When I raised the matter of G.A.T.T. and the E.E.C. with the hon. the Minister last year, we were told that while there were problems there was nonetheless no reason for pessimism and that the Minister was busy negotiating with these two organizations. We were told that the Government was leaving no stone unturned to protect South Africa’s interests and that it was unlikely that Great Britain would do anything to protect us in the event of her entering into the E.E.C. despite the fact that we are a party to the Ottawa Agreement. His remarks seem to be borne out by the remarks of the Deputy Prime Minister of Australia who seems to feel that Australia’s position will also not be protected in the event of England going into the E.E.C. It seems, Mr. Chairman, that we are going to be alone in this issue. Indeed, there is a lot of concern about this at the moment because following the meeting of the Prime Minister of Great Britain and the President of France it does seem that England’s entry into the E.E.C. will not be long delayed.

Since last session the Government have been completely silent on this matter of G.A.T.T. and the E.E.C. So I hope that we are going to get a complete statement from the hon. the Minister today. We want to know from him whether, in the light of what has transpired since we met last, there is still no need for pessimism and we want to know what the result of our negotiations with G.A.T.T. and the E.E.C. are as far as these negotiations have gone. Furthermore, we should also like to know what the Minister and his department are doing generally to protect the interests of South Africa.

Allied directly with the question of G.A.T.T. and the E.E.C. is the problem of our own exports and imports, i.e. our lack of exports and our over-abundance of imports. The figures for the first four months of this year are certainly disturbing. Imports total R964,7 million as against R773,7 million for the first four months of last year. Against that, exports for the first four months of 1971 amount to R446,6 million, a drop of R57 million compared with the corresponding period of 1970. The trade deficit for the four months was R498 million compared with R249,9 million in the previous year—an increase of R248 million. It is true that imports came down in April in comparison with March although I do not know what significance this has. Perhaps the hon. the Minister can enlighten us in this regard. However, one thing is clear and that is that if it were not for the fact that South Africa at the moment is, fortunately, experiencing an unprecedented inflow of overseas capital, our balance of payment position would really be beginning to look silly. What we would like to know from the hon. the Minister is what is happening in regard to our exports. We know that exporters are getting certain incentives, like tax incentives, and we know that we have an Export Promotion Council. However, the long and the short of the situation is that we are not getting the exports. World exports are expected to rise between 8 per cent and 10 per cent in 1971, but our exports are at best remaining static. If you look at other countries of the world, you will see that South Africa is really lagging far behind. I just have a few examples here. Ghana’s exports for the three months up to May increased by 94 per cent, Kenya by 15 per cent, Uganda by 29 per cent, Zambia by 21 per cent, Brazil by 12 per cent, Chile by 17 per cent, Colombia by 21 per cent, Ecuador by 53 per cent, Guatemala by 20 per cent and Peru by 13 per cent. But we do not seem to be able to make any progress in our exports. We want to know from the hon. the Minister what results we are getting from the subsidized S.A.F.T.O.; what is happening with the Export Promotion Council? What are they doing? Are they doing anything to help us along? What is the hon. the Minister doing about the suggestion we made to him last year as to how we could improve our exports, when we suggested to him that he should remove from those organizations which were export-orientated the Physical Planning Act and allow them to expand to their full potential? What is he doing about making labour available to those companies that export? What is he doing with the railways and the harbours to see that when we have the products to export, we can get them out of the country?

These are things the country wants to know, because we have for years now been hoping and hoping that we will see an increase in exports from South Africa and we are just not seeing it. We have been told that this is largely due to a lack of agricultural exports and because there has been a recession overseas. Therefore, for example, diamonds are not being purchased to the same extent in America. But this is only half the question. What is the answer to the fact that our manufactured products are not going overseas? We have to get down to this problem of exports, and get down to it on a realistic basis, because time is running out. If we are having problems with our exports with England not in the Common Market, what will be our position when England goes into the Common Market? Then we will really find ourselves faced with a tragic situation.

Linked up with this, because it is indicative of the Government’s attitude, I want to ask the hon. the Minister what is happening to the question of iron ore. Here is something we can export, but we do not seem to be getting anywhere. If this is the way the Government is going to handle the problem of exports generally, we will never export enough from this country. We discussed the question of iron ore under the Mines Vote, but we got no reply whatsoever. We have discussed it now on two or three occasions in this House, but we still do not know what is happening. My information is that subject to a number of reports which are expected to be completed in June or July, and all of which are expected to be favourable, the Japanese will sign a contract for the export of iron ore through St. Croix and that the contract will have the blessing of the Railways.

I am also told that Iscor has been negotiating a sample contract in Europe, also to be exported through St. Croix, and that there is a possibility that if they negotiate the sample contract there will be a larger contract to follow. We also know that the Railways is in favour of St. Croix. Apparently Iscor is still running around in Japan, trying to get a contract and not being very successful, while in the meantime the iron ore position is getting softer and softer. I want to warn the Government that they are playing a very dangerous game. The Cabinet appears to be unable to make up its mind on this issue. They have obviously not had the business experience to know that when you negotiate a contract, time is of the essence of the contract, because if you do not clinch it when the clinching is possible you can lose the contract altogether. That is what might well happen here. We know that the demand for iron ore at the moment appears to be lessening.

I want to say this to the hon. the Minister. If we find that as the result of these delays we do not get the anticipated contracts, the blame will lie squarely at the door of the Government because of its continual dithering. We would like to know from the hon. the Minister this afternoon exactly what the position is. We had a date given to us, the 31st March, on which we were going to be told what was happening. It is now the beginning of June and we still do not know anything.

