I move—

This side of the House gives the Bill its full support.

Motion put and agreed to.

Bill read a Third Time.

I want to refer first to the recent transactions the hon. the Minister has had with the International Monetary Fund. As you know, Sir, we have a subscription to the Fund of 200 million dollars and we are allowed to draw up to 25 per cent of that amount if we require it. The hon. the Minister announced recently that he had drawn an amount of 50 million dollars, plus the so-called “super tranche” of 16 million dollars. He had drawn it in 46 million American dollars, 10 million Canadian dollars, and 10 million Japanese yen. There are one or two questions I would like to ask the hon. the Minister in connection with this transaction on which I hope he will be able to enlighten us. Are we under any obligation to re-instate the 50 million dollars which we have drawn as part of our subscription or can it remain indefinitely as a reduced subscription? Secondly, I would like to ask whether the International Monetary Fund regards this as a loan or not. If it is a loan, are we being required to pay any interest on the amount? Thirdly, I would like to ask the hon. the Minister whether we have the option to repay the amount either in gold or in ordinary currency as we wish?

The fourth question I would like to ask is whether this is to be regarded as a permanent reduction in our subscription to the International Monetary Fund or is it merely a tiding over; by tiding over I mean tiding over the problems of foreign exchange depending on some agreement, by which we hope with the central banks to buy our gold at 35 dollars an ounce. If this is the case, it is only offering temporary relief in the question of foreign exchange, as the hon. the Minister will agree. If we are being called upon to pay interest on this money, I would say the sooner we face it and repay with gold, the better. I have no doubt that the hon. the Minister will be able to enlighten us on this matter. The transaction, important though it is to us, has been overshadowed by the very recent events which have occurred in France, which it seems to me can put the whole international monetary question into the melting pot once again. It looks as if the hon. the Minister’s prediction of renewed monetary crises amongst the leading financial powers may very well be fulfilled. He has made these predictions over the last year or two. These monetary crises may have far-reaching consequences for us. I need not elaborate on that at this stage, but it looks as if France may be faced with a period of political uncertainty, now that General De Gaulle has resigned, and certainly the possibility of a devaluation of the franc in the near future seems greater than it was. If that happens there is a general belief, a general doubt, as to whether sterling may also not be compelled to follow as well. I would like to ask the hon. the Minister in the event of that happening how do we stand. Various factors will have to be taken into account if that situation arises. However, I do not propose to elaborate upon them here, because we can have a very long debate on the subject. The position is that in the future we may well be faced with such a problem.

I think, Sir, that this House and the whole country under present conditions are anxious to hear the Minister’s views on the position as he sees it generally. In particular, I should like to ask the hon. the Minister, does he think that the present and likely events in the near future will facilitate or impede the solution of his major problem, which of course is how to dispose of our gold in an orderly and satisfactory manner. So far, the hon. the Minister has played his game strictly according to Queensbury Rules. I think we have all supported him in doing so. But I think the feeling is growing that the Republic is not getting a square deal from her financial partners in the monetary world. A question which may have to be faced, is how long the hon. the Minister will be able to stick so strictly to the Queensbury Rules as he has in the past; because, really, the position now does seem to become difficult. I would not say the position is impossible, but the problems the hon. the Minister is faced with, are ones which no self-respecting country should be asked to face in its dealings with major partners in a world economy such as we are doing and in such financial matters as we are intimately concerned with. I hope the hon. the Minister will be able to enlighten the House on these matters in the course of this debate.

Mr. Speaker, I want to begin by saying that we on this side of the House express our gratitude to the hon. member for Constantia for having said on behalf of his side that he respected the wise way in which the hon. the Minister of Finance was handling the whole gold question. These words support him in his task as that task undoubtedly is a difficult and at the same time a delicate one.

The hon. member put a few technical questions to which I think the hon. the Minister will reply in due course. I just want to refer to one aspect he mentioned, and that is whether South Africa has the right to repay the loan in gold. Sir, the rules of the I.M.F. make provision for that to be done. In terms of the rules it is a completely legal transaction for South Africa to contract that loan of R50 million as a gold tranche and to repay it in gold. The rules make provision for that. Sir, there is doubt whether South Africa can repeat this process, and doubt about the reaction of other countries as far as the permanence of such a transaction is concerned. Hon. members know that the U.S.A. did not react too favourably to it. The U.S.A. did in fact allow it this time, but it is doubtful whether she will allow it again in future. As far as I know, South Africa can draw that amount of 66 million dollars once per annum, of which 50 million dollars can at present be repaid in gold. South Africa is completely within its rights to do so and the U.S.A. cannot, in terms of the rules of the I.M.F., prohibit South Africa from repaying it in gold.

As regards the question whether this is a transaction which can normally be concluded, I should like to refer you, Sir, to the opinion of an international expert. His opinion is not necessarily that of this side of the House. We are cautious in this regard and do not offer any comments. But I think it can only serve a good purpose to read to you, Sir, what Mr. C. Gordon Tether wrote in the Lombard Column of the Financial Times, London, on 18th April, 1969, under the heading “The Cool Cheek of the U.S. Treasury”—

The words which I should like to emphasize are “the illegal slamming of the front door in her face”. Because our hon. Minister of Finance has been acting with a sense of responsibility, we have gained many overseas friends for our standpoint. Last year I referred you to the points of view of the Governor of the Bank of England and of the President of the Academy of European Bankers. We also know that a country such as Japan is very anxious to increase its gold reserves and will like to buy gold with a view to doing so. Because of the world-wide influence of the U.S.A. and because of its stubborn refusal to permit South Africa to sell gold to monetary channels, however, Japan cannot do so. We know that the gold reserves of various countries are very low, proportionately lower than those of Italy, France or Germany. But they can do nothing about the matter. Since the time when this struggle began, however, the prestige of gold as international currency and as a reserve monetary unit has increased substantially, in spite of the attempts of certain countries to harm that prestige. Gold as an international monetary unit is in a far stronger position today than at any time during the past year. What is more, the confidence in gold is still growing, as is evident, inter alia, from the price of gold on the free market.

That brings me to the second point which the hon. member raised, i.e. the possible results of the disappearance of General De Gaulle as head of state of France and the uncertainty which that may create on the international financial markets. We in South Africa have always had great appreciation for France and its former head of state for their cooperation—economically, financially and militarily. We regarded France as a friend and we were appreciative of that. We accept that the change which has now taken place in the Government in France may indeed and probably will have its repercussions in the economic sphere as far as it may affect Britain’s entry into the E.E.C. It may also, as the hon. member said, lead to the devaluation of the franc before long. But we cannot say for sure, although this is a possibility. We all know how uncertain the international financial market is under these circumstances. But we can assure the hon. member for Constantia that since this Government has come into power it has been applying itself to broadening South Africa’s economic and financial relations with the outside world. There was a time in our history, in the thirties, forties and fifties, when our economic and financial relations were largely channeled in one direction, in the direction of Great Britain. The National Party, however, has made it its task to extend our economic and financial relations to every country of note in the world. To-day we can say that if something were to go wrong in one of these countries that need not affect South Africa substantially at this stage. This is the position as we have spread our interests. And neither should we accept in advance that a new head of state in France would bring changes in the relations between South Africa and France. [Time expired.]

I should like to ask the hon. the Minister a few questions about the South-West Africa Account. According to a statement which the hon. member for Windhoek made a short while ago in a newspaper in South-West Africa, companies tax in South-West Africa was going to be increased by 3⅓ per cent only to 33⅓ per cent, instead of to 40 per cent. He also mentioned that the sales duty in South-West Africa would be paid over to the South-West Africa Account in full. I assume that the hon. member for Windhoek had been authorized to make this statement and to give the details to the Press. Seen from the point of view of the Minister, however, I doubt whether this was the correct procedure. At present the financial affairs of South-West Africa are, after all, a matter for this Parliament. Any decisions now taken with regard to the Territory, have a wider impact than merely the interests of the Territory itself. That is why I should like to hear from the Minister what the present position is, how he arrived at the figure of 33⅓ per cent, and what considerations obtained in respect of this change. As far as the sales duty is concerned, I shall be pleased to learn from the Minister what amount he anticipates will be collected in sales duty in South-West Africa and in what way it is going to affect the accounts before us at present. It is clear that it must necessarily affect the accounts drastically and consequently I shall be pleased to learn from the Minister how he is going to effect the necessary adjustments.

As far as the form of the accounts is concerned, the situation we have does not seem to me to be very satisfactory. As the amounts for the previous year, 1968-’69, are not reflected we have nothing with which to compare the revenue or the amounts to be voted. We realize, of course, that here the hon. the Minister is presenting a new account and that it will be in this form this one time. However, I wonder whether it was not possible for the Minister nevertheless to have furnished Parliament with the comparative figures for the previous year, even if that was only between brackets, so to speak. It would have better enabled us to form a comparative opinion about the accounts.

I also want to add that on the face of it it would appear as though the hon. the Minister has underestimated revenue to a very large extent. I have checked a few items in the previous Estimates, as they were presented in South-West Africa. I want to mention two examples only. In the present Estimates the revenue from Customs and Excise is given as R11 million. In 1967-’68 an estimate of R7 million was made in the accounts. In point of fact an amount which exceeded the Estimate by R3,700,000 was collected on the item Customs and Excise. We concede that this is not something which can be estimated accurately. But here we had a case in which an amount was collected which exceeded the original estimate nearly by half. We had the same thing in connection with another item, namely interest. The Territory collected an amount in interest which exceeded the original estimate by R2,444,000. The original estimate was R3,500,000. The estimate was very far out because the real receipts amounted to nearly R6 million. We know that the Territory is experiencing a terrific boom. One has every reason to believe that government revenue will be much higher than the estimated amounts of the hon. the Minister. Then, of course, there still is the sales duty which now has to be added to South-West Africa Account. That is why one gains the impression that here we have a fairly large under-estimate of revenue. In general I just want to remark that it does not seem as though the hon. the Minister has given us a great deal of assistance to enable us to form a proper judgment of the accounts of South-West Africa.

Mr. Chairman, the hon. member who has just sat down will forgive me if my speech does not follow on what he said, because I must admit that I know very little about South-West Africa.

I want to come back to the remark of the hon. member for Constantia. I want to join my friend, the hon. member for Florida, in expressing my appreciation to the hon. the Opposition for their attitude as regards this question of gold as an international means of payment. The hon. member for Constantia admittedly made no positive contribution. Nevertheless we appreciate the fact that he merely asked questions and did not attack the hon. the Minister about this question of gold as an international means of payment. The question of gold as an international means of payment is so complicated that the less we say about it, the better it will be. It is undoubtedly true that the mighty United States is trying to apply a stranglehold on South Africa. We do not want to force a confrontation with the mighty America. But we should very much like to have a reply from the U.S.A. to the question why it allows large increases in the prices of all products, except in the price of the product gold. After all, gold is a product like all other products. As a metal, gold is a product just as copper, silver and platinum are also mining products. The prices of copper, silver and platinum have increased tremendously over the past 30 years. In contradistinction to that the price of gold has remained fixed. What is more, if we are to accept the American point of view, we are now forbidden even to sell gold at 35 dollars to central banks. The position of gold has deteriorated a great deal during the past 30 years and more in the sense that the prices of all other products have increased while only the price of gold has remained constant, i.e. 35 dollars per ounce. If we were to measure the price of gold in terms of the prices of products, we would find that 12 bags of wheat could be bought for one ounce of gold in 1934-’35, whereas that would buy less than four bags to-day. If we come back to the Western Province, we find that one could buy two leaguers of good wine from a farmer with one ounce of gold in 1934 and to-day one can buy only half a leaguer. That is how much the position of gold has deteriorated.

But when I examine our total index figures, I find that if the price of gold had to follow the cost of living index figure, the price of gold would not have been 35 dollars per ounce to-day, but R67.50 and in terms of dollars it ought to have been R94.50. We may therefore rightly ask: What country has ever been treated as harshly as the Republic; or what industry has ever been treated as harshly as the gold-mining industry? Fortunately there are many bankers and economists in the West who do not think as the Americans do, although they dare not say so, because the countries of Western Europe live under the constant fear of aggression from the East. Therefore they dare not risk a confrontation with the mighty America. That is why we appreciate the fact that there still are men such as Lombard of the Financial Times who has the courage to come right out and say what he thinks of the whole matter, and that is why we must treat this whole matter of gold as an international means of payment and its price with such great circumspection. Up to now the hon. the Minister and his competent team of experts have been handling this question brilliantly in my opinion, and all we on this side of the House can offer him is our fullest confidence that he will continue to play this game of chess, because at the moment it is nothing but a game of chess, with as much success and with as much confidence as he has been playing it over the past months. We have the fullest confidence that up to now he has been using only his pawns, his bishops and his knights in the game. In the background he still has his rooks and his queen, and when the time comes, we believe he will bring those rooks as well as his queen into play to force the desired checkmate. From our side we want to congratulate him on the special way in which he has been playing this game up to now, and we want to thank him very very much and assure him of our fullest confidence. If we look at the team of experts who are assisting him, we cannot have anything but confidence, because apart from the experts of the Department of Finance he also has the men from the Reserve Bank, and here I cannot resist the temptation to point out that we have two Dagbreek old-boys in the persons of the president of the Reserve Bank and his Deputy, Dr. Franszen. You, Mr. Chairman, as an old-boy of Ikeys, will perhaps not understand this language, but the Deputy Minister of Finance, who is a Wilgenhof old-boy, will understand this language. He will probably be just a little envious that the men who are assisting the hon. the Minister so outstandingly and so brilliantly are Dagbreek old-boys. The hon. the Minister of Bantu Administration, the hon. the Minister of Water Affairs and the hon. the Minister of Economic Affairs, who are all Dagbreek old-boys will proudly take cognizance of the fact that the hon. the Minister of Finance is being assisted in this very difficult task by a clever team of Dagbreek old-boys.

Order! Is the hon. member for Orange Grove not a Dagbreek old-boy too?

Sir, it is very clear to me that you, as an old-boy of Ikeys, are misinformed.

I want to follow up what the hon. member for Constantia has said with regard to the drawing from the International Monetary Fund of some 66 million dollars or R47 million. The Press has published a report indicating that the Minister has made a borrowing from the International Monetary Fund. I want to know from the Minister whether any interest is charged on that borrowing, because if so, as the International Monetary Fund can only buy gold at 35 dollars an ounce we are in effect selling our gold at a discount to the fund. If we have had to borrow 66 million dollars from the fund and have to pay interest on it instead of paying 66 million dollars to buy foreign exchange, it means that we are either paying a premium on that exchange to the extent of the interest or, alternatively, we are selling our gold at a discount. I think it is important that the country should know where it stands. I appreciate that there are many things in connection with the international gold position that the Minister cannot tell us. Both sides of the House will agree that we hope the Minister is successful in his negotiations, but I refer to the matter in view of the fact that this is a substantial drawing and in view of the criticism which has been voiced outside. The hon. member for Florida has already referred to that criticism, and I agree with him that that criticism was unfair criticism of the Minister’s action; I think the Minister has taken an action which is justified in terms of the regulations of the International Monetary Fund. I do not think it is a back-door transaction. It is a transaction he is entitled to enter into. No one can suggest that the International Monetary Fund would be party to a back-door transaction. But on the other hand, if a loan of this kind has been made and we have to pay interest on it, then it looks very much as if we are in difficulties in regard to the selling of our gold to the International Monetary Fund. I would like to know whether the Minister can give us any indication as to how long our difficulties will continue, because as far as international exchange is concerned there have been several changes over the last few months. As the Minister reported earlier, the difficulties in Czechoslovakia helped the dollar. The dollar is probably stronger to-day than it has been for some time; and with the present position in France there is a very grave danger of devaluation of the franc. If the franc is further devalued—one does not know what position may obtain in France over the next few months—then sterling may follow, and if sterling follows, to what extent do we stand fast or to what extent do we follow sterling? Those are difficulties which the Minister will have to deal with when the time arrives and he cannot and dare not give advance information because obviously it will encourage speculation. But the Minister will know, if he goes back in our history, that one of South Africa’s biggest crises happened when South Africa did not follow sterling in the old gold standard days. We did not follow sterling then and there was a substantial difference between ourselves and London, between ourselves and the sterling rate. I think the rate went as far out as 32⅝ per cent in those days.

