elevators, pipelines, harbour facilities, and rolling material which is being purchased on a large scale and which is once more going to require a large part of these estimates, then I say that everything has been done to prepare the carrying capacity of the Railways for the future, so as to be able to keep pace with the economic developments of the country. Those are things which cannot be achieved overnight. Those are things which demand long-term planning, and that is why there is no sign of poor planning once we consider these things. These are not merely ideas which are being expressed; they are facts which are being laid before us. The hon. members could have seized upon these facts, and if they could have adduced proof of poor planning we would have welcomed it, but no such proof has been adduced.

Another possible reason for deterioration which can sometimes be mentioned, is poor staff relationships. We know that they can undermine the productivity of any undertaking. But facts have been submitted to us that just the opposite is true in respect of the Railways. There was correct selection and posting by professional experts. As far as this matter is concerned I just want to point out that it is of the utmost importance. One cannot achieve higher productivity, no matter how effective your mechanism is, if the human factors are not correctly adjusted. If one places a man in surroundings or gives him work in which he has no interest or for which he has no aptitude, one cannot expect results. But if one has selected the Railwayman correctly and placed him correctly in a post where there is a high degree of correlation between his interests and his aptitude, then one can expect only good results, and that is what the Railways is doing to an increasing extent. These are things which were not done previously. If we consider the methods of work which are being applied, we hear of functional training, and simplification of organization and method of work, concepts which did not previously exist on the Railways, but which are now being introduced. All these things are being done to make the workers more efficient. In addition we now find stronger motivation of the worker through the provision of better conditions of service and salaries and better working conditions. What were the working conditions like during the time that side was in power, and what do they look like to-day? What do our workshops look like? Never before has so much been done to create better human relationships in the Railways as is being done under this Government. That is why I say that the Railwayman will contribute his share in this crisis and that he will prove worthy of his trust, that he will economize more and be more productive, all of which will result in the entire Railways undertaking becoming a great success.

But it is the task of the Government to furnish the country with an explanation of what the deficit could be attributed to. It has been said here openly that it was the salary increases which brought about this deficit. That deficit would probably not have existed if other factors have not turned up which were beyond the control of the Administration, i.e. the inflationary tendency at present existing in our country’s economy. But it is a tendency which has its roots in the world economy. It not only exists in South Africa, it is being met with throughout the world. Even in America one finds that tendency. All those countries must attempt to-day to counteract inflation, and just as one cannot separate False Bay from the ocean, so one cannot separate us economically from the world economy. There is a measure of determination and of influences from outside which affect our economy and for which no individual or government can be blamed. But the Government began at once to consider steps to counteract those things. There were the credit restrictions which were imposed, import control and the increased rate of interest. Obviously those things had an effect on the revenue of the Railways. We know that if there are credit restrictions, less purchases are made, particularly of the high-tariff goods which are such a major source of revenue for the Railways. In the same way we know that when import control is introduced one finds that those high-tariff goods enter the country on a smaller scale. Those steps which were taken to counteract inflation had to have an effect on the earnings of the Railways. Then there is also the second important factor over which one could not have any control, and that is the drought with its tremendous effects on our agricultural production, one of which was that there was much less produced which had to be conveyed.

What is the solution which can be offered in respect of this problem?

Increased tariffs.

The hon. member is now beginning to reveal some insight and I am glad of that. What were the suggestions offered here? We expected the Opposition to stand up and say that they had a realistic approach, or a method which could be applied to solve the problem, but all that they said was that the reserves should be utilized. The Rates Equalization Fund which was built up out of the surpluses of the past, and which must see the Railways through whenever a serious crisis occurs, must now be utilized, according to the hon. member for Durban (Point). If one asks him what proof there is that we will not be faced with a greater crisis in the future, if that Rates Equalization Fund which has already been drawn from were to be utilized, he cannot reply. He wants to take this single card which one has to play with against the powers taking the field against one, out of the hands of the Government. The hon. member for Yeoville said that the relaxation of import control would be a solution to the problem because, he said, many more high-tariff goods would come into the country, the Railways’ earnings would therefore be higher and the deficit could then be wiped out. But I want to tell the hon. member that this was mere conjecture on his part. No one knows, if import control were to be relaxed further or abolished totally, what returns those steps could yield for the Railways. Has he ever made an estimate of that? It could be a few million rand at the most, and of what use would that be against a deficit of more than R40,000,000? But even if that were to be done, the question remains to what extent it would be effective, because we know that the means which are being applied by means of credit restrictions and the means which the Government are applying to counteract inflation could have this affect that even one’s importers would then be hesitant to import, and what kind of solution would that be? It is mere conjecture to say that that would be the solution. At the most it could bring only a measure of relief.

But there is another possibility, and that is that our salaries should be reduced. It is the attitude of this side of the House, and we stand or fall by it, that the burden should be borne by the country as a whole rather than that we should touch the salaries, the bread and butter, of our Railwaymen. Does that side want to see that we reduce the salaries of our Railwaymen? If not, nothing else remains but tariff increases. But if tariff increases are being introduced, everyone has the right to expect that the Government do so as judiciously as possible, and that is what is being done here. The Deputy Minister mentioned interesting figures, figures which those members never made use of to prove to us that this is not being done selectively. He proved to us that the bread and butter brigade in this country are being protected as far as possible by making those tariff increases as selective and as few as possible. They had the chance to analyse those figures and to prove that it was not true. But they simply said that it was not true and they said we do not want to take the other man into consideration. In the past this Government has proved that, with the introduction of tariff increases, it has always taken into consideration the ordinary citizen and his means of subsistence. If we take into consideration, with the rise in prices in the past, that the retail trade index has risen by 160 per cent since 1939, and that in the same period the tariff increases have risen, this one included, by a 118 per cent, then I say that this is conclusive proof that this Government is doing everything in its power to protect the ordinary citizen as far as possible.

The hon. member for Green Point referred to the high train fares and he said that it was contrary to the recommendations of the Schumann Commission, because, he said, that Commission had said that the increases should be spread over a ten-year period. No fault was found with the increases, because their purpose was to place the Railways on a sound basis, but he said that they should be effected over a period of ten years. The Government, however, so the hon. member said, had introduced them straight away. But did it ever occur to the hon. member that as far as fares are concerned, there is a deficit of R43,000,000 and that these increases will only bring in R5,800,000? In other words there is still ample time during the next ten years to adjust it gradually, and I doubt whether the hon. the Minister will ever cover the deficit. No, I say that very conclusive proof has been adduced that this Government is going to work in a sensible way, and I am certain that the ordinary citizen, to whom so many references have been made, thoroughly realizes the implications of all these things. I am certain that he realizes that he is being faced with a challenge here which has to do with his entire future existence, and that he is willing to bear his share of the burden. We have seen this in the past, and I know that if we ask the population of South Africa to help bear the burden in a responsible way then we are going to get nothing else but strong support for this attitude of the Government. The Government has always risen in the estimation of the public outside as far as its prestige is concerned because it is not afraid to inflict hurt when it is necessary, and because it offers those people a challenge, and those people are adult enough to accept that challenge. It does so whenever it deems it necessary, just as a surgeon will not hesitate to use a scalpel to remove the cancer in order to save the life of his patient. We are fighting here for the existence of the ordinary worker and for the protection of his future and these measures may perhaps not be pleasant, but they will yield good fruits for which the Government will still be thanked in future.

It is rather extraordinary to hear two members on the Government side accuse members on this side of the House of acting dramatically. The hon. member for Kimberley (South) and the hon. member for Florida have made that allegation, and I might have taken that seriously if it had not been such a joke, because those two hon. members on the opposite side have excelled in dramatic statements. Yesterday we heard the hon. member for Florida accuse the hon. member for Yeoville of being terribly dramatic, and to-day we heard the hon. member for Kimberley (South) say that the hon. member for Durban (Point) had become so dramatic that he actually became angry.

Later the hon. member for Kimberley (South) took up the cudgels for the hon. member for Florida with regard to the statement he made yesterday that the standards of living in our country had become too high, terribly high. And then he added for good measure that the standard of living in all countries was high, but that it was not necessarily quite as high here in South Africa as in other countries. I hope the hon. member for Florida realizes that wages in our country are not as high as in other countries either, and consequently one would not expect the cost of living to rise as high. But I am now speaking of the standard of living, and of the scandalous allegation that the standard of living in our country is too high. I want to ask the hon. member for Florida to what percentage of the population that applies. Was he referring to the entire population of the Republic, or merely to the Whites, and a section of the Whites? He is quiet. Was he referring to the entire population of the country? If so, then I want to suggest that the percentage to which that applies is very small; I am not sure that it is 10 per cent; I am not even sure that it is 5 per cent. As an example of the high standard of living in our country he mentioned the shiny motor cars which have done 5,000 and 6,000 miles and are parked at dealers in second-hand cars. Now I ask, what percentage of the population is living too high? Is it the section of the population which now has to pay the higher rates charged by the Railways? Or is it the position that that section which owns the shiny motor cars never travels by train? The fact remains that the increase in rates as regards passenger traffic affects that section of the population which does not have a high standard of living but which, on the contrary, has a very low standard of living. A while ago the hon. member for Durban (Point) pointed out how many of the Railway workers even have a fairly low standard of living, but I ask myself whether the hon. member for Florida has seen enough of the cities to know that a large percentage of the population lives on a level which is virtually below the breadline. Is he aware of the numerous individuals and families who find it hard to get food every day? In saying that I am not being dramatic. Surely we all know of such cases, because one meets them in every city and every town and every area. The people find it hard to make ends meet. And those are the people who will have to contribute to the R5,800,000 in respect of increased rates. And then the hon. member for Kimberley (South) comes along and alleges, as other hon. members on that side have also alleged, that we are accusing the Government and the Minister of Transport of a lack of planning in these Estimates, because the entire cost-structure as regards passenger transport and freight has been increased at one stroke to the extent to which, as they point out, there may be a deficit. But now I want to ask a few questions as regards what we call poor planning. Who is there on this side of the House who has ever suggested that the entire Rates Equalization Fund should have been used to meet the current deficit? Who has suggested that the more than R40,000,000 in the Fund should have been used to meet the R46,000,000 deficit? Is it not sound budgeting and sound planning if one builds up one’s reserve funds in good years and then starts to use those reserves in poorer years? And conversely, if good years come again, one rebuilds the reserve funds.

Is this year a poor one?

The Deputy Minister is the man who explained to us just now that it was a poor year, and he pointed out how poor it had been as a result of import control and droughts. I shall come back to that in a moment. Is the hon. the Deputy Minister anticipating another deficit of R14.7 million next year as a result of the drought, and fewer products conveyed because less is being produced? Is that what the Government is anticipating? Are they planning for a crisis year of that nature on the grounds of unknown factors and on the grounds of a drought which will be as severe as the past drought has been? Is that the long-term policy of which the hon. member for Kimberley (South) spoke? Is he suggesting that we should not only increase the rates to a considerable extent for the present, but that we should also provide for the continual occurrence of extraordinary deficits? He maintained that the deficit was due to reduced imports, with the result that the Railways had fewer goods to transport. But the hon. member failed to mention agriculture, despite the fact that there has been a decrease of almost R15,000,000 as regards the transport of agricultural produce, because circumstances had brought about a lower production. But is that planning; is that the long-term planning? I should have thought long-term planning, sound economic planning, would be that if there was a crisis in the country, such as the present one in respect of agriculture, there should have been concessions rather than increases in rates, we should have used a portion of the Races Equalization Fund to wipe out the deficit rather than to add everything to the rates, and that we should build up the Equalization Fund again if matters improved in future years, as we hope they will improve for the Railways and for our country. In my opinion that would be long-term planning and sound planning. How can one member after another get up on the opposite side and praise the Government in this respect, claiming that this is the best possible planning? Surely that is not so. Hon. members may correct me if I am wrong, but surely the best planning is to use a portion of the Rates Equalization Fund—I am not saying which portion—to wipe out part of the deficit and to recover the balance selectively from the traffic.

The hon. member for Kimberley (South) is pretending that we pleaded for an increase in the salaries of Railway officials in the past, but are opposed to it now that the money is being made available for it. I want to remind the hon. member that the Prime Minister himself said that the Railway workers did not need higher wages, but that they merely wanted more.

That is not true.

Yes, he said that they did not actually need higher wages, but that they merely wanted more. That was said at the time we were pleading for improved conditions for the Railways personnel.

Business suspended at 12.45 p.m. and resumed at 2.20 p.m.

Afternoon Sitting

When business was suspended for lunch, I was making certain points as regards the lack of planning on the part of the Minister of Transport. I now want to apologise for having referred to the hon. member for Florida this morning, when I actually meant the hon. member for Primrose, who made such a fuss yesterday and accused the hon. member for Yeoville of having been dramatic.

I want to come back to the statement made by the hon. the Deputy Minister of Transport, when he tried to defend the actions of the Railways, and I want to assure the hon. the Deputy Minister that if the Railways had been a public company that had to make a living from rates, instead of a monopolistic Government undertaking, they would have found other means, rather than to pass on the entire load to the public at one stroke. I speak under correction, but I think the hon. the Deputy Minister used the words “that other factors, apart from the Railway rates, are forcing up the cost structure”. I now put it to the hon. the Deputy Minister: Which other factors, individually or jointly, can contribute more towards forcing an increase in the cost of living than a simultaneous increase of R46,000,000 in Railway rates? Tell me, which are those factors? An extra R46,000,000 is collected from the public of South Africa in one year, and almost everybody uses the Railways in some way or other. Now I put the question to him: Which section of the community does he think will not be affected by the increased Railway rates? In view of the fact that the cost of living is already so high, is there one single factor that can contribute more towards inflation than the increase in the Railway rates? Can any action on the part of any Department contribute more towards increasing the cost of living than this step on the part of the Minister? Is there anybody who does not have to use the Railways in order to obtain his commodities? I want to put it this way: The consumer who finds it hard to make ends meet, may still cut down on the use of agricultural produce if the cost of living rises. He may simply use less of those products, less sugar, less butter, etc. But is there any way in which he can reduce the costs of transport, which he has to pay directly and indirectly? Or is the hon. the Minister suggesting that an increase in the prices of products, particularly primary products, is contributing more towards the higher cost of living than the increased Railway rates in these Estimates? The hon. the Deputy Minister went further and claimed that petrol—I think he spoke of petrol, and of one other item—was all that would have a direct effect on the cost of living, but I am asking, what other factor can have a greater effect on the cost of living than this general increase in rates?

Last week the hon. the Minister of Transport claimed here that he was implementing the Schumann Report in part, and I should like to subject that position to a close scrutiny. The Schumann Report made certain recommendations, and two of the cardinal recommendations are those on which I want to dwell for a moment. The Report refers to the preceding paragraphs and then states—

That is recommendation No. 1. Now I want to ask the hon. the Minister whether his method of reducing that gap is to increase both to a considerable extent, and then reduce the gap by merely increasing the higher rates by more than the lower? An analysis shows that the rates from 1 to 6 have been increased by approximately 8.4 per cent, and the rates from 7 to 13 by approximately 13 per cent. In other words, as regards the recommendation from the Schumann Commission’s Report that he has accepted, the Minister has increased both rates considerably, but he did try to reduce the gap by merely differentiating to the extent of 4.5 per cent between the first group of higher rates and the second group of lower rates. Hence the hon. the Minister’s claim that he has partly implemented the Schumann Report.

That brings me back to agriculture, and throughout this debate I have waited patiently for one single member on the Government side to get up and repeat the pleas they made repeatedly to the Minister last year when the Schumann Report was under discussion. Then they pleaded with the Minister not to implement the recommendations of the Schumann Report as regards agricultural products. Now I want to admit in all fairness that the Minister has not carried out the Schumann Report so fully as regards agricultural produce, but the fact remains that an additional R2,500,000 will be recovered from the transport of agricultural produce. What was the hon. the Minister’s reply last year, when members on his own side pleaded that the Schumann Report should not be carried out as regards agricultural products? The Minister replied: “Hon. members on this side have pleaded fervently that the recommendations of the Schumann Report should not be carried out as regards agricultural products. I can give them the assurance that I will give due weight to their representations.”

Mr. Speaker, is this the “due weight” he has given to their representations? According to the statement made by the hon. the Deputy Minister, the traffic as regards agriculture has represented R15,000,000 less, and in consequence there has been a decrease as regards revenue from the transport of agricultural products. I want to put it to the hon. the Minister in all fairness, if that was the position of the agricultural industry last year—and agriculture is now experiencing an even greater crisis, with a lower production and higher production costs—does he think that those products are now able to carry increased Railway rates in addition? Did he not have the power, for this year at least, to take the portion of the increase that affects agricultural produce from the Rates Equalization Fund? The rates on all agricultural requisites will rise, and in addition to that there will be increased costs for the transport of the farmers’ products, and that while the production is decreasing as a result of circumstances. Think of the fencing materials the farmers need, their hardware and spares, all the things they need will have to carry a higher rate. Their production costs are rising, and now they will also have to pay an increased railage on their products. Think of the consequences of the drought and the rehabilitation problems as regards the farmers. This is not an agricultural debate, but I think the Minister of Transport is doing agriculture a great injustice at this stage; even though the increase as regards agricultural produce is minimal, it is still quite wrong in principle. I am still waiting for hon. members on the opposite side to get up, those of them who pleaded so fervently last year that the recommendations of the Schumann Commission as regards agriculture should not be implemented. Then the Minister said that he would consider their representations. Now we may expect them to get up and point out to the hon. the Minister that farming cannot bear it, that it cannot be done. If matters improve as far as the farmers are concerned, and conditions change, it may perhaps be possible to let them pay something more, but under the present conditions, in view of all the factors that are against the farmers, in view of droughts and higher rates and a shortage of fodder, and everything that accompanies that, in view of the problems facing the farmers, that is impossible now. In view of the announcement we heard this morning, that even the water supply of the Vaal River, particularly as regards the Vaalharts Scheme and the lucerne produced there, will be less as a result of the low supply of water available, I cannot understand how a Minister can claim in his planning—if things are going the way they are going now—that this is a balanced Budget. I cannot understand how he can call this a long-term and short-term Budget, and state that it is proposed to impose perhaps even higher rates eventually, because we understand that there are still losses on the passenger transport. Under all these circumstances we can expect members on the opposite side to get up and urge the Minister to give up these plans. But no, they have the audacity to get up and claim that this is the best that could have been done for the entire country and also for agriculture. Where are the hon. members who should champion the cause of the farmers under the present circumstances? Where are those who champion the cause of the ordinary users of the Railways, who fall mainly in the lower income groups? I find it incredible that in a House constituted like this one, with a government which has such a large majority as this Government, which has the power even at this stage to effect a change in a Railway Budget in order to bring relief in the present circumstances, the members who form that great majority get up one after another and do nothing but thank the Minister for the miracle he has performed. When will the time come when a government constituted like this one, with such a large majority, will experience a change of heart, and when members on the other side will help us and say: “Mr. Minister, A, B and C. or A, C and Z in these Estimates are oppressive, and should be eliminated, and we should like them to be changed”? But no, it is the same old story. In actual fact it is now considerably worse. In previous Sessions we still heard members on the Government side get up and say, after having expressed their gratitude: “But, Mr. Minister . . .” and then they made quite fruitful suggestions. But not as regards these Estimates, not in this Session. One after another, front-benchers and backbenchers, they come up with the same old story and thank the Minister very much for the wonderful Budget he has introduced. I want to submit that these Railway Estimates that have been introduced have neither short-term nor long-term objects. All the Minister has done is to increase the rates. He did not want a deficit and that was that. He never considered using, say R5,000,000 from the Rates Equalization Fund, and trying to bring relief to those places where relief is needed, as he knows and I know and everybody in the country knows. It is rather late to make such an appeal, and it will probably be of no avail. But let me put it this way, that the country as such—we read it in the papers and we hear it over the radio—is expecting alleviation as regards the Railway Estimates. But this Government refuses to listen. The people have to fork out the millions. On the one hand attempts are made to stem inflation by means of the Main Estimates, but here we have an attempt—perhaps not a deliberate attempt, but in any event a measure—that will serve to boost inflation. I think the time has come for the Minister to reconsider this position. I have made a plea here on behalf of agriculture in particular. He may tell me about the decreased rate he had introduced in respect of agriculture, but the fact remains that he is taking more money from the pockets of the farmers for the transport of their produce, and on an unnecessarily high scale. It is an ill-timed and unfortunate step which is being taken in these Railway Estimates.

Mr. Speaker, on a previous occasion in this House I raised the question of the salaries of Coloured Railway workers in the S.A. Railways. The hon. the Minister was kind enough on that occasion to get up immediately after I sat down and to give the undertaking that this matter would be investigated immediately. A few weeks later I was called to the Minister’s office, and on that occasion the Minister informed me that he had decided to raise the salaries of Coloured Railway workers by 15 cents a day and in the category of those who normally under the previous system reached the maximum of R2 a day after 10 years, the period would be shortened to R2 per day after five years. Mr. Speaker, I deem it my duty to express to the Minister my sincere thanks and appreciation of the thousands of Coloured Railway workers who have benefited as a result of this. It might sound very little if one says 15 cents a day but this amounts to about R3 per month, which is half of the sub-economic rent that that Railway worker has to pay.

As far as the shortening of the period is concerned, I am able to tell the hon. the Minister that at a public meeting at Uitenhage of my constituents there, a Coloured Railwayman got up at the end of the meeting and requested me, by moving a motion, to thank the Minister for the benefits that had accrued to them as a result of the shortening of this period. While I am able to tell the Minister that the Coloured workers are grateful, I feel however that I have a further plea, and that is to point out to the hon. the Minister that commerce and industry are rapidly going over to the system of a R2 per day commencing salary, and I feel that it is only fair that the S.A. Railways, as the employer of many thousands of Coloured people, should also consider that and also go over to a commencing salary of R2 per day.

I feel that I have to point out that especially in the Western Cape and in the areas designated as areas where Coloured labour has priority, the intention of the Railways to go over to the employment to Coloured instead of Bantu labour should make the Minister realize that it must be borne in mind that the average Coloured man cannot feed himself and his family and maintain himself and his family on the same rate of pay as the Bantu is able to do. Your Bantu labourer in general has not got his family here. He eats a different type of food, he lives differently to the Coloured man who has his family here and who has to feed them and clothe them. The tendency with the Coloured people is that whenever economically possible, wherever according to his standard of education or development possible, the Coloured man of the same economic and educational level as the White person, lives exactly as the White person does. I refer to the 20 per cent increase in second-class fares.

Sir, it is a well-known fact, whether it is long-distance travel or suburban travel, that the Coloured people mainly make use of the second-class, and this increase is quite a severe blow to them. I am certain that as far as the people I represent are concerned, they will also realize that certain circumstances necessitate this increase, but then I wish to draw the attention of the Minister to the fact that although the Government is criticized from time to time for the imposition of job reservation, the oldest form of job reservation is the Railway Act of 1911. While I fully realize that thousands and thousands of railwaymen are doing their jobs conscientiously and efficiently, I also feel that the stage has been reached where the average railwayman should know and should be made to know that if he does not do his job, it may be handed over to a Coloured person who could do it better, more efficiently and more conscientiously. We had the example recently where the hon. the Minister of Labour increased the quota of Coloured employees as conductors and drivers from 16 per cent to 25 per cent in the case of the City Tramways Company. I can assure the Minister that the Company concerned was able to whip off the cream of the Coloured applicants.

I live in an area now where for the first time in our history Coloured drivers and conductors are employed and the general consensus of opinion is that they are the most efficient, the most helpful and the most courteous people who could possibly be employed in those capacities. I feel that the stage has been reached where certain railwaymen must not have the assurance that because there is a shortage of man-power their places cannot be taken by Coloureds.

I can give the Minister an example. Let me tell him what happened in a certain office in the Cape Town docks. I mention this because it is so unfair to the thousands of other railwaymen and to the Coloureds who are capable of doing that work. In a certain office in the Cape Town docks, an office in which seven men are employed, five of them, three of whom are on the permanent staff and earning very good salaries, left their office at 12 o’clock on the 9th of August to go and play putt-putt at Green Point and they came back just in time to book off to go home. If the Minister requires the information I can tell him in which particular office this happened. The only two men left in the office that afternoon were two immigrants, who had come to South Africa only a few years ago, and all telephone calls from Culemborg Station and from other Railway Departments fell on deaf ears because the men were simply not there and nothing was done about it.

On the 4th January, 1964, my family and I came back from Pretoria and there again I had an example of the sort of thing that happened. I was clad in a pair of flannels and a shirt. I brought four loads of luggage to the station that day. I did not have a tag around my neck proclaiming that I was a Member of Parliament, which in any case should not be necessary for me to mention. Sir, I can assure you that the four loads of luggage were offloaded at Pretoria Station by myself and my eldest son. We procured a barrow; we loaded the luggage on to the barrow; we took it to the cloak room and we did everything ourselves. But, Sir, all of a sudden a car stopped outside with a Government Garage registration and the Secretary of a certain Department got out of the car. You should have seen the reaction of the porters. Some of them were too old in any case to do the job but they were there immediately like bees around a honeycomb. I feel that the average member of the travelling public should have the same service as the head of a Department or anybody else.

I point this out not because I want to talk derisively about the men working there or the men working in the docks, but I do feel that this idea that the man’s job is guaranteed because there is a shortage of manpower and because only a White man can do the job, detracts from the efficiency of certain types of railway workers. I point this out to the hon. the Minister in all sincerity and I do feel that in fairness to those thousands of railwaymen who are doing their jobs conscientiously and in fairness to the Coloureds who would be prepared to do those jobs if they were given the opportunity, the railwaymen in general should be made to understand that Coloured people are available to do these jobs. We know what difficulties the Minister has in getting shunters. I am certain that Coloured shunters could be found and that they would be able to do the job just as efficiently. It is an undeniable fact that a Coloured man who is properly educated and trained, whether he is used as a soldier or sailor or in any other capacity is able to do the job just as well as the White man.

The hon. member for East London (City) made an attack on the hon. the Minister and on this side of the House because we said nothing about the fact that a burden of R2,400,000 was being imposed on agriculture. I want to point out to the hon. member that the rate on fertilizer has not been increased by one cent. Does he know that we are using more than a million tons of fertilizer in South Africa? Does the hon. member know that the Schumann Commission recommended an increase of no less than 27 per cent, which would have amounted to a total of at least R1,200,000? We owe the hon. the Minister gratitude for having been so considerate towards agriculture, which is experiencing difficulties at this stage. Take fruit and vegetables, for example. Here it is recommended that the rate on potatoes and vegetables should be Rate L. Does the hon. member know what the Schumann Commission recommended? They recommended an increase of 100 per cent in the rate on fruit and vegetables, and an increase of 80 per cent on potatoes. Take the rate on livestock: the rate on small-stock has not been increased by one cent, and do you know what the Schumann Commission recommended? The Commission recommended an increase which would have meant an additional income of R3,200,000 to the Railways. And yet the hon. member for East London (City) comes here and claims that the hon. the Minister is exploiting the farmers. On behalf of the farmers I want to thank the hon. the Minister for having treated us so sympathetically, particularly in these hard times we are experiencing. We appreciate that; we appreciate that very highly.

Mr. Chairman, our time is practically up but I think it is necessary for something to be placed on record and that is that since Monday, when this debate began, we have raised certain matters with the hon. the Minister and have still not received any reply from him. The hon. the Minister replied to all kinds of other matters and he made all kinds of personal attacks but he did not reply to the following matters and I hope that he will make use of this, his last opportunity, to reply to them. We wanted to know why, although the Schumann Commission had recommended it, there had been no downward adjustments in any of the 14 tariffs.

We wanted to know whether the hon. the Minister was aware of the trigger-effect of railway tariff increases on prices outside; we have received no reply in that regard. We asked why, as the Schumann Commission had recommended, a committee of appeal which was to have consisted of high officials of the Railways had not been appointed, but the hon. the Minister has given no reply. We asked what his long-term financial plans were to prevent his having to cause this tremendous periodic explosion in the price structure of our economy, and we have received no reply. We asked him whether he would consider the introduction of a revenue policy in the Railways in order to prevent there having to be a tremendous explosion in our costs structure every three or four years. We asked him how he could reconcile a Budget in which prices were being increased with a policy to combat inflation and to prevent the income of people having fixed incomes being further limited. We asked him other questions as well, but seeing that our time is almost up we will be grateful if he could avail himself of the opportunity which is still being afforded him to reply to these few questions. If he does not reply then it will at least be placed on record that the debate which we are holding on the Railways is being used by the hon. the Minister to evade the vital questions which have been put to him.

Why should I reply to a lot of silly questions?

Business interrupted in accordance with Standing Order No. 92.

The hon. the Minister has quite rightly remarked: Who would reply to such silly questions? As regard the long-term planning for which the hon. member for Yeoville has asked, I want to ask him whether he does not think that his idea of long-term planning to exhaust the reserve funds of the Railways is really silly.

Are you aware of the fact that we suggested that the Rates Equalization Fund should be used temporarily while the long-term plan was being drawn up and applied?

What long-term plans has the hon. member suggested?

Four.

The four that I dealt with this morning?

Resign so that we can take over.

That hon. member who is now asking us to resign so that they can take over, tried to refute my statements this morning by misquoting me. He alleged that I had said that the tariff increases would have no effect on the cost of living.

Very little.

No, that is not what the hon. member said. The hon. member said that once, and then proceeded to make the following statement, to which I have already referred. The hon. member actually went to such ridiculous lengths as to allege that I had said that the tariff increases would be to the advantage of the man in the street. Where did I say that? I challenge the hon. member to show me anywhere in the report of my speech where I suggested something like that. What I did in fact say, was that the increase in the tariff for petrol and in passenger fares would have some effect; that the increase in the other goods tariffs would have a minimal effect, and that other factors have a much more significant effect on the cost of living than tariff increases. But I can quite understand the hon. member; I do not really blame him for misquoting me, because if the hon. member had quoted my words correctly, he would have found that he simply could not refute my statements. That was the hon. member’s problem. If he had quoted me correctly, he would have been unable to make a speech, the more so because he seized upon something that had been dealt with here by the hon. member for Malmesbury, and misrepresented the words of the hon. member for Malmesbury and then built the rest of his speech on that misrepresentation.

I used his own words.

The hon. member for Malmesbury never suggested that people with an income of R100 per month were living too high.

He said that there were no classes any more.

Of course the hon. member had to attach that interpretation to it, otherwise his entire speech would simply have collapsed.

Do you agree with him?

To me the speech made by the hon. member for Durban (Point) was the clearest proof of the fact that the United Party has come off second best in this Budget debate. Once their attacks on the Budget had been refuted conclusively and they had become demoralized, they naturally had to resort to new arguments, and they could only develop those new arguments by misquoting hon. members on this side.

Do you agree with the views of the hon. member for Malmesbury that South Africa is living too high?

The hon. member is now trying to present the matter in a way which is different from the way he presented it in the argument he used here. He accused the hon. member for Malmesbury of having alleged that people who earned less than R100 per month were living too high.

Answer my question.

The hon. member for Durban (Point) also said that I had spoken of factors outside the Railways, and had presented those as though the Government was not responsible for them. I never said or suggested that. He said that the hon. the Minister of Transport, together with the Government, bears the full responsibility for those factors which are outside the Railways. I fully agree with him, and neither the hon. the Minister, nor I, nor anyone on this side has ever tried to evade his responsibility. Although these matters certainly come under the control of the Government—matters like increased import control in 1965 and the credit restrictions—it was a case of the Government being forced to take those measures. Those measures were not taken because the Government had failed in its duty to South Africa, but for the very reason that the Government had carried out its duty to South Africa too well.

As a result of the Government’s sound economic and financial policy, a policy has been put into operation in this country over the years which has inspired confidence and which has stimulated our economic development. That has been done to such an extent that we have experienced unparalleled economic development and industrial expansion in South Africa. And that, Mr. Speaker, has come about despite all the Opposition’s forecasts during the past years of economic disasters and misery that would strike South Africa. It has become proverbial that every time this Opposition forecasts disaster for South Africa, things have never been better for South Africa and worse for the Opposition. I say that despite all the Opposition’s dark forebodings about South Africa’s economic position in the past years, South Africa has continued to grow and prosper. And as a result of this tremendous economic growth-rate an adverse balance of payments position came about and the dangers of inflation began to arise. The Government was therefore forced to take measures to apply the brake in order to change our adverse trade balance into a favourable one, and in order to bring about a more even economic growth in order to eliminate the dangers of inflation. In order to achieve this object, the Government had to take those measures.

My argument remains valid, and although the Government accepts full responsibility for the position—and also the hon. the Minister of Transport, together with his Government—those were factors which fell outside the control of the Railways and had nothing whatsoever to do with poor administration or poor management of the South African Railways. Then the hon. member for Durban (Point) came along and said that I had actually given the hon. member for Yeoville an incorrect answer, and that the latter had never mentioned mechanization on the Railways in general, but had specifically referred to and wanted a reply as regards the mechanization of the goods revenue accounting system. The hon. member for Durban (Point) really should listen. Surely that is what you said. You levelled that accusation against me. If you referred to your Hansard speech you would find that you levelled that accusation against me, namely that I had given the wrong information. The hon. member for Yeoville asked very specifically—and I think he will admit that—for an inquiry into mechanization on the Railways, so that the Railways could derive the maximum benefit from that.