Then I want to raise one last matter, and that is the question of import control. About two years ago import control was almost removed and permits were given fairly freely. This year there has been a change. Permits have been tightened up again but on a different basis. Instead of import control at the moment, we now seem to be having commodity control; in other words, the hon. the Minister and his department, while not applying import control generally, are, through the issue of permits, selecting those commodities which they believe should be allowed to come into South Africa, and they are not giving permits in regard to those commodities which they believe should not be allowed into this country. I have had representations from a number of wholesalers and importers who a year ago got permits quite freely for a particular type of product, but who now tell us that they are finding it impossible to get anything like the quantity of permits that they require from the department. We would like some explanation for this position.

Sir, I really am amazed when I listen to the hon. member for Parktown. He wants to know from the hon. the Minister of Economic Affairs this afternoon what the position is in regard to the contract between Iscor and Japan. The hon. member knows concluding a contract is not one of the easiest tasks in the world. Such a contract is not simply concluded overnight. There are many problems which must be ironed out, but I can give the hon. member for Parktown the assurance that this Government will see to it that we obtain the contract if it will be to the advantage of the Republic of South Africa. It is this Government which has brought about our economic prosperity in the past ten years, which we may regard as the ten golden years in the economic life of South Africa. Sir, this afternoon I am going to call as my witness none other than Mr. H. S. Mabin, the Executive Director of the Association of Chambers of Commerce. What does he say? He says—

Sir, is this not a wonderful feat which has been achieved in the past ten years? But I want to go further; I call as my witness Mr. De la Harpe de Villiers, who said the following—

Is this not a great achievement? I go further; tourism in the Republic of South Africa has exactly doubled in this period in which the National Party has been governing.

Sir, these are all very fine achievements which we have gained over the past ten years, but I want to agree with the hon. member for Parktown that it is a foregone conclusion that sooner or later Britain will become a member of the E.C.M. Seeing that it is a foregone conclusion that Britain will also become a member of the E.C.M., I want to ask the hon. the Minister this afternoon what the position of the Republic of South Africa is. We know that this Government appointed the best legal team to put our case in the World Court, and I want to ask the hon. the Minister this afternoon, although I am convinced that much is already being done and that the position is being watched closely: Seeing that we appointed the best lawyers to look after our interests before the World Court, has the time not arrived that we should also assemble the best team of economists to look after the interests of South Africa and to gain the best advantage for us from any negotiations which may take place as a result of England’s entry to the E.C.M.?

But, Sir, there is a second matter which bothers me and this is the tremendous unfavourable trade balance of the Republic of South Africa. If we look at the tremendous increase in the imports to South Africa and at our shrinking exports, we must lay the blame for this state of affairs at the door of many of our own people in the Republic who prefer imported goods to goods manufactured in the Republic of South Africa. I wonder whether the time has not arrived for the hon. the Minister of Economic Affairs to consider applying price control in respect of the products brought into the country by importers and merchants, and on which they are at present making a tremendous profit. I also want to appeal to our own people in the Republic to use the goods manufactured here. But I go further. We are concerned about our exports, I want to say that not only the Department of Commerce and Industries should be concerned about this; it should be a matter of concern to every individual in the Republic of South Africa.

I want to ask the hon. the Minister this afternoon whether the time has not arrived that we should establish an organization to take the lead in research work in South Africa in order to determine how we can be of service to the industrialists in the Republic of South Africa, in the same way as the I.D.C. played a very important role in the development of industry in the Republic of South Africa. It should not be left only to the Minister and the Department, but every institution in the Republic should be made export-conscious. Once we have established such an organization to promote exports, the industrialists should register with it. When such an industrialist indicates that he is only going to manufacture articles for export, the local authorities must make concessions to that industrialist and give him cheaper electricity and water and tax reductions. The industrialist should also receive preference in regard to housing. The provincial administration must also be able to offer assistance; for example, the licence fees for the vehicles of the industrialists may be subsidized. As far as the Post Office is concerned, the industrialist who concentrates on export articles, should be granted special rates in order to help him make contact with the outside world. Even as far as our Airways is concerned, the industrialists should be granted special concessions if they want to go overseas or if their staff want to go and do research work. Furthermore, I want to appeal to the State to consider exempting such an industrialist from the payment of duty on his vehicles and to allow him to purchase his vehicles, motor cars and lorries at the same price which the State pays. They should not have to pay the duty on petrol, fuel, oil, etc. All of us in South Africa should accept what was Britain’s motto at one stage, namely “Export or die”. If everyone in the Republic of South Africa, from the local authorities to the Government, does not pay positive attention to the export market, this unfavourable trade balance is going to continue. It will not help simply to expect the State to grant subsidies, if these other people do not assist.

And labour?

Yes, the State will examine the labour question as well. The Riekert Committee was appointed for that purpose. I want to go further. If it would be more advantageous for such an industrialist who concentrates on export, to obtain land in Cape Town, East London or wherever, the State, the province or the local authority should help him obtain that land at a reasonable price. All of us in the Republic of South Africa —it does not matter who it is or what institution it is—should come forward now, and not merely sit and look to the State. We should all help to ensure that our exports gain a much better position on the world market. We must ensure that the article we are going to export can compete on the world market as far as quality is concerned. If all of us in the Republic help the State—I am convinced that the State will contribute its share—I see another ten golden years lying ahead for the Republic of South Africa.