The hon. the Minister is going to find, with the pressure on the franc and also pressure on sterling, that South Africa is in the vortex of a currency crisis despite the fact that we are the world’s largest producer of gold. When the world is in a financial crisis of this kind, the world will again turn to gold as in the past, despite all the efforts of the United States of America to make the dollar stronger than gold. These are matters which concern the country despite the speculative fever that exists in the country to-day. With international exchange as the background the hon. the Minister has to face the local position, namely the excess liquidity in the local market. Speculation is also going on in the share market, and the Minister has warned the public about this so that they only have themselves to blame if they should burn their fingers. For this reason I cannot understand why the hon. the Minister does not take some action as regards another organization over which he has some indirect control. The hon. the Minister is concerned with loan money in the Government sector. Last year he made reference to loans in connection with the I.D.C. and to mutual funds. We drew the attention of the hon. the Minister to this, and he indicated that the matter would receive his attention. In 1967 the I.D.C. stated the following in their annual report:

I think the hon. the Minister will agree with us when we say that we do not think it advisable for the I.D.C. whose aim is to develop industries, to enter into the mutual fund market. But what do we find this year? On the 10th March, 1969, it was published in the Press that the Central Accepting Bank for Industry Limited and the City Merchant Bank Limited are amalgamating. The share allotment was as follows: 2,100,000 to the Industrial Development Corporation; 2,100,000 to the Standard Bank of South Africa Limited; 2,089,183 to Sanlam; 1,875,000 to the Syfret and South African Trust Companies, Limited; 1,875,000 to Volkskas Limited and 4,804,760 to sundry shareholders, making the capital amount of R40,833,933. I have no quarrel with this organization at all, and I think it is doing a very good service. Certain of this company’s representatives asked the public for their support, with the announcement that this is a Government-backed institution. Is it customary and advisable for the I.D.C. to invest in this way? The hon. the Minister is concerned with raising national loans. Every time finance is invested outside of Government securities he finds that it is more and more difficult to find the finance for his Government loans. He has to compete with the outside rates and the Government generally gives a lower rate. Every time encouragement is given to these outside organizations to attract funds at a higher rate of interest, the hon. the Minister is indirectly creating a competitor for the funds which he is wanting. Surely the hon. the Minister will agree with me that his main problem is to have long-term funds for the requirements of the country. The hon. the Minister’s concern is to get rid of his excess liquidity. Is it the hon. the Minister’s policy to get rid of excess liquidity by investing it in organizations such as this, or is it the Minister’s desire to get rid of excess liquidity by having long-term Government loans? I suggest that this is a factor the hon. the Minister must take into consideration and he must answer this question. If it is the function of the I.D.C. to invest in these fields, why did they withdraw from the national growth funds, as was indicated in previous reports? The I.D.C. is used as the agency of the Government in connection with assistance to countries outside of South Africa. I do not disagree with investments which have been made in Malawi, and the assistance given to the Malawi Government, but I want to suggest that the time has arrived when the hon. the Minister should consider whether the exchange position in South Africa is satisfactory and whether the Government should not allow a relaxation of exchange control. The Minister cannot have it both ways. He cannot allow on the one hand that the I.D.C. may invest Government money in Malawi and on the other hand discourage South African investors investing outside South Africa.

Mr. Chairman, I rise to deal very briefly with two matters. In the first place I want to thank the hon. the Minister, and in the second place I want to rectify something for the record. We in Pretoria have a particular problem in connection with the levying of taxes. Rates and taxes are the only source of revenue of the municipality for all the services it has to render. As a result of this representations have been made for many years. Amonst other things certain members of the City Council approached the Member of Parliament for Pretoria (Central) in 1967, and this eventually led to the Members of Parliament for Pretoria meeting together.

After we had discussed the matter, we visited the hon. the Minister and the matter was then put to him. Last year I put the matter to Parliament, and I outlined in this House the problem of the levying of taxes for local authorities as well as the special and unique position in which Pretoria found itself. We were very fortunate in that we received a certain amount for Pretoria as well as for Cape Town, and on behalf of the inhabitants and the Municipality of Pretoria. I want to express our sincere gratitude to the hon. the Minister for that consideration. With the new taxation structure for financing the treasury, the hon. the Minister has progressed much further. This is an innovation, and, as one hon. member said, it is a Renaissance Budget. We sincerely hope that as far as local authorities are concerned, a decisive answer will also be given in this connection before long. As long ago as 1923 the Stallard Commission made certain findings. I want to quote from paragraph 388 of the report of the commission on local authorities. It reads as follows—

Now we ask ourselves who the people are who do the spending? Nearly 90 per cent of all Whites find themselves in urban areas to-day. The people who make up this figure of 90 per cent are all national taxpayers and consequently they are making contributions to the treasury. All these people demand care and services on local level. Even before someone is born there has to be clinical and other provision for the mother. Provision also has to be made for small children, for example, playgrounds, etc. Provision also has to be made for children at school, young people and for old people until the day they die. It has been found that one-third of such a community has to shoulder the actual burden of local taxation. This means that two-thirds of this group of 90 per cent do not contribute to these local taxes, but that services nevertheless have to be provided for the entire community. I just want to emphasize once again that property tax places an unreasonable burden on the minority in a community; that minority which in point of fact forms the backbone of a healthy nation. I want to quote from “Essays in Taxation” by Professor C. R. A. Seligman, page 62—

This tax is not only double in that it is passed on, by the industrialists and the business men, but it is regressive and is a very heavy burden on that minority group within the local authority. This matter contributes to the fact that immigration through the cradle is. discouraged, because people in the urban areas simply cannot make ends meet any longer. This is true especially in respect of one-third of the population. This tax is borne by plus-minus 30 per cent of the population, where as the services have to be provided for plus-minus 90 per cent of the population. As this minority group are also national taxpayers, it may happen that this group becomes so bowed down by this burden that they may become dissatisfied. This may lead to the national taxpayer becoming more dissatisfied.

Now I want to mention a few problems in connection with Pretoria. Last year already I dealt with the 26 per cent of Government property which is not taxable. We must also have regard to the fact that the population of Pretoria is made up largely of public servants. Of the 82,000 economically active people 50,000 are in the service of the State, or in the service of semi-State institutions and other public authorities. The rest is made up to a large extent of artisans, clerks, etc. Another special problem is that Pretoria, as the capital, is the show-window of South Africa. All the important visitors visit Pretoria, with the result that these people are obliged to do their best in the field of providing services.

In Pretoria we find the heaviest concentration of young people in our country. I have in mind, for example, the university, the teachers’ college, the technical college, the police college and the Defence Force, all of which attract young people to the city. These young people do not pay direct taxation. In Pretoria we also find a concentration of old people. These people are all unproductive as far as taxation is concerned. Pretoria, therefore, is struggling to make ends meet. In the same way the local authorities have to struggle to make ends meet. We hope to get a decisive answer to this whole matter before long. We, as members of Parliament of Pretoria, would appreciate it very much if we could have another discussion with the Minister.

Mr. Chairman, I want to raise a matter with the hon. the Minister which is not of enormous importance in the world of international finance. But I think it does affect the ordinary citizen in South Africa in his everyday life. It is a source of considerable irritation. I refer to the question of the condition of the banknotes that we use in South Africa, and more particularly the R1 notes, which get an enormous amount of wear and tear in everyday usage.

I asked the hon. the Minister a question earlier this session as to whether consideration has been given to the introduction of a R2 note in order to alleviate some of the usage on the R1 note. He told me that a great number of R1 notes were removed from circulation by the Reserve Bank when they were submitted to the Reserve Bank by the commercial banks, and that new notes were constantly being put into circulation. He told me that consideration had been given to the issue of a R2 note, but this had been turned down,

largely because of the difficulty that blind people would experience in distinguishing between the R5 note and the R1 note due to the fact that there was very little difference in size. It seems to me that this is not really a valid argument at all. After all, one has all sympathy with the blind members of the community, but fortunately they form a very small percentage of the total population. There are other countries which also have blind people, but manage to introduce notes of different denominations, despite the fact that there are difficulties in distinguishing between the various notes if one does not have sight. It seems to me that we could overcome this problem. We could do it by either making our R1 note smaller in size or by making the R5 note larger in size. Surely it cannot be an insoluble problem, one which is beyond our ingenuity. I want to point out that when we did not have decimalization some 10 years ago, there were, in fact, the 10 shilling note, the £1 note, the £5 note and also the £10 note. There were larger denominations available as well.

We never had a £2 note, did we?

No, but certainly we had a £1 note, which, of course, is the equivalent of a R2 note and which took away the wear and tear from the 10 shilling note.

There was a £1 note and a £5 note.

We had a 10 shilling note, a £1 note, a £5 note and a £10 note. We also had a £20 note, which, of course, was not in such great usage, and the £100 note, which was seldom used. Now we only have the R1 note, the R5 note and the R10 note. That is meant to be used in all the cash transactions which take place in South Africa, which must be far greater in volume to-day than they were 10 years ago, before decimalization. I would suggest that the time has come for us to introduce at least an additional note. We must either have a R2 note or a R20 note, either the smaller or the bigger, preferably both, I would say. I can see no reason why we cannot have it.

I want to point out that commerce is certainly very much in favour of this. A survey was undertaken in Cape Town on the question of whether a R2 banknote should be reintroduced. It was prompted by a questionnaire from the Associated Chambers of Commerce. Apparently it was received with acclamation. It dealt with the necessity for the reintroduction of a denomination between the R1 note and the R5 note. I understand the banks were not so much in favour of it, but they gave a very extraordinary reason. One reply from the manager of a bank on the Foreshore was that the re-introduction of a R2 note would ruin the ease of dealing in notes of R1, R5 and R10 denominations, because he said we are only now getting used to the decimal system. Well, I do not think that is a valid argument at all. We have had decimalization now for 10 years. Everybody is used to the decimal system. Another banker suggested that we have a R20 note. As I say, I do not really mind which way we do it, but I would suggest that since it is the lower denominations that have the most wear and tear, the obvious thing to do would be to introduce a R2 note.

I want to give the hon. the Minister an example. I did not select these notes I have here. I cashed a cheque a day or two ago, and among the notes I was given were these disgusting looking R1 notes. They look as if they have been floating in the Vaal River for about two or three weeks. They are most unhygienic and filthy. I might say that they are not, by far, the worst that I have seen. If one happens to send an African to the bank to cash a cheque, the sort of tattered notes one gets, really beggars description. But this is so. I make a point of putting a note on the letter, saying “new notes only, please”. But these notes are disgustingly unhygienic. I think too that they create a very bad example. When visitors come to South Africa, change their currency into South African currency and are presented with things like these, I think it creates immediately a bad reflection. So I would suggest that the hon. the Minister should rethink this matter. It surely cannot be too difficult to design a note which is different in size from the R5 note and the R1 note, or, as I say, to increase the size of either the R5 note or the R1 note. That is one matter.

The other matter I want to raise with the hon. the Minister, comes under his Vote as far as the excise and customs section is concerned. I want to ask whether the hon. the Minister would not reconsider the decision given by the Department of Customs and Excise not to allow an offer made from an overseas country, by a Swiss church, to send powdered milk to South Africa for free distribution in drought-stricken areas. Now this does not concern the Minister, but I have to lead up to it, because it is part of the story. The Dairy Board in Pretoria would not give permission for an import permit for the powdered milk to come in. We have plenty of surplus fresh milk, but we do not have plenty of surplus powdered milk.

We have plenty.

It is not relevant, but the hon. member keeps interrupting me. We are throwing away hundreds of thousands of gallons of fresh milk, because we cannot process the fresh milk into powdered milk. We do not have sufficient facilities. But the point is that we were offered this free powdered milk for distribution in drought-stricken areas, and it would appear that the customs people said that they would not allow the powdered milk to enter free of customs duty. This, of course, made the whole matter quite uneconomic, as far as the churches were concerned, and they were unable to accept the offer. I think this is a very churlish attitude to adopt, where we are being offered this particular gift for drought-stricken areas. I know we now have a scheme to assist the Transkei, but I do not know what is being done about the Northern Transvaal. Several tons of powdered milk in those areas would make all the difference between life and death for a number of children.

Mr. Chairman, I should like to make a few observations in connection with Vote 3 on the South-West Africa Account.

Before coming to that, however, I should like to refer to the speech made by the hon. member for Bezuidenhout. Apparently he deemed it advisable to report me to the hon. the Minister of Finance as having spoken out of turn. If the hon. member had gone a little further back into history, he would have been aware that representatives from South-West Africa had made representations to the hon. the Minister’s Department in connection with this matter he raised. We received a decisive reply to those representations. The public of South-West Africa had been informed of these representations, because one does not really do this sort of thing secretly, and they waited for the reply, because it was very important that they should know, especially at this juncture, when the financial year for companies is closing.

As regards the hon. member’s concern about the payment of the revenue from the purchase tax, I may refer him to the White Paper that was issued in this connection. If he studies this he will see that the steps being taken in this connection are quite in accordance with the spirit of that White Paper. I therefore think that this is quite in order.

Mr. Chairman, the hon. member expressed misgivings about estimates in South-West Africa in the past. What this has to do with this Budget, I do not know. He was concerned about under-estimates in South-West Africa in the past. I think that if the hon. member had taken the trouble of going back and looking at the basis on which those estimates normally have to be made, he would have found that it was not so fantastic as he imagined. He also expressed misgivings as to whether the hon. the Minister had not perhaps under-estimated his revenue in his present estimates, if I understood the hon. member for Bezuidenhout correctly. Sir, I also had a look at the estimates, and I am convinced that they are safely conservative, and since the sources of revenue of South-West Africa are uncertain, as the hon. member should know, I think that when revenue has to be estimated the correct approach is that those estimates should be safely conservative.

In the time at my disposal I want to refer briefly, in the first place, to subhead B, “Police”, where provision is made for R400,000. The history in this connection is briefly the following: When South Africa took over the Police in South-West Africa in 1939 the expenditure in respect of Police at that stage was £114,000. This amount was annually paid over to South Africa by S.W.A., after the South-West African Police had become the South African Police in that year. Through the years the expenditure of the Police naturally increased gradually, and approximately a decade ago a new agreement was concluded in terms of which South-West Africa was to contribute R400,000, as is still the position. There is an understanding that this contribution of South-West Africa may be revised at any moment. I am not pleading for a revision to-day. At present the cost of the Police in South-West Africa amounts to …

Order! I think the hon. member must raise this matter on the Vote of the Minister of Police.

No, the hon. member is quite right.

I am dealing with the actual amount estimated. The cost of the Police in South-West Africa is at present more than R1 million, and this may interest hon. members of the Opposition very much, because their political friends in South-West Africa take the view that the Republic of South Africa is using South-West Africa for its own purposes and its own financial gain. I want to impress this specifically on the hon. member for Rezuidenhout, who is concerned about the finances of South-West Africa.

He thinks he is the member for Namibia.

The next matter to which I want to refer briefly is “Land and Agricultural Bank—R1½ million”. I had the opportunity of discussing this matter with the hon. the Deputy Minister of Finance, because there is some concern in South-West Africa about this estimate of R1½ million. Therefore I think it will be a good thing if I raise the matter here. During the past years the Land Bank in South-West Africa needed considerably smaller amounts than this for the fulfilment of its obligations, but this was a result of the buying up of the Odendaal farms, which meant that the Bank received many capital amounts, and consequently had no need of funds. Those contributions have now come to an end, and if one considers the needs of the Bank in the past, it is just possible that this amount of R1½ million will prove to be insufficient to meet the needs of South-West Africa. Therefore I should be glad if the hon. the Minister could clarify the position for us in that regard as well. There are various other considerations in connection with the Land Bank to which I should perhaps refer briefly.

We in South-West Africa feel that our farming industry is dependent on the low rate of interest that applies there in respect of loans to farmers, i.e. 4 per cent as against the rate applicable in South Africa at present. You will see in the White Paper, Sir, that as long as South-West Africa’s own funds are sufficient, that rate will be maintained, i.e. as long as the South-West Africa Account with the Land Bank can be financed from South-West African funds. That is why we in South-West Africa are anxious that the policy being followed at present, i.e. that loans should not exceed R20,000 per farmer, should be maintained. We feel that it is very important to South-West Africa that that low interest rate be protected. If this amount should be increased to more than R20,000 we foresee that the funds of South-West Africa will shortly be insufficient. This will mean that the South-West Africa Account will also have to be financed as is the case in the Republic, and that South-West Africa will then have to pay the higher interest rate. It is important to the farming industry in South-West Africa that those interest rates should be maintained.

I am sure the hon. member who has just sat down would not want me to get involved in a little debate on South-West Africa, but there is one thing about which I want to put his mind at rest. He need have no fear that the estimates of income will not be safe and conservative. We can give him the assurance that the estimates which the hon. the Minister puts before this House will always be safe and conservative and that he is always likely to receive the income which he shows that he is going to collect.