If you consult Hansard, you will see that I referred to “this mechanization” with reference to the accounts. I said “this mechanization”. I appreciate, however, that there may be a misunderstanding.

Shall I read to the hon. member the relevant part of his speech from Hansard? It reads as follows—

“… this”.

But listen to the whole of the sentence. The hon. member said—

You should be ashamed of yourself; you are denying your own words.

I can now appreciate why the hon. member for Durban (Point) does not really have much respect for speeches made by the hon. member for Yeoville about Railway matters. Therefore I shall not go into this matter any further. But, Mr. Speaker, I now want to give the hon. member for Yeoville the information for which he asked. There has been a saving of approximately 900 units since the goods revenue accounting system was mechanized. The process was completed approximately four years ago, and has had the result that the adjustment of these accounts is no longer done at the stations but at the offices of the local accountants.

Tell us something about the increase in the incidence of thefts.

The hon. member for Durban (Point) insisted again that the deficit should be met from the Rates Equalization Fund. Do the hon. members not understand for what purpose the Rates Equalization Fund was established? The Rates Equalization Fund is intended to be used in poor economic times to meet deficits on the Railways, and thus to obviate tariff increases having to be made when South Africa experiences economic difficulties.

So inflation is a good time?

But is South Africa experiencing economic difficulties at present?

But what about the Budget?

Mr. Speaker, you heard what a silly interjection the hon. member for Yeoville has just made. He tries to pass everything off as a joke. He knows as well as I do that he said in this House the other day that economically things were going well with South Africa. In fact, inflation is a problem that arises from the very fact that things are going too well with South Africa. It would be pure folly on our part to exhaust the Rates Equalization Fund when things are going well with South Africa. Mr. Speaker, can you imagine how the United Party would seize upon such an opportunity to make propaganda among the railwaymen out there? How they would accuse us of precipitating the Railways into financial ruin? How they would tell the railwayman that his guarantee fund was bankrupt and that he would no longer have any protection against salary and wage reductions? Will we ever forget the pathetic voice of the former hon. member for Umhlatuzana (Mr. N. G. Eaton), when he said six years ago in this House: “Nothing in the Rates Equalization Fund. No benefits for the staff in the next two years. If we add everything together, it will show that for the next few years the railway worker will indeed suffer, and that no further relief can be, expected until the Rates Equalization Fund has been replenished. When will that be?”

What is the object of the Fund?

I have told you what the Rates Equalization Fund was established for. You know that as well as I do. It is in fact ironic that the United Party, of all people, should want the Rates Equalization Fund to be exhausted. How was this Rates Equalization Fund built up over the past years? It was built up from surpluses on the South African Railways. And do you know of what the hon. members on the opposite side accused us when the South African Railways showed surpluses in those years? They accused us of having over-taxed the people of South Africa, the railway users.

And now you are doing it again.

And now they are the people who actually want to fall back on a fund which was established as a result of the fact that the South African Railways showed surpluses. I say that it is in fact ironic that that should be the case. I now come to the hon. member for East London (City). A friend of mine has assured me that that hon. member does not have a doctorate in economics. I am very glad about that. I was very grateful to hear that. All I want to say is that I have never listened to more confused thinking then when I listened to the hon. member for East London (City). That hon. member said that I had said that there were other factors which had had a much more significant effect on the cost of living than tariff increases had had. What I did say was the following. I quoted figures as regards the changes in the consumers’ price index during the period preceding an increase in tariffs and in respect of the period following it—six months before a tariff increase and six months after it. I then gave the average. I told you, Sir, what it had been in 1950, 1953, 1958 and 1962, when tariff increases were introduced on the Railways. And then I said the following: “The deduction to be made from this is that other factors have had a much more significant effect on the cost of living than tariff increases have had.”

You said that.

Yes, I did say that. Now I just want to tell the hon. member that the factor which contributed most significantly to an increase in the cost of living was not tariff increases. The most important factor causing an increase in the cost of living is when the demand for material increases to such an extent that the supply is inadequate, and when that in its turn pushes up wages and prices. Apart from the aspects I have dealt with, I do not think there is anything of importance left for me to reply to.

Motion put and agreed to.

Bill read a Third Time.

Mr. Chairman, I move the following amendment—

1. (b) four shall be appointed on the recommendation of the South African Agricultural Union;

Mr. Chairman, we on this side of the House think that this Bill is a Bill which enables the Minister to finance farming in general. It is really a Bill which makes provision for loans to a far greater extent than just the provision of credit to farmers. Therefore we are of the opinion that the word “finance” will be a far better word and would suit the Bill in every respect far better. Right throughout the second-reading speech of the hon. the Minister he used the word “finance”. He never used the word “credit”. So also did the hon. member for Winburg. I am sure that hon. members on the other side will agree with me that the word “finance” is a much better word in this Bill than the word “credit”. I therefore hope that this amendment will be acceptable. With regard to Clause 2 (1) (b) I think that it is in the interests of agriculture generally that the South African Agricultural Union should have the right to recommend certain appointments. In this respect we suggest the appointment of four such members. The South African Agricultural Union is an organized body and we are certain that it will recommend the very best people for this particular position. And we very strongly feel that they are the people who should recommend for appointment, at least four of these members. I do not like the argument advanced by the hon. member for Winburg in which he said that our suggestion is motivated by the desire to have United Party supporters appointed to this board. Mr. Chairman, I know that the members of the various farmers’ associations and agricultural unions do their utmost for the advancement of agriculture and that they do not allow politics to play any particular part in those organizations. I can give hon. member the assurance that the United Party has never tried, through these agricultural organizations, to obtain representation for its supporters on any such body. I think that the hon. member for Potgietersrus also made the point that, if organized agriculture is allowed to be represented on this board, other institutions and organizations should be allowed to do the same. Mr. Chairman, there are no other organizations or institutions that really have a direct interest in this Bill. There is therefore no argument that they should also be allowed to make recommendations. It is only the South African Agricultural Union that should be allowed to do that. The South African Agricultural Union is a very highly responsible body and I have no doubt whatsoever in my mind that they will recommend the best people available with the sole object in view of furthering the interests of agriculture.

Mr. Chairman, I am sorry, but I do not see my way clear to accepting this amendment. I want to give you the following specific reasons for my rejecting the amendment. I want to mention a few examples in regard to this aspect of financing. The Land Bank is a bank which finances our co-operative societies in particular as well as some of our farmers. Farmers are financed with a view to the purchase of land, while co-operative societies are financed with regard to the granting of loans. But this body is not known as a financing bank, but in fact as the Land and Agricultural Bank. If we take other credit institutions whose main concern is financing—it does not matter whether it is mortgage financing or any other form of financing—the term which is used is not “financing”, but “a banking or credit institution”. I want to point out that the department concerned is known as the Department of Agricultural Credit and Land Tenure, because this Department does not only deal with the financing of farmers, but also with the consolidation of credit obtained by farmers from other bodies and persons. That includes cases where farmers have obtained credit at ordinary commercial banks, insurance companies and other financial institutions. Should this Department be asked for assistance, it will be one of the functions of this Department to consolidate that credit into one account. In other words, it deals with credit. It is the function of this Department to make available credit for the purchase of land in terms of Section 20. Its function is not merely financing. Furthermore it is the function of this Department to allot Stateland, be it in densely populated settlements or elsewhere, to farmers on a credit basis, that is by means of a mortgage which is registered. In other words, this Department is not merely a financing department and for that reason one cannot give it that name. I shall now deal with the second part of the amendment, namely that four of the members on the board should be nominated by organized agriculture. Mr. Chairman, hon. members are after all not strangers as far as parliamentary institutions are concerned. Hon. members know that the Minister and the Minister alone is held responsible—via the Auditor-General’s reports which he has to submit to the Select Committee of this Parliament—in regard to the funds handled by this Department. If the Minister is to be held responsible for the function of and the work done by its boards, it cannot be expected that outside bodies—it does not matter whether it is the Agricultural Union or any other bodies—should dictate to the Minister as to what members should serve on such a board. It has to be the exclusive prerogative of the Minister and the Minister alone to appoint members and also to dismiss them if necessary. I want to mention a parallel example. We have various boards in this country. There is the Escom Board, which is a statutory body. Do the Chamber of Business, the Chamber of Commerce, organized industry and all other bodies which are consumers of electricity, appropriate to themselves the right to nominate people on that board? There is the Land Bank Board which does financing in a different connection. Has it ever been a principle in South Africa that outside bodies should have the right to nominate the members serving on this statutory board? In this manner I can mention one board after the other. It has never been the case, because where statutory bodies have to carry out their functions and work under the control of a Minister, the Minister accepts responsibility. That is why the Minister cannot allow himself to be dictated to as to whom he should appoint to such a board. That is why I am sorry, Mr. Chairman, that I cannot accept this amendment.

I am sorry that I cannot agree with the hon. the Minister in regard to the latter part of his speech which deals with the right of agricultural organizations to nominate members on the board. But let us leave it at that for the time being. First of all I want to exchange a few views with the hon. the Minister on the word “credit”. While he was pointing out reasons for this Bill being called the Agricultural Credit Bill, and not the Agricultural Financing Bill, he was constantly using the words “agricultural financing” and not “agricultural credit”. Let us be frank. Surely the hon. the Minister has received representations to use the word “financing” rather than “credit”, since there is a certain stigma attached to the word “credit” as far as the farming community is concerned. This stigma is not implied in the word “financing”. Why is it that this hon. Deputy Minister, since holding this office and having sold his farm, is always trying to present the farmers in an unfavourable light in some respect or other? Why? Why does he always want to dole out charity to us, and why does he always want to make us dependent as he, the big bug, sees fit?

Grow up, lad!

Yes, he must grow up; I agree with the hon. member. That hon. member of the National Party is at leas’, on my side, but the hon. the Deputy Minister does not want to side with me. Why is it that he always wants a stigma to be attached to the farmer? The hon. the Deputy Minister knows that the South African Agricultural Union has politely requested him to remove this stigma. Why should a person who has been assisted, be branded because the State has given him credit, while the State has in actual fact merely financed him to help him out of his difficulties? This Government is now doing the same work a bank could have done. What is more, Mr. Chairman, the Deputy Minister said in his second-reading speech that charity would not be doled out here. He was going to help people to help themselves, but only on an economic basis. But the hon. the Deputy Minister is only too willing and too eager to discredit the farmers, and he is only too pleased when he is able to attach such a stigma to the farmers. Why? In the days when he himself was a farmer he did not do that. What has happened to the hon. the Deputy Minister? If concessions at a settlement do that to a Minister, Mr. Chairman, then he must not be granted any more concessions. The Government is making our farming community the rubbish of the country. Why is the hon. the Deputy Minister doing these things all the time? He cannot tell me that the words “agricultural financing” are out of context here. It is merely out of obstinacy that he cannot accept it. He is obstinate like a blue wildebeest. But the hon. the Deputy Minister may not bring the characteristics of a blue wildebeest to this debating chamber.

There is another thing which paws in the mud.

As regards that hon. member who is now making interjections, I can tell him that I already have a mind to take him to task on the question of the appointment of the four members by the South African Agricultural Union.

We still have to deal with that.

Since when has he been assuming to himself the right—as he has done in the second-reading debate—to say that the United Party wants the South African Agricultural Union—understand me well—to be deprived of the right of recommending people to serve on the board, since we will supposedly make use of that to have United Party men elected to the board.

Shame!

We would supposedly make use of that to have United Party men elected to the board as well. Are we once again dealing with the creation of posts, a “jobs for pals” affair?

I shall prove it.

The hon. member for Winburg cannot prove a thing; I know him too well for that. Is he already saying in advance that these posts which are being created now, should be reserved as jobs for Nationalist pals? Is that what he wants to do? I hear the hon. member saying yes. Why does he say yes?

Yes, you must crawl out of the mud.

I am not throwing mud. I am merely pleading that the farmers should be treated like respected Whites of this country. They are not the rubbish of this country and I want the hon. the Deputy Minister and the hon. member for Winburg to understand this once and for all. The fact that those two members were elected as members of this House, does not give them the right to treat farmers as though they are the rubbish of the country. Mr. Chairman, I think that the excuses the hon. the Deputy Minister offered for not complying with the request of the S.A. Agricultural Union, are simply childish. He cannot hide behind the fact that it is a statutory body and that he should therefore have the right to appoint and dismiss whom he wants to. The Minister retains the right of dismissing members. The proposal of the hon. member for Cape Town (Gardens) makes no difference to the hon. the Minister’s right to dismiss people and to terminate their term of office if they do not behave themselves. It says so in the Bill. That is not what the hon. member for Cape Town (Gardens) is asking. The hon. member for Cape Town (Gardens) is merely asking that the S.A. Agricultural Union should be consulted in the appointment of those four members. Nothing is wrong with that at all. May I refresh your memory as far as the past is concerned? I am doing that especially for the information of the hon. member for Winburg who is as yet relatively young, but is already impetuous in politics; not young in years, but young in other respects. At the time when the late General Smuts was Prime Minister—it was shortly after the War—he deemed it fit to appoint Mr. Jan Viljoen, who subsequently became a Cabinet Minister—to the Land Board, another statutory body. At that stage there were also extremists just like the hon. member for Winburg and the hon. the Deputy Minister. It was asked then how a Nationalist could be appointed to such an important post. Do you know what the late General Smuts’s reply was? His reply to us was that Jan Viljoen was the best man for the work and that only the best man got the work and that what a person’s political affiliations were, was none of his concern; he had to get the work by reason of his ability to serve the farming community. And I want this hon. Deputy Minister to make this very same principle part of his policy, namely that, in the administration of this country, the man’s capacity and ability to serve should be the deciding factor. The S.A. Agricultural Union is much better equipped to elect people on merit, because in making such appointments they are not committed to taking into consideration the political affiliations of a person.

It will not be you.

That hon. member does not know a thing. Mr. Chairman, it will pay the hon. the Deputy Minister well to have a little more respect for the S.A. Agricultural Union. I am giving him good advice, because if he does not take it he will be trampled to dust as certainly as the sun will shine tomorrow.

Mr. Chairman, at this stage I should very much like to ask the hon. member who has just sat down—and I do so with all due respects—when the United Party was asked by the South African Agricultural Union to make on their behalf representations in this House in regard to the selection of members on this advisory board. I think that organized agriculture is moving on too elevated a level and that it is carrying out its business too objectively that it can be referred to in this House as the rubbish of the Government; in other words, that the farmers can be referred to as the rubbish of the Government. I want to refer to the agricultural credit committees which are nominated from below by farmers’ associations and district agricultural unions and of which the names are submitted to the hon. the Minister of Agricultural Economics and Marketing. Is that not the crux of the entire Bill; in other words, feeding from below by the local district agricultural unions which are conversant with the local circumstances of its local farmers and which makes recommendations upwards, to the Minister? Who are they, the United Party and the hon. member who has just spoken, to say that the farmers are being made the rubbish of this Government through this system? Those who are practical farmers and who move in organized agricultural circles, know just as well as the hon. the Minister that these recommendations which come from below, such as the former assistance committees which will now become the agricultural credit committees, are of the greatest importance. Is it not also a fact that the hon. the Minister knows the leading figures in the field of organized agriculture as well as he knows hon. members in this House, and that he himself is sufficiently discriminate to know the man on whom he can depend? Did the Minister not for the whole of the past week sit in a committee held across the road with the Agricultural Advisory Board which consists of the leaders of the S.A. Agricultural Union?

The hon. member for Pretoria (District) should actually agree with this side of the House, because what has he just said? He says that the local agricultural credit committees will emerge from the local farmers’ associations, and what is the hon. member for Gardens asking? The hon. member for Gardens is asking that when the Agricultural Credit Board, which we propose to call the Agricultural Financing Board, is constituted, four of those members should be elected to that Board on the recommendation of the S.A. Agricultural Union. In other words, the hon. member for Pretoria (District), who was a well-known official of the S.A. Agricultural Union, knows how it works. That is precisely what the hon. member for Gardens wanted. He wants recognition to be given not only to the local farmers’ associations, but also to the national body, the S.A. Agricultural Union. According to Clause 2 as it stands here, and not according to the amendment of the hon. member for Gardens, the Minister still has sufficient power. Ten members have to be appointed. One of them, who will be the chairman, will most probably be an official. But the other members will have to be appointed by reason of their knowledge of agricultural technics or agricultural economics, or by reason of their knowledge of farming. Thus, according to the proposal of the hon. member for Gardens, we are not asking that this should be rejected. The Minister will still have sufficient power to appoint to this Board other people who have knowledge of agricultural economics, and so forth, but where it is asked that four members should be appointed at the recommendation of the S.A. Agricultural Union it will be for the very purpose of giving recognition for the tremendous role the S.A. Agricultural Union plays in this respect. I can visualize that it will also work out like that in practice. The S.A. Agricultural Union will perhaps submit a whole panel to the Minister, and not only four; it may perhaps be a panel of eight, from which the Minister has to take four on the recommendation of the Agricultural Union. The Minister therefore still has a choice in that respect. But I simply fail to understand why the Minister is not prepared to acknowledge that the S.A. Agricultural Union is right in this respect. We are not pleading on behalf of the Agricultural Union; we simply regard it as important that the S.A. Agricultural Union should be given recognition in this respect.

To return to the Minister’s first point, namely his reasons for not being able to accept the name Financing Board instead of Credit Board, the Minister says, “Yes, but look at the powers this body will have; it will be able to purchase land from and sell land to farmers”. Precisely. The Minister did in fact mention one of the arguments why that should be an agricultural financing board, and why it should be called that and not an agricultural credit board, because this board will have all these powers. I do not want to repeat arguments.

Order! That is exactly what the hon. member is doing now.

I want to tell him this; if we want to develop the future of our agriculture correctly, it should be our very aim to get away entirely from the old stigma which has always prevailed. Make it an agricultural financing board so that everybody may know what its purpose is.

Everybody knows that in any case.

No, everybody does not know what its purpose will be. If we retain this name, everybody will realize that it is merely a summary of all the old systems we have had, it is precisely and by means of the new name, the agricultural financing board, that we should try to obtain a new approach to agricultural economics and financing. If the Minister retains this name, the agricultural credit board, he will simply remain stationary and make no progress.

It is a pity that the hon. member for Sea Point is not here at present. There is not a single occasion on which he speaks that he does not paw about in the mud and become personal. The words he used here towards the hon. the Deputy Minister and the hon. member for Winburg are not fitting to be used in this House. He cannot argue without being personal. But he spoke and then left the debating chamber.

Let us return to the motion of the hon. member for Gardens. Hon. members know that it is an enabling Act with a very wide scope and tremendous powers. I wonder why the hon. members, in accordance with their usual policy, did not complain that the Act granted the Minister too many powers. On the contrary, they accept the powers the Minister is granted by the Act, with this one exception that they now want to force the Minister to accept a recommendation of the S.A. Agricultural Union. Do they realize what the consequence of this recommendation will be? I do not doubt that the Minister has already consulted the Agricultural Unions. But their motion is not that there should be consultation; they want it to be stipulated in the Act, and that is the difference. I think the Minister is prepared to consult the Agricultural Union, as the body which represents the farmers, at all times and to receive their recommendations. But this amendment goes much further and forces the Minister to do so. If clashes should result—and the Minister carries the great responsibility of the powers entrusted to him by this House—he will have to accept those recommendations of the Agricultural Union. Not even the Marketing Act went as far as that; it merely said that the Minister could in his discretion consult bodies representing certain sections of the population. This proposal is that he should make the appointments in consultation with the Agricultural Union. It goes much further than any previous legislation, and I am convinced that if the Opposition had to carry out the responsibilities of this Act to-morrow, they would not accept such an amendment. We recognize the responsibility of the Agricultural Union, but I think that it is wrong to lay that down by law and to place the Minister under that obligation. Since the hon. member is here at present, I want to ask him when this side of the House ever regarded the farmers as rubbish? It is not the first time that the hon. member has used these words. On the contrary, he has such contempt for his own party that he scolds another person for a United Party man when he cannot defend himself. That is his attitude. [Interjection.] Of late the hon. member always becomes personal when he speaks, and this insinuation which he made against the Deputy Minister does not become him. The hon. member must not think that he has humiliated the Minister; he merely humiliates himself.

I rise to support both these amendments. In regard to the first amendment, that this board should be known as the agricultural finance board, we have heard many argument why it should not be called a finance board. The Minister tells us that this is an agricultural credit department, and not a finance department, but I think we must disagree with him there because it is a finance department. I think that the words used by the hon. member for Sea Point to the Deputy Minister, that it is merely a question of “koppigheid”, applies here. I support the amendment.

Referring to the second amendment, that is the suggestion that four members of this board should be nominated by the S.A. Agricultural Union, let me say that I must reject the explanation or the excuse given both by the Deputy Minister and other hon. members opposite that it would be wrong for the Minister to appoint nominees from the S.A. Agricultural Union, because he must appoint persons who must be responsible to him: the Minister is responsible to Parliament and the members appointed by the Minister must be responsible to him. I submit that there is ample provision in this Bill, particularly in Clause 2 (4) (a), for the Minister to take action against anybody whom he considers is not responsible enough. Is the Minister afraid that organized agriculture will nominate persons who do not agree with his views or with his policy? I wonder whether that is perhaps the reason why we have met with the opposition that we have in what we consider to be a perfectly reasonable request. Another thought is that perhaps this is one of the reasons why agriculture in this country is generally in the mess in which it is. It is in this mess because the only real and positive criticism there has been of Government policy has come from this side of the House and that criticism has been ignored. The hon. member for Winburg said in reply to our request in the Second Reading Debate that the United Party—he used that phrase; I prefer to refer to the Opposition—wanted this amendment so that we could infiltrate organized agriculture and arrange for our nominees to be on this Board. I resent this and I deny it categorically. This Opposition would not stoop to that sort of thing.

Let me tell you now, Sir, that this has been done by hon. members on that side of the House. The stage has now been reached where the Nationalist Party has become so arrogant that it does not even pretend to be discreet about this any more. They are now doing it quite openly, flagrantly and overtly.

Order! The hon. member is now delivering his second reading speech. He must come back to the clause under discussion.

I was referring to reasons advanced by hon. members on that side why the S.A.A.Ü. should not have nominees on this board. I was trying to make the point that if infiltration was in fact taking place, it was not being done by this side of the House. I was referring in particular to the nomination in the recent provincial by-election in Pietermaritzburg South of the Secretary of the Natal Agricultural Union by the Nationalists.

Order! That has nothing to do with this clause. The hon. member must come back to the clause under discussion.

Because of the matters referred to by me, we on this side of the House feel it is wrong that the hon. the Minister should be given full autocratic powers in this regard. It has been said that organized agriculture should be considered. We oppose the granting of these autocratic powers to the hon. the Minister, and accordingly I, too, must support the amendment.

Mr. Chairman. I want to return briefly to the two amendments of the hon. member for Cape Town Gardens. In the first place he suggested that a change of name should take place. According to the hon. member it should not be a Department of Agricultural Credit, but a Department of Agricultural Financing. The hon. member for Sea Point—and I notice that he is once again not present in the House—came here with the nonsensical argument that the name Agricultural Financing instead of Agricultural Credit will not attach a stigma to the envisaged board. According to the hon. member a stigma will attach itself to the proposed board should it be called Agricultural Credit. But it is just the other way round, Mr. Chairman. What is the meaning of financing? Financing does mean that one will make a loan available to a person. One makes money available to a person for the purpose of purchasing land, for instance.

But what do banks do?

If the hon. member will wait until I have completed my argument, he will not make such nonsensical interjections. The hon. member is a newcomer who started very sensibly here, and he should not go astray now. But financing does of course not only mean that one lends money. Financing also includes the donation of an amount of money. For instance, a father gives his son an amount of money to buy a piece of land. They enter into a donation agreement. He gives the money to his son as a gift. Financing also means a donation of money. The very thing we want to prevent is that the stigma should attach itself to the farmers as though they are being financed by the State; in other words, that they are being spoon-fed and receiving charity from the Government. For that reason we feel that the name Agricultural Credit is the right one. It is after all an appropriate name if consideration is given to the functions this board will perform. Apart from financing, the board will do a great deal of work which is not implied by this name. It is not quite clear to me why hon. members on the opposite side are accusing the hon. the Deputy Minister of obstinacy because he does not want to agree to a change of name. The new name Agricultural Credit and Land Tenure has been in use since February this year. That is why it is logical that this board will be called the Agricultural Credit Board.

In his other amendment the hon. member for Cape Town Gardens asked that the S.A.A.U. should appoint four members to this board. The hon. member for Newton Park—and I do not see him in the House either; I am beginning to think that hon. members on the opposite side simply say a lot of things and then run away—came out with the story that the actual purpose of the amendment is not that the S.A.A.U. has to appoint four members, but that a whole list of names should be submitted to the Minister by this union and that the Minister should then appoint four persons. The amendment has therefore been watered down somewhat. But if that is in fact the intention of that side, surely it does not have to be incorporated into the Act. As the Bill reads as present, the hon. the Minister can make such appointments. Surely he can ask the S.A.A.U. for a list of names.

If he feels like it.

Yes, if he feels like it. He is not obliged to do so, but nothing prevents him from doing that.

If he does not feel like it, he does not have to do that.

According to the provisions of Clause 2 (1) the board can consist of not more than ten members. That does not mean that the board does in fact have to consist of ten members. I do not think that the board will consist of the full ten members from the very beginning. As matters develop and interested bodies come forward the membership can be enlarged in due course until the full ten members have been appointed. Now, if the S.A.A.U. has to nominate four members, what about all the other bodies and persons who will have a direct interest in the functions of this board?

Like what?

I shall teach the hon. member yet. He knows precious little about these matters. The hon. member talked politics in the Wool Board and now he is talking wool in politics. He does not understand these matters. Many farmers are not members of organized agriculture. But they also have a great deal of interest in this envisaged board. Why can they not also have representation? They have their own representation on the control boards, their organized agriculture also has its own representation. Why then can they not also have representation on this board if organized agriculture has four representatives on the board? Then there is also the world of commerce which has a direct interest in the functions of this board. The banks, the retailer, surely all those people have as much interest in this board as the S.A.A.U. On what grounds will it be possible to refuse them representation on this board? No, Mr. Chairman, as the clause reads at present, namely that the hon. the Minister will nominate the members, provided that either the chairman or the vice-chairman should be an official of the Department, it is at its best. Now the hon. the Minister is free to appoint only the very best people, people he regards as the right people to serve on this board. The hon. member for Sea Point made a lengthy plea for the appointments to be made by the S.A.A.U. But then, towards the end of his speech, he destroyed any case he might have had by reminding us that in the days of the United Party régime, General Smuts had to appoint Mr. Jan Viljoen from the Free State because he. was the best man. In saying that, is he not giving the lie to the arguments raised by his side? At that time General Smuts appointed the best man for the post. By mentioning this incident, the hon. member destroys the proposal made by that side that panels of people should be submitted to the hon. the Minister. [Time limit.]

Mr. Chairman, the hon. member for Winburg said that the board would not merely be a financing board. In other words, he realizes—just as this side of the House—that financing will be the principal function of the board. We admitted that credit provision would also take place, but in the main the functions of the envisaged board will be financing. That is why we on this side of the House are of the opinion that the name proposed by us is much more suitable than the present one.

Do you want to give money away as a present?

The question of giving away money has nothing to do with this. This Bill deals mainly with loans to farmers. For that reason it is a measure which deals mainly with financing, and therefore I believe that the present name is wrong and that the name in the amendment is in fact the correct one.

The plea made by my good old friend, the hon. member for Christiana, amounted to the fact that he does not have any confidence in the S.A.A.U.

No, that is not so.

But allow me to finish what I want to say. The hon. member said that if the S.A.A.U. also appointed members to the board, clashes would probably occur in the board. Those were his words.

No, you are representing my words quite wrongly.

Those were the hon. member’s words. I have merely repeated his words. He said that clashes could occur. Now, Mr. Chairman, I believe that appointments made by the Agricultural Union, will indeed be appointments which are in the best interests of agriculture. That is my honest belief. This board will carry great responsibilities and the appointments made by the S.A.A.U. will be responsible people and will probably be the best appointments the Agricultural Union will be able to make.

You must accept that the principal responsibility always rests with the Minister.

I am actually dealing with another argument now. I want to emphasize the fact that I have the fullest confidence in the appointments the S.A.A.U. will make. The hon. member does not have such great confidence, because he predicts clashes as a result of which the board will not be able to function smoothly.

No. Do you want legislation which is based on your confidence?

Are you getting up or are you asking a question?

Mr. Chairman, I want us to appoint a board which will in all respects take action which will be in the best interests of the South African farmer, and I believe that these amendments are a step in that direction.

Now, the hon. member for Pretoria District asked whether this amendment was introduced as a result of representations made by the S.A.A.U. No, we have received no such representations. Surely it will be a most unusual occurrence if the S.A.A.U. approached the Opposition to do such a thing. But it nevertheless remains the right and the privilege of the Opposition to analyse a bill, to accept or reject it, and to take such steps as we may decide are best under the circumstances. Therefore we are also doing our best in respect of this Bill.

Are these two amendments the best you can do?

From the very beginning we said that we welcomed this measure wholeheartedly. We said that during the Second Reading debate. We are in agreement with this Bill. But we want to improve it, and in this respect we can improve it, and for that reason we stand by our amendment.

Order! The purport of this clause is very limited. Unless hon. members digress from the clause, I believe that it is not possible to add much which will not be a repetition. For that reason I appeal to hon. members not to repeat arguments.

Mr. Chairman. I want to talk about the composition of the Board as laid down in clause 2 of this Bill. I want to reply to arguments raised here, and I want to attempt to free the hon. the Minister and the hon. the Deputy Minister from the blame the hon. member for Sea Point cast on them in such a reckless and shameful manner. The hon. member for Sea Point said that the composition of the Board and the name of this measure was being used by the hon. the Minister to attach a stigma to the farming community and to make rubbish of our farming community in South Africa. Now I want to ask the hon. member for Cape Town Gardens whether he agrees with his colleague, the hon. member for Sea Point, when he suggests that. Mr. Speaker, let me make it quite clear that there has never been any suggestion in this House or outside that a stigma attached itself to the present name of this measure, until the Opposition came forward with this amendment. I now want to suggest that it is indeed the Opposition which is very subtly and wilfully trying to attach a stigma to this legislation. I know that the hon. member for Cape Town (Gardens) is a very reasonable person and that he has an intense interest in agricultural matters. That cannot be said for the hon. member for Sea Point. The hon. member takes cover in Sea Point. He hides himself there. I challenge the hon. member to stand for election in a platteland constituency, and to repeat the language he used this afternoon before a farmers’ meeting. I know that the hon. member will not seek election in a platteland constituency. Oh, no. He hides himself in Sea Point and then he hides behind his privilege by using such shameful language in this House. Now I want to ask the hon. member for Cape Town (Gardens) and the hon. member for Newton Park whether they are also of the opinion that a stigma will attach itself to this measure should the composition and name of this board, as defined in the Bill, remain unchanged.

May I ask you a question?

The hon. member knows that we are now in the Committee Stage and that he has every opportunity of taking part in this debate. Mr. Chairman, do those hon. members also feel that a stigma will attach itself to those farmers who make use of the credit facilities for which this measure makes provision? I want to suggest that by the manner in which the hon. member for Sea Point interpreted this clause to-day, he did not only do the Minister and this House a great disservice, but also the entire farming community.

The farmers will not believe you.

Mr. Chairman, I am speaking on behalf of the constituency which I represent, and I am speaking on behalf of the entire farming community when I tell the hon. the Minister that he may proceed with the composition of the board as he envisages it. We have confidence in him and we assume that he will compose the board in a manner which will be in the best interests of South Africa and of agriculture in South Africa.

On a point of order, may the hon. member for Sea Point have his lunch here?

I say that it is with full confidence that we leave the Bill and the composition of the board in the hands of the hon. the Deputy Minister of Agricultural and Water Affairs. I have had the opportunity of working with him in committees for many years and I should like to call him the father of this Bill which is before the House to-day. I think that the hon. member for Sea Point owes the hon. the Deputy Minister an apology for the remarks he made here. It is with full confidence that we leave this clause in his hands, and we know that he has never conducted himself like a rhinoceros or a blue wildebeest, or whatever the hon. member called him; that he has never attached a stigma to the farmers. On the contrary, what is implied in this Clause is that the farmer will be freed from any possible stigma which might have attached itself to him in the past should he have availed himself of agricultural credit. Such a thing does not exist.

I find the arguments advanced by hon. members opposite as to why this Bill should not be called the “Agricultural Financing Bill” really funny. The hon. member for Winburg said that financing was not the same as credit provision; “financing” means when a father gives one of his children money as a present, for example.