Mr. Chairman, the hon. member for Parktown raised a great variety of matters, probably half a dozen or more. I think it would be well if we were to discuss, as far as it would be possible to do so, one subject at a time. For that reason I thought it fit to rise at this early stage so as to give Parliament a report, as it were, on our negotiations in respect of Britain’s entry into the E.E.C, The hon. member for Parktown spoke as though Britain's entry into the Common Market and G.A.T.T. were linked. Well, there is some link, but not to the extent the hon. member gave us to understand.

At the start I want to confine myself to the E.E.C. The subjects which were raised here, are very wide ones, and naturally it would take much time if one were to discuss them in detail. For that reason I shall comment only in broad outline on the various subjects.

In the first place I want to say, as the hon. member for Parktown also said, that ever since the first negotiations between England and the E.E.C. countries concerning Britain’s entry, this Government has always kept its ear to the ground and conducted the necessary negotiations where it was necessary to protect South Africa’s interests. Even as far back as July, 1962, the then Minister of Economic Affairs was conducting negotiations with his opposite numbers in the various E.E.C. countries and also in England concerning the possibility of Britain's entry. The entry did not take place at that time and at a later stage in 1962 negotiations were again conducted in this regard. When Britain made renewed attempts after 1966, the Minister of Economic Affairs again made contact with the various member countries of the E.E.C. in 1967. At the council of Ministers of the E.E.C in April, 1970, it became clear that a different atmosphere prevailed in regard to the possible entry of Britain. In October last year I made it my business to visit the various countries, as hon. members know. Actually, I want to give a short report on that visit. But I have outlined the background to this matter merely in order to indicate that from the earliest times the necessary contact has been maintained and the necessary attempts made in order to protect South Africa’s interests if this were to happen.

Let us consider for a moment what the consequence of Britain’s entry into the E.E.C. would be, because in my opinion this problem should be discussed with that background in mind. In the first place, I think, one should have regard to the fact that most of our exports go to Britain. In spite of the fact that today our exports are much more widely distributed over the world than in the past, 33⅓ per cent of our exports still go to Britain. It is important to take cognizance of the fact that the South African economy—and this is how we should regard the matter—has been built up to a large extent by virtue of our trade links with Britain. Take, for example, our canning industry. The development of this canning industry would in all probability not have taken place if we did not have free access to the British market. Our economy has developed as a result of our ties with Britain and as a result of the advantages of access to the British market which we are enjoying. We shall lose the treatment we are receiving in respect of tariffs and all the preferential tariffs we are enjoying at present if Britain enters the European Common Market. This is by no means all that is going to happen. Not only are we going to lose our preferential treatment in Britain, but subsequently we shall be obliged to pay the high customs duties applicable to the E.E.C. countries today. However, this is not all. All the countries associated with the European Common Market as well as the associate members of the E.E.C. will have free access for their goods to the British market. In other words, on the one hand we shall lose our preferential treatment and on the other band there will be a large number of E.E.C. countries and associate countries that will now obtain free access to Britain’s market.

From the nature of the case the implications which Britain’s entry will have for us, are major ones indeed. There is not the least doubt about this fact. Our competition on the British market will naturally be much more difficult than it has been up to now. There is a further implication, and this is that on its entry Britain will have to follow the agricultural policy of the E.E.C. This will make matters even more difficult for us in view of the nature of the products we export. When I went to Europe last year to have discussions, I spoke to the Ministers of Economic Affairs and to other Ministers concerned in Britain’s entry into the E.E.C., in the various countries. In Britain I had a very long and a very sympathetic interview with Mr. Rippon who is the chief negotiator in regard to Britain’s entry into the European Common Market. In addition, I had an interview with Mr. John Davis, the present Minister of Commerce and Industries in England. Similarly, I had interviews with the Ministers of the Netherlands, Belgium, Luxembourg, France and Germany. I had interviews with their Ministers there and also with other persons concerned in this matter.

The only member country of the E.E.C. I did not visit—because of other problems I could not have discussions there—was Italy. Subsequently I had occasion to pay a visit to Geneva as well. There I had talks with, inter alia, the Secretary-General of G.A.T.T., Mr. Long. These discussions, loo, were very valuable to me. The general picture I must draw, is that our reception was a very friendly and good one. The general impression I gained was that our problems were understood. Understanding our problems is, however, something completely different from doing something about them. I should like to add that the purpose of my visit last year was not to submit formal requests to the E.E.C. group or to Britain. At that stage the purpose of my visit was to have frank discussions. From the nature of the case I am of the opinion that this is the way we go about this. One should first have frank discussions concerning one’s problems.

For that reason we had frank discussions and in each member country of the E.E.C. I visited, we emphasized one matter, i.e. the problems we are going to experience in future. Furthermore, we also discussed the detrimental effect Britain’s entry into the European Common Market would have on us if something were not done to assist us in one way or another. When we held discussions here last year, it was said that it was not necessary to be pessimistic. For the most part the hon. member for Parktown and I agreed about the fact that we in South Africa could speak forcefully about these matters. We can speak forcefully about these matters because the South African trade with all the various members of the E.E.C., and especially with Britain, was definitely not to be despised. All the countries with which we had discussions, and especially Britain, have substantially large exports to South Africa.

In 1969 our exports to Britain were slightly more than our imports from Britain. Last year, however, Britain overtook us and its exports to South Africa were in excess of our exports to Britain. In the past few years, however, the two have been more or less equal, and therefore it is obvious that our trade is of great value to Britain. This was my experience over there as well, and the various Ministers discussed the matter with me in that realization. I think we may say without hesitation that the same circumstances are prevailing in respect of the other E.E.C. countries. We have strong trade links with countries such as Germany, Belgium, Holland and France, and these are countries which have a high regard for the value of their exports to South Africa and their trade relations with South Africa.