Sir, I want to deal with another matter. I would like to ask the hon. the Minister whether he can tell us whether he is satisfied with the progress that is being made with the sale of the 5½ per cent Jubilee bonds. You will remember, Sir, that in the Part Appropriation debate, the hon. the Minister told the House that the excess liquidity in the country at the time was estimated to be some R400 million and that he hoped to draw off some R250 million through the various loans which the Government had introduced. That was the position some two months ago, and probably still is to-day. But the one fear, of course, is that the position may again be exaggerated by the political events in France, and that South Africa might again find herself a funk-hole for a considerable amount of money coming from overseas, which could well aggravate the position. At the time of the Part Appropriation debate I questioned whether the hon. the Minister, in fixing his interest rate at 5½ per cent, had not fixed it too low, because I believe that taking into account the present investment climate we might find that 5½ per cent is insufficiently attractive. Sir, there was a report last night in The Argus which said that R14.859 million has been raised on the 5½ per cent Jubilee Bonds since the 12th February, 1969, that is to say, in a matter of some ten weeks. If this figure represents the average that we can expect over a year, then we will finish at the end of the fiscal year with something like R75 million to R80 million from the 5½ per cent Jubilee Bonds, an amount which is well below the figure which the hon. the Minister requires.

If the figures in the Argus report last night are correct and the amount raised last week was only R703,000, and only that rate of sale of the bonds is maintained, then of course over the 12 months, all that the Minister will collect is between R45 million and R50 million. We know there are other sources besides the 5½ per cent Jubilee bonds, but I presume the bonds are anticipated to provide the bulk of the R250 million which the hon. the Minister is looking for. You see, Sir, the share market, despite the Minister’s warning in the Budget debate, has certainly maintained its momentum and equity investments are still the popular investment of the day. Again, with the political position in France, one can expect that the market will attract more attention and a greater interest. It is going to encourage people further to invest in equities as a hedge against potential French devaluation; because one of the problems the Minister might have to face, which has already been mentioned by the hon. member for Pinetown, in regard to South Africa is that if the franc is forced to devalue, with its impact which it might have on sterling, we might find a general devaluation right throughout the world, something which we were glad was avoided when Great Britain devalued on the last occasion. There has always been the fear that the devaluation of the franc might spread far wider than France or even Great Britain. It seems to me that if this should happen we may run into quite a lot of trouble in drawing off from the excess liquidity the R250 million that the Minister is looking for. Of course the Minister has told us, and we subscribe to it entirely, that unless we can cull this liquidity from the market, it is going to have an enormous inflationary effect, something we all want to avoid.

There is another factor that has come into being since the Minister told this House that he wanted R250 million from these bonds, and that is the change in the structure of our direct taxation. With the general lowering of the tax rate, something we all accept as having been necessary, and the reducing of the loan levy from 15 per cent to 5 per cent, the 5½ per cent tax-free bond is not as attractive to-day as it was before the Budget speech, because the gap of tax saving has narrowed very considerably in many cases. The Minister may be placed in this position regarding the 5½ per cent long-term investment. I use the term “long-term” advisedly in the context of life to-day; I know the Minister is quite apt to tell me that five years is not a long-term investment, and I would be inclined to agree with him in normal circumstances, but to most people to-day five years is a long time; tomorrow is when they expect to make profit.

A long-term investment at 5½ per cent is not as attractive now, against what one might call the short-term investment of, say, per cent which one can get to-day in the normal market, the grey market and other markets, for a period of, say, a year. We know the problem the Minister has in regard to this very difficult question. As was mentioned this afternoon, he has problems in regard to gold and foreign exchange, and the fact of the matter is that until those problems are solved he will be unable to take any real steps to halt inflation. Until these problems of gold and foreign currency are solved the major attack which he can make on excess liquidity is through his loans. I want the Minister to tell the House whether he feels that these loans are going to produce the amount he anticipated and whether he is satisfied that the 5½ per cent at which he fixed the loans is still satisfactory, or whether it may not be in the interests of the country generally, in our peculiar circumstances at the moment, that these loans even at this late stage should not be fixed at 6 per cent.

I shall try to reply as briefly, but nevertheless as fully as possible, to the questions which have been asked. I appreciate the way in which hon. members asked the questions. This bears testimony of responsibility and proves that hon. members appreciate that I cannot give full replies to many of these questions.

The hon. member for Constantia asked me, in the first place, about the gold drawing of 66 million dollars at the I.M.F. He rightly pointed out that 50 million dollars of that amount constitutes the gold tranche, while the balance is the super gold tranche. The gold tranche, as you know, constitutes our part of payments of our gold at the I.M.F., and the super gold tranche constitutes the amounts which we lent to other countries through the I.M.F. and which are again made available to us by the I.M.F. in the form of exchange. I want to make it perfectly clear that our only object in making this drawing at the I.M.F. was to obtain foreign exchange. Hon. members have pointed out several times, and everyone knows, that the ratio of our gold to our foreign exchange in the case of our reserves is extremely high and that we need foreign exchange for foreign payments. Since we do not want to sell gold, we have to supplement our foreign exchange from time to time, and this is one of the legitimate methods of doing so. Hon. members may accept, and I do not think any hon. member has any doubt about it, that this drawing at the I.M.F. is a fully justified and regular one, so that the I.M.F. raised no objection to it. Neither did the Americans raise any objection to if. The matter followed quite automatically and although a great deal was written about it in the newspapers and various interpretations were placed upon it, this drawing was a perfectly legitimate and fair one. In addition I want to point out that this is no loan as was suggested by my hon. friend here.

It is not a loan that was made; it is a drawing, and no interest is paid on it, but only a service charge of ½ per cent. We have to repay this drawing when we are able to do so after the end of the financial year of the I.M.F. That is after the end of April. It is to be paid when we have sufficient foreign reserves. We are expected to repay it in proportion to the increase in our gold and foreign exchange; and we are expected to repay it on the basis of the composition of these foreign reserves. In other words, if our foreign reserves have increased mainly in gold, our repayment of the drawing will be mainly in gold.

†I think that is the reply to hon. members opposite. The repayment will take place after the end of this financial year of the I.M.F. and it will take place according to the increase in our reserves, and mainly in the form of gold. The question has been asked whether we are able to renew this drawing at any time. All that depends, of course, on the position of our foreign exchange reserves. Theoretically of course we could go back again and after we have paid back this drawing we could draw it again, but in such cases our position in regard to our reserves will be taken into account, whether we really need that foreign exchange or not. I may say here quite clearly and emphatically: It has often been stated that as South Africans we want to play a game in this case and that we want to draw and pay back and draw and pay back again in regard to the I.M.F., but that is not in the least the idea of the South African authorities. We have been playing this game, I think, quite responsibly in the past and we shall also act responsibly in this case because we know we have many friends overseas who honour us because of the responsible way in which we have acted in the past. This, then, is my reply to the hon. member for Constantia and to the hon. member for Pinetown.

The hon. member for Constantia also asked me for the reason. Well, the reason is, as I have already stated quite clearly, in order to get some foreign exchange pending an arrangement with the proper authorities regarding the sale of our gold. I do not want to say too much on this point now, because we have said and talked so much about it recently. I have expressed it as my opinion in the past that we can come to a satisfactory agreement with the authorities concerned in regard to the marketing of our gold. This is still my view and there are strong possibilities that South Africa may, in the near future, come to an agreement in regard to the sale of our gold. This step we have taken is only an intermediate step, a step to which we are perfectly entitled, i.e. this drawing of our gold tranche.

The hon. member for Constantia has also asked me about the position in France. It is, of course, difficult to comment on such recent events. However, as far as the monetary position is concerned we have here a position which is different from the position in other countries where we experience financial problems. In these countries these problems were due mainly to financial and monetary reasons. As against that in France financial and monetary difficulties arose mainly on account of political factors. France is a country which used to be economically strong. If we were to compare the position of France with that of Britain, for instance, we would find in the first instance that France had strong reserves—seven billion dollars. Furthermore, France does not have large debts. Accordingly the French economy was relatively strong. But France was thrown into the present crisis by political forces. It landed up in this crisis on account of the action of these political forces. This illustrates the influence and power which politics have on finance and economics. Political stability is a most important factor for financial stability. So, we as South Africans should do all we can to ensure political stability in our own country, as we would thereby ensure financial stability. What the position in France is going to be, no one knows or can foretell. However, I do not think we need expect any rapid changes within the near future. The other powers, of Western Europe particularly, will do all they can to uphold and protect the franc as long as they possibly can because, as hon. members have rightly said, if the franc were to fall, there is a very strong possibility that sterling, and may be the dollar, would follow in the wake of the franc. Consequently, I think they will do everything they can to uphold the franc as long as they possibly can. We know that a few weeks ago at Basel the central banks concerned adopted a resolution to protect the currencies of countries against flights of those currencies. Countries in Europe are aware of the possibility of and the dangers which might flow from any major currency falling. Consequently, they would do all they can in order to protect that particular currency. But the danger may come from political circumstances in the first place. If the franc, not on monetary grounds so much as on political grounds, were forced to devalue, the danger is that it would devalue to such an extent as would be dangerous for other countries. On the other hand, if the franc were to devalue only to a limited extent, that danger might be obviated. We know that during the last crisis there was talk that the franc might devalue by 11 per cent and that the other countries would be able to absorb that devaluation. But if, on the other hand, the franc were to devalue by 15 or 20 per cent, or even more, there is the serious danger that sterling may be affected, and even the dollar. At this date the dollar is fairly strong, because of international political circumstances. Furthermore, recently we have seen a large inflow of capital into the United States from Western Europe. This is probably only a temporary phenomenon. In any event, nobody can foretell that this will continue year after year. As long as we have an inflationary position in the United States, as there is at the present moment, the dollar might also be affected by a major occurrence in the currency field in countries of Western Europe. If, therefore, the franc were due to political reasons to devalue considerably, sterling and currencies around sterling, and the dollar, might be faced with a severe crisis. Of course, it is impossible for me to say what we shall do in those circumstances. We cannot, in any event, say now what steps will be taken. With the devaluation of Britain circumstances were somewhat different from the position in the 1930s. In the 1930s we were in difficulties because we did not follow Britain. However, in 1967 we did not follow Britain with quite different results. If there is to be a fairly general devaluation right throughout the world, we shall, of course, be faced with a severe problem. But that might be the occasion to bring about a revaluation of the position of gold, although this is not the type of revaluation which we are looking for. However, as I say, that might be an occasion for such a revaluation although that might not be an orderly revaluation, as we have been advocating.

The hon. member for Constantia and the hon. member for Parktown commented in passing on the general monetary situation. I do not want to say too much about that. All I want to say is that what is happening in France to-day and what has happened in the world during the last months is indicative of a general feeling of unrest in the monetary field, a feeling of mistrust in the major currencies of the world. We see these so-called speculative movements. There is, for instance, the speculative movement against the franc into the Deutsche Mark. In these movements so-called speculators play an important part and speculators are being blamed for everything that takes place. All these so-called speculative movements are but a sign, a symptom. They are not the cause of the unrest in the monetary field. They are the signs and the results of the inherent distrust of the major currencies of the world. This underlying distrust of the major currencies of the world is due, not so much to the fact that the international monetary system is at fault and is to be blamed for the position in which we are to-day, but to the fact that countries are not playing the system according to the rules. There has been much said to-day about this monetary system and about all types of changes that are to be proposed Our system which we have to-day, is not perfect. The main reason, however, for all these crises today is that countries are not using the system as it should be used. As long as there are imbalances in countries, whether they be internal or external imbalances, and countries do not take steps to correct these imbalances, so long shall we have these constantly recurring monetary crises. So long as countries who are in deficit do not take steps to control total demand and countries who are in surplus do not take steps to promote development within their own borders, as long as countries persist in inflationary policies, I think that we shall always be faced with problems of this nature. During the last few months the world has devised a few methods of trying to combat these constantly recurring crises. We have the two-tier system on which many place their hopes. We have this Basel agreement of assistance to nations. We have quite a number of other devices which are being explored to-day, such as the help to countries when their currency is in danger. All these devices might help, but they will never cure the basic deficiency in the system. That is the discipline which nations have to exert. We believe that discipline can only be enforced when we again have the real discipline of gold playing its role as it should play its role. This will be one of the methods of curing the world in its present difficult state.

The hon. member for Parktown has referred to a few matters with regard to loans. He has asked me about the Treasury bonds and whether I am satisfied with the receipts in this regard. As he rightly mentioned, the receipts are about R15 million. I must honestly admit that this is rather disappointing. They are less than we hoped for. It could be that the receipts are lower than we expected on account of two factors: firstly, the general monetary situation in which we find ourselves and the Stock Exchange boom, because people want to invest more in growth funds and the fact that because of the concessions in income tax, these bonds are now less attractive. He is quite right in his diagnosis of the problem. Because in regard to the interest factor, we did not consider it right to follow the pattern of rising interest rates. Even when we see what is happening now, I still think it would be wrong on the part of the State to follow this trend of rising interest rates. We should try as far as possible to be conservative in our own interest rates policy. With regard to the second factor, the question of the investment in shares instead of investment in fixed interest securities, there is little we can do about that as long as there is this psychosis amongst our people. However, the solution would be only the general solution which we have all spoken about, the solution of the draining of liquidity. “Draining of liquidity” are big words. Hon. members and I know quite well that one major method of draining this liquidity cannot be only through, internal loans. The hon. member for Constantia rightly remarked that it is impossible for the State to continue by means of State loans to drain away liquidity from the private sector and pay more interest. We already have a R38 million increase in interest payments. Our main objective should be to drain away liquidity across our borders. That means export of money, opening the gates for money to drain away out of our own domestic income. Hon. members are also aware that this is impossible for us as long as we have this gold problem on our hands. We hope, as I have already stated, that we shall be able to find a solution in the near future. We are not the only ones that are eager to find a solution to this problem. We know that there are many other authorities in the Western world who are eager to find a solution. We are optimistic in this regard that we shall be able to find a solution with which we shall be in a position to market our gold and in this way to acquire foreign exchange. If we have the foreign exchange we shall be able to drain the excess liquidity by making more money available for investment abroad.

The question has been asked whether we should completely abandon exchange control, if this should happen? My reply is that we should definitely not, because there is always this possibility that if we should abandon exchange control completely, as I have already stated, we might be faced with such an inflow of money into this country that we will rather aggravate the problem than solve it. With all this uncertainty in the monetary field and with the attractions that South Africa can offer, because of the strength of its economy and gold shares, there is just the possibility that we might be faced with such an influx of capital that we shall find ourselves in serious difficulties. Even if we should solve this problem of marketing our gold, even if we should be in possession of sufficient foreign exchange reserves, I think the only policy that we shall follow is to relax gradually, step by step to feel our way, and let the money go out in a determined way, in such a way that we shall have control over it all the time. In the modern world with all these currents of capital flowing from one country to another, South Africa, as a small country, would find herself in a much more difficult position than any of the large countries if there were to be a huge inflow of capital. We can never allow a position in South Africa where hot money flows into this country and then causes difficulties here. We do not want to make it easy for people to bring in money and to take out that money easily again. Therefore, if we should relax on foreign exchange control, it would be a relaxation more for those funds which are real investment funds and not hot money that flows in and flows out again. We shall have to follow a very cautious policy, a very selective policy if we were to lift our foreign exchange control. I think I have replied to most of the questions of the hon. member for Parktown.

The hon. member for Pinetown has also mentioned this matter of liquidity in speculation. He has also asked a few questions about the I.D.C. and I.D.C. participation in the money market through the Central Acceptance Bank. I just want to point out that these merchant banks play a very important part in the financing of industry. Much of our industrial progress and much of our financial progress during the past few years, are due to the increased sophistication of our money market.

We agree with that.

Hon. members on that side of the House agree with that. I do not think it is wrong for the I.D.C., which plays an important part in the promotion of industry as such, to also play a role in the financing of industries in the money market, in other words, thus playing a part in our industrial development.

The hon. member has also mentioned that the I.D.C. has been allowed to export capital to Malawi. I think he has the credit insurance, the credit guarantee, in mind. This credit guarantee is available, not for the I.D.C. itself, but via the I.D.C. to other companies. This service can be rendered by the I.D.C. to every company which exports capital goods in particular to another country.

The hon. member for Houghton has asked a question about the R2 note. This is not a matter of principle; it is a matter of expedience, of the practicality and the usefulness of such a note. In these things I want to be guided by the experts in this field. They feel that there is really no demand for a R2 note. We have a R1 note, a R5 note and a R10 note, and there is no demand for this R2 note. I think the proof of the pudding is in the eating; in this case there are huge stocks of R2 notes in our banks.

