laid upon the Table:

Order! I have to announce that I have called a joint sitting of the three Houses of Parliament for Wednesday, 3 June, at 14h15 for the delivering of the Second Reading speech on the Appropriation Bill.

as Chairman, presented the Second Report of the Standing Select Committee on Transport and Communications, dated 2 June 1987, as follows:

Mr Speaker, I move:

The past financial year, particularly the latter part, has been characterized by three developments, namely—

Firstly, a turn for the better in the finances of the Post Office, mainly brought about by a drastic curtailment of expenditure and a moderate growth in telephone traffic.

Secondly, considerable progress in providing services, in particular telephone services, thereby reducing the waiting list by 17 873.

Thirdly, significant findings resulting from the investigation by Dr W J de Villiers into financial and related matters in the Post Office.

FINANCE 1986-87

I should now like to give hon members a review of the financial performance of the Post Office during the 1986-87 financial year. I am pleased to inform hon members that we achieved a better financial result than was originally expected. This is mainly due to strict economy measures and the application of financial discipline in every sphere of the Department’s activities. In addition, a moderate improvement in telephone traffic, higher interest earned on the re-investment of temporary surplus funds and the strengthening of the rand against other monetary units contributed to the improved financial result.

Total expenditure came to approximately R5 319 million, which is R81 million or 1,5% lower than the amount of R5 400 million originally budgeted for. A saving on both operating and capital expenditure was realised.

Operating expenditure amounted to nearly R3 374 million, ie R47 million less than the original appropriation of R3 421 million. Capital expenditure was decreased by R47 million from R1 724 million to R1 677 million by the selective and judicious slowing down of certain building projects. On the other hand, an additional amount of R12 million was needed for standard stock capital for which R50 million had to be provided, compared with the original appropriation of R38 million.

As far as revenue is concerned, at the time of the introduction of the Part Appropriation Bill earlier this year, taking into account the promising indications of a slight revival in the economy at the time, I estimated that our revenue would be R93 million higher than the original estimate. I am pleased to tell hon members that as a result of the sustained improvement of the economy, the Post Office’s total revenue comes to almost R3 792 million, which is R152 million higher than the amount of R3 640 million originally budgeted for.

With the expected lower operating and related expenditure of R3 641 million and the higher estimated revenue of R3 792 million, the operating shortage of R36 million originally budgeted for was transformed into an operating surplus of R151 million. After meeting the operating shortage of R108 million carried forward from the 1985-86 financial year, a surplus of R43 million was available to contribute to financing capital expenditure.

Before concluding the financial review, I should like to bring to hon members’ attention that a large saving, namely almost R51 million, was effected on personnel expenditure. This was achieved, for example, by keeping vacant posts unmanned where possible, withholding the creation of posts which were justified according to the norm and curtailing paid overtime. The result is that many thousands of hours of unpaid overtime are being performed voluntarily. I mention these facts so that hon members may realise that the favourable operating results were not achieved without great effort and sacrifice on the part of the personnel.

I accordingly wish to express my sincere thanks and appreciation to every member of the staff who contributed towards this achievement.

I shall now confine myself to a few of the basic services rendered by the Post Office, their pattern of development over the past financial year and our forward planning.

TELEPHONE SERVICES

Telephone services, including extensions, call-offices and miscellaneous services, increased by just over 178 000 during the past financial year. This brought the number of telephones to more than 4 200 000 at the end of March 1987 and represents a growth of 4,4%.

Of the total number of telephone, nearly 96% were connected to automatic exchanges.

The waiting list for telephone services was reduced by nearly 18 000, or almost 10%, to just over 167 000 at the end of March 1987, which is the lowest it has been for the past five years.

TELEPHONE SYSTEM

During the past financial year the capacity of the automatic telephone exchange system was expanded by nearly 292 000 allocatable lines—the biggest number of lines ever provided in a single financial year.

In addition there were 122 fully electronic switching units and 146 remote concentrators in service at the end of March this year, providing 691 000 subscriber lines, 480 000 junction lines and 160 000 trunk lines.

It is planned to further extend the automatic exchange capacity by about 316 000 lines during 1987-88.

DATA TRANSMISSION SERVICES

Analogue data services increased by more than 6 000 during the past financial year, which represents a growth of 9,6%. It is estimated that a further 5 000 services will be provided during the 1987-88 financial year. The lower expected growth is attributed to the increasing demand for services on the digital network, known as Diginet, which provides data users with better availability and quality of service than analogue services. In view of the important cost and other advantages of the digital system, the expansion of the existing analogue transmission network has already been discontinued.

DIGITAL TRANSMISSION LINKS

The first of the inter-primary digital links will become operational during the 1987-88 financial year. These links include long-distance microwave and optical fibre systems which will connect Johannesburg and Pretoria to the other major centres in each province, namely Cape Town, Durban, Pietermaritzburg, Port Elizabeth, Bloemfontein and Kimberley, as well as providing links between all these centres. In addition, links have been planned to most of the secondary centres, some of which are already in use. Many more links will be operational within the next two to three years. With the establishment of a national digital transmission network all future speech, data and video requirements will be provided by suitably increasing the capacity of the digital links. New techniques, which are at present being evaluated for use in our network, include a variety of digital television coders which enable video signals to be carried over digital transmission systems, as well as 565 Megabit optical fibre systems. The latter technique can quadruple the potential traffic carrying capacity of our optical fibre systems.

DIGINET

Diginet is the Post Office’s purely digital transmission network for high-grade data transmission. At the end of the past financial year 2 630 Diginet terminals were in operation, representing an annual growth of 125%. It is planned to expand the network during 1987-88 to all the major centres where digital transmission facilities are available. It is expected that some 55 new multiplexer sites will be established where data lines of different clients are concentrated and linked with Diginet. The total number of Diginet terminals should increase to 7 000 and the total number of Diginet multiplexer sites to 169.

†SAPONET

Saponet, the public data network, provides both circuit and packet-switching services to customers. Owing to reduced demand for circuit switching services, only the packetswitching network will be expanded during the 1987-88 financial year. Following a decision during September 1985 to modernize and expand the packet-switching network, orders were placed for advanced packet-switching exchanges for delivery during the 1986-87 and 1987-88 financial years. The expanded network, which is expected to be completed by the end of 1987, will provide capacity for more than 300 000 channels on more than 4 000 ports.

The international packet-switched data service has been extended to Ireland, Israel, Luxembourg, the Netherlands and Sweden and is now available to 19 countries.

TELEX SERVICE

There were approximately 33 000 telex subscribers at the end of the current financial year, representing an increase of almost 1 000 services and a growth-rate of 3% over the previous financial year. Approximately 254 million inland telex call units were registered during 1986-87.

The service is still available to 196 destinations abroad, 118 of which can be dialled direct by subscribers. Some 14 million call minutes were registered during the year by South African subscribers.

TELETEX SERVICE

The number of teletex subscribers increased by nearly 1 000 to more than 2 000 during the past financial year. Almost 30 million inland teletex call units were registered up to 31 March 1987, 16 million units more than during the previous financial year. International dialling is already available to 8 countries, which is expected to lead to an increase in the demand for the service and result in a considerably higher volume of international teletex traffic. France, England, Switzerland and the Netherlands have expressed an interest in teletex access to the Republic and relevant negotiations with the administrations concerned are at present in progress.

PRE-PAYMENT PAYPHONES

The new pre-payment payphone is a great success from the point of view of both the user and the Department, for the user because he can use a variety of coins and for the Department because it renders vandalism and theft more difficult. It has accordingly been arranged with the suppliers to increase production of the wall-mounted unit to 600 units per month.

CARD-OPERATED PUBLIC TELEPHONES

Investigation into the use of a pre-paid card-operated public telephone is continuing and the Department intends undertaking a limited field-trial of a suitable unit within the next few months. The popularity of this type of payphone is rapidly increasing in many countries, not only because it is very convenient for the user, but also because it limits vandalism and is more reliable, therefore requiring less maintenance.

BUREAUFAX

Bureaufax is the name given internationally to the service which provides a facility for a customer to hand in a document at a Post Office for transmission, in the same way as in the public telegram service, except that it can also transmit graphics, for example, a signature. A pilot scheme to evaluaté the need for a Bureaufax system has been introduced between Johannesburg, Cape Town and Durban. If the demand justifies it, the service will gradually be expanded during 1987-88.

BELTEL

The system has 500 access ports and can serve 15 000 users. Users in Pretoria, Johannesburg, Cape Town, Durban, Pietermaritzburg, Port Elizabeth and Bloemfontein can obtain access to Beitel by means of a local call. In areas where Beitel cannot be reached by means of local calls, users can phone their nearest Beitel centre or gain entry to the system through the public data network.

At the end of March 1987, barely 9 months after the public Beitel service was launched, there were already more than 4 000 users, 144 information providers, 59 sub-information providers and 14 service providers registered on Beitel.

BUSINESS TELEPHONE SYSTEMS (BTS)

The BTS is a modern program-controlled substitute for manual switchboards. Development of a new digital version of the BTS, providing up to 100 extensions, has already reached an advanced stage. It is expected to be completed during 1989. This system has been developed entirely in the Republic by the supplier, in co-operation with the Department. Compared with similar apparatus available on the world market, the quality and potential of the system are such that it is predicted that it will also be in demand outside South Africa. It therefore has good export potential. If one considers the extremely fierce competition in the field of such systems world-wide, it will indeed be a compliment for South African technological ability should exports materialize.

POSTAL OPERATING

The economic slackness has, as one could expect, caused a slight decline in the volume of certain classes of mail. Large volumes are, however, still being handled and it remains the Department’s aim to process and deliver postal articles to the addressees as soon as possible. At present there is no accumulation of mail at post offices. We are actually being hampered only by the long distances when air conveyance is not available.

In the light of the progress being made with the transmission, by means of the electronic media, of messages which would normally be channelled through the post, as well as with the electronic transfer of money and the greater utilization of credit cards which adversely affect mail volumes, there has been much speculation about the future of the postal service.

In extensive consultations in this regard with postal administrations in developed countries, we have found it to be the general viewpoint that the postal service will remain an important infrastructural service. In an advanced country such as the USA, for instance, mail volumes are still on the increase and our own investigations show that we must also expect this in South Africa.

PERSONNEL

Earlier I referred to the important contribution made by the personnel towards more favourable operating results. Among other things the creation of posts was restricted to a minimum. In a rapidly-growing business which does not develop uniformly on a country-wide basis, but has to meet demands at specific strong growth-points, the expansion of the staff establishment to maintain a satisfactory level of service is unavoidable. During the past financial year the staff complement in the Post Office consequently grew by 1,7%.

As far as training is concerned, the Post Office is still doing its part. The Department has at its disposal an extensive infrastructure to meet the technical training needs created by the highly sophisticated telecommunications technology. Country-wide almost 5 000 students of all population groups are receiving intensive formal training in various technical work-spheres at 13 well-equipped training centres, and the Department invests about R150 million annually in this training.

This contribution by the Post Office must be seen against the background of the disturbing phenomenon of technical training almost everywhere being curtailed.

Apart from the almost 5 000 students in the technical sphere, 453 persons are at present studying with Post Office bursaries at universities and technikons. For this purpose an amount of more than R1 million is being provided for this year.

A new development worth mentioning is the implementation in the Post Office of the system of Achievement Groups (Quality Circles), which is gaining ground world-wide.

An experiment has proved that the concept can be applied to advantage in the Department, thereby rendering a substantial contribution towards curtailing expenditure and increasing productivity. We intend implementing it as widely as possible in the Department.

Changes have been effected in the organizational field, with a view to rendering a more effective service to telephone clients in rural areas, by shortening lines of communication as much as possible. Satisfactory progress has already been made with the decentralizing of specific telephone commercial functions to selected rural offices. Seven such offices have already successfully been put into commission.

As hon members know, last month the Post Office experienced a strike by workers in certain areas. In all but two Black towns near Johannesburg, the Post Office succeeded in maintaining the service to the public at such a level that the strike was not disruptive.

I am keenly aware of the demands that were made on those staff members who did not strike, to keep the service running so smoothly. Time unfortunately does not allow me to elaborate on this, but suffice it to say that the country is greatly indebted to these people. I have already had my personal appreciation and that of the Department conveyed to each of them, but I wish to take this opportunity of again saying that we have every reason to feel very proud of them. With people who display so much loyalty towards their Department and who are voluntarily prepared to do more than is normally expected of them, we face the future with confidence.

*FINANCIAL INVESTIGATION

I informed hon members, during the introduction of the Part Appropriation Bill in February this year, about the investigation, similar to that undertaken at Escom and the South African Transport Services, which is being conducted for the Post Office by Dr W J de Villiers. The investigation mainly covers the capital expansion programmes of the Post Office and related financial matters.

The investigation, with which good progress is being made, has focussed on three areas, in particular during the past few months, namely:

1. 1. The cost-relatedness of the tariffs of the various services rendered by the Post Office, in conjunction with the external cross-subsidization between services and internal subsidization between subdivisions of the same services;
2. 2. the enormous growth in the capital expansion programmes necessitated, in particular, by the exploding demand for telephone services and the changing demand patterns; and
3. 3. the changes necessary in policy strategy in order to administer a public commercial undertaking, such as the Post Office, along business lines, as required by the Post Office Act.

I shall now deal with these three matters briefly on the basis of the preliminary findings of the investigation. I expect that they will be dealt with fully in the report which we expect to be available later this year.

Cost-relatedness of tariffs and crosssubsidisation

It has been found that, owing to particular considerations and developments over a period of years, the unprofitable postal, telegram and money-transfer services are being subsidized by the more profitable telephone service. In addition it has been found that internal subsidization is also taking place between sub-divisions of the same service, the most important being the subsidisation of telephone rental by telephone call charges. It is estimated that telephone rental will subsidize telephone call charges by more than R500 million in 1987-88. As a result of the change in the revenue and demand patterns for the various services during the past decade—more residential telephone services with a low call rate, for example, are being provided at an increasing rate—the ability of the profitable telephone service to subsidize the unprofitable postal and other services as well as the unprofitable rental of telephone services, has to a large extent also been adversely affected.

It is essential that tariffs for the various services should be adjusted to relate them more closely to the cost of rendering the service.

Capital expansion programmes and demand for telephone services

During the period 1950 to 1978 the average annual growth in the demand for telephone services was 5%. This growth-rate increased to an average of 10,8% per year during the period 1978 to 1982, but levelled off to an average of 5,3% per year from 1982 to 1986. A growth-rate of about 7,3% is forecast for telephone services for the next few years.

In 1986 residential telephone services constituted 73% of the total number of telephone services. During the period 1950 to 1978, the demand for residential telephone services increased by an average of 5,5% per year.

