I move—

A country’s Budget is primarily, although not entirely, an economic document. Unless a country is itself socially and politically perfect in a socially and politically perfect world, its Budget must feel and show the impact of the socio-political atmosphere within which it operates. To ignore this atmosphere and to divorce a Budget from the socio-political considerations in which it is begotten, may be a useful economic exercise, but it must at best result in a Budget which is “faultily faultless, icily regular” but “splendidly null, dead perfection, no more”.

In South Africa under present-day conditions, socio-political considerations must therefore carry great weight. What are these conditions? It is obvious that the Republic is under fire on various fronts. More, it is under cross-fire. We draw fire from one quarter by reason of the fact that South Africa is the chief obstacle in the way of the attainment of Communism’s designs on Africa. We are the main bastion of the West in this troubled continent—guarding the sea-route to the East. Therefore our people and our peace must be disrupted and our resistance shattered to pave the way for the final communistic conquest of Africa.

From another direction also, and from different motives, South Africa is under fire, under threats of violence and disruption. Under the banner of “Africa for the Africans”— Black Africans of course—covetous and hostile eyes are trained upon us. What we have done and are prepared to do for emerging Africa and our own Blacks is dismissed as of no consequence. Our desire for peaceful and co-operative co-existence in Africa is ignored, as well as the great need for the orderly development of Africa, politically and economically.

There is a large extent of interplay between these twin hostile forces, for, true to character, Communism seeks to inspan others to attain its objectives.

It seems unrealistic, except in a “hot” war against Communism, to look for assistance to those countries who speak our accents and share our beliefs, but in whose global strategy it would appear to be more important to appease uncommitted countries than to stand by old friends who have already declared in their favour by deeds and not only in words. These facts are a warning that we should look to our defences, against aggression from outside, but also against lawlessness and subversion from within. These are facts which a realistic Budget can ignore only at the country’s peril.

The accelerated development of the Bantu homelands is another socio-political duty which we dare not shirk. Firstly, because it is our moral duty to promote the economic and political development of the Bantu in their own areas; and sceondly—but only secondly— because we may thereby be able to convince those not blinded by prejudice that our policy of separate development is no sham, but a sincere attempt to solve, with justice to all and in the interest of all, a problem which in other countries has failed to find a satisfactory solution.

This Budget is planned with due regard to these weighty socio-political considerations; but however important they are, that does not mean that economic considerations can be neglected. In any modern economy the Budget is a significant element in economic policy— perhaps not so all-important as is sometimes believed, but still significant. The expenditures of the Government, and the taxes and other revenues to be raised, must be considered in the light of their effects on the economy, and may indeed be adapted to promote positively the progress of the economy.

In planning a Budget, as in planning a military operation, it is advisable to begin with a systematic appreciation of the situation. Such an appreciation should first of all define the aim or objective of the operation, and then examine the various factors affecting the attainment of that aim before considering the various courses of action open.

The aim of the Budget-planner is always complex, but in present-day South Africa I think it can be reduced to three main elements. These are—

1. (1) security against external attack, as well as against internal disorder, for all races in the Republic;
2. (2) the greatest possible degree of economic progress and stability, within the context of general government policy; and
3. (3) the alleviation of the lot of the handicapped and other less fortunate members of the community, to the extent that our resources permit.

This Budget must therefore be judged as a financial plan of campaign to attain these aims.

Before developing my plan, it is necessary to look at some of the main factors which are likely to affect any proposed financial plan of campaign. Some of these factors are factual, whether in the Republic or outside; but others are reasoned conjectures from known data and tendencies. As in military science, financial diagnosis and forecasting must sometimes proceed from the known to the unknown. I have thought it advisable to furnish the House with a field map of the known terrain in the shape of a revised and enlarged White Paper, which I shall presently lay upon the Table. I hope that this will assist hon. members in studying the background of the plan of campaign. It will also enable me to avoid over-burdening the Budget speech with detailed statistics, since the figures are available in the White Paper.

_I shall begin with a survey of—

The Balance of Payments:

The spectacular recovery of our gold and foreign exchange reserves since their low point in June 1961 is the main feature in the economic history of the past year. After an initial rise in the first quarter of 1961, the reserves fell sharply, so that between 1 January and 30 June they showed a net decline of R18,000,000. In the second half-year, however, they improved by no less than R125,000,000. This recovery was due, in the first place, to a sharp drop in imports; secondly, to the checking of the outflow of private capital, and thirdly, to an encouraging increase in merchandise exports and gold production.

Over the year as a whole our imports decreased by R116,000,000 or about 10 per cent as compared with 1960. This was due not only to the intensification of import control, but also to the diminished demand for imported goods as a result inter alia of tighter money conditions in the first three-quarters of the year, and to the fact that inventories had already been replenished in 1960. I do not think there can be any complaint that the reduction in imports has caused any noteworthy shortages or any marked inflationary tendencies in the economy.

Merchandise exports reached the record figure of R926,000,000—R47,000,000 or 5.3 per cent above the 1960 figure—despite a fall of R29,000,000 in uranium exports as a result of the new “stretch-out” arrangements. So much for boycotts! According to preliminary figures, exports of wool rose by R13,000,000, of maize by R18,000,000, and of diamonds by R15,000,000, while re-exports (also largely diamonds) increased by R17,000,000.

Gold production again showed a most satisfactory increase to reach a new record level of R576,000,000 for the year. Net payments for services, however, also increased substantially, reflecting mainly increased remittances of profits and dividends abroad, particularly during the first half of the year.

The balance of payments on current account accordingly showed a net surplus of R205,000,000 for the year 1961, of which R175,000,000 was attributable to the second half-year. This compares with a surplus of R21,000,000 for the year 1960.

On capital account, official and banking institutions were responsible for a net outflow of R11,000,000 in 1961, representing the excess of loan repayments over new loans received. There was a net outflow of private capital to an amount of R72,000,000, as compared with R152,000,000 in 1960. By far the greater part of this outflow, namely R56,000,000, occurred in the first half of the year. The purchase of South African securities from non-residents, which caused a net outflow of R28,000,000 during the first half of 1961 (as compared with a net outflow of R78,000,000 in 1960), was effectively stopped by the measures announced in June of last year. Moreover, substantial new foreign loans received by the private sector during the second half of the year offset to a large extent the contractual repayments of uranium and other loans as well as a further moderate outflow of South African resident capital, mainly for direct investment. The final outcome was that the Republic’s total gold and foreign exchange reserves increased over the year 1961 by R107,000,000—a most satisfactory result.

Since the end of 1961 the reserves have continued to rise. In this period we have repaid our entire drawing from the International Monetary Fund (approximately R27,000,000), which is the equivalent of our gold subscription to the Fund. Stand-by credits in respect of our first and second credit tranchés and amounting to a total of R54,000,000 were also granted by the Fund, but it was not found necessary to avail ourselves of any part of these credits, and in fact the second credit tranché was relinquished by us some time ago. We have also repaid a further $10,000,000 (approximately R7,000,000) of our revolving credit with a group of American banks. A previous repayment of $10,000,000 was made last December so that $20,000,000 is available to be drawn again at any time if it should be needed. Despite these repayments, the Reserve Bank’s gold and exchange reserves stood last Friday at R313.9 million or R37.3 million higher than at 31 December 1961.

The prospects for the current year, barring unforeseen events, are generally favourable. Gold production should continue to increase, though perhaps not quite so rapidly as in recent years. Economic conditions in most of our principal markets should be conducive to at least the maintenance of our merchandise export trade at the 1961 level. We have to meet substantial repayments on official and private overseas loans, but at least some of these have either already been renewed or are likely to be renewed, while new foreign loans may again be raised during the year. The reserves will, of course, not continue to rise indefinitely, and may indeed decline temporarily during the seasonal lean period ahead, but that is no cause for concern, because the underlying trend is sound.

This improvement in the balance of payments inevitably gives rise to speculation regarding the relaxation of import and exchange controls. The events of the past two years have shown, however, how necessary it is for us to be armed against any sudden attack on this economic flank, and I think we shall be well advised to aim at maintaining our gold and foreign exchange reserves at a higher level in future.

This does not mean that no relaxations are possible. As regards import control, I think that the situation justifies and indeed requires a limited relaxation, and I have therefore agreed to make an additional amount of foreign exchange available for this purpose. My colleague, the Minister of Economic Affairs, has recently made an announcement in this connection. I would emphasize that it is the Government’s policy, when relaxing import control, to do so gradually and with circumspection so as to cause no undue disturbance to local industry.

The exchange restrictions imposed last June on the transfer of the proceeds of securities sold in South Africa by a non-resident were reluctantly resorted to as an emergency measure. It would be premature and dangerous, however, to lift them completely at this stage. The appreciable difference between the prices of South African shares on the Johannesburg and London Stock Exchanges, is an indication that many foreign investors still do not share the confidence of South African shareholders in the future of the Republic, and that, if all restrictions were lifted, any unfavourable incident might lead to a renewed outflow of capital. There are, however, certain steps which we can take and which will benefit the foreign investor and possibly reduce to some extent the gap between London and Johannesburg share quotations, without at the same time placing our balance of payments position in jeopardy. I shall deal with these steps later.

Let us now turn to look at the field of

Domestic Economic Activity:

According to preliminary estimates, the net national income for the 12 months ended 30 June 1961, amounted to R4,271,000,000—an increase of 5.7 per cent over the revised figure of R4,040,000,000 for the previous year. This increase is smaller than that of 1959-60 but is not unsatisfactory for a year in which the South African economy had to cope with many adverse influences. The increase for 1960-1 was fairly evenly spread over the main sectors of the economy: the net income of private manufacturing industry rose by 6.1 per cent, of mining by 5.6 per cent, of agriculture, forestry and fishing by 3.7 per cent, and of commerce also by 3.7 per cent. The available information suggests, however, that the internal economic situation took a less favourable turn from the second quarter of 1961 onwards. I shall not weary the House with the statistics, which are available in the White Paper and other official publications, but there are a few aspects of the situation which I should mention.

During the year 1961 unemployment tended to increase, notably in the building, motor and engineering industries. After reaching a peak in August it declined slightly, but rose again in January and February 1962, when large numbers of school-leavers were seeking work.