If you ask for it, you will not get any.

No, they are not being asked for.

They are being asked for.

If the hon. member should ask for them, he shall get them. There is no demand for these notes, but they are available.

They are not made available.

If a person is very eager to get hold of these R2 notes, he will make it his business to ask the bank for these R2 notes.

I did ask for these notes.

If we should introduce a new R2 note side by side with the existing rand note, it will create great difficulties, particularly for the blind people. This is, as I say, not a matter of principle; it is a matter which can always be investigated and if we really find it necessary there will be no difficulty.

What about the introduction of the R20 note?

We can go in upon that matter, but as I have already said, it is a matter of the practicality. We must also consider whether the introduction of such a note will be worth the cost of printing a completely new note. We shall go in upon these practical matters in consultation with the Reserve Bank and the Mint.

Does the hon. the Minister mean that the R2 note is actually accepted currency and that one can demand that it be accepted?

Yes, so long as the R2 notes are available they can be used.

Then the hon. member also asked me about the powdered milk which Customs and Excise refused to allow free of customs in the country. Unfortunately, there is no legal provision for allowing skimmed milk to enter free of customs.

Can they not use their own discretion?

No, unless the Act is changed.

*The hon. member for Bezuidenhout asked a few questions in regard to South-West Africa. In the first place, I just want to point out to him that changing the companies tax from 30 per cent to 33⅓ per cent is a concession in South-West Africa. In actual fact the idea was that South-West Africa would have to pay 40 per cent, as in the Republic. Since the rate of tax was 30 per cent, we found that an increase from 30 per cent to 40 per cent was too large. After discussions with the South-West Africa Administration we came to an agreement that we would increase the rate gradually, i.e. from 30 per cent to 33⅓ per cent. You will agree that this was a concession in that they do not have to take that enormous plunge at once.

The hon. member also asked me what the purchase duty in South-West Africa would amount to. Our object in deciding that the sales duty of South-West Africa would all go back there, was not to place South-West Africa in a worse position than before. The final calculations as to what that amount will be, still have to be completed, but according to the provisional estimate it will be R2½ million. This amount represents revenue and not expenditure and will be credited to South-West Africa. For the moment we expect that the South-West Africa account will close with a deficit. That is to say, our accounts will not be upset by it if we get some extra revenue there.

The hon. member also asked whether we were not being too conservative in regard to our estimates of revenue. That may be so, but the hon. member for Parktown said that being conservative in these estimates was a very good attribute. However, the difficulty is that we do not have sufficient data in regard to South-West Africa over the past year. These figures were not available at the time of this year’s Budget either. These figures relating to interest which the hon. member mentioned here, are based on data which were available at that stage. These amounts were not based on guesswork, but on existing data. That was the reason why the State arrived at that figure in its financial report.

I think I have dealt with all the questions. The hon. members who discussed the gold price will appreciate that I do not want to say more about the gold price now. I want to thank the hon. member for Hercules for what he said in regard to the contribution which the State made to the capitals, Pretoria and Cape Town. In regard to the towns which are asking the State to give them more help in erecting Government buildings, I might just say that it is not only one side that benefits; these towns are also very glad to have those Government buildings there.

Mr. Speaker, I want to deal with two matters which have arisen out of the hon. the Minister’s reply. First of all, with regard to exchange control, I do not think we advocated, nor do we advocate, the abolition of exchange control. Secondly, the hon. the Minister referred to the LD.C.’s role in the field of merchant banking. We on this side of the House appreciate the importance of merchant banking, but it is equally important that one particular merchant should not be in the position to indicate that it has special Government backing. I draw the attention of the Minister to a recent statement which was made by Mr. Ian Marais, when he addressed a meeting in Pretoria on the subject “South Africa’s Economic Future”—

He said that it was high time that the matter of State competition with private enterprise should be brought into the limelight. He went further to say that—

I agree with those views. I do not think that organizations which are not too small and not too new should be backed by the I.D.C. Organizations such as the Standard Bank and Volkskas are not small or new organizations. I do not think it is the role of the I.D.C. to take loan money which comes from this House and to attach themselves to these firms. These organizations are competing with other merchant banks in the country. I think the hon. the Minister will agree with me that this is a private enterprise country. I think the other merchant banks are at a disadvantage, particularly when officials of this Central Merchants Bank, when offering terms and conditions, say that they are in a position to offer special terms, that they are recognized by the Government, and that they have I.D.C. backing. They use this method and I do not think it is fair to other merchant banks. I have no quarrel with the I.D.C. as an organization. It has a function to perform and has been created by a Statute of this Parliament. When it goes into the competitive field, however, and competes with other organizations to the extent of lining up with the Standard Bank and the Bonuscor Group in competition with other organizations, I think these other organizations have a valid complaint against the Minister of Finance. The hon. the Minister of Finance has already expressed the view to the hon. member for Parktown that he is disappointed with the R.S.A. loans. He should not be doing business in this field, and on the other hand be looking for R.S.A. loans, because he will virtually be competing against himself. It is this factor which I think is not satisfactory. We recognize the need for an organization like the I.D.C. in order to get matters moving. The I.D.C. has made considerable progress in this year. In their latest report they have indicated for the first time that they have been receiving more in repayments than they are investing.

The final matter I want to raise is in connection with the foreign loans. I now refer particularly to a paragraph in the report of the I.D.C. which states that it has made an investment of some R11 million in Malawi for a special project. This is what I referred to. I did not refer to the financing of export loans. This is in order and we have no complaints in that regard. Our doubts are in connection with the I.D.C. entering into the merchant banking field. Its position is being used in opposition to other merchant banks and we think this creates the wrong impression. I think the complaints raised by Mr. Jan Marais are legitimate in this country, which is supposed to be one of private enterprise.

Mr. Chairman, the hon. member for Pinetown astonishes me. If he knew the history of how the I.D.C. entered the field of accepting banks, he would refrain from expressing the criticism he did. The I.D.C. was the initiator of the founding of the old Industrial Bank, which was one of the first accepting banks in South Africa, because for many years our capital markets in South Africa were to a large extent not organized. It was, in the first instance, in the interests of our industries in general for those capital markets to be organized. That is what the I.D.C. did. Hon. members may ask the industries what an important role the old Industrial Bank played in the financing set-up of our industries in general. What happened subsequently? It has been proved in the financial world, abroad as well as in South Africa, that the trend towards larger units is unavoidable and essential. It enhances the competitive ability and efficiency and it improves the service. This is a world trend, but also a South African trend. Subsequently an amalgamation took place between the old Industrial Bank and the Central Accepting Bank of Bonuskor. This was the first amalgamation that took place. A few years later a new bank was founded, i.e. the City Merchant Bank, which was organized by a number of bankers, inter alia, the Standard Bank. They learned from experience that they had to become bigger and stronger if they wanted to render proper service on reasonable terms so as to compete with other central banks. What is the name of the other bank? The only other central bank of considerable size is the U.A.L. which was founded by Sir Ernest Oppenheimer. The Central Accepting Bank of Bonuskor and the I.D.C. then came together and a further amalgamation resulted. Subsequent to that the City Merchants Bank, in turn, amalgamated with the Central Accepting Bank for Industry. I want to submit to-day that this is an essential development and that the industries in general for the sake of which the I.D.C. was established, are greatly indebted to the I.D.C. They are indebted to it for organizing the capital market and the maturity it reached through its initial aid and instrumentality. The hon. member must pardon me if I say that the Union Acceptances is the only competitor worth mentioning.

What does Jan Marais say?

Mr. Jan Marais is not an industrialist. This organization was established for industries in general. This new bank competes with U.A.L. (Union Acceptances). But who are the shareholders in this organization? Bankers, such as the Standard Bank and Volkskas amongst others. This organization is a very important capital instrument for industries in general. After all, that is what the I.D.C. was established for. I know what procedure this organization follows, and my experience has been that that institution which was originally initiated by the I.D.C. has all in all made a tremendous contribution towards the industrial development of South Africa. It meets a special need in respect of financing which all economically mature countries have. Instead of expressing criticism, I want to say that this side of the House is in complete agreement on the important role played by the I.D.C. in the establishment and the development of central accepting banks. In the interests of industry in general we are grateful for the role played by the I.D.C.

Mr. Chairman, we have had a well-considered speech by the hon. the Minister of Finance in regard to the latest developments overseas and their effect on South Africa. I hope that all interested parties will take cognizance of this, and I do not wish to go into this any further. However, I just want to emphasize once again that, since gold as an international currency is of so much importance to us in South Africa, any steps taken in order to enhance the importance of gold, will meet with our interest and receive our support. At the same time I want to say that I hope the hon. the Minister will investigate further the possibility of the reissue or rather the popularization of the two-rand note.

The matter I really want to touch upon, is connected with Loan Vote A, namely Item 9. It is an amount of R3,940,000 which represents a loan to the South African Broadcasting Corporation. As you know, Mr. Chairman, previously this amount was included under a separate Loan Vote (Posts and Telegraphs), but because of new adjustments in regard to the Post Office, it is now being classified under Loan Vote A, and the hon. the Minister of Posts and Telegraphs is the person who has to account for it. I see that the amount has increased from R2,950,000 to R3,940,000; this is an increase of almost R1 million which will be made available to the S.A.B.C. as a loan. According to the figures, from what I can infer from the latest report of the S.A.B.C., the total amount of this longterm loan from the State is R25,913,400 at present.

We have no objection to the principle of a loan being made to the S.A.B.C. in respect of this capital expenditure, but our objection is that we do not have enough information in regard to this amount. If we look at the latest report, which was tabled a few days ago, we find that R12,376,000 is being requested in respect of “freehold land, buildings and improvements at cost, less amounts written off”, and if we look at page 68, Table A, where particulars are to be reflected of all the capital assets of the S.A.B.C., we also find that such particulars are not being reflected as we should have liked to have seen them, but that this item appears once again: Land and buildings, R12,376,000. I should like to ask the hon. the Minister to explain to us for what purpose this amount of almost R4 million which is now being made available to the S.A.B.C., is being used. When I raised this matter previously, the reply given to me in those days was that it was for the most part being used for developing the F.M. system, for developing F.M. towers, etc., but we know that the F.M. system in South Africa has now almost reached its final stages and that there is not much left that has to be done in that regard. Yet we find that this amount has been increased by R1 million this year, and we should like to know why it is necessary this year to apply for this increased amount in respect of buildings and capital expenditure.

Do you want television to be introduced?

I do not wish to discuss the matter of television here; if I did so the Chairman would rule me out of order, although I want to say that if the hon. the Minister were to rise and say that part of this amount was for equipping television studios, we could have a very interesting debate in regard to that matter. But I do not want to allow myself to be put off my stroke by the hon. member. Mr. Chairman, we have read about tremendously extensive capital expenditure which is in store for the S.A.B.C. in view of a new complex of buildings which, I think, is going to cost more than R20 million. An amount of R4 million is being requested here to-day. Is part of this R4 million available for that large complex of buildings? Sir, this is our problem: Amounts are being requested here for the S.A.B.C. in respect of capital expenditure, in respect of buildings and in respect of the purchase of land. Then, all of a sudden, we as ordinary laymen read in the newspapers a report about a 32 storey building which is being erected at Auckland Park; we as a Parliament cannot discuss this matter here except under this particular Vote, and I hope that we shall obtain more information from the hon. the Minister in this regard.

The hon. the Minister will recall that in the course of the Second Reading debate on the Post Office Appropriation Bill he gave us the undertaking that we could, under the Vote of the Minister of Finance, question him about matters of this nature which were connected with the S.A.B.C. It is as a result of the undertaking I received from the hon. the Minister that I am now raising these matters here. The first matter is this huge complex, which is going to cost more than R20 million, which is to be erected at Auckland Park. Where does the money come from? Are we engaged in voting money for that purpose at this moment? If so, it is essential for us to know more about it.

It is essential for us to know more about the land transactions; it is essential for us to know more about the arrangement entered into between the S.A.B.C., of which Dr. Piet Meyer was in charge, and the Rand Afrikaans University, of which Dr. Piet Meyer was also in charge in regard to the purchase and the acquisition of the premises. It is essential for us to know whether changes have been made and losses have been suffered in regard to the original contracts. This is a matter in regard to which the Minister could not give me a reply to a question in the House of Assembly, but here he has an opportunity for eliminating a great deal of the concern on the part of the public in connection with the spending of capital funds by the S.A.B.C. At the same time he is also being afforded the opportunity here this afternoon to tell us whether some of these amounts are, for instance, going to be used for the purposes of the Bill we passed recently, i.e. for the erection of stations outside South Africa. This is information which we are entitled to have, because a large amount of R4 million is being voted here for the S.A.B.C., and we are asking the hon. the Minister to be so kind as to account for it now.

The hon. member for Orange Grove really makes me laugh. If I told the hon. member in reply to a question that in terms of the Act I could not furnish him with that information, will he not accept it? After all, this is an Act which was introduced by a United Party Minister in 1936. I am still acting in terms of the provisions of that Act of 1936. But that is merely by the way, Mr. Chairman. It has absolutely nothing to do with this matter. The Auckland Park development has nothing to do with this matter either. Of this amount of R3,940,000 a sum of R2 million is in respect of the further development of the F.M. system. There are another five transmitting stations which are to be erected in the course of the next financial year. Of this amount of R3,940,000 a sum of R1,300,000 is in respect of the extension to the F.M. system to South-West Africa, particularly in view of the non-white services provided there, and the remaining amount of R640,000 is in respect of capital expenditure in regard to the foreign radio service which has to be incurred in connection with essential and strategic spare parts. In this respect I want to satisfy the hon. member once again: It is not foreign radio stations which are being erected; nor does it in any way concern the Bill passed here the other day. I want to set his mind at ease at once. There is nothing sinister or secretive or mysterious in this whole thing. It is purely and simply money which has always been spent in this way.

Where is the S.A.B.C going to obtain the capital which is going to be used in connection with Auckland Park?

Mr. Chairman, that does not concern this matter at all. The Chairman would rule me out of order if I were to reply to that. I give the hon. member the assurance that it does not concern this matter at all. I shall not be able to reply to that question. The hon. member knows that I cannot give him that information. It is obtained from the funds of the S.A.B.C., but in terms of the Act I am not going to furnish the particulars. I told the hon. member on Friday that in terms of the Act I could not give him that information. These are matters which belong under the S.A.B.C. as an autonomous corporation.

That proves how you are concealing things.

Order! The hon. member must not make insinuations.

No, it proves nothing on earth; it merely proves how stupid the hon. member for Orange Grove pretends to be and that he does not know the Act, the Act in terms of which these powers are granted and which was introduced by Minister Clarkson of the U.P. Government in 1936 and in terms of which the S.A.B.C. is still being administered. That is all it proves.

Votes put and agreed to.

Revenue Vote 12.—Inland Revenue, R7,900,000. and S.W.A. Vote 4.—Inland Revenue, R160,000:

Sir, there are two points I want to raise under this Vote, and they both have to do with the special income tax court. At the present moment the Income Tax Act provides for objections to any assessments made under the Act, and the first right of appeal is to the Special Income Tax Court. But the jurisdiction of that court is limited to hearings of appeal against assessments. An assessment is defined in the Act, in relation to appeals to this special court, as meaning only (a) the determination of the amount upon which the tax is levied and (b) the determination of any loss or rebate and any decision of the secretary which in terms of the Act is subject to objection and appeal. Sir, the amount of tax that has to be paid goes far beyond the question of the taxable amount. There is, for example, the calculation of the tax payable on the taxable amount; there is the rating formula which might be applied to lump sum payments from pension funds; there are the interest calculations in regard to late tax payments, and there is the correction or otherwise of P.A.Y.E. deductions, but the definition of “assessment” precludes the taxpayer from being able to seek relief through the Special Income Tax Court in regard to the amount of tax payable. The only remedy, therefore, is to go to the Supreme Court, and even here his rights are somewhat uncertain. As we know, it is a costly procedure to go to the Supreme Court, and I wonder if the hon. the Deputy Minister who, I understand, is handling this Vote, would tell us whether he is prepared to increase the jurisdiction of the Special Income Tax Court by amending the definition of the term “assessment”.