In this spirit, we spoke from a strong and not a weak position. We realize that these various countries attach value to their trade relations with South Africa. We pointed out that it was obvious that economically South Africa herself would lose as a result of circumstances in Europe. If economically South Africa were in a weaker position, it would go without saying that we would not be able to buy from our trading partners to the same extent or be able to import as we would have liked to import. We conducted the discussions in this spirit and throughout, as I have already said, there was a great deal of sympathy for our circumstances. We adopted the point of view that Britain’s entry into the E.E.C. was their affair. It was not a matter on which we should express an opinion and it was one which should be discussed only by Britain and the member countries concerned. I fully realize, and this is my personal opinion as well, that it is desirable for Britain to become a member of the E.E.C. This, however, is my personal opinion, and Britain’s entry is a matter to which Britain itself should apply itself or otherwise.

Our approach was that we had certain problems and that we had to find means of meeting those problems. The general reaction to our standpoint was that our fears were exaggerated. I often heard from the various Ministers of member countries, and especially in England, that our problems, in as far as problems were going to be created for us, were of a short-term nature only and that the large and more prosperous European community which would result from Britain’s entry into the European Common Market, and probably these of other countries whose applications were being considered, would bring about a greater, more powerful and, in the economic sense, stronger Europe. This greater and stronger Europe, in the economic sense, would afford us a better and more fertile field for our exports than had been the case up to the present time.

Furthermore, it is the general feeling that Britain will benefit greatly by its entry into the European Common Market. The standard of living in Britain will rise as a result of this. It is generally accepted that costs will increase above the normal level, if their latest increases can be regarded as normal which I doubt, and that as a result of this we shall obtain better prices for our products than we have up to now. The improved prices we shall obtain for our products, will compensate us to a large extent for the losses we shall suffer as a result of the tariffs which will be imposed on our exports to Britain.

The general expectation is that the prospect of special concessions cannot be held out to us, to Canada or to Australia. All there remains for us is together with Canada, Australia and other comparable countries to effect the necessary adjustments during the transition period of Britain’s entry into the E.E.C. Mr. Chairman, I am aware of the fact that this is not such an easy matter. We have concentrated on certain industries in South Africa. One does not like elaborating on this, but where one has vineyards today, one cannot simply destroy them and cultivate something else on that land for which one may be able to find an easier world market. Climatic conditions and other factors do not make this possible. Apart from that, if one had to destroy apple and pear orchards and cultivate something else on that land, one would be destroying an industry which had been built up over a period of years. It takes seven years for an apple tree to bear fruit after it has been planted. Therefore, it is one thing to talk about this, but to carry it into effect, is another. What all this amounts to, is that special arrangements cannot be made, not even for the developed Commonwealth countries.

I should like to emphasize that in previous negotiations. Britain’s special attempts at making provision for the Commonwealth countries which would be affected by its entry into the E.E.C., were a cause of the failure of the negotiations in the past. For that reason I am afraid that in this case similar attempts will not be made for and on behalf of the Commonwealth countries as in the past, in the fear that it would again play a role in respect of the possible failure of the negotiations. The deduction which I may justifiably make, is that the only arrangement which will probably be made will, in the first place, be for developing Commonwealth countries in Asia—developing countries, as opposed to developed countries, as we, inter alia, are regarded to be. In the second place, there will probably be limited arrangements for New Zealand in respect of its dairy industry. In the third place, there will be an agreement with the Caribbean states in respect of their sugar exports. In the last place, Commonwealth countries in Africa will obtain associate membership of the E.E.C. However, Canada and Australia, together with South Africa, will receive no special concession, except, of course, the advantages, in as far as there may be advantages in the transition period.

It is my personal opinion that Britain’s entry will have economic advantages as well as political advantages. We realize, of course, that Britain is promoting its own interests in its attempt at entering the E.E.C. For that reason it is understandable, as the hon. member for Parktown, too, rightly said, that we are in fact standing on our own legs in this regard and have to see to our own interests on our own. It is very clear that at the moment the climate for Britain's entry is much more favourable than it was in the past. One almost feels inclined to say that, although there still is a number of problems. Britain’s entry is in fact only a matter of formality. Political unity in Europe is probably one of the main reasons for the enlargement of the E.E.C. When one thinks of the E.E.C., one is inclined to place the emphasis on economic considerations: but I think the time has arrived when political considerations are probably playing a larger role in the greater Europe and the E.E.C. than economic considerations do. It is obvious that as Europe becomes larger through the agency of the E.E.C., a greater and stronger Europe will arise, not only in the economic sphere, but also as regards being able to discuss and negotiate world affairs.

What is our position at present; what is the present position in regard to the negotiations? As I said a moment ago, I think there are indications that the negotiations for British entry will succeed, and I am also of the opinion that even the British Prime Minister has already indicated his seriousness as regards Britain’s entry to the E.E.C. In fact, at this stage I think it is very important to the British Prime Minister and his party that the negotiations should succeed. Much progress has been made, but there still are a few very important points which have to be settled, inter alia, Britain’s contribution to the funds of the E.E.C.; the British change-over to the agricultural policy of Europe; the special arrangements which have to be made with New Zealand in respect of its dairy industry and with the Caribbean Islands in respect of their sugar; the introduction of a monetary unit and matters connected with that, such as, of course, the role which sterling as an international monetary unit will play in the whole set-up. It is my personal opinion that the final decision will be taken on the highest level and that not only economic matters, but also political considerations, will probably play the main role.