The building industry, which is one of those in which unemployment has increased, is likely to present special problems. The value of building plans passed dropped sharply in the second quarter of 1961, and for the year as a whole declined by 28 per cent compared with 1960. Though some temporary factors were at work causing hesitancy in undertaking new building works, I think it must be recognized that office accommodation, and to a lesser extent dwelling accommodation, is in many centres reaching saturation point, so that the building industry may have to adjust itself to a somewhat lower level of activity for some time.

Rough preliminary estimates indicate that, for the calendar year 1961, the gross national product increased by only about 3 per cent above 1960. There was a small increase in consumption and a substantial increase in saving, and private sectors, but net private fixed investment increased moderately in both the public and private sectors, but net private fixed investment showed little change. The comparatively slow rate of growth of our economy, as measured by real income per head, and the sluggishness of net private fixed investment, remain a source of concern. It is true that similar growth rates are found in other countries at a comparable stage of development, such as Australia and New Zealand, and no doubt this is associated with some deterioration in the terms of trade of primary producing countries in recent years. But, with our wealth of natural resources, I think that we can and should show more rapid progress than we have done in the past few years.

There are, however, many bright spots in our economy. In many branches of activity, notably in gold mining and in our export trade, there has been a substantial advance. Agriculture has, on the whole, had a reasonably good year, though certain sections are burdened with the problem of surpluses. In business generally, profits appear to have increased; a survey of 271 companies with financial years ended 30 June 1961 conducted by the Bureau of Census and Statistics, showed an average rise in profits, before tax, of 10.7 per cent.

Some experienced observers consider that a revival of capital development in the private sector is already under way, and there is some statistical evidence that economic conditions did in fact improve in the past few months. The gross national product, for example, after showing little change in the second and third quarters of 1961, rose again in the fourth quarter, and this increase was reflected particularly in increased consumption. After allowance for seasonal fluctuations, the indices of fixed property transactions and of employment in private construction industry turned upward during the last few months of 1961, while bank debits tended to increase more rapidly.

On the financial side, the liquidity of the economic system is now such as to permit of a reasonable measure of expansion. When the outflow of capital reduced the foreign reserves to their low point about the middle of 1961, considerable financial stringency was experienced. The subsequent rise in the reserves led to a substantial easing of the position, so that over the year 1961 the private sector’s total liquid assets increased by R140,000,000 to the record level of more than R1,600,000,000. Similarly, the liquidity of the commercial banks has improved over the year; the ratio of their liquid assets to liabilities to the public, which stood at 43.2 per cent at the end of 1960, fell to a low point of 35.4 per cent at the end of June and then recovered rapidly to 47.6 per cent at the end of December 1961.

Interest rates have reflected these movements in liquidity. Thus the Treasury bill tender rate, after increasing from 3.90 per cent at the end of 1960 to 4.73 per cent on 9 June 1961, decreased thereafter to 4.03 per cent by the end of the year; last Friday it stood at 3.68 per cent. Bank rate was reduced by ½ per cent on 7 December to its present level of 4½ per cent. This latter reduction was followed by a similar movement in the rates charged and offered by commercial banks and, more recently, in those to be offered by building societies. As regards long-term interest rates, the Reserve Bank’s pattern of rates for Government stock which was increased by ¼ per cent in February 1961 and again by ¼ per cent in May, has since remained unchanged, but the results of recent public loan issues by municipalities and public utility corporations indicate that the pressure on the capital market has eased considerably.

The general conclusion from this brief reconnaisance of the economic sector is that our forces are well deployed and in good fettle, and that they have stood their ground resolutely and well against the shock attacks of the past year. Conditions are now favourable for an advance on this front. The question is whether, in the light of the demands of other sectors, it will be possible to devote any fiscal resources to speeding this advance.

From the national accounts, I now turn to the Government’s accounts for—

The Financial Year 1961-2:

It is estimated that the Revenue Account for the year ending 31 March 1962 will close with a small surplus of about R5,000,000. Expenditure is likely to be at about the same level as originally estimated, but whereas customs and excise receipts will be somewhat lower than forecast in my Budget speech last year, inland revenue—mainly income tax—is expected to be appreciably higher.

On Loan Account, expenditure during 1961-2 will be considerably less than originally estimated, principally because of lower capital expenditure by the Railways. Furthermore, the Loan Account started the year with a credit balance of nearly R27,000,000, mainly because the Railways Administration did not require its full allocation in the previous financial year. These and certain other favourable factors enabled the Treasury to repay to the Reserve Bank recently the counterpart of the $40,000,000 revolving credit from a group of American banks, and still to end the year with a credit balance.

The Loan Account for 1962-3 must now be surveyed.

The Estimates of Expenditure on Loan Account submitted by Departments amounted to R242,000,000. With the co-operation of the Departments concerned, the Treasury was able to reduce this amount to R218,000,000— R12,000,000 less than the main estimates for the current year.

Further progress with the Railways’ capital programme has made it possible to reduce the provision for this purpose by R15,000,000, as compared with the provision for 1961-2. A decrease in the requirements for assistance to farmers has enabled the provision under Loan Vote H to be diminished by nearly R5,000,000. There is also a reduction of R2,000,000 in the provision for Housing and of a similar amount under the Commerce and Industries Vote for the Industrial Development Corporation. On the other hand, I have provided R4.9 million more for the Provincial Administrations, mainly for schools and hospitals, and R4.5 million more for Water Affairs. There is also an increase of R1.5 million in the provision for Community Development and of over R1,000,000 for Telegraphs, Telephones and Radio Services. These decreases and increases account for a net decrease of R12,000,000 in the amount requested by Departments on Loan Account.

In Vote E—Water Affairs—there is included an amount of R2,000,000 as a first instalment for the Orange River Development Project. The Orange River, Mr. Speaker, is one of our most valuable assets, and yet, by reason of the large variations in its flow from year to year and from season to season—which is not properly controlled—it causes periodic flood damage. Moreover, 80 per cent of its water runs unused into the sea.

By the turn of the present century our population will have doubled. This calls for a steady expansion of food production. Likewise rural development, the decentralization of industry, and the provision of rail transport facilities, will generate an increasing demand for electric power.

The need for harnessing the Orange and utilizing its great potential is obvious. Investigations by the Department of Water Affairs reveal that—leaving out of account the waters of the Vaal which are needed in its own catchment area—it should be practicable, by providing sufficient storage capacity, to ensure a reasonably continuous and controlled flow of 1,600,000 morgen feet per annum, and to apply this to the irrigation of 360,000 morgen of land as well as to the supply of certain quantities of water for power generation and domestic purposes.

This great project, involving a series of storage dams, a 50-mile tunnel, several hydroelectric power stations and hundreds of miles of irrigation canals, will take many years and many millions of rand to complete. Even the first phase, upon which we now propose to embark, is estimated to cost R85,000,000. But, Sir, water is our life-blood, a vital but scarce resource essential to ensure for future generations adequate food supplies, and we should fail in our duty if we did not start now to develop this asset. Posterity will appreciate the tremendous significance of this step.

Until a few years ago, the grant to the South African Native Trust Fund for the purchase of land and for the development of the Bantu areas was always voted on Loan Account. In 1958 it was transferred to Revenue Account, on the ground that it did not result in the acquisition of permanent assets by the central Government as such. There can be no doubt, however, that a very large proportion of this expenditure results in the creation of permanent assets for the State in the wider sense, and in view of the much larger amounts now being provided for the Trust, I feel that, in present circumstances, the present generation of taxpayers should not be asked to bear the whole burden. I have, therefore, included an amount of R10,000,000 for this purpose on Loan Account. A considerably larger amount is, in fact, expected to be spent by the Trust on the creation or acquisition of permanent assets in 1962-3, so I consider that there is ample justification for this step. Further details of the Trust’s proposed expenditure will be given when I deal with the Revenue Account.

The total amount included in the Loan Estimates is therefore R228,000,000. In addition, R1,200,000 is required for a further contribution to the International Bank for Reconstruction and Development, R800,000 for an advance to the Bantu Education Account, and R1,000,000 in respect of the cost of raising loans.

External loans to an amount of R33.2 million and internal stocks amounting to R33.6 million must be repaid, while the loan levy of 1957-8 amounting to R18.6 million also falls due during the coming financial year. A total of R316.4 million is therefore required.

The following funds should be available:

An amount of R124,000,000 must still be found.

I think it is reasonable to hope that we shall be able to arrange new foreign loans, or the renewal of existing loans, to an amount of R35,000,000.

As regards internal stocks, a loan of R29,449,000 falls due next month, and the Treasury will issue two new loans, one for 20 years at 5⅞ per cent and one for 5 years at 5¼ per cent. In view of the easier trend in the capital market, I think it should be possible to raise R40,000,000 by this issue and, if necessary, by a further stock issue later in the year. In other words, we do not envisage taking more than about R7,000,000 in new money from the capital market.

Last year I re-introduced the special 5 per cent tax-free Treasury bonds, and this issue will be continued. At present these bonds have a life of seven years, but can be repaid after five years at a discount of 2 per cent. To increase the popularity of these bonds, I propose to abolish the discount, so that the bonds (including those already issued during the current financial year) will be repayable at par, at the option of the holder, at any time between five and seven years from the debate of issue. These bonds should yield R6,000,000.

I mentioned earlier that there were certain measures which could be taken to relax the exchange controls on the transfer of the proceeds of South African Securities sold in South Africa by non-residents. After careful consideration of various proposals, the Government has decided upon two measures, both of which, apart from the benefits they confer upon foreign shareholders, will also be for the benefit of the State and thus of the country as a whole.

Only the first of these measures has a direct bearing on the Loan Account. The Government intends to permit holders of “Blocked Rand” to subscribe to a special issue of five-year non-negotiable Government bonds, bearing interest at the rate of 5 per cent per annum and repayable in five annual instalments, reckoned from the date of subscription by the parties concerned and freely transferable in foreign currencies on the expiry of each instalment. The amount which could be so subscribed, however, will be limited to R20,000,000 during the financial year 1962-3, but the ultimate limit contemplated at present would be R50,000,000. This would enable existing holders of “Blocked Rand” and non-resident holders of South African securities who desired to sell such securities on the Johannesburg market, to repatriate their capital, if they wished to do so, on the expiry of each instalment, at the ruling official rates of exchange. Further details of this loan will be announced in due course.