The second matter that I want to raise is one which, I believe, is of great public interest and that is the question of the publication of the Special Court’s decisions. At the moment the secretary may, with the consent of the applicant concerned, publish those decisions of the Special Court which he considers to be of general interest. Sir, this is really a very unsatisfactory state of affairs because only some of the decisions taken by the Special Income Tax Court ever become known to the public generally. Taxpayers, if they had knowledge of the decisions of the Special Income Tax Court, might very often never go on appeal because they might well know what the answer would be before they went on appeal, if they were aware of previous decisions. They could, therefore, save themselves a considerable amount of time and cost. Conversely, of course, if the public knew of all the decisions of the Special Income Tax Court, they might well take on appeal a number of other matters which they do not take on appeal at the moment because they do not know the decisions of the Court. When an appeal is made to the Special Income Tax Court, we have this situation that the Secretary for Inland Revenue, who is the defendant in the matter so to speak, has knowledge of all the decisions of the Court, but the appellant does not have this knowledge. You, therefore, get a certain amount of unfairness in a situation where the defendant knows more about established law than the appellant. Surely, this cannot be regarded as a satisfactory state of affairs. The only reason that there seems to be for non-publication of all decisions by the Income Tax Court is the question of secrecy. I do not believe, Sir, that if you really examine the situation you will find that there is any real reason for withholding the publication of these decisions on the ground of secrecy. What happens at the moment is that where the Secretary, with the consent of an appellant, publishes the decision of an Income Tax Court, all that is published is the number of the Special Income Tax Court case. There is no reference to the appellant’s name or address or to anything which would indicate who he was.

Nor is there any reference to the amount.

No. They might publish the amount but it would not be necessary because it is the principle that is involved. Even if the amount was published you would have to go into the whole case very deeply to find out who was involved. But you certainly do not know the name of the person concerned. You do not know where he lives or even what type of business he runs. All that is published is the number. I think there would be no hardship whatsoever if the hon. the Minister decided in the interest of the public generally that all these Special Income Tax Court decisions should be published. I certainly believe that it would be in the interests of justice.

I should just like to reply to the second matter raised by the hon. member for Parktown. As regards this matter, I should just like to point out once again that the Secretary is not the only person who has a right of decision in this connection. As regards the publication of the decisions of the Special Income Tax Court, two elements come into play. The one leg is that the Secretary must consider the publication thereof to be in the general interest, and the second is and remains the fact that he must get the permission of the taxpayer to enable him to do so, and not only to enable him to do so, but also with regard to the form in which he may publish a decision. We cannot get away from that.

Why not?

He must get the taxpayer’s permission. The Department does not have any objection to moving in this direction, but you will appreciate, Sir, that if the Department were to do so off its own bat, that would be in conflict with the secrecy provisions of the Income Tax Act. I think the entire operation of the Department of Inland Revenue, or much of the execution of its work. is based on the public knowing for a fact that the Department is doing its work and is not revealing any information. Now if the decisions of the court were to be published on the decision of the Secretary only, it would be a matter which would affect not only the Department. but also the taxpayer; and even if you were to publish it under a code number or a letter of the alphabet: it would still be very easy for people who have a knowledge of the circumstances of the case, to know exactly to what persons and firms it applied. I think the intention of the hon. member is that persons who want to go on appeal, should be able to know what previous decisions have been taken in this connection. They, either they themselves or their advocates, should be able to study the “case law” in connection with these cases. Now I just want to say the present policy of the Department is, when it is notified of an appeal which is being lodged, to inform the appellant of decided cases in that field. so that the person may know that certain cases have already been decided in this connection. Then he does in fact have knowledge of such cases. This is my reply to the first point raised by the hon. member.

The second is this. The hon. member also requested appeals to the Income Tax Court as regards certain matters mentioned by him. I wonder whether the hon. member will not agree with me that practically all the matters he mentioned were purely factual matters. Take the question of the calculation of interest on late income tax payments. Surely this is an arithmetical question, something that can be calculated, and if the calculation is wrong, one may go to the Receiver and tell him that it has been calculated incorrectly. He also mentioned overpayments under the P.A.Y.E. system, the credits which resulted from that and the repayment of those credits. Then he also mentioned the rating formula according to which a person is assessed. This used to be one of the matters which applied in connection with married women, but that has fallen away now. One still finds that people are assessed on another scale than that which is applicable to their actual income, particularly in the case of the levelling out of the income of farmers. But these, too, are factual matters and I think it would be wrong if we were to make these matters the subject of appeal to the Special Income Tax Court. I think these are matters of such a nature that if the taxpayer were to discuss his case with the Receiver. there practically would not be a single case in which both parties could not obtain satisfaction to both sides.

I think the Deputy Minister should give consideration to the recommendations of the hon. member for Parktown, because it might even save his Department work. Instead of taking the matter on appeal, if the appellants knew the background and knew the decided cases, and had more information, it might save appeals which would lead to a saving of staff.

But I want to come to another matter and that is the question of P.A.Y.E. deductions and also provisional tax payments with regard to the current year. As the Minister knows, the rate of taxation has been completely revised. P.A.Y.E. deductions are being made for the current year at the old rates and I understand that the new tables will be ready in the beginning of July. What I want to know is this. Will the new tables take into account the tax at the new rate less the over-payments at the old rate from the beginning of the financial year up to the date of the tables, or will the deductions be calculated on the basis of the new tax; because if they are calculated only on the basis of the new tax, most P.A.Y.E. deductions in the case of salaried people will be at the higher rate and they will also have had to pay the increased sales tax. So in effect from now to the beginning of July they will be substantially overtaxed. Having had to pay a higher price for the articles they purchased and having had higher deductions made than they would normally have had to pay they will not get any redress until the end of the Government’s financial year, which is the end of February next year, when the new assessments are made which will be based on the amounts overpaid under the old rate and the amounts deducted under the new rate. There will be credits due to them which will have accumulated right up to the end of February, 1970. There will be thousands of people having accumulated balances with the Treasury. Has the Treasury, in making its forecast of the revenues to be collected made the appropriate calculation, and will it take into account the amounts overpaid, or is it just being calculated on the basis of the new rates of tax? Because there will be a substantial amount collected from all P.A.Y.E. taxpayers, as well as from provisional taxpayers. I submit that this is a matter on which the taxpayers are entitled to have some enlightenment.

The hon. member for Pinetown has just raised a point which he may, of course, discuss, but surely he knows that this Bill which is before this House, at the moment will only become law towards the middle of June, and within a month’s time, in July, those tables will be made available. Or does the hon. member expect the tables to be made available now before the legislation has been passed?

You have not been listening.

No, the fact remains that what is before this House is a proposal and that these taxes will be amended in this way at a later stage. As soon as the Bill has been passed by this House, it will be implemented, and only then can the tables be changed.

But I am really on my feet to address a word of thanks to the Department of Inland Revenue. We know there are problems in connection with getting sufficient staff. We know that this is a technical department and that staff for this kind of job is not readily available. But I think from this side of the House we should thank the Secretary and his officials for doing this work so well, work which is so difficult and which takes up so much time and which has to be done so accurately; for it is easy enough for anyone to say to anything, but when it comes to figures, they must tally. We know this is very difficult, and I think we as a House want to thank those people very sincerely for the services they are rendering to us, particularly in regard to the collection of the revenue of the country, because it is a fact that if the State does not receive its revenue, it simply cannot function. I think hon. members on both sides will be in agreement about expressing our gratitude to these people.

The hon. member for Pinetown has asked me to consider the matter raised by the hon. member for Parktown in regard to the special Appeal Court and the publication of the decisions of that court. I have given my views on the matter already, but I will look into the matter again and see whether there are any new angles which I can consider.

With regard to this matter of the P.A.Y.E. tables for the last eight months of the year, I can give the hon. member for Pinetown the assurance that the Department has given it earnest consideration. The tables from July onwards until the end of the financial year will take into account the over-payments for the first four months of the year. With regard to the provisional taxpayers, traders and other people, I think they are more in a position to calculate their income. They know the new scales of income tax and I think they will be in a position to assess, more or less, their income tax liability. In regard to the salaried people, who pay on the P.A.Y.E. basis, their over-payments for the first four months of the year will be taken into account in the tables that will be issued for the last eight months of the year.

I would just like to ask one question in regard to provisional taxpayers. A provisional taxpayer can base his first payment on the last assessment received. If he does that, he will then be paying at the old rate instead of the new rate. Will it be permissible for him to take the assessed amount of the previous period, adjust it to the new rate and then pay his tax accordingly?

If the provisional taxpayer takes his income for the previous year, he will be within the provisions of the Act, and then he can work out his tax liability on the new tables.

Votes put and agreed to.

Revenue Vote 13.—Customs and Excise, R9,270,000, and S.W.A. Vote 5.—Customs and Excise, R95,000:

I wish to inform the Committee that the Deputy Minister of Finance will be in charge of this and the following Vote.

I wish to deal with two matters falling under Customs and Excise. The first is in regard to staff problems in this Department. I know it is not peculiar to this Department, but the information which continually comes to me indicates that some action should be taken in regard to the dissatisfaction in this Department which ranges right from the uniformed staff up to the higher levels. Just to give an indication, we have here a Department which is very important from the revenue point of view and which controls activities, controls people and controls goods, and which has as part of its enforcement staff people who start at a salary scale of R55 a month. The highest a white uniform staff member can go is to R300 per month, i.e. R3,600 per annum. But when he starts in the department, he has to start with R660 going up to R1,020. The next scale is from R840 to R2,400. On this scale is the vast bulk of staff members. As a matter of fact, 342 of the uniformed staff members are in this group and they have to start at R70 per month. And these people have to meet and control travellers arriving at our airports and at our docks. These are the people who create the first impact on visitors to South Africa. Yet we rate them such that we place them in a pay group starting with only R70 per month. I cannot see how we can get satisfied staff if we pay them that. What is more, by paying them so little we are subjecting them, even if not the uniformed staff perhaps so much, to a tremendous test of integrity. Temptations there will always be. Yet of these staff members we expect a high degree of integrity and, I believe, we do get it. I might mention here that a typist starts at a higher rate of pay than a white uniformed staff member. So, dissatisfaction starts at the bottom and it goes up to the top. I have had telephone calls and I have had letters …

Read us some of your letters.

If the hon. member wants me to, I shall. Here I have one in which the writer says, “I take the liberty of writing to you about the growing degeneration of the abovementioned department”. Another one writes, “Dit gaan ’n jong oorlog hier in die departement afgee”. [Interjections.] Hon. members may interject and may make as much noise as they want. But let them get up and say that I am wrong; let them get up and say there is no dissatisfaction in this department; let them get up and say that they are quite satisfied with the rates of pay of these people; that they are satisfied with the things which are creating dissatisfaction and disgruntlement amongst the staff. Let me give them an example. Earlier this session I asked the hon. the Minister whether there had been delays in dealing with correspondence in the department during the last two years. In his reply he said that there were such delays and as a reason for those delays he quoted an abnormal working load on one section of the departmental head office. In one of the letters I have here, it is stated: “Ons het hier tot 18 maande op ’n antwoord gewag … Die antwoord is dat die slim mense die gemors gemaak het en dat die ou hande dit toe moes regmaak. Is dit nou geregtigheid?” It is being alleged that persons who do not understand the work have been promoted, resulting in bottlenecks in the department. The Minister in his reply to my question admitted that one of the solutions was “bigger delegation of powers and duties to certain controllers commensurate with their higher grading”, a delegation therefore, to people capable of handling the problem. I do not want to go into all the details, but I want to make two appeals to the hon. the Deputy Minister who is dealing with this Vote. I want to ask him to go into this question of dissatisfaction, discontent and disgruntlement, which I have been told in another letter is leading to staff members doing just what they have to. I want to quote it: “Senior officers are up to their brims about this state of affairs and are, consequently, giving the minimum just to stay out of trouble.”

How many letters have you received?

I have had three letters; I have had phone calls and I have had discussions with members of the department. What has that hon. member done about this dissatisfaction? Is he interested? Does he care? No! All he is interested in, is thanking the Minister. I am asking the hon. the Minister to investigate. If that hon. member does not believe what I say, I am not asking him to. I do not care whether he believes it or not; it will make no difference. What can make a difference is that the hon. the Minister should investigate and find out what the actual facts are. He should go into it and see whether, in fact, there is discontent. What the hon. the Minister should also do, is to find out what the causes are of the discontent and to make sure that it does not happen again. He will find out soon enough if he makes an investigation. Hon. members can joke as much as they like about these letters. The fact is that people come to us because they want their problems raised, and they want something done about it. They know that, if they go to those hon. members, all they get is a brush off; they know that those hon. members make their sole contribution by getting up to thank the Minister. Therefore, if anything is going to be put right, if attention has to be drawn to anything, they have to come to a member of the Opposition. I have yet to hear one of those members raising the complaints of people who have genuine problems within the departments. Here is a department which I believe requires investigation. Therefore, I am entitled to raise and I have raised the problem here.

I shall not have time to deal in detail with the second matter which I want to raise, namely the application and administration of the amendments to the Customs Act introduced last year, but I should like simply to put on record what the Secretary for Customs has said about this matter. I quote:

That, Mr. Speaker, is an indictment by the department of legislation which this Minister introduced last year, against our opposition, and which I submit is not capable of being implemented properly without being further amended. This is what was published in a Chamber of Commerce report, reporting the department’s own reaction to the problems which they face in implementing this legislation. [Time expired.]

Mr. Chairman, I have been following the hon. member for Durban (Point’s) questions about the Department of Customs and Excise for quite some time now. The hon. member has just referred once more to the questions which he asked, but he only made use of a portion of one of the replies, the portion which suited him, about the work of the Department in respect of which there is a so-called backlog. He carefully suppressed point (iii) in column 3759 (Hansard 1969) which clearly indicates that that backlog developed as a result of—

That was one of the points mentioned. He knows as well as I do that, as a result of this work, four cases have already been brought before the court and some of those people have been found guilty.

Mr. Chairman, on a point of order, are we permitted to discuss this question of evasion of duty, which is at the moment sub judice? I deliberately did not, but I ask whether we are permitted to discuss it. If the hon. member may, I should also like to deal with it.

If the matter is sub judice it may not be discussed.

Mr. Chairman, with respect, the cases have been concluded; the people concerned have been found guilty and sentences have been passed.

Mr. Chairman, an appeal was noted yesterday.

An appeal has been noted. Therefore it may not be discussed.

Very well, Mr. Chairman.

The next point which he suppressed is point (iv), i.e. “research in connection with the imposition of a new form of indirect taxation, namely sales duty”. This the hon. member also deliberately suppressed.

Order! The hon. member may not say that an hon. member deliberately does something which is not right. He must withdraw the word “deliberately”.

Mr. Chairman, please pardon the word “deliberately”. But he did suppress it. In the same column one finds question No. 5, point (1), i.e.—

Then the hon. member continued and asked the hon. the Minister—

A sufficient reply was given by the hon. the Minister.

What is the reply?

The answer is printed there. I now make the claim that this hon. member has purposely wanted to antagonize a very large group of fine and satisfied public servants in this way. What is the position? What are the facts? He said that the immigration officers made a poor impression on visitors to the country.

That is untrue!

Mr. Chairman, I appeal to you in order to be able to continue with my speech.

Well, then, do not tell untruths!

Here the Cape Argus of 1st February, 1969, states—

Here it is clearly stated—

Mr. Chairman, I think that that hon. member must apologize to the officials of the Department of Customs and Excise for the way in which he insulted them this afternoon. The report goes on to say—

This is the true position. Then the hon. member makes all kinds of insinuations against a very good Government Department.

I say that is untrue.

It is not an untruth. It is printed here in the Cape Argus of the 1st February, 1969. The hon. member should rather read his own newspapers.

He then went on to make vague insinuations against the management, the secretary and high officials of this Department, as reflected in his speech and in the questions in Hansard. What is the position? As a result of the very capable actions of this Department, offences which were taking place in the harbours were brought to light last year, misdemeanours about which I have already spoken, whereby the State was deprived of its rightful revenue, where consumers were exploited. Instead of thanking that Department this afternoon, the hon. member dragged the good names of 1,240 fine public servants through the mud in this way. Instead of thanking them, he made these accusations without any proof. He cast aspersions on the most senior official of the Department, the Secretary, who has spent his whole career in the Public Service, from his position as a second-grade clerk to the position he holds to-day. In the Department of Bantu Administration and Development he passed through the commissioner ranks, through the departmental inspectorate and subsequently through the Public Service Inspectorate, which makes the highest demands on an official.

Eventually he became Senior Public Service Inspector. He was promoted to Chief Bantu Commissioner and subsequently transferred back to the Public Service Commission as a senior inspector. Then he went to the Department of Customs and Excise as Under-Secretary, where for three and a half years he occupied the Staff and Administration post with distinction. Since then he has, for ten years, with the greatest measure of success, been Secretary of that Department …

I must point out to the hon. member that it is not customary to mention the names of Secretaries when Departments are discussed in Committee.