I said that financing included that.

As far as the agricultural industry is concerned, agricultural financing means only one thing and that is that one goes and borrows money from the Land Bank or from the Farmers’ Assistance Board or from some financial institution or other. That is what agricultural financing means; it is not simply “financing”; it is “agricultural financing”. I still want to know why this Bill should be called “Agricultural Credit Bill”. The Minister did not give a convincing reply in that connection. We started our plea in connection with agricultural financing more than a year ago and now at last we see our plea being implemented in a Bill called the “Agricultural Credit Bill”. I simply cannot find out why it should be called “agricultural credit”. If any stigma should attach to anybody who has to obtain credit from some financial institution or other, “financing” surely would not have that same stigma attached to it.

Why should there be a stigma attached to him?

I said “if any stigma should attach to him”. To my mind the body to be established here should obviously be described as a body for agricultural financing and land tenure. What is the hon. the Deputy Minister’s motive; why should it be “credit”, as though a stigma is attached to “financing”? Surely that is not the case.

I want to deal with the reasons advanced by the Deputy Minister as to why the S.A. Agricultural Union should not nominate members for appointment to the board. The Minister mentioned two reasons; one of the reasons was that the Minister was responsible to Parliament in connection with the functions of this board. If I remember correctly, the second reason was that the finances of the board had to be audited by the Auditor-General. Are there any statutory boards in respect of which the Minister is not responsible to Parliament? Throughout this Bill it is provided that “the Minister may determine”, “with the approval of the Minister”, and so forth. I agree that this board has a wide scope, but in what respect is this board so much different from a marketing board, a commodity board, established for a particular commodity in terms of separate legislation? Has the precedent not been created over and over again that the South African Agricultural Union or the relevant commodity board would nominate a panel of members out of which the Minister would then appoint the members? And now we find that the hon. member for Winburg comes along and pleads on behalf of unorganized agriculture. He mentioned that as part of this Bill. Mr. Chairman, what will our position be when someone starts pleading that the unorganized farmers, who also want to make use of these financing facilities, should also have a say or that they should also be represented? That hon. member, who now wants to teach me, spoke of personal remarks that were being flung about here.

You make such silly interjections.

And immediately afterwards he took me to task too. If I talked wool when I should have talked politics, he talks nonsense when he should talk politics. Does the hon. member not know that the precedent was created in the past in connection with the composition of boards, where provision was made initially for unorganized farmers to be represented and where that was changed subsequently? I find it strange that somebody who pretends to know something about agriculture can come along and state in this House that unorganized people should also have the right to say that they should be represented on the board. How on earth can they nominate their representatives? Surely it is only organized people who can nominate representatives. Moreover, the Minister is not obliged to appoint ten members in the first place. The Clause provides for a maximum of ten members; it may be eight or nine or whatever. If the hon. the Minister is not prepared to accept the amendment, it is surely a clear indication on his part that he is not prepared to let organized agriculture have a say in the functions and powers of that board as far as agricultural financing or agricultural credit is concerned. Of course he is in a position to appoint only whom he wants to. He may appoint good farmers or he may appoint the chairman and vice-chairman of the S.A. Agricultural Union if he wants to do so, but where is it stated that he must appoint them? After all, it is long established practice that the Minister appoints board members from a panel submitted to him; that happens in the case of more than one board. We have no hesitation at all in recommending that to the Minister, and we still hope that he may change his views even at this stage because he has considerable powers as far as the functions of this board are concerned. The Minister’s powers are referred to in clause after clause. I hope that he will have sufficient confidence in himself and in the S.A. Agricultural Union to accept the amendment.

It is very clear to me that the hon. members of the Opposition have not even read their own amendment. The hon. members for East London (City) and for Pietermaritzburg (District) said: “Yes, the Minister can get a panel and he can appoint members from that panel.” Here it is expressly stated: “(b) four shall be appointed on the recommendation of the South African Agricultural Union.” In other words, this amendment binds the Government to appoint the four persons nominated by the S.A. Agricultural Union, and now the hon. members speak about a panel. They do not even read their own amendment. But, Mr. Chairman, let us put a few things on record. I consider it beneath my dignity to give any reply to the hon. member for Sea Point, because he came along and made a few dirty remarks and then fled from this House. He is not even here to follow the debate. I want this House to know that as regards him, as far as I am concerned, I do not touch pitch. That is final as far as he is concerned.

Let us now consider the question of the name of the Bill, namely “Agricultural Credit Bill” or “Agricultural Finance Bill”. Have hon. members not read in the Bill that this Board was going to provide credit on an economic basis? In other words, this Board will never do any subsidizing—and subsidizing is also financing. The hon. member for East London (City) must listen now. This Board will do no subsidizing. It will make credit available on an economic basis at a rate of interest of 5 per cent; it will consolidate credit in one account on an economic basis at a rate of interest of 5 per cent. It will be the mortgagee, when it has allotted land, on an economic basis at a rate of interest of 5 per cent. Financing in the form of subsidies, whether rebates on the transport of fertilizers or rebates on the transport of livestock from drought-stricken areas, falls under other departments and does not concern this Department at all, and because this Department is going to make credit available and is going to consolidate credit on a purely economic basis, it is called the Department of Agricultural Credit. Hon. members opposite should not now come along with the story that a stigma is attached to credit. If a man is not creditworthy, then he may have to hide his head, but as soon as one says that a man is creditworthy then it follows automatically that the bank is prepared to grant him credit. Is that then a stigma? When a person approaches this Board or the Department to deal with or to administer his affairs or to consolidate his debts, the Department analyses his position in order to decide whether he, as far as the Department is concerned, still has sufficient creditworthiness even though the Land Bank and other institutions may not regard him as having sufficient credit-worthiness for their investments. Therefore hon. members must not come along and tell us that they have moved this amendment because a stigma is attached to the word “credit”. No, it was simply to look for a debating point. But I want to make the position very clear. There is a fundamental difference between the credit which will be granted by this Department and ordinary financing undertaken by other institutions and for that reason this Bill is called the Agricultural Credit Bill. I now come to the Board itself. I have already said that the Opposition’s amendment does not relate to the submission of a panel. They want the appointment of four members to be compulsory. The hon. member for Gardens and other members opposite said that other organizations had nothing to do with this Board, but surely that is not so. When one administers the affairs of a person, whose debts have to be consolidated, it is going to affect his trade account, his bank account, his garage account and all other accounts and it is going to affect those creditors. Consequently they all have an interest in the action taken by this Board.

But we also have another problem. I want to remind hon. members once more of the composition of this Board. It is laid down specifically that “the Board shall consist of not more than ten members to be appointed by the Minister of whom (a) one shall be an officer in the Department, and (b) the other members shall be appointed by reason of their knowledge of agricultural technics or agricultural economics, or by reason of their knowledge of farming”. Hon. members opposite now say that we should consult the Agricultural Union in connection with this Board. The hon. member for East London (City) and the hon. member for Gardens said that if we did not do so it would be a motion of no confidence in the S.A. Agricultural Union. But now I want to ask whether the fact that the South African Agricultural Union was not consulted in respect of other statutory bodies, such as the Land Bank Board, has to be regarded as a motion of no confidence in that body? Is the fact that the South African Agricultural Union was not consulted about the appointment of the members of the five Land Boards and the Central Board, a motion of no confidence in that body?

The same applies in respect of the members of the Farmers’ Assistance Board. When members of this Board were appointed in the past—and not only by this Government but also by other governments—and the agricultural unions were not consulted, was that interpreted as a motion of no confidence in them? Let me say very clearly that there has never been any government which has had so much confidence in the S.A. Agricultural Union and which has taken so much care to prevent it from being dragged into politics, as this Government. Hence the composition of the Agricultural Advisory Board, for instance, which enables the S.A. Agricultural Union to advise any Minister of Agriculture on any subject. We even go as far as providing them with the necessary documents. We attach a great deal of value to their advice. As a matter of fact, we have just discussed agricultural problems with them for two days. Has this Department of ours not already addressed a circular to all magistrates with the request that all farmers’ associations and district agricultural unions should be consulted for the purpose of obtaining a panel of names of people who can be appointed to the local credit committees?

Why do you not do the same in respect of this Board?

Because these local committees are only advisory committees whereas this Board is one which is instituted for the entire Republic. But I want to ask the hon. member whether it has been laid down in legislation that farmers’ associations and the district agricultural unions should be consulted about the composition of the local committees? The fact that we have done so proves that we have every confidence in our agricultural unions and that we admit that the S.A. Agricultural Union is there as an organization in the service of the farmer and of agriculture. There is nothing which prevents the Minister from consulting the S.A. Agricultural Union in connection with the persons to serve on this Board. But one cannot bind the Minister as regards the composition of any statutory body by giving outside organizations—organizations which cannot be called to account—the right to prescribe to the Minister who should and who should not be appointed by him. I want to mention another example. The hon. member for Pietermaritzburg (District) has apparently done somewhat more homework than other hon. members. He said the safety valve was in Clause 2 (4) (a). That clause provides that a member of the Board shall vacate his office if his period of office has expired or is terminated by the Minister. Does the hon. member want the Minister to give the right to an organization over which he has no control, to prescribe the names of four persons to him—persons whom he then must appoint to this Board—and that the Minister should then apply the provisions of this clause to dismiss them from office should he deem it necessary to do so at a later stage? But on what grounds will he then be able to dismiss those members from office? After all, this clause does not provide that one of the grounds on which a member may be dismissed is that he has been appointed to the Board by a certain organization. Mr. Chairman, I want to advise hon. members to make a better study of this Bill so that they may be better informed about the work this Board will have to do. They should rather do that than make suggestions which will oblige the Minister to accept certain appointments to the Board.

The hon. the Deputy Minister made a lengthy speech about the question of confidence or lack of confidence in the S.A. Agricultural Union. In addition the hon. the Deputy Minister suggested that the hon. member for East London (City) and I had said that the Government by its attitude in regard to this matter showed that it had no confidence in that body. I now want to say that we definitely made no such statement here. What I did say was that the hon. member for Christiana, in the light of the statements made by him, had no confidence in Agricultural Union.

The hon. member for East London (City) said that if we did not accept this amendment it would prove that we had no confidence in the S.A. Agricultural Union.

No, Sir.

We on this side certainly did not make the statement that the hon. the Deputy Minister showed that he had no confidence in the S.A. Agricultural Union by the attitude he adopted here. The hon. the Deputy Minister is right when he says that this amendment gives the S.A. Agricultural Union the right to appoint four persons to the board. Other hon. members did say that the S.A. Agricultural Union could then submit a panel of names. That was done as a test to see whether the Minister did not want to accept that. If the Minister is prepared to accept that we will at least have something. I believe that the S.A. Agricultural Union should have that right. As far as the question of the designation of this board is concerned, I should like to point out once again that the main object of this legislation is to finance the farmer.

Order! The hon. member must not repeat arguments that have been advanced before.

Then I shall leave it at that, Mr. Chairman. I still believe that the amendment we are proposing here is in our interests.

I think we should try to get back to the actual meaning and purpose of the Board which is being set up by this clause. When the hon. member for Pretoria (District) stood up and told us how the Agricultural Credit Boards would be built up throughout all the districts, he was at the same time pleading the point being put forward by this side of the House, i.e. that the farming community should have a direct representation in this particular case. This Board will be the last resort of the farming community. After they have come to this Board they cannot afterwards go anywhere else. That, I think, the Minister will concede. If this Board refuses them there is no other source of credit available to them. Therefore we believe that the active farming organizations should have the right of direct representation on this Board.

Order! That point has already been made.

Very well, Sir. The other point I wish to make in regard to this clause is in connection with the word "technics” appearing in line 8. This is a word with which I am not familiar. Neither are those hon. members sitting on each side of me. I had to consult Webster’s dictionary to find anything about it. It is, I must say, a very far out word. The only quotation I could find wherein that word was used not as a translation from a foreign language was made by Lord Russell, the man who is the leader of the ban-the-bomb movement. The quotation was to the effect that man with his technics has acquired a sense of power, etc. Would the Minister not agree to reconsider the use of this word?

Do you not know that we have a Department of Agricultural Technical Services?

Yes, I am aware of it. But does the word “technical” have the same meaning as the word “technics”? I think this clause would have been much better had it read “… by reason of their technical knowledge of agriculture . . The word “technics” is not to my mind commonly used in the English language.

Read the Afrikaans version of this clause and you will see what is meant.

Mr. Chairman, I should like to see that the law in my language should use words which I can understand. Therefore I should like to ask the Minister whether he would not agree to reconsider this matter.

There are two points, points which have not been raised before, which I should like to discuss here. If I were to ask the hon. the Deputy Minister what “agricultural finance” meant he would tell me that it meant just what it says. If, on the other hand, I were to ask the hon. the Deputy Minister what “agricultural credit” meant, he would say that it meant “to finance the farmer”.

Order! That point has already been made.

Well, Sir, that is the first point I wanted to make. My second point is that knowing organized agriculture as we do, the farmer is beginning to believe that the say he has in the running of his own affairs is being whittled down by degrees and that he has less say to-day in the running of organized agriculture than he had some ten years ago.

Order! The hon. member must confine himself to this clause.

Well, Sir, that is the second point I wanted to make.

Amendments put and negatived.

Clause, as printed, put and agreed to.

Clause 9:

Mr. Chairman, I wish to move the following amendment to this clause—

1. (2) The Secretary or any person designated by him shall have power to execute all documents on behalf of the board.

Agreed to.

Clause, as amended, put and agreed to.

Clause 10:

Mr. Chairman, I wish to move the following amendment to sub-section (1) of this Clause—

In his reply to the second reading debate the hon. the Minister said that the Department of Indian Affairs as well as the Department of Coloured Affairs would make the necessary arrangements for financial assistance to Indian and Coloured farmers.

Order! I am sorry, but I cannot accept the amendment, as it would have the effect of extending the scope of the Bill, as read a Second Time.

Clause, as printed, put and agreed to.

Clause 12 put and negatived.

New Clause 12:

I move—

1. 12. The terms and conditions on which any assistance shall be rendered to any person shall provide that his existing rights, duties and obligations under this Act or any law repealed by this Act, shall lapse on the date referred to in section 14 (1).

The object of this clause is merely to allow the consolidation to be made after a new loan has been granted. It will prevent the granting and payment of new loans from being delayed as a result of the process of consolidation. In addition, it will facilitate administration. As the legislation now stands it means that, in the case of a person wanting a loan for seed or fertilizers or for whatever purpose it may be, the granting of such loan will be delayed until such time as the registration consolidating his bond has been concluded. This new Clause will enable us to effect payment immediately and to register the bond afterwards.

New Clause put and agreed to.

Clause 14:

I move—

1. (3) The terms and conditions referred to in sub-section (2) shall, subject to the provisions of section 15, be determined with due regard to the rights, duties and obligations referred to in section 12.

This is merely a consequential amendment, the object of which is to bring this clause into line with the new Clause 12, which was agreed to a moment ago.

Agreed to.

Clause, as amended, put and agreed to.

Clause 15:

I should like to move the following amendment—

In moving this amendment, I have in mind cases under the Land Settlement Act where in the past provision has been made for a low rate of interest to land settlers in respect of the first few years. It is with a view to ensuring that they will continue to enjoy this privilege that I move this amendment. We want to help them over the first few years.

I regret that I cannot accept the hon. member’s amendment. In the first place, it is explicitly provided in this legislation that the rate of interest shall be 5 per cent, whatever the general rate of interest may be. In the second place, the position will be, as the Minister explained in his second-reading speech, that if we want to think along the lines of lower rates of interest with a view to encouraging certain agricultural projects, that can be done only by way of a subsidy which has to be granted by another department. For example, if we think along the lines of granting loans at a lower rate of interest with the object of encouraging soil conservation, it will have to be charged to the Department of Agricultural Technical Services in the form of a subsidy, which will then have to be paid over to this Department.

Now the hon. member for Gardens is concerned about those people who enjoyed the concession of a very much lower rate of interest under the old Department of Lands—I think it was 1 per cent for the first year and 2 per cent for the second year. The position here is that where there are still contracts which have been entered into with those people, such contracts will be recognized, unless those people come under this new legislation and negotiate a new loan and at the same time consolidate their debts. If they do that they will be placed on the 5 per cent basis immediately.

In the past we have had the position where we had different rates of interest for different types of loans. That made our bookkeeping virtually impossible, or at any rate very difficult, and as far as the farmer was concerned, he received accounts from all and sundry. In terms of this new legislation such a farmer will receive an account from only one department in future. When that farmer receives his account he will know that there is no stigma attached to it, because he will know that credit facilities are being extended to him on an economic basis.

What the hon. the Deputy Minister has said now means that there is a stigma attached to these young settlers who have obtained loans at a rate of interest of 1 or 2 per cent.

No. Do not put words into my mouth that I never used.

But that is the argument that you used. You stated explicitly that the rate of interest was now going to be fixed at 5 per cent with the specific object of preventing the farmer from feeling that there was a stigma attached to the assistance received by him. Surely that is what the hon. the Deputy Minister said. But if he did not mean it that way, I accept his word. The reason why this specific concession was made to young settlers in the past remains unchanged as far as new settlers in the future are concerned. If a lower rate of interest was necessary in the past, it will be necessary in the future as well. I think the point the hon. the Deputy Minister raised in connection with accounting is not strong enough to justify those people’s having a difficult time in future.

I think it is in the interest of the settler that this concession should continue to be granted. I cannot think of any other cases where such a concession will be justified, but in the case of the settler it can be justified. For that reason new settlers in the future should also enjoy this concession.

Mr. Chairman, the hon. member for Gardens is just trying to score a point. He now wants to exploit the feeling we all have as regards the difficulties of the farming industry and the high rates of interest the farmers have to pay on loans. He is just trying to cast suspicion on hon. members on this side of the House. But the hon. member is too late to do that. We know the position of our farmers and we know to what extent interest rates are a determining factor in the economy of every farmer. To the investor interest rates are, of course, the golden egg laid by the goose, but to the person who has to pay interest to his creditors endlessly it is a constant negative factor which determines the profitability or otherwise of his undertaking. For that reason we have to accept the provision in respect of interest rates which is contained in Clause 15 as a special concession to the farmer on the part of the Government. In view of the fact that interest rates on State loans generally were approximately 6f per cent and even higher, we can hardly expect the Government to fix the rates of interest on loans in terms of this legislation at even lower than 5 per cent. I think this rate of interest of 5 per cent is a realistic, positive and a particularly reasonable concession. There are thousands of farmers who have already made use of the credit facilities made available by the various agricultural departments at considerably higher rates of interest. They will accept this new arrangement most gratefully. I want to stress, and on behalf of all those people who are going to benefit I want to place on record, that we on this side accept this measure as a special concession to our farmers on the part of the State. There is no g’eater drain on the income of especially a young farmer than having to pay interest, the more so when he is subjected to prolonged periods of drought. It gnaws at his innards like the worm at the tree under which the profit Johan sat on a dry hillside near the city of Nineveh. It gnaws at his purse like a cancer and it is forever undermining his undertaking. It is the cause of many farmers leaving their farms. Recently a young farmer told me that he was obliged to take up employment outside but that he had to spend 75 per cent of the salary he earned to pay interest. On the one hand there is interest on an overdrawn account at the commercial bank and on the other hand interest has to be paid on loans at the agricultural co-operative society, at the Land Bank or at a credit corporation, and so forth. Here we have legislation in terms of which all those debts can be consolidated at an extremely reasonable rate of interest which will be applicable generally.

I want to point out to the hon. the Deputy Minister that attention will have to be given to the problem which we as representatives of rural constituencies will experience in the future. Farmers will come and ask us whether they should leave the Land Bank now that they are able to get their loans from the State at these more reasonable rates of interest. What should they do if pressure is brought to bear upon them there? That is an aspect about which we should have clarity.

As for me, I welcome this legislation and particularly the provisions of Clause 15, with which we are dealing now. As far as the provision of credit is concerned, it is one of the greatest concessions which has been made to our agricultural sector during the past decade.

We on this side of the House do not object to the fact that if people should approach the Board for loans and assistance they will have to pay 5 per cent only, and that is not the intention of the amendment moved by the hon. member for Gardens. He has made it quite clear that under the Land Settlement Act many people were encouraged by the low rates of interest to take up farming. According to the provision made by the Minister in Clause 15, it means that all those people will now also have to pay 5 per cent interest. The only thing the hon. member for Gardens wants is the old arrangement which applied in respect of the man who paid 1 per cent in the first year—that it will still be possible to make an exception in his case.

But that remains as it is.

But then the amendment moved by the hon. member for Gardens should be accepted. I just want to repeat that we are not objecting because we regard it as being quite fair that a person who receives assistance will have to pay 5 per cent interest in the future. But we should not forget that people have previously approached the State and that we encouraged them by way of the low rates of interest under the Land Settlement Act, but now those people have to be placed on the same level as the new man.

No, the old loans remain as they are.

What then is the position of a new settler who wants to do exactly the same as was done by previous settlers? [Interjection.] The Deputy Minister says they pay 5 per cent, but one will have to encourage those people in that manner. But if a farmer should get into difficulty to-day and should need assistance, I can understand that at 5 per cent he will still be paying a reasonable rate of interest. However, the Minister will not be able to make any exception at all for the people he now wants to encourage to settle on more densely populated settlements or to make some beginning on State land. It is for the protection of those people that the hon. member for Gardens has moved his amendment.

I just want to make the position quite clear. Existing loans, unless the person requests otherwise, remain at the same rate of interest. Secondly, hon. members say that one should now render assistance to the new settlers at the same low level of 1 per cent, 2 per cent, and 3 per cent and subsequently 6j per cent. But I should like to ask hon. members: “Will the settler in the long run not derive much more benefit from paying interest at 5 per cent right from the outset instead of enjoying the benefit of a lower rate of interest for a few years and having to pay a high rate of interest for the next 30 years?” But we are not only dealing with settlers in this Bill. We are also dealing with people who are indebted to the State under farmers’ assistance and under State advances at a whole series of different rates of interest as rates have fluctuated. By request all of them may be placed on 5 per cent. However, if they obtain loans for consolidating their debts, they must necessarily come on 5 per cent.

But it goes even further than that. Has the time not arrived for agriculture to be on a sound economic basis? Is this legislation not being passed for the very reason of enabling us to finance farmers in the future so that they may become independent owners, and for the very reason of enabling us to eliminate unbalanced competition which cannot be reconciled with agricultural laws? Is it fair that one makes land available to certain farmers at sub-economic prices or makes credit available to them at sub-economic rates of interest and that they then compete with their products on the market against people who have bought land at economic prices and who have had to obtain credit from the Land Bank or from other institutions at the full economic rates of interest? Should we not once and for all make the farmer who is assisted by the State under this legislation—no matter whether it is in the form of land which he acquires on the more densely populated settlements, or land which he buys under Section 20 where he has to pay 1/10th, or additional land which he buys for consolidating his unit—realize that he is treated on the same basis as any other farmer in South Africa, and by doing that enable him to face the world with self-respect? I want to make the following very clear. In the long run also those people who now obtain funds at cheaper rates of interest for the first three or four years under the old system, will receive the benefit of being on 5 per cent, because he is not going to pay 6¼ for the next 30 years; his rate of interest will be fixed at 5 per cent.

I also want to reply briefly to the hon. member for Marico’s question whether the farmers should now leave the Land Bank to come to this Department. No, this Department is not there to invite all debtors in South Africa, whether they are debtors with the Land Bank or with commercial banks, to come to it because we shall never have sufficient funds to meet all demands. This Department is there to assist those people who no longer have sufficient security to get assistance from private institutions or even from the Land Bank but whose capacity for work and whose management ability we believe to be such that they ought to be saved as producers.

It seems as if the Deputy Minister does not understand that the hon. member for Gardens has asked that the maximum rate of interest should be 5 per cent. Now he comes along with his explanation about the consolidation of interest in the long run. We are all grateful to be getting a finance or credit scheme under which debts are consolidated at 5 per cent, but the fact remains that there are State advances and other loans with high rates of interest. The borrowers are now paying a higher rate of interest than 5 per cent and now it is being enacted that if he consolidates his debts and he comes along with a new application, even though he had been paying 5¾ per cent, he will revert to paying 5 per cent. Now, the argument of this side of the House is the following. Why should that person have to follow such a round-about way of incurring additional debts and then try to have them consolidated under this Department? Is it not possible to arrange matters in such a way that he pays the maximum of 5 per cent interest in any case so that the person who pays 5i per cent, where he already has a loan at more than 5 per cent, will automatically revert to paying 5 per cent without having to incur additional debts or without having to run to this Department to be financed? Then he does not become a new applicant at this Department to whom additional financing has to be granted. The Minister should just explain to us why it has to be provided that he should first try to consolidate his debts and then he may come as a new applicant under this scheme, and why he cannot be accepted as an existing borrower.

Order! What connection does that have with the clause?

Then I simply request the Minister to give an explanation.

The hon. member should read the Bill again. This clause does not provide that a person has to apply anew. It reads—

Notwithstanding anything to the contrary interest is charged at 5 per cent. However, at present there are cases where less than 5 per cent interest is paid on loans, as the hon. member for Gardens said. If those people should apply for new loans, or when they come to have their debts consolidated, they fall under this clause immediately. But their existing contracts will not be broken and interest will not be pushed up to 5 per cent. Now the hon. members come along with an amendment that the words “not more than” 5 per cent should be inserted in this clause. It is not necessary to do so because we do provide in this Bill that the rate of interest will be 5 per cent. That means that it will not exceed that figure.

I think that when the Deputy Minister was speaking a short while ago, he was merely setting up puppets. He has just said that the Bill provided that rates of interest may not exceed 5 per cent. We know that, but there are certain circumstances under which we want the rate of interest to be less and I have mentioned them. That is in the case of new settlers. The position of a new settler in ten years’ time, when he has had a difficult start, should be the same as in the past. I want to say the following. We are not pleading for the other cases. We realize that where people are at present paying less, their payments will remain at that figure, unless they take up new loans and fall under these provisions. We appreciate the fact that loans are fixed at 5 per cent. If the Minister will accept the amendment if it is changed in such a way that it would only relate to new settlers, we are quite prepared to agree. It is merely for those people who are setting out and who will really have an extremely difficult time that we feel an exception should be made.

May I tell the hon. member that many of the farmers who will apply for the consolidation of their debts in terms of this legislation may perhaps find themselves in a much worse position financially at the time when their applications are granted than the person who applies to set out as a settler. Why then should any difference be made between them? A person who applies for the consolidation of his debts is usually experiencing pressure from all sides. He will not easily approach the State with a request for the consolidation of his debts or for a new loan simply for the reason of making use of this rate of interest. He will do so because he is heavily burdened and has nothing else to resort to. Does the hon. member want him to be the only one to pay 5 per cent interest whereas the other person is only paying 1 per cent or 2 per cent? Within the purport of this legislation that will look like unjust discrimination.

Amendment put and agreed to.

Clause, as printed, put and agreed to.

Clause 19:

I move as an amendment—

The consolidation of debts entail entering into new agreements with debtors. It may just happen that a debtor will be unwilling to sign such agreement after he has received assistance. This amendment will enable us to call in the debts. You will remember, Mr. Chairman, that when I moved the previous amendment I explained that we should like to be able to take rapid action. Where persons already have loans for land which they may have purchased for instance, and subsequently want loans for seed or fertilizers, such loans may be granted before the new agreements have been registered and have been signed finally. If one first has to check the agreements, cause new documents to be signed, etc., there may easily be a delay of a month or two and by that time one might be locking the stable after the horse had been stolen, and the loan might no longer serve any purpose. But we have to safeguard ourselves of course. If the new loan has been granted and the person no longer wants to comply with the agreement, we want to be in a position to call in the entire loan and that is the sole reason for the insertion contained in this amendment.

Amendment put and agreed to.

Clause, as amended, put and agreed to.

Mr. Chairman, I move—

Agreed to.

Schedule, as amended, put and agreed to.

Mr. Speaker, I move—

Mr. Speaker, the Agricultural Credit Bill, which was considered by this House a moment ago, repeals the Land Settlement Act, 1956, and in so doing abolishes the Central Land Board and the five local land boards. Those functions of the land boards which relate to the rendering of assistance to the farmer are being assigned to the Agricultural Credit Board, but provision also has to be made for a body to which the land boards’ function of making valuations of land can be assigned.

With this end in view, the Land Tenure Board is being established in order to assist with the land transactions of the State; that is to say, to exercise control over and to check valuations of land which is to be purchased for settlement purposes, waterworks and general State purposes outside of townships. For these purposes the board will make use of the services of agricultural credit committees and of sworn appraisers. The Land Board also determined the selling price of farm land which was alienated.

The value of land situated within townships was determined with the assistance of the Department of Public Works and/or sworn appraisers.

The board will also advise the Department of Water Affairs in regard to the distribution of scheduled land and the allocation of irrigation water to land which, in terms of the Water Act, is withdrawn from scheduling because it has passed into the possession of a person who is already entitled to use water from a Government waterwork for agricultural purposes. This function is at present assigned to the Central Land Board.

The board will make recommendations in regard to the acquisition, lay-out and development of land for farming purposes and the provision of State land to other departments, bodies and persons.

However, as it is too much to expect of the four board members that they should be fully acquainted with land values throughout the Republic, provision is being made for the appointment of additional members on an ad hoc basis to carry out valuations in particular areas.

Jobs for pals.

The hon. member is very much without pals, and that is why he is so concerned. As far as the purchasing of land for the Orange River project is concerned, for example, one or more local appraisers will be appointed to the board to assist in checking the valuations there, while, for the purchasing of sites in Pretoria, one or two local appraisers will be appointed to assist in bringing such transactions to finality. Such an additional member will hold office only for as long as and when the matter for which he has been appointed is being dealt with.

There has been no consultation with the provinces yet, but consideration may be given to making the services of the Land Tenure Board available to the provinces as well, in the same way as the Land Board to-day carries out valuations for the Department of Bantu Administration and Development and the Department of Coloured Affairs. That may possibly lead to the centralization of all purchases by the State, and should in any case lead to greater efficiency.

As a result of the repeal of the Land Settlement Act, it has become necessary to provide statutory authority for the establishment of settlements. The Bill has been drafted in such a way that it will make possible the purchase of suitable land for farming purposes and, if need be, will authorize the expropriation of land in a Government water control area. Any State land which, in the opinion of the board, is suitable for farming purposes may be developed and improved for such purposes with a view to allocation under the Agricultural Credit Act.

Because there will have to be close liaison between this board and the Agricultural Credit Board, the Bill provides that the chairman of the Agricultural Credit Board shall be the chairman of this board as well, without receiving any additional remuneration, of course. It is even envisaged that one or more of the members of the Agricultural Credit Board will be co-opted when the acquisition of such land as will eventually be dealt with under the Agricultural Credit Act is being considered. I move.

Mr. Speaker, we on this side of the House support this Bill. The Bill, of course, seeks to replace what will be cancelled by the Bill we have just adopted, especially that part of it relating to the Land Settlement Act, the Central Land Board, and so on. Therefore we on this side are prepared to support this Bill. I like the coordinating aspect of this Bill regarding the various boards, and the fact that the chairman of the Agricultural Credit Board—I would have liked to have said the Agricultural Finance Board—also happens to be the chairman of the new board which is being established under this Bill. We are not quite happy with the composition of this board, because here again we believe that the S.A.A.U. should have a say. But that we will discuss during the Committee stage, when we shall probably move a few amendments. As I say, we on this side support this Bill.

Mr. Speaker, in the first place I want to congratulate the hon. the Minister on the steps which have been taken to establish these two boards. I am of course referring to the Agricultural Credit Board and the Land Tenure Board. The old institutions had been established many years ago, and it had become high time that changes were made. This new measure will only be an adaptation to the times and circumstances in which farmers find themselves to-day. The old system of the old Land Board and the five local boards was really a very cumbersome and long-drawn-out business, and farmers had to wait a long time to hear what the outcome of their applications was. Under this system it will be possible to act much more quickly. The old system has really become obsolete. In the old days the intention was to provide a farmer with a small piece of land for as little money as possible. In some cases the restrictions that were imposed perhaps caused the Land Board to buy uneconomic pieces of land. Because the amount of money was fixed, people sometimes selected very poor pieces of land in order not to exceed the fixed amount. Many farmers were unable to make an existence on those uneconomic pieces of land and consequently had to approach the State for assistance. This new measure will make it possible to eliminate many of the failures of that type. This Land Tenure Board will be able to make use of the agricultural credit committees which are to be established in the various magisterial districts. These local committees will of course be fully acquainted with the potential of the land concerned, the conditions prevailing in the district, the market value of the land, etc. They will then be able to advise the Land Tenure Board. Consequently it will not happen so easily that poor land is purchased at high prices.