The second measure which, as I have implied, does not directly affect this Budget, has been prompted by the desire to alleviate the shortage of scrip available to South African investors. Since the breaking of the link between the Johannesburg and London Stock Exchanges, South African investors have sometimes found it difficult to obtain sufficient share investments on the local market. This has also had the effect of driving up share prices in Johannesburg and widening the margin between these prices and those quoted on the London Stock Exchange. Representations have, in fact, been made to me by persons desiring to start open-end trusts under the legislation recently passed by Parliament, that the establishment of such trusts will be very difficult, if not impossible, unless they can obtain more adequate supplies of appropriate scrip than are obtainable locally.

The only solution is to purchase the scrip on the London market. But such purchases must obviously be strictly controlled, otherwise the drain on our foreign reserves may become too great. Moreover, I feel it would be wrong to permit a limited number of local investors to reap any profit arising from the margin between the London and Johannesburg prices of the securities purchased.

The Government therefore intends to arrange with the Reserve Bank, as its banker and agent, to receive applications from approved financial institutions in South Africa for the purchase on their behalf of South African shares on the London market. The Bank will buy these shares to the best advantage and will deliver them to the South African institutions at a price agreed upon in advance, which will generally be the current market price quoted on the Johannesburg Stock Exchange on the date the order was placed. Further details will be announced in due course. The total amount of such orders accepted will be limited, and the limit will be fixed from time to time by the Treasury in accordance with the position of the balance of payments and the state and trend of the Johannesburg share market. A limit of the order of R20,000,000 or R30,000,000 is at present envisaged.

The question remains: what is to be done with any fortuitous profits arising from these transactions? Clearly they should not benefit any individual or any group of individuals, and it might be invidious to assign them to any charitable or educational cause. I think justice will be best served if such profits, if any, should be credited to the Defence Special Equipment Account, since the defence of South Africa is the concern of every individual citizen of the Republic.

These two measures have, I think, several advantages over other devices which have been suggested. They will furnish greater scope for the overseas investor who wishes to realize his investment; they will provide for a controlled repatriation of South African securities and consequently a reduction in South Africa’s foreign liabilities in respect of portfolio investments; they will alleviate the shortage of scrip on the local market; they may tend to cause, without any disruption of the local market, a narrowing of the gap between share prices on the Johannesburg and London Exchanges, and they will confer some financial benefit on the State and hence on the country as a whole.

I return to the Loan Account. To meet the gap of R124,000,000, we should have available R35,000,000 from foreign loans, R40,000,000 from local loans, R6,000,000 from tax-free Treasury Bonds, and R20,000,000 from the special “Blocked Rand” loan. There remains a balance of R23,000,000. The volume of Treasury Bills outstanding has increased over the current year, but is still below the level of two or three years ago. Provided the liquidity of the money market does not deteriorate seriously I see no difficulty in raising the additional money required by the issue of Treasury Bills.

From the known I now proceed to the unknown terrain and offer estimates of—

Expenditure on Revenue Account, 1962-3:

The printed Estimates show a total provision on Revenue Account of R790.8 million, approximately R70,000,000 higher than the main Estimates for 1961-2. Of this increase, Defence is responsible for no less than R48,000,000.

Mr. Speaker, this is a Budget of national security. Defence is at once its dominant theme and its ultimate justification, and yet I do not think it is necessary to say very much about defence here this afternoon. South Africans have always been ready to make sacrifices when their national security is threatened. I do not say that our national security is actively threatened now, but I say that it very soon will be, unless we are strong enough to deter a potential aggressor. I say further that such a threat, under whatever guise and from whatever quarter it is launched, bodes no good in the long run for any racial or political group in South Africa, unless it be the small group of communist-inspired agitators who thrive on anarchy and chaos. It is the duty of us all, therefore, to strengthen our defences—already far stronger than they were a year ago—and to provide our defence forces with the means, not only to ward off attacks, but also to strike back at the aggressor. The ability to retaliate is the best guarantee that retaliation will never be necessary.

Defence expenditure is the premium which a country pays on a policy for peace. Si vis pacem, para bellum. South Africa should not only be prepared for the eventuality of aggression, but it should also appear to be prepared. And who grudges the accident premium if no accident happens?

It is with confidence, therefore, that I ask the House for an amount of nearly R120,000,000 on the Defence Vote, or 67.3 per cent more than in the Main Estimates for 1961-2. Hon. members will not expect me to give details of the Vote this afternoon; my colleague the Minister of Defence will do so, so far as this is compatible with the public interest, in the Committee of Supply.

Excluding Defence, the total amount asked for by Departments on Revenue Account exceeded the current year’s estimates by R42.1 million or 6.5 per cent. With the whole hearted co-operation of my colleagues, this increase was reduced to R31.7 million or 4.8 per cent, even before the transfer to Loan Account of R10,000,000 of the provision for the Native Trust. This is the more remarkable if it is borne in mind that certain increases, for example, in the provision for interest on the public debt (R6.3 million) are unavoidable, while others such as the increase for Police (R2.4 million) are essential for maintaining internal security.

I would also draw attention to the increase of R5.6 million in the provision for Provincial Administrations. Statutory provincial subsidies amount to the formidable figure of R136.7 million, and at the urgent entreaty of the Provincial Administrations concerned, I have increased the extra-statutory subsidies in the Estimates to no less than R8.9 million. It is most unsatisfactory that we should have to deal with the question of Provincial subsidies on this ad hoc basis, and I sincerely hope that the Commission now studying this problem will be able to find an acceptable solution.

I should also like to refer to the grant-in-aid for the South African Native Trust. During the year 1961-2 R17.5 million was provided for this purpose. Despite very rapid progress by the Department of Bantu Administration and Development, some R5.5 million of this amount will probably remain unspent at 31 March 1962. The Department is now pushing forward with its development plans for the Bantu Areas at full speed, and for the year 1962-3 expects to require no less than R25.2 million, or more than double the amount expected to be spent in 1961-2. Of the R25.2 million, R2,000,000 is needed for the purchase of land, R8.1 million for the establishment of villages, R1.8 million for irrigation and water supplies, R1.7 million for soil reclamation, R2,000,000 for forestry development, R1.9 million for buildings such as agricultural schools, youth camps, etc., R1,000,000 for machinery and equipment and electricity supply, and R6.6 million for general development. To obtain the R25.2 million it is necessary to supplement the unspent balance of R5.5 million by voting R19.7 million, of which R10,000,000 is included in the Loan Estimates and R9.7 million on Revenue Account.

There are a few new items of expenditure which I propose to include in the Supplementary Estimates. The first concerns—

Assistance to Exporters:

In order to strengthen our balance of payments, it is important that we should build up our export trade. I think that many potential exports are lost to South Africa, simply because our manufacturers and merchants have not the experience and knowledge to break into world markets; the products and the prices are right, but the marketing technique is lacking. There may be need for some machinery to assist exporters in these matters. Private industry and commerce should play their part in such an effort, but the Government is willing to do its share.

An Exporters Convention is to be held in Johannesburg in May, and the Government will await the results of this Convention before deciding upon the exact form of its contribution. As an earnest of our willingness to help, however, I propose to include an amount of R500,000 in the Supplementary Estimates for this purpose.

Social Pensions:

The third aim which I set myself in planning this Budget, was the alleviation of the lot of the less fortunate members of the community, to the extent that our resources permit. It is clear that it is no easy matter to set aside any considerable sum for this purpose at this time. Nevertheless, the Government attaches such a high priority to the needs of social pensioners that I have decided to ask Parliament to vote increased funds for these pensions. It is proposed to increase the bonus paid to White social pensioners and grantees by R18 per annum. Approximately proportionate increases will be made in the case of non-Whites. This increase will mean that the maximum amount payable to, for example, a White old age pensioner will be raised to R294 per annum.

Corresponding increases will be made in respect of maintenance grants and family allowances.

These concessions will take effect from 1 April 1962, and will cost R3,550,000.

War Pensions:

The Government has decided to bring the ratio between White and Coloured war pensions into line with the ratio between White and Coloured social pensions, by increasing the pensions and allowances payable to Coloured ex-servicemen and their widows and dependants. This will mean, for example, an increase of R72.50 per annum in the pension paid to a 100 per cent disabled Coloured exvolunteer. The additional cost will be R150,000.

Civil Pensions:

Civil pensioners are at present paid a bonus equal to ten per cent of their pensions. This bonus is paid from revenue funds and not from pension funds.

Honourable members no doubt know that the amount of the pension granted to a public servant on his retirement depends not only on the length of his service, but also on his average annual pensionable emoluments over a prescribed period.

The cost of living allowance which was payable to public servants and other Government employees, was partially absorbed in their pensionable emoluments as from 1 October 1953. Total consolidation took place from 1 October 1958.

In order to afford relief to officials who retired before consolidation at a time when salaries—and also pensions—were relatively low, it has been decided to increase the bonus to 20 per cent of the pension in respect of those who retired prior to 1 October 1953, and to 15 per cent of the pension in respect of those who retired between 1 October 1953, and 30 September 1958. These increases will take effect from 1 April 1962.

The pension of a public servant is now based on his average annual pensionable emoluments during the last seven years of his service. Consequently the longer he remains in service after 1 October 1958, the more he benefits from the consolidation of the cost of living allowances and pensionable emoluments in so far as the amount of his pension is concerned.

It is considered that there is no justification vis-à-vis pensioners who retired prior to 1 October 1958—for the retention of the 10 per cent bonus in respect of pensions earned on the consolidated emoluments, and it has been decided to reduce this bonus to 7½ per cent of the pension in respect of officials retired on or after 1 October 1962, but before 1 October 1965, and to 5 per cent of the pension in respect of officials retired on or after 1 October 1965.

Similar changes will be made in respect of widow’s pensions.

It has also been decided that where a pension is paid from a pension fund, that fund shall, as from 1 April 1962, bear a portion of the cost of the bonus by reason of the increased interest now earned by such fund. This portion will be equal to 5 per cent of the pension.

After allowing for this contribution by pension funds, the cost to the Consolidated Revenue Fund of the revised bonuses will amount to approximately R100,000 during the financial year 1962-3.

Total estimated expenditure on Revenue Account, including the additional R3.8 million required for pensions, and the R500,000 for assistance to exporters, is therefore R795.1 million.

The answer to the question how this amount can be met, brings me to the—

Estimates of Revenue, 1962-3:

On the existing basis of taxation, the revenue for 1962-3 is estimated at R754.4 million, or R38,000,000 more than the Budget estimates for 1961-2. The main increases are in respect of income tax on gold mines (R16,000,000), on companies other than mining companies (R6,000,000) and on individuals (R12,000,000), while slightly higher receipts are also expected from certain other taxes and from the Department of Posts and Telegraphs.