Now we ask ourselves what further steps we are taking against this whole background that I have just outlined. In January this year I held a very enthusiastic meeting with our exporters here in Cape Town, at which about 70 of our most important exporters to Britain were present. We sketched the background and said we were there to listen to proposals on how to meet our problems. Let me tell you now, Sir, it is easy to say we have many problems, but it is much more difficult to say what the answer to our problems is. Since questions have now been put in this regard, I want to say I would welcome it very much if opinions could also be given to us as to what we should do and what attempts we can make, things which others and I have perhaps not thought of yet. The points raised at this conference in Cape Town on 23rd January were—I shall mention only a few—firstly, that we should seek associated membership of the E.E.C. Theoretically this is probably possible, but in practice it would have fatal consequences for us. If we were to obtain associated membership of the E.E.C., and had to throw South Africa open for the exports of the whole of Europe and England, without any tariff adjustments, surely it is obvious that it would have a fatal effect on us as a developing country. Although we are now regarded as a developed country by many people, we are in fact a developing country as far as industry is concerned. With our limited market and our limited manufacturing in the various industries, it would be fatal to have to throw open our doors to all manufactured goods because of associated membership. Our development and expansion in the industrial sphere would be fatally harmed by that.

The second suggestion that is made is of course the most obvious one that is usually made, namely that we should negotiate tariff preferences. This is just as unrealistic in view of the background I have already outlined. We cannot do this either. The third suggestion is that we should conclude a tariff preference treaty with the E.E.C. This would of course be in conflict with the terms of the G.A.T.T., of which we are a member.

It actually boils down to the fact that there is not much one can do. However, we agreed at that conference that we should strengthen our representation at the E.E.C. We have an ambassador in Belgium and up to now he has represented us at the E.E.C. as well. Then we decided that we should have a special ambassador to represent South Africa at the E.E.C. For this purpose the Government has deemed it desirable to appoint Dr. Naudé, who was in Geneva, and who I think is still there, as our special representative at the E.E.C. With a view to the new post he was to occupy, he was also present at the conference we held in Cape Town in January, and he will now be our ambassador at the E.E.C. I think the strengthening of our representation there by the appointment of a person such as Dr. Naudé. with the wide experience he has, especially in respect of these matters, can only be to our advantage in the future. It is very difficult to say what more should in fact be done about the matter.

Apart from insisting on the retention of tariff preferences, which, as we all know, we cannot retain, there is much more that can be done, For example, I am thinking of a greater measure of liberalization of the E.E.C. towards parties outside the community itself. Such a solid economic wall has been built around the E.E.C. that it is very difficult for third parties from outside to enter the E.E.C. sphere with their goods; it is an almost impenetrable wall. This applies particularly to the agricultural industry. If we can succeed in bringing about a measure of liberalization, I think we may perhaps be able to gain something for South Africa. There is no doubt that Britain’s entry to the E.E.C. is going to create problems for us and that we will have to do everything in our power to reduce the disadvantages for South Africa. Our exporters themselves will have to adopt a more dynamic attitude in respect of exports, and this does not apply only to the manufacturing industry; it also applies to our fruit industry and to everybody who is intent on exporting to Britain and to Europe; they will have to be more dynamic and more aggressive on the world market. We will have to find means of competing more effectively.

Hon. members may perhaps ask me what my next endeavour is going to be. Apart from the fact that the Government goes out of its way at all times to co-operate with all bodies and persons in order to meet these problems, I intend first holding discussions with our ambassadors in the E.E.C. countries and with our ambassador in England. Sir, I should like to assure the Committee that our ambassadors mean a very great deal to us in this field. If I have to judge from the reports coming through on matters concerning the possible entry of Britain to the E.E.C., I cannot but draw the conclusion that they are paying attention day and night, as it were, to this problem which we have to face. My first step will be to hold discussions in London next week with our ambassadors in the E.E.C. countries and with our ambassador in London. At that conference we shall formulate a procedure according to which we will be able to remain in contact with one another and to co-ordinate our actions in respect of the E.E.C. countries and the possible British entry and achieve a greater measure of concerted action in order to meet this problem. After these deliberations next week, we shall consider requesting an interview with the Council of Ministers of the E.E.C.

At this stage I should like to reply to what the hon. member for Brakpan said. We shall apply every means and pool all experience and knowledge in order to solve this problem. It is also my intention to have close co-operation with the South African exporters, not only exporters to England, but also exporters to Europe. As I have said, it is my intention to maintain the closest form of contact with them and I shall try to take them with us in our negotiations and in the attempts we make in order to overcome the problem.

I shall rather reply later to the other matters raised here.

We are glad that the hon. the Minister has given us a review of South Africa’s position in regard to the negotiations of Britain to enter the E.E.C. We do not underestimate the problems that will be created by such entry. There is also no doubt that as a result of Britain’s entry into the E.E.C. the pattern of our exports will change. This underlines the need for taking every possible step to encourage our exports into other markets and at the same time the export of new commodities. With that in view, we look to the Government to remove the obstacles which exist impeding our exports, particularly in so far as the infrastructure of our country is concerned. At the moment this is preventing the optimum development of our exports.