In the high-growth period, 1978 to 1982, the increase accelerated to an average of 12% per year, but during the period 1982 to 1986 again declined to an average of 4,9% per year. The relatively high growth-rate in residential telephone services during the period 1978 to 1982 is chiefly attributable to the radical change which has taken place in the demand pattern, namely a relatively high demand by Asians, Coloureds and Blacks compared to Whites. This trend is clearly illustrated by the increase in telephone density in the case of the different population groups since 1978. The telephone density in respect of Whites increased from 71,5 per 100 dwellings in 1978 to 83,9 in 1986, in respect of Asians from 35,6 to 71,8, in respect of Coloureds from 19,3 to 53,2 and in respect of Blacks in metropolitan areas from 3,3 to 37,9 during the corresponding period.

This is undoubtedly an outstanding achievement for which the Post Office deserves to be commended.

To provide for the exploding demand for telephone services, and to supply commerce, industry and financial institutions with the advanced and rapid communication services which they demand, coupled with the decision to change over to an electronic telecommunications network, required an exceptionally high capital outlay, especially since 1978-79. The revenue and user patterns of services and the adjustment of tariff structures did not, unfortunately, keep pace with these high expenditure levels and have contributed largely to the weakening of the financial structure of the Post Office during the past few years.

Policy strategy

It is already clear that a change in policy strategy has become vital in order to deal with the basic problems of, firstly, the high demand for services that generate a low income, in particular residential services, and secondly, the cross-subsidization that exists between profitable and non-profitable services and between sub-divisions of services. It would appear that solutions to these problems are to be found in the re-organization of the existing functional structure into business units and the management of the Post Office on business lines, with return on capital and cost-related tariffs as the most important norms. Moreoever it appears desirable to undertake an investigation into the possibility of increasing the efficiency of parts of the telecommunications system.

†FINANCE 1987-88

Expenditure

Apart from the financing of loan repayments which will amount to R305 million, total expenditure for 1987-88 is estimated at R5 845 million. This represents an increase of 9,9% on the previous financial year. Operating expenditure is estimated at R3 891 million, and is R517 million, or 15,3%, higher than in 1986-87.

The increase in operating expenditure stems mainly from higher estimated expenditure on salaries in the form of a general salary increase of 12,5% with effect from 1st July 1987, on international commitments as a result of an expected growth in international traffic, on financing costs of new loans, on exchange rate adjustments resulting from the redemption of foreign loans, and on general cost and price increases. Expenditure on other appropriations, namely standard stock capital, the Staff Housing Scheme and the provision to spread the redemption of loans and the effect of exchange rate changes over a suitable period, amounts to R334 million, which is R67 million more than in 1986-87. In view of the need to limit expenditure to what is absolutely unavoidable in order to make the best use of the financial resources of the country, capital expenditure for 1987-88 has been drastically cut to R1 620 million. This is R57 million less than in 1986-87 and represents the curtailment of the capital expansion programme by approximately 20% in real terms.

Revenue

At prevailing tariffs, revenue is estimated at R3 919 million in 1987-88. Despite the expected moderate improvement in revenue, and positive efforts to cut expenditure to a bare minimum, we shall still be facing an estimated operating deficit of R307 million. Unless tariffs are adjusted this deficit will have to be financed from loans, which would bring the total loan requirement in 1987-88 to R1 195 million.

The financing of operating deficits from loans is an unsound practice which no business undertaking can afford. Such action would not only weaken the financial structure of the Post Office, but would moreover adversely affect its ability to negotiate loans.

To maintain a sound financial position, the Post Office should each year have at its disposal an adequate operating surplus to contribute towards capital expenditure. Since the surpluses realized on the profitable services were insufficient, over the past few years, to cover fully the losses on the unprofitable services, the operating surpluses have been declining, and in 1985-86 an operating shortage was incurred for the first time in many years.

As a result of price and cost increases over the years, and the fact that the tariffs of the unprofitable services could, for particular reasons, not be adjusted sufficiently to keep pace with the rapidly increasing expenditure, the losses on these services have now reached such proportions that they cannot be borne by the profitable services for very much longer. Even with moderate tariff increases, which I unfortunately have to propose and which I shall deal with later, the losses that will be incurred on the unprofitable services in 1987-88 will still amount to almost R200 million. Of these losses R147 million will be incurred on the postal service, R13 million on the telex service and R28 million on the telegram service.

Having introduced every possible economy measure in running the unprofitable services, it is clear that three options remain open to us, namely—

1. 1. The abolition or curtailment of services;
2. 2. maintaining the status quo of cross-subsidisation; or
3. 3. applying a cost-related tariff structure.

We have thoroughly investigated the possibility of abolishing or curtailing services. We have considered possibilities such as postal delivery on alternate days instead of daily, the suspension of the special delivery of telegrams, the closure of uneconomic post offices, of which there are many, particularly in rural areas, and the reduction of service points at counters, to name but a few. These services are so basic that I believe that hon members would not wish any of these steps to be introduced in the communities they represent.

As regards the second option, namely the continuation of cross-subsidisation at the present rate, I believe I have made it clear that the revenue pattern of the telephone service, which until now has had to carry the burden, is changing to such an extent that it cannot be allowed to continue any longer without landing us in an unmanageable situation. Moreover, it causes price distortion and creates an unrealistic demand for the unprofitable services which continually compound our problems.

This leaves us with the last option only, which I believe will be the only equitable one for all users of Post Office services, namely to plan in such a way that ultimately a person making use of a service will pay for it without being subsidized by the users of other Post Office services.

We intend adjusting tariffs gradually to achieve this goal. I know that tariff increases should, under present circumstances, be kept as low as possible, and for that reason an adjustment that will increase Post Office revenue by only 8,8% in the 1987-88 financial year is contemplated with effect from 1 July 1987.

It will yield additional revenue of R345 million during the 9 months of the financial year, reduce the loan requirement for 1987-88 to approximately R888 million and leave a small operating surplus of about R38 million which can be appropriated towards the financing of capital expenditure. If the prevailing inflation rate is taken into account, the adjustments are very reasonable.

Details of the tariff adjustments will shortly be published in the Gazette. They are already available. For the information of hon members I should like to deal with some of the more important adjustments.

The telephone call unit charge is being increased from 12c to 13,5c; this also applies to telex and teletex calls.

The call unit charge for payphones is being increased from 10c to between 15c and 16c for long-distance calls and 20c for local calls. Although the increase may appear to be drastic, it should be borne in mind that the tariff of 10c has been applicable since 1 April 1982, that is, for more than five years. No rental is received for payphones although they require expensive apparatus. A higher call unit tariff than that applicable to calls from normal rented services is therefore fully justified.

The cost of handling a payphone call unit is at present in excess of 20c. At the current tariff a loss of R44 million will be sustained on payphones during 1987-88. The proposed tariff adjustment will reduce the loss to R13 million.

Telephone rentals are being increased by between R3 per month and R5,50 per month. The “rental” charged for a telephone service is, in fact, the minimum payment necessary from any telephone customer for the service to be viable. This amount should be paid even if no calls are made, and should cover the cost of giving the customer access to the system.

The current rental for a telephone service does not nearly cover the cost of providing and maintaining it and rentals, will as already mentioned, still have to be subsidized to the tune of more than R500 million per annum by telephone call charges. A considerable increase will therefore be required to put rentals on a cost-related footing. The following examples illustrate the situation:

As a sudden increase of rentals to a cost-related level would be too drastic, only a moderate increase is proposed at this stage. This is a basic tariff, and the fact that it is not cost-related results in an artificially high demand for services. Furthermore, it has the effect that the loss on rentals has to be made good by the business sector and persons who make full use of the service, thereby paying more for calls than is justified from a cost point of view. This naturally increases the cost structures of those users and also stimulates inflation. We also cannot afford the excessive capital outlay required for the provision of services which are not economically justified.

I do not like drawing comparisons with the tariffs of other countries, because in such comparisons so many factors come into play that incorrect conclusions are easily drawn. However, I have noted the rentals that are levied elsewhere, and whatever allowance is made for other factors, the proposed tariff is still among the lowest in the world.

The installation charge for a telephone is being increased from R90 to R125, but the tariff of R25 for social pensioners is left unchanged. The present telephone installation charge of R90 is far below the cost actually involved in installing and providing a telephone service. This cost averages R204 at present.

Here too I have information at my disposal about the situation in other countries which leaves me in no doubt that whatever allowances are made, the proposed tariff will still be among the lowest in the world.

The handling cost of a telegram is being adjusted from R1,30 to R2,50 and the tariff per word from 8c to 12c. As the man in the street only occasionally uses the telegram service, the increase will not constitute an undue burden.

According to a recent cost study the actual cost involved in handling a telegram—that is, acceptance and delivery—is R5,76. Notwithstanding the proposed adjustment of telegram tariffs, the telegram service will still be operated at an estimated loss of R28,3 million in 1987-88.

The tariff for non-standardized letters of, for example, 100g, is being increased from 22c to 25c and for a parcel of 1kg from 145c to 165c. Despite the tariff increases, postal services will still be operated at an estimated loss of R147 million in 1987-88.

Cash-on-delivery charges are being increased from R2,20 to R2,40 per parcel, and on this service, too, a loss of R3,8 million will be sustained in 1987-88.

It is essential, in the national interest, to ensure that such a strategic service as is rendered by the Post Office remains on a sound footing. The Post Office Act makes it compulsory to manage the Post Office on business lines and I believe that by introducing these tariff adjustments we shall be giving better effect to the provisions of that Act.

In conclusion I should like to convey my thanks and appreciation to the Postmaster General, his top management and the personnel of the Post Office for the untiring zeal and dedication they have displayed during the past year, and for the loyal support I have received from them.

TABLING

Mr Speaker, I now lay upon the Table—

Estimates of revenue and expenditure of the Department of Posts and Telecommunications for the year ending 31 March 1988 (RP 15—1987)

Second Reading resumed

Mr Speaker, in essence the Post Office consists of people on whom the success or failure of the whole Post Office administration depends. That is why, at the very outset, I want to record the CP’s thanks and appreciation to the Postmaster-General and all other members of the Post Office staff for the diligence, dedication and loyalty they have displayed. South Africa is very proud of the Post Office workers and I am glad to pay tribute to them. We are aware of the fact that Post Office workers have on occasion this year had to work under very difficult circumstances. They were burdened with strikes and frequently even had to work overtime without remuneration. I should therefore like to pay tribute to the workers of the Post Office.

Amongst other things it is the task of an opposition party, and in particular that of the Official Opposition, to express appreciation where this is appropriate, but it is also an opposition party’s task to mete out criticism where necessary. It is my intention, in my speech, to express both appreciation and criticism of the Post Office Appropriation.

Firstly, it is fitting to congratulate the hon the Minister on the three positive developments he mentioned at the very beginning of his speech, ie the favourable trend in Post Office finances, the positive progress in the provision of services and also the significant findings of the De Villiers Commission.

The reason why the finances show a more favourable trend than was expected, the Minister attributes mainly to two factors: Strict economy measures and financial discipline in every sphere of the Post Office’s activities.

A very important question emerges from the hon the Minister’s reasons for the improved position. The question is this: Why were strict economy measures and financial discipline necessary? The implication is surely that economy measures and discipline were necessary because of a previous lack of economy measures or insufficient economy measures and because proper discipline had not previously been applied. That is the inevitable implication. The hon the Minister therefore acknowledges the fact that he previously made a mistake, and the first question that can then be asked is how many millions of rands South Africa has lost as a result. Secondly a very important question can be asked: Would it have been necessary to increase tariffs if the Government had previously dealt with the administration of the Post Office by applying proper discipline and economy measures? If the Government had indeed done so, it would not suddenly have been necessary to apply discipline and economy measures now.

Economy measures and financial discipline are an integral part of sound administration. So if one applies the proper planning and administration it is not necessary to wake up suddenly and hastily start applying discipline and economy measures. We are criticising the hon the Minister because he has obviously not done proper planning, because South Africa has thereby lost money and because the user, as usual, is the victim. In the long run it is the user who has to pay for the increased tariffs.

Secondly we want to congratulate the hon the Minister on the fact that he did succeed in effecting a saving in both operating and capital expenditure. With reference to the basic services furnished by the Post Office, I as a South African and my party are very proud of that, as we are of the quality of that service. As far as basic Post Office services are concerned, South Africa does not need to take a back seat to any country in Africa, and there are few countries in the world to whom it has to do so. The CP greatly appreciates that fact. We join the hon the Minister and the officials of the Post Office in being very proud of that.

According to what the hon the Minister revealed in his Second Reading speech, the Post Office at present furnishes 14 basic services. These range from ordinary mail deliveries in one’s mailboxes to the most sophisticated digital and other modern services. If one thinks of the fact that at present South Africa has more than 4 200 000 telephones, and one compares this with the figures of other countries, particularly in Africa, one is even prouder of in the Post Office. According to figures I obtained from the hon the Minister’s office—for which I am grateful—on 1 January 1986 South Africa had 2 403 446 telephone services, whilst the rest of Africa had 3 543 029. Here I am referring solely to primary services and not to telephones as such. What this amounts to is that South Africa has 40% of all the telephone services in Africa.

Vote National!

And pay! [Interjections.]

The country that comes closest to the RSA as far as telephones are concerned, is Egypt. That country had 892 000 telephone services, in other words approximately 40% of those of South Africa. We join the hon the Minister and his department in being very proud of that fact.

The fact that the waiting list is still 167 000 or more, emphasises the challenge facing the Post Office. I would appreciate it if the hon the Minister could furnish more particulars about that backlog. We would, for example, like to know in what areas that backlog manifests itself and what the backlog in each area is. It would also be interesting to see estimates of the hon the Minister’s planning aimed at eliminating that backlog.

It is also encouraging to note that approximately 96% of all telephones have already been linked up to automatic exchanges. It seems to me as if the days of “Number, please” are slowly but surely numbered. I often find myself gazing wistfully at my modern telephone with its many buttons. On that telephone one simply has to press a few buttons and within a few moments one is put in touch with virtually any place on earth. Gone are the good old days when one simply had to crank a handle—of course one first had to pick up and say “Busy?”—and wait for the exchange to obtain the correct number. It seems to me as if the days of exchanges are also past.

This is perhaps a good opportunity to pay tribute today to those who were our “exchange”, since it is clear that they are systematically being phased out. One simply telephoned and asked the chap in the exchange for the correct time or whether he did not know where a certain person or place was. Frequently one telephoned the exchange when one needed some medicine. The exchange operator was actually a kind of walking encyclopedia. One chap at Koppies was eventually nicknamed Exchange. It was funny running into him in the street and saying: “Good afternoon, Exchange.” Frequently he would reply: “Number, please.”

One reflects with nostalgia on those days. I would not like to become a second Oom Sporie van Rensburg. I shall therefore rather confine my comments to the debate itself.

One would like to say something about each of the 14 basic services. Unfortunately time does not permit. I shall therefore confine my comments to only a few of them.