I find it strange that the hon. member who spoke a short while ago objected to the fact that the chairman of the Agricultural Credit Board will also be the chairman of the Land Tenure Board. Surely, in the light of the coordinating nature of the functions of these two boards, such a dual appointment is very desirable, because the boards will co-operate so closely with each other that they will be virtually inseparable. Therefore it is desirable, for financial reasons as well, that one and the same person should be chairman of both boards.

The main function of the Land Tenure Board will be to see to it that land which is purchased and subsequently transferred to the Agricultural Credit Board to be sold to farmers will in fact be economic units which are in such a condition that the farmers will be able, as it were, to start producing immediately. Moreover, the farmer will not find it so difficult to pay the 5 per cent interest, because he will have an economic piece of land which will be productive from the outset. In the past the position was quite often a very different one. Frequently a farmer received only a bare piece of land and had to work on it for many years before it was converted into a productive unit. Henceforth the Land Tenure Board will buy the land, prepare it and, particularly as far as settlements are concerned, see to it that the land is first levelled and prepared in such a way that the settler will be able to start producing immediately. That will of course mean a very great deal to the settler.

Mr. Speaker, the Land Tenure Board will have to undertake the valuation of the land, and they will have to decide whether or not the land is economically satisfactory. They will have to make a valuation of the land before the land is purchased. Will this Land Tenure Board not be able to make valuations of land in other cases as well? For example, I am thinking of a case such as when a provincial council, or the Department of Water Affairs, wants to buy land. Would it not be desirable that only one body should be responsible for the valuation of land? The Board could keep a register of all land purchased by the State in that way. The register could be extremely useful for purposes of future reference.

In the past, when a farmer wanted an additional piece of land, the local land board first had to send a person to make a valuation of the piece of land concerned. Then the Board had to meet to take a decision on the matter. It sometimes happened that all the particulars had not yet been obtained. Then an extension officer was perhaps sent to the land. He then had to submit a report. By the time the case eventually reached the Central Board the option had expired and the farmer had the bad end of the stick. It was a protracted, complicated and sometimes irritating procedure. This new measure will eliminate all these cumbersome procedures. The people who have to assist with the valuation of the land will know the district in which the land is situated, and they will be fully acquainted with all the relevant aspects of the land under consideration. By means of this improved procedure it will be possible to deal with applications much more quickly. Therefore I am very grateful to the hon. the Minister for having greatly facilitated matters in this regard for the farming community, and I trust that the Opposition will accept this measure forthwith.

Mr. Speaker, we on this side of the House can accept this Bill without reservation. I find it a pleasure to support this Bill. This measure is of course essential in the light of the Bill we disposed of a few moments ago, because without this Bill the Bill which has just been disposed of will not make complete sense. We accordingly support this measure.

We are particularly glad about the hope expressed by the hon. the Minister that the boards which will be appointed to assist with local valuations will also assist with provincial valuations. Such a situation will be a great improvement on the present state of affairs. I do not think anyone in this House can find any fault with this Bill. I am particularly glad about the inclusion of Clause 6. It was high time that a measure such as this was brought forward, and apart from one minor amendment which will be moved at a later stage, this side of the House has no objection to this legislation. I am glad the hon. the Deputy Minister is casting such an appreciative glance at this side of the House for the assistance we are offering him.

Mr. Speaker, this is the umpteenth Bill on which this House has been unanimous. As soon as we notice that we do not really differ, we begin to talk about odds and ends, and that is what I am now also doing. Members soon exhaust the subject, a fact which is emphasized by the Press because they find it hard to distinguish between that which is important and that which is unimportant. The trouble is that the Opposition’s concurrence is a kind of qualified concurrence. They come up with a few qualified arguments, and we on this side bring up a few counter-arguments. Now, Mr. Speaker, it costs the State a considerable amount every day, and it amounts to injudicious spending of capital, which furthers inflation.

Order! The hon. member is now digressing very far from the Bill. He must come back to the Bill.

Now, Mr. Speaker, in a recent publication I read something about our old Department of Lands, a Department of which we are taking our leave to-day. This Department, the article states, is doing everything in its power to satisfy the land-hunger of the farmer. Millions of rands are made available for this purpose every year. In the article reference was made to various schemes by means of which the farmers were assisted to obtain land. In some cases farmers had to pay one-tenth of the purchase price. Thus no fewer than 191,131 morgen were allocated between 1962 and 1965, for an amount of R10,131,876. During the same period the Department of Lands also bought irrigation land for an amount of R14,648,000. The Department also bought land for Government use, to the amount of R11,309,648. The Department also bought up ¡black spots to the value of R2,628,000. With the introduction of this measure we have to take leave of our old friend the Department of Lands. We do so, of course, with some nostalgia. By means of various schemes and for various purposes, the Department has bought land to the value of almost R40,000,000 in the course of the past four or five years. As I have said, Mr. Speaker, we take our leave of the old dispensation with some nostalgia, but at the same time we have high hopes for the new dispensation, and we should like to thank all the persons, bodies, boards, organizations, etc., that, after years of appreciated service, have to make room for others who are equally welcome.

That the chairman of the board will, at the same time, be the chairman of the Agricultural Credit Board, affords co-ordination which should be welcomed. If we note that the board is to consist of only four members, with occasional increases by means of the appointment of ad hoc members by the hon. the Minister and that the activities of the board will be, amongst other things, to advise the hon. the Minister as regards the value of land, etc., then some questions arise on which I should like to receive replies from the hon. the Minister, if he will be so courteous as to give them. In his brief introductory speech the hon. the Minister has already dealt with some of these questions. In any event, Mr. Speaker, the questions are the following: What qualifications must a person have to be appointed to the board? What procedure will be followed in the appointments in order to ensure a representative knowledge potential among the four members as regards land values, and so forth, in respect of the large surface area of the Republic, with its many regional differences in land values? How will the committee set about carrying out with the least delay such a responsible and comprehensive advisory function in respect of (a) the value of land, (b) rights in respect of land, (c) alienation of State land, (d) allocation of State land, and (e) other matters which the hon. the Minister may refer to the board?

Mr. Speaker, in my opinion the most important aspect of the board’s function will be to advise the hon. the Minister in respect of the value of land. If in the past we committed the error of making available uneconomic units, then it was likewise an error to make land available at uneconomic prices—a burden which rests heavily upon us to-day, upon the farmer as well as the Government. That occurred in terms of Section 20. Under Section 18 we erred in the opposite direction, namely by awarding land to farmers on an uneconomic basis. Farmers who obtained land in terms of these two sections had to compete with each other on an unequal basis as regards production and the marketing of their produce. We should guard against this. Our motto should be sound investigation, supported by knowledge and characterized by thoroughness, and the remuneration, allowances and other conditions of service should be proportionate to the responsibilities to be carried by the board. They should also be proportionate to the penal provision of a fine not exceeding R1,000, or imprisonment for a period of five years, in the event of such a member being convicted of an offence as provided in Clause 47 of the Bill. Heavy responsibility and, consequently, severe trouble if matters miscarry, demand that these persons shall be remunerated on such terms as will entitle one to expect them to be prepared to bear the risk involved in their duties.

We have suggested that the board’s actions should be supported by knowledge and characterized by thoroughness, but it should not be possible, however, to hold these up as a pretext for delays when applications are dealt with by the board. We know that under the present dispensation options are asked for four months, are then extended for another four months, and even then it happens that the land still cannot be bought and that the prospective buyer loses a good opportunity because the seller is not prepared to extend the option any further, possibly because he has in the meantime received a more favourable cash offer.

The Bill which is before this House to-day not only affords us an opportunity of taking leave of the Department of Lands, but it also affords us an opportunity of making a few observations about the mistakes which have been made in this country as far as the allocation of land is concerned, and I think that, while we are now establishing a new Department of Land Tenure here, this is perhaps the proper occasion to say something about that. If one considers many of our more densely populated settlements to-day and the policy followed there in the past, then, as far as I am concerned, there is no doubt that very many mistakes indeed have been made in the past. I think one of the greatest mistakes made in the past was that we allocated land which was hopelessly too small for the people we tried to settle there. In other words, we tried to settle the largest possible number of farmers on the smallest possible piece of land, and I think that if there is one mistake which should not be repeated in future, then it is that mistake which has been made over the past 30-50 years. Although one is grateful for what was done by the Department of Lands, one wants to express the hope, seeing that this board is now being granted new powers for buying out land, for laying out schemes, etc., that that mistake in particular will not be repeated in the future. How many times have we not seen, particularly on the more densely populated settlements, that people landed in difficulties, not only because they over-capitalized, but also because they landed in a situation where they simply had no more land to enable them to make a decent profit. In the second place we made the mistake that we frequently gave land to people in the so-called uneconomic areas, land which is still lying there to-day and which is completely uneconomic. Such a person may have a unit of 40 morgen, but only has water for 30 morgen; the other 10 morgen are regarded as the so-called uneconomic part. If there is anything to which this Department will have to give its attention when laying out new schemes in the future, then it is to see to it that they do not repeat that mistake, that as far as possible they will give the person concerned a piece of land on which he will be able to make a decent living.

Another point I want to mention in this respect is the following: one finds that such a holding which is allocated is so small that there is no reserve left. In other words, the person starts cultivating his piece of land and subsequently finds that he has no opportunity of expanding, with the result that exploitation of the land is inevitable.

Where has that happened?

The hon. member can go and take a look at all the more densely populated settlements. Go and take a look at Vaalhartz. There he will see that people have had to exploit their land because there was no reserve left for expansion. Some farmers received 30 or 40 morgen of land, but others received much less, and I say that if we do not want to repeat that mistake in future we must see to it that the people are given enough land. I think that if there is one thing this hoard should guard against, then it is a repetition of that mistake made in the past.

The next point that I want to make as far as the hoard and its functions are concerned is this: It is correct that it should function in very close co-operation with the Agricultural Credit Board; that is beyond any doubt, but I regard the functions of this board as being of even greater importance, because, as a member on that side said on a previous occasion, the land in South Africa is not increasing. Land is becoming scarcer and scarcer, and accordingly, when laying out settlements, one must see to it that those schemes are laid out where the best use can be made of the land. Not only that, but I would suggest that, when laying out schemes, particularly for settlements, we should not only think of the people whom we are going to place there, but should also consider building up fodder-bank reserves for farmers already settled on the land. When thinking of settlements we should not think of them merely in terms of the settlement of one person on a holding; we should also think in terms of the farmers who are already settled on the land and, when laying out a settlement scheme, this Land Tenure Board should also bear in mind that ‘one does not only want settlers there, but I hope that it will set aside large portions for farmers who are already settled on other land, so that they may have irrigation land where they can build up fodder banks for themselves. We should not forget that our stock-farming industry in particular is an industry which will be affected and can be promoted here, and I want to make a plea for the large number of stock-farmers who are farming in extensive areas to-day and who have no irrigation land at their disposal, and who will only be able to have irrigation land at their disposal if they can obtain a holding on such a scheme. What has been the policy that we have followed up to now? The policy we have followed up to now has been to assist only the small farmer, the man who wanted to make a start. I do not disagree with that, but we have never made provision for land also to be allocated to people who are already farming but who have no irrigation land on their own farms. I think that if there is any thing to which this Land Tenure Board can give consideration, it is to set aside portions of such settlement schemes for that type of farmer as well. We know what tremendous losses we suffer in South Africa as a result of the shortage of fodder for our animals, particularly in times of drought. We know what a tremendous influence is exerted by wintering, as a result of the fact that the farmer does not have artificial fodder with which to feed his animals during that period. If one had such a scheme, however, one would also improve the position of the existing stock-farmer, particularly in the extensive areas. The extensive farmer is dependent mainly upon what he can get out of the soil, upon subterranean water, and that supply is not inexhaustible either. But, after all, this Land Tenure Board is not going to establish settlements in parts where they will not be assured of a sufficient water supply. In the first instance I want to plead that we should see to it that there will be sufficient land for the new settler, that his holding will have some reserve potential, so that it will not be necessary for him to exhaust the land, and in the second instance I want to plead that land should also be made available to the extensive farmer who is already settled on his land, but who does not possess the means to apply irrigation on his own land, and if this Land Tenure Board could follow that policy in the future, it would be a great improvement upon what we have had up to now under the Department of Lands, although we are grateful for what was done by them. But when one changes the name of a department one should also follow a new course; one should also adopt a new policy and one should also display new vision.

In Afrikaans we have the well-known saying that every South African owns a farm, even if he carries that farm in his waistcoat pocket. Because this Bill seeks to some extent to assist that farmer who is carrying his farm in his waistcoat pocket to take it out of that pocket and put it under his feet and have it registered in his name, even though in the indirect way in which the new board will be of assistance, we want to extend a hearty welcome to this Bill and also to the sound principles contained in it. If we examine the constitution of the board, we cannot but be satisfied with the proposed legislation—in contrast with hon. members on that side. We are just hoping that half of the members will at least be practical farmers, people who have already made a success of their farms and who will at least be solvent, as is stipulated further on in the Bill, for if one cannot look after one’s own affairs, how can one be an asset to anyone else or to the country? We are also very glad that the Bill provides that the members of the Board shall not take an active part in politics; that they shall not stand for election to this House or to a Provincial Council. We are very glad that this measure does not disqualify those who in the past sought to become members of this House or of a Provincial Council, because if that had been so, I do not know where the Minister would have found enough members to make appointments to this Board. It is provided here that the salaries of members of the board shall be determined in consultation with the Treasury, and here I want to plead at the outset that these persons shall be paid a decent salary. A good salary lends status to the profession which is practised, and by means of that we shall also obtain the right persons, persons who are interested in the matter. In the Bill provision is made for the possibility that many of the members may under certain circumstances be influenced to give their decision in favour of some concern or other, or, to put it frankly, attempts may be made to bribe them, and that will probably happen. The Bible says money will open all gates. In this respect, too, proper salaries for the members will ensure that men with the desired integrity will be interested in these positions. We hope, however, that it will not be so generous that members of this House will be tempted to become members of that board.

The Bill also provides that these members will assist the Minister in determining the value of land. I think that that will probably be their most important function. When land is bought or sold nowadays, two criteria are applied. The first is the production value of land. It is a self-defining term, but I think it is nevertheless necessary to set it out more clearly. I wonder if the Minister will differ from me if I say that when we speak of the production value of land, we have in mind, roughly, that if a man buys a farm for a certain amount, he should be able, within a period of approximately 25 years, to recover the money he has invested in the farm, redeem his bond with interest, and at the same time make a living from that farm.

The second criterion is the market value. That is the value attached to land when it is offered for sale. But now we have found in recent times that the market value is approximately twice or three times as high as the actual production value of land, and that hampers land transactions in South Africa to an alarming extent. Take the young farmer, the man who leaves an agricultural school, who is trained to become a farmer and would like to buy some land. He is compelled to buy according to the value of the land, because he has no capital behind him to support him if he meets with adversity. But if he waits until it becomes possible to buy land at production value, he will never be able to buy a farm; and this does not apply only to young farmers. It also applies to any farmer who wants to buy land because his has become too small. and in order that his sons may farm with him. Then we also have the man who cannot be anything but a farmer. If one put him in a workshop, he would not fit in; he can only be a farmer. There are all these groups that cannot afford to buy land at the market value—some of them are forced to buy land sooner or later, and if they then buy at a price which is much higher than the market value they are faced with only one prospect, and that is that sooner or later they will land in financial difficulties and will then have to apply to the Government for assistance. Now we have to note that the recent credit restrictions and also the drought have tended to narrow the gap between these two extremes, but it has not been bridged altogether. In dealing with this matter we should not overlook the fact that agricultural land has probably become the best investment in the country, not only for the farmer but also for other concerns. By buying land many farmers and also other concerns seek protection against the deadly erosion of money, and in actual fact find it, because in the past we have had the phenomenon that land one buys for R20 a morgen to-day can be sold at double the price to-morrow. If everything is taken into account, land is extremely limited; the supply can never be augmented from any other source. But I think that the most excellent quality of land, which makes it a sound field for investment, is the fact that it is indestructible. No matter how hard one tries, one can never really destroy the land. All one’s art treasures and all one’s gilt-edged shares may one day come to dust or depreciate, and one may be left with only the paper representing them, but land retains its value no matter what happens, and also tends to appreciate.

All these factors form a most complicated structure, and if the board envisaged here succeeded in narrowing the wide gap between the market value and the production value of land, and in presenting us with a realistic pattern according to which we may buy land and in which the State would actually set us an example, that board would do agriculture in South Africa an excellent service.

I find myself this afternoon in the position of hon. members opposite, where I can also thank the Minister. We do thank the Minister for this legislation and we do not intend opposing this legislation except for the one small amendment we have moved, which we spent most of the afternoon discussing, namely the question of the representation of organized agriculture on this board. I must say also that I am very glad to see this clause which says that any member of the board shall terminate his period of office if he seeks election at any party or official nomination for Parliament or Provincial Council. Once again I thank the Minister.

However, there is one aspect that I do want to ask the Minister to consider. I know that possibly some hon. members opposite will say that once again I am looking for a lion in the road. Perhaps it is our duty on this side of the House not only to look for the lions in the road, but we heard from the hon. member for Smithfield the other day about the bees around the flowers and we must look for the sting in the tail of those bees. I am referring to the clause which provides for the expropriation of land within a water-controlled area. I sincerely hope that this clause will not be used as a weapon against the smallholders. Most of these water-controlled areas comprise smallholdings where you have many small farmers practising mainly market gardening or poultry farming, and perhaps even pig breeding, on a concentrated scale. An investigation of the previous Acts, of which this Bill is a consolidating measure, shows that in terms of Act 21 of 1926, from which this clause particularly seems to stem, there is reference to irrigation areas. I think that the intention of that Act was that expropriation could take place for the development of irrigation schemes like the building of dams and the establishment of pipelines, and where the expropriation of land was necessary for the continuation of such an irrigation scheme. To-day, however, we have the definition of a Government water-controlled area. Particularly in my constituency, where there are Government water-controlled areas, a number of the smallholders are not so situated that they could ever be considered to fall anywhere near where irrigation works would take place. It is for that reason that I appeal to the Minister to give us at least some indication on this point, or at least an undertaking that this clause will not be used as a weapon against these smallholders. I would have liked to discuss these smallholders under this clause, but I am sure, Sir, that you would rule it out of order, and therefore I feel that perhaps I should sit down and leave it to the Minister to answer us on this point.

It almost makes one feel uncomfortable to hear so many words of thanks from all sides. I should like to tell the Opposition that I am glad that they accept this legislation. However, they cannot do otherwise because it is a logical consequence of previous legislation which has been passed. But I want to tell the hon. member for Gardens straight away that it will be of no avail to come along with an amendment that the members of this board should also be nominated by the Agricultural Union, as he has briefly intimated that he was going to do.

Then I immediately want to give the hon. member for Pietermaritzburg (District) the assurance for which he has asked. I want to tell him that the State has already had the power to expropriate land in terms of previous Acts which have been repealed. It is necessary to have that power, because if one wants to proceed and it is not possible for one to buy out a person immediately, one must be able to expropriate that land so that State works will not be delayed. But it has always been the policy of this Government, and it will always be its policy, never to enrich the State at the expense of the individual. In other words, where it becomes essential to expropriate land, for whatever purpose, it will not be done at the expense of the individual. The hon. member said that in the past land was only expropriated in connection with irrigation works. That is not so. To mention one example, it has already been necessary for us to expropriate 33,000 morgen of land for carrying out soil conservation works in cases where soil erosion had taken place to a large extent and where it was the only way of restoring the land. I also want to give the hon. member the assurance that the law provides that Provincial Administrations have the right to decide on the subdivision of land into units which are less than 25 morgen in extent. That position is not affected here. He need have no fear that we are going to expropriate the land of smallholders in terms of this legislation.

The hon. member for Mossel Bay mentioned a very important matter namely that this board, because of the method according to which it was going to act, would possibly be a stabilizing factor as regards land prices. I hope that that will be so. But I want to tell this House that it should bear in mind that when land is purchased from private persons other persons who apply should also be assisted to acquire land, as happened under old Section 20 of the Land Settlement Act. In terms of that Act the price which the private person charged had to be paid. It is obvious that neither this board nor the Agricultural Credit Board will buy on an uneconomic basis by paying prices which are too high. They will simply tell the applicants: “It will be of no use to help you from the frying pan into the fire.” But where this board is going to make State land available, that State land will surely be made available at its agricultural value. Over-capitalization will not take place but neither will the land be made available as a sub-economic unit, because that in turn will upset the balance of agricultural economics.

Mr. Speaker, the hon. member for Waterberg asked a number of important questions. He asked whether it would be possible to eliminate delays in the valuation and expropriation of land through the medium of this board. He also asked how this board, which is a small board, would be able to make valuations all over the country. This board will surely make use of the agricultural credit advisory committees which have been appointed in each magisterial district. These committees will assist it in connection with local valuations. But this board may also co-opt ad hoc persons. In other words, if this board wants to make valuations in a certain area, it will ad hoc co-opt a sworn assessor in that area, or persons who have proved that they have a thorough knowledge of the value of land, to make those valuations. Consequently this board will be able to make use of all the available knowledge of circumstances in the locality which the Land Board could not do in the past. Because this board may co-opt people for that specific purpose, matters will be expedited. Consequently the delay as a result of the option of four months, plus an extended option, which the hon. member was afraid of, will be eliminated to a large extent. We should not blame the hon. member for having waxed lyrical and even wanting to quote the Holy Communion service to show what this board could do and what it could not do. Perhaps the reason for that is that he has had so many problems in connection with settlements which this board is now going to solve for him. It is only a happy man who speaks like that.

I am glad that the hon. member for Newton Park wished this board well. But the hon. member should be consistent, and he should not speak without his book. The hon. member said that we should not make the same mistakes as in the past, namely to allot units which were too small. I am in complete agreement with him. But if the hon. member says that when this Bill is discussed, why did he make an issue about the matter here yesterday and the day before yesterday by saying that the rural areas were becoming depopulated? The fact that smallholdings are already being consolidated into units was used by him for the purposes of a political quarrel the other day. He levelled the charge at this Government that the rural areas were becoming depopulated as a result of bad government. He must be consistent. If he is really convinced that units which were too small were allotted in the past—and that may possibly have been the case—he should be consistent and say: “You must help them to consolidate.” Then, when consolidation is undertaken, he should not charge the Government with the depopulation of the rural areas.

The hon. member made a fuss not only during the election, but yesterday as well, and said that I was not assisting the small farmers. Yet it was precisely these uneconomic units with which he linked the small farmers—small farmers who were farming on land which was too small. Why can he not remain consistent?

I was talking about private farmers and not about farmers on settlements.

The position remains the same. The hon. member asked that this board and this Department should see to it in future that economic units, and not overcapitalized units, should be made available units on which a person could make a decent living without over-cropping. That is a fine ideal, but I just want to say that that is already being done. The old Department of Lands and the new Department of Agricultural Credit and Land Tenure have already been doing so for the past two years. Because they were doing so, the hon. member jumped at the fact and used it as an opportunity for telling the electorate and us that the rural areas were becoming depopulated.

What settlements are there in Beaufort West, for instance? See how that area is becoming depopulated.

I want to say straight out that this Department and this board have the necessary foresight to see to it, as I already said at the outset, that State land will be allotted in future to the best advantage of the nation.

Bill read a Second Time.

Mr. Speaker, I move—

It is very interesting to know that a very long history is attached to this Bill. That history started in the days of the London Mission Society and Van der Kemp. The Bethelsdorp saltpan was transferred to a board in terms of the Bethelsdorp Settlement Act, 1921, subject to an existing lease and further subject to the right of the owners of erven in Bethelsdorp to collect salt. A new lease was substituted for the original lease during 1933, and with extensions this new lease would be valid up to 1994. The new lease provided that the lessee should pay one sixpence to an owner producing salt (called a holder of a strip) and one penny to the Saltpan Board for each bushel of salt received by him. However, the saltpan’s yield—after having been worked for 150 years—became uneconomic, and the lessee tried to increase production by pumping sea-water into the pan. This attempt has not been successful, however, because the 141 holders of strips did not want to co-operate. Consequently working virtually came to a standstill.

Through the medium of the Saltpan Board a different tariff of payment for the salt collected was introduced during 1959 and the lessee himself could work strips he took over from the holders of such strips. This resulted in a considerable increase in revenue and, for the first time in many years, holders of strips received a reasonable return on their saltpan rights.

The complicated system of bookkeeping which the new arrangement demanded adversely affected the profits, and it was arranged during 1960 that the lessee would work all strips at a compensation of R6 per annum to each holder of a strip. The arrangement worked very well and, during the 1961-’62 and 1962-’63 seasons, compensation to holders of strips was increased to R10 each per annum.

During a meeting on 6th October, 1962, the owners of erven gave the Saltpan Board a power of attorney to enter into an amended lease at R3,600 per annum, from which amount the recognized holders of strips would each be paid R12 per annum for their saltpan rights. That would have meant that they would have received more without any exertion on their part than they would have received through their own efforts. In addition large-scale working by the company would have created employment opportunities for the entire community.

The lease, which would have been valid for a period of 20 years as from 1st July, 1963, with provision for three renewals of 20 years each, was presented to the Deeds Office for registration. The Registrar of Deeds refused to register the lease, however, unless provision was made to reserve the right of collecting salt to the owners of erven in Bethelsdorp. Such a condition would have placed the lessee in such an untenable position that he would have been compelled to drop the new lease and to fall back on the 1933 lease.

Since this lease has already proved unpractical, there is a strong possibility that the company will withdraw itself entirely. During the past number of years the following revenues were directly paid to the Saltpan Board and the holders of strips by the lessees, and it is clear that in all respects it would be to the advantage of the community to register the new lease: 1950, R874; 1951, R624; 1952, R1,266; 1953, R1,348; 1954, R750; 1955, R1,182; 1956, R1,292; 1957, R958; 1958, R924; 1959, R257; 1960, R1,101; 1961, R2,254; 1962, R2,509; 1963, R3,600. Therefore, you will see that, under the system of the new lease, they will immediately derive greater benefits. Consequently, it is proposed to amend the Bethelsdorp Settlement Act so as to empower the Saltpan Board to let the saltpan to the best advantage of the community without interference from the holders of strips or from other owners of erven.

The Bill further deals with the cancellation of certain conditions of title which are applicable to the Bethelsdorp common. The common, which is approximately 7,000 morgen in extent, was transferred to the Divisional Council during 1949 subject to the condition, inter alia, that any erven on the common which may be sold may only be owned and occupied by Coloureds and Bantu, and that the proceeds of such sales should be utilized for church, school and other public purposes at Bethelsdorp.

Since that time the borders of Port Elizabeth have been extended to such an extent that Bethelsdorp and the common fall within the municipal boundaries. Although the common is still registered in the name of the Divisional Council, it is controlled, and its development is planned, by the City Council. The entire area is intended for non-White housing but, because of its topography, a portion will not be built up. Consequently grazing will still be available.

Because vested rights will be affected by the legislation, notice of the intention to introduce the Bill was given by registered mail to all 453 registered owners of land at Bethelsdorp. The general objects of the measure were explained and copies were deposited with the magistrate, Port Elizabeth, for inspection. The notice also appeared in the Government Gazette and local newspapers.

The Saltpan Board, of which the Chief Magistrate of Port Elizabeth is chairman, reports that the entire community of Bethelsdorp is anxiously looking forward to the registration of the long-term lease of the saltpan in order that the construction of the purification works, etc., may be commenced. However, the owners of erven are mostly illiterate, and it is doubtful whether they understand the finer legal aspects of the matter. That apparently explains the lack of reaction to the notices in connection with the Bill.

The contemplated measures are in all respects in the best interests as well as to the advantage of the owners of erven and the residents of Bethelsdorp, and I want to move that they meet with the approval of this House.

Mr. Speaker, we on this side of the House support this Bill. It is a completely non-contentious Bill, and that is the reason why a non-contentious speaker like me is to speak on this Bill. The Deputy Minister is correct. Bethelsdorp has had a very chequered and interesting past and, with all these old entailments, one reaches the stage, sooner or later, when you run into difficulties. This is one of those times in the history of Bethelsdorp where difficulties have been encountered. You will note, Sir, that this is a hybrid Bill. I believe that the Department has circularized the various interested parties in Bethelsdorp, and only one reply has been received. That reply stated merely: “Ek is neutraal.” I believe, however, that this person’s handwriting was not too good, and nobody could make out whether he meant “Ek is naturel” or “Ek is neutraal”. In any case, there have been no objections, and if the people of Bethelsdorp have no objections, surely we should grant them what they have requested. There is just one aspect to which I want to draw the Minister’s attention. In Clause 1 (a) provision is made for R300 to be paid to the Bethelsdorp Congregational Church, and R100 for school purposes. Are we correct in assuming that these amounts are per annum? It does not say so in the Bill.

Yes.

I have nothing more to say in this regard, except to hope that the Minister will keep an eye on the interests of the inhabitants of Bethelsdorp. I think there are approximately 500 of them, and the majority of them work in areas outside Bethelsdorp. They can, therefore, only benefit as a result of this Bill, and we welcome it.

Bill read a Second Time.

Mr. Speaker, on a point of privilege, I want to draw attention to the following words which appeared under the heading “Politicians’ Claptrap” in the South African Film Weekly of 11th August, namely—

I submit that there is a possibility of a breach of privilege here, in that these words reflect on the House of Assembly, and I submit a copy of the publication concerned for your consideration, Mr. Speaker.

The hon. member for Innesdale was good enough to show me the words in question beforehand. I have considered the matter carefully and, in view of the offensiveness of the words used, I consider that a prima facie case has been made out. In the circumstances I am prepared to allow a motion for the appointment of a select committee to inquire into the alleged breach of privilege.

I move—

“During that period the atmosphere surrounding it reeked as if the ‘kitchen’ of the House of Assembly itself—representing the worst features of political and parliamentary practice—had been transported into our midst.”

the Committee to have power to take evidence and call for papers.

Agreed to.

Mr. Speaker, we have now had an opportunity of examining the Budget proposals more closely and I wish to move the following amendment—

1. (1) the necessary incentives for increased production and productivity;
2. (2) a long-term plan to combat rising living costs;
3. (3) adequate measures to curtail unnecessary and unsatisfactory spending in the public sector; and
4. (4) the necessary basis for steady economic growth in the country and relief from the unfair and unduly heavy burdens which the public has to bear”.

I think it will be generally agreed that this Budget which we are now going to discuss is the most drastic one which this House has had before it for many years. In fact, it might be argued that this is possibly the most drastic Budget we have ever had. I seem to hear hollow laughter opposite, but I shall be very glad to hear of a more drastic Budget than this for quite a number of years, and it is drastic in more senses than one. It provides for an increase of expenditure out of current revenue or of plus-minus R200,000,000. It provides for no reduction in the enormous figure of capital expenditure which we were called upon to face last year, and in fact there has been an increase of some R30,000,000: and there is an increase in taxation on the people in the country of some R53,000,000. Sir, these are formidable figures and they certainly, I think, require a good deal more explanation than we have had so far before they can be accepted as justified. Incidentally, one would not have thought that they were particularly serious last Wednesday, judging by the way, the lighthearted and almost flippant manner, in which the hon. the Minister of Finance introduced them, and the lighthearted way in which he cast these fresh burdens upon the people of this country. I think he would have made a better impression—and you will remember, Sir, that the speech was being broadcast and was being listened to anxiously by thousands of people throughout the country—if instead of being facetious about his cooking the Minister had presented himself seriously, say, as an architect who was called upon to face the task of re-shaping and re-designing the future of South Africa from the ruins of a boom period which he and his Government have so hopelessly mismanaged and mishandled. Of course the snag about that is that if he was doing that he would have had to introduce designs or plans, or a blueprint of some sort, but I suppose that is asking too much of the hon. the Minister.

The Minister announced that his Budget was going to be “a holistic conception”, “a coordinated fiscal plan with a clear-cut objective, both short and long-term”. We sat back with interest and listened to what he had to say. I am not quite sure what holistic means in this connection. I am quite sure it was far from being immaculate. The Minister then went on to tell us what his objectives were. He said he wanted to find the necessary funds for military and economic defence against attack from any quarter. That, in itself, is of course a pretty tall order. Secondly, he wanted to finance the country in a non-inflationary manner to protect the stability of the rand and to spare South Africa the ravages of inflation. Thirdly, he wanted to ensure the continued growth of the South African economy, within reason, and lastly, he wanted to assist those who in present conditions are finding it difficult to make ends meet. Those are all very laudable objects and I suggest that the Budget will have to be judged by the extent to which it meets with these requirements as outlined by the Minister.

From a cursory glance at his speech, one might get the impression, and I think one does get the impression, that the main object of the Minister’s proposals was to deal with the threat of inflation. I think we should try to get clarity on this point, because the Minister himself seemed to be in two minds on the subject; indeed, the whole speech was full of contradictions, as I thought, and of varied opinions. In this particular case, in dealing with the cost-of-living indices, he said “they do not support the somewhat exaggerated references to inflation sometimes heard”, and he went on to say that “the degree of price inflation has not so far become dangerous”. Then, having said that, he spoke about having to save South Africa from the ravages of inflation. He talked about inflation not being a word but a brutal fact. He said it works insidiously like a cancer which feeds upon itself. Then he said it could be smashed and it must be crushed, and the Government was quite adamant that it would be crushed.