Honourable members may have noticed that I did not propose that the surplus on Revenue Account for 1961-2, estimated at R5,000,000, should be transferred to Loan Account, as has been customary in recent years. Since our main problem for 1962-3 is on Revenue Account, I propose that the surplus should remain there.

Taking this surplus into account, the additional amount which must be found is therefore R35.7 million. For whatever comfort it may be, I offer the thought that, but for the increased expenditure under the Defence Vote, there would have been no shortfall of revenue to be met.

In considering the various courses of action open to us to meet this shortfall, we must bear in mind the second objective of our plan of compaign, viz., the greatest possible degree of economic progress and stability, within the context of general government policy. Additional taxation is unavoidable, but we must try to select our tax proposals so that they operate fairly and with the least possible adverse effect on the progress of our economy.

Before dealing with tax increase, however, I wish to propose certain concessions designed to stimulate economic development.

Investment Allowances:

Last year the investment allowances were increased and extended, and I consider that economic conditions justify their continuance at the present levels. Representations have been received that the time allowed for the introduction of new machinery or the erection of new buildings to qualify for the allowance is still too short, and I propose that the existing allowance in respect of equipment and machinery be extended to 30 June 1965, and in respect of buildings to 30 June 1966, provided the construction of the building was commenced not later than 30 June 1965. I can give no assurance that these periods will be extended again next year.

The enhanced investment allowances for the Bantu and border areas will also be continued, for the same periods.

Export Concession:

I have already referred to the need for encouraging our export trade.

In to-day’s highly competitive world markets it is essential that every incentive should be granted to exporters to maintain and expand their exports. I propose, therefore, that exporters who increase their export turnover should, in respect of their expenditure (other than capital expenditure) on the development of export markets, receive a special income tax allowance in the shape of an enhancement of the amount of such expenditure.

The concession will apply in respect of all goods manufactured or produced in the Republic which are exported (excepting gold coin and bullion and uncut diamonds) and also to re-exports where the goods originally imported have been in some way processed in the Republic or have been incorporated, for purposes of re-export, in South African goods. Disposal of such merchandize to ships or aircraft for use or consumption outside South Africa will rank as exports, but sales to South West Africa or the High Commission Territories will not.

The special allowance will be granted in respect of expenditure (other than expenditure of a capital nature) incurred by an exporter (whether manufacturer, producer or agent) during the year of assessment in question in respect of the development of export markets.

Full details of the legislative provisions which will govern the allowance have not yet been finally worked out but it is proposed that the extra deduction will be determined in relation to the increase in the selling value of exports during the year of assessment in question as compared with the selling value of exports during the immediately preceding year of assessment. If such increase does not exceed 10 per cent the extra deduction will be calculated at 25 per cent of the relevant allowable expenditure. If the increase is between 10 per cent and 25 per cent the extra deduction will be 37.5 per cent and if the increase exceeds 25 per cent the extra deduction will be 50 per cent of such relevant expenditure. Various safeguards may have to be incorporated and one of those safeguards will be designed to discourage the splitting of export activities for the purpose of deriving the maximum possible extra deduction.

Since it is hardly probable that exporters could increase their exports significantly during the current tax year by increasing their expenditure on market development, this concession will only take effect from the new tax year beginning 1 July 1962. There will consequently be no loss of revenue during the year 1962-3, but for 1963-4 it may amount to R250,000.

I have endeavoured, by extending the investment allowances and by providing assistance to exporters, to place manufacturers in a position where they can properly plan their production and investment schemes, and I trust that they will rid themselves of any remaining hesitancy and go ahead with confidence and expedition. To those who still allow themselves to be deterred by what they may feel to be a lack of complete security, I would ask: where on this globe do you imagine to find that complete security? Let us grasp the opportunities and build our future in faith and confidence.

Donations to Universities:

In view of the continued pressing need for expanding university facilities for pure science and technology, the concession made in 1960 and extended last year in respect of donations for this purpose will be continued for a further year.

I come now to my proposals for additional taxation. Indirect Taxation was first explored.

Liquor:

My first proposal will, I think, cause surprise only by reason of its moderation. At a time when millions have to be found for our national security, I think it is only fair that the consumer of liquor, in whatever form, should bear his share of the burden, but it will not be a heavy one. I propose that the excise duties on spirits be increased by 18c per bottle; this means that the retail price is likely to rise by 1c per tot. Fortified wine at present bears an excise duty of only 4 5/6c per bottle; I propose that it be increased by a like amount. On sparkling wine, the increase will be 5c per bottle. Unfortified wine at present pays no duty, and it is from many points of view desirable that its price should be kept low, so as to encourage its consumption in preference to spirits. In present circumstances, however, I believe that all who buy liquor, of whatever sort, should be prepared to pay a little more, but the excise duty on unfortified wine will be only 2½c per bottle. On beer, I propose an increase of 12½c per standard gallon for lager beer and 10c per bulk gallon for special beer; in both cases this should result in an increase of not more than 1c per pint in the retail price.

Customs duties on spirits, wines and beers will be increased by equivalent (or, in the case of wines other than sparkling wines, slightly higher) amounts.

I believe that these moderate increases should not unduly affect consumption, especially when account is taken of the proposals to extend the sale of liquor to the Bantu. The additional revenue from liquor duties is estimated at R14.3 million.

Customs duties on non-essential goods:

Last year I increased the rates of import duty on a number of non-essential items. I propose to do the same this year on a further range of items. I do not think the new duties will adversely affect any local manufacturer, but any who consider that they are so affected, may submit representations to the Board of Trade and Industries.

The duties affect a number of items, and I do not propose to mention them all here; details will be given in a Notice of Motion which I shall table. There is one item, however, which I wish to mention, and that is the duty of 5c on paper-back fiction. I am reluctant to impose a duty on books, even if only on paper-back fiction, but anyone acquainted with the enormous volume of trash which enters the country in this form to-day—even in 1954 no less than 6,000,000 such books were imported—would agree that it is not unfair to impose a small duty on such so-called literature. I would have liked to exempt the better class of paper-back fiction from this duty, but it has not so far seemed practicable for the Customs Department to distinguish between the wheat and the chaff. The increase in the retail price of the better class of paper-back fiction should in any case be relatively small.

The estimated additional revenue from all these duties is R1.7 million.

Petrol and Diesel Oil:

It is with some regret that I propose an increase in the customs and excise duties on petrol and diesel oil, since I know that this may affect costs throughout the economy. The increase is, however, a moderate one—1c per gallon—and is indeed the only tax measure in this Budget whose effects are likely to spread, in some measure, to all sections of the community. In the case of diesel oil, the increase will apply only to oil which at present bears customs duty of 12.083c or excise duty of 11¼c per gallon, i.e. diesel oil for use in ordinary road vehicles other than for agricultural purposes or public passenger bus services.

The increased revenue from petrol and diesel oil should amount to R5.4 million.

Gramophone Records:

When duties were imposed on gramophone records three years ago, these duties were graded according to the speed of the records. Technical developments have made it desirable to base the duty rather on the playing time of the records, and representations have been received from the trade to this effect. The proposed basis is fairer in all respects, and I propose that the customs and excise duties on records be changed to the following:

This is a technical adjustment rather than a revenue measure, but it will yield an incidental additional revenue of about R100,000.

The total additional revenue deriving from indirect taxation is therefore R21.5 million. All these changes in customs and excise duties will take effect immediately. In the case of spirits, wine, beer, petrol and oil and gramophone records, the increased duties will also be payable on such goods not delivered at this moment from the stocks of manufacturers, importers, and distributors and dealers in wholesale quantities, who should take stock of the specified articles immediately.

But direct taxation cannot escape the impost for national security altogether!

Income Tax:

For ten years there has been no general increase in personal income tax; on the contrary, there have been several reductions by way of, for example, higher rebates or discounts. Last year, for instance, the discount on basic personal income tax was increased to 10 per cent. The rate of company income tax has also remained basically unchanged for ten years, except that last year a discount of 3 per cent was allowed. Furthermore, during 1962-3 income taxpayers, both persons and companies, will become entitled to the repayment of 19578 savings levy, amounting to R18.6 million.

I feel, therefore, that when additional funds are required for national security, the income taxpayer will not expect to be forgotten. I accordingly propose to abolish the discount of 10 per cent of the normal tax payable by persons other than companies and of 3 per cent of so much of the normal tax payable by companies on taxable income, other than that de rived from the mining for gold and diamonds, as does not accrue for the benefit of the respective provincial funds.

The estimated additional revenue for 1962-3 is R14.2 million, which is substantially less than the amount of savings levy repayable to persons and companies, viz. R18.6 million.

That concludes my proposals for raising the required additional revenue. There are, however, certain other tax matters to which I wish to refer.

Other Changes:

In pursuance of my policy of rationalizing our tax system, a number of minor changes in the income tax law will be proposed. The most important are:

1. (1) Royalties on films will be taxed in the same way as other royalties, i.e. tax will be levied on 30 per cent of the gross income instead of the present 10 per cent.
2. (2) Accumulated losses will be ignored in determining the percentage of dividends to be exempted from normal income tax.
3. (3) In respect of any divorced or judicial separation granted in consequence of proceedings instituted after to-day, and in respect of any written agreement of separation entered into after to-day, any amount payable by a taxpaper to his spouse or former spouse will not be allowed as a deduction in the determination of the taxable income of such taxpayer, and the amount received by the spouse under such order or agreement will not be taxable in the hands of the recipient.
4. (4) Retirement gratuities up to a maximum of R4,000 will be exempted from tax.

Full details of these changes will be given when the Income Tax Bill is introduced. The net effect on revenue will not be significant.

Pay As You Earn:

Last year I said that, in spite of certain difficulties, I still hoped that it would be possible to introduce the pay-as-you-earn system of income taxation shortly. I regard this as an important step in the programme of fiscal reform which is now under way. In the meantime the question has become more actual. The Department of Inland Revenue has drafted a possible scheme which has been referred to a Select Committee to allow all interested parties to make representations. I am now awaiting the Committee’s report before deciding whether to introduce legislation to bring the scheme into operation for the 1963 tax year, or whether the matter should be further postponed. Even if the Report is too late for including an acceptable scheme in this year’s Income Tax Bill, it may still be possible to introduce such legislation early in 1963 to bring it into operation for the 1963 tax year.