I shall now deal with quite a different subject and I am afraid that I shall have to be critical of the way in which the hon. the Minister handled certain aspects of import control for 1971. When on the 19th November, 1970, he issued his policy statement on import control, he started off on the wrong foot. That statement to my mind contained a number of unsettling remarks, remarks which, as a matter of fact, I can only describe as irresponsible. Let me quote certain of these remarks to help hon. members to understand what I mean. The hon. the Minister on that occasion said—

He said further that he was also aware of the fact that—

As far as the first category of importers were concerned, he stated—

He also pointed out, as far as the second category of importers were concerned, that—

He added—

In that statement the hon. the Minister is making two accusations against importers: The first accusation is that importers are using their import permits to import absolutely non-essential items and thereby irresponsibly wasting the foreign exchange reserves of the country. I think that a good case can be made out that as long as we need import control for the protection of our foreign exchange reserves, those reserves should not be used to import absolute non-essentials. What are non-essentials? Do we regard Cadillacs and Olds-mobiles as being essential or non-essential when such good motor cars as Mercedes and Jaguars are being partly made and fully assembled in this country? Do we regard French champagne, German wines and Spanish sherries as being essential or non-essential when we have such excellent products of our own? I would like to emphasize that no importer has been breaking the law by using a valid import permit issued to him by the hon. the Minister’s department, if he has used that import permit to import non-essentials. Surely it is completely wrong to castigate and threaten importers that corrective steps will be taken against them, when they have in fact been acting perfectly legally and within their rights? If it is in the interests of the country to slow down the importation of nonessentials—and I think a case can be made for such a step—then the hon. the Minister and his department have the power to do so by the promulgation of regulations in the Government Gazette. Castigation and threats such as were contained in the Minister’s policy statement can only create uncertainty and importers just do not know where they are.

The second accusation made by the hon. the Minister in his policy statement was levelled against those importers who allegedly have been selecting goods with a view to importing them and making excessive profits on them and, according to the Minister, thereby disrupting the operations of local manufacturers of similar merchandise. I find that a contradictory statement in itself. If the importers of these vines had not been making the so-called excessive profits on them, they presumably would have sold them more cheaply with the result that these goods would have posed an even greater threat to the manufacturers of similar local merchandise. But surely it is wrong to try and protect local industry by making threats in regard to import control against importers? The machinery for the protection of local industry exists in the customs tariffs which, subject to G.A.T.T. limitations, can be applied on the recommendation of the Board of Trade and Industries after careful examination of each case. As to making excessive profits on these importations, in any society which practices free enterprise importers are obviously in the game for profit. It is my experience that, even with imported goods, competition exercises very strict discipline on profit margins and in the commercial distributive trade competition is very keen indeed.

I regard the hon. the Minister’s statement as being irresponsible. In fact, I go further. I would say it is an arrogant statement. I think, not having been a businessman, the hon. the Minister does not appreciate the uncertainty and harm which a statement of this kind can cause. Uncertainty is bad for business. It causes a scarce resource, such as our foreign exchange reserves, not to be used in the best manner. I do hope that when the hon. the Minister issues his policy statement for import control for 1972, the statement will be a factual one, a helpful one, and that it will be issued in plenty of time so that importers will be able to plan their importations to the best advantage of the country.

Mr. Chairman, the hon. member for Constantia referred chiefly to a statement that was made by the hon. the Minister of Economic Affairs. I do not want to reply to that today. Like the hon. member for Constantia, I should just like to refer to the first statement the hon. the Minister made, i.e. laying down as a guideline to importers that they must not use their import quotas for importing non-essential goods, particularly those goods in a very high price class, and that they should rather use them to import essential goods. In this connection I just want to say that I do not think that any right-minded South African will find any fault with this. What probably bothers one the most, if one look’s at what goes on in the shops in Adderley Street and in many other shops throughout the country, is that one sees expensive imported goods in these shops that can as easily be equalled in quality by South African products. In a situation where South Africa needs foreign exchange more than ever, where it is more necessary than ever that everyone should make an effort to reduce the gap between imports and exports, it disturbs one that there are merchants who, in spite of this big problem that is common to us all, still import expensive handbags, certain kinds of shoes and many other goods that could very easily be manufactured in South Africa, and then sell them here at prices that are much higher than the prices at which the South African product of equal quality is sold. I do not think the hon. the Minister could have done better than to appeal to these merchants to make better use of this foreign exchange than to compete at keeping this gap as wide as it is at present.

In his reply to the speeches of the hon. members for Park town and Brakpan, the hon. the Minister said that he is aware of the problems that will develop with respect to our exports, particularly to Europe. after Britain's entry into the Common Market, and asked for ideas in preference merely to further problematic statements. In this connection I think we would do well not only to look at the short-term problems, but also to direct our gaze for a moment at the long-term position. We must not emphasize the negative side of the question too strongly, because if one looks at what really happened with respect to our imports and exports from and to Europe, with the European Common Market now having been in existence for several years, it is gratifying to note that there has specifically been a big increase in our exports to Europe in recent years. Europe is today virtually equal to the United Kingdom in its importance with respect to imports and exports. One now wonders whether the mere entry of Britain into the European Common Market, with a view to the greater prosperity which would then prevail in Europe and, we hope, in Britain itself, would not perhaps be advantageous, in the long run, not only to imports, but also to our general export position with respect to this bigger market. I should also just like to focus attention on the fact that perhaps we always think only of drastic new things that have to be done to improve our position in this respect. It is nevertheless a fact that the greatest success one always achieves in commerce or industry is specifically achieved by concentrating on those things in which one’s true strength lies. We chiefly export those goods that we cannot market in South Africa. Our gold, diamonds and agricultural products that are exported, are all products for which there is an insufficient market in South Africa. One wonders whether the real answers to this big problem of reducing the gap between exports and imports does not perhaps lie in the fact that we should rather try to encourage greater production in our own industrial set-up in South Africa. As a person coming from the Western Cape, I should particularly like to advocate, in this connection, that attention be given to the position of the Western Cape region. According to a recent speech made by Mr. Human, chairman of the Afrikaanse Handelsinstituut, we shall have to find additional work in the next two or three decades for about 105 000 Whites that will enter the labour market. In the same period additional work will have to be found for about 733 000 Coloureds alone. This means that for every White person for whom work must be found here in the Western Cape in the next 20 or 30 years, work will have to be found for seven Coloureds. It is also a fact that there are certain industries, situated in the Western Cape, that have made a significant contribution to our general export position. I am thinking, in particular, of our clothing industry. The mere fact that the major portion of the clothing industry in the vicinity of Cape Town is already established, makes it necessary for us to look to this industry for further expansion.