The pre-payment payphones are truly a great success. It is also gratifying to note that their production has now been expanded to 600 units per month. I note that the hon the Minister has said that that apparatus makes vandalism more difficult to perpetrate. That is very good news. It is true that the old “tickey-box” very frequently fell victim to this. At Jan Smuts Airport I have, in the past, watched people making a punchbag out of them, and what they have sometimes called them I unfortunately cannot repeat in Parliament. [Interjections.]

The card-operated public telephones also seem to be a very interesting addition which could, in particular, benefit the user. It would be interesting to obtain more information about this, and also about where the envisaged field test is going to be carried out. The card-operated public telephone is apparently going to mean the end of the notorious old “long tickey”. It is, of course, possible that students will eventually come to light with a “long card”.

The business telephone system or BTS is a modern programme-controlled substitute for manual switchboards, and the Conservative Party would very much like to congratulate the Post Office on this exciting new digital version of the BTS. It will have up to 100 extensions and is wholly manufactured in South Africa. Although this system will only be completed in 1989, there is talk even now of exporting this system. We should like to congratulate the Post Office and the manufacturers of this system very sincerely.

As far as postal operating is concerned, the hon the Minister has said that there was a marginal decrease in the volume of certain classes of mail items. He ascribes the decrease to what he calls the “economic slackness”. What is difficult to understand is that in his Second Reading speech the hon the Minister ascribed the high revenue of the Post Office to what he called “the sustained improvement of the economy”. My question to the hon the Minister is now: Is the economy in a good or bad position? It seems to me as if the hon the Minister is using the country’s economy as a useful reason for fluctuations. He should perhaps now decide whether there is a slackness in the economy or not, and then cut his coat according to that cloth. He cannot have his bread buttered on both sides. Nor can he apply double standards and get himself out of a corner by putting forward the condition of the country’s economy.

As far as personnel are concerned, we feel that more can be done about the training. At present 5 000 students are being trained, and we should like to know how many of the 5 000 are Whites. If personnel training could be expanded further, and even given a new lease of life, it should have a very important effect on production. When production improved, a better effort could be made to fight inflation and tariff increases could, of course, occur less frequently. The Post Office annually spends R150 million on training, and this represents only 2,8% of its total expenditure. We suggest that the hon the Minister consider increasing this R150 million for training with a view to effecting better production. It could place a damper on inflation.

[Inaudible.]

The hon member for Newton Park should merely ask for a chance to speak. Then he would also have a chance to say what he has to say. [Interjections.]

At present there are also 453 people studying, with Post Office bursaries, at the universities and technikons. Only R1 million is budgeted for this, and we feel it is too little. The hon the Minister would do well to consider spending more on technikon and university bursaries and ordinary training, if his budget permits.

This now brings me to increases. In spite of what the hon the Minister said, in spite of all his explanations and in spite of all his dilemmas, there is one fact that is as plain as a pikestaff—tariffs have been increased. The hon the Minister therefore simply does not succeed in operating within the limits of Post Office revenue.

These are not the only increases; it is clear that more and more increases are on the agenda. If I may just briefly refer hon members to the hon the Minister’s introductory speech, they will see that he says:

So this is neither the beginning, nor the end. He then goes on to say:

It is quite clear that if this adjustment is a moderate one, users face a very great calamity.

I blame the hon the Minister for having done a neat job of announcing his tariff increases after the general election. If one looks at the Post Office Appropriation—the hon the Minister announced certain increases before the time, did he not?—and one also has a look at the Transport Services Appropriation, one holds one’s breath at the thought of what is going to happen in the Main Budget tomorrow.

We shall protect you.

I shall come and discuss matters with the hon member in Krugersdorp.

It is now clear why the Government held an election on 6 May and did not first present the budgets. It was, after all, possible to deal with the budgets first, and then hold an election. But no! The election was held first and then the budgets followed.

It is very clear that if the budgets, with these shocking price increases and everything else, had been introduced first, with the election being held during the second half of the year, a large number of hon members of the NP would no longer have been here. [Interjections.] I need merely refer to the hon member for Krugersdorp, the hon the Minister of Manpower, the hon the Minister of Constitutional Development and Planning and many others. [Interjections.]

It has indeed become necessary for the Post Office to be placed on a sound footing—as the hon the Minister himself acknowledges. Let me quote to hon members this very illuminating portion from his budget speech:

This, of course, contains an acknowledgment that this is not the case at present, because it still has to be placed on a sound footing. So the Post Office is not on a sound footing, and the hon the Minister is striving towards having it placed on a sound footing. This means it is not on a sound footing, but rather on an unsound one.

It is with little enthusiasm that the CP supports the Post Office Appropriation Bill. In South Africa it is really high time the Government tackled inflation and price increases effectively. It does not appear as if there is any proper long-term planning to deal with this, because year after year one Vote after another contains one increase after another. What we are asking is where the Government’s long-term objectives and plans are for combating inflation and price increases. We see no sign of them. Nor are there any prospects of the hon the Minister combating price increases in the Post Office— on the contratry, the country can brace itself for further increases.

It is with great enthusiasm that the CP looks forward to the 1989 general election. [Interjections.] Let me tell hon members that they would do well to read what the Sunday Star of 24 May had to say. It published an article by a scientist of the University of Potchefstroom. He did some research into South Africa’s electoral system and election results and said that in the next election NP seats are going to fall like ninepins. He came right out and said—hon members would do well to read the article—that in 1989 Dr Treurnicht was going to become State President. [Interjections.] It seems to me as if any NP member with a majority of less than 1 000 or 2 000 would do well to look for another job. We shall accommodate them in the Post Office. It seems as if the country will have to go on suffering for another two years …

Order! May I interrupt the hon member and ask whether he realizes that he has now also referred to Mr Speaker?

By implication, Sir. [Interjections.] Mr Speaker, I just want to say that any hon member with a majority of approximately 500 is not included. [Interjections.]

Two years from today South Africa will again have a government with the will to solve South Africa’s problems, one which will do long-term planning with a view to combating price increases and inflation properly. The great problem lies with inflation and continual price increases—also as far as the Post Office is concerned. From our point of view, only a new government will be able to do this.

In the light of the price increases I should like to move as an amendment:

Mr Speaker, it was interesting to listen to the hon member for Overvaal, and in the course of my speech I shall refer to certain of the things he said in his speech, and to things he said shortly after the Budget was announced.

First of all, on behalf of this side of the House, I want to congratulate the hon the Minister of Communications and the Postmaster General and his personnel, on this Budget which they have presented to this House. We on this side of the House have only praise and appreciation for the hard work of the Post Office officials, the loyalty they have always had and for the contribution they are making to build up the communication systems of South Africa.

Before I comment on a few aspects of the Budget, I first want to comment on those who commented on this Budget. I am referring to the political representatives in Parliament, and also to the representatives of commercial organizations outside Parliament.

We on this side of the House, who have over the years been encouraging the Post Office to modernize, wish to thank the private sector for their well-balanced and constructive criticism of the budget.

Die Vaderland of 26 May summarized what businessmen said of the Post Office splendidly. The main headline of the newspaper on that date read “Sakelui wens die Poskantoor geluk.”

†The Citizen of 26 May carried an article from which I wish to quote:

Mr H A Murray, chairman of the National Consultative Committee on Post Office Affairs, representing the Afrikaanse Handelsinstituut, the Federated Chamber of Industry, Assocom, Seifsa and the Transvaal Chamber of Industries said that the committee agreed with the general policies being followed by the Post Office.

*The general criticism from the private sector was favourable and in support of the Budget. Now and again there was an organization that criticized a few aspects, but not to any appreciable extent.

In spite of this the comment on the budget by the parliamentary opposition was rather different. If the business world, which is the sector hardest hit by the tariff increases to which the hon member for Overvaal referred, refers with praise to the hon the Minister’s budget, it confirms one’s suspicion that the Official Opposition’s complaints were not mainly concerned with what is stated here. Unfortunately their comment is politically inspired. To them the main concern is not what is in the Post Office’s or South Africa’s interests, but all they want is that it should have been announced on 6 May because they wanted to make political capital out of it. That is the only reason why the hon member referred to it.

And then your party made political capital out of it.

The comments to the media by the hon member for Overvaal confirms the standpoint I am adopting. In his statement in The Citizen he said that the hon the Minister had not had the courage—he repeated that statement here this afternoon— to announce these things prior to 6 May. I now want to tell him that surely such a statement was merely for the purpose of making political capital out of the situation and using the Post Office in the election in an effort to win a few more votes. Consequently I think it is unfair to the Post Office to deal in this fashion with this wonderful department, which has come into existence over so many years.

Incredible as it may seem he said in that same statement in The Citizen—he repeated it here this afternoon—that he wanted to convey his thanks to the officials of the Post Office because they were the people who had been responsible for the success. That is what he told The Citizen. Just imagine? On the same budget, at the same time he is attacking the hon the Minister, he tells the officials that they have been wonderfully successful. Surely such statements and behaviour have no logical foundation. I want to ask the new hon members sitting opposite whether they are prepared to defend such standpoints in this House.

You prepared that little speech of yours last night, before you knew what I was going to say.

I did, yes, because I read what every opposition member said. I had to know what every opposition member said. I want to tell the hon member that it was very clear from what he said this afternoon that he never read the report. Many of the things he asked here this afternoon he would have found in the report if he had opened it. Consequently he could also have done a little homework last night.

In his comment in The Citizen the hon member also said that the hon the Minister could have found solutions for these tariff increases. However, not one of the CP spokesmen on the Standing Committee said a word about what proposals they would have put forward in order to have prevented the tariff increases. This afternoon he did not say a word about that either. If he had had any solutions to the problem, why did we not hear about it? Why does he not bring them to the House?

We on this side of the House must admit that the hon member for Overvaal’s predecessor as the CP’s official spokesman on the Post Office, the former hon member for Nigel, always went to a little extra trouble to thank the Post Office personnel. The hon member for Overvaal tried to do that this afternoon, but I think he tried to do so too late. He should not first have castigated them after the budget and now tried to curry favour with them.

Nowhere did I castigate the Post Office.

The hon member’s predecessor always complained about the multiracial service at the counters. It is a wonder that he did not also refer to it this afternoon. I wonder whether he might not want to become nostalgic about it.

†On the other hand the new official spokesman for the PFP, the hon member for Greytown, made the following comment to the media:

In answer to that kind of logic I want to ask him whether, when he buys a house, he tells the seller of that house that the children will be paying for it one day when they inherit the house. This kind of logic proves why the PFF was rejected in the recent election.

*I now want to ask the hon members who are newcomers to those two parties please not to emulate their official spokesmen. They are now becoming involved in a debate and they are going to hear a great deal about the Post Office. We want to request them not to politicise the Post Office. They must not turn a department which does not receive its money from the taxpayers, but from the consumers, into a political issue. If they are not going to do so, they must not be surprised if the hon members of the other Houses of Parliament follow their example. Then we will not in future be able to discuss the matters of this department meaningfully, and take decisions in that regard. I think that I have, with this, devoted enough attention to the opposition’s comment.

We on this side of the House are of the opinion that the change in policy strategy, which the hon the Minister announced, is timeous and advisable. We agree with the other principles which he set out in his budget speech. The Post Office must be managed according to business principles. Internal and cross-subsidization must be restricted to the absolute minimum. We are no longer able to adhere to what the Franzsen Commission asked of us so many years ago. The Post Office must continue—on this score I want to agree with the hon member for Overvaal— with training and must meet the needs involved. Of course, it can only do so if there is a demand for it. The hon member advocated that so much more should be spent, but if only certain number of people want bursaries, only that number of bursaries are made available. If only a certain number of people have the ability to occupy positions in Post Office departments, the Post Office only makes that number of posts available. It is no use building a whole university and have only one small group of people attend it.

In addition the enquiry on which Dr Wim de Villiers is engaged must be continued.

Finally, we also support the Post Office striving for a cost-related tariff structure. It is very clear that various growthpoints are developing within the communications industry in South Africa. There is a heavy demand for telephones in the developing residential areas—this is perhaps what the hon member should have taken into consideration—of the respective population groups. The hon the Minister quoted the figures. There is also a heavy demand for the various types of communication equipment and services in the commercial sector. This is another need that has to be addressed.

To quote an example, I want to refer to the report. There has been a growth of 129% in the telex terminal installations, and 11,8% growth in data modems, which is already equipment of a kind that is being phased out. There is also a growth-rate of 18% in the telephone trunkline network. I think the writing has been on the wall for a long time. In the developing countries small businessmen have begun to run their entire companies from their homes and their offices, owing to the growth in communications system technology.

We are already right in the middle of the electronic era of communications, and we must make a deliberate attempt to involve the entire nation in communications of this type. We must attempt to construct those installation by means of which we can expand and enlarge this system in all the Black and Coloured residential areas as rapidly as possible. This would be in the interests of everyone in South Africa. Communities in our country are expanding, and we must involve them in the expansion of the systems. I believe that the services rendered by the Post Office are not only going to play a cardinal role in commerce, industry and agriculture, but are already playing a cardinal role in the development of South Africa’s own electronics industry.

The consumer must be made aware that the telephone is not a status symbol. He must not only insist on having a telephone, but once he has that telephone, he must use it productively, and must not merely want it for the few times he is perhaps going to need it. If that is what he wants the telephone for, he must be prepared to pay for it. One cannot, with a tremendous infrastructure, try to provide everyone with telephones if they are going to utilize them unproductively.

The consumer must be made aware that the Post Office is not run like a government department from tax moneys. I also want to say this to the new hon members of Parliament. If the consumer demands the service, he must pay for it, and he must not make demands about how sophisticated it should be. He must simply accept that what the Post Office is going to offer him is going to be the most sophisticated equipment we can afford in the economic climate. It does not help us to consider purchasing a space satellite if we cannot afford it as this stage.

The greater the number of consumers making use of the infrastructure, the cheaper such a service will become. That is true. However, it must not then be subsidized within that department. We cannot allow some people to subsidize others in one department. I think it is time we got away from this subsidy business. I should like to repeat what I said in a previous debate, for the sake of the many new members who have entered the Post Office debate:

This was done many years ago by the officials of the Post Office, who were very far-sighted. The East Rand is a splendid example of this, and I want to tell hon members about it. There, where 40 years ago one found only mealielands, one will at present find South Africa’s, and the southern hemisphere’s, largest telecommunications manufacturing factories. The people of that region are no longer dependent upon the rainfall or the agricultural quality of that region. They are dependent only on their brain power, their skill and their ability to work hard and co-operate in the same factories with other people. We created good prosperity for ourselves in that region because we moved into this electronics era. That is why I want to tell hon members of this House that the future of South Africa lies in this industry. The Post Office made these things possible for us, and we must continue with it and expand it. That is why I am grateful that the hon the Minister came forward with this budget.