That concludes my taxation proposals.

It is never a pleasant task to impose additional taxation, but the demands of security are paramount and confer upon me both a duty and a right to ask all sections of the community to make some sacrifices. I have always considered it a Minister of Finance’s duty to give when he can and to take when he must. Defence is this year a “must”. Moreover, the taxpayer will get value for his money. He will pay an extra R21.5 million in indirect and R14.2 million in direct taxes, or R35.7 million in all, but the provision for Defence is actually R48,000,000 higher than the original estimates for the current year and R40,000,000 higher even than the revised estimates for that Vote. When account is taken of the R18.6 million of savings levy to be repaid to taxpayers, it is clear that the additional burden is not a heavy one.

I must point out that the additional amount required from taxpayers will not all be withdrawn from circulation. On the contrary, some 55 per cent of the increased Defence expenditure, for example, will be spent in South Africa, and may indeed have an important stimulating effect on certain sections of the engineering industry. Increased expenditure on the Bantu areas and on irrigation should also boost investment, while the additional expenditure on pensions should give a fillip to consumption. When account is taken of the expansion programmes of the public corporations, to which I referred in my Budget speech last year, and which should soon be gathering momentum, then I feel that this Budget need not exert any undue retarding effect on the economy.

Summary:

I shall now summarise the Revenue Account for 1962-3:

We should, therefore, end the year with neither a surplus nor a deficit.

Conclusion:

In previous Budgets I have indicated that economic and financial stability demand a flexible monetary and fiscal policy which can adapt itself to changing circumstances, here and overseas.

At times our balance of payments position must be protected; at other times our internal economy should have first priority. Sometimes monetary and fiscal measures have to be relaxed to stimulate development, but sometimes these measures have to be tightened up to preserve stability and ward off creeping inflation. Sometimes fiscal relief is called for; at other times increased taxation. Fiscal and monetary policy must never be an inflexible ramrod which cannot be bent. It should be supple enough to be bent in either direction, depending on the circumstances and requirements of our economy at the time.

A Minister of Finance should be conservative, but not a slave to tradition or hidebound by convention. He should not be a gambler or a chancer, prepared to regard the country’s economy as the guinea pig for fiscal and monetary experiments.

Hon. members will have observed that I did not hesitate to depart from custom in this Budget by leaving the revenue surplus in the Revenue Account instead of transferring it to Loan Account. While we have often financed part of the Loan Account from Revenue, we have never reversed this process, as I am virtually doing in this Budget in regard to the financing of the Native Trust Fund. The financing of Loan Account from Revenue is desirable in certain circumstances and as long as the resulting tax burden remains bearable. By the same token the reverse process may be desirable in a year in which the tax-burden is being appreciably increased.

This is obviously a Budget of national security. At the same time I was not prepared to place the Republic’s financial stability and economic development in jeopardy. I have sought to reconcile these two fundamental requirements, these twin pillars on which the future of South Africa must rest. This Budget represents a synthesis of the demands of national security and financial stability. I am prepared to let it be judged on that basis.

I second the motion.

The Minister of Finance laid upon the Table:

and conveyed to the House for its consideration the State President’s recommendation of the appropriation contemplated in these Estimates of Expenditure.

The Minister of Finance also laid upon the Table:

1. (1) Estimates of the Revenue to be received during the year ending 31 March, 1963,
2. (2) White Paper in connection with the Budget Statement, 1962-’63;
3. (3) Taxation proposals;
4. (4) Comparative figures of Revenue for 1961-2 and 1962-3:

REVENUE, 1961/62

R,000

REVENUE, 1962/63. (On existing basis of taxation)

R,000

Mr. Speaker, after the speculation in the last few weeks as to what the hon. the Minister of Finance will have to propose this afternoon, together with his reluctance to place the Estimates of Expenditure on the Table, as is usually done, one can only imagine that the average taxpayer, who has either listened to or is very shortly going to read the Minister’s statement, will feel that all the fears expressed in the last few weeks have been fully justified.

Sir, the hon. the Minister is always entertaining when he introduces his Budget, and he likes to dress up for the occasion. Last year you will remember, Sir, he was a doctor, complete with stethoscope and a book of prescriptions for the ailing body of the economy of the country. This year, presumably influenced by his colleague, the Minister of Defence, he has become a general, and he spent his afternoon talking about plans of campaign, making reconnaissances, and he has even gone so far as to mobolize the Reserve Bank to turn shares into swords for the benefit of the country. The Minister says that this is a defence budget, and of course that is perfectly true. I think that the country will realize that the Minister is introducing his Budget under the shadow of events to come, the extent of which nobody can foresee. Apart from the words used by the Minister at the beginning of his speech, we have other factors casting uncertainty over the country. We have, for instance, the Prime Minister’s colonial adventure in the Transkei; we have the deep uncertainty as to the future of South West Africa and its implications both for that territory and for the Republic; we have the war-like speeches of the hon. the Minister of Defence, whose speeches can be interpreted in the words of one of his own newspapers which said last week that the citizens of South Africa must henceforth learn to live with a trowel in one hand and a sword in the other. Sir, these are all grave and weighty matters. We shall examine these Budget proposals purely on their financial aspects, naturally, but in the course of this debate it will be quite impossible to ignore the wider issues, both the ones raised by the hon. the Minister and the ones referred to by myself—issues for good or ill—and nobody even knows that to-day—will certainly affect the financial position of the country and will certainly affect its economic prospects.

At this stage, with the consent of the hon. the Minister, I would like to move—

I second.

Agreed to; debate adjourned until 26 March.

I move as an amendment—

Someone very wisely said: “If hard cases make bad law, arbitrary powers make worse.” We are here concerned with a case where arbitrary powers are being conferred upon the Executive Government to change existing laws by the simple process of the issue of a proclamation. In other words, powers are being conferred in this sub-section which can result in an outright repeal or an amendment of any existing law—whether it be a law of this Parliament, or a pre-Republican or pre-Union law, a provincial ordinance or even a by-law—and that alteration can take place by the simple process of a proclamation. That is of course legislation by decree.

In principle my amendment has got nothing to do with group areas at all. The principle I am concerned with here is to secure the prerogatives of Parliament and to see that those prerogatives are maintained. Accordingly my proposal is that any step taken in terms of this sub-section shall come for approval before Parliament at some stage. Now as the hon. the Minister will see, I, speaking for this side of the House, have had second thoughts in regard to the matter. The principle is still the same as that of the amendment which was moved during the Committee Stage, but the method by which the approval of Parliament shall now be sought has been changed. I now propose that approval should be by way of a resolution of both Houses. There is precedent for that, because the hon. the Minister of External Affairs, now of Foreign Affairs, last year in a Bill dealing with the Commonwealth Relations Temporary Provisions (Act 41 of 1961) himself moved a provision which is virtually the same as the one I have moved. The hon. the Minister of Foreign Affairs rightly accepted that parliamentary supervision and control over the repeal of existing laws was of the essence for good government. Sir, until last Session I know of only one instance which gave power similar to these to change an existing law by means of a proclamation. That took place in 1933. At that time South Africa was in the throes of an economic depression and there existed virtually a state of economic emergency. But even in those circumstances, Sir, the powers conferred upon Executive Government did not go beyond permitting a suspension of an existing law, not a repeal or an amendment. I am referring to the case of the Currency and Exchange Act No. 9 of 1933. In that instance Parliament recognized that there was an inherent danger in surrendering control over the amendment or changing of existing laws by means of proclamation and Parliament therefore inserted a safeguard. The safeguard inserted in that case is identical in principle to that set out here, with this slight modification, namely that the approval of Parliament can now take place by resolution of both Houses instead of by Act of Parliament. Last Session the Minister of Community Development himself agreed to a similar provision when he piloted through the House the Preservation of Coloured Areas Act (No. 31 of 1961). As I say, the principle involved here has got nothing to do with group areas at all; the principle involved is the preservation of the legislative sovereignty of Parliament. Subject then to a safeguarding provision such as I have moved, it leaves the hands of administration free. Administration can continue to act, can do what is necessary, but will have to come to Parliament in the ordinary course of events in the ensuing Session, or during the same Session if it has to be done so expeditiously, to have approval for the proclamation which has brought about a change or a repeal of an existing law.

I quoted two instances during last Session where legislation by decree was authorised by Parliament, but subject to this safeguard. But the principal Act we are dealing with now is of course a different one from both those other Acts. Here we are dealing with a contentious subject, we are dealing with a highly complicated subject and with an Act where the rights of individuals may be affected. If ever there was a case in which the prerogatives of Parliament and its sovereignty in the legislative field should be safeguarded and protected, this is one.

As I say, I have had second thoughts in regard to the matter and I hope that the hon. the Minister will also have second thoughts in regard to the matter and will therefore accept this amendment which, as I say, is a modification of the one he accepted last year, it is exactly in the same terms as the one which the Minister of Foreign Affairs himself moved during last Session.

There is one other aspect about the matter that I think I should mention, and that is this: If a proclamation in terms of this power is issued and the wrong law is altered or some error is made in that proclamation, the executive government cannot adjust the matter itself—it is functus officio, the matter is finished. It will have to come to Parliament to set the matter right. I think that is an undesirable state of affairs. I think therefore that is an added reason why a safeguard of this nature should be provided for in legislation of this kind. As I say, this is not only a controversial subject, but it is an extremely complicated subject, and nobody knows that better than the hon. the Minister himself. If the House is to permit the alteration of existing laws by proclamation—well, that is what Parliament has done. I concede that the legislation must work, and that administration must be entitled to go on, but I say that provision should have this additional safeguard, namely that any laws that have been altered shall come back to this House and it will lapse unless the Minister gets approval by sanction of both Houses of Parliament in an ensuing Session. I do not think that anybody can say that there is anything difficult in a situation of a safeguard of this nature, and it is one, I think, which Parliament has a duty to insert. I therefore hope that the hon. the Minister will also have second thoughts and will agree to the amendment.