I apologize, Mr. Chairman. Under the supervision of this senior staff to which the hon. member referred, there has been a reduction in staff during the past ten years, in spite of the fact that its efficiency has been increased. The administration costs were almost halved in proportion to the total revenue of that Department under this Vote. During the same period, expenditure on overtime in this Department was decreased from R160,000 to R60,000. My submission is that this hon. member should apologize to this Department and to its officials for the aspersions which he cast upon the Department in this House this afternoon.

Mr. Chairman, I want to tell the hon. member for Durban (Point) that I was disappointed in the manner in which he presented his case here this afternoon. I do not think that the hon. member for Durban (Point) will get far by those means. On the contrary, the hon. member will achieve nothing by that. When the hon. member was speaking I thought about why there was a difference between someone such as the hon. member for Durban (Point) and myself, who must in this case deal with this matter in the Department. I and the hon. the Minister can testify that we did not receive those letters which he spoke of. Not one of them Why do such letters and complaints specifically conglomerate only around the hon member for Durban (Point)?

Because they know that we are interested.

Or is it that the hon. member for Durban (Point) allows himself to be used by people to do certain things which they cannot have done in another way. The hon. member mentioned two matters. He said that there was dissatisfaction with the Department, “with” the Department.

Within the Department.

The hon. member could not have said “within” the Department. The hon. member said that it was with the lower and higher grades. If the hon. member will give me the assurance that he said “within”, “within the higher grades and within the lower grades”

Within.

How do I then explain this letter, which the hon. member quoted, from an outsider who said that he had had to wait up to 18 months for a reply to his letter. If that is not dissatisfaction with the Department …

It was not an outsider.

Was it not an outsider who wrote that letter? Was it an official of the Department who said that he had to wait up to 18 months for a reply?

Yes.

Is the hon. member then not willing to make such correspondence available?

They merely want to make politics out of that.

Let us now be very clear about this.

I shall make the letter available without the name.

Without the name?

Then it is surely an anonymous letter.

Will it be much use giving me the letter without the name?

Would it help you if I gave only the name?

Will the hon. member add to that the stipulation that I may not discuss it with the Department? Even if the name is withheld, it would surely be the simplest thing in the world for the Department, when the letter is read and it is seen what the person’s problem is, to know who the person is. What is then the use of leaving out the name? The hon. member now has me doubting his whole story to a certain extent.

I am not going to divulge the name of the person. We are arguing about the facts. We are investigating the facts and not the man.

We therefore now have the hon. member’s unqualified assurance that the public outside is altogether and totally satisfied with the Department and its officials. The hon. member has now taken the trouble to assure me and the House that he used the word “within” and not “with”.

There are complaints, but I said that the dissatisfaction was within the Department.

That means something, I accept it and I am quite glad to hear it. I should merely like to say that I do not know of any complaints inside or outside the Department. However, the hon. member has now said that there are complaints within the Department. I do not know of any internal complaints against the Department and the manner in which it does its work. I can merely attest to the great loyalty of the officers of the Department of Customs and Excise. I want to thank them for the very good work they are doing. The hon. member merely quoted portions of two of the three letters to which he referred. The second letter, inter alia, read as follows:

Is this also a letter which came to the hon. member from within the Department?

Yes.

Then the hon. member said that he received “numerous ’phone calls”. Is this also from within the Department?

I assume they are. They said they were.

The hon. member ought at least to know that if he receives a telephone call, and he has said that he receives many, he must ask the person who he is, if that person does not tell him. That person must then also say what he does. He has a complaint, surely, and his complaint must specifically relate to some point or another.

How does the hon. member know that it is a man?

It may be a lady. The nature of the person’s complaint must identify him. The hon. member cannot now come along and tell this House that he “assumes they are from the service”. The hon. member ought, after all, to be much clearer on that point. And now I ask the hon. member again: Were these “numerous ’phone calls” only from people within the Department?

I will answer you. Those ’phone calls are probably tapped anyway. Why not ask Basie?

I do not want to be funny. I have already fold the hon. member that I am disappointed in the manner in which he handled this matter. I do not want to argue with the member unnecessarily. I merely feel that if one looks at the questions which have been asked this year about this Department there is a discernible pattern to them. There is one or other abstruse, in my opinion, unfounded reason for criticizing the Department and its officials. If people want to do so they must furnish proof, and substantial proof at that. They must not come and fling wild stories around and expect us to reconcile ourselves to that.

I should now like to say something about the staff position in the Department. The Department of Customs and Excise always deals with the total framework of the economy. It does not stand aloof from it. One must not appoint more people in a department than one needs. I can give the House a great many figures in this connection and if we are going to discuss this matter further this afternoon I shall furnish all the figures, because I have them with me. However, I merely want to give the figures for the years 1961 and 1968. I also have the figures for the years 1957-’58, both in respect of the staff, the work done by them and the expenditure involved. For the purposes of this reply, however, I merely want to furnish the figures for the years 1961 and 1968. In 1961 there were 1,324 officials in the Department and in 1968 1,240. In 1961 R244 million was collected by the Department while R450 million was collected in 1968. In 1961 the administration costs were R1.135 per R100 collected and in 1968 the costs were R.748. In spite of what the hon. member said in connection with what happened in the past two years, the Department nevertheless carried out its work at a unit cost of R.748 per R100 in comparison with a unit cost of R1.135 in 1961. It did this work with a smaller staff than seven years previously and in spite of that it handled almost twice as much money. In the financial year 1957-’58 overtime remuneration in this Department amounted to R160,000. In the financial year 1968-’69 the overtime remuneration amounted to a mere R60,000. I merely want to point out that I have all the figures in front of me in respect of the staff. From the grade of administrative officer, which is the grade just above that of a clerk, to that of the Secretary, all the posts in the Department are filled, there are no vacant posts. From the rank of administrative officer down to the lowest rank, not all the posts are filled. If the hon. member wants all these figures I can give them to him and then he can judge for himself. If the hon. member wants to ask a question in this connection he may do so and then the figures can be tabled. The posts in the lower grades are not completely filled but the staff position is quite satisfactory.

I could also say quite a good deal about the Department’s training programmes. I have acquainted myself with the position and I am satisfied that the Department has made a great deal of progress with its training programmes and that these programmes are at present progressing successfully. However, the difficulty is that there are people who are depriving us of our officials. The Department does not work with the general public. This Department works with specialized people, such as manufacturers, dealers, etc. When the officers come to these people they have a chance of summing the officers up well. If such a person has summed an officer up and realized that he is a good man, he makes him an offer. During the period between the 1st Otober, 1965, and the 30th September, 1966, they enticed 42 intensively trained administrative assistants to the private sector. During the period from the 1st October, 1966, to 30th September, 1967, the figure was 56. These officers were all of above-average capability. A large liquor concern recently advertised for trained excise officers. They subsequently coaxed away two of our officers. I nevertheless want to say that we are to-day succeeding in training people for the Department and, to an extent, for other bodies as well. This Department has recently done a great deal of work. The investigation in connection with the sales duty has already been in progress for a considerable time and all that work has rested on the shoulders of the officials of the Department. I think that they have done a good piece of work. But in spite of all these things, I want to re-assert that there is to-day very little reason for complaint about the staff position in the Department. I want to tell the hon. member for Durban (Point) that my summing up of the staff position is not as bad as his. I think that the work is still being done very well.

Since the hon. member has objected to the salary scales, let me say that the hon. member’s figures are correct, but this Department does not lay down these salary scales. These are the salary scales of all uniformed officers. The academic qualification required is Std. VIII and this salary scale is accepted throughout the Public Service as the commencing salary scale. I therefore want to tell the hon. member that he cannot criticize this Department. I do not admit to it, but if there is criticism it must be made to other Departments and to the Public Service Commission. These are scales which are laid down for us and which we must then apply.

Is the responsibility which these officers must carry equal to those of other uniformed officers?

The people who are appointed with these academic qualifications as outdoor officers do, in fact, work strictly under the supervision of senior outdoor officers and other administrative officers.

It is not more responsible work than that of ordinary uniformed officers?

If the hon. member would look at the tables concerned he would also see that there are various grades. The people who begin on the lowest scale definitely work under the supervision of other officials.

Mr. Chairman, I rise only to deal with one matter, namely the attempt of the hon. the Deputy Minister to get me to disclose in this House the names of certain persons. I am not prepared to do that, but I will tell him why I receive this information. Last year I raised problems in regard to staff complaints. I have done so over the years. About eight years ago I also dealt with complaints and problems in regard to customs officials because I happen to have them living in my constituency. I happen to have the harbour in my constituency and many of these officials live in my constituency. I therefore meet them and discuss matters with them. During the last recess I had not only officials but also the wives of officials in my office.

Oh!

Those hon. members may have minds like sewers but I happen not to have that kind of mind. There were wives who came to me and said: “I am desperate. My husband is so upset that he wants to resign. Can’t you persuade him not to.” As a member of Parliament it is your duty to deal with problems of this nature when they are brought to your attention. The attempt of the hon. the Minister to get me to disclose names will do no good at all. I could have gone much further than I went to-day. I could have told him about some of the complaints I have had, and some of the personality problems that have arisen. I could have told him that I have had complaints that English-speaking officials are not given equal and fair treatment when it comes to promotion. I did not raise those matters, but if the Minister wants me to, I will. These are matters of which a member of Parliament who does his job, comes to hear. That is why I have got this information. In fact, one of the letters I received begins as follows: “Vertroulik. Ek het u onlangs oor die telefoon belowe dat ek aan u sou skryf”. Whenever you receive information of this kind the persons concerned are desperately anxious that their names should not be disclosed, in spite of what the Minister may have promised. The Ministers of all the various Departments have said that they do not victimize officials and that no victimization will take place. Why then are people so afraid of their names being disclosed? I have yet to receive information from anyone who gives me permission to use his name. The condition is always “please do not mention my name. Please do not let me be identified”. That is why I am not prepared to give any names or even the addresses of the officers from whom I have received this information, because not all of this information has come from Durban. I have told the hon. the Minister that I have received this information by means of telephone calls and the letters I have mentioned. I have also got this information by means of personal discussions with officials of the Department on sufficient a scale to feel justified in asking the Minister to investigate the matter. If he says that he will not investigate the matter, that he is satisfied that everything in the garden is rosy and that he will not even investigate the possibility of there being complaints, then it will be on the hon. the Minister’s own head if that dissatisfation increases.

Mr. Chairman, I do not rise to pursue that matter very much further. However, I certainly cannot leave the statement of the hon. member which he has made in conclusion, without answering him. I have never said that I will not take any notice of this matter. That hon. member has said it.

The hon. the Deputy Minister said that he was satisfied that there was no dissatisfaction in the department.

My remark was in regard to the fact that I am satisfied that, generally speaking, there is no dissatisfaction in this department. The people who work in this department are loyal and are rendering wonderful service to the department.

I agree that they give wonderful service and that they are very loyal.

In the South African Railways and all other Government services certain channels are open to servants. Surely if any person has a grievance or feels that wrong has been done to him, he should complain through the proper channels. The door of the Secretary is open to him. During the time I have been in this position, one instance has come to my notice of an official who was not satisfied. I can assure hon. members that that man received the most sympathetic treatment from the higher officials in the department. There has been no victimization whatsoever. Therefore, I conclude this matter by saying that the hon. member has given the impression here of a huge storm where there was not even a fair breath of wind blowing. He has completely overstated his case. I can only think that he has done this, because he wanted to make political capital out of it.

Before I resume my seat, there is one other point which I should like to raise. The hon. member has referred to the amendments to the Act which we have passed last year. He read an extract from a certain publication saying that the Secretary said that the amendment made last year was just an experiment and that the Act would be changed by further amendments as soon as we have further clarity on the matter. If the hon. member wishes to tell me, I should like to know whether he quoted from a letter that the Secretary wrote to Assocom?

I quoted from a circular issued by the Durban Chamber of Commerce.

That means that it is still only their interpretation of a letter or of discussions or interviews which they had. I am not sure on this point. However, I want to say that it is my opinion that the member has tried to bring the House under the impression that the Secretary has told people that this was only an experiment whereas actually it is the rendering of other people’s impressions of what the Secretary told them. I should like to state that matter very clearly.

Votes put and agreed to.

Revenue Votes 15.—Agricultural Economics and Marketing: Administration, R2,760,000, 16.—Agricultural Economics and Marketing: General, R73,357,000, 17.—Agricultural Credit and Land Tenure, R2,650,000, 18.—Deeds Offices, R1,220,000, 19.—Surveys, R2,980,000, and 20.—Agricultural Technical Services, R32,356,000, Loan Votes C—Agricultural Economics and Marketing, R300,000 and D.—Agricultural Credit and Land Tenure, R39,700,000 and S.W.A. Votes 6.—Agricultural Economics and Marketing, R1,100,000, 7. —Agricultural Credit and Land Tenure, R4,200,000, and 8.—Agricultural Technical Services, R2,500,000:

Mr. Chairman, may I request the privilege of the half-hour? In spite of the fact that the Votes were put in the same way to-day as last year, i.e. so that we can discuss everything which has a bearing on agriculture, I want to say that my speech will have more of a bearing on the Department of Agricultural Economics and the Department of Agricultural Credit, for the simple reason that I think that these two Departments are very closely linked and because we regard the economic problems of the farmers in South Africa to-day as the most important they have to deal with. This year we have had ample opportunity of discussing agriculture in this House. May I add to that at once that in spite of the opportunity we had during the Budget debates, in spite of the private motions we had here, in spite of other opportunities which were created for us so that we could discuss agriculture, this side of the House is still extremely disappointed with the situation prevailing outside. To that again I want to add that during the past month or two we have had good rains, which have changed the situation in South Africa considerably. To a large extent the rains have brought relief to a Department which had to work hard under those difficult circumstances. We want to express our gratitude to them for the assistance they gave us under those difficult circumstances and also for the task which they were able to perform in such a competent way.

It is essential that we take our industry under review. As far as this side of the House is concerned, there are still major deficiencies in our industry. At the outset I just want to refer to one matter which was touched upon in this Budget. When we said to the Government that the sales tax would, for example push up production costs, hon. members on that side expressed doubts as to such a thing happening. Only last week it came to my knowledge that as a result of this increased sales tax a perfectly ordinary tractor increased in price during the past 14 days or three weeks by R80. To us on this side of the House it appears as if the Government is still not concerned about the position of the average farmer. It passes them unnoticed. The reason for our concern at this situation is obvious. We have stated previously that we not only regard the platteland and of South Africa as that part of the world where the farmers have to make a subsistence, but we also regard it as that part of the world where many other people, who are not necessarily associated with farming, have to make their living. We are concerned about the situation which is prevailing in the platteland, because we have always regarded the platteland above all as the home of people of firm character. One can arrive at that conclusion not only in South Africa but in any other part of the world. Not only do we want to see the platteland and our agriculture prospering, but that that part of our country should continue to produce what it has always produced in the past, viz. people who can make a great contribution to South Africa. There is no need for me to mention examples, but some of the leading scientists, professional people and businessmen in South Africa, and political leaders and statesmen South Africa has produced, came from the South African platteland. It is for this reason that we maintain that this part of the country is important to us. We are entitled to ask the Government what its approach is when it comes to the economic front as far as agriculture is concerned. Under this Government agriculture does not have a special place in the general financial policy of the country. I want to say to the hon. Minister that if he wants to let the farmer compete on the open market to-day for capital and money, while he does not have the same say over the price of his product, it is simply impossible for him to compete in that market with any other person.

Agriculture is not in a position to pay the increased rates of interest which it is expected to pay under this Government to-day. Nor is agriculture in a position to absorb the increased production costs. We have been discussing the question of increased rates of interest since last year. We insisted that the hon. the Minister of Finance furnish us with a reply. Hon. members in the Other Place also insisted on a reply from him. We have also insisted that the hon. the Deputy Minister furnish us with a reply in regard to the increased rates of interest. We have also insisted that the hon. the Minister of Agriculture furnish us with a reply. From them we have received a partial reply. The person who was supposed to furnish the reply, i.e. the Minister of Finance, simply ignored the farming population of South Africa. I want to assert that this is the most disgraceful thing that has ever happened in the political life of South Africa, i.e. that a population group, which comprises such a large portion of the population and even now is still so important in the sphere of economics, should be absolutely disregarded by the Minister of Finance in that way. He did not even take the trouble of replying to members on this side of the House, and even less so to the hon. members in the Other Place. I want to inform the hon. the Minister of Agriculture and his Deputy that this behaviour on the part of the hon. the Minister of Finance in respect of hon. members on this side and the people outside will not be the last he hears of this matter. On every opportunity we have we will inform the farming population of South Africa that this is what the Government, which represents them, is doing. Hon. members on the opposite side are always very quick to ask us where our seats are. They say that our seats are situated in the cities only, and that they are the representatives of the farmers. However, when we put in a plea here in regard to such a serious matter as this, we are simply disregarded.