I think—this was quoted in certain newspapers last week—that South Africa is becoming the leader in certain sectors of the electronics industry, and that a fine future awaits the electronics industry in South Africa. That is why I want to welcome the fact that there are so many positive aspects in this budget.

I believe this makes us less dependent on the import of telecommunications equipment, and it makes South Africa one of those multinationals that are becoming involved in exports. The hon member referred to a few other products. The Post Office must render assistance in this connection, because the Post Office is at present the largest utilizer of electronic equipment in South Africa. It supports the growing electronics industry, and it helps us to provide our people with that training to which the hon member for Overvaal referred.

The Post Office budgeted a million rands for the training of its own people. I want to ask the hon the Minister to continue along these lines. No one else in this country will train those people for the Post Office. The Post Office must train those people itself. We are aware of the role the Post Office is at present playing in the manufacture of various electronic equipment. I want to refer to optical fibre cable. Previously it was inconceivable that optical fibreglass cable would be manufactured in a community such as Brits. At present, however, there is a wonderful set-up in that area.

Quartz crystal—this is a strategic material— which is used in many branches of the Defence Force, is at present being manufactured in South Africa. If the Post Office had not insisted on this, we would never have succeeded in doing so.

I have also referred to telephone exchanges. South Africa is taking the lead in the area of electronic telephone exchanges, thanks to the Post Office. I can carry on at length, but I think I have said enough in respect of these matters. I think I have demonstrated that the Post Office is making a contribution towards putting South Africa into the lead. I want to tell the hon the Minister that with this budget he has again taken the lead. We agree with him that certain tariff increases were necessary, but we shall definitely have to consider the way in which we make these tariff adjustments in future. I should like to support this motion.

Mr Speaker, if the hon member for Boksburg will just listen to some of what I have to say, I will explain in greater detail what I meant when I said that current users were being ripped off for the benefit of future users of the Post Office.

Hon members will recall that last year, I did not see eye to eye with the then Minister about the Budget. The facts would seem to indicate that in fact I was far closer to the truth than he was. It is obvious that the then Minister did not understand the arguments I put to him. Alternatively, it could possibly have been the case that because his mouth was open, he could not think on his feet.

Have you paid your account? (Interjections.)

There are, however, some pieces of information which he gave us last year which one can use to measure last year’s performance and to evaluate the new Budget. Let us first look at last year’s performance and at what the present hon Minister had to say about it.

He said that he was pleased to inform members that the Post Office had achieved a better result than originally expected. He attributed this to four factors, namely strict economy measures, a slight improvement in telephone traffic, higher interest on investments and a strengthening of the rand. The net effect of this was a turnaround of R150 million, which wiped out the deficit from the previous year and also provided a surplus of some R43 million.

Finally, the hon the Minister looked very pleased about the whole exercise. He even persuaded some observers that we should also be pleased about last year’s performance and that we should be thankful for this year’s tariff increases, which he implied amounted to only approximately 8,8%—a figure below the rate of inflation. However, let us take a more critical view of last year’s performance.

As pleased as the hon the Minister may have been about last year’s performance, and as much as he may have attributed it to strict economy measures, any similarity between last year’s Budget and what was really achieved seems to be purely coincidental. The hon the Minister chose to highlight a few figures, but he did not quote the real fluctuations between the Budget and actual performance. Let us therefore look at some of these.

Let us look at operating expenditure, starting with personnel. The hon the Minister said that operating expenditure was down R47 million, implying to the casual listener that this was perhaps due to the strict economy measures to which he had referred. He also said that a large saving, namely R51 million, had been achieved on personnel expenditure, implying once again that this was some additional saving. However, when one looks at the situation carefully, one finds that personnel falls under the same heading as operating expenditure, and that net operating costs have in fact increased by approximately R4 million. That still does not give the true figure, however.

Last year I said that personnel expenditure had been overbudgeted for to the tune of approximately R120 million, depending on what assumptions one made. I used a figure of 1% growth in staff because I took the then Minister at his word when he said that in the current climate, personnel growth would be kept to an absolute minimum. During the previous year personnel growth had been 0,9%, and so I used a figure of 1%. The Minister then reacted like the proverbial child with his hand caught in the cookie jar, but he did reveal some secrets to us later. For instance, he told us what it cost to put Black labourers on salary scales, and he detailed the cost of parity. Last but not least, he told us that he had in fact budgeted for a 3% growth in staff, notwithstanding his stated intention to keep staff growth to an absolute minimum.

The next point was overtime. That was over budgeted for to the tune of at least R4 million, as I said last year, because he based it on 7,5% of the inflated salary figures and not the usual approximately 7,3%. As it is, it is back to that sort of figure, and therefore the so-called saving was in fact a saving on an inflated figure.

Taking into account the real growth of 1,7% and the 10% salary increase of last year, my projected cost of salaries amounted to R926 million. The actual figure was R923 million, which is a sight nearer the mark than the hon the Minister’s budgeted figure last year of R972 million. [Interjections.] All I can say, therefore, is that if one takes away the overbudgeted figure for last year, then the real saving or the real figure is much closer to approximately R30 million and not the R50 million that the hon the Minister cares to highlight.

*Let us examine some of the other items of operating expenditure. The hon the Minister pointed out a few selective differences between last year’s Budget and the actual figures, and he will say that they are the result of good economy measures. However, let us look at some of the other deviations that he failed to mention. The amount spent on International Commitments is R26 million, or 8% less than was budgeted for, and the contribution towards the development of satellite systems is R16,5 million, or 87% below the budgeted amount of R19 million. How does one explain this? Surely it is not a deferred amount, for I notice that the present Budget is just the same. Apparently that was another one of those items that were used last year to inflate the Budget. Losses amount to R24 million, or 65% less than the amount budgeted for. Could the Minister perhaps explain the saving of R12 million under “Standard equipment”? What has become of that equipment? Why is it no longer being written off or depreciated?

As far as the financing costs are concerned, there was overbudgeting to the tune of R73 million or 11 %. Of course, it is in terms of financing costs that one measures financial control. However, when one looks at the various deviations under that same heading, one wonders how on earth one could be so wide of the mark if there were proper control measures. For example, the amount for the cost of loans, stock and bonds is R24 million less than the R28 million budgeted for. In respect of interest on loans, stock and bonds the amount is R47 higher than budgeted for. The Minister says it has to do with interest rates and exchange rates, but how can one …

Order! The hon member must refer to other hon members as “the hon member” or “the hon the Minister”.

Mr Speaker, I shall do so.

I should say that interest rates have shown a downward tendency. This being so, why was it necessary to pay R47 million more in interest? The interest on Savings Bank certificates was R25 million or 11% more than budgeted for.

These deviations from the Budget, of which there are far more than the hon the Minister mentioned, reflect, in my opinion, a rather poor attempt at strict financial discipline.

As far as capital expenditure is concerned, the Minister said that there had been a saving of R47 million. I assume that this will not affect the ability of the Post Office to meet the explosive demand, for I see that the capital expenditure is mainly on buildings, while the expenditure on equipment is in fact slightly higher than budgeted for.

This brings me to the next heading: “Amounts from operating surplus”. The Minister …

Order! The hon member must please co-operate with the Chair. I am very patient and I enjoy listening to the hon member, but I have directed his attention to the rule of this House which requires him to refer to other hon members as “the hon member”. I realize that the hon member is not doing this on purpose, but it becomes a habit and he must please concentrate on using the correct form.

I am sorry, Mr Speaker.

†I now want to look at the question of revenue. Here again the hon the Minister…

Well done!

That is better; the hon member may proceed.

… is very misleading in his speech in that he attributed the R151 million increase in revenue to “the sustained improvement in the economy” which to the uninformed listener would indicate a greater usage of the services of the Post Office. The truth is that only R5 million comes from operating revenue whilst R145 million can be attributed to a massive 157% underestimate in respect of non-operating revenue.

Let us look more closely at non-operating revenue. Insofar as the question of interest is concerned, it again seems that financial management is more or less non-existent. On an amount of R71 million budgeted for the estimate was out by R96 million. This means an increase of 135% on the interest earned. One can ask how this is possible during a period of declining interest rates. Even if most of these funds were invested in the USA—that is the only place where we can really talk of an improvement in the exchange rate—we still cannot account for such an error in last year’s Budget.

I now come to the question of dividends. Here the previous Minister was out by R27 million on the R9 million budgeted for. I believe the previous Minister who believed that R20 per month was enough to live on could recognise a good investment when he saw one but he still underestimated the magic of it to the tune of 300%.

As regards profit-sharing, the figure was out by R22 million on R12 million—this is 89%. That previous Minister certainly chose his partners well! This heading again has to do with financial management and the fluctuations I have pointed out certainly do not give confidence that the department is in proper control of this very important aspect.

When we look at real operating revenue we see that the telephone service is up by R43 million or 1,5%. This is not a bad estimate. However, the other services actually cancel out that R43 million gain.

As a final assessment, one could say that last year’s Budget was misleading, because there was overbudgeting to give the then Minister room to manoeuvre and to hide an inadequacy in financial management. I shall deal with some of the items when we discuss the current Budget at the Committee Stage. However, as in the past, one needs much more information than just a comparison between the final figures for this year and those for the previous year. The various figures as they are reflected in the Budget, are the product of a volume and of a rate. I think the department would make the debate much more meaningful if they were to include for discussion a working document, similar to that of the SATS, where the hon the Minister’s assumptions on the various parameters that influenced the Budget are set out. One would then be able to talk about his assumptions and not simply compare figures. With regard to policy, the hon the Minister referred to the study that is being made on financial arrangements. However, he also slipped up in that he failed to report on a very important aspect, viz loan redemption and period of depreciation. The previous Minister promised to tell us about it in this year’s Budget.

This is a very important issue, because the redemption period for loans of the Post Office is on average only six years, whereas the depreciation is 25 odd years. This is patently absurd and, I think, one lesson that one can learn from any bankrupt is that there is no better way to land in financial trouble than to finance long-term assets with shortterm funds. However, that is not all: There is still a component of internal funding from revenue, which adds to the burden of current users.

If it was merely a case of providing and maintaining a fixed network for a fixed number of users then those users can at least say: Well, let us pay up now because we will benefit in the end. However, because there is an explosive demand for services the system needs to be extended for future users and therefore current users can rightly claim that the redemption period should be brought much more closely into line with the depreciation period.

Let us now look at technological advances. The problem of depreciation becomes even more difficult when one talks about quantum leaps in technology. It means that one does not only look to replacing equipment at the end of its functional life but that in order to remain efficient and for economic reasons one can replace equipment that has become obsolete long before its functional life has expired. Provided that such new equipment is financed from loans the redemption period of which is more or less the same as the life of the equipment, even current users can obtain an immediate benefit. This also makes a mockery of the practice of allowing for a higher replacement value because the equipment that is to be replaced will cost a great deal less in terms of its historic value than the new equipment. This I believe is a totally unfair practice and a spill-over of the past or from other departments where equipment to be replaced is to be replaced by equipment of more or less the same type. I am not satisfied that the benefits of the new generation of equipment are fully exploited both for the benefit of users and in order to put South Africa on the map in the world of electronics.

I therefore ask the Minister to appoint a study group, involving the private sector, to investigate the feasibility of a rapid replacement of old-generation equipment, especially in the telecommunications field. Such a programme can be of great benefit to the local electronics industry and make South Africa not only self-sufficient but also more competitive on world markets in this industry of the future.

As regards the detailed estimates, I shall deal with them during the Committee Stage. May I say at this stage that I cannot detect any gross laundering as in the previous Budget but then the hon the Minister may have various ways of concealing this which I have not been able to discover!

In conclusion one can say that the Post Office may be operating in a wonderful technological world but at the same time it is also operating in the socio-political environment of South Africa today. In that regard I think the Post Office has a great deal to learn. It was disconcerting to learn that the Post Office Black Staff Association that was established only some 18 months ago was still so disorganised that it took them quite some time to get to the negotiating table. However, the tendency today is towards freedom of association in the workplace and for unions to fall under the umbrellas of federations. I certainly do not think that the Post Office workers will be excluded from this tendency and I want to hear from the hon the Minister what his views will be and what his intentions are if, and not when, the staff association seeks incorporation into one of those umbrella associations or if one of those unions asks for recognition from the Minister.

Given the increased confidence for an upturn in the economy; the fact that the investigation into financial arrangements has not yet been completed; and for the reasons I mentioned earlier, viz that I do not think current users are obtaining the benefit of modern equipment and because of the old style of financial management, we certainly cannot see our way clear to passing this Budget. I believe the hon the Minister could have added to that confidence by pegging tariffs for this whole financial year.

I therefore wish to move as a further amendment:

1. (1) to apply the tariff increases only from 31 March 1988;
2. (2) to appoint a study group, involving the private sector, to investigate the feasibility of a programme for the rapid replacement of all telecommunications equipment with modern equipment; and
3. (3) to close the gap between the redemption period of loans and the depreciation period.”.

Mr Speaker, I should like to open by asking the hon member for Greytown—on the strength of the amendment he has just proposed—who is to pay for those replacements which he advocated. On the one hand he devoted 40% to 50% of his time to conducting a discussion on the demerits of previous appropriations and the shortcomings of the present one. He merely provided an historical survey. I believe the hon member would do well to abandon engineering and become an accountant in preference, to enable him to study the historical figures.

He did it well!

What is your opinion?

It was poor! That is what I have to say about it. [Interjections.] I thought the hon member would refer at some stage to the matter on which he attacked the hon the Minister earlier this year. I am holding The Citizen of 20 February 1987 in which a report bears the following caption: “Cronjé complains about phone bug”. The hon member would have been better advised to tell us about that. He should have informed us of the solution to this matter about which he made such an enormous fuss—the so-called “phone bugging”—which supposedly took place last year and the inconvenience and danger to which it allegedly exposed him and his family. Instead of relating this to us, he said R4 million was both too much and too little.

I should also like to refer to the hon member for Overvaal. This hon member moved an amendment here and on reading it I must say I find it typical of a fowl scratching about but I am not comparing the hon member for Overvaal to an animal. I merely mean his actions resembled those of a fowl scratching about in an attempt to build its nest. Right at the end of his speech my “friend”, the hon member for Overvaal …

Your friend?

Yes, he is my “friend”; which is why we can differ so seriously. Right at the end of his speech he tried to make something of the Budget. Eventually he turned to politics again, however, and not to the Budget. I do not hold this against him as I believe the Budget is a very good one. I believe the hon the Minister has succeeded in introducing a very, very good Budget for the Post Office from an operating point of view, especially against the state of the national economy, inflation and various other existing problems. I should like to congratulate the hon the Minister on this as well as staff assisting him.