I beg to second. I would like to support the reasons given by the hon. member for Port Elizabeth (South) (Mr. Plewman) and to submit some additional reasons to the hon. the Minister why this amendment should be accepted. Sir, the clause with which we are dealing and to which the proposed amendment is moved, is one of a far-reaching character, and it provides that in respect of the establishment of a local authority, the Minister after consultation, may in respect of management committee area which is within an existing local authority, if he considers it desirable that a local authority be established, direct the Administrator to take the necessary steps. The law then provides—it is a very far-reaching provision for which I know no parallel in our law—that the Administrator concerned—

That is going very far. It vests extraordinary powers, but it goes even further. The clause proceeds—

Not only is there an inroad into the normal procedure by which local authorities are established under the authority of a provincial council, but all the safeguards which exist for enquiry, and so forth, are swept aside by the provision that there is a deeming provision which deems all the necessary prerequisites to have been complied with. In other words, this cuts right across the system of local authorities, and it is proper that Parliament should have the final say. I believe that the hon. member for Port Elizabeth (South) has here produced a better amendment than the one which the hon. Minister was not prepared to accept, and I express the hope that the hon. the Minister will be prepared to accept this amendment. It will mean that this procedure will be established—the clause has already been approved of—but it will also mean that the objectionable provisions of this clause (I am not reflecting on the clause), the provisions which cut across the prerogatives of the local authority itself and of the provincial administration will be subjected to the safeguard that it is necessary that a resolution should be adopted by both Houses of Parliament. I do submit to the hon. the Minister that if ever there was a case where an amendment should be accepted, this is it. I would say further to the hon. the Minister that it is quite obvious that this would lead to no inconvenience. Only in each session of Parliament the hon. the Minister would come before the House with a resolution which would approve not separately of each particular case where there may have been a local authority established, but one resolution would be quite adequate in terms of the resolution which is proposed by the hon. member for Port Elizabeth (South). There would only be a debate, if necessary, upon one resolution and upon acceptance of that resolution by this House, it would go to the Other Place for confirmation. I appeal to the hon. the Minister in the interests of sound legislation to accept the amendment.

As the hon. member for Port Elizabeth (South) has mentioned, I proved in the past that I agreed to this principle when I accepted it in connection with another Bill, and I should very much like to meet hon. members, but I hope that in that case the hon. member will also meet me. As the amendment now reads it says that every such proclamation will cease to be valid 30 days after it has been Tabled in both Houses of Parliament. That seems to me to be an unduly short period because as the result of the procedure here, with which we are all acquainted, we may find ourselves in this position that we are unable to give effect to it within that short space of time. I suggest that the hon. member should make it 90 days; I would then be prepared to accept the amendment.

I am prepared to accept the alteration.

With leave of the House, Mr. Plewman withdrew his amendment.

I move as an unopposed motion—

I second.

Agreed to.

Amendment in Clause 36, the new Clause 39 and the amendment in Clause 42 put and agreed to, and the Bill, as amended, adopted.

I move—

More than two members having objected,

Bill to be read a third time on 22 March.

I move—

Hon. Members will recall that last year this House approved of fairly comprehensive amendments to the Marketing Act with a view to making the Act more effective for the purpose for which it was designed, and that is to promote stability in our agricultural industry. Although to a very large degree the Act as it now reads makes provision for the great variety of powers which are needed to establish effective schemes to deal with the particular marketing problems which are peculiar to every product that falls under the Act, there are still a few aspects which have come to the fore since then and for which further special provision is necessary. The aspects can be summarized briefly as follows:

It is generally know that fresh milk is produced at a higher cost than industrial milk. One of the reasons for this is to be found in the stringent requirements laid down by local authorities for the hygienic production of fresh milk. In practice therefore fresh milk also has a considerable price advantage over industrial milk. Because each centre only needs a certain quantity of fresh milk every day, the surplus production has to be diverted to other channels, usually as industrial milk, and naturally at lower prices. This aspect necessitates the taking of special steps in marketing fresh milk to ensure fair treatment for the producers. The method which is followed pretty generally in practice under conditions of free marketing, is that the distributor of fresh milk grants a fresh milk quota to each of the producers delivering milk to him. For deliveries within his quota the producer then gets the ruling fresh milk price and for any surplus over and above that he receives the lower industrial milk price. The “quota” of a producer is calculated as a rule on the basis of his total production during a previous specified period. A scheme was recently announced which makes provision for regulating the marketing of fresh milk and fresh cream in the Pretoria, Witwatersrand, Bloemfontein and Cape Town areas. In applying this scheme it may also be necessary to cause payment to be made to producers on the basis of allocated quotas or according to other methods which are considered reasonable—for example that producers be paid on a pro rata basis according to the total quantity delivered by each but at a rate per gallon which diminishes as the producer’s deliveries increase. According to legal opinion which has been obtained, there seems to be doubt as to whether the relevant provisions of the Act are wide enough to permit of such methods of payment to producers. A suitable amendement so as to be able to grant the necessary powers to a control board, and thus to remove this doubt, is proposed in Clause 6 (1) (a) of the Bill. It is further proposed that this amendment be made of retrospective effect from 18 June 1951 that is to say, the date on which the Act was amended the first time to make special provision for regulating the marketing of fresh milk and fresh cream.

There are quite a few other proposed amendments which relate exclusively to milk and cream but which are of a purely technical nature, for example provision is made for definitions in terms of which “milk” and “crem” also include the sterilized products, and references to the “Dairy Industry Act of 1918” are being replaced by references to the “Dairy Industry Act, 1961”.

The Marketing Board, as the result of representations received by it, investigated the possibilities of a scheme for the marketing of fruit and vegetables which are destined for canning. It appeared from these investigations that in all probability such a scheme would succeed in its purpose and would also prove more practicable if arrangements could be made whereby the transaction between producers and canners could take place in an orderly fashion and on a fixed basis. At this stage it does not seem to be necessary for a control board to step in as the first buyer in such a case, but that the board must have the power to prohibit producers and canners from trading with one another except in accordance with a written agreement of which the control board must have knowledge and in which provision is made for the purchase and sale of such products at prices calculated according to the grade of those products. Amongst other things, such an arrangement would prevent producers and canners during the harvesting season from making all sorts of loose arrangements to the detriment of the industry, and there would also be more certainty then with regard to the payment to producers according to the quality of their products.

At the moment the Marketing Act does not make provision for such a power to be conferred on a control board, and the necessary amendment in this regard is proposed in Clause 6 (1) (b) of the Bill. This particular matter is regarded as being so peculiar to the production and marketing of fruit and vegetables destined for canning that this power is only being granted in respect of a scheme for these products.

In those cases where the production of an agricultural product is continuous for a few months, or even spread over the whole year, it is customary for control boards which control one-channel schemes with pools for the marketing of such products, to institute separate pools which may extend over a month or even over a shorter period. In the case of export fruit, a separate pool is sometimes controlled for each consignment. The main reasons for these separate pools is obvious. Marketing conditions sometimes vary considerably and it would be unrealistic therefore, for example, to control one export citrus pool for the whole of the citrus season.

However, hon. members will readily understand also that a particular pool may be affected very detrimentally by some unforeseen occurrence—for example a strike of dock workers resulting in an accumulation of supplies and a deterioration in the quality of the product. In such a case it would not be unreasonable to supplement the proceeds of that particular pool to some extent with the proceeds of the other pools. It is now proposed to make provision in the Act for a power in terms of which such transfers between pools may take place with the approval of the Minister.

The other amendments which are being proposed here are more of an administrative nature. Amongst other things, provision is being made for a power in terms of which an acting chairman of the Marketing Council may be appointed when the post of chairman becomes vacant. As the Act now reads, an acting chairman of the Council cannot be appointed. It sometimes happens that upon the retirement of a chairman, one would like to appoint an acting chairman in the meantime. It may also happen that the chairman is not available as the result of other circumstances, and the Act makes no provision for the appointment of an acting chairman.

In connection with the publication, for general information in the Government Gazette and in newspapers, of particulars with regard to proposed schemes and proposed amendments to schemes, it is proposed that the Act be so amended that there will be no doubt that such publication will be in the discretion of the Minister and the reference to publications and newspapers is being deleted. This proposed amendment is designed to obviate cumbersome and expensive procedure, and in fact, this has also been done in the past; this is the procedure which has always been followed, but the opinion has been expressed that procedure is not valid. In order to place the validity of the procedure that was followed when the existing schemes were instituted beyond any doubt, it is proposed to make this amendment of retrospective effect from the date of the passing of the principal Act.

Since this Bill was read a first time, it has been brought to my notice that certain boards, which have been established in terms of the Act, are experiencing problems in connection with the implementation of Section 20 (2) bis (i) (c) of the Act. This sub-section (2)bis provides that a board, if authorised by the relevant scheme and with the approval of the Minister, may instruct producers to notify the board of the total quantity of any product that they propose to deliver to the board during any future period. It also grants the board the power to recover from any producer, who has delivered to the board a quantity which differs from the quantity of which the producer concerned gave notice, an amount which, according to the estimate made by the board, with approval of the Minister, is approximately equivalent to the amount of the loss suffered as the result of such difference in the quantities. An amendment to the section referred to will be moved in the Committee stage so as to eliminate the problems which are being experienced in this connection. This amendment will be printed on the Order Paper when we have disposed of the second reading.

Just explain that last portion again please.

Last year when we amended the Marketing Act, the Opposition moved the insertion of a proviso to the provision that the board may recover such loss from a member or members. The proviso was to the effect that the board should only be able to recover that loss if the circumstances were within the control of the member or producer concerned. I then accepted that amendment. But now we find in the case of the Citrus Board, which acts for people who have to deliver fruit to them for export, that they cannot recover from those people if they fail to deliver, in other words, where they are responsible for the fact that higher costs have to be incurred. An Opposition Senator has already discussed this matter with me, and this amendment is being moved to enable the Citrus Board, for example, to make its arrangements in the future.

The amendments proposed in this Bill are necessary to promote the aims of the Act, and I confidently submit this Bill to the House in the interest of our agricultural industry.