Today I specially want to advocate that we give renewed attention to the problem of general industrial settlement in South Africa. We must specifically do this because a region, where industries and the skills of labourers and entrepreneurs are concentrated, cannot only make a name for itself in its own country as an industrial region or as a region where a specific product is made, but can also do so more easily on the international market as far as a specific product is concerned. Therefore, if we look at new industrial growth in the Western Cape, we must look, in particular, at those industries in which the Western Cape has already made a name for itself in South Africa. We must then also look at the industries in which it has made a very big contribution to our exports abroad. I do not think that we need to go further, in the first instance, than specifically this industry. For years now I have served on the board controlling the Cape Technical College, where all our Coloureds, who receive higher education, are given practical training. In this connection I had the opportunity of discussing this problem with the biggest manufacturers of clothing products in South Africa. They are people who have already established factories in the United States and in Britain. They told me that, in their honest opinion, this industry was capable of much greater production in the Western Cape. With the results they have already achieved in exporting clothing to Britain and the United States, they are convinced that by encouraging this industry in the Western Cape, so that it concentrates itself increasingly in this area, the Western Cape will not only offer a better livelihood to the men and women who must inevitably live here in the future, but it will also be able to make a much greater contribution to our export position.

Another industry that we can perhaps view again in a different light is the diamond industry, which was mentioned in this House this afternoon. It is a fact that the price of uncut diamonds has decreased by about 50 per cent. Last year, under this same Vote, I advocated that in South Africa we would perhaps have to give special attention to the extent to which we cut our own diamonds. I advocated that we should cut more diamonds of one carat and less in South Africa. Those who have already established themselves in this industry in Cape Town, are convinced that this can be done. I want to add that these are people who have a very good knowledge of the international market. They are people who were in this business in Is real, Brussels and those places where most of the diamonds are cut today. Here in the Western Cape, and particularly in Cape Town, there ought to be room, not for 1 000 diamond cutters, but for at least 10 000 to 15 000. The value of our cut diamond exports ought not only to amount to more than R50 million per year, it ought to go up to about R100 million per year, provided we are also prepared to cut these stones in South Africa. This can be done, in particular, with the aid of Coloured labour. [Time expired.]

Mr. Chairman, the hon. member for Vasco pleaded for the establishment of more industries in the Western Cape, and I want to join him in his plea. However, I want to raise a matter which concerns the Eastern Cape very closely, and the hon. member will therefore pardon me if I do not follow up his argument.

†The great importance and the urgency of exporting ever-increasing quantities of ore and minerals cannot be overemphasized and I make no excuse for once again referring to this matter. Here I think is the key to the immediate improvement of our balance of payments problem. It will be remembered that Iscor was given until the 31st of March this year to furnish proof that it would, firstly, be able to raise outside South Africa the capital needed for the development and construction of the Saldanha Bay project and. secondly, that it would be able to secure firm contracts for the export of adequate tonnages of iron ore to justify this huge undertaking. According to Press reports Iscor had been unable to meet this deadline although it seems, according to Press reports once again, that there have been subsequent developments. I must plead with the hon. the Minister to give a clear and unequivocal answer to the question: May the interested parties forthwith proceed with the St. Croix project in Algoa Bay? I want to stress that the crux of the controversy between Saldanha and St. Croix has always been the total iron ore tonnage which South Africa as a whole may reasonably expect to export up to 1980, plus the capacity of the Railways to handle this volume of trade. Japan has indicated very clearly that she has no intention of buying more than approximately ten million tons of iron ore from South Africa within the foreseeable future. The total tonnage which Europe is expected to buy may reach five million tons per annum by 1980. That is a total of 15 million tons per annum. The Chamber of Mines has predicted that South Africa’s iron ore exports could reach 15 million tons per annum by 1980 and about 50 million tons by 1990.

It is therefore essential that we decide on the correct order of priority between the three major export schemes which Africa today wishes to undertake, namely that at Richard’s Bay, at St. Croix and at Saldanha Bay. This order of priority must be determined against: (1) the total capital outlay of each scheme; (2) the availability of finance; (3) the availability of labour; (4) the anticipated completion date; and (5) the optimum railway capacity utilization. The Government has already given permission for the first stage development of the Richard’s Bay harbour. The construction of the necessary railway and harbour facilities, initially for the export of coal, is expected to amount to about R160 million. If this scheme were to receive priority it could be operational by 1975. South Africa could, economically speaking, find the capital and labour for the Richard’s Bay and the St. Croix projects simultaneously, because the R160 million for the Richard’s Bay project would be spread over a period of about five years. The St. Croix project which could be operational by 1973 would cost an estimated R33 million, plus an additional R6 million for four tugs. The Sishen/Port Elizabeth line must be improved and will cost about R12 500 000. The Railways have indicated that they would bear that expense. There would also be additional rolling stock and locomotives, to the tune of about R70 million, but that also would be necessary for the Saldanha project and therefore I do not bring these figures into account. Now if St. Croix becomes operational by 1973, it would be able to handle the export of iron ore as well as coal until Richard’s Bay becomes operational, and these two schemes could earn for South Africa about R1 000 million in foreign exchange up to 1980. St. Croix is designed to cope with iron ore exports of about 15 million tons per annum. According to the S.A. Railways, the capacity of the Sishen/Port Elizabeth line after improvements would be about 20 million tons per annum. This would be adequate to cope with the iron ore and manganese exports were to increase to 50 million tons by 1990, it would be imperative that another iron ore export harbour be developed for the 1980s.