While on the subject of staff, my hearty thanks to the hon the Minister and his staff for their willingness to provide us with information requested in the standing committee as well as for its immediate dispatch as it was requested by members of that committee. I wish to thank them sincerely for this on behalf of my standing committee.

In addition, I want to take the opportunity of thanking the Post Office which proved a very good partner to each of us sitting in this House as well as of those who did not succeed in the election. The role of the telephone in modern elections is increasing in extent and importance. It often happened that the Post Office had to make a large number of telephone lines available at short notice— lines required around the clock on polling day. I believe I am speaking on behalf of us all in thanking the Post Office and its staff for their contribution to the smooth course of the election.

I wish to proceed and refer to something most interesting which occurred in my constituency—the building of the Posmed head office. This head office was opened by the Post Office at the end of last year at a cost of R1,8 million.

You are being favoured.

Let me tell the hon member that the Posmed articles of association specify that that head office should be in Germiston. The hon member need therefore not be concerned; when a new one is built, it will be done in Germiston again.

Primrose at least.

But I want to express my thanks that Primrose was chosen since Germiston has three constituencies as the hon member knows.

Posmed has been a very interesting development within the Post Office over the years. Consequently additional benefits are being offered in State enterprises today of which medical aid funds are one of the most important benefits in any undertaking.

Many years ago Posmed began very humbly and is a huge organisation today. It serves approximately 100 000 people of whom almost 45 000 are Posmed members.

Although Posmed is reserved for White workers, there are four separate medical associations, each with its own management, controlled by four different groups. These four associations are operated in the same way, one is not favoured above the other, they are all treated equally and are subsidised in the same manner. As an example, the Post Office general fund contributes R2,00 for every R1.00 contributed by the worker and this applies to all population groups. I think this is a factor even private enterprise would do well to examine as an example of equal treatment of workers.

I wish to convey my heartfelt thanks to everyone employed by Posts and Telecommunications and in particular the people on the Witwatersrand for ensuring that the service continued during a strike, which could have assumed reasonably serious proportions—which it did to a certain extent. Nothing occurred to disrupt the service and we wish to convey our most sincere thanks to those people who put in so many extra hours and were prepared to minimize the negative effects and side effects of the strike.

In a last reference to Posmed I wish to say I hope it will continue to furnish its people with the good service they have had up to the present. It has performed exceptionally well recently, also as regards its finances, but I think we have reached the stage at which the escalation of medical costs will cause Posmed problems in the long term too. At this early stage I wish to ask the hon the Minister to examine this aspect timeously before Posmed perhaps—there is no indication that this will actually take place—takes the same course as certain other medical funds which had to be taken over and saved, as we saw recently in Cape Town. Care should be taken in good time that benefits provided to people remain as good as possible within a reasonable price category.

I wish to proceed to the finances of the Post Office. I consider it important that we examine these finances at this stage as this is an enormous organisation with an exceptionally large work force. Post Office staff increased by 1,7% according to the hon the Minister’s appropriation, which indicates that productivity must also have increased phenomenally.

I now wish to revert to the hon member for Greytown who said in the second part of his amendment:

This is a most commendable motion and I support it, but my criticism of the member is that he did not add “within the financial capabilities of the country in the first place and the Post Office in the second”.

I wish to discuss this because we have quite a major capital problem in South Africa. We know that capital flow to South Africa has been cut off on a large scale and that there are certain other standstill agreements, etc. To my mind the Post Office is following the right course by using incentive capital it is able to obtain from abroad to finance goods people sell us—as it has done up to the present. Nevertheless there is still a large need for capital in this country.

I wish to thank the hon the Minister for preparing his Budget in such a way that he is not placing further pressure on domestic capital requirements of the country but is borrowing only a very small portion there. If the hon the Minister of Finance follows the example of the hon the Ministers of Communications and of Transport Services who both go to the capital market for a minimum of their financing, I think we are on the right road when it comes to providing ourselves with capital. It is my impression that this will be the future course we shall have to follow. We shall have to consider becoming independent as far as possible in South Africa as regards capital.

We are going to pay for apartheid, aren’t we?

Yes, the hon member for South Coast spoke about the photograph of the hon member with his hand raised and I wish to tell the hon member we would prefer to pay for apartheid than finance what he advocates and what was rejected by the voters. His party was returned with reduced numbers.

I want to add that the appointment of Dr Wim de Villiers also reflects a very sound tendency. Every undertaking should undergo self-examination from time to time to see whether it is on the right road, is taking the right action and is still offering a market-related product. Hon members should bear in mind that Dr Wim de Villiers is dealing with service organisations in his inquiry into Transport Services and the Post Office. These people do not sell products. If a person does not use his telephone, the income to the Post Office from this is merely the rental regardless of money spent on equipment in making that instrument available for use. The same applies to an aircraft that has to take off even if there are a few empty seats. Those empty seats are useless as one cannot sell them again. I therefore think it right to conduct an outside examination of these service organisations from time to time.

I also consider the philosophy of cross-subsidisation, which is being addressed here, correct. Although all these State services fall within the socioeconomic and even the political cadre, it is a good thing to know exactly what each service is costing us. The Post Office system will be so refined one day that each subdivision will be able to calculate its income and expenditure exactly, enabling one to determine ultimately what remains below the line in the red area—profit or loss.

I should also like to discuss the problem I foresee regarding agency services offered by the Post Office. I think the services all yield a splendid income and the Post Office should continue expanding and operating its services but agency services pose a problem to me. From information at my disposal it appears that remuneration received by the Post Office for agency services amounts to just over 1%. I think the hon the Minister and his staff should publicise this information more widely as there are a large number of people in the private sector who would like to make use of these Post Office services. A payment of 1% is so low that no one could provide the same service as cheaply. We should see whether we should not raise some of these tariffs slightly. This should form part of Dr De Villiers’s terms of reference—I believe this is so—to evaluate agency services and to see whether the remuneration of 1,1% which is obtained for rendering the services represents an economic return. If so, I know of no one else capable of supplying the services much more cheaply. [Interjections.]

This brings me to the point of financing and a possible new issue of national savings bank certificates. The Post Office is in the unique positon of financing itself to a great extent through its ability to act for the Post Office Savings Bank, Telebank and others in terms of the Post Office Act and certain concessions made by the Treasury. I think this should be encouraged because it ultimately benefits everyone in this country if the Post Office can also earn money in this way.

It may be said that the Post Office has certain advantages as it is able to give tax-free interest up to a certain maximum per person on certain investments, for example Post Office Savings Bank certificates—if my information is correct. This also applies to building societies, however, so each has that advantage. If the costs are calculated, I think that at some stage there will be insistence that it be abolished so that the Post Office will be able to compete with other financial institutions on an equal footing.

We are on the threshhold of the electronic age and this may be applied to the benefit of the Post Office. There is the present link-up with Saswitch for instance and an additional 2 200 teller points may be used by the Post Office. I therefore want to appeal to the hon the Minister of Communications and his staff to make financial services available on a larger scale at post offices. When travelling one finds there are no banks or building societies in certain places. There is always a post office, however, and in such a small place it is often the only financial institution where a large number of people are able to save and draw their money safely.

The first time I saved money I also did it with the Post Office. We bought stamps at school which had to be pasted onto a blank certificate. A full certificate was worth ten shillings in those good old days. We collected a few such certificates and later exchanged them for cash again. Many of us among the old guard—I am not speaking of youngsters now—must have started saving with the Post Office Savings Bank at school.

[Inaudible.]

Even the hon member for Greytown falls under the groups which should have saved at the time.

The tenth series of National Savings Bank Certificates was closed on 1 September 1984. For the sake of the advantages to both the Post Office and the investor, I wish to request the hon the Minister of Communications to consider issuing National Savings Bank certificates again in future in an eleventh or new series. This will give the Post Office the opportunity to enter the retail capital market and also offer the man in the street the opportunity to venture into the bond market on a very small scale. If the hon member for Greytown’s second amendment should be adopted, the Post Office will also gain from its financing because the only way we will be able to finance it will be to recover it from the man in the street.

I also wish to request the hon the Minister of Communications to attempt a further extension of advantages to the Post Office in current financial markets. I want to ask the hon the Minister to investigate whether there may be further services which can be paid directly through Telebank. When one examines figures on the number of people paying their telephone accounts directly by stop order through Telebank, the first year was an enormous success. I do not wish to enumerate further fields here as I think it is the duty of the Post Office general management to deal with this matter and announce whether it is able to extend these services further.

Mr Chairman, I would like to say that I found the hon member for Primrose’s comments interesting and authoritative. I can only wholeheartedly endorse what he had to say about the officials of the department.

The hon member for Greytown must be congratulated for his thorough research of the Budget. He has quite obviously done his homework and I look forward to the time when I, too, through experience, can make so detailed an analysis of the Budget in question.

I am sorry that the hon member for Boksburg—it looks as though he is not here now—politicised the debate with his comments addressed to the hon member for Overvaal. For that reason I wish to separate my comments on the Budget into two sections. The first relates to the way in which the department is being run; the hon member for Boksburg knows full well to what extent the officials have contributed to that success. The second relates to the political running of the department.

I have a particularly soft spot for the Post Office and the Department of Posts and Telecommunications. I am the son of a public servant and my late father was, when he retired as a result of ill-health at the age of 39, the deputy postmaster at Kimberley. I have therefore watched the development of the Post Office over the years with a proud but critical eye. I have also observed the increase in its efficiency with great personal interest. What has been achieved in the face of at times serious problems is gratifying to see.

I have also had the pleasure of being associated with officials of the Post Office through the opening during my year of office as mayor of Bedfordview of a new post office in that community. I was a member of the town council that took the decision to erect that building and I am happy to be able to report that the increase in activity since the opening of the new post office has more than justified that decision. I have also both through business and politics had and still have a close contact with the Post Office and can and must from my experience congratulate the hon the Minister on the standard of efficiency attained by Post Office officials, sometimes under very adverse conditions. There have been achievements but there have also been faults. I think particularly of the disaster surrounding the introduction of the Disa ’phone. It would be interesting to know what that cost the department. However, I still think that the efficiency of our Post Office and the development which it has attained rank it among the best in the world.

I have also had contact with the ramifications of the department in other fields by virtue of my employment with a supplier of electronic equipment; up to then it had been a multinational company but was subsequently taken over. Although I was not involved with the technological side I certainly had quite a good insight into the difficulties and the efforts which went into the upgrading and streamlining of the whole operation of the department.

On the subject of the political decisions I would like to ask the hon the Minister to what extent the policy advocated by the Government, the policy of the narrowing of the wage gap, has been responsible for the increases which we have experienced and are still due to experience as far as the increase in tariffs is concerned. We all know that Professor Owen Horwood is on record as having stated that South Africa’s inflation is 50% due to the policy of the narrowing of the wage gap. I hope this is not applicable to increases in the tariffs which we have experienced now and in the past.

Some of the increases are obviously as a result of the anticipated 20% increase in bad debts to be written off and the resultant increased provision. It would also be interesting to hear—I would like to address this question to the Minister—whether these increases were perhaps not generated by an increase in inefficiency as a result of the policy of integration of services. I would be interested to hear the Minister’s comments in this regard. I would also like to know why the tariff increases are based on a revenue increase of 8,8% whilst the increases levied via the Budget range from 12% to in some cases 100%.

We on this side of the House are very glad to note that no further increase has been effected in the postal rates. I think that a crippling blow was dealt to many companies that use the postal services, particularly the mailing services, extensively in their operations, as a result of those tremendous increases over the past 18 months. It was good to see that those rates were not once again increased.

In closing, in view of this, I would like therefore to support the amendment of the hon member for Overvaal that the House declines to pass the Second Reading of the Post Office Appropriation Bill unless and until the Minister gives the assurance that he will announce no further tariff increases during the financial year.

Order! Before calling upon the hon member for Umlazi I should like to point out to hon members that Mr Speaker has clearly stated that hon members and Ministers must be referred to as such.

Mr Chairman, I still find it strange that we have seen here again, this afternoon, these two opposition parties both obsessed by tariff increases and not wanting to take the other side of the coin into consideration.

In the past few weeks we have been given notice of salary increases, not only for public servants and Transport Service officials, but also for officials of the Post Office, and the only comment we have been able to elicit from opposition parties in this House has been criticism of these increases—that they are too small. The hon members in these two parties have never lodged any objection to the principle of the Post Office having to be administered as a business undertaking. We have general consensus in this House that the Post Office should be run on business lines, but when it comes to the financing of expenditure, such as salary increases, hon members on the other side of the House can apparently not comprehend that those costs have to be met in some way or another. Instead of the hon members of both opposition parties telling the country that they are satisfied and happy with the overall cost increase, the overall tariff structure increase, being about 8%, which is considerably less than the inflation rate, they come along with complaints about tariff increases, without presenting the public with the other concomitant aspects.

This afternoon the hon member for Primrose raised a very valid point, and that is that the Post Office, like any public administration, has to examine the costs of its services. This afternoon I also want to refer to certain aspects of the services of the Post Office, the cost of which we are obliged to consider. The hon member referred to the costs of agency services—the recovery costs for various other departments. I want to refer, more specifically, to various costs involved in the training of technicians. I am sure you will permit me just to refer briefly to certain aspects of this training programme—it is something that should actually be done during the Committee Stage—and then eventually to bring to the attention of the House the specific conclusion I want to draw from that.

Apart from all the other special services which it furnishes in this country, and apart from the fact that it is an essential creator of infrastructure in our economy, the Post Office also has the singular distinction of always having trained its own technical staff. I believe that one of the reasons why the Post Office can take pride in the fact that it provides one of the most efficient services in the world is that it does not skimp when it comes to the training of its staff. All the technicians serving in the Post Office undergo a three-year period of training. This training’s so intensive that only the first-year training, ie the reasonably general training, can be furnished at technikons and technical colleges, whilst the more specialised training is provided by the Post Office itself. And that is not all. It is not only the technical polish that the Post Office gives its staff; it also enables its technicians to specialise even further. A technician can advance to the level of technologist and, apart from that, at the more general level there is also training for those who want to become telecom electricians.

These training facilities are available throughout the country. We have Post Office training centres in virtually every part of South Africa. Here in the Cape at Milnerton we see, at the moment, large extensions being effected to the training centre. In the city I come from, Durban, there are also large extensions being undertaken at present. Each year the Post Office furnishes between 3 000 and 4 000 new technicians which the Post Office itself has trained.

The important point I want to make is that this training is a costly item. It costs the Post Office approximately R38 000 to train an N-stream technician and approximately R46 000 to train a T-stream technician. One can say that it costs the Post Office approximately R40 000 to train a Post Office technician.

Telecom electricians, like the technicians, receive a three-year period of training in the Post Office. The costs involved amount to approximately R28 000.

One finds that the Post Office manages to retain its technicians in periods of an economic slump or recession; in other words, in times such as those we have experienced over the past few years, the Post Office retains its personnel. As soon as there are renewed signs of an economic upswing, one finds that the Post Office is the place where numerous other industries recruit their technically trained people.