I think that this side of the House, like the other side of the House is compromised in the better sense of the word, as far as the Marketing Act is concerned, to uphold and support the basic principles of the Marketing Act. The main basic principles of the Marketing Act are known to all of us, namely to promote the orderly marketing of our agricultural products as far as possible by way of schemes under control boards instituted in terms of the Marketing Act. That is why this side of the House will always support any amendment to the Marketing Act which is aimed at improving it and facilitating its application and making it work more smoothly. That is also the reason why this side of the House has no great objection to any of the clauses which the Minister suggests in this amending Rill. In the Committee Stage we will move an amendment in respect of Clause 4 (a) where the Minister proposes to delete completely from the Marketing Act his right to advertise any scheme which is promulgated in one or other newspaper circulating in the area where the scheme will operate. As the Marketing Act reads at the moment, the Minister may—he is not obliged to do so —advertise the scheme in the Government Gazette as well as in any publication or newspaper circulating in the area where the proposed scheme will operate. If I read this clause in the Bill correctly, he is doing away completely with his right to advertise it in a local publication. He also adds that if he deems it necessary he may advertise it in the Government Gazette but he is not obliged to do so. I am somewhat doubtful as to the wisdom of deleting completely the Minister’s right to advertise any scheme which he wishes to promulgate in a local newspaper circulating in the area where the scheme will operate. That is what is being done in this Bill. As the Act reads at the moment, I think, it provides that the Minister may advertise a scheme in the Government Gazette and in a local newspaper, if he deems it necessary. In this proposed amendment he only retains the right to advertise it in the Government Gazette but his right to advertise it in a local newspaper which circulates in the area where the scheme will operate is taken away completely. I am somewhat doubtful as to whether that is the right thing to do. I realize that in terms of the amendment which we effected to the Marketing Act last year, the Minister may accept any scheme without the local inhabitants to whom the scheme will apply having asked for it. Even if they do not want the scheme the Minister can make the scheme applicable to them if the Agricultural Union has asked for it. If the Agricultural Union has asked for it he can make the scheme applicable to a certain number of producers in a certain area. It may be argued that in view of the fact that he no longer has to have the consent of those producers, now that he is not obliged to ask for their approval and can apply it merely on the recommendation of the S.A. Agricultural Union, it is no longer necessary to advertise such a scheme in a local newspaper circulating in the area concerned. But as the Act read originally it is not necessary for the Minister either to advertise it in a local newspaper if he does not deem it necessary. But I think circumstances may always arise where it may be necessary for the Minister to have the right to advertise it in a local newspaper in order to give general satisfaction to the producers who will come under the scheme. Circumstances which we cannot visualize at the moment may arise which may make it advisable for the Minister, for the sake of general satisfaction, to advertise the proposed scheme in a local newspaper, so that the people affected may read about it. It may be that they are satisfied with it or it may be that they object to it. But I do not think the Minister ought to relinquish the right which he has under the existing law to do so. As the law reads at the moment he is not obliged to do so but in terms of the new provision that right is taken away from him completely. No mention is made in the Bill that the Minister may advertise such a scheme in a local newspaper. I wish to make an appeal to the hon. the Minister. I do not understand why the Minister should relinquish the right which he has at the moment, a right which he need not exercise if he does not wish to do so. Circumstances may arise which may make it necessary for him to have that power and I cannot understand why the Minister should delete completely from the Act a right which he has, a right which may become necessary in certain circumstances. The original Act says “The Minister may”. He is not obliged to do so. But if this amendment is passed he relinquishes the right to do so completely. I think this is an unnecessary provision. The Minister may be sorry one day that he has deprived himself of this right. That is the main criticism I have to offer in respect of the various provisions of this Bill.

As far as Clauses 6 (1) (2) are concerned— they deal with the question of the marketing of fresh milk and fresh cream—we have no serious misgivings about those. As far as I personally am concerned, I think it is an improvement and I shall support it. Clause 6 (1) (b) deals with the position where a scheme in respect of the processing of fruit and vegetables is introduced in an area and I cannot see how any scheme can operate successfully if the control board to be established does not take the powers which are defined here. If the Board does not have the power to prohibit people from selling fruit and vegetables out of hand but under contract, without that contract coming to the notice of that board to be appointed, and without the approval of that board, the scheme will be doomed to failure right from the start. That is the main reason why I support Clause 6 (1) (b).

I come to paragraph 5 (b) which provides that subject to the approval of the Minister the board may transfer a certain portion of the proceeds of a pool to any such other pool conducted by the board. I take it that will be a pool in respect of the same product. In practice the position is that you have a pool and then another one is formed. They are not two pools in respect of different products. I think that is correct, isn’t it? From my experience as a director of co-operative societies for many years, particularly before maize came under the Marketing Act, I know that it was necessary on occasions to strengthen one pool at the expense of another, and we never had the right to do so. That was before the Marketing Act was made applicable to maize. It will now be possible to do so with the approval of the Minister. But I hope that the board who will be charged with this —it cannot be done without the approval of the Minister—and the Minister, will do so with the greatest circumspection and that the proceeds of one pool will not lightly be transferred to another one. Because it may be that a person who has contributed to one pool in respect of a certain product, contributes much more or much less the following year and if you transfer too much from one pool to the other some people will certainly benefit and others will certainly be prejudiced, although for the sake of the whole position in general and for the soundness of the whole undertaking, it may be a good thing to do so. It may be to the benefit of the undertaking as a whole, but an individual may perhaps be affected adversely and I hope that the hon. the Minister and his Department and his advisers will not give this approval lightly. It can be resorted to in order to assist some organization out of its difficulties, but it may affect other people adversely.

Mr. Speaker, I do not think this is the right time to discuss the general principles of the Marketing Act. Nor do I think that you, Mr. Speaker, will allow it. However, I do want to say this that the Marketing Act has now passed through the first phase of the test namely whether the Marketing Act and the system of control boards under the Act have been a success. That was the phase to ascertain whether the Marketing Act and the control board system have been to the benefit of the consumer and I think we can definitely say that it has passed that test successfully. But we are now entering another phase and I want to state it very clearly that the Marketing Act will have to prove that it can still operate successfully during a period when agricultural prices are falling, to help the farmer over his difficulties. The picture has changed to-day. To-day it is the consumer and other undertakings in the country who will have to make the sacrifices for the sake of the farmer, whereas the farmer has been the one in the past who has had to make the sacrifice as far as price fixations under the Marketing Act have been concerned for the benefit of the other undertakings. The time has arrived when we will have to prove whether or not under the control system the Marketing Act will also pass successfully through this second phase. That will depend on the measure of sound judgment which this hon. Minister who is in charge of the Marketing Act and the measure of sound judgment which his Department displays in the application of the Act during this second phase.

As has often been said the Marketing Act is the magna charta of the farmers. Those who tamper with that Act tamper with the farmers. Where the S.A. Agricultural Union have been consulted in this instance by the Minister and where various groups have discussed this matter, I do not think that this is tampering with the Act but that we are improving the Act. We all know the Marketing Act of 1937 and we also know the Marketing Act as amended in 1946. As we all know it was a compromise Act. When we come to the fixation of prices of farm produce, we find that the boards are composed of representatives of all those who are concerned with that product. We have the brokers, of course, and we have the farmers —it is a compromise Act. Thus far the Act has worked well. We only hope that in future the farmers will be given a slightly bigger chance of bringing their products, a little nearer to the people in the cities. As the position is to-day we cannot do that. I think we can only support the Minister in this case where he is effecting an improvement. We are all bound by organized agriculture and where organized agriculture supports the Minister, I think the whole House will agree that the Minister is doing the right thing in removing the hitches which still existed. We have nothing here which is not constructive. The Minister will always have to have a certain amount of power and I do not think the Minister is relinquishing any of that power in this Bill. He must always ensure that the law operates smoother. We know there was a time when a vote had to be taken, and all the rest of it, before a product could be declared. That often cause difficulties, with the result that the law could not be applied. That has now changed. If the Minister is convinced that the Act will function properly and the agricultural union supports it, he may promulgate a scheme.

[Inaudible.]

Mr. Speaker. there I hear the fog horn again, and I have heard him before. That name suits him admirably because he has never done anything else but make a noise. That is why his name is fog horn and I hope that will always be so. In conclusion I wish to say that I am convinced that the whole House will accept this Bill.

The hon. member for Cradock (Mr. G. F. H. BEKKER) has said that the Marketing Act, No. 26 of 1937 is regarded by the agricultural community as their Magna Charta and that any tampering with or amendment to that Act will be regarded with grave misgivings. The member for Cradock says that the amendments to this Act have been approved by the South African Agricultural Union. We would also like to have the assurance of the Minister in this regard. We also want the hon. the Minister to give us further reasons for the powers which he seeks in this amending Bill. We realize that in the administration of the Marketing Act the Minister has to have certain powers; those powers change from time to time to fit in with the peculiarities common to various products. We notice, for instance, in this Bill that the Minister is including sterilized cream and sterilized cream in the definition of milk and cream so as to keep on the right side of the law and to regularize the control of this product. It is our duty on the Opposition benches also to see that the rights of both the producer and the consumer are safeguarded. We have certain misgivings when the Minister seeks powers which will have a retrospective effect. This Bill makes provision for powers which will have a retrospective effect. We look with disapproval at sub-section (2) of Clause 1, sub-section (2) of Clause 2 and sub-section (2) of Clause 3, which provide that these provisions will now come into operation as from 1 January 1961. In Clause 4, section 17 of the principal Act is amended and this is dated back to the commencement of the principal Act in 1937. This will legalize all schemes which were not properly advertised. We would like the Minister to inform the House how many schemes, by the laws of this land, are regarded as not having been adequately advertised. I think that schemes which affect the lives of everyone should be advertised in one or more of the local newspapers as has been stressed by the previous speaker from this side of the House. In the case of schemes which only operate in a local area I think in the Minister’s discretion they should be advertised in the local newspaper only. We would like the Minister to inform us why he seeks this amendment in Clause 4, namely to amend Section 17 of the principal Act—

That condition will now read—

What I want to stress is that unless the Minister deems it necessary he need not advertise the particulars of any scheme in the Government Gazette. Now, Sir, advertising in the Government Gazette is something fundamental. In the administration of estates and in everything else you must advertise in the Gazette. Why the Minister seeks to free himself of this, is not clear to me. Surely the Minister did not think that the word “may” gave him an option. Surely the Minister knows how the courts of law have often interpreted the word “may” as meaning “must”. I can assure the Minister as one who helped to draft the Act and pass it in Parliament, in this particular instance “may” was meant to imply “must”. The Minister must advertise the particulars. It does seem so because the Minister now wants this amendment to be of retrospective effect—he wants it to date back to when the Act was passed in 1937. I think this is a fundamental change in this legislation. The Minister must give us better reasons for this change than those he gave when he introduced the Bill. Perhaps the Minister can inform us about his contact with the S.A. Agricultural Union and the advice he received from that body. How did they regard this provision? I can assure the Minister that this was a provision which we did not consider lightly when the Act was passed. We feel it is essential that any scheme which concerns the Marketing Act should be advertised in the Gazette. Perhaps I do not feel so strongly about the Minister’s discretion as regards local newspapers. Perhaps the Minister would also explain to us, when we come to the Committee Stage, why he wishes to delete the words “and in one or more newspapers circulating in the area in which the scheme is to apply”, from the respective Section. Perhaps the Minister could give us some further reasons for it. It seems only natural that before a scheme is passed it should be published in the Gazette to legalize it. We farmers feel that the publication of a scheme in the Gazette is fundamental. I also feel that numbers of local people do not know what is published in the Gazette. Our idea, when passing the Marketing Act, was that schemes should be open to all farmers. A scheme is only applied when a certain percentage of producers approves of it and for that reason the advertising is very essential and I appeal to the Minister not to include this amendment in the Bill and I hope that when we come to the Committee Stage the Minister will make some concessions in this regard.