Talking about inflation being a brutal fact and working like a cancer feeding upon itself and having to be crushed, one wonders what the Minister would call exaggerated terms when referring to inflation. These terms seem to me to be as exaggerated as any ordinary person could be expected to use on the subject. I think we should try to see just how adamant this Government is in dealing with this insidious cancer-like growth which feeds upon itself and which is a brutal fact in the country at present.

One has to look, I think, at the points the Minister made as his objectives. In the first place there is the question of economic and military defence. Well, we are spending R255,000,000 this year, an increase of some R26,500,000, and, of course, all that is inflationary. It is entirely non-productive. It may be inevitable or it may not; that is another matter, but the fact is that it is inflationary; it is certainly not deflationary and has no effect on smashing inflation. Of course, this question of defence expenditure is so wrapped up in mystery that it is very difficult for anybody to discuss the subject. I think you can be perfectly certain, Sir, that our potential enemies, whoever they may be, are fully informed as to the last button of our military preparedness and what we have and have not. The only people who do not know are ourselves and the public outside. I know very well, of course,, that there are matters which are not for general knowledge, but I do think that a great deal more information could be given to the people on the question of our defence preparation than is being done. I do not think anything is gained by being so secretive about the whole thing. We are told, for instance, just as an example, in quite responsible circles that our munitions production in some respects has reached such formidable proportions that we are not only able to supply our own needs and to build up our own reserves but that we are in a position to export and to sell certain arms and ammunition abroad. I am not criticizing that in the least, but what I do say is that if that is so I do not see why we should not know it, because we are putting very large sums of money into increasing our production of arms, and if indeed some of that is going to be sold abroad as part of our export drive, it is a very important question.

Generally speaking, I do not see why a lot more information should not be made available to this House and to the country as to the progress and the position of our Defence Forces. Unless they are going to export some of it, our munitions production is all inflationary. Secondly, the hon. the Minister said, very laudably, that he wanted to provide the necessary money in a non-inflationary manner; that he was concerned with maintaining the stability of the rand. Then he quite frankly, and quite truly, mentioned that he found it very difficult to budget on a non-inflationary basis at the present time and he gave his reasons for it. In the first place he said that it was difficult because 4½ months of the financial year had gone already. That is perfectly true, Sir, but whose fault is that?

Surely if that fact made non-inflationary budgeting much more difficult, that is a factor which should have been taken into account when the Government was deciding as to whether it should introduce the Budget at the proper time or not, so it is definitely a matter of Government policy that budgeting in a non-inflationary manner for that reason is more difficult. He pointed out that the Defence demands this year amounted to 20 per cent of the total Budget. Again, Sir, whose fault is that? It is common cause, I think, that the reason for the urgency, the necessity, for our very heavy Defence preparation, has been the attitude of the rest of the world towards us in recent years, and it is common cause that the reason for that attitude is the race policies of the present Government.

That is nonsense.

It is no good hon. members opposite laughing. This is what the hon. the Minister of Finance called a brutal fact and I do not blame them for not liking it. It is no good their pretending that that is not the reason why we have had to spend all this money on Defence.

You read that in the Sunday Times.

The third reason given by the hon. the Minister is that there has been a sudden inflow of capital. He gave the figure of R270,000,000, a very big sum, and he said that of that over R200,000,000 was private capital, in the private sector, and nearly half of it was long-term capital. Well, if it was long-term capital, if it was coming in in the form of machinery and plant—I do not know—it may be that it was not inflationary, but it means that there was R100,000,000 of short-term capital, which was clearly inflationary. I raised this question last year with the hon. the Minister; I raised it twice, and he dodged the answer each time.

We are told that it has been Government policy during the past 12 months to allow the inflow of capital into this country on a short-term basis with the assurance that it can be repatriated after six months. I think we were given the figure of R50,000,000 or R60,000,000. Quite clearly that was inflationary. The only person who, as you know, did a special deal with the Minister’s predecessor was Mr. Engelhard who made an arrangement with regard to the right to repatriate his capital whenever he felt like it. But the hon. Minister’s predecessor stood up in this House and told us quite frankly of this deal which he had done, a deal of which many of us did not approve. But if there has been R100,000,000 of short-term capital coming in, how has it come in and why, because as everybody knows, once the capital is in this country it is not very easy to get it out again and I cannot see people introducing short-term capital into this country unless they have some assurance that they can get it out again if they want it.

Of course, I know there is the further factor that under that heading there will be an amount for the importation of machinery and plant, of capital goods, on long-term credit from abroad, which the Government has been encouraging, but the point is that this is all inflationary and it is all Government policy, and one wants to know whether that is still the policy and exactly what is being done. But apart from the long-term credit on capital goods coming in, which we know about, was permission in fact given to import considerable sums of capital on a short-term basis, and what undertaking was given to them that they could withdraw it if they wanted to and why was it done? Because, as the Minister himself said, that has again made it more difficult for him to budget on a non-inflationary basis.

The Minister is concerned with the stability of the rand which is clearly linked up with the question of inflation. With the new taxes amounting to R53,000,000, at least two-thirds of which is certain to put up the cost of living—R33,000,000 is in the shape of direct taxes which will certainly be passed on to the consumer, aided and abetted by the Railway Budget, it is quite clear that these things are going to put up the cost of living. Sir, I have here a very beautiful new note from the Reserve Bank. I would like to ask the hon. the Minister whether he believes that this note will buy as much in 12 months’ time as it does to-day, because that is the acid test of inflation; that is the only thing that matters to the average man, the average taxpayer, the average citizen of the country: What is his money going to be worth in 12 months’ time? Did the Minister not make some kind of analysis or estimate as to what effect these taxes were going to have on the cost of living? I will come back to that question a little later and have some more to say about it, because the Minister had very little to say about it.

Sir, what other factors have caused inflation? The Minister has admitted that one of the main causes has been the Government’s borrowing of some R243,000,000 from the commercial banks last year. He said that he had no alternative; the Government was hard-up and it could not get money anywhere else and it had to borrow from the banks. That brought a lot of extra money into circulation and undid a great deal of the good which had been effected by the credit squeeze, but again it is Government policy. Secondly, the Government’s policy over the last years of borrowing short and spending long on long-term projects has again affected the issue. Year after year the amount of repayment that we have to make is becoming larger and larger. The Minister tells us that this year some R300,000,000 has to be repaid—most of it short-term borrowing over the last few years.

The third point is the failure of the Government to curb public expenditure. Hon. members have seen the estimates. We are budgeting for an increase in ordinary expenditure of some 20 per cent over last year. Last year the hon. the Minister mentioned in the course of one of his speeches that he regarded 2 per cent as a normal rate of increase in the Budget, as the normal growth. He said that if Budget expenditure went up 2 per cent he would regard that as normal. This year it is 20 per cent. Why has it really become necessary that there should be ten times the growth in normal expenditure at this particular juncture, at a time when everybody is called upon to throttle back? The hon. the Minister, quite clearly, has worked very hard on this matter. He has told us how he has curbed the demands of the various Departments for money. He has told us how his colleagues have co-operated. He has told us that after all the estimates had been prepared, his colleagues, as a result of further appeals all agreed to make a further 10 per cent cut in their spending, which will save the Minister another R12,000,000. Sir, I shall believe it when I see it; I hope the Minister is right. It is going to be very difficult but they have all agreed in principle to do it.

You saw it last year.

I do not see how I can see from what happened last year how we are going to do it next year; I do not pretend to be a star-gazer. But I am not belittling it; I quite agree with the Minister; I think it is very meritorius and I think he has worked very hard on this subject. What I am interested in is what kind of contribution is the Prime Minister making to all this? At the time when the hon. the Minister of Finance was wrestling with the Government Departments—an annual wrestling match which has taken place between the Treasury and Government Department from time immemorial—and having further discussions with his colleagues to cut down expenditure in every possible way, the hon. the Prime Minister threw in a contribution by creating another Government Department, another portfolio. Sir, I think that that was really a shocking thing to do.

I would not say it was a shocking thing to do; it was a very sporting thing to do.

I do not believe that even the hon. the Deputy Minister will maintain that the creation of a Ministry of Sport was a matter of urgent necessity at the present time.

They had to do something for Frankie.

They could have found bits and pieces for Mr. Waring to do; it was not even necessary to do it for his sake. I think if the hon. the Minister of Finance was correct in calling on all his colleagues to economise, in calling on the country and Government Departments to economise, it was downright wrong on the part of the Prime Minister at that juncture to come along and create a new and quite unnecessary Government Department. In fact I go further; I think it was unpatriotic. Either the Minister was right, in which case the Prime Minister should have backed him up—if he is a good South African he must back up his Minister of Finance in a matter like this; it was a crisis—and if the hon. the Minister was wrong then he should have booted him out. What he did was to come along and give the hon. the Minister and all the other people who had been called upon to economise, a slap in the face by creating this new Department. It is true that it is only going to cost R250,000 this year. They have only collected 32 people so far for this Department, but that is not the point. It may be only a little one to start with but it will grow all right in terms of Parkinson’s law, and I think it was a shocking example to set. I think the Prime Minister ought to be ashamed of himself.

Sir, last year, of course, we had the sudden increase in pay for the Railway servants and the increase in pay for public servants at the beginning of this year. Obviously this was inflationary. The hon. the Minister will not argue about it, he knows that that is so. We know also that import control is having an inflationary effect; it is putting up prices, and now we are asked to agree to a long range of increased customs duties amounting to 10 per cent on a lot of things. The hon. the Minister must realize what that means. His argument was that most of the things on which the increased duty was being put are being manufactured locally so that it does not mean that they will not be available. But the hon. the Minister must know—and if he does not his officials will tell him—that by putting that 10 per cent duty on all those articles which are now imported, it means that the prices of the local articles will also go up by 10 per cent. That is our invariable experience. That means more inflation. So you see, Sir, all these factors to which I have referred, all of them inflationary, all tending to put up the cost of living, all tending to erode the purchasing power of the rand, are matters of Government policy, done either at the initiative of the Government or resulting from the Government’s neglect to deal with the matter properly. One can only conclude, therefore, that if there is serious inflation or if there is a serious threat of inflation, so far from crushing it, in every single instance that I have quoted—and there are plenty more that one can quote—the Government either by its actions or its lack of action is to blame for that particular instance causing inflation, and in this Budget there is no sign whatever of any effective reform on the part of the Government. I think the second conclusion to which one can come is that this Budget is going to do very little to crush or even to check inflation. Indeed, on balance, it is quite clearly an inflationary Budget, and together with the Railway Budget it will certainly increase the cost of living and depreciate the value of the rand. I see one economic expert has reckoned that it is going to mean a matter of R5 a month for the average householder. He may be right or wrong but it is certainly going to cost the average householder more. I think the third conclusion is that the fiscal proposals which are now before us are simply ad hoc devices to raise the wind to allow the Government to carry on with its reckless career of spending that has been going on for years, regardless of whether it causes inflation or not, and I venture to say that all this talk about being adamant is just bunkum. In this particular matter the hon. the Minister of Finance is just about as adamant as a soft-shelled crab. There is little in this Budget which shows any inclination to curb inflation. After all, this Government during its term of office, going back to 1948, has had surpluses, over and above what it asked for, amounting to R701,000,000. In addition to that it had another R400,000,000 odd, taken from Revenue before the surpluses were declared so it really had R1,100,000,000 since 1948 over and above what it actually required for administering the country, and yet to-day we have before us a Government that is broke, and that, Sir, is the real reason for the present Budget. The hon. the Minister quite rightly said that two positive measures can be taken to combat inflation; the one is personal saving and the other is increased productivity. One is glad to see that the hon. the Minister has introduced a new system of saving and I hope it will be successful, but if the money which he gets from these extra inducements to deposit savings with the Post Office Savings Bank and to take out savings bonds is going to be promptly spent by the Government, as presumably it is, then the deflationary effect is nil; it does not matter whether the citizen spends the money or the Government. Once it gets into circulation it is spent and it has the same effect, so that kind of saving is quite useless as a deflationary measure.

There are other things which the hon. the Minister could have done in the way of savings which might have had effect. And while I am on the question of savings. I want to refer again to the question of the loan levy which is being repeated this year. The hon. the Minister expects to receive R23,000,000 as a result of the compulsory levy from the taxpayers of this country. No interest is being paid on the levy, and no time limit has been laid down for repayment. I think the Minister said we can expect to have it repaid within seven years. Now, what does that mean Mr. Speaker? The Minister takes R25,000,000 for a period of seven years and pays no interest on it. All it amounts to is daylight robbery. That is all it is. I do not know of any civilized country where the Minister of Finance will come along and in addition to the ordinary taxation which he imposes will just put out his hand and take an additional R23,000,000 from the taxpayer, saying to the taxpayer that he will hang on to it for seven years and may or may not pay it back at the end of the seven years, whilst not paying any interest in the meanwhile. It is a shocking thing. Indeed, it is a swindle. I am surprised that the public of this country have not jumped on to their feet and protested about this loan levy, I think they have been so brain-washed that they do not want to do anything about it, or else they just do not understand what is happening. [Interjections.] We all know what the hon. member for Vereeniging thought about the people. He was the person who protested so strongly at the suggestion that they should get more pay. I did not hear any suggestion that the Government should increase wages and salaries. I really think that it is a blot on the hon. the Minister’s escutcheon that he should be the one to introduce a system whereby a Minister of Finance just comes along, puts his hand out, and takes up to R25,000,000 from the taxpayer without paying him any interest and with no set time for repayment. It is a shocking thing to do. I appeal to the hon. the Minister to take action in the short time which he will still be occupying the post he is occupying to have this matter cleared up, so that he will not go down in history as a wicked person.

Another matter I want to refer to is increased productivity. The hon. the Minister talks about it, I talk about it, indeed, we all talk about it. well, nowhere in the Budget can I find anything which will lead to increased productivity. Nowhere do I see anything to encourage productivity. On the contrary, I can find several things which do exactly the opposite. Companies are going to pay another R500,000 in loan levies. These levies will be interest-free and will be tied up for seven years. In the result R3,500,000 or R4,000,000 will go to the Treasury. In addition, companies and industrialists will pay another R18,000,000 per year in increased income tax. This money would presumably have been used to bring their factories up to date which would result in increased efficiency. In general the money would have been used to strengthen their position. The hon. the Minister is discontinuing the machinery investment allowance, something which has been very useful indeed to companies wishing to re-equip themselves and those embarking on expansion schemes. The hon. the Minister gave no reason for discontinuing this allowance. He blandly stated that there was no reason for continuing them. It is, of course, a well-known fact that industrialists have had to face formidable import-control difficulties. It is very difficult for an industrialist to obtain replacements for factory equipment or to have his plant modernized from overseas sources. I know of one instance—and it is not an isolated case at all—where an industrialist was told that he could have an import permit for the machinery he required provided he could persuade the suppliers to grant him three years’ credit. Well, I feel it would be a very undignified thing for that man to have to go along to the suppliers and ask for those terms. After all, we are supposed to be a country that is prosperous, that is booming and going ahead. Yet, although a man has the money, he is not allowed to pay for his legitimate requirements but has instead to go cap in hand and beg for three years’ credit from people overseas.

Mr. Speaker, I can find nothing in this Budget whatever that can be regarded as an incentive for increased productivity. But I can find quite a number of things which tend to discourage increased productivity. And if hon. members think that these things do not mean anything, I can assure them that they are wrong. I can remember right back to the war years when Mr. Hofmeyr was taxing people right up to the hilt. Manufacturers told me then that they were refusing to increase their turn-over because, as they said, “What is the good? We are simply working for Mr. Hofmeyr.” Mr. Speaker, excessive taxation does have a negative effect on the spirit, on the attitude of people. They regard the Minister of Finance as an enemy rather than as an ally and a collaborator in trying to build up the economy of the country.

Did I understand you correctly to say that there is no interest on the loan levy?

Yes, that is what I understand the position to be. Am I wrong?

Yes, you are quite wrong. The hon. member for Pinetown has misled you again. You should be an old horse by this time, you know.

When the hon. the Minister first introduced the levy he was not going to pay any interest on it. However, I am glad to know that pleas from this side of the House have had an effect.

That was the basis of your whole argument.

Order! The hon. member will probably withdraw the word “swindle”.

Yes. I withdraw that, Mr. Speaker. Regarding the cost of living, Sir, I feel that the hon. the Minister dealt in a very summary way with this pressing problem. He said that the Government was not satisfied with the position and that the Government was going to watch the cost of living. Well, the Government has been watching it for a long time, but he gave no indication how they were going to deal with it. I consider food subsidies to be very important and a step in the right direction. Broadly speaking, though, has the hon. the Minister made no estimate of the effect of the Railway Budget and the main Budget on the cost of living in this country? Or is it a fact that the people of this country do not matter at all? That is something that worries this side of the House, Sir, because it seems to us that the Government and their followers have reached a state of mind where the ordinary people of this country just do not matter at all. They are so intoxicated by their successes at the polls that they just do not seem to worry about the people.

The hon. the Minister also spoke about assisting the needy, those people who find it difficult to make ends meet. It is true that our pensioners have benefited by about R12,000,000, and that is an important concession. But there are thousands and thousands of people who are not pensioners who are finding it extremely difficult to make ends meet. There is no comfort for those people in this Budget. Their difficulty is a direct result of this Budget. And for the hon. the Minister to say that he has a soft spot in his heart for those people who are finding it difficult to make ends meet is, in my opinion, tantamount to piling on the agony. I do not think the hon. the Minister has a heart at all!

Then, Mr. Speaker, we come to the basis for steady economic progress. As I said before, Sir, this Budget is nothing but a bill for five years of mismanagement. We come to the end of a five-year boom period and we find the economy of the country in a straight-jacket. We find the economy of the country being throttled back. Nobody knows for how long this will be. They call it a “cooling-off period”. If one looks back on the past five years, and one surveys the position in which we are today as a result of these five years of so-called immense prosperity under this Government, one is constrained to ask whether we dare face another five years under the present Government and relax at all. Dare we relax under this Government, Sir? What will the position be like in five years if there is another boom? Does this Government intend relaxing? Because, Mr. Speaker, there are sinister indications in certain circles of the Nationalist Party that they would like to have this situation as something permanent. It is very easy for these things to become permanent. I think that to say that at the present time we are ready for a period of steady economic growth is taking rather an optimistic view. This Budget should be a plan for the future. It should hold out hope. It should show a way how to get through the next five years on an even keel to a stable economy and sustained progress. But instead of that, Sir, I ask myself when I look at the Budget, what hope is there for the future. The hon. the Minister commenced his Budget speech by talking about a holistic conception. My description of it is that it has been a horrid miscarriage. I am sure that the best description for the Minister’s speech is one which he himself used at the beginning of it. He was telling us what a budget should not be. He said that a budget should not be an amorphous collection of unrelated measures …

Are you describing your speech now?

No, I am describing your Budget. The hon. Minister said that a budget should not be “an amorphous collection of unrelated measures loosely gathered together to gladden or sadden the taxpayers”.

That being so, Mr. Speaker, I regret that this side cannot accept these proposals and I move the amendment standing in my name.

Mr. Speaker, on Friday afternoon the hon. member for Constantia said that the Budget which the hon. the Minister presented to the House, reminded him of a “dog’s breakfast”. Having listened to the hon. member this afternoon. I was quite prepared to acceDt that the Opposition is so confused that it is possible for them to think that they are getting their breakfast at 4 o’clock in the afternoon. I listened attentively to what the hon. member had to say, and I tried to follow the import of his words. I also read the hon. member’s amendment. But unfortunately the hon. member was very vague. He confined himself to general observations and did not raise any clear points of attack. The hon. member did not come forward with clear points to which I can reply one by one. In the course of my speech I shall deal with the various points touched upon by the hon. member, namely the large public expenditure, the increase in taxation, the boom which, according to the hon. member, was bungled by the Government, and the question whether this Budget seeks to arrange the finances of the State on a non-inflationary basis. Mr. Speaker, I want to state very clearly what this debate is about, so that we may present the country and the people of South Africa with a very clear image and a realistic picture of the present financial and economic position of the country. The matters in dispute really deal with the question of whether or not the Government has taken the right steps in handling the country’s prosperity over the past five years. Did the Government take the wrong action, and if so, where did it take the wrong action? Did it take action too late? This is one aspect of the matter which we will have to settle in this House. A second point we shall have to settle here, is the continuous criticism in the newspapers of the Opposition about the alleged large expenditure on the part of the authorities. This is also a matter which affects the man in the street in South Africa. The third matter we have to settle is the position of the man in the street and what contribution he should make to stabilize the purchasing-power of our money. As far as I am concerned, Mr. Speaker, this is the major issue.

However, before I go into this, I think that it will not be out of place to refer to the hon. member for Pretoria (Central) who is not here this afternoon. It is with appreciation that I want to mention the long, faithful and competent service rendered by him as chairman of the Select Committee on Public Accounts. In that role he was a very important cog in the parliamentary machine, and as a practical man with a great technical knowledge of the economy, the hon. member inspired great confidence and played a very important part in this House. I should like to put it on record here that we have a great deal of respect and appreciation for the services he rendered.

This afternoon I want to state without hesitation that, seen against the background of the economic situation in South Africa, and viewed in the light of the function this Budget has to perform, and judged further by the criterion of how this Budget burdens the various sections of our population and the various sectors of our economy, this Budget is without a shadow of a doubt a very great success, and on behalf of this side of the House I want to extend my sincere congratulations to the hon. the Minister on this Budget. And we are not the only people to think so. I do not want to dwell upon this, but I want to tell hon. members that there are many examples. A man such as Dr. Hupkes, chairman of the Bureau of Economic Research in Stellenbosch, is of the opinion that the Budget should for various reasons be welcomed everywhere, and that the Budget will succeed. A man such as the chairman of the Johannesburg Stock Exchange, Mr. Simmonds, says that the Budget is in all respects “an honest and skilful effort to attack inflation on a broad front; taxes are so well spread that there should be no more than a temporary recession in any section of the market, if any”. Similar views are taken by the Afrikaanse Handelsinstituut and the chairman of the Federated Chamber of Industries, and even the financial editor of the Cape Argus concludes his article on the Budget on a very fine note. He says—

Now tell us what the workmen have to say. [Interjections.]

I want to tell the hon. member for Yeoville that if I displayed as much financial knowledge as he did in the Railway debate when he told this House that inflation in South Africa started in 1962 … he can look up his Hansard again. He said—

Those were his own words. Of course, the Opposition will not agree with the Argus, and I want to proceed at once to dealing with this matter. As I have said, what we have to determine and what the people outside want to know is this: why is public expenditure so large? I should now like to read what the hon. member for Constantia said in 1961. At that time he said that the Government had to do something—

The hon. member probably had tea with the hon. member for South Coast that morning—

Sir, it is not a tap one can open and allow a 100 gallons a minute through, and to-morrow one closes it and nothing goes through or only 50 gallons go through. It is a matter of planning, and the plans take time to realize. One plans in a period of economic recession, and by the time one’s plans are realized there is an economic revival, but one cannot drop those plans immediately. We did exactly as that hon. member asked us to do in 1961. The plans were realized, and then his hon. Leader accused us the week before last that of being out on a “spending spree”. But I do think that the hon. member for Parktown could have been somewhat more loyal towards his leader because only two days later he said no, that nothing was wrong with the spending; everything the Minister had mentioned was correct, for example defence and the expenditure on essential sectors of our economy; he said that the only fault was the manner in which it was financed. Now I want to say this. Here we have a budget before us. In his speech the Minister made specific mention of certain things such as water and border areas, the aeroplane industry and tankers, and the Minister mentioned housing. Will the Opposition now rise and tell us where we should not spend money? The hon. member for Constantia spoke this afternoon. I call upon the entire House as witnesses to the fact that he did not mention a single item in this Budget which we should delete. He confined himself to general, vague allegations.

What about sport?

I am sorry, but those who speak after me will go into the matter of how much money will be provided for the Department of Sport this year. Let us therefore see what percentage of the whole Budget it is about which they complain so. They did not mention a single item to point out to us where we should spend less money, and I challenge them to do so. Mention these items to us. [Interjections.] Will hon. members tell us and prove it from Hansard, giving chapter and verse, what proposals they have made over the past five years for curtailing State expenditure? Not a single one. Now they want to bring the public under the impression that it is the State which is spending all the money. Let them go to the civil engineering industry of South Africa. Do you realize that that industry obtains more than 80 per cent of its work as a result of public spending? Let them tell that to those people. The state does not build the roads. We hand out the work under tender and contract. We hand out our buildings under tender. The private sector benefits from all this public spending. Ultimately the only thing that really remains is the salary of one’s officials, and do hon. members now want us to economise there? Then there is public spending in regard to the infra-structure. Should we, or should we not spend money on transport, on communications and all those things? If we do not do that, we cannot have any progress. Does the Opposition want us to curtail spending in that regard? Or should we allow bottlenecks to develop? What will the inflationary consequences of this be? The strategic industries of South Africa are Sasol, Iscor, and so forth. Does the Opposition want us to curtail spending there? Take defence. The hon. member did in fact talk about defence but he was not so bold as to say that we should curtail spending in that regard. We all know that defence expenditure is to a certain extent inflationary. At present America is experiencing the same difficulty as a result of the Vietnam War. But as the Minister said in his speech, in view of the position we occupy in the world and in view of the fact (that we are open to possible military and economic action, it is a calculated risk we in South Africa must run; and it is a calculated risk which the people of South Africa are prepared to run with us.

But what was the result of this spending? Surely the result was that our country occupies a strong position in the world to-day, that we have status in the world to-day, that we have almost become indispensable in international world trade—a strong South Africa as opposed to a weak South Africa. That is what public spending and planning has brought us. It has raised the standard of living of the population tremendously. For that reason I say that we should settle this matter once and for ail. Together with the hon. member for Constantia I say that we should always watch over public spending, particularly current public spending, so that it might be restricted to the minimum, but I agree with the Minister that with South Africa’s unique position in the world we cannot afford to curtail our public spending too drastically. That is our guarantee and our security and, after all, it is our people who benefit from that. That is why we differ from the Opposition on this point, namely that we cannot spend less in South Africa.

The actual question is how we finance that spending. That is a very important point, and it is something that has to be faced. It is said that the State competes with the public for funds which have to go to the private sector. I just want to refer hon. members to this White Paper. There they will see, on page 13, that in 1960 the private sector had 64 per cent and the public sector 36 per cent of the total investments. Last year the private sector invested 62 per cent, and the public sector 38 per cent. There has actually been a very small difference over the years. Now, how must that be financed? To my mind the hon. member for Constantia made a second fairly radical allegation this afternoon, if I understood him correctly. He wanted to know what the good of it was to take the people’s money, because one took it from the pockets of the private sector and then it was spent again by the authorities, and it was still in circulation. But then it is not inflationary. Inflationary spending only results when new money is put into circulation. That has been the difference between that side of the House and us all these years. It is a difference which became evident as far back as Mr. Havenga’s time. At that time the Opposition said, “Return the people’s money; that tax-levy is conscience money; it does not belong to the State, but to the taxpayers”. Ever since that time up to now it has always been the difference between us, and this side of the House has to a large extent been using its surpluses on the Revenue Account to finance the Loan Account. Where would we have been if we had followed their advice? Last year still the hon. member for Parktown said, “Let us give the people a rebate of R240 per child for each child born in the first four years”. Sir, that would have meant that a person would have become very rich and that he would not have had to pay tax for 20 years, i.e. a person with an income of R8,000 or R9,000 per annum and almost R6,000 for two children, and until those children are 18 years of age, he will never have paid tax. That is the manner in which they wanted to finance the public expenditure of the State. But now they want to know why we financed the State’s expenditure with short-term money last year. The hon. member for Constantia referred to the R202,000,000. Well, there was a tremendous inflow of capital and long-term money was not available.

Why not?

Because usually, when there is a loan, the public debt commissioners have a great deal of money to make available, and in October last year they only had a small amount of R16,000,000 to make available. Another reason is that the Minister floated a loan in October last year. He wanted R80,000,000 and offered 6 per cent interest, but it was with difficulty that he raised R50,000,000, and why? Because short-term money was still running riot at that time, and found channels in which to run. That was the position, and the Minister had no option whatever but to take the money offered him by the banks, short-term money. But this Budget seeks to remedy that very thing about which they are complaining, and now hon. members are still dissatisfied that the Budget wants to remedy this. This Budget seeks to finance public expenditure by means of long-term loans, i.e. that R65,000,000 which is mentioned, as well as taxes, and not by new money. The point is that it can only be inflationary while it is being financed with new money, and new money is short-term money, the money which is provided by the banks or money the Government borrows from the Reserve Bank, and new money is also that money which comes from abroad in the form of loans.

I must make haste, because I want to say something about the man in the street. The Opposition will not succeed in creating the impression that this side of the House does not have the interests of the man in the street at heart. Sir. the ordinary people—the so-called man in the street—are sitting in this House. The farmers, the clerks, the railway workers and the mine-workers are sitting here. They are sitting here and that is why the country will not believe the Opposition if they want to make the country believe that we do not care for the man in the street. The provision made for pensions in this Budget is R13,000,000 more than that of last year. The prices of bread and other essential foodstuffs have been fixed. Food subsidies have been increased by R14,000,000. The Post Office, the poor man’s savings bank, has increased its interest and the interest has been exempted from tax. Insurance rebates have been increased, and permissible deductions for pension funds have been increased. Last year we found that deposit rates were pegged. The hon. member for Constantia is seated over there. He pleaded—and if I had had the time I would have read it to you—that the Minister should unpeg deposit rates. His words were that, if they were increased by ½ per cent or 1 per cent and the building societies added it again, they could merely extend the term. Now the Minister says that he will introduce legislation to extend the term, and then the hon. member for Parktown rises and says that it will not help. One year they ask for something and in the following year they say that it will not help. The rent of housing units was fixed as from the 1st May, and the income limit for qualifying for sub-economic housing is being raised. Sir, the military and economic safety of South Africa, are these not in the interests of the man in the street and of all of us? Stabilizing the value of our money, stabilizing the purchasing-power of the rand, are these not in the interests of the salary-earner and the pensioner? If this is the aim and if this is the effect of this Budget—and this will be the effect—then, surely, it is in the interests of the man in the street. Take taxes. Nobody who has not previously paid tax, pays a cent in tax under this Budget.

What about the shareholders and the companies which are paying higher taxes now?

I do not have much time left. I am talking about income-tax now. Nobody is paying a cent more in provincial tax. Nobody who was not previously paid a tax-levy, is doing so now. Now I want to refer to the 5 per cent by which income-tax has been increased. A married couple with an income of R2,000 p.a., with two children, pays 70c p.a. more. A married couple with an income of R2.500 p.a., with two children, pays R2.70 p.a. or 23c per month more.

But it is more!

I shall proceed. A married couple with an income of R3,000, with two children, also pays 23c per month more. When there are four children and the income is R3,500, 26c per month is paid more.

May I ask the hon. member a question?

No, South Africa simply remains a fine country to live in. It is still the cheapest country to live in. [Interjections.] Mr. Sneaker, the hon. member for East London (City) perpetrated the nonsensicality here last year by saying that no credit curtailment was necessary, but the only thing that was in fact necessary, was that the hon. the Minister had to prohibit the import of luxuries. That was his solution of the matter. When he found out that it merely represented 1 per cent of the total imports, and that a tax of 100 per cent was imposed on some of those fine cars, the Leader of the Opposition forbade him ever to take part in a financial debate again.

Mr. Speaker, if the flag of South Africa is threatened, the people of South Africa will help to protect that flag. They will rally round the flag. Mr. Speaker, we have here one of the national symbols of our country. It is neither the American dollar which we should help, nor is it the pound sterling which we should help, but it is the rand of South Africa. The rand is not in danger, but we find ourselves in a situation where things can go wrong if we do not remedy the position in which we are. I would say that there has never been a time like the present, a time in which we should take our people along with us and educate them further for the economic realities of the present. Hon. members say that the people have to pay more. Of course, we all have to pay more. We all have to make our contributions. The people of South Africa must know that. And I am telling you that, if the people of South Africa understand it correctly, they will do it. This circle, this vicious circle, must be broken. It may not be allowed to whirl round and round. It must be brought to a stop. And, Mr. Speaker, when it has been brought to a stop, we shall stabilize the purchasing-power, the value of our money. It cannot remain the same for ever. That does not mean that wages and salaries will never be increased again. That does not mean that prices will never rise again. But we shall have to break the circle in which we are landing ourselves, we shall have to put a stop to it. The people of South Africa must help us and they will help us. And if that happens we shall achieve what this Budget was designed for, namely to ensure growth in South Africa, to ensure stable growth and true prosperity in South Africa and to raise the standard of living of the entire population of South Africa on the road to a fine and great economic future.