I think it is now relevant for us to give attention to these matters because, according to the economists, we are now on the threshold of a new economic upswing in our country. The truth of the matter is that the Post Office does feel that this is in the process of happening. The last period of economic prosperity that we had in the Post Office was during 1981-82. At that time the Post Office lost 500 of its technicians and 800 of its telecom electricians. If we bear in mind the costs involved in the training of those people, we find that it lost R20 million in training costs on its technicians and a further R22,4 million in training costs on its telecom electricians. If one also bears in mind that this overall loss of R42 million is as much as the revenue furnished to the Post Office by two of its sources of revenue in the past year, ie the total revenue it obtained from monetary transfer and agency services, one finds that the Post Office suffers material losses in revenue because of the fact that it is also a training field for other bodies.

It would have been all very well if the Post Office were responsible for the overall training of the community as a whole, but that is not the case. The Post Office is run as a business undertaking. It is therefore responsible for providing a service to its clients. If the Post Office loses R40 million per annum, in times of economic prosperity, on the training of technicians and experts to meet its own needs, and if it is indeed to be run as a business undertaking, it has to be compensated for that loss of R40 million.

There are two ways in which the Post Office can be compensated. The one is by way of direct subsidisation by the State. It is probably possible for the State to take the view that it is responsible for the overall technical training of the population. It is, after all, a fact that in the past few years the State has spent large sums of money on training in general; to teach people new skills. In that sphere the State has also made great strides.

Here, however, we are dealing with postschool vocational training, and we are not a socialist state. We believe in the individual either paying for this training himself or through organised private industry. I would therefore say that the other manner of compensating the Post Office for its losses should also be investigated.

This method involves encouraging alternative employers—those bodies which entice trained technicians away from the Post Office in times of prosperity—to participate in the training of their own technicians. We know that the Post Office is, to a limited extent, taking steps in this direction. During the past few years the Post Office has, to a limited extent, made training facilities available to bodies such as Escom and the SADF, to help with the training of technical staff.

I want to propose, however, that we continue with this. I want to suggest that the suppliers of automatic exchange services, the suppliers of electronic items in general and private undertakings should also be encouraged to make use of the Post Office’s training facilities. These training facilities should be made available to private undertakings and they should be encouraged to make use of them, for example by incentives such as special tariffs for their use of telephones, and so on. Companies participating in the training of the Post Office’s technicians should therefore pay reduced tariffs for the use of telephones.

Only if we go further along the adopted course and extend the partnership between the Post Office administration and private entrepreneurs, can the Post Office halt this drain on its trained personnel, be compensated for its losses in a justifiable manner and, in truth, increasingly be assessed on the strength of business principles.

Mr Chairman, I attended my first meeting of the standing committee to discuss the Post Office Appropriation Bill. I must say that I, too, was impressed by the ability of the Postmaster-General and his deputies to answer a wide range of questions thrown at them on a variety of topics during the course of several hours.

However, in the course of quieter moments, one is often able to sit and think more reflectively about particular matters that concern one. The picture that is sometimes painted for one by people in charge is not necessarily always as rosy as it would first seem to be. That the Postmaster-General and his deputies are able and competent people is of no doubt. There are nevertheless some areas that concern me, and I wish to mention them today.

The hon the Minister mentioned in this House the other day that R150 million was invested in the running of the 13 well-equipped training centres and in the training of students of all population groups in various fields of technical work. At present, we are informed, there are some 5 000 people in training. We note, too, that the Department of Post and Telecommunications has in fact budgeted to spend some R4 743 000 on training this year, which represents an increase of R1 846 000 on last year. This is an increase of approximately 60%. This is a substantial increase, but of course the R4 763 000 is only a drop in the ocean in respect of the real cost of training when one takes into account the fact that each trainee receives a salary, as well as the depreciation of training equipment and facilities etc.

No one denies the importance of training, particularly in the field of electronics, telecommunications etc, if the Post Office is to provide a good service. The hon member for Umlazi also referred to this fact today and he went into this and other points in detail. The point to be made, however, is that the cost of training people for work in the Post Office is great, and is obviously increasing rapidly if the budgeted figures are to serve as a guide. Yet the hon the Minister himself has said that the private sector has cut back greatly on the training of technical staff, and he has implied that the Post Office is carrying the greater part of the burden of training people in the field of telecommunications technology in particular and other related areas as well. In fact, in The Argus of 24 October 1986 it was reported that Mr Johan de Villiers, Deputy Postmaster-General for Personnel and Technical Development, had said that the Post Office was no longer financially able to train technicians to meet the needs of the entire country. He appealed, therefore, to major employers “to do something about technical training requirements”.

The hon the Minister made no mention of this during his Second Reading speech. It would seem, therefore, that the Post Office will continue to train people to meet the needs of the whole country, despite the fact that it is costing the Post Office millions of rand per year. Unless something is done, the matter becomes farcical. I cannot accept that it is in the best interests of the country as a whole— and certainly not of the taxpayer—for the Post Office to have the turnover of skilled staff that it has.

On page 33 of the 1985-86 annual report of the Postmaster-General, reference is made to the fact that, and I quote:

It gives cause for serious concern that the Post Office is unable to provide the incentive to retain the people they have trained at great cost and at great length, and that the private sector seems intent on simply sitting back and waiting for the Post Office in turn to produce the trained people they require, after which they will entice them across with apparent ease. It is clear that the terms of employment offered by the Post Office in respect of issues which appeal to the young person, such as salary, job opportunities, promotion opportunities etc, are not satisfactory. No doubt this will remain the case for as long as the public service remains as large and as cumbersome as it is, and departments such as the Post Office are likewise affected.

For many years there has been a call for investigations to be made into the overall rate of productivity of the Post Office and for steps to be taken to improve productivity. There has also been a call for an investigation into finding ways and means of retaining skilled staff once they have been trained. Each year we see a growth in the number of people employed by the Post Office but what in fact is more important and more urgently required, is a streamlining of administration and a cutback in the turnover of staff.

When one talks about the employment of staff, one must also address the issue of discrimination in the employment practices of the Post Office. I have not had figures made available to me with regard to the number of Black, Coloured and Indian employees in relation to the number of White workers employed during the current year, but I have no reason to believe that these figures will have changed substantially from those of last year, ie for every 100 White workers there were 80 workers from the other three race groups combined.

I notice that in the annual report of the Postmaster-General the breakdown of the number of White staff employed as well as the number of Black, Coloured and Indian staff employed is no longer given; that in fact the number of staff employed is now grouped under a single heading. This is good in that it has removed apparent discrimination on the basis of colour as far as statistics are concerned, but I do not think we should be fooled by anyone. When we look at the figure of 97 392 people employed by the Post Office at present and we use the ratio of Whites to Blacks as 5:4, we see that over 50 000 people employed by the Post Office are white. When we look further at the more detailed figures provided up to and including 1984, we notice that in that year in the areas of management and general administration all posts were reserved for Whites, as was the case with those involved in the accounting section. The great majority of clerical posts were also filled by Whites. There were four Coloured, Black or Indian engineers as opposed to 321 Whites; 251 Black, Coloured or Indian technicians as opposed to 5 016 Whites; and 1 555 Black, Coloured or Indian electricians as opposed to the 7 530 Whites employed. It is only when one comes to the occupations listed as being for other technical and technical auxiliary staff and postal collections and delivery that one finds the reverse in terms of numbers employed.

Neither I nor my colleagues have reason to believe that these ratios have changed much. However, here I would seek clarification from the hon the Minister.

It would therefore appear that the Post Office, as with most Government departments, remains a haven for White employees. One can talk about parity in salaries, but it is essential in this country that one talks about the parity in job opportunities as well. It is important that the Post Office look very carefully into this matter. We are all well aware of the fact that in the private sector parity in job opportunities has gone a long way. However, there is a general belief that the public service should be leading the way.

Last year the PFP proposed that discrimination in employment be removed, and that call certainly continues today. This applies as much to training facilities that exist as to any other form of employment. It is important that aspiring people of all race groups are able to apply for and obtain bursaries and that they are able to attend training centres with the same ease as Whites are at present, so that they will be able to reach the highest ranks of employment in the Post Office or any other Government office for that matter. Until that happens and a real sense of competition is established, with people competing for top jobs in all fields of employment, regardless of race or language, I fear that the Post Office will never reach the full degree of productivity that it should, and that it will continue to lose the highly trained people which it can ill afford to do.

Mr Chairman, I listened with great interest to what the hon member for Durban North said. However, he argued against himself. Firstly he said that the cost of training was great—I think those were the words he used—and then he said that the private sector had cut back and that it was enticing the trained staff of the Post Office away. So which way does he want it? Does he want the Post Office to raise salaries and compete on the same basis as the private sector, because the only reason why the private sector can entice the trained staff of the Post Office away, is because of the salaries they pay. If we want to be on a par, then we have got to pay for the service that is rendered. Therefore I do not quite follow his argument along that line.

He also went on to say that parity in salaries must go along with parity in job opportunities, but I want to say to him that, equally, with parity goes responsibility and capability. That is very important and must be borne in mind.

I want to congratulate the Postmaster-General and his four deputies, on a very concise, easy-to-read and very comprehensive annual report on the department’s activities for the year under review. I intend to deal with only one facet and that is telecommunications, in particular the telephone system. I will also endeavour to put the tariff increases into their correct perspective as seen from the position of the department which is after all the provider of the service.

I think the key to that lies within the preface to this report. I know many hon members do not read this report but I would like to quote two paragraphs to them from page 5:

A very important point follows:

Under the changing circumstances an inadequate telecommunication infrastructure can become one of the biggest obstacles in the progress of the country.

How true those words are! It continues:

So far, so good. I think that is the key to getting the right perspective as to why we have increases. The report goes on to say:

That is 14 000 new telephones per month or 538 per working day. It is important to note that a further 29 manual exchanges were automated which means that 95,8% of the telephone users in the Republic are connected to an automatic exchange.

Furthermore the telephone density in respect of Whites increased from 71,5 per 100 dwellings in 1978 to 83,9 in 1986. In respect of Asians the increase was from 35,6 to 71,8. In respect of Coloureds the increase was from 19.3 to 53,2 and in respect of the Blacks living in metropolitan areas the increase was from 3.3 per 100 to 37,9 during the corresponding period. When one considers that we are still a developing country with a large segment of the Third World, the Department of Posts and Telecommunications has in my opinion achieved notable success in this particular area. I believe they deserve our sincere congratulations on their achievement.

However, like all achievements there is a price to pay and the price has been to keep pace with demand and to change to an electronic telecommunications network which has required exceptionally high capital outlays. Unfortunately, as the hon the Minister put it in his Second Reading speech, and I quote:

The position has to be rectified and I firmly believe that if we, the public, continue to demand a First World telecommunications service, urgent attention will have to be given to the price structures of providing the service that is demanded. This, with respect, is the only way in which the department will be able to continue to provide a service demanded from it by the public.

With this in mind I wish to touch on the increase in telephone installation costs from the present R90 to the proposed R125. This of course excludes the social pensioner who will continue to pay only a R25 installation fee. The cost of providing a telephone connection, excluding the administrative costs involved in processing this application and arranging and maintaining directory information, is estimated as follows: That telephone that we have installed in our home—and I am just looking at the Erica, which is a plain telephone—costs the Post Office R104.

Give that one to Colin Eglin!

If that hon member on the other side of the House had done a bit more homework, he might have been able to deliver a better speech than he did. I would like to say to that hon member that he made the pronouncement that, in two years’ time, his hon leader would be the State President. I take it then that he has aspirations to be the Minister of Posts and Telecommunications. I would just like to say: Heaven help us if that ever happens! [Interjections.]

Let us look at the cost of the miscellaneous materials required for the installation of the telephone. They amount to R10,23. That includes indoor wire, saddles, window block, drop wire, fastening, plastic and hooks. A technician has to put in the telephone and he has an assistant, or a “mate” as he is commonly referred to. His charge is R58,38 for the labour. The transport—which we shall take at a basic five kilometres in each direction, therefore 10 kilometres in all …

Who is “we”? You and whoever wrote the speech?

That is the department.

The transport costs amount to R3,05 which, in my opinion, is minimal. Then, in most cases, we have a jack installed, which comes to R3,55. The further labour charge is R7,30. The total amounts to R168,51, and that is just for installing the telephone.

I have excluded administrative costs and if one adds another R20 for those, the total cost to the department works out at roughly R206. So, in fact, the installation costs are being subsidised to the tune of R81 per installation. When one looks at that figure for the past year—that is the year under review—one sees that it amounts to roughly R13,608 million, just for installation.

However, let us compare these figures with some of the installation costs in overseas countries: In Australia it is R203, in West Germany it is R73, in the United Kingdom it is R313,41 and in the Netherlands it is R209. Let us go one further. Before one can install a telephone you must have the infrastructure to make it work. When one has dialled a number, one expects someone to answer. Without that infrastructure the telephone will serve no purpose.

When one looks at the new tariff for rentals— and these points have been highlighted by both the Postmaster-General and his deputy, and the hon the Minister in his Second Reading speech—one finds that rentals will still have to be subsidised by the amount of roughly R500 million out of telephone call charges. Therefore, to put rentals on a cost-related basis will mean future increases. In regard to the urban rental fee, for example, the proposed amount is R15 and the cost-related fee is R27 per month. If one looks at a party-line service, which is not automatic, the new fee will be R16 and the cost-related fee is R78. The new tariff for an automatic party-line service will be between R15 and R20 per month and the cost-related fee is actually R137 per month.

The situation with pay telephones is another difficult problem to work out because pay telephones do not generate any monthly rental. However, there the charges also have to be changed because capital and the interest have to be paid for, and the only way to do that is through the pay call system.

The problem is that current thinking is moving away from cross-subsidisation, which is something the hon member for Primrose said earlier. If subsidisation has to take place, it has to be shown as such in the books of account, so that everyone is fully aware of who or what is subsidising what. Reference has been made to the report of Mr Wim de Villiers. That is the general trend today, viz that cross-subsidisation can no longer be accepted. If we are going to have subsidies of any description whatsoever this must be clearly stated in the books of account so that everybody knows exactly what is going on.

This factor brings a very pertinent point to the fore, viz the position and the plight of our social and other pensioners in respect of telephones. The telephone to them is in many instances their anchor. It is their only means of communication with the world outside their home environment. The telephone to them is a godsend, an instrument of hope— hope, in many cases, that somebody, even their families, will phone them to enquire about their well-being and in so doing pass the time of day with them. To them the telephone is also an absolute necessity in times of sickness, in times of need and when they have to request police protection. It is their only means of communication with those who are able to assist them.