We want to say to the hon. the Minister and his Deputy that we will tell this to the people outside and that it will be left to them to do something about the matter. Hon. members on the opposite side cannot say that we are merely doing this in order to make political propaganda. How can they say this, when there is no agricultural congress? One of these days the mealie farmers are coming to talk to him again, and not only about the mealie price. I am certain of that. They will also talk to him about the increased rates of interest.

There was not one deputation to the hon. the Minister and to the hon. the Minister of Finance during the past few years which did not insist that something be done in regard to the increased rates of interest the farmers have to pay. Hon. members on that side cannot say that we are simply exploiting this matter for political purposes. If they think we are exploiting it, then surely it is in their power to rectify the matter; it is in their power to correct the error they made a few years ago. We on this side also state that the State aid which has been rendered during the past few years, is not to be scorned. We are grateful for that ad hoc assistance which was granted in spite of the circumstances, but we want to repeat that the ad hoc assistance which was granted under these Votes in the form of subsidies, etc., offers no long-term solution to the agricultural problem. To us on this side it is disappointing, since we have pleaded so many times for a revolutionary change in approach to the problems of agriculture. Notwithstanding all our pleas, we find that precisely the same old course is being adopted every year. Ad hoc assistance is being granted, but nowhere do we hear of a new approach in respect of our agricultural problems.

And we are getting the same old speeches.

What is your revolutionary approach?

If you want a change in this situation then greater recognition must be given to the risk factor in the mealie industry.

The risk factor is being recognized.

This fact that the risk factor in agriculture is not receiving sufficient recognition in the determination of the farmers’ price, is the principal reason today why private capital is taking increasingly less interest in agriculture. There is increasingly less private capital available for investment in agriculture because there are other fields of investment where the prospective investor can invest his capital far more lucratively.

To whom are they selling their farms?

I know that the hon. the Minister will ask me on what I base this hypothesis.

It is these people who are making money on the sharemarket who are causing the prices to soar.

Sir, an analysis of the yield of the different sectors of economy during the past few years will reveal the following to the Minister: Between 1960 and 1966 the contribution of agriculture to the gross domestic product increased by 39 per cent, but the total increase in the gross domestic product of our country during the same period, 1960 to 1966, was not 39 per cent, as in the case of agriculture, but 64 per cent.

What does that prove?

It proves very clearly that agriculture has a major backlog to make up as compared to the other sectors of the economy. That is the reason why people are not interested in investing their money in the agricultural industry.

You do not know what you are talking about. I am continually being approached by people who ask me to help them to purchase land.

May I put a question to the hon. member? He has stated that people are not interested in investing their money in the agricultural industry. Then why are land prices increasing every day?

That can be explained very easily. The simple reason is that the value of money is becoming less. There are some parts of the platteland where land prices are increasing, but there are some parts where there has been a tremendous decrease recently. In many parts of the Karoo there has been a decrease to-day in comparison with land prices four to five years ago; the hon. member knows that.

Only in the Karoo.

Sir, if land prices in the platteland are increasing, is it not precisely for the same reason why land prices in the urban and peri-urban areas are increasing; it is precisely the same thing. It is because land does not increase; land becomes increasingly scarce, and there is less of it all the time; that is the reason why land prices are increasing. But the increase in the price of land has absolutely nothing to do with the remunerativeness of the agricultural industry.

You are making a mistake now.

Of course that is so. This same argument which I am now adducing here, has been put forward repeatedly by Mr. de la Harpe de Villiers, chairman of the S.A. Agricultural Union, i.e. that the price of land has nothing to do with the remunerativeness of agriculture.

Why is the price of land in the Kalahari ten cents per morgen and not as high as it is in other parts?

Sir, let us consider a few other figures; let us consider for example the net fixed capital increase in agriculture. [Interjections.] Mr. Chairman, I hope I shall have the same opportunity of making such interjections when the hon. the Minister is speaking. Let us look at the net fixed capital increase in the agricultural industry, and in other sectors, between 1960 and 1967. In trade and industry it increased by 92 per cent over that period, but in agriculture it increased by only 39 per cent, and this figure includes forestry as well. The hon. Minister is saying that I am talking nonsense, but there are the figures which can be found in any agricultural journal. I just want to correct the hon. the Minister. Sir, do you know where I am quoting these figures from? I am quoting from “The Financing of Agriculture in South Africa”, an article which is published in the June 1968 edition of the Volkskas Monthly Bulletin—Economic Spotlight.

What are you proving with this?

What I am proving with this is the following: As a result of the fact that insufficient recognition is being given to the risk factor, and because there is no regular increase in the price of the farmers’ product, agriculture is deteriorating to an increasing extent in comparison with the industrial and business sector in South Africa. Sir, I know that the Government recognizes these things. There are members on the opposite side who know enough about agricultural economics to realize this. They realize this, but we want them to act, and that is why we say that we are disappointed because what we are getting this year from the Government is precisely the same old approach instead of a new approach to agricultural problems.

Tell us about the new approach.

We hope, in the course of the debate, to tell hon. members opposite about the new approach; we have told them about it before. Sir, surely one can still draw certain conclusions from the figures I have mentioned here and the statements I have just made. The first is that the remunerativeness of the industry still leaves much to be desired. That is why investors are not jostling one another to invest in agricultural industry.

Sir, you can page through the reports of the Suiderland Development Corporation. At frequent intervals they have to inform their shareholders that they are no longer going to invest so much money in agriculture because the interest they get on their money is too low. They are continually informing their shareholders that they can invest their money far more profitably elsewhere, that the capital is too expensive and that the dividends they receive on their investment is too low and that they are consequently no longer prepared to invest in agriculture. They are therefore finding other channels through which they can invest their money to better effect. That is why we on this side maintain that it will become increasingly difficult for the farmer to acquire capital in the open market. In addition the capital which is available to the farmer is far too expensive. That is also why prospective investors, in the shape of mortgagors, are hesitant about investing in the agricultural sector. They do not want to give the farmer a mortgage on his farm. It is only the large-scale and well-provided-with-capital farmer who can to-day receive assistance. The average farmer is dropping by the wayside and must rely to an increasing extent on State aid. Hence the present-day phenomenon that Governments throughout the world are being compelled to take a hand in long-term as well as short-term financing of the agricultural industry. Recently a further report appeared in the Press to the effect that Rhodesia is going to establish an Agricultural Development Corporation. They are aware of the situation, and they are taking the necessary precautionary measures in good time. Sir, this situation is going to result in the Government having to change its extremely casual attitude towards agriculture drastically. I want to state that it is not beyond the Government to change and to remedy the situation. The Government will undoubtedly have to do certain things, and I am dealing now with agricultural financing. We have on various occasions, through the hon. the Leader of the Opposition and the hon. member for Gardens, suggested that we should in the first instance have an agricultural planning council to replace the present Advisory Council. Sir, the present Agricultural Advisory Council means absolutely nothing because it has no power, although its advice may be of importance. They are not even allowed to discuss the price policy. That is why we say that such an Agricultural Planning Council must be the central point at which the policy will be laid down, not only in respect of financing but also in respect of marketing, and any other problem which may be experienced in agriculture. Agricultural financing will have to be brought in under one roof. A result of this will be that the bonds which farmers have today at a fair rate of interest will have to be taken over by such a division or a department of agricultural financing. In this respect the Government has already been warned in circles outside the South African Agricultural Union. Mr. Chris Cilliers made a public speech about three weeks ago in which he envisages this when he said that the heavy mortgages farmers had to-day would in due course have to be taken over by the State, for the simple reason that the rates of interest which those people have to pay to-day are far too high. Only when one has such a department of agricultural financing, which will bring the Department of Agricultural Credit and even the Land Bank under one roof, will the farmers of South Africa have a chance of making a greater success of their farming activities. They will also have to undertake short and medium term financing. Now the hon. member for Colesberg has asked us: Tell us about your policy; tell us what you want us to do. This is nothing new. It has been said I don’t know how many times, and I am certain hon. members opposite have considered it already, but they are simply not prepared to do anything. It is too easy to say, we have had rains and the problems have been solved; the farmers have no difficulties, they are no longer wearing out the steps to my office, and we can breathe easily again. I maintain that this is precisely the time when the Government ought to give attention to these matters, in this time when things are a little better, where there is no problem of a drought. Now the Government ought to avail itself of this breather to give attention to these matters. And if they do not do so, they must tell us how they think they are going to solve the agricultural problems in South Africa. But one of these steps which I have not sketched, would have been necessary if the farmer, in the determination of the price of his product, had had realistic adjustments which kept pace with the increase in production costs.

What about the products which do not have a fixed price?

One has such products, but there, too, we say that if difficulties are being experience with those products, the Minister and the Government must be prepared to lend a hand. If these price adjustments had come at the right time, and production costs had not got out of hand, and if the Government had assisted with an amount in respect of production costs, these steps would not have been necessary. If rates of interest had been low, this would not have been necessary. If the Government envisages giving attention to this question of central agricultural financing, they must bear in mind that the chances of ever having low rates of interests in South Africa again are undoubtedly slender.

What do you mean by “low rates of interest”?

Fair rates of interest which the farmer to-day can afford. I would say that this is round about 4 per cent to 5 per cent. But the moment it exceeds 6 per cent there is trouble. It also depends upon the capital position of the farmer, of the amount he borrowed. But if a man begins today under the present circumstances, if he has to pay far in excess of 4½ per cent to 5 per cent, he will be in trouble. The Government could have done something to alleviate the effects of the risk factor. The agriculturalist must be given proper recognition in that regard. Our policy is that the risk factor must not only be taken into consideration with the determination of the farmers product prices, but ought also to be kept in mind with his insurance schemes so that we can say to the farmer: There is your crop on the land; you may have hail or frost or other damage, but in this way you will be protected. I can furnish examples. Quite recently I saw how a man in Wesselsbron had a wonderful wheat crop, but how in October he experienced a terrible frost and his entire crop was immediately lost, a crop which he expected would bring him R40,000.

Was he not insured?

No. Unfortunately he was not insured, for the simple reason that the premiums were too high. We maintain that attention should be given to this matter in order to see whether those people cannot be assisted in that respect. [Time expired.]

This afternoon the hon. member for Newton Park put me in mind of a few of the bodies which are at present active in the platteland. There are today bodies in the platteland which are trying to arouse the farmers by saying to them that they are not receiving enough for their products and that they do not have enough say, etc. We live in a country of extremes, of droughts, of too much rain, and all kinds of climatic conditions, and if we consider what has happened during the past few years, I want to state that our Minister has, during the past few years, ensured us of a very safe passage. I have had dealings with many Ministers of Agriculture in my time, and I want to give him the credit for standing head and shoulders above all the previous Ministers of Agriculture which South Africa has ever had. It is a fact that our farmers sometimes allow themselves to be incited, and now we find that the United Party is also participating in this by saying how badly things are going with the farmers, and that all kinds of things should have been done. This puts me very much in mind of a couple of farmers who came to see me a few years ago because the price of mealies had dropped slightly. They told me how badly things were going with them. I happened to know that they had recently purchased more land, and I said yes, I agreed with them that things were going badly; now that the price had dropped a little, it would take them three years before they could buy another farm instead of one year. The same applies to the United Party. The Agricultural Union and Sampi are not competing in the platteland to see who can charge the highest prices for products. If the one charges one price, the other charges a little more. But they know that that price cannot be paid, and if the price they have charged cannot be paid they compete against each other again to see who can express the greatest disappointment at the fact that they did not receive their price. If we were to listen to the hon. member for Newtown Park, that things are going so badly now, and that, as he said, Mr. de la Harpe de Villiers is of the same opinion, and he is an expert—but is he an expert on saying how well or how badly things are going with the farmers? But in the same breath the hon. member states that the Advisory Council of the Minister of Agriculture means nothing. But Mr. de la Harpe de Villiers is represented on that Advisory Council.

I said they did not have the powers.

When Mr. de Villiers says that things are not going well with the farmers, he is speaking the gospel truth, but if he advises the Minister he means nothing. If things are going so badly for the farmers, why is price of land continually increasing? Now you will say yes, land is becoming scarce, and they want to invest their money in land because it is something which will increase in value. But surely there are other factors which will cause them to invest their money in other bodies which are more profitable, and then the price of land ought not to be increasing so rapidly.

But if things are in fact going so badly for the farmer, let us see what the Land Bank has to say. I have the 1968 report here. We find that in 1964 the long-term loans to farmers, the capital which they owed, amounted to R141 million, and at the time they were in arrears to the tune of 2.47 per cent in regard to interest, and 1.27 per cent in regard to capital, a total of 3.74 per cent. This increased up to 1966, which was a drought year, until they were in arrears to the tune of 4.06 per cent. But now we come to 1968, when things went so badly according to the hon. members, and then the amount to which they were in arrears decreased to 3.62 per cent. If we glance at the medium term loans, they had R5,691.000 out on loan in 1964. They were in arrears to the tune of 23.65 per cent, and last year they owed more than R5 million, but they were only in arrears to the tune of 9.25 per cent. Are things going badly? [Interjection.] This is an indication that the farmers are better able to pay now than previously. But let us just look at the income. It is true that Treasury loans were granted to the cooperatives to pay the farmers for their products. In 1964 they received only R658,000 for tobacco, and in 1968 it was R2,541,000, which was granted to the co-operatives to pay the farmers. In this way we find that the amount in respect of dried fruit was R2,600,000, and in 1968 it was R3,255,000. This is money which is being paid to farmers for their products, and this shows how the position improved. We find the same thing in regard to wine and wine grapes, R2 million in 1964 and R6,780,000 in 1968. Now we go further to what was also granted to the co-operatives for grain bags in order to help them to supply their producers. In 1964 the farmers needed only R12.75 million as far as grain bags were concerned, and in 1968 it was more than R17 million. This shows how this item increased in spite of bulk handling which is being applied to-day to a tremendous extent. But if we look at the cash credit accounts in respect of other products we find that in 1964 the amount for mealies was only R81 million and in 1968 it was R264,809,000. If our farmers are getting so much more income, how can things be going badly for them? You would say that the costs have also gone up. That is correct, but the production costs have not gone up in the same proportion. One finds that where a farmer was first making a certain profit per morgen, that profit per morgen has now increased. Take wheat for example. In 1964-’65 the profit was R56 million. In 1967-’68 the farmers received R63 million. [Time expired.]

Mr. Chairman, the hon. member for Ladybrand told us how the farmers in the Free State are being incited and how they are being told that they are not receiving enough, etc. But I believe that those farmers are, for the most part, responsible people who can think for themselves and who will probably not allow themselves to be incited that easily if they did not honestly think that they were not getting the right prices.

Do you say the mealie price is too low?

The farmers say the mealie price is too low.

I am asking whether you say the mealie price is too low?

Why should I now say the mealie price is too low? Then he would say that it is because of all kinds of climatic conditions. It is quite correct that climatic conditions play a role in our country. No one denies that. But this is not something which has been happening during the past four to five years only. Our country is continually being stricken by periodic droughts, and this will always be the case. The income of (the farmers must be regulated in such a way that they can tide over those periods and still make a reasonable living.

The hon. member also said that this hon. Minister is the best Minister we have ever had, and whom he has ever known. His fellow farmers in the Free State do not think so. A few years ago he held meetings among those farmers. They showed him quite plainly that they did not think so much of him.

I come now to the chairman of the South African Agricultural Union, Mr. de la Harpe de Villiers. The hon. member says he is not an expert. I take it that he is not an expert, but I nevertheless want to believe that he is an outstanding, skilful farmer. I believe that he knows what the circumstances of the farmer in this country are. If he is not personally aware of this, I can tell him that all the control boards of the various products keep him up to date on these matters. He knows precisely what the position is. If he says that things are not going well, then that is the case.

I do not want to discuss the price of land. The hon. member for Newton Park stated the matter very clearly here. There is no doubt in regard to this matter.