Mr. Speaker, I should like to take this opportunity of congratulating the hon. member for Queenstown on his election as chairman of the Select Committee on Public Accounts. It is a senior position and this is my first opportunity of congratulating him. I should like to associate myself with his remarks concerning the hon. member for Pretoria (Central), who gave many years of good service on that committee. But there, Mr. Speaker, I stop with my congratulations, because I cannot join him in his congratulations of the Government, nor of the hon. the Minister of Finance. The Minister of Finance has indicated that he has various objectives. But before I deal with the hon. the Minister’s objectives, I should first like to deal briefly with one or two matters raised by the hon. member for Queenstown. He admitted that Defence expenditure was inflationary. I shall have something to say about that later on, because while Defence expenditure is inflationary, it is inflationary to the extent of the Defence expenditure in South Africa, and not of Defence expenditure outside South Africa. I think he will concede that. With the position of Defence expenditure inside South Africa I will deal later on. Then the hon. member went on and quoted what the hon. member for Constantia said in 1961. But, Mr. Speaker, we are dealing with the 1966 Budget. Advice given in 1961 could very well have been the correct advice at the time. Things are considerably different in 1966 to what they were in 1961. I think the hon. member quoted a very bad example to support his weak case. The Minister, in introducing his Budget, said that he had four objectives. His first objective was to provide the necessary funds to enable South Africa to withstand any military or economic onslaught from any quarter. Does the hon. the Minister want the House to take him seriously when he suggests that we could withstand an onslaught from any quarter on the basis of this Budget? Let me remind the hon. the Minister that at the present moment with the affair in Vietnam, the United States of America is spending $15 billion a year. Then the Minister suggests that we would be able to withstand an onslaught from any quarter. This does make the Minister’s claim a bit hollow. During his address he told us that R46,800,000 was due to late deliveries of Defence equipment. Can the Minister tell us in his reply how much of this was genuine late deliveries and how much of it was represented by a shortfall due to embargoes? I think that is a matter on which the hon. the Minister should supply further information. Then I want to ask the hon. the Minister to deal with the question of the economic onslaught. To what extent has the Minister been successful in standing independently of the outside world? He knows that he has bungled the boom. He knows that the economic difficulties we are experiencing at present are due to the Minister’s delay in acting. And he knows—when talking about standing against the outside world—that he went overseas last year to try and get long-term loans and that his attempts were unsuccessful. Let us deal with the history of the hon. the Minister’s handling of finance over the last few years. I do not intend going back to 1961. Let us take a more recent year, namely 1964, when the Reserve Bank first gave the indication that there should be a cautious credit policy. On the 15th July, 1964, the bank raised the rate from 31 per cent to 4 per cent. Again in October the Reserve Bank advised that the granting of credit should be slowed down. What acts did we see on the part of the Government then? On 8th December, 1964, the bank rate was raised from 4 to 4f per cent. In February, 1965, the Governor of the Reserve Bank again impressed upon the financial institutions the need for restraint. And here it is quite clear to me that when the hon. member for Queenstown is talking about inflation, that he had not read this recent report of the Governor of the Reserve Bank. One finds a vastly different story there from what the hon. member had to say about Government spending. In February, 1965, we had a further increase in the bank rate from 4¼ per cent to 5 per cent, while the liquidity ratios were increased from 30 per cent to 34 per cent and 20 per cent to 24 per cent, short-and medium-term liabilities respectively. On 22nd March, 1965, interest rates were frozen. Then we had last year’s Budget which we warned was inflationary. The hon. member for Constantia warned the hon. the Minister last year that his Budget was inflationary and that it would have an inflationary effect. We told the hon. the Minister that excess Government spending at the same time as the private sector—and this is my answer to the hon. member for Queenstown—could only have an inflationary effect. The hon. member for Queenstown referred to tenders and said that some of these contracts, for instance that of public buildings, were entered into as a result of the invitation of tenders. By implication he suggested that they would not necessarily have to be inflationary. But, Mr. Speaker, surely the hon. member knows that if too much work is chasing too few employees, the tendency is to get cover tenders. If he were to go to certain of the big cities today and ask for tenders for a big job amounting to a couple of million rand, he would find that only certain tenderers would be prepared to quote. The others would give cover tenders. It does not necessarily follow that because they were public tenders that they would not be inflationary and that the cost would not be pushed up. I should like to suggest to the hon. member that he should go into some of the contracting firms and see what goes on. Then he would not come here and persuade the House that because contracts were put out to tender that there would be adequate control over expenditure. And that has been the trouble, Mr. Speaker, over the past two or three years, that instead of the Government spending at times when the private sector was slack, the Government has been competing with the private sector, and that had the effect of pushing up prices. There is the classic example—and the hon. member for Transkei can tell you all about it—of the cost of the new Government buildings in the Transkei. When one has any doubt as to what costs are, one should inquire what wages were paid, what incentives were given for working Saturdays and Sundays and all manner of hours of overtime in order to complete that job at the right time. And if that was not inflationary I should like to know what was. You see, Sir, the liquidity ratios were raised in May, 1965, and again in July, 1965. The liquidity ratios were raised by 2 per cent in May and by 2 per cent in July, raising the short term and medium term liquidity ratios to 40 per cent and 30 per cent, respectively. By August, 1965, bank rates were increased to 6 per cent. On 15th September, 1965, the Minister announced steps to prune the spending programme of Government Departments. We saw little evidence of this. We saw little evidence of this in this year’s Budget. The hon. the Minister told us that he had a certain figure and that he had reduced it and that we would have an opportunity to examine those details when the various Estimates come under examination. The first let-up in the spending spree was in June, 1966, less than two months ago. On 8th July the bank rate was raised to 6 per cent. Last week we received the report of the Governor of the Reserve Bank. I should like to quote one or two extracts from the Governor’s report. It reads as follows—

That is my answer to the hon. member for Queenstown—the answer of the Governor of the Reserve Bank. In the past year fixed capital outlays advanced by as much as 27 per cent compared with 12 per cent in 1963-4 and 19 per cent in 1964-5. The Governor goes on to say this:

I also read the following extract:

Who is guilty of inflation now? The hon. member for Queenstown I think has put a very poor case. The report goes on to say:

Surely, Mr. Speaker, the financing works on treasury bills is one of the most inflationary ways of financing Government capital expenditure. I quote the following further paragraph from the report of the Governor of the Reserve Bank:

So the Government was responsible in no small measure for adding oil to the fires of inflation. The Governor proceeded thus:

Mr. Speaker, the hon. the Minister could not resist the temptation to wait until the election was over before he took drastic steps to mop up this liquidity. We have seen his proposals during the course of his Budget Speech and his proposals which will be covered by legislation at a later stage when he is going to force public institutions to make long-term investments with the Government. But this in itself, Mr. Speaker, is a deflationary measure. But here the hon. the Minister had the opportunity of taking those steps a year ago, instead of which he has allowed an inflationary state of affairs to continue. He has allowed it to grow, and despite what has been said by the member for Queenstown, the present inflationary position and the falling-off in the purchasing power of the rand is due entirely to Government action. And when the hon. member for Queenstown talks of the value of the rand I hope he is going to be able to guarantee—for what his guarantee is worth—that a hundred rand will buy this time next year what it is buying to-day.

The hon. member ought to know that the Government is responsible and that they are in a position to control the cost of living, to control the inflationary spiral. And this hon. the Minister claims that he is going to do it. And the hon. member for Queenstown claims that he is going to do it and that he is quite adamant about it. I want to know whether he is going to do it and what effect it will have.

You see, Mr. Speaker, we have brave words from the hon. the Minister telling us that his duty is to provide the necessary funds. But his record of the past year does not impress. The interest rate, Mr. Speaker, is the highest for over 30 years and compares with the depression years of 1930-1 and 1922. That is a significant factor. This interest rate of 6 per cent is the highest for over 30 years. This is something of which the Government is obviously proud, judging by the support it received not only from the hon. the Minister but also from the hon. member for Queenstown. This Budget is a mixed bag, Mr. Speaker. It may prove deflationary in parts, but the hon. the Minister will have to desist from the inflationary spending spree by Government Departments. Let me give a few inflationary items: Bringing in this year’s surplus is an inflationary move. If the cost increases resulting from the higher tax and higher rail tariffs are passed on, they in turn will be inflationary. New borrowing by the Treasury from the banking sector will also be inflationary, and Defence expenditure, insofar as the money is spent in this country, is inflationary.

[Inaudible.]

Sir, the hon. member has clearly not been following my argument. By financing Government expenditure through Treasury bills you are creating new money and that is inflationary. As long as the Government persists in financing Government works by means of Treasury bills, by creating the money, it has an inflationary effect. I think the hon. member has been caught in his own argument and I think he would be better advised to keep quiet. I will give the Minister credit for certain deflationary measures. He claims that part of his Budget is deflationary. The tax increases on incomes are deflationary. Bigger long-term borrowing at higher interest rates is also deflationary and food subsidies are deflationary. But if all these increased taxes are passed on in the form of increased prices, followed by increased wages, and further Government spending with short-term money, we will face a worse inflationary prospect this time next year. If we are going to avoid further inflation it is essential that we have very strict financial discipline from now onwards.

You see, Sir, since 1961, after Sharpeville, the Minister has shown little acumen in handling reserves and has been one of the main offenders in the dangerous game of getting reserves into circulation by running them down.

You had better not talk about 1961.

We had the Sharpeville incident in 1961. The Minister does not want to be reminded of that. But I think this is the appropriate time to put a few questions to the Minister and my questions are these: In view of the improvement in the balance of payments and the obvious need to keep down prices, why was import control on consumer goods tightened up further earlier this year? Secondly, in view of the improvement in the balance of payments since September last and the obvious increase in liquidity that this signalled why were effective steps not taken to mop more up by long-term funding? Why were Treasury bills used? Is this not the most inflationary method of financing State expenditure short of direct borrowing from the Reserve Bank? Thirdly, is it not a fact that the misguided policy of trying to freeze interest rates from March, 1965, to July, 1966, lies at the root of the Government’s subsequent financing difficulties, that is to say, it could not borrow long-term at the fixed pattern and so had to resort to inflationary financing; in other words, it had to borrow short-term on Treasury bills. Fourthly, higher interest rates, as every first-year economics student knows, encourage saving and discourage spending. The year 1965-6 was a period when higher savings were urgently needed to keep prices, costs and imports down. Why then did the Reserve Bank and the Treasury freeze interest rates, discouraged saving and encouraged spending? Fifthly, is it not a fact that in this way the Government itself sabotaged the 1965-6 credit squeeze and created the inflation that a tough Budget now has to combat at the 11th hour? Sixthly, was it not obvious that a clamp on bank credit for the private sector in a period of rapid industrial growth would lead to local subsidiaries seeking finance from oversea parents on a large scale, instead of subsidiaries seeking finance from the local banks? Because of the Minister’s credit squeeze, overseas concerns have been encouraged to send money to their subsidiaries in this country. Is the Minister surprised at the capital inflow under those circumstances? My next question is this: Why, with so many warning signals of inflation appearing late in 1964 and early in 1965, with the economy over-heated did the Minister present an inflationary Budget last year? Why does this Budget do nothing to help exports—the key to a permanent improvement in the balance of payments?

The Minister’s second objective was to finance expenditure in a non-inflationary manner and protect the stability of the rand. So far the Minister has given no evidence of success in this field. Last week his colleague, the Minister of Railways, indicated to us that he was going to inflict further cost burdens on the country. A few days ago a representative delegation of the Women of South Africa called on the Minister of Economic Affairs, his colleague, about the soaring cost of living and gave him a long list of complaints. They must have been very desperate to appoint a deputation to go to the Minister. I do not know what they received from the Minister to comfort them. The Minister urges the importance of financing expenditure in a non-inflationary manner, but how does he explain his priority? He prefers the Orange River scheme, border industries, and an aircraft industry and the purchase of tankers to immediate water supplies, agricultural rehabilitation, higher vocational training and a vigorous drive to train our manpower. There are no incentives in this Budget to encourage productivity.

Sir, I would like to know what the Minister is doing to control Defence expenditure. Does he propose to introduce a cost investigation as was done during the war years, particularly for local factories, in order to ensure that their profit margins were reasonable? In spite of what has been said by the hon. member for Queenstown everyone knows that the cost of living has gone up and that the ordinary man has been very hard hit. Let me quote a few items: Since 1948 the price of bread has increased from 6c to 9c, the price of butter from 25c to 41c; milk from 4c to 9c, cheese from 18c to 36c, sugar from 3c to 8c, petrol from 22c to 41c, and cigarettes from 13c to 22c. All our past and recent experience show that the average citizen has to pay more for food and clothes, higher rail fares and higher interest on his bond. The family man is completely bewitched, bothered and bewildered when he finds himself being asked to mop up the Government’s mistakes.

The third objective is to ensure the continued growth of the South African economy at the maximum rate consistent with our resources. Here again the Minister offers us a pompous platitude. How can we expect continued growth when the Government talks with different voices and in fact sometimes engages in what can only be described as double talk? The Minister of Economic Affairs warned the motor industry of a likely clamp-down on new types of cars in South Africa when he addressed the national convention of the Motor Industries Federation last June. In effect he said he was looking after the older firms in the industry at the expense of new firms. But if that is the attitude of the Government when it comes to motor cars, it has a totally different attitude when it comes to beer. As far as the brewing industry is concerned it looks after the new firms and does not look after the older firms, what is going to be the position if an oversea firm comes here to develop a cigarette industry? Is the Government going to look after the cigarette industry here and not look after the South African cigarette industry overseas? Or if an oversea concern comes to this country to start manufacturing soap, is the Government going to look after the local firm and leave the oversea firm to look after itself?

It depends on who it is.

It depends who has the ear of the right Department. You see, Sir, when we talk about industrial incentives, we must have some indication as to what the Government’s policy is. The hon. the Deputy Minister of Bantu Administration and Education is very enthusiastic about the reduction of Bantu labour in the big towns. He has been given the job of switching back the flow from the towns to the reserves and he is very keen on border industries. But one of the testing factors of border industries is the labour ratio and the labour intensity of the particular industry. What happens when an industry gets border industry privileges, establishes itself in a border area, pleases the Minister of Bantu Administration and Development and provides the necessary facilities? They go to the Industrial Development Corporation and the Minister of Economic Affairs enthusiastically receives them. The Industrial Development Corporation builds the factory and leases it to them on very favourable terms. But what happens when the firm then introduces new techniques and introduces a high degree of automation, to such a degree that it can dispense with most of its labour? What happens; must the factory then leave the border area?

Do not be ridiculous.

Sir, these are questions which have to be answered. The Minister of Finance has told us that he is providing incentives and that he wants to see development in this country. We want to know what happens when a factory discovers a new technique for developing the industry along modern lines thus enabling it to reduce its labour very considerably?

Who is interfering with it?

I want to know if the Government is going to interfere with it. If the factory gets all the benefits of the border industry plan, the benefit of a low rental and special concessions, and then cuts down its labour force from, say, 2,000 to 200, will it still get these benefits?

We will see when the time comes.

How can an oversea industrialist know where he stands when he is told that the determining factor is the number of Bantu he employs in his factory; that that will be the determining factor for the siting of his industry? You see, Sir, we have growing in this country, as evidenced by this Budget, a system of nepotism in that taxes are discriminatory and nobody knows the real answer as to how an industry can be established and what the criteria are in order to determine whether an industry is going to be discriminated against. One has to guess, and one can well imagine that just as breweries and motor car factories find themselves in a dilemma today, so other big industries manufacturing soap and cigarettes, for example, may find themselves in a dilemma should they decide to develop in South Africa.

The answer to most of the Minister’s troubles lies in increased productivity. When you can build houses faster, provide better services, grow more food, produce more meat, increase your exports, etc., you are able to solve at least some of your problems.

The Minister’s fourth objective is to assist those who under present conditions find it difficult to make ends meet. There is no comfort for them, either in this Budget or in the Railway Budget. Costs are rising and in no field is that better demonstrated than in the case of food. Sir, what the Minister fails to realize is that he is causing them so much anxiety that they will not be here to enjoy the long-term benefit of his plan, if there are any benefits to be enjoyed from this Budget. Sir, we condemn this Budget because it fails to provide the necessary incentives for increased production and productivity. There is no long-term plan to combat rising living costs. There are no adequate measures to curtail unnecessary and unsatisfactory spending in the public sector. It fails to provide the necessary basis for steady economic growth. I want to warn the Minister that if there is no discipline in public spending and if there is no increase in productivity, and if the present inflationary spiral is allowed to continue, we could have serious monetary difficulties within the next year to 18 months. Financial discipline is imperative because if we have a currency crisis in the next year to 18 months the inflationary embarrassments which we have experienced up till now will grow far more serious. I would remind the Minister that he has been given advice and he has failed to use the right directions. He has been given the recipe but he has failed to carry out the instructions.

Do you agree with his measures?

The result is that the cook has given us a dish which is covered with confection but the contents have proved to be indigestible.

In the course of my speech I shall return to a considerable number of the questions which the hon. member for Pinetown has just put, but I would rather deal with them in the context of an holistic concept of what a Budget ought to be. However, I just want to return to one remark which the hon. member made a moment ago. The hon. member read something which was supposed to have been said by the President of the Reserve Bank in his annual economic revenue, published last Friday, and I want to put it to the hon. member that the passage he read out did not come from this economic report of the President of the Reserve Bank. I want to put it to him that the words which he read out in regard to the Government’s so-called inflationary manner of undertaking financing were not from the report of the President of the Reserve Bank but were from the newspaper report of what the President said, which is not the same as the actual words of the President himself. I then want to ask the hon. member why he tried to mislead the House with a report which does not reflect the President’s actual words, while he had the actual words in front of him.

What are the actual words?

If his contention is correct then I want to ask him on what page of the report those words occur, but I allege again that they were not the words of the President of the Reserve Bank and that those words came from a newspaper report, which was incorrect.

Over the past week-end I spoke to many prominent people, people who have well-considered opinions on our national affairs, and the general impression I got is that the public outside are very, very concerned. The public is very concerned and it has reason to be concerned because we find ourselves to-day with an Opposition which is no longer making any constructive contributions, and particularly in this Budget debate, to which I have been listening for more than two hours this afternoon already, there have been no constructive contributions from the Opposition side. The impression which I get is that the situation is really critical because here we are saddled with an Opposition which no longer thinks of itself as an alternative Government. That is the reason for the fact that we do not get any constructive ideas from them, only petty criticism of measures which this Government is taking, measures whereby this Government rules the country in a very effective way. That is why the public outside are very concerned.

We are dealing here with a Budget, and in his introduction to his Budget speech, the hon. the Minister of Finance stated it very well and clearly that a Budget is not an amorphous collection of unrelated measures which are thrown together once a year, but a clearly co-ordinated fiscal plan; it must be an ambitious plan, and in so far as a Budget can determine the direction of the economy of a country, so far must this Budget determine the direction of the economy of this country. It is very easy to be wise after the event. It is much more difficult to be wise before the event, and that is why some people who try to be wise before the event fall into a nasty trap. During the recent election the hon. member for Constantia also tried to be wise before the event. At a meeting which he addressed in Constantia he predicted that the country’s income would remain more or less constant, that the expenditure would increase tremendously and that he therefore expected a deficit of nearly R200,000,000. What has actually happened is that the hon. the Minister of Finance has only asked for a little more than R50,000,000 extra from the taxpayers for this very essential expenditure. And now the Opposition and in particular the hon. member for Constantia are very concerned about the fact that we do not have such a large deficit.

But I would prefer to see and deal with this Budget against the background of economic and financial conditions in our country and in the world of to-day. In spite of all the retarding factors which one finds in the Western world to-day in the economic field, the economic cycle still applies in the Western world. We still have economic cycles of approximately nine years, unless they are very seriously disturbed by exceptional world conditions such as a major world war for example. At the moment South Africa finds itself at a point on the downward curve of the economic cycle, with all the adverse consequences of a period of tremendous growth and prosperity, as well as of over-spending. It is a world-wide phenomenon. It is not restricted to South Africa. Is it necessary for me to remind the Opposition that Mr. Wilson came forward a few months ago with a much more drastic plan to save the economy of Britain? Has the Opposition not heard about what happened in Belgium, where all new appointments in the civil service were frozen for six months? Wages and prices have also been frozen there for six months. Has the Opposition not heard that Mr. Eshkol of Israel has introduced a three-year plan which is much more drastic than that of South Africa? Fortunately we have here in South Africa a Minister of Finance and a Government which looks very far ahead, a Government which plans ahead. [Interjection.] In spite of what the hon. member for Pinetown has just said, i.e. that the Minister of Finance did not take action in time, I want to point out to him that in November, 1963 already the hon. the Minister of Finance warned us that we should take our foot off the accelerator. Must I refer the hon. member for Pinetown to what the hon. the Minister of Finance said in March, 1964 already in his Budget speech? He said (Hansard, Vol. 10, Col. 3036):

He followed up those words in his next Budget speech of March, 1965. He then said (Hansard, Vol. 14, Col. 3320):

He said that our slogan should be:

“Save to maintain prosperity.” These measures would certainly have been adequate if a totally unforeseen factor had not entered the picture. In November, 1965, the Economic Advisory Board of the Prime Minister still expressed the opinion that the excessive economic growth and the attendant inflationistic tendency had been sufficiently contained. In February of this year they still reconfirmed that opinion. If we were to have had a Budget in March—the normal time for the Budget—we would therefore not have had such a deflationary Budget as the one we have had. The great unforeseen factor which has since entered the picture, is the tremendous influx of foreign capital. I shall refer to the report of the President of the Reserve Bank. Therein it is stated that, during the years 1959-63 we had an average annual capital outflow of R88,000,000. In the following year, 1964-5, we had a small influx of R36,000,000. However, in the present financial year, 1965-6, we have had the enormous influx of R270,000,000.

Mr. Speaker, you may now ask me why such an enormous influx of capital took place. This influx of capital becomes even more interesting if one considers its distribution over the four quarters of the year. In the first quarter, i.e. the third quarter of 1965, the influx was R60,000,000. In the next quarter, i.e the fourth quarter of 1965, the influx was R68,000,000. In the first quarter of 1966. the influx was only R10,000,000. In this case there was a long-term influx of R21,000,000, but there was also a short-term capital outflow of R11,000,000. It turned against us rather quickly. But then there followed the remarkable influx of R132,000,000 in the fourth quarter, i.e. the second quarter of 1966, that is to say from 1st April to 30th June. If you were now to ask me why there was such a tremendous influx of capital, I should like to remind the Opposition that on 30th March we had an election in this country. On 31st March the results became known, with an overwhelming defeat for the Opposition. The Nationalist Government of Dr. Verwoerd came out of that election as the indisputable and strong ruler of South Africa. What a tremendous influence did that not have on the financiers of the Western world! Does the Opposition still ask why that tremendous influx of capital took place after the election of the 30th March? I cannot help thinking back now to what my hon. friend, who has just entered this Chamber (Mr. Moore), said in 1961. He said at that time that South Africa would never again obtain capital from abroad.

Unfortunately, Mr. Speaker, most of this capital is short-term capital which does cause inflationary pressure. There are of course other contributory factors for inflation having got out of hand to such a tremendous extent, but I am afraid my time will unfortunately not allow me to deal with these factors individually. I just want to refer to them in passing. Our import replacement programme did have an effect. Transportation costs had an effect. Mr. Speaker, you will not allow me to talk about Railway affairs now, but I want merely in passing to refer to them. When I talk of transportation costs, I am referring more specifically to transportation costs between South Africa and abroad, than to transportation costs in the interior. Sea freight tariffs increased by 30 per cent to 35 per cent in the period 1959-65, while railage tariffs in the same period increased by 18.8 per cent. This increase was more therefore in the case of sea freight tariffs, over which we had no control. So I can continue listing factors which contributed to the inflation. There were the wage increases, the terrible drought, land values, building costs, etc. which all had a great effect. The point I really want to emphasize here is that last year’s deflationary measures would have been adequate and that is why I reject the assertion of the hon. member for Pinetown who said that last year’s Budget was inflationary. Last year’s deflationary measures would have been adequate if it had not been for this tremendous increase in the influx of foreign capital. In this regard I want to refer to the retail price index. In the year 1963-4 we had an increase of 4 per cent in the retail price index. In 1964-5 the increase was 4.1 per cent and in the year 1965-6 it decreased to 3.2 per cent. Of this increase of 3.2 per cent the most important part was in the last quarter, which we have just dealt with. That is why I say that these deflationary measures would have been adequate if it had not been for the vast increase in the influx of foreign capital. Many complaints have been made about the inflationary effect of this Budget as well. The hon. member for Pinetown and the hon. member for Constantia tried to indicate that this Budget together with the Railway Budget are tremendously inflationary. I cannot agree with that. I want to point out that we could easily have prevented the hon. the Minister of Finance taking this extra money out of the pockets of the taxpayers if we had been able to spend only R50,000,000 less on defence. But now I want to ask the hon. member for Pinetown this: Is that small amount too much to pay for the safety of South Africa?

I also want to return to the allegation that this Government is not taking care of the man in the street. I have before me a very interesting table taken from the latest edition of the Financial Mail in which it is indicated in what measure the man in the street in South Africa pays taxes as compared to the man in the street in the United Kingdom. In the income group R2,000 per year the South African pays R29 in the form of direct taxation. I am referring here to a married man with two children. As against that, the Englishman pays R105. Let us now consider the income group R4,000. I have chosen this figure because it is by chance also the salary which members of this House earn. In this case the South African pays a tax of R250, as against the Englishman’s R690. These two groups which I have just mentioned are made up of the so-called men in the street. That is in respect of our men in the street here and the people who earn less. There the Englishman pays approximately three times as much as we pay. But if we proceed further and consider the R14,000 income group, we find that the South African pays R4,419 as against the Englishman’s R4,348. In this high income group of R14,000 the South African actually pays more than the Englishman. And then the hon. members of the Opposition are trying to make us believe that this Government is not looking after the man in the street. We have seen that the South African pays R29 as against the Englishman’s R105, and R250 as against the Englishman’s R690. Then, in the higher income group, the Englishman pays considerably less than the South African. Mr. Speaker, this Opposition has never been concerned about the man in the street. It is merely trying to scavenge a few miserable votes. Unfortunately my time does not allow me to give further proofs of this statement. All that I want to say here is that this Government is very thoroughly aware of the requirements and the interests of the man in the street and of the poor man, because it understands those people. It is not for this Opposition or for us to say what the interests of the man in the street are. We draw our members from those ordinary citizens of the South African nation. That is why it is not necessary for us to scavenge a few votes. This Opposition will go from bad to worse as long as it refuses to think as people should who must constitute an alternative government. As long as they do not learn to think about what an alternative government ought to do, they will remain sitting on that side.

Mr. Speaker, I am sorry that I cannot do anybody on that side the honour of speaking after him in this debate. Unfortunately for them that is the case. Circumstances are to blame, and if one listens to their speeches this afternoon one is not surprised that circumstances are such that two members on this side of the House have to speak in succession to give the greatest possible number of members an opportunity to speak. If one listens to the remarks from that side, and in particular to the remarks from the hon. member for Constantia, one is even less surprised that that has happened. He was quite surprised that the country did not revolt as a result of this Budget. He said that he was surprised about that and that it could be nothing less but “brainwashing”. If one has such a low opinion of the electorate, namely that brainwashing can persuade them not to object, I think one no longer deserves the support of the electorate. A great deal has been said about the Budget, especially by newspapers, since last Wednesday when the Minister of Finance made his Budget Speech. One would have expected, especially if one had read the English newspapers, that there would have been a tremendous interest in the discussion here this afternoon. According to those newspapers there would have been such tremendous interest that the country would virtually have been waiting in a state of commotion for the hon. member for Constantia to get up and annihilate the Government about this Budget which was so unfair towards all sections of our population. But what happened? You yourself have seen that here this afternoon, Sir. I have never witnessed a more pathetic performance by the hon. member for Constantia. I am sorry to say that. He is a very senior member of this House. I do not really blame him for that. The reason for that is the contents of the Budget which has been presented to this House. It is for the very reason that this Budget is so good that we do not see any interest on the part of the public in the discussions here this afternoon. I do not intend repeating what the hon. member for Queenstown said when he congratulated the hon. the Minister of Finance, but I want to tell the Minister that he has never presented a better Budget than this to this House since he has become Minister of Finance. That is especially true if it is seen in the light of circumstances in which we are living to-day.

Another shortcoming of members opposite is that they apparently have no ideas of their own. If one sees how slavishly they echo the Sunday Times, Mr. Speaker, it is really pathetic. If I now read to you what has been published in the Sunday Times you will understand.

You do not read the Sunday Times!

Yes, I do. Why not?

Is it a sin? In the Sunday Times it is stated—

I do not want to devote my time to that, but I just want to quote further in order to draw a comparison with what the hon. member for Constantia said—

Those words were used by the hon. member for Constantia too.

That is what lack of initiative they have. But they do not go as far as telling us where the Sunday Times contradicts itself. I shall also read to you a paragraph from the leading article published in the Sunday Times last Sunday—

If one considers a Budget, one thinks in the first instance of making provision for services which have to be rendered by the State. In the second instance it is essential to take cognisance of prevailing conditions, i.e. the economic climate in which we are living. If it was only a question to-day of finding the necessary funds for the services of South Africa, it would most probably have been much simpler. The hon. the Minister of Finance said so himself. But that is not actually the case. We also have to take other tendencies into account. We have to take a hostile world and inflationary conditions into account. During the past number of years we have noticed a tendency that people were spending too much. We also realize that to-day we have to spend a tremendous amount on defence. I should like to ask members opposite whether they have any objection to that. I should like to follow up what the hon. member for Queenstown said. They should tell us where they find fault with Government expenditure. In the first instance provision has to be made in a Budget for expenditure. They accuse this side of making too much provision and of spending too much. They should tell us to what they have objections. We realize that we devote approximately 20 per cent of our expenditure to defence at present. But is that really such a terribly excessive amount? A few years ago, in 1961, the percentage expenditure of the U.S.A, on defence was no less than 57.5 per cent. In Canada the percentage was 27.8 per cent, and in France 29.4 per cent. I consulted the Year Book of National Accounts Statistics, a publication of U.N., and I noticed that since that time expenditure on defence by the various countries in the world has shown a slowly decreasing tendency whereas South Africa’s expenditure in respect of defence has shown an increasing tendency. But you should bear in mind, Sir, and also members opposite, that in 1961 when the U.S.A, devoted 57 per cent of its expenditure to defence, South Africa devoted only 5.4 per cent to it. The following year it was 12 per cent. We realize that we had a tremendous backlog.

But I do not want to discuss comparisons. As I have said, in the first instance we have to provide large amounts for defence. We should also try as far as possible to slow down the unsound, rapid growth of our economy in South Africa to some extent. That holds considerable danger for us. It is essential to slow down—slow down, not stop—the rate of growth we have been experiencing recently. Mr. Speaker, the various increases in expenditure are given in the Estimates of Expenditure. For instance, under Education, Arts and Science there is an increase of R4,447,000. In the case of Social Welfare and Pensions, and I should like to stress this, there is an increase of R11,150,000. In the case of Posts and Telegraphs the increase is R2,800,000. In the case of Agricultural Economics and Marketing there are various increases, inter alia, the subsidy of maize, which has been increased by R10,989,000. In the case of Defence there is an increase of R44,945,000. I should like to tell members of the Opposition that if they are dissatisfied with these increases they should get up and say: “I am dissatisfied with this that or the other. In this or that case expenditure should not be incurred”. I think that the Minister’s approach was very obvious, namely that funds should be employed as economically as possible. We are aware of the fact that a spending spree on the part of the Government would promote conditions which we should like to prevent, namely conditions of inflation.

Once one has made provision for expenditure, one naturally has to find the necessary money. If the Opposition has any objection to expenditure to be incurred, it must state specifically where else the money has to be found and what methods should be employed instead of the methods proposed by the hon. the Minister of Finance. If you now look at the tax increases—and every member opposite is at liberty to say: “It should not have been increased in this or that instance.”—you will see that most of those tax increases are in respect of indirect taxation, in other words taxation which least hurt the taxpayer. After all, it is a wellknown fact that indirect taxation does not hurt as much as direct taxation. Indirect taxation also corresponds to all the good aims and objects of taxation. What it amounts to is that a person may pay a tax if he should choose to do so and need not pay it if he does not want to do so. And particularly in this case it is not indirect taxation on essential commodities. It is mainly indirect taxation on non-essential commodities such as cigarettes, tobacco, etc. Petrol is the only exception and the Minister of Finance also said expressly that it was with trepidation that he increased taxation on petrol. [Interjections.] There is also a very sound reason for that. I do not know why hon. members opposite are laughing. The Minister did so with trepidation because that was the only instance in which there was a large measure of essential consumption. For that reason he said he was increasing taxation with trepidation. But, Mr. Speaker, even in this case there is a tremendous consumption of fuel which can be avoided. Yesterday, for instance, it was a lovely day in town. If you looked at the roads in the vicinity of Cape Town yesterday, you would have seen how fuel was being consumed. Everyone is at liberty to drive somewhat less than before. Those then are the tax increases there have been. If hon. members opposite want to say so. let them say that there was a surplus and that it was not necessary to transfer that surplus to capital account but that it should have been utilized in the current account and that it would not have been necessary to levy higher taxes in that case. Let them say that if they wish. The standpoint of this side and of the hon. the Minister is that that surplus should be utilized in a non-inflationary manner. That is why Defence is financed from revenue to a large extent. Apart from the surplus, there is other revenue which is utilized directly for Defence. I am of the opinion that expenditure on Defence should as far as possible be financed from revenue because expenditure on defence is a premium which we have to pay for safeguarding our country. Premiums are not paid from capital but from revenue. Because that is the position and because defence is unproductive, it is good that we finance expenditure on defence as far as possible from revenue.