I want to state that the Government is very mindful of their position and has great sympathy for the plight of our pensioners, the elderly and the disabled. We fully realise that any increase in rentals or charges poses a serious problem to these people. It is not an easy problem to solve, though. To compound this very complex issue and the control thereof we have within our community a large number of pensioners. The November 1986 figures from the Department of Social Welfare were as follows: Whites 213 500, Asiatics 62 300, Coloureds 256 300 and Blacks 450 000—a total of roughly 980 000 pensioners. It is very difficult to determine how many of them have telephones but if one takes as an estimate that 40% of White, 20% of Asiatic, 5% of Coloured and 2% of Black pensioners are telephone users then on the present fee— that is the higher fee of R1l per month—the estimated loss of income to the Post Office is in the vicinity of R6 million per annum. Certainly concessions can be dealt with administratively but, equally so, concessions of this nature can only lead to a further demand for further concessions from all kinds of organisations because of the environment in which they work and their involvement with the senior citizen community.

Furthermore, concessions in my opinion will lead to further abuses. This is a recurring expense and the temptation to exploit every possible loophole is always present. Subscribers will always opt for a lower rental, for example where pensioners stay with their children which is often the case in our communities today. I personally would rather see a situation in respect of subsidies where a direct grant is given to our genuine social old age pensioners by the State or, alternatively, a further increase in tariffs could be borne by the public at large. That increase in tariffs could be used to offset the reduced tariffs to our less privileged elderly citizens. However, one must ask whether this is a fair way of going about it and whether the public at large would accept such a situation. I doubt it very much.

We have to be ever mindful not to put telephone costs beyond the reach of our less privileged senior citizens. This problem must be addressed as with greater life expectancy it will become more and more pertinent. Unfortunately we are unaware of any other country which offers concessions on telephone rentals to pensioners. I respectfully ask the hon the Minister and the department concerned to look again at this particular problem. At the same time I realise that the department also has a responsibility to all the users of its services.Some where along the line, however, I believe, a solution may be found to this very difficult problem in which our senior citizens find themselves. Therefore, Sir, I should like to suggest that the department look very carefully into this situation in relation to our senior citizens and that this is done in conjuction with the hon the Minister in order to establish whether some kind of solution cannot be found in order to ease the situation in which they find themselves.

Mr Chairman, I had the opportunity of listening to an explanation of the development of technology. As regards Posts and Telecommunications, no one in this House can entertain any doubts on the high degree of development in technology and the great contribution it makes to the success of this department. Nevertheless technology cannot succeed if it does not go hand in hand with the right human material. At the outset of this debate the Post Office staff received praise—as did the hon the Minister. The longer the debate lasted, however, the more we heard about the achievements in the electronic sphere, in the field of technology, and the more man himself had to take a back seat.

I should like to associate myself with those hon members who expressed their appreciation of the Post Office staff, with those who thanked the hon the Minister as well as with other speakers who contributed here. I am no expert in this field. I am sure you will soon gather that, Mr Chairman. This is my first speech dealing with the Post Office and technology but I hope I shall be able to contribute both in this and in later debates on these subjects.

On the subject of the people, it has come to my knowledge that a chaplain has been appointed for Post Office staff. One actually wonders whether one chaplain can furnish an adequate service to the diversity of religious denominations represented. I should therefore like to know of the hon the Minister in what measure this chaplain fulfils the purpose for which he has been appointed as well as the assistance which may be offered him.

I am convinced—as we have all seen—that increased tariffs were certainly essential in consequence of business and economic conditions prevailing in the country. There was mention that the Post Office should be operated on a business footing and to accomplish this increased tariffs are certainly necessary owing to the general economic conditions in the country. This prompted arguments that one could not get away from these increased tariffs because they were business related. I should like to warn, however, that one should not lose sight of the fact that tariffs have to be increased in consequence of their relation to the operation of a business undertaking but why—this is the question we should actually answer—should all business enterprises increase their tariffs in consequence?

The question then arises whether the fault does not lie with our general business management when all business enterprises are forced to continue raising tariffs for the ultimate balancing of their budgets. This does not apply only to Government departments but also business undertakings in normal private life which, to keep pace with the inflation rate, have to increase tariffs continually—something which in turn contributes to a higher inflation rate and which therefore completes this circle which certainly creates an inflation spiral—while every further increase contributes to it. Some salary increases were less than inflation rate; there were tariff hikes which were below the inflation rate, according to our information. We were also informed that further possible increases were on the cards in the course of this year which may perhaps cause tariff hikes to be equal to or even in excess of the inflation rate.

To avoid tariff increases, however, we should investigate the possibility of savings somewhere so that one may economise on expenditure and create an enterprise in which expenditure and income balance without the necessity of this type of tariff increase.

In my efforts to establish where possible economies could be effected by the Post Office, my enquiries revealed that the delivery of post represented huge expenditure. Possible economies may also be brought about by providing more postboxes. I believe it is departmental policy to supply more such boxes in new residential extensions and discontinue postal delivery services.

I could unfortunately not establish from the official concerned what the percentage saving would be here but I was assured that it would be considerable. I wish to ask whether the hon the Minister would not see fit to investigate whether we might effect a saving in this way which would decrease or even eliminate a further increase in tariffs.

One of the hon members commented that this would create unemployment but it can offer the private sector the opportunity to furnish that delivery service and then avoid that unemployment which would originate from the side of the Post Office by creating jobs for people who could deliver that post. Newspapers are already doing so by employing schoolboys or the unemployed to deliver papers. Consequently I do not believe it will create any unemployment; it may even promote employment.

I wish to request, however, if the hon the Minister were to consider and possibly adopt this method, there be early planning and relevant warnings issued, for instance that it is envisaged that Pretoria is to have postboxes throughout in 1989. The private sector will then be able to prepare for the collection rather than the delivery of postal articles. This is an extra task laid on the private sector or the user but I believe that no user has ever worked himself to death in this country of ours and the little extra effort expended on this could only do him good and perhaps even combat our health problems to some extent!

The hon member for Overvaal discussed the subject of training and bursaries and the private sector was also mentioned which in its turn entices these people, trained at a high cost of R40 000 per person, from the department. This is a problem the Public Service must always have faced but which was circumvented in great measure when the Public Service attempted to offer competitive employment and provided officials with benefits which could compete with those of the private sector. We are also aware that in various fields, for instance the legal profession, Public Service posts have been made so attractive that they are able to compete with those of the private sector and the Attorney-General could retain staff because salaries were made competitive with those of the private sector. This benefited both the State and the private sector.

If we examine salary increases here—we know there was a 12% raise—and we find such a large number of resignations—233 in a single year—we will also have to investigate whether these people, after the investment in their training has been made, cannot receive a competitive salary and benefits from Posts and Telecommunications to keep them in the department. The loss of a trained person of that kind is considerably greater than the salary increase would ultimately amount to circumventing this.

There was also considerable discussion on the privatisation of certain departments of Posts and Telecommunications. From enquiries and personal experience I have learned, however—I say this most respectfully to the great advocates of privatisation—that this is not the solution to everything. I can assure hon members that as regards Posts and Telecommunications the private sector will not be able to supply a cheaper ordinary or even business telephone service than the Post Office.

A further matter was merely touched upon in passing—the strikes which took place during the past few months. I have been informed that 5 000 workers went on strike and resumed work on 4 May. It is not clear to me whether all those strikers—I understand they were all re-employed—received their wages for the period they were on strike. I should like the hon the Minister to inform us whether they received their wages and, if so, how much they received and how many working hours were lost through these strikes. If they were remunerated in full for the period they were on strike—during this time their work had to be done by loyal workers—I want to ask the hon the Minister whether it would not rather be advisable to pay the bonus to the loyal workers instead. The striker, who did not know why he was striking and could not even air his grievances, should not have received remuneration for that period. [Interjections.]

The Post Office came in for considerable praise and I wish to associate myself with the hon member for Primrose who thanked the Post Office for the efficient way in which telephones were installed at short notice during the election. We on this side of the House also wish to express our thanks in this respect.

The matter of concessions in telephone services to pensioners and senior citizens was also broached. I respectfully submit that concessions in telephone services to these people are not the answer. It is of no avail to provide the pensioner with a cheaper telephone because obviously ten dependants can use the same telephone later. The solution remains to give the pensioner a pension which enables him to pay the same tariff as every other user of the telephone. [Interjections.]

… more Black pensions …

It does not help to make concessions haphazardly. The crux of the problem is that we should attempt to give everybody a reasonable pension and that he should pay the same price for food and other facilities from that as I have to pay. That is the only way we can ensure that concessions granted here and there to various people are not abused.

Mr Chairman, I think hon members will agree with me that the hon member for Bethal was correct when he initially said that these were his first steps in the field of the Post Office. I shall therefore deal gently with him this afternoon; he will find out that the Department of Posts and Telecommunications is a very proud department. We are all proud of this department which renders a tremendous service, despite problems over which they do not always have control and which make things difficult for them. I now want to ask the hon member not to come and ask the department in this Parliament to dismiss thousands of postmen. At present we are experiencing such a degree of unemployment, particularly in certain areas of our country, that there are people who are totally dependent on delivering post for a livelihood for themselves and their families. [Interjections.] To plead for postal deliveries to be discontinued or reduced is in my opinion not fitting in the times in which we are living. [Interjections.]

The hon member for South Coast addressed a request to the hon the Minister to make the installation of telephones cheaper for pensioners, and I should like to support his request, although I do realise that the department is also dependent on finance. In view if this request, the hon member for Bethal was of the opinion that no provision was made for pensioners.

He then asked for another interesting thing. He asked for social pensions to be increased to the extent that the pensioner could not be entitled to concessions of that nature, whether it be cheaper installation fees for a telephone, cheaper television licences, or cheaper train or bus fares, etcetera. Pensions must be such that they can afford all these things.

It is a pity that the member of the PFP, the former “Pack for Perth” member for Edenvale, Mr Goodall, lost the election. He was an expert in this field. He would have told the hon member for Bethal…

Would you have voted for him?

For him? No, I would not have voted for him, but I am sorry, because he was an expert in the field of pensions. He would have told the hon member for Bethal that if pensions were to be increased to the extent that it would be possible for all pensioners to share all the facilities people with an average or above-average income have, this country could not afford it. I therefore want to appeal to the hon member to be careful with statements of this nature.

You give him a concession of R10, but cannot give him R10 more pension. [Interjections.]

I think it would be more interesting and more fruitful if we were to devote a much bigger portion of the time we have devoted to the debate—as tremendously interesting and fruitful as it was—to the discussion of the single major problem the Post Office has to contend with, for if one looks at page 3 of the Budget document, one sees that the loss in our postal services has been R117 million over the past financial year. This is the loss or deficit of income over expenditure. In the present financial year an increase in this deficit to R149 million is being budgeted for. This is the problem this department has been stuggling with for many years. Every year this is what it is about, and it the one thing which gives rise to an increase in telephone tariffs, amongst other things.

The hon member for Bethal is wrong. The private sector can run the telephone service cheaper than our department is doing. Of course they can, but we have the problem that the telephone, the profit or surplus on telephone income must compensate for the losses in the postal services. That is our problem. [Interjections.]

Look at page 3 of the Budget document. The hon member will see what I am talking about. [Interjections.] Of course! When one is talking about privatisation, there is one thing the private sector would grab at, and that is our telephone services. However, there is one thing they would not want to touch and would turn their backs on, and that is our postal services because that is the biggest loss maker in our department. Earlier this year when we were discussing the Part Appropriation here in this House, I warned the hon the Minister and said we must be careful with the telephone tariffs, otherwise we were going to kill the goose that lays the golden egg.

We are talking about the losses on our postal services. These losses are going to increase, because 76% of the working expenditure of the postal services consists of staff expenditure, which is going to increase by at least 12% from 1 July. I say this means that staff expenditure, which constitutes 76% of the total, will increase by at least 12%, since all kinds of contributions to pension funds and so on are included as well, which also have to be carried by the department. This is apart from the cost relating to officials who are entitled to an annual salary increase in terms of their conditions of service. Transport costs represent 22% and more of the operating costs of this department. These transport costs simply have to increase. For this reason the losses of our postal services will become greater.

The preferential tariffs the postal service enjoyed through the transportation of post by the SATS—this was announced by the hon the Minister in the Transport Services Budget—are being phased out. What is more, the transportation tariffs on post are being increased. The point I therefore want to make to the hon member for Bethal…

The hon member is having great difficulty in making it!

… is that the losses on our postal services are going to increase; they cannot decrease.

Having said that, I am not accusing the department of not doing everything possible to restrict these losses as far as possible.

Sir, unfortunately I shall now have to burden you with statistics and a lot of figures which you are going to find very boring. I want to place them on record, however, and I am therefore going to read them to you.

Before doing so, I want to point something else out. I live in Pretoria. What happens before a letter arrives at my house? If I post a letter here to my home in Pretoria, that letter is handled by 43 people, and four motor vehicles and one aircraft are also involved in the process. The cost involved in getting a letter posted in the Parliamentary post box to my street address in Pretoria is therefore considerable.

The department has already taken steps to limit and eliminate the cost of this service, which is mainly labour costs, by mechanising as far as possible. Experiments with a prototype letter sorting machine which was purchased at a cost of R350 000 for Pretoria in 1968 were very successful. The mechanisation programme was then extended to Cape Town, Johannesburg, Durban and Pretoria.

To simplify and speed up the sorting and stamping of postal items, 14 letter sorting and cancelling machines were installed at the nine largest Post Offices during the period 1969 to 1972 at a cost of almost R1,2 million. The machines in Johannesburg and Cape Town are to be replaced during the 1987-88 financial year at a cost of R3,3 million.

The postal code system without which we cannot get along these days was introduces in October 1973 to make it possible to sort letters mechanically. The first semi-automatic letter sorting machine purchased from a West German firm at a cost of R3,5 million was put into operation in Cape Town on 11 September 1975. The installation of similar sorting machines then followed in Johannesburg in 1976 and in Durban in 1977 at a cost of R5,4 million and R4,8 million respectively.

During 1982 and 1983 four optical character reading sorting systems, which can each sort 30 000 letters per hour provided that the addresses on such items are typed, printed or processed by computers, were purchased from a Belgian firm at a total cost of R6,6 million. Two were installed in the Johannesburg Post Office and one each in the Cape Town and Durban Post Offices.

During 1983 the outdated mechanical lettersorting system in Johannesburg was partially dismantled and to replace it two video coding units and two high-speed letter sorting machines were installed at a cost of R4 million.

To complement the optical character-reading system in Cape Town a compact letter-sorting machine which can sort 18 000 letters per hour was put in operation on 13 June 1984.