The hon. member also read from the report of the Land Bank and told us, inter alia, that the number of bags purchased in 1966 was far less than compared with the number in 1967. I did not write down the figure. According to him this is a sign of the prosperity of the farmers. But it simply means that 1967 was a good rain year. The mealie crop was a large one. As a result of that they bought more bags. The following year, on the other hand, they bought fewer bags and the amounts they borrowed or received from co-operatives were much less. I make no apology for the fact that I, too, like the hon. member for Newton Park, want to discuss the situation of the farmers in South Africa. In spite of the fact that this is the third consecutive year climatic conditions in South Africa have been reasonably favourable, there is still a large number of farmers who are suffering financial hardships this year. In the latest report of the South African Agricultural Union, on page 9, the following is stated—

According to this report 20 per cent of them find themselves in financial straits.

What does the previous paragraph state?

I shall read it, Sir. It reads as follows—

I do not see what that has to do with it.

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

No, please resume your seat. According to revenue statistics there are only between 2 and 7 per cent of our farmers who have an income of more than R10,000 per year. The income of 75 per cent of the farmers is less than R3,000 per year.

What percentage of the country’s population has an income of more than R10,000.

This may also be the case as far as the population of the country is concerned.

I am only asking.

I am saying that it might also be the case, but it is not the case that 75 per cent of the country’s population has an income of less than R3,000. The hon. member for Prieska recently made a speech here in which he stated that things were going well with the farmer. I am now referring to a speech in Hansard of 10th April, 1969, column 3751. He was discussing the statement that the Opposition were supposedly pleased about the drought conditions. While he himself said that he did not accept this, he went further to say—

In other words, he stated that things were going well with the farmers. The hon. member called me as witness that things were going well with the farmers. But now I want to call him as witness that things are not going so well. In the same speech the hon. member stated that in one district in his constituency there were 422 farms, of which only 29 farms were less than 1,000 morgen, and 66 farms less than 3,000 morgen. He stated further that the situation was the same in the time of the United Party, and then wanted to imply that the United Party had been the cause of the uneconomic units which existed. But in 1948 hon. members on that side of the House never spoke about uneconomic units.

When?

In 1948. Then nothing was said about uneconomic units. It is only during the past 10 years that they have such a great deal to say about uneconomic units. What is to-day an uneconomic unit, was not necessarily an uneconomic unit at that time. This does not follow. Production costs were much lower at that time. The people received less for their products, but the gap was not as wide as it is to-day. Then the hon. member proceeded to say that of the 422 farms in that district 362 had applied for fodder loans. During that time almost every farmer in that district applied for fodder loans.

And were they assisted?

They were assisted. Well then, this is proof that things are not going so well for those farmers.

This is not the Minister's fault. The drought is responsible for that,

Whether it is the drought, or whether it is not, things are not going well for the farmers. The hon. member has stated that things are going well for the farmers, and then he tells us that almost all those farmers received fodder loans because they did not have capital. The hon. member then went on to say that the amount which they had borrowed during that period of 2½ years amounted to almost R¾ million. That amount represents fodder loans only. None of the other loans is included in this. There are still many other loans, and other debts, which they incurred. No, Mr. Chairman, according to the member’s own allegations and his own figures, things are not going so well in that district he spoke about.

Does the United Party want to imply that the Government is not rendering enough assistance?

I am not making that point at all. The hon. member stated that things were going well with the farmers. Then he turned round and stated that almost every farmer in that district had to approach the Government for a loan. Is this a sign that things are going well? Things are going badty for them, and for that reason they had to make all these loans. [Time expired.]

Mr. Chairman, I am not keen to follow up what the hon. member for Gardens said. He expressed sympathy with the adverse circumstances in which certain farmers found themselves, and in this regard I may just tell him that both sides of the House probably feel the same about that. However, we should not refer to the position of the farmers across the floor of this House as though these people form a group which does not fit in with the people of our country. As far as our farmers are concerned, things are being said here which I want to lay at the door of the hon. member for Newton Park in particular. Certain accusations are being made, and I ask myself what is involved here. The United Party has been making this very same fuss over as long a period as 16 or 17 years. They let off steam here and then one listens in vain to the suggestions they may want to make, suggestions as to what can be done or what has to be done. I have already given my friend over there the fine name of “subsidy”. He is always concerned about subsidies, as though the interest burdens and financial problems of farmers can be solved through subsidies. This is childish talk. It is impossible for one to take an interest in it. If we consider the large extent of the position in which the farmers in our country find themselves at present, I think back to 1948 when General Smuts was defeated. At that time his opening remarks were, and this has become a legacy of the United Party which we are still hearing every day: Blood and tears in South Africa now. Blood and tears, bankruptcy, banks will close down, industrial revolutions, trade unions which go on strike and farmers who go bankrupt. Indirectly we are still listening to that old story every year. No constructive proposals are being made as to what has to be done. This is the case because the United Party is not capable of suggesting an alternative in this country.

If it rains, there are no difficulties that year. But if it does not rain, even the best farmer lands in difficulties eventually. I merely have to mention my own constituency. For the work they have done, those farmers would without exception have harvested 40 bags of maize per morgen this year. They are going to get 10 and 15 bags at most. To any farmer who invested extensively in agriculture that financial setback is not an easy pill to swallow. And then the accusation is being levelled every year that this Government is unsympathetic. The Minister is unsympathetic. How many schemes do we not have in this country for assisting farmers And for what purpose is this assistance being made available other than making it possible for a man to approach the State so that he may obtain assistance there when he finds himself in financial distress and his commercial banks no longer want to help him? How many schemes do we not have already? The hon. member spoke of our interest rates which were too high. I wonder whether he knows that the interest rates on loans obtained at the Department of Agricultural Credit and Land Tenure are 5 per cent and those at the Land Bank are 5½ per cent? These loans extend over a term of 35 years. There are crop and production loans. If in any particular year the farmer does not have the money to cultivate his crop, it is possible for him to obtain assistance. Is the State to blame for the conditions that exist there? Could the United Party, if it were in power to-day, be blamed by any right-minded person? How can the farmer produce a crop if rain does not fall? In his Budget the hon. the Minister of Finance once again made a special concession to those sheep-farmers who are struggling. He made concessions to the pineapple farmers. In addition there were concessions in the case of farmers who export fruit. Does this not constitute aid to the farming community? We can do everything, but we cannot make rain. The United Party cannot make it either. We have now had this challenge from the hon. member for Newton Park, i.e. that they will mount platforms and accuse us there of not being sympathetic. They threaten us with that story every year. So far they have mounted platforms every year and returned subsequently with nothing to show for their pains. Therefore, as far as that is concerned, we invite them to come. I also invite them to Liehtenburg.

We must view these conditions in the light of the circumstances which cause them. Our country is known for that. Its history proves it. In years to come we shall, from time to time, have to deal with more conditions of this nature. Our rainfall is very precarious. If we do not have rain, the farmers will struggle, because they simply cannot make a living on dry soil. We do not have water for irrigation works. Look at the history of the United Party before 1948. As far as Government water schemes are concerned, we can count them on the fingers of one hand. Then compare the number of dams built at that time with the number of dams being built at present.

Therefore I feel quite at ease as far as this position is concerned. This has been the third time that this House has had the opportunity to discuss the interests of farmers. The United Party has attacked us with empty hands. They are welcome to indict us before the farmers. I can give them the assurance that they will come off even worse than they did in the past.

Mr. Chairman, the hon. member has just spoken about the substantial assistance given to farmers through, for example, the building of schemes. We do not say that this is not being done. We do not say that schemes do not exist. We have never denied it. However, the fact remains that the position the farmers find themselves in to-day, is not a good one. Things are not going well for them. According to the hon. member all the difficulties experienced by the farmers are attributable to the drought. Surely, if that is the position, there is no hope for the farmers in this country because we are going to have droughts again. I can assure the hon. member we shall have droughts again.

I see in the report of the Department of Agriculture that production costs increased by 1.2 per cent last year. On the other hand, prices of agricultural products decreased by 1 per cent. In other words, the position of the farmers deteriorated by more than 2 per cent. The drought has nothing to do with the reduction in prices. By the same token, the drought has nothing to do with the increase in production costs. Therefore the deterioration of the position of the farmers has nothing to do with the drought either. The hon. the Minister said in the Other Place a few years ago that the farmers in South Africa were not making 3 per cent profit on their capital investments. According to the South African Agricultural Union the farmers are not even making 2 per cent on their capital investments. However, we have to pay 8 per cent now. I should like to quote from the report of the Land Bank to show to what extent the position of the farmers deteriorated.

We do not pay 8 per cent to the Land Bank.

I did not say that. The report I have here in front of me, is the same one from which the hon. member for Ladybrand quoted. According to this report the “long term debt of farmers” amounted to R141 million in 1964, while it was R195 million in 1968. I concede that capital works were undertaken and that this also had an influence on the matter. However, I believe that the main reason for it was debt. In 1964 the farmers’ debts with co-operative societies amounted to R25 million and in 1968 it amounted to R50 million. Their debts increased to that extent. In 1964 the total amount of debts amounted to R167 million and in 1968 it amounted to R245 million, i.e. an increase of almost R80 million. In 1964 short-term loans to co-operative societies and control boards amounted to R120 million, while the figure was R265 million in 1968, i.e. an increase of more than R140 million. In 1964 long-term loans, i.e. mortgage loans, amounted to R29 million and in 1968 to R45 million, which amounted to an increase of R16 million over that period. The position has therefore deteriorated. I now want to refer to what the hon. member said in connection with capital and interest arrears. I want to say here that the farmers of South Africa are proud of the fact that they pay their debts as far as it is possible for them to do so. They are doing their best to honour their commitments as far as debts are concerned. There are probably not many sections in the community that take as much pride in meeting their commitments as the farmers. Therefore the percentage is not much higher. We also heard that mention was made of droughts here. We have droughts and we recognize the problems which accompany them. Our real difficulty is the fact that the production costs are so high and that prices do not keep pace with such high production costs. Above all. our greatest problem is the fact that we have to pay such high rates of interest to-day. I refuse to be told that it is impossible to help the farmers to overcome the financial burdens which are placed on them as a result of the high rates of interest. The hon. member for Christiana knows in which way this can be achieved. He was a member of a United Party Government which did this very thing when it was in power. That hon. member can tell his hon. friends in the caucus how it was done at that time. Three or four years ago the liabilities of the farmers amounted to approximately R1,000 million. The rate of interest charged at that time was 6 per cent which resulted in an interest burden of R60 million. At the moment the liabilities of the farmers amount to R1,200 million. At a rate of interest of 8 per cent their interest burden amounts to R96 million. All of them do not pay 8 per cent however; many farmers pay much more while farmers who negotiated loans with the Land Bank and with the Department of Agricultural Credit and Land Tenure pay much less. As a result of that the interest burden on the farmers increased by at least R15 million per year. Considering the circumstances of the farmers, this burden which has been imposed by the increased rate of interest, is enough to ruin many farmers in this country. They simply cannot pay this high rate of interest. They have been granted financial assistance in the past and this can be done again. I believe that the majority of members on that side of the House who are farmers, feel that we are right in what we are saying.

On what basis should this assistance be granted?

It should be granted on the same basis as the one on which we granted it before.

Who has to grant the assistance and in which way should it be granted?

The Land Bank should grant assistance in respect of interest.

What interest?

Interest on mortgage loans. I want to reiterate that the hon. members on that side of the House who are also involved in farming, feel the same as we do. I just want to tell them that they would do their duty in their caucus to persuade the Government to do the right thing. They know themselves what the right thing is to do.

What?

Ask the hon. member for Christiana if you do not know! As regards the Department of Agricultural Credit and Land Tenure, we do not expect that advances and loans should be granted left, right and centre, but I think they should be a little more generous, particularly as far as the consolidation of debts is concerned. Where a farmer is hopelessly in debt, the Department could try to come to a compromise with the debtors. In this way many creditors will be prepared to waive what they are owed. When creditors see that farmers are in a difficult position and they cannot recover the amounts owing to them, they will be prepared to waive what they are owed. The Department should come to a compromise with the creditors so that the debts of the farmers may be consolidated in that way. However, where the farmer is in such a bad position that he cannot bear any additional burdens, the Department should help him in all respects so that he may not go under. They should be prepared to help him when he is on the verge of ruin by reducing his rates of interest and by giving him a chance to get on again. I believe the Department is too strict as regards the granting of assistance. The Department should be more generous and assist these farmers in their time of need. I notice in the annual report of the Department of Agricultural Credit and Land Tenure that 4,513 loans were granted during the period 1967-’68 while 3,979 were refused. That means that almost half the number of applications were refused. Surely, there must be something wrong when one has such a state of affairs.

The farmers are in an even worse position.

A nation which neglects its agriculture will go under and a Government which has forsaken its farmers, will have to make way for another!

Mr. Chairman, I wish I also had half an hour in which to discuss this matter. The hon. member for Newton Park says we are still approaching this matter in the same way, and that there is no question of a new approach from our side. But when listening to the speeches of that hon. member and of the hon. member for Cape Town Gardens I heard the same approach as the one he has repeatedly displayed in this House. One could just as well have read his previous speeches and then one would have had the complete picture of the speech he made to-day.

The position is the same; that is why our approach should be the same.

I am still going to deal with that. I want to tell the hon. member that there is no need for him to tell us to do our duty, because we as members of this party, know what our duty is. I challenge the United Party to draw a comparison between the period during which the United Party was in power and that during which the National Party Government was in power. Hon. members on that side of the House are quite right; I was a member of the United Party, but if the policy of the United Party and its leaders at the time when I was a member of the United Party was the same as it is now, I would have resigned from that Party long before the time. Fortunately, when I was a member of the United Party, the Party had men like Gen. Hertzog as leaders and not Sir de Villiers Graaff. Under the circumstances prevailing in the United Party at present, I would never have had any truck with that Party. The subsidies which hon. members on that side of the House mentioned were on quite a different basis to the one suggested by the United Party to-day. When one compares the basis of subsidy of that time, which was 4½ per cent, with the present basis of subsidy of 5 per cent, and when one takes into account the changed circumstances, that subsidy compares unfavourably with the present one. None of us said that the farmers were doing so extremely well as the hon. member for Cape Town Gardens wanted to make out. The hon. member said that for three consecutive years climatic conditions in this country were excellent. Was the hon. member a stranger in Jerusalem? Was he not here when we lost our entire maize crop? Where does he get that from? Where does he get those three consecutive years he mentioned from? Does the hon. member not know that our maize crop was a failure? We did have belated rains which gave us a good wheat crop, but what about our maize crop. How did the yield we had from our maize crop compare with the original estimate?

What about the wheat crop?

As I have said, the wheat crop was a record, but what about our maize crop? How does the maize crop compare with the original estimate? All the aspects of our crop were affected by the drought, but something we want to deal with at length and which we regret so much, is that these people exaggerate and misrepresent everything in order to prove their contention that the farmers are doing badly. We have every sympathy with the farmers, especially under these circumstances of major crop failures and heavy burdens of debt. The hon. member for Pretoria (District) asked the hon. member for Cape Town Gardens a moment ago to quote the preceding paragraph from the report of the South African Agricultural Union. I just want to quote this paragraph. It reads—

This assistance was granted because we had asked for it. The hon. member for Cape Town Gardens referred to the fact that prices of agricultural products decreased by 1 per cent. Why did the hon. member not give the House the complete picture of this decrease in respect of which horticulture was the major factor? Let us consider the position of the index as a whole. It is wrong to use those figures, as the hon. member for Newton Park has done, to prove that the farmers are having a difficult time. One cannot use these index figures to prove that the farmers are going through a difficult time. If hon. members opposite use other arguments, we may possibly agree with them. From 1948 to 1960 the producers’ price was calculated at 100, and this figure is 175 to-day. The figure in respect of farming requirements is 110 to-day. What does the hon. member want to prove and why does he use the figures wrongly? If these figures are quoted, one sees that the producers’ price increased more rapidly than production costs. The figures I have quoted just now, are the latest figures made available by the Department. I take it amiss that hon. members opposite are using the wrong methods to prove their point of view. As an example of this, I want to mention the statement made by the hon. member for Newton Park in connection with the planning council. He said the hon. the Minister ignored them, and that it is disgraceful.

About the rates of interest.

Exactly. If the hon. the Minister had ignored them, it was disgraceful, but did he ignore the question of the rates of interest?

Of course he did.

That is not so. In the first place, the hon. member knows that the Minister has taken steps for the purpose of granting loans to farmers at a reduced rate of interest, namely Agricultural Credit 5 per cent and the Land Bank 6 per cent.

Business interrupted in accordance with Standing Order No. 23.

House Resumed:

Progress reported.