Let us now dwell for a short while on the economic circumstances at present prevailing in South Africa. Recently we have been experiencing unsurpassable economic progress. We have all the requirements for economic growth, requirements such as a stable Government, a wealth of natural resources and sufficient labour. If we are looking for evidence of the wonderful economic future which South Africa offers, then we need only look at the projects which have been announced recently. Projects for R3,000,000,000 have already been announced. I want to mention a few of these projects here. There are the expansion plans of the Electricity Supply Commission for the next ten years, expansions which will amount to R400,000,000. Expenditure on the supply and conservation of water and on irrigation amounts to R450,000,000. It is the intention to increase our production of iron and steel by 92 per cent, i.e. to 4,500,000 tons in 1972, a production which will require a total capital investment of R560,000,000. Seventy-five per cent of this expenditure will be incurred locally Then there still is the chemical industry. There is the construction of a new Sasol, there is the construction of refineries, the manufacture of synthetic rubber and a massive project for the manufacture of fertilizers. If one looks at all these things, one wonders how a young country like South Africa can afford it all. But we are producing two-thirds of the gold of the free world, we have one-third of the total coal reserves in this Southern Hemisphere and in addition we have unlimited supplies of iron ore, manganese and chrome, etc. As a matter of fact, we are fast becoming the workshop of the continent of Africa. And it remains our task, with all the basic means which we have at our disposal, to maintain and to perpetuate this growth. Planning for the next five years is, according to the Department of Planning, 5.4 per cent per annum from 1965 to 1970. But we should take into account the particular demands of our economic climate. The present demand in this connection is that we should combat inflation. That is the major problem we are facing to-day. It is not our problem only. It is not only the problem of this Parliament, either the Government or the Opposition. It is the problem of the entire country. Just as we know that our safety is dependent upon our expenditure on defence, just as important it is to South Africa that our economy should be stabilized and perpetuated and that we should combat inflationary conditions. But we have faith in the future and we believe that in the years ahead we shall be able to combat inflation with the means at our disposal so that we may once more bring about a balanced, steady, upward trend in our economy.

What I find so striking and beautiful about our South African economy is that it is so sensitive to and receptive of monetary and fiscal measures which are taken. You will remember that we had to take cognisance of inflationary conditions when the Budget was presented last year. In March last year the hon. the Minister of Finance announced credit restrictions and what happened then? Were those restrictions of any use or were they not? From the end of 1963 our gross internal expenditure began exceeding our gross national product. It gradually became higher and higher up to a stage during the second quarter of 1965 when our gross national expenditure by far exceeded our gross national product. The Minister of Finance announced credit restrictions at that time and our gross internal expenditure immediately showed a decrease. Our economy reacted so rapidly that our gross national expenditure decreased after six months to a lower figure than our gross national product. To me that is the feature of a fine, sound and growing economy, an economy which is not merely stable but also sensitive and which is affected by monetary and fiscal measures which are taken. If you look at the graph of the sales of property, you will notice that there was a decreasing tendency immediately after the measures were announced. The same applies to the sale of cars and other vehicles. It is particularly noticeable in respect of industrial and trade supplies. Over the years these supplies increased gradually but immediately after these measures were introduced they started decreasing. After some time the supplies were less than they had been previously. Those to me are the fine features of our economy.

Foreign money unfortunately once more found its way into our currency circulation at the beginning of this year. Inflationary tendencies once more developed at that time. In spite of what hon. members opposite have to say, I am not afraid that we shall not be able to combat inflation, but that we shall possibly go too far. I want to state quite frankly that inflation is not really as dangerous as its opposite. For that reason we should be careful not to take anti-inflationary measures too far until we experience instead the opposite of inflation. Let me quote one example of this. Let us examine the position in connection with the construction of buildings. Some time after the announcement of increased rates of interest I met one of my voters who told me that he wanted to build but had decided to wait a little while longer in view of the increased rates of interest. I then told him that that was exactly what we wanted. The fact that capital has become more expensive as a result of higher rates of interest necessarily had to have the effect that persons who would have built otherwise would no longer do so. What is going to happen now? Here I want to give a warning.

We recently learned from the Minister of Community Development that rentals had been frozen. I am not saying that it is not a good thing, but it does serve as further discouragement to those people who wanted to erect flats and buildings. Let me say once more that we have confidence in the future but that we have to be careful that our anti-inflationary measures do not go too far.

Efforts to slow down our economy should not be confused with a slump. The pace of our economic race has to be suited to the competitor’s capability. That is very important. We are living in a world in which an economic race is in progress. The race which is in progress here is not only for the prosperity of South Africa, but also in competition with the rest of the world. Our competitor is the material and human resources in South Africa. Our capability depends on the use we make of our human resources. From this point onwards it will be our task to see to it that the pace of the economic race is suited to the competitor’s capability. When we look at that, I have no doubt that a bright future is awaiting South Africa.

I intend replying to points raised by the hon. member for Ceres in the course of my speech. Mr. Speaker, if it was necessary for the hon. the Minister of Finance to appear before us this year in one of his guises, he could not have chosen a more appropriate one, because if ever there was a member of this House who had occasion to eat his words, that member is the hon. the Minister of Finance. It seems that until recently the meals prepared by the hon. Chef appeared to be quite to his taste. To-day, however, I think he realizes that they were very poor indeed. To-day he realizes that they were in no way conducive to the well-being of those who had to eat them. I do not think they were judiciously blended, nor suitably prepared nor were they served with the appropriate garnishings. I think it would be reasonably fair to say that they left in their wake indigestion, heartburn and ulcers. Now the hon. the Minister, like all poor chefs, chooses to find the fault of these meals not in the cooking but in the eating thereof. But where does the fault really lie? It lies in the monetary policies of this Government, particularly in so far as they apply to its own spending.

I was very interested to hear the speech of the hon. member for Ceres because it seemed he did not listen at all to any of the speeches made this afternoon from this side of the House. Nor does he seem to realize what has been going on in this country during the past two years. He does not seem to realize the part the private sector has played in trying to cure the situation. He quoted certain figures but he took no cognisance of those figures quoted by the hon. member for Pinetown from the report of the Reserve Bank, to the effect that private investment spending had dropped from 22 per cent to 5 per cent while, on the other hand, Government spending had gone up, I think one can say, fairly considerably.

Could you give us amounts rather than percentages?

Sir, the hon. the Minister has a happy or an unhappy knack of seeming to want the opposite of what we give. If we give percentages, he wants amounts; if we give amounts, he wants percentages. If one looks through his speeches of the past one will find that on every occasion he used that which was best suited to him.

I use both. You do not seem to want to do so.

His figures went up to 27 per cent. Now I want to compliment the Minister because this year his increase is only 61 per cent. That constitutes a considerable improvement. In the course of the debate on the motion of censure the hon. the Minister gave us some of the reasons for this large increase in expenditure. We accepted that he was partly correct. What we do not however accept is that (a) all this expenditure is essential and (b) that the funds are being economically spent. We know that for years now large sums of money have been spent by the Government, directly to further its own ideological policies.

We see no profit and no benefit in that for the country, Mr. Speaker. We also feel that money is being spent at a tempo which in some cases seem to be unduly accelerated. Like the hon. member for Pinetown, I, too, am not at all satisfied that the control being exercised over the spending is what it should be. We on this side of the House have for many years asked for the appointment of a select committee on Defence expenditure. All our requests have been turned down. Will the hon. the Minister please tell us when the House will be advised whether funds voted for Defence expenditure are in fact correctly spent. The same sort of situation is arising in regard to the Department of Water Affairs. Enormous contracts are being handed out. The hon. member for Pinetown is quite correct when he asks what is the position with cost investigations. Perhaps the hon. the Minister will reply to that question.

But apart from these aspects, Sir, it is the manner in which the hon. the Minister raises his funds that is so open to criticism. But this does not seem to worry the hon. member for Ceres unduly. Now, what did the hon. the Minister say in his speech? He said this—

Well, Sir, the Minister’s sentiments are entirely correct. We agree with what the hon. the Minister said in his Budget speech as far as this aspect is concerned. But in the same speech he told us that the Government’s net borrowing from the banking system had increased during 1965-6 by an amount of R243,000,000. In other words, Sir, the Government was financing spending in the most inflationary way possible. The position was that the Government had no money. That was the factual position. It had exhausted all its own funds and it therefore turned to the banks and borrowed from them.

Where did the banks get the money?

We will get to the banks and where they got the money and how the whole thing revolves just now, Mr. Speaker. The hon. the Minister knew—I do not say that he should have known because I am positive that he did in fact know—that between March and October of last year there was an improvement in the inflationary position. But along came the Minister and by his unwise actions he reversed the entire trend. Because the money which the hon. the Minister borrowed eventually found its way back to the private sector, from where it went to the banks, then on to the Government, back to the private sector, back to the banks, and so we had this vicious circle in full swing. The whole matter is very well put in the report of the Reserve Bank.

The hon. member said that the hon. the Minister must attract more savings. Of course he should. And we on this side have been telling the Minister for years how to do it. But the hon. the Minister wants to learn the hard way. He would not accept our advice to increase the interest rate. I hope he has learned by now that it is in the open market where interest rates must be determined, where there is a free play of supply and demand. You do not fix interest rates in the office of the hon. the Minister.

But the hon. member for Pinetown complained about that.

You complained about it, and obviously you do not want houses to be built in this country, because your friend said he will wait. What about those people who have nowhere to live? Do you want them to wait as well? Of course, Mr. Speaker, some cynical person might have said that the reason why the interest rates were not raised prior to the election was the very thing that the hon. member for Ceres talked about, namely because of the effect on the mortgage bond rate and the farm credit rate and how this would hurt everybody. It seems, Sir, that anything and anyone can be sacrificed on the alter of power.

Now, another instrument which the hon. the Minister had at his disposal and which he used through his colleague the Minister of Economic Affairs, was that of import control. We have had tighter control on capital goods, on consumer goods, and on raw materials since August, 1965. We had a further tightening up in February of this year. Now suddenly the whole position is completely reversed. Additional permits have been given, or will be given, to the extent of another R125,000,000. And we have the extraordinary situation—in view of what went before—of the Director of Imports appealing to the manufacturing community to increase their stock levels from four to six months’ requirements at a cost of R50,000,000. These were obviously inflationary steps. But they were necessitated in the mind of the hon. the Minister of Finance by the balance of payments position. The hon. the Minister should have known that the buoyancy of our economy provided a wide field for investment opportunity for overseas funds. The hon. member for Paarl, whose main speech was devoted to the question of the inflow of funds, should also have a word or two to say to the hon. the Minister. Because, Sir, one could have expected an influx of foreign capital which in fact took place in 1965. Capital flows to where it can make a profit. There was opportunity for investment in South Africa, and capital came here and the Government should have known that it was coming here. Instead of tightening controls the Government should in the late mid-1965 have relaxed import control to combat inflationary tendencies which were worsened by the inflow of capital from overseas. What have we had as far as import control is concerned, Mr. Speaker? A blow-hot-blow-cold policy all the time. It is very difficult for commerce and industry to plan ahead if a policy of that nature is followed. We know, of course, that commerce and industry does plan ahead. But sometimes one wonders whether the Government plans ahead. We know the result of their planning ahead for prosperity and for boom conditions.

Another factor that had a bearing on our liquid position was the policy of the Government of encouraging imports provided long-term credit facilities could be arranged. We know that a great number of import permits were given on condition that such credits were made available. Here I hope that the hon. the Minister has digested the fact that the so-called long-term credits include all capital for a period of longer than one year, and that many of the credits which were given to importers are only good for 18 to 24 months. These are going to fall due in the not too distant future, and they are going to create their own problems. No, Sir, it is not surprising that the hon. the Minister has mixed the wrong ingredients in his fiscal puddings of the past few years. Because he still has not got his recipe right. Because if one turns to pages 13 and 14 of the Budget speech it appears that the hon. the Minister is very critical of some people who, he says, have made “somewhat exaggerated references to inflation which have sometimes been heard”. Then, of course, the hon. the Minister once more gives us only half the story. He again uses figures which he likes to use. In his Budget speech he told us that the seasonally adjusted consumer price index increased by only 3.2 per cent between June, 1965, and June, 1966. That is quite correct. But the Minister did not tell us that it increased by 5 per cent between January, 1966, and June, 1966. The hon. the Minister also told us that the wholesale price index increased by 3.5 per cent from June, 1965, to June, 1966. But he did not tell us that the wholesale price index had increased by 5.6 per cent from January, 1966, to June, 1966. As the hon. member for Pinetown asked, where is the exaggeration? The hon. the Minister has under-stated the case by giving us the yearly figures.

The whole problem of the Government is that it will not face squarely to the issues and it is the man in the street who continues to pay for these constant changes and the constant errors of omission and commission. It is not possible to have a steady economic growth under those circumstances.

Now I want to come to the Budget itself. It is a contradictory Budget. As has been said, it is both inflationary and deflationary, but on balance I think it can be said that it is inflationary. There is no pruning of Government expenditure. New taxes and excise duties make it a cost and price raising Budget. Prices will rise before the measures of the Budget can take the money out of the private sector, and this is going to lead, and perhaps has already led, to further demands for wage increases. There is no incentive to increase productivity, the point raised by the hon. members for Constantia and Pinetown, and there is no export incentive except in some small degree for the farmer. The imposition of additional excise duties and the simultaneous freezing of prices as in the case of mineral waters, look very much like the re-introduction of price control. The new duties on the so-called luxury goods imported into the Republic, without a corresponding duty on the locally manufactured goods of a similar type, is first of all protective and secondly inflationary. I want to ask the Minister: Has he consulted with the Board of Trade, as is usually done before protective duties are imposed, in regard to these new duties he has imposed? Are they protective duties supported by the Board of Trade? The hon. member for Ceres, who is no longer in the House, likes indirect taxation; he says they are borne more easily. But what he has not told the House is that for a man who earns R100 a month it is a lot more difficult to face the increases of indirect taxation than for a man who earns R1,000 a month, and indirect taxation is a burden which falls heavily on the poor man. I shall come back to the poor man a little later.

This Budget has many bad features, but one of the worst features is the discriminatory excise duty on beer; because it is not an excise duty; it is a straight tax on profit. There are eight breweries in the country, and only one apparently is affected. But this duty affects not only the company concerned, which incidentally has the largest number of share holders of any company in South Africa, but it affects the shareholders themselves. They are the people who pay the penalty. Ninety-two per cent of the company’s shares are held in the Republic. They are held by individuals and they are held in the portfolios of insurance companies, pension funds and unit trusts. It is these investors who are being directly discriminated against. But even that is not the main issue. What is at issue is that one company, because of its size, is being taxed at a different rate from other similar companies, and in a system of free enterprise this is intolerable. Is the hon. the Minister establishing a precedent? Is he going to apply discriminatory taxes to other large companies and organizations like the O.K. Bazaars and Rembrandt Tobacco, or perhaps to his own members opposite? Is he going to have a discriminatory tax on his members’ salaries because they are more than we are? That may be wise, in the interests of the country! Or does he intend to deny to an organization the benefits of efficiency and productivity and put a premium on inefficiency and stagnation? Because this is what this measure means. It is rotten to the core. Sir, I want to warn the hon. the Minister that the harm it will do psychologically internally, and to our economic image abroad, is incalculable.

Another bad feature is another discriminatory one, the decision to include unit trust schemes among the institutions now required to hold a portion of their assets in Government securities. There is a basic difference between an insurance company, a pension fund and a unit trust. In the case of an insurance company or a pension fund, the beneficiary is not concerned with the form of investment that is made. His purpose is not one of investment. He is not investing; he is providing for something. In a unit trust a person’s object is purely that of investment. It is wrong that investors who invest directly in the market as a group, should be penalized as against individual investors who do exactly the same thing because people invest for certain specific purposes in things like unit trusts for growth, and the purchase of Government stock inhibits growth, and as a hedge against inflation. Sir, you know what happened to certain people who bought Government stocks some years ago. I hope this discriminatory legislation will not be proceeded with because it causes doubt and hesitation in our whole economic structure.

A third bad feature is the transferring permanently to Loan Account of R22,000,000, which up to now has been regarded as revenue income. This step is completely inflationary. From now on, in good times and in bad times, this R22,000,000, or whatever the figure might be, is lost to revenue and must now be found by some other form of taxation. It has now become a permanent burden on the taxpayer. The Minister gives as one of his reasons for this change that it is a modest step in the direction of a unitary Budget. Sir, the Minister has not said enough on this issue. Is he contemplating a unitary Budget for the future? If so, what form is it going to take? The Minister must not come here and just drop a hint at a major change in our Budget procedure. He must tell us what his intentions are. We would like to know whether he is moving towards a unitary Budget, with this “modest” change he was made, and how far, how fast, what form and when?

The worst feature of this Budget is that it is a diet for the rich. It is a rich man’s Budget. While it places further burdens on the lower and middle income groups already struggling to make ends meet, it serves largesse to the rich. In his efforts to get the public to save the Minister is holding out a few new carrots to the would-be investor. What are their effect? Interest on Post Office Savings Bank accounts is being increased from 4 per cent to 44 per cent, and the annual amount of interest exempt from tax is raised from R100 to R200, a tax-free income of an additional R100. The rate of interest on Post Office Savings Bank certificates will be increased from 44 per cent to 5 per cent, and the interest exempt from tax is raised from R100 to R400, an additional tax-free income of R300. A new savings bond is going to be made available to investors where you can invest a maximum of R20,000 per person with interest at the rate of 6 per cent, a tax-free income of R1,200; and the tax-free contributions to pension funds, and retirement and annuity funds, have been increased from R1,200 to R2,000, a tax-free saving, perhaps only temporary, of R800. If you add all these amounts together, you find they amount to R2,400. The highest rate of tax payable in the Republic by any individual is 64c in the rand, so that these new measures could give a tax saving in any one year to any one individual of R1,536, provided he has the funds to make these investments—and it is only the rich who have the funds to make these investments. That is the tax he could save. Against this there is the loss of the 5 per cent discount, which is now being done away with. It will be necessary for a person to earn an income of R50,000 per annum before the discount which he has now lost is equated with the income tax benefits he could gain by the measures the Minister has proposed in this Budget. For the rich man this is a wonderful Budget. The rich will get richer, and the poor will get poorer. [Interjections.] Those who can save are not the poor people of this country, and not even the middle class. The hon. Minister has proved a poor cook. The indigestion will persist the heartburn will worsen and the ulcer will grow more troublesome. It is only a pity that in 1963 the hon. the Minister chose the role of a doctor. We will have the need for that role in 1967.

The hon. member who has just sat down mentioned everything the Minister had already considered when he prepared the Budget. I listened very attentively to the hon. member. Apart from mentioning a few technical details, he never really touched on the main points of the Budget. To this House and to the Opposition it was therefore of no value whatsoever. I may not be clever, but I want to emphasize this, that after I had listened to the hon. member for Constantia to-day, I asked myself the question: Where is this House of Assembly heading with such an Opposition? And now that hon. member has merely confirmed the suspicion I got after I had listened to the hon. member for Constantia. In the interests of this House I shall therefore not devote much attention to the hon. member for Parktown, but I want to point out two aspects.

The hon. member said that import control had further intensified the inflationary effect of the influx of foreign capital, but why did the hon. member not mention the advantages offered by import control, and that import control is not a measure which is lightly decided upon by the Minister, but that it is applied only if it is absolutely essential? Here we were faced with a diminishing balance of payments. It had become dangerous. Money was leaving the country freely as a result of imports. When those measures were taken, our balance of payments recovered miraculously as one of the results of import control. Secondly, why did the hon. member not mention the other indirect salutary effect produced by timeous import control measures, which is the incentive it offers to the development of private initiative? And we find proof of that if we consider the tremendous industrial development and the upsurge of private initiative in this country, the fact that you yourself are forced to produce what you want. The hon. member does not mention that. Then the hon. member said that this capital had flowed in from abroad “because there existed an opportunity for investment”. But what has become of the reproach hon. members on the opposite side have been levelling against us for years, namely that the National Party’s ideological policy is to blame for the fact that nobody has confidence in the country? One after the other the hon. member knocked down the puppets he himself had set up, and I shall not pursue that any further, because I have no time to do so.

In his Budget speech the hon. the Minister set out four objectives. I want to couple the fourth objective set by the Minister with the first two, namely the military, economic and social defensibility which the Minister had as his objective when he drew up the Budget. I want to call that the broad infra-structure; the Minister’s objective of maintaining the broad infra-structure in the country and also of maintaining development as far as possible, rather than to retard it. The second objective set by the Minister was to maintain monetary stability, and his third objective relates to the maintenance of sound growth in our country. In this Budget record amounts for the broad infra-structure are asked for. It is an outstanding feature of this Budget that the Minister places the emphasis on the sustained development of our broad infra-structure, and I find that highly satisfactory. I appreciate that as wise and unassailable fiscal policy in the right direction. In the light of our declared policy—and we should always bear in mind that we are here by order of the people, and that we have a mandate from the people, to build a great, multi-national economic structure in and around South Africa—full-scale activation of the infra-structure development deserves the fullest stimulus. I can find no fault with that, and no right-minded person can find any fault with that cornerstone and that outstanding feature of the Budget. The sustained development of this essential infra-structure in our country is bound up with our military defensibility, our economic defensibility and our social defensibility, and I shall later add something more to those. The relative deficiency that has occurred as regards some aspects of the infra-structure development, particularly in the last five years of rapid economic growth, is a completely natural and explicable phenomenon. It is not restricted to South Africa, but can be generalized to apply to all countries dealing with a development growth like the one we have been experiencing for the past number of years. The further development of the broad infra-structure is the fatherly duty of the Government, and here the Minister has accepted responsibility for that task with great success and full credit. I have confidence in the Government that they will see to it that in future the development of military, economic and social defensibility will continue to enjoy high priority. In reading this Budget, I find irrefutable proof of that. Consider the Loan Estimates, the amounts that are to be spent, despite the fact that for the purpose of developing this infrastructure the Minister necessarily had to effect certain economics as far as the Loan Account was concerned. My confidence, which is based on an extensive and empirical knowledge of what our people may be thinking, is vested in the willingness of our public to bear the burdens that will be involved in such a sustained endeavour to promote this defensibility. The Minister’s task to support monetary measures by suitable fiscal means and measures in order to prevent the financing of this infra-structure from maintaining a sustained inflationary pressure, is no mean one; I want to agree with that, and when I look at this Budget, I see a most successful attempt on the part of the Minister to combat this inflationary trend which is irrevocably bound up with the development of an infra-structure and the reinforcement of our defensibility. It is a most successful attempt, as an analysis of the figures will show, but you will appreciate, Mr. Speaker, that in the few minutes I have been allowed I do not want to get bogged down in figures which are generally available. It is beyond doubt that this Budget has not had the painful effect that was expected; that is as plain as a pikestaff. But the fact that the Budget has virtually elicited a sigh of relief, creates the impression, on a penetrating analysis of this Budget, that the Minister has had an unenviable task in tying up all the loose ends. Sir, the Minister has had a difficult task.

Let us summarize everything that has taken place in South Africa in the past two years. The Minister has had to deal with an increasing capital inflow, with inflationary trends; the Minister has had to deal with a declining balance of payments; and then in turn with an increase and a tremendous swing in the current account. He has had to deal with a legion of monetary problems and with the measures to be taken to maintain stability. He has had to deal with rising and falling domestic savings, and with the major question of maintaining the development of the infrastructure in the midst of his vacillating curve, a curve which is also influenced by events abroad, and not by our ideological policy, as one hon. member on that side has suggested in his inanity. We find that the Revenue and Loan Accounts have been cut down by R90,000,000. If this curtailment has been on non-essential services, then I can find no fault with it; I would have welcomed it, and I would have greatly welcomed it, if there had been no need for the Minister to cut down R90,000,000 on the amount asked for on the two accounts. But the fact that R59,000,000 has had to be cut down on Loan Account, compels me to ask, as has also been asked in the Press by various authorities on the financial constellation, whether in future it will not be necessary to take alternative measures to stop the inflationary trend which has arisen locally as a result of a sustained development programme. When I read the Press comment, I note that some of the authorities have commented along those very lines. This curtailment of R59,000,000 on our Loan Account must unavoidably have influenced or at least retarded the essential development, or the essential full-scale development, of the infrastructure. I find it a pity that that was unavoidable. I find it a pity because the Republic of South Africa dare not flinch for one moment from unpopular monetary and fiscal measures which now have to be taken very urgently in order to ensure that our declared policy, for which a mandate has been given by the people and which is so closely interwoven with our survival, will produce the necessary results. I also have to dissociate myself partly from the Press comment on the Budget, namely as regards the impression they sought to create that the Minister had here made a popular attempt to finance State expenditure by non-inflationary means, without the unavoidable cares on his part. That does not seem correct to me, and the difficulties with which the Minister was faced become apparent when one reads the lastest annual report of the Governor of the Reserve Bank. The report—and I take from that what is suitable for the purposes of my argument—shows that the Government’s net debt with the banking sector has increased by R212,000,000. There were good reasons for that, and I do not want to go into those now; the time does not allow me to do so. But according to the report a large portion of this R212,000,000 was frozen, and as a result of that the Government’s balance at the Reserve Bank increased by R72,000,000 in the last quarter alone. It would appear to me—and I am not quite clear on that, but to me that merely emphasizes the difficulties with which the Minister was faced—as though additional Government stock had to be made available to the banking system in order to afford the banking sector the opportunity of investing their surpluses on an interest-bearing basis, in view of the inflow of capital from abroad. I can find no fault with such a concession. But if this R72,000,000 was frozen, as appears from the report, then it means that during the past financial year the Government financed expenditure to an amount of roughly R140,000,000 by means of new money, and if that happened—and I think it did happen—then it was a “must”. For some reason or other the favourable balance of the Reserve Bank, as I see here in the Minister’s Budget speech, now amounts to R94,000,000, and that is called new money. According to the Budget that new money will now be utilized on the Loan Account. Now I ask, Mr. Speaker, whether this money, by means of which the Loan Account is to be financed, is not going to have an inflationary effect, and I relate that to what the Minister said in 1965. The Minister said (Hansard, Vol. 14, Col. 3321)—

I am in complete agreement with this viewpoint. It may be unpopular, but I want to ask. and I put it to you. Sir, whether an additional savings levy on the higher income groups would not have been justified if such an additional savings levy could yield some R30,000,000 to R40,000,000. A large portion of that frozen new money could then have remained frozen, and could have eliminated altogether the possibility of inflationary trends resulting from the introduction of new money. If some of that new money could have been frozen, that curtailment of R59,000,000 on Loan Account would definitely have had a greater anti-inflationary effect, or it could have been saved for the essential development of our infra-structure, which in my view is our most important task in the new era our fatherland has entered. A matter in this regard which I find very thorny is the measures that have been announced to obtain funds for the financing of the broad infra-structure by canalizing savings to the public sector, as has been announced in this Budget. It is merely that I fear that canalizing savings to the public sector may have an adverse effect on the private sector. A shortage of loan funds may arise; pressure may be exerted on the banking institutions to take new measures to create credit, and capital creation by the private sector may be restrained; capital may become more expensive to the small private entrepreneur, and I fear that the grip of powerful capital groups on the small entrepreneur may deal the final blow to the small entrepreneur, who is even now making a large-scale exodus from commerce. The possibilities I want to put to this House in all seriousness to-day, I want to motivate as follows: the Government is undertaking large and justified expenditure—which we welcome—in order to expand the infra-structure. In the second place the Government is continually compelled to finance partly by means of money obtained from the banking sector. Thirdly, if that will result in a sustained upward inflationary price spiral I want to refer to the possibilities that may arise—and these cause me some concern. It may happen that the development programme of our infrastructure becomes retarded; the possibility of imposing higher interest rates may arise, regardless of the restraining effect that may have on the growth-rate of the private sector. That may then virtually result in a depression, as has happened in France. It may contain the possibility of direct control, for example price and wage determination, having to be applied. We should bear in mind that on the one hand we have to maintain this development of our domestic programme and the reinforcing of our defensibility, and on the other hand the Minister wants to maintain a sustained 5 per cent growth-rate. The Economic Development Council has made the target 5½ per cent. And then we also want monetary stability, and according to the Minister of Economic Affairs monetary stability will be affected if prices increase by more than 2 per cent. Now I ask: Is it possible to achieve all three of these objectives—monetary stability, a sustained infrastructure development programme and a sustained growth-rate—without the eventual application of technocratic methods? Unless the unforeseen happens, namely the outflow of foreign capital, I find some justification for the question whether these objectives, as the Minister has put it, can be achieved without deciding in principle to adopt control of the market mechanism in order that organization and canalizing of capital and means of development may be put into effect at any given time, as dictated by the requirements resulting from the obligations imposed upon us by the policy of our country. Measured by the objectives the Minister has set up, the Budget presents us with a huge task. The broad socio-economic infra-structure which has to be built up before we can actually realize this multi-national economic and political constellation here at the southern extremity of Africa, in our race against numbers and against time, cannot be reflected explicitly enough in our Budget. In my opinion it can never be over-emphasized. I want to point out seriously that the economic measures which should enjoy the very highest priority in order to realize fully the means to be employed for the achievement of our objective, should be set up explicitly as one of the economic objectives in the Budget, and that, with a view to the expansion of our country’s infra-structure, nothing should be spared to achieve that objective. Mr. Speaker, since the Opposition Party was obliterated at the last election, the task and the problems of our country have been taken out of the politico-ideological arena. For the next few decades we are going to stand in the harsh reality of the economic arena. To give effect to the mandate of the people as regards our continued existence as a separate White national unit will be no light task. In his Festival address in Pretoria on 31st May, 1966, the hon. the Prime Minister asked the question: What are we going to do with our riches? Our vast riches can only be of value of we utilize them speedily and productively, and on condition that they are utilized for the achievement of a solution to our greatest survival problem. All artificial impediments, whether vested capital power interests, or individual discomforts and sacrifice, whether drastic technocratic measures or policy decisions are required, are subservient to the primary task with which the people have charged this mighty National Party. This is the year 1966. In 1950 a Tomlinson Commission was appointed with certain terms of reference of which we are all aware. Mr. Speaker, one may read this Budget, but one cannot place this Budget without continually having at the back of one’s mind the border area development and the problems which are directly and indirectly related to our survival as a White nation. The question of border areas and Bantustan development is not something which affects only border areas; it is a matter which lies at the root of the South African economic structure. We shall not achieve our objective by coming here year after year and hearing criticism from the Opposition Party to the effect that a trifling amount of money is being spent on border areas and Bantustan development. In my opinion the desired development of border areas will not be brought about in that fashion, particularly not with such an Opposition. It will mean, and it entails, the investigation of the entire institutional framework which we employ in the economic field, and I want to ask the question whether the time has not come to inquire into the implications an optimum development of the border areas will have for the South African economic structure. Such a commission should not only inquire into the technical and financial implications, but in particular into the institutional and administrative implications.

I want to conclude, and I want to say that this Budget, if I place it within the framework of the mandate we as a mighty National Party have received, is actually a challenge in which the part now played by the Opposition is dwindling and disappearing altogether. I do not want to belittle them, but it is with some measure of contempt that I sit here and listen to the arguments brought up by hon. members on that side. Is this an opportunity for the Opposition, within the new era we have entered, to inspire the Government and to come up with criticism that will open new vistas, or is this an opportunity for the Opposition to come here and plead the cause of one particular beer company which is being discriminated against, according to them—and then that is not even true?

Mr. Speaker, I stand here in defence of this Budget, because this Budget emphasizes the main point of our economy, namely the development of the infra-structure, which is bound up with our economic and our military and our social defensibility, and I want to congratulate the Minister on the fact that in spite of all these difficulties, in spite of a curve which has vacillated so much in recent times, he has kept his bearings, that he has kept cool and that he has here set a course for us on which we can safely continue in future. I thank him for this Budget.

Before dealing with some of the remarks of the hon. member of Carletonville I should like to commence my remarks on the Budget in a rather unconventional manner, because I wish to make an appeal to the Minister for expenditure, expenditure which will, however, not be much. This debate offers me the opportunity to associate myself with what hon. members here and the public outside felt about the judgment by the World Court on South West Africa.