During March and September 1983 two sorting systems for non-standardised postal items were put in operation in Cape Town and Johannesburg respectively at a cost of R3 million. These systems can each sort 22 000 items per hour to 215 direct destinations in the case of Cape Town and 175 in the case of Johannesburg. The letter coders in a machine like this are able to code postal items twice as fast as sorting by hand. In contrast to the large number of direct destinations to which mechanical sorting takes place, a letter sorting rack for sorting by hand has only approximately 40 direct destinations.

An optical character-reading system and a high-speed letter sorting machine were put in operation in Pretoria on 23 November 1984 in the place of the prototype letter sorting machine installed in 1968.

Two video coding units and two high-speed letter sorting machines were also installed in the new sorting offices in Pretoria during the second half of 1985 and put in operation on 11 November 1985. That was the day they had that tremendous hail storm in Pretoria.

Apart from that the department is trying as far as possible to cut the costs of this section of their activities in many other ways. As far as routing is concerned, the shortest possible routes or the most economic routes along which post can be transported have already been worked out. Regarding the self-service post collection points to which the hon member for Bethal referred, in more prosperous times 100 such points were introduced, and these provide 117 500 additional post boxes where subscribers can collect their post themselves so that it is not necessary for their post to be delivered.

Another aspect receiving attention at present is the transportation…

Order! The level of noise in the House is too high. The hon member may proceed.

Mr Chairman, I agree that this is a difficult subject to listen to. The section of the department’s activities receiving a great deal of attention at present is the transportation of post. You will agree with me that if the preferential tariffs are phased out by the Railways and the transport tariffs are increased further, the transport costs will be increased considerably, and this can only contribute to a much greater loss in respect of this fine service which our department renders.

We should like to wish them a great deal of success in this specific investigation into the most economic way of transporting post. I think this could mean that in future it will no longer be possible to post a letter in Cape Town today and it will be delivered at your home in Pretoria tomorrow, but I do not think the efficiency of our service will suffer.

I want to tell the hon member for Bethal with all due respect and great appreciation that I am pleased that he is interested in this department, because it is a fine and very interesting department. There are places where tremendous work is being done and which he could not imagine in his wildest dreams at present. I hope that in time the Postmaster-General will show him these places and activities. Once he has seen them, he will speak with much greater appreciation and sympathy about the work being done by this department and all its people.

With all the efforts being made and everything being done, I think the loss on the postal services could perhaps be a few thousand rands less than the R151 million budgeted for.

Mr Chairman, I should like to avail myself of this opportunity this afternoon to express a few thoughts on communication. For the purposes of my speech I shall define communication as the process through which ideas, standpoints and information are conveyed between people.

I think the Post Office is an excellent example of a body which promotes communication. Think, for example, how we would communicate with one another if we did not have the letter, the telephone, the telex and the telegramme.

I also feel that Parliament is a very important communication forum. In this House we debate policy with one another and we make our standpoints and ideas known to one another. We would not have a true democracy in this country if there were no forum like this where the repesentative of the voters could communicate with the Government. Parliament is therefore of particular importance to all of us who are prepared to serve here.

We are also in the process of moving away from the Westminister style of government. We should like to promote consensus politics to an increasing extent. We therefore realise how important communication is. Here one thinks for example of the important work being done by the standing committees and the committees of the President’s Council. In a country with a heterogeneous population like the RSA it is vital that we exchange ideas and listen to one another’s standpoints.

I should like to plead today that we communicate more at the individual and group level, since by talking to one another and listening to one another’s standpoints, we will get to know and understand one another better. That is why it is so essential to use the communication channels and existing structures in this country—we must not simply ignore them but make use of them—and even extend them if at all possible. We must also continue extending Parliament’s function as a forum for communication.

Mr Chairman, as I am trying to indicate how important I regard Parliament to be, you will permit me to refer briefly to my grandfather and my father. It is a special honour to be allowed to act as a representative of the third generation in this House. My grandfather, whose name I am privileged to bear, rendered a valuable service—in my opinion—as Minister of Lands, and later as Minister of Native Affairs, in General Hertzhog’s Cabinet. My late father, whom I think of with affection today, represented the Brits constituency for 10 years and served in the Senate for 15 years. He was a journalist and he realised the value of communication and practised it daily.

I am acutely aware that it is dangerous for me to speak about my forebears in this House and I do not want to burden you with this any further, as I know politicians can easily make the mistake of doing so. This reminds me of what Mr Hein Kruger, my former colleague in the President’s Council, as well as the Transvaal Provincial Council, told me: The leader of that Council remarked after my maiden speech: Did the Whips not tell the man we do not want to breed with him? [Interjections.] I hope it will not be said of me that I am a chip off the old block.

I am talking about communication today, and perhaps I should recount this incident which took place during the recent election campaign. My brother—who by the way wrote his doctoral thesis on the early career of P G W Grobler, which, he hopes, will soon be published as a biography—agreed to us setting up a mini-party office in the basement of his house. When the election was called, we of course moved to larger offices, but the telephone number—and now I am back with the Budget, Mr Chairman—remained in the telephone directory as that of the NP office in Roodeplaat. My nephew’s task was to answer the telephone and to give the correct number for the election office, because his mother was our secretary and she worked full time at the head office. On election day the telephone rang incessantly and my nephew, who is only seven, answered each time and gave the correct number of the election office. A lady phoned and he gave her the number. A while later she phoned back and said: “ You gave me the wrong number, little boy. How old are you?” He replied: I am seven, aunty.” Her reaction was: “ Good heavens, what has possessed the NP to put such a little person in such a small office?!” [Interjections.] Then he said: This is a small office, aunty, and that is why I am here.” [Interjections.] My constituency, Roodeplaat, is not small, however. It is a vast constituency which stretches from the Witbank freeway in the South to north of Hammanskraal in the North. Since this is a large rural constituency, hon members will understand that the services rendered by the Post Office are particularly important to the inhabitants of that constituency, especially where people live on small holdings which are relatively remote.

I therefore want to avail myself of this opportunity to plead that if it is at all financially possible, some of these services be looked at. For example, there is the service which begins with the 50 code where people still make use of a party service, and then there is Hammanskraal itself which does not have direct dialling facilities yet, and there are even areas with the code 82 which are served by a mini-exchange which is unmanned and when interruptions occur, it takes a very long time before the service is restored. I hope the hon the Minister will not take it amiss of me that I have conveyed these problems to him.

At this stage I should also like to refer to my predecessor, Adv Koos Lloyd, and his wife Marietjie, who rendered loyal service for many years, first in the Pretoria East constituency and then in the Roodeplaat constituency. Hon members who are acquainted with Adv Koos Lloyd know that he is someone with unique talents and we honour him for the valuable service he rendered our constituency.

In conclusion I just want to make another plea for us in this country to speak to one another to an increasing extent. We must listen to one another more, and we will find that there is much more we have in common than what we can disagree on.

Mr Chairman, it is an exceptional privilege for me to congratulate the hon member for Roodeplaat on his wonderful maiden speech, but I think what I must really congratulate him on is his wonderful pedigree. I want to say that when I listen to his pedigree and see what a fine figure he cuts, I am not certain whether that fellow was right. Perhaps they do want to use him for breeding purposes.

The hon member’s grandfather was also undersecretary of Foreign Affairs under Leyds, in Pres Paul Kruger’s cabinet. After that he accompanied the old president to Europe, where he served him as assistant secretary under a certain Mr Bredell. These two secretaries subsequently wrote a biography of Paul Kruger.

Having listened to the hon member, I am convinced that we are dealing here with a communicator who is a son of a communicator, who in turn was the son of a communicator. If we were therefore, to use him for breeding purposes, the genes would work very well indeed. I foresee a brilliant career for the hon member in this House.

Before I go any further, I want to address a special word of thanks to the Post Office for the services they rendered to us during the past election. I hail from a rural constituency, where there were many problems with train services etc, and yet, thanks to the help of the Post Office, that constituency had the highest percentage poll in the country, namely 82,9%. That was even higher than in Helderberg.

I should like to say a few words to the hon member for Overvaal. That hon member is a person who, together with others who are no longer here, had a great deal to say about the runaway commando. Then it turned out that the hon member, who was a member of the runaway commando, found safe asylum in the place he fled to. Once he has dug himself in well there, we shall see whether he starts to make his normal speeches, for today he did try to address the problems.

In ’89 he will flee from Overvaal.

What about “over de muur”?

I think I should come and stand in Heilbron for a change!

That hon member was one of the people who told me I was working out my notice month. I am still working my notice month, and I do not know how long it is still going to last. The other morning the hon member for Lichtenburg also spoke about the NP that was working their notice month, but I have an idea he is going to wait a long time for that notice month to end.

The hon member for Overvaal, as I said, underwent a considerable alteration of style, but he also underwent an alteration in his approach to a matter. Hon members will recall that he appeared on television during the election as the CP spokesman on Manpower. When the subject of the unemployment in South African society was discussed with him, he said that he only spoke on behalf of the White workers—that was all. That was all he cared about. Now I am surprised to see that when he undertook the expression of thanks today, he thanked all the Post Office staff, and not only the Whites. I am so pleased to see that that change of heart is beginning to occur in him, and I foresee that in future an improvement might perhaps be discernible in him. Perhaps it is as a result of his elevated position as whip in that party.

The hon member for Bethal spoke about inflation and said that price increases simply fueled inflation. Nevertheless I do want to take this opportunity to point out to the hon member that the only increases that can boost inflation are increases which are higher than the inflation rate.

Are you certain?

Yes, Sir, unlike the hon member who has just spoken, I am certain of what I say.

Only increases higher than the inflation rate can cause inflation to increase. It is expected that the average rate of revenue increase in the Post Office will be in the region of 11,7%. You must agree with me that if the matter is approached from that angle, this budget is not of an inflationary nature and we should in fact thank the Post Office and its officials for the responsible way in which they approached this matter, and also the matter of salary increases.

I should like to say a few words about the Post Office as a business. The annual Budget is normally used by companies and businesses to assess the results of the past year. It is used to a greater extent to study the business cycle and to make an evaluation of the business environment in which the business finds itself. It is also used to make a forecast of the short-term and long-term conditions under which that undertaking must operate.

In this connection it is very important for the Post Office as a business to establish whether its services are still in demand. It must establish who its clients are and what clients make use of which services. It is also necessary for it to establish which services are profitable and may be beneficially offered, but also which services are obsolete. The main reason why companies in this country begin to experience problems is that the services they offer or the products they sell are obsolete and there is consequently no longer a demand for that service or product. Then certain problems arise.

The Post Office is committed to rendering a wide series of services to a very large and diversified clientele. The effect of external factors, such as the recent recession, the general reform activities in the economic sphere as well, and the rapid technological developments, are causing exceptional fluidity in the conditions in which the Post Office has to do business.

These factors also cause greater fluidity in the clients for whom the Post Office has to render services. The rapid technical development, as the hon member for Hercules correctly pointed out, causes systems to become obsolete very rapidly, which must then perhaps be replaced at great expense.

At the juncture in which this country finds itself at present, it is therefore imperative for us to pause to consider some of the external factors influencing the commercial climate. Let us scrutinize a few of these factors.

Firstly, as a countryman, I want to refer to the conflict between the mission of the Post Office and the demands we make on the Post Office. This mission is that an effective communication network must be established throughout the entire country. When we say that it implies, after all, that services in certain geographic areas will have to be subsidized. These are not only services that have to be rendered to certain geographical areas, but also to certain communities. Surely all of us are aware that the small country post offices cannot be operated economically.

On the other hand it is true that the necessary balanced development in the rural areas is not possible without an effective communication network coming into existence in these areas. This fact has a material effect on the profitability of the Post Office and consequently on the injunction that Post Office be run as a commercial undertaking. In all fairness to the Post Office we must always realise, when we evaluate results, that in spite of the efforts on their part not to apply cross-subsidization, certain of the services must nevertheless be subsidized.

What is even more important is the need for us to make an evaluation of the present and future situations. This is essential because at present, far more than ever before in our history, we find ourselves in an extremely volatile business environment. External factors can change the business environment of the main post office drastically.

Business interrupted in accordance with Rule 47 (3) (a).

Mr Chairman, I want to thank hon members sincerely for their participation in this debate, and allow me at the outset to congratulate the hon member for Boksburg on his appointment as the main spokesman on the Government side on Posts and Telecommunications. I think that he is preeminently equipped to perform that service well, and I wish him everything of the best in this connection. I also want to congratulate the hon member for Primrose on his appointment as chairman of the Standing Committee on Transport and Communications, and I want to wish him everything of the best too. I am certain that the two hon members will form a very good team.

Then, of course, I want to thank the hon member for Umlazi sincerely for the good service he rendered as the chairman of the Post and Telecommunications standing committee and chief spokesman on the Government side for many years of excellent service. I think hon members will agree with me that there are probably few hon members in this House who have Posts and Telecommunications at their fingertips as the hon member for Umlazi does.

I also want to congratulate the hon member for Overvaal sincerely on his appointment as main CP speaker on Posts and Telecommunications. I know that the hon member will react very technically, and will confine politics to a minimum in this debate. If he does raise political issues here, it will be done in a jocular fashion, as I know the hon member can do very well. I sincerely wish him good fortune on the task that has been entrusted to him.

I also want to welcome the hon member for Greytown as the chief PFP spokesman. I think he is technically equipped to make a positive contribution, and I wish him well in this connection.

I myself am relatively new to this particular discipline, and I am still doing research to establish precisely what the nuances in the various divisions of the department are. I think there are so many other hon members here in this House who are also new to this particular field that it is perhaps a good thing, in the short while I have at my disposal this evening, to remind the hon members who do not know about this that the finances of the Post Office formed part of the Exchequer from Union until 1968. All the revenue obtained by it during that period was paid into the Exchequer and was administered by the Treasury, together with all the other revenue received there. In fact, the Post Office was one of three such departments. The other departments were of course those of Inland Revenue, and Customs and Excise. It goes without saying that in such a set-up the revenue of the Post Office declined, and was not closely connected to the services rendered by the Post Office.

There was a broadly defined requirement that the Post Office should be run according to business principles. In the end, however, those funds disappeared and it was not always possible to get to the bottom of things. That was the reason for commissions of inquiry being appointed, and as time went by these problem areas—that the Post Office should be run according to business principles—were gradually pinpointed. In 1968 the matter was clarified, yet it was only in 1976 that a clear obligation was placed on the Post Office to run its undertaking as a business enterprise. I just want to bring one section, section 12 A.(1) of the Post Office Act, Act No 44 of 1958, which was discussed in this House in 1976, to hon members’ attention. Inter alia this section provided:

In that section an obligation is being placed on the Post Office, in terms of a Act of this Parliament, that business principles shall be applied in the administration of the Post Office. This is matter which I should like to discuss further during this debate. It is a matter which is at present, too, as I have already indicated, being thoroughly investigated, and to which hon members could also make a sound contribution.

Mr Chairman, I now move:

Agreed to.

Mr Chairman, I move:

Agreed to.