We now have the peculiar phenomenon that the hon. member for Florida (Mr. Swart) quite rightly gives his party’s full support to the Bill with the exception of Clause 4 (a) which refers to whether the Minister is obliged to publish in a newspaper or newspapers or not. But while the hon. member for Florida is giving full support to the Bill, we find that the hon. member for Albany (Mr. Bowker) doubts the retrospective effect of the Bill. He refers to various clauses which stipulate that this Bill is retrospective to January of this year in one instance and in the other instance even further back. Now I don’t know. If the amendment is in order in the eyes of the Opposition and they welcome it and if it is in order from now on and to the advantage of agriculture, of the producer and of the consumer, according to them, then I cannot see how it can be logically argued that the Bill should not be good in retrospect. I cannot see why they do not want to accept that it will be good in retrospect, as there are certain reasons for it.

I first want to point out that the hon. member for Florida was right in making this statement that the Marketing Act is a permissive Act which gives the Minister, together with the various boards of control and the Marketing Board authority to organize the sale of products in an orderly fashion and that the Marketing Act will now have to be put to the test to a greater extent than in the past. In the past the Act gave the producer protection to a very great extent. But as a result of a temporary over-production as the result of this revolutionary agricultural progress, it has now become necessary for the Marketing Act also to give the producer proper protection in these times of over-production. Now we know—and for that reason I come to the clause about which the United Party has doubts—that there has already been a law-suit about whether there should be publication or not as regards the fresh milk scheme. And in that case it was established that the word “can” does not mean “must”. The court found that the Minister could use his discretion and that it was optional to him. If in his discretion he thinks that it should be published, he is free to do it, and the court decided that the Act never intended that “can” should mean “must”. But an appeal can be lodged against that decision and for that reason I am of the opinion that it is imperative that the Department and the Minister must have clarity in the Act so that this decision cannot later be rescinded. Because if an appeal should succeed against this decision, it can only be to the detriment of the milk producer as it will put the whole new scheme into reverse gear.

Now I come to the request of the hon. member for Florida, where he says that they are going to move an amendment in which they will force the Minister also to publish in the ordinary daily newspapers and not only in the Government Gazette.

Not force him.

This amendment makes provision for the Minister to publish it in the Government Gazette if he deems it fit, but immediately it makes provision that he will not publish it in the local newspapers—that he cannot publish it there. Why? He is doing it because it is also provided in the Financial Regulation Act of 1932 that when something has to be published in the Government Gazette, in which way it should be published in the local newspapers. Now we find that if we protect the interests of the taxpayer correctly, the levy funds of the producer, we have to ask ourselves what it would cost to give publicity to such a scheme in the ordinary daily newspapers. Let us take fresh milk as an example. You start a scheme and you have Cape Town, Pretoria, Johannesburg, Bloemfontein and Durban. You cannot confine yourself to local publication in the Burger or the Cape Times. You will have to publish in all the other daily newspapers so that people will be able to see it in all those places. If you place an obligation on the Minister or even if you allow a clause in the Act which would be disputable in the courts, so that he would be forced to publish in those newspapers as well, two results will follow. The one is enormous expenditure, as it is an expensive business to publish it. Secondly, it may perhaps be omitted to publish in a Natal newspaper and then the people can obtain a court decision to the effect that the Act had not been complied with by not publishing it there. For that reason it is stated clearly in this clause.

Where I have said that the time has now come for the Marketing Act to stand the test of giving the producer proper protection in order that he may get proper compensation for his work, I think it would be as well if the Opposition would not make a political question out of this Bill, but that they should support it. Because this Bill also has the effect of making provision for sterilized milk and sterilized cream, and affords the necessary protection to the fruit farmer, and because that is so, I want to support this Bill very strongly.

The hon. member for Wakkerstroom (Mr. Martins) sees only politics in everything said from this side of the House. He has just said that we should not always try to talk politics. If we on this side of the House try to give our view in order to improve a Bill, that is not talking politics.

Mr. Speaker, as you have already heard, we on this side support this Bill in general, but I also want to say something about Clause 4 (1) and I also believe that the position there is not correct. I do not believe it is correct that the Minister should have the right only to advertise the scheme in the Government Gazette when he thinks fit, and if he does not think fit he need not do so. That is how I read it. I have also thought about publication in the local newspapers and I realize what costs are involved, but on the other hand it is no more than right that the people interested in such a scheme should have the opportunity to know that such a scheme is forthcoming, and that their attention is directed to it. We did think that it should be compulsory to advertise in the Government Gazette, and that the attention of interested parties should in some way be directed to the fact that it is published there. That may perhaps be done by placing an advertisement in the local newspapers to the effect that the scheme is published in the Government Gazette. But I think it is no more than right that the attention of interested parties should be directed to it as far as possible, because we do not want the public to think that something is being done on the quiet. It should all be done in public. For the rest, we support the Bill, and I believe it will be an improvement, but in my opinion it is wrong not to compel the Minister to publish it in the Government Gazette.

I am glad of the general support given to this Bill by both sides of the House. When we propose an amendment to the Marketing Act, that is generally done after certain problems have arisen. Hon. members have particularly raised two objections. The one is to Clause 4 (1) (a). I just want to say what the position is.

When a scheme is submitted to the Minister it is generally submitted by people interested in the industry, by the producers of that product. As the law stands now, it says what must be done when a scheme is submitted to the Minister. The Marketing Board or any of the other bodies mentioned in the Act may submit a scheme to the Minister. If the Minister grants preliminary approval to the proposed scheme, the Act further provides in Section 17 (3) (a) that he should refer the scheme to the Marketing Board for investigation and report if it was not submitted to him by the Marketing Board, and in that case he may publish the details of the scheme in the Government Gazette and in one or more newspapers circulating in the area. As the law stands now, the Minister need not publish the scheme in the Government Gazette, but he may do so. Now the position is this. All the schemes which were submitted in the past were published in the Government Gazette because any Minister wants to bring it to the notice of the interested parties. But then there was a court decision in regard to the introduction of the fresh milk scheme. That scheme was also published in the Government Gazette, but the decision was to the effect that if the Minister makes use of the right given to him by the Act to publish it, he must also do the following thing. Then he may not only publish in the Government Gazette, but in terms of the Act he must publish full details of the scheme in one or more newspapers circulating in the area. That means that if the Minister makes use of the power given to him by the Act, he must also publish the scheme in the newspapers. That means that in any case in which the Minister publishes the scheme in the Government Gazette, he can be compelled also to publish it in the Press. The logical result of this is that, due to the costs connected with it, the Minister will not publish it in the Government Gazette at all. Let me give an example. Just the publication of the fresh milk scheme in the newspapers cost more than R2,000, apart from the publication in the Government Gazette. In order to prevent that, we now say that the Minister need not publish in the Press, apart from the Government Gazette, where he makes use of this right, but he need not make use of this right at all. He need not publish if he does not want to, and the amendment proposed here does not derogate from or add to that right in any way. The section must be made retrospective. The hon. member for Albany (Mr. Bowker) objects to that. It is being made retrospective because all the other schemes established under the Marketing Act in the past were established merely by means of publication in the Government Gazette, without publishing it in the general Press. In other words, unless it is made retrospective, all those schemes may be tested in court and they may all be declared invalid. That is why this amendment is being introduced. Perhaps that will now satisfy hon. members. But it still will not prevent the Minister, if he has published the scheme in the Government Gazette, from drawing the attention of the public to that publication in the Government Gazette by means of newspapers circulating in that area.

Is the Minister prepared to accept or to move an amendment to the effect that if he considers it necessary to publish it in the Government Gazette he will simply put a notice in the local newspapers to draw the attention of the public to the fact that the scheme has been published in the Government Gazette?

I would not mind accepting such an amendment, but I do not think we should provide for it in the Act, and I will tell hon. members why. We can get the Press to draw the attention of the public to such a publication in the Government Gazette in a much cheaper way. If one notifies the Press, the Press is generally prepared, because it is a matter of public interest, to make it known that such a scheme has been announced in the Government Gazette. Therefore I do not think it is necessary to have such an amendment. I think hon. members are needlessly afraid that when a scheme is instituted one is trying to mislead somebody, but that is not what happens. If a scheme is established it is done only with the approval of the producers of that product, and all the interested parties who deal with that product receive recognition when such a scheme is established. I think hon. members are unnecessarily afraid that there will not be sufficient notice. It is merely intended to prevent people from going to court on minor points in order to nullify a scheme. One perhaps finds one person out of a hundred who goes to court on a trivial point, and that delays the introduction of the scheme for six or nine months, to the detriment of the whole industry.

The next point I want to deal with is the matter raised by the hon. member for Florida in connection with the pools. I think the hon. member has somewhat misunderstood me in this respect. It is not a question of one pool compensating for another, where one has had a pool for a year, as sometimes happens in the case of a co-operative when it has received a lot of grain and forms a pool for it, and the next year they receive the new crop and then the pool is used for that. With export fruit and other pools it may happen for some reason or other, like a docks strike overseas, that one has a pool for a few weeks and then one cannot sell the fruit. It is just that in such cases one can take from the one pool to assist the other which is affected in such a way. But that will never happen over a long period and therefore we are retaining the Minister’s approval in regard to this matter.

The other matters which were mentioned can be dealt with in the Committee Stage.

Motion put and agreed to.

Bill read a second time.