I want to join in the paean of praise to our successive governments during the past two generations who have stated our position in regard to South West Africa and to our wonderful legal team who put our case to the International Court. We all are very proud of what has happened. While all of us can sing Psalm 146, yet we have forgotten the most important people, namely the men who marched into South West over 50 years ago. This is my opportunity to make a request to the hon. the Minister, a request which I have already made on previous occasions, i.e. that the old veterans of the First World War be treated in the same way as the veterans of the Anglo-Boer War. I plead that the South Africans who served in the First World War should be treated just as well as those British soldiers who fought in South Africa in the Anglo-Boer War and who chose at the end of the war to stay behind in South Africa. That is the appeal I want to make at the beginning of my speech, an appeal which is an important one and for which this is the occasion.

I come now to the hon. member for Carletonville. We have heard him speak in Budget debates in the past and naturally we have listened to him with attention because he has now become one of the recognized speakers on the Government side. He said he might be “dom”, but I will not go as far as that; I will not go as far as he himself was prepared to go in this respect. I think he was anxious to encourage foreign capital. I shall have something to say about foreign capital and, therefore, I am pleased that the hon. the Minister of Economic Affairs is in his bench at the moment. The hon. the member for Carletonville has pride in his country, in the same way as the hon. member for Queenstown. They make patriotic appeals to us to support this Budget. I presume we are all patriotic people and that all of us want to speak in favour of South Africa and that all of us are doing our best for this country. But I could not understand whether the hon. member for Carletonville wanted to bring pressure to bear on the banks in South Africa. He spoke about “canalizing” their investments. Does he mean that the hon. the Minister must go further and, perhaps not seize their funds, but bring pressure to bear on financial institutions to support this Government more than they have done already? Is that the suggestion of the hon. member for Carletonville? He referred to what the hon. the Minister said in 1965. Well, that is our difficulty with the hon. the Minister, namely the difference between precept and practice. Often he says the right thing but then he does not do it. That is our difficulty.

Then my hon. friend, the member for Carletonville, spoke about the Tomlinson Commission. What about this Commission? Its report was for us a milestone in our development of South Africa but this Government refused to carry out its recommendations! What they have done, was to pay lip service to the recommendations but they were not carried out. Now the hon. member for Carletonville suggests another commission. But we do not need another commission, unless, of course, the Government wants to find an excuse for not doing anything.

Finally he says that the time will arrive when the role of the Opposition in this House will have disappeared. So, we are making progress! It has already been suggested that South Africa is on the road leading to a dictatorship. Well, that is the tone of a dictator: The Opposition must disappear. But as long as you, Mr. Speaker, are there, I know that the traditions of Parliament will be maintained.

I have already mentioned the fact that the hon. member for Carletonville referred to foreign capital. In one of his important speeches during the course of the year the hon. the Minister of Economic Affairs referred to the same thing. I am referring to his speech to the Federated Chamber of Industries—a very important occasion and a very important speech. He told them that we would welcome foreign capital. He, however, warned foreign capital and made mention especially of American capital.

I do not know whether the Minister possessed any information in this regard but it has been suggested that they were bringing pressure to bear to influence the policy of this Government. That, I think, was the gist of the speech. I am in agreement with him in so far as the first part of his speech is concerned. When foreign companies, rather than foreign capital, come to this country, they very often finance themselves with South African money. How do they do this? They are usually rich companies and establish for themselves subsidiary companies in South Africa. In order to finance the subsidiary companies they are prepared to allow South Africans to participate. South Africans are told that those subsidiary companies are prepared to borrow money from them at a high rate of interest, a rate of interest much higher than that which the Government can offer. Accordingly, it is a very good investment. But these companies even go further and say that South Africans would be allowed to buy preference shares at a very high rate of interest. That is a good investment and I think any pension fund would be glad to get such shares. But what South Africans are not allowed is to participate to any extent in the equity of the company. It is the equity of the companies which is the important thing—this is what we in South Africa call “ordinary shares”. South Africans are not allowed even to have shares which give them a vote but from which they may draw dividends. The Minister’s reaction to this state of affairs was, I think, correct. Australia and Canada have to face a similar problem.

The second part of the Minister’s speech related to American capital in particular. He proceeded to warn American capital. It is strange, coming from this Government, to warn American capital because if there has ever been a government which has offered special inducement to American capital to come here this is the Government. As a matter of fact, they started off by doing that. In his Annual Report on the Reserve Bank in 1949 the Governor approached this question of American capital by saying that they were now successful in getting American capital to participate in the opening up of our goldfields. He went further and said that the Government fully recognized the importance of this pioneering arrangement to obtain a considerable participation of American capital in the development of new gold mines “by agreeing to a special reduction in the lease formula under which the mining company concerned will operate”.

So, if a mine could obtain American capital the Government was prepared to accord that mine a special lease formula. But the Governor went even further on this occasion and said: “And that the shareholders of vendor companies will be prepared to sacrifice such part of their subscription as may be necessary to secure substantial amounts of American or other foreign capital for mining purposes in their own interests in the long run as well as in the interests of the country in general.” In other words, the vendors, i.e. South Africans, should be prepared to allow the Americans to come in at more favourable terms than the South Africans were going to have. That was the way this Government started off but they did not finish that way. They went very much further. In 1958 I sat in this House listening to the Minister of Finance putting forward a proposal which to me was an outrageous one. As a matter of fact, I could not believe it. He said that we were anxious to get American capital and in order to succeed in attaining that object we were prepared to make a special concession.

At that point the hon. the Minister was very indiscreet because he mentioned the name of a company concerned. He said that this particular company would be permitted to come to South Africa to do trade as a finance company. He then proceeded to explain something to this House which we already knew, i..e that if hon. members opposite or on this side bought shares and sold them at a profit they would not be taxed on the profits, nor would they get an allowance on their losses. But if a finance company, such as Anglo-American, Union Corporation, Bonusbeleggings, Santam, and others, buy shares and sell them at a profit they must pay income-tax on that profit. But the hon. the Minister of Finance said that this would not apply to this special American company, a company which was going to be allowed to trade in this country without paying any income-tax whatsoever on their profits. For the knock-out blow the hon. the Minister finally said that the concession was on condition that no South African should be a shareholder in that company. Well, well! Talk about selling South Africa down the river! [Interjections.]

Yes, you know the company: the American South African Investment Trust. The shares of this company are not listed on the South African Stock Exchange because there are no South African shareholders in that company, or at least not that we know of! But this company is listed on the New York Stock Exchange, the greatest stock exchange in the world. What is more, this company has been booming on their gold investments. There are no South African shareholders in that company, nor is this company paying our income-tax. So they enjoy life. Now, this then is the hon. the Minister who threatens them if they should come here and try to influence the policies of the Government. Well, I do not think this Government is very consistent.

You are quite wrong. I never threatened a particular company.

Apparently the hon. the Minister misunderstands me. I am sorry about that. I am speaking of the 1958 Budget in which the Minister of Finance of those days mentioned this particular company …

You then said that I threatened that company.

If the hon. the Minister got that impression from what I said I am exceedingly sorry. I never intended to convey such an impression. As far as this hon. Minister is concerned I dealt with his speech of last year before the Federated Chamber of Industries.

But now you are going back to the 1958 Budget.

I am referring to the 1958 Budget plan which has not yet been changed. The company concerned is still operating. And although this hon. Minister has not initiated this he obviously condones it. He agrees with it. He agreed with it at that time and, I presume, he still agrees with it.

You have been rather slow in moving.

Obviously the hon. the Minister has not read the debate on the Budget of 1958 because we from this side of the House queried that at the time. This hon. Minister has now been acting as Minister of Finance for a number of years and yet he has not changed this position. So I presume he agrees with it.

You will be going back to 1066.

Oh, no. What is more, the hon. the Minister cannot get out of it in that way. He can try to do that when he is reading his Budget Speech because then there is nobody to contradict him but he cannot try that now. Every Minister of Finance since 1958 has accepted that position. So did the party on the other side.

But the hon. the Minister of Economic Affairs made another speech the other day. That was the occasion when he said that the price of bread would not be increased. But man cannot live by bread alone. That is what the Book tells, us, Sir. But there are other things in this Budget apart from the price of bread. In any event, apart from what is said about the price of bread, the hon. the Minister of Economic Affairs said he wanted to give us hope for the future. He said he looked forward to a breakthrough in our economic position. Because of what? Because of the progress they were making with Bantu education! How glad I am that I was in this House when the hon. the Minister said that. This is the Government who pegged the amount available for Bantu education at R13,000,000. Now they say that because of what they have done for Bantu education they are hoping for a breakthrough to greater productivity. But if the Government wants us to believe that there is going to be greater productivity, then they must train the Bantu. At present they are doing the opposite because they are telling the Bantu to go home. They must go back to the Reserves.

We are training more Bantu to-day than were ever trained before. [Interjections.]

In every speech of the hon. the Minister of Economic Affairs, as in those of the hon. the Minister of Finance, there appears a magic word. It is like the old lady’s who said that she liked the word Mesopotamia because it was such a lovely word! These two hon. Ministers on their part like the word “bottleneck”. Why have they not made progress? It is because they are faced with “bottlenecks”. The hon. the Minister of Transport finds himself within a bottleneck. Transport was mentioned as one of the bottlenecks. The reason they give for these bottlenecks is that there are not sufficient trained men. Whose fault is that? It is because we do not train enough men. What is more, we have not a system of education to do so. So we say that we are dependent upon skilled people coming into the country from overseas. But it is necessary that we train our own skilled men.

I should like now to deal with the approach of the hon. the Minister of Finance to this Budget. In this House they have created the impression that everything was going along splendidly when out of a clear blue sky there came inflation. But inflation does not come that way; it has never come that way. I looked up what the Minister told us on previous occasions when inflation was approaching and storm clouds were already in the sky, not as big as a man’s hand but big enough for everybody to see them. Then the hon. the Minister of Finance said, in his Budget for the year 1964-5 that “so far there has been no sign of general demand inflation. Indeed the steadiness of the price level, both wholesale and retail, has been remarkable”. Further on the Minister said “there is no immediate danger of general demand inflation”. Then he came to the magic word “bottlenecks”. There always are bottlenecks. In his Budget of last year the hon. Minister said that there was “as yet no sign of the levelling out in the rate of growth widely anticipated a year ago”. My point is that the Minister did not anticipate it; he merely expected it. He then proceeded to talk about the “sustained strength of the upwards swing”. He concluded—

In other words, this was the policy. I will not go so far as to say that it added fuel to the flames, but there was no warning, there was no attempt to deal with the situation, as the hon. member for Parktown pointed out.

I want to say a word or two about the methods which the hon. the Minister has used. He spoke about the orthodox methods. He talked about manipulating the bank rate. That is number one. Then you introduce an indirect tax. One of the hon. members on that side said this afternoon that that does not really hurt anybody. Then there is hire-purchase controls. And the most important of all—about which the hon. the Minister said very little—is cuts in Government expenditure. That is the most important orthodox method. The Minister should start at home. But I am afraid he does not start at home. Let us now take these taxes. I should like the hon. member for Queenstown to listen to this. To say that when one taxes a company one is then not taxing an individual is absolutely incorrect. A company is an association of individuals, and when you raise the company tax from 30 to 33f per cent you are taxing every shareholder at the same rate. The rich shareholder does not care very much, but the poor shareholder—and I have many of them in my constituency—who has an income of but R1,000 or R2,000 per year from his investments is very hard hit indeed.

That will only be true if there is a reduction in dividends year after year.

I know all about that. That is patchwork. And until the hon. the Minister applies the principle of apportionment there will never be a fair deal. Apportionment has been recommended.

In England they have departed from it. They have found it to be unworkable.

All the Government commissions recognized that there was only one fair system, namely that of apportionment. Because when a man is paid his dividends he should be told that he has received his dividends and that he has already paid tax thereon.

The United Kingdom have now come around to our way of thinking. They have abandoned the apportionment system.

Well, perhaps they abandoned it only this week, because I was over there earlier this year, and it had not been abandoned then. Another thing I discussed with them was their savings funds. The hon. the Minister has introduced savings bonds here. I presume he has taken over the system from the United Kingdom. In Britain they have two good savings systems, namely the Post Office Savings Bank Investment Account and National Development Bonds. The hon. the Minister has taken over the National Development Bonds idea. What I want to tell the Minister is, that he cannot compete with other financial institutions. He cannot compete with the building societies, with the banks, with the trusts, because they will borrow money on better terms.

Then I will have to have higher surpluses.

No. I want to help the hon. the Minister. I came forward with a private motion last year in an attempt to help him. There is one kind of investment on which the Minister can score, namely on premium bonds. When we discussed this last year, there happened to be in South Africa the Chairman of the British Thrift Committee. He mentioned the various savings schemes in operation in Britain, including these two I have mentioned. But he said that their bestselling line was premium bonds. A man invests his money, he never loses his money …

Why not football pools?

The hon. the Minister has been given a constructive suggestion, one which he did not accept last year. I tried to explain to him last year that there was nothing very virtuous in obtaining interest. But, of course, he could not agree. Mr. Speaker, I am not asking for a lottery, and I never have asked for one. I am asking for a premium bond investment scheme, something which was discussed in this House.

There is another important point which I wish to raise. I thank the hon. the Minister of Economic Affairs for being present in the House. We spoke about Government expenditure. Here is a big item of R26,000,000 for border industries, for South West Africa, the aircraft industry and tankers. Investments will go through the Industrial Development Corporation. The hon. the Minister will come to this House for the funds, and no doubt they will be voted because of the solid phalanx sitting there behind him. And then we lose all trace of the money. We do not know how the money is spent, who is handling it, or anything about it. I think the time has arrived for me to press again for the plan which I have asked for many years. We should have something on the lines of a Select Committee. It should not be a body like the ordinary Select Committee, but a body to study the aims, the activities and the problems of these corporations that we have established. We sometimes call them utility corporations, but they are not utility corporations. ESCOM is one, but the others are not. I would say that the time has arrived for us to study this matter very carefully. Let us meet these people and see how public money is being spent. They have annual general meetings of shareholders. And who are the shareholders? There is only one, namely the taxpayer of South Africa. He is the man who is the only shareholder. But he is never represented. He does not know how the money is being spent. There is no questioning of the directors. No information is given, except what is disclosed in the annual report. I have the annual reports, and they show that big reserves are being built up. I want to ask the hon. the Minister of Finance why he does not tax some of these reserves. He is short of money. Why should he not go to his own companies. They have the money. I should also like to ask him this: What dividends have we been receiving from these great corporations over the years? I have looked at the amount of taxation they pay. It is not very high. I should like to know what dividends the hon. the Minister receives, because he is after all the investor. Do they pay dividends? They mention dividends in the annual reports, but they are very small. I think the time has arrived for the payment of larger dividends. I will not go to the extreme, but I think it should be considered. The extreme is this: The Government should consider now whether the time has not arrived for private enterprise to participate in the Industrial Development Corporation, in ISCOR, and any other enterprise of that kind controlled by the Government. Hon. members must not be shocked. The hon. the Minister has started that already. Klipfontein Organic Products was a Government undertaking of this kind. It was sold to a consortium of companies.

No tenders were called for.

It was not tendered for. The hon. the Minister sold it to the consortium.

There were reasons for that.

Oh, reasons are always given. They are always given, but they are not always accepted. Mr. Speaker, I think the time has arrived to obtain some private capital participation. That will solve much of the hon. the Minister’s loan difficulty. My suggestion is by no means original. Indeed, I was very pleased to see the hon. the Minister of Economic Affairs taking that step in the case of Klipfontein. That had been suggested by leading industrialists. Let them participate. Let them have part of the equity. Let them come into the company.

The final point I want to raise is that of differentiation in taxation. I do not think that a man of over 65 years should be asked to lend money to the Government. I do not think he should be included in the compulsory loan scheme. When a man has reached that age he should be excluded, because I think he has reached the stage of life when he wants to draw his money and live on it. I think the hon. the Minister should consider excluding these people from the savings levy. I should also like the hon. the Minister to explain to me why there is differentiation between beer and wine in the new taxation. And why is there differentiation between beer and beer? That is something scandalous. [Time limit.]

Mr. Speaker, the problem which this House has to deal with today is the discussion of the Budget, in order to ascertain what is good and what is not good for the country. However, the Opposition’s amendment seems to me to be quite contradictory. It gives me the impression, particularly where we are talking about inflation here, that they have read something about inflation in a textbook somewhere but that they do not know precisely what it is all about. Hon. members on that side objected here to the Government’s increased expenditure and to the fact that more money than is actually necessary is being ploughed back into the public sector. It is a fact of course that one of the methods of combating inflation is to plough less money back into the public sector. The only item which hon. members on that side opposed was the amount of R150,000 voted in respect of sport. I now want to ask hon. members whether they are opposed to this amount of R150,000 being voted for sport and recreation? Do hon. members on the opposite side want that amount to be withdrawn? They must just say yes or no.

I should like to be of assistance to you, and I shall discuss this matter when the relevant Vote is under discussion.

That they will never say. They did not complain about the salary increases. Are hon. members on the opposite side opposed to the fact that the salaries of Railway and public service officials have been increased this year? That is all in the Budget. An additional amount of R26,000,000 has appeared opposite Defence. Do they take it amiss of the Government because the hon. the Minister of Finance is contemplating this additional amount for our defence? Are hon. members on the opposite side opposed to this item? I would like to know from the hon. member for Kensington whether he is against this additional amount? Hon. members do not want to say that they are against this amount. Consequently they are in favour of it. But if they are not in favour of it, they are undermining the safety of South Africa, because what they then want is that this Government should not spend money for the sake of the safety of this country. There is also a further amount in respect of Social Welfare and Pensions. Are the hon. members opposed to this additional amount? All that the hon. member did was to come along and request that we do not deduct money from dividends which are being paid to people who are older than 65 years of age. Money will be deducted from the hon. member’s dividends for many years to come still. Is the hon. member opposed to the additional amount we are giving to old people? The Opposition is silent. They are silent because they cannot attack this Budget, Mr. Speaker.

Hon. members on that side raised various points, but unfortunately time does not allow me to go into all those points in detail. One of their points was that this Government does not have any long-term planning. Let us now deal with a few points under this head. In any country, under any circumstances, water is surely of the greatest importance. What has this Government done in respect of water supply?

One may well ask.

Are hon. members on the opposite side opposed to this amount of R450,000,000 which is being contemplated for the Orange River scheme? Are they against this additional amount which is being requested for the Department of Water Affairs? Hon. members on the opposite side will never say that. I want to mention what the hon. the Prime Minister said in the beginning of the year about water. He said that, within five years there would be 86,000 morgen of new land under irrigation, excluding the Orange River scheme, and that also within the next five years an additional 148,000 morgen of existing development would be supplied with more water; and supplementary to that there will be another 53,000 morgen available through the Orange River scheme. We also find that, elsewhere, another 86,000 morgen of new land will come under irrigation. I do not even want to mention power. The hon. member for Ceres mentioned what is being done by Escom. We can mention what is being done in regard to housing, and that is one of the Opposition’s points of attack. From 1948 to 1965 R177,000,000 has been spent on the erection of 43,000 houses. We can also mention that within the next two years more than 8,000 families will have been accommodated by Community Development alone. Furthermore, a further 4,500 houses will have been erected by the various town councils, with the help of the Government. So we can continue and mention many other things as well.

But the Opposition also said this afternoon that the Government is not looking after our people and that things are going badly with everybody in the country, with the company as well as with the individual. Are things going badly with the labourers in our country if we have had absolutely no unemployment? This Government saw to it, with its planning and financing, that we had no labour surplus and that there is no prevailing unemployment. On the contrary, we have a major shortage of the necessary labourers. This Government also provides the necessary artisans who are imported by our Department of Immigration. Are we not to be allowed to spend money now to bring in the necessary artisans? Is the Opposition opposed to that? These facts give the lie to the Opposition’s motion. It is said that the companies are having a very hard time. I have selected a few names at random from the newspapers published during one week only. One of them is Rand Selections, which is in the Oppenheimer group. Last year its profits were R18,981,000 after taxes, as compared with R15,093,000 the previous year, i.e. R3,888,000 or 35.8 per cent more this year. Are things going badly with a company like that? Take the Phosphate Exploitation Corporation. Its surplus last year was R2,505,338, as against the previous year’s surplus of R1,425,398, ie. an increase of R1,079,940, or 75.7 per cent. Are things going badly with that company? Let us take ISCOR. Its net profit for the financial year amounted to R25,614,803 after taxes, as against R21,974,835 during the previous year, i.e. an increase of R3,639,968, or 16.6 per cent. Things cannot be going too badly with this country of ours. So I can go on mentioning them. I may mention that Anglo-American’s profit last year was R29,227,000, as against R27,460,000 in the previous year, i.e. an increase of R1,767,000, or 6.4 per cent. Now I want to ask the Opposition whether things are really going so badly with these companies? Is this Government not entitled to ask the meagre amount of If per cent extra on companies?

Let us go further and look at the income tax, and let us compare it with that in other countries. Take the R5,000 notch. In South Africa a married man, with two children, earning R5,000 pays R291, or 5.8 per cent of his income, but what happens in Britain? There he pays R952 on the same amount, which is 19 per cent as against our 5.8 per cent. In Australia he pays R1,036, or 20.7 per cent. Our taxes are still the lightest in the whole world. Everything here is moonlight and roses, but the Opposition simply cannot realize it. We can also consider at what notch one begins paying tax. In South Africa one begins at R972, as a married man with no children, whereas in Australia one begins paying tax at R208 and in New Zealand at R1,098. If we analyze the tax-payers, as at 1962, a little more carefully, we find that in South Africa the people earning up to R2,000 number 667,603, or 61.9 per cent of the tax payers, and they pay only R10,682,000 or 9.9 per cent of the total taxation. Sir, you can see therefore that we in this country pay very light taxes. The actual notch, under which only 36.6 per cent fall, is between R2,001 and R8,000. We in this country must not complain about very high taxes. The Opposition knows how light our taxes are. I do not want to bother you with more figures but I think it is a good thing to point out the sins of the Opposition, and I want to mention one example, a comparison between 1947 and the present day. In the year 1947 a man who had two children and was earning R3,000, paid R158.69, as against R110.29, the figure for 1957 when this Government was in power, and to-day, in 1966, he is only paying R94. Let us go back and we shall see how that Opposition taxed a married man in their day. They did not want to see any children in the family, because they knew that the children would become Nationalists and would outvote them.

I want to touch on a few other matters before my time runs out. What we have found this year is that this Government has shown that it has the courage of its convictions and that, if they are necessary, it takes steps, and on several occasions, whenever there was any danger, the Minister of Finance took steps to safeguard the economy. In this way the hon. the Minister recently unpegged the rates of interest which had been pegged. That is one of the methods which can be used to combat inflation. That is what the hon. the Minister did because it was only at this stage that he was able to introduce a Budget. That had its effect, but unfortunately it is also a heavy burden on certain sectors of our population, and I want to ask the hon. the Minister to reconsider it. I obtained a number of figures and I just want to furnish them for the consideration of the Minister. I was able to approach three building societies and these are the figures which they gave me. At the one company the people whose mortgages will remain at 7½ per cent comprised 25 per cent of its mortgage holders. The percentage in another major company is 55 per cent. This company, i.e. the 55 per cent one, previously had a clause in its mortgages stating that only when there was an increase of more than 1 per cent does the increase in the rate of interest stop there. Now this is affecting certain people very badly. There is another company which was only able to furnish me with the figures from one of its branches, and its rates of interest are between 7 per cent and 7y per cent, which remain constant. But now we find that of the people whose rates of interest will go up from 71 per cent to 8 per cent, the percentage in one company is 26 per cent, it is 24 per cent in the second, and 221 per cent in the third. But those which will increase from 71 per cent to 81 per cent are in the case of one company 49 per cent, in the case of the second 21 per cent, and in the case of the other company’s branch, it is 70 per cent. All new mortgages will of course be 81 per cent. Now I feel that here we have discrimination between people who have mortgages, and I know the Government will go into that matter. The one group are paying 81 per cent and the other 71 per cent. We also find that the man who took out his mortgage first, the oldest man, who has established himself in life, pays the lowest percentage. The man who began only recently, whether a beginner or one who has only now been able to get together his deposit, pays 81 per cent. I think the Government will probably give attention to the matter at a convenient time, and we would appreciate it very much if this were done.

I want to touch upon another matter about which the Opposition has had so much to say to-day, i.e. that there is too much money in the country. This brings me to banking, and I would like to say something about that. I think it is time, where the hon. the Minister and the Reserve Bank already have to control the money and the credit in the country, that we gave a wider definition to the Banking Act so that we can include certain of the establishments which do not at present fall under the Banking Act. There are certain establishments which sell debentures to the public and so create more money. Others again negotiate loans and then lend the money out at recklessly high rates of interest. Those people, when they borrow money and lend it out again, must also be brought in under the Banking Act so that they have to make the same deposit at the Reserve Bank as the commercial banks do. These people are undermining the country’s policy as far as finance is concerned. They circumnavigate the Banking Act and that creates problems for us, but the Opposition simply cannot realize this.

There are other cases, too, where major companies form subsidiary companies and supply them with funds so that they can enter the loan market. There is one thing further, and I would like to point out these faults, seeing that the Opposition does not do so. They take no notice of what is going on in the country and they are not concerned about it. What I am referring to is this f per cent which is being paid to agents who canvas deposits for financial institutions. I think the time has come when we should take away that £ per cent again. Another matter which we can surely give attention to is the Usury Act. We do find that there is a limit of 12 per cent on usurious profits, but many of those people with their finance Charges and all the other charges which they have, circumnavigate the Act and the interest rates go up to 25 per cent, and it is the poor man who cannot afford it who suffers. It is not the rich man and the large company, who have the money, who pay.

We also find that these foreign banks are entering the country. We saw recently in the Financial Gazette of the 8th April, 1966, that they furnished the names of the share holders in Barclays Bank and the Standard Bank, and we know that these two banks are fully controlled from abroad. I just want to read something written in August, 1964, in Oud-Pretoria in regard to the Standard Bank (translation)—

I do not say that that is going to happen again to-day. Neither do I want to say that that bank to-day is the same as it was then, but we have seen what happened in Rhodesia and that is why I want to make the following request here, i.e. that banks which are controlled 100 per cent from other countries should, to begin with, annually finance at least 10 per cent of their advances to the public from abroad until they have a 100 per cent local financing. We cannot allow that we in this country become vulnerable as a result of the activities of financial institutions which do not play their part as they ought to do.

As a newcomer to this House I want to pay tribute to my predecessors in the customary fashion, but it is my sincere desire and also the wish of my voters that I shall refer here to-day in grateful acknowledgement to the late Judge-President Conradie, who was laid to rest last week. He represented Gordonia for more than 22 years, and in that period he rendered great services to the farming community there. His services and in particular his sympathetic grasp of the many problems experienced by the pioneering people in that extensive and isolated region will always be remembered with gratitude.

To come back to the subject under discussion, the Budget, I do not want to go into it too deeply or to become technical, but I want to say that I was particularly glad to note that the hon. the Minister of Finance has continued with a policy of capital expenditure in order that, as the economists put it, a sound infrastructure may be built for our country, which is absolutely essential to long-term economic development in the Republic. In this regard I am thinking, of course, of electric power; I am thinking of means of communication, education facilities and of water, because nowadays we are thinking particularly of water, and here I am thinking in particular of the ample financial provision that has been made for proceeding with the Orange River Project without delay. Some security against possible disasters, such as those which may now arise in the region I come from if the Orange River were to stop flowing, can no longer be postponed and is of the utmost importance to my constituency. And then, Mr. Speaker, in his reference to this infra-structure I trust the hon. the Minister also had in mind those left-behind regions of our country where particular bottlenecks still arise to retard orderly growth. Not only have such regions enjoyed an inadequate share in the economic prosperity of our Republic, but the greater potential contribution they may have made is also being lost to us. I think my constituency is one of those regions, and I just want to give you a brief survey of it. It is the largest district in South Africa—20,000 miles in extent, considerably larger than some of the independent Africa states. On the western side we have boundaries in common with South West Africa, and on the north-eastern side there is a very long boundary that we have in common with our new neighbours, the newly independent state of Botswana or Bechuanaland. I may therefore suggest that in future this region will be of great strategic importance in our future relations with our neighbours, in our future international relations. We find the southern boundary of this area stretching along the banks of the Orange River for a distance of approximately 140 miles, and there lucerne, sultanas and cotton are cultivated intensively on approximately 25,000 morgen of land, and further to the north of the region, which some hon. members may know, there is the extensive and sparsely populated expanses of the Kalahari, which is not a desert. It is a large grass-land of approximately 1,500,000 morgen, but large expanses of it are still unexploited due to the shortage of water. On the asset side I cannot omit mention of two world-renowned attractions, the Kalahari Gemsbok Park and the Augrabies Falls. But a defective communications system—and here we come to the means of communication—with the larger centres of our country and also within the region itself, where tarred roads represent only some 8 per cent of a total main road distance of 1,200 miles in that district, is also hampering the good tourist industry which may now develop there. And yet the main town, Upington, with its 25,000 inhabitants, showed a population increase of 53.1 per cent from 1951 to 1961, a higher increase than that of any town or rural area in the Cape. I regard that as an encouraging sign; to me that points to economic viability. The allocation of certain border area benefits to Upington in 1965 was therefore also a step in the right direction, because that will encourage industrial development. There are also great unexploited mineral resources in that region, but I hope to be able to say more about those on a later occasion and on a future day. In the field of industry the region is very far behind, because the pattern of economic development in our country is perhaps quite naturally—because it is readily explained—comparable to a snowball effect in a few large industrial complexes in the country, an effect which is increasing continually. Nobody can be blamed for that, least of all the industries that have settled in those areas, but as the policy to-day is surely one of decentralized industries—it is a generally accepted policy, because it results in a more well-balanced exploitation of existing and potential resources in our country—I want to plead to-day that serious consideration should be given to a development plan for the Northern Cape. I am thinking in particular of the North-Western Cape, and I believe and I am confident that we are moving in the right direction for the entire Republic because of the wise policy of the hon. the Minister of Planning and his Department, to encourage planning, particularly physical planning, on a regional basis. They have also already compiled a development atlas for the various regions in the Republic. I believe that this policy may yet some day uncover many unexploited resources in our country. Within a few months, I hope, an economic regional survey of the Lower Orange and its environments, compiled by the Bureau for Economic Research of the University of Stellenbosch, will be completed. I just want to mention to you that the people of the Lower Orange did not wait to be assisted. They themselves paid R3,000 for this survey. Those people believe now that they have contributed their share to prove their claims as well as their needs, and it may therefore appear that we shall in future, more urgently than in the past, make certain recommendations and representations as regards the essential economic growth in the left-behind regions such as those, because we have already made some of those, but people have often said that they were founded on sentiment.

I shall briefly summarise the kind of representations we shall make to the authorities. We are thinking of a harbour for transport by sea, because we are only 250 miles from the Atlantic Ocean and we are 800 miles from Cape Town by rail. We are thinking of a road link with the interior, with Kakamas. We are thinking of a policy which will envisage better means of communication for this great region as such. We are thinking of an incentive policy for industrial development, because the population increase in Upington has already shown that it is a point of growth. We are thinking of how to expedite the provision of electric power to the rural areas of the Lower Orange. We are thinking of additional water supplies from the Orange River project, for although that may not have been considered initially, I want to mention that there is still a great deal of unexploited land along the Lower Orange, where the established farming community lives on these 25,000 morgen. We are thinking of the renovation of the existing and inadequate irrigation canal systems which are now becoming inefficient, or which have become inefficient in course of time and may now become totally inefficient in view of the Orange River project. I plead for consideration of these particular problems which arise in my region, and it is my belief that capital expenditure on such essential projects will not be a misappropriation of Government funds, because I know the people who live there. They know what it is to experience difficulties and they know hard work. They have quite frequently experienced them there, when human powers have been put to the test. To me the human material one finds there is still the best guarantee that Government expenditure to create a sound infra-structure for that area as well, will be to the good and will in future yield good dividends for the Republic.

Mr. Speaker, I do not want to refer to a previous debate on farsightedness, but I do want to thank you very much, Sir, for being so far-sighted as to spot me here in the dark shadows of the House. I also want to say that as one newcomer to another, I may now have to take the unconventional step of congratulating my hon. friend, the member for Gordonia, on his excellent maiden speech. I think the scope of his vision and his view of his constituency equalled the vast area of that constituency which he described so strikingly here. Like an able physician the hon. member handled the knife skillfully and immediately went to the heart of matters in his constituency. As one who has not yet finished his maiden speech, I want to say in all modesty that if the hon. member is going to maintain that standard in his speeches, I as a newcomer and a novice in this House will feel very proud to be associated with a colleague such as he. With your leave, Mr. Speaker, I now want to ask whether I as a newcomer may move—

Agreed to.