It is estimated that the Saldanha Bay scheme would cost about R350 million to R450 million. Leading civil engineers have estimated that the realistic completion date for this scheme would be about 1980, but the most optimistic assumptions are that Saldanha could become operational by about 1975, If, therefore, the Government decides on the development of Saldanha and has to finance this scheme wholly or partly, it would mean that the two major schemes, namely Richard’s Bay and Saldanha Bay, could not be tackled simultaneously, due to the shortage of labour. The result would be the postponement of Richard’s Bay. If this were to happen, Saldanha could earn about R500 million in foreign exchange for South Africa up to 1980. If priority is given to the St. Croix and Richard’s Bay schemes, South Africa would be earning foreign exchange white Saldanha is being constructed. I would therefore plead with the hon. the Minister to give the go ahead for the St. Croix project, because its feasibility has been proved. It will provide the immediate answer to the need for a terminal to accommodate large vessels to convey our anticipated ever-increasing exports of ore until the 1980s.

Then I want to tell the hon. the Minister that in his reply to the debate last year in September, (Hansard Column 4517), he said—

And in Column 4518 he said—

Sir, the statement that the swells change from nothing to 30 feet is an impossibility. If the hon. the Minister had only telephoned the port captain at Port Elizabeth, he would have ascertained the incorrectness of this statement. The St. Croix Island is about 650 metres long. The length of a 350 000 ton vessel is about 365 metres. Therefore the statement that some of the ships will be longer than the island is not correct. My advice to the hon. the Minister is that he must change his advisers.

One of the world’s leading firms of consulting engineers, Soros Associates of America, said that the feasibility of the Port Elizabeth scheme had been proved and that further studies of waves and wind would only be required to refine the design and not to prove feasibility. Then they go on to make this rather interesting observation, that storms at Port Elizabeth tend to be of relatively short duration and that the study of wave and current conditions near St. Croix, which were completed at the request of the S.A. Railways, proved that the requirements of the Japanese steel industry could be met, and that suitable berthing conditions at St, Croix would be available for about 80 per cent of the time. The S.A. Railway’s and Japanese experts regard ships of 150 000 tons to be the maximum practicable for Saldanha Bay. St. Croix could accommodate ships of 250 000 tons and after additional dredging, vessels up to 350 000 tons, [Time expired.]

For obvious reasons the hon. member, who has just resumed his seat, lodged a plea with respect to the shipment of ore in the vicinity of Port Elizabeth. Let me say at once that I actually do not blame him. That is his part of the world; he probably has his interests there, and his constituency is there. Inevitably he must look for subtle arguments with which to defend this project in his area. But I must point out that as far back as the end of 1969—I think it was 6th December, 1969—a very definite statement was issued about this matter, on behalf of the Government, by the then Minister of Economic Affairs. In it the following appeared, inter alia. (translation)

And then further—

Please note, Sir: “Drawn up by Iscor and the South African Railways”—

This report then also contains the following, inter alia—

And then the following—

In other words from this statement at the very outset, three things most definitely came to the fore, and these are contained in this statement: In the first instance the necessary contracts must be concluded. Secondly the necessary money must be obtained. The third important fact is that the Government had already taken a decision at that stage about the point from which the shipping of this ore must take place. It is clear from this statement that the Government had decided that Saldanha should be this point.

Sir, in spite of this, there is probably no prospective project about which so much has been written and about which there has been so much speculation as there has been, since this statement, about this possible project, particularly on the part of my United Party friends in Port Elizabeth. I think that there was, in actual fact, an unnecessary amount of insistence about that area after the Government had adopted a very definite view about this matter; I actually think it unfair on their part. They speculated left, right and centre, and at one stage I saw a report in which they claimed that the Saldanha area did not fit into this picture at all; in fact, that the harbour there would be too shallow.

I am not going to examine this detail, but I want to point out that the announcement of this intention by the Government created very far-reaching expectations, also within the Western Cape growth pattern. The hon. member for Vasco advanced certain arguments in which he pointed out certain problems we would have in respect of the future growth pattern in the Western Cape. I think that, viewed basically, this intended protect means so much more to us in this respect because, in the first place, it can be the beginning of new growth possibilities in this particular area with its future growth problems. Apart from this, here lie the old great north western parts of our country, the area between Saldanha and Sishen, a world that has been dormant over the past few years, but one with tremendous possibilities. I see no other possibility than that this intended project can be a handy starting point in the creation of new life and a new growth momentum in this area. I want to tell the hon. the Minister that dreams have already been dreamt. New attitudes to developments have been created in this specific area which, to my mind, justify the fact that this project should be tackled in that area, as the Government decided.

Now I should like to ask the hon. the Minister to again emphasize and clarify certain basic aspects for us on this occasion, in the light of these wild speculations that took place and in the light of the importance of this project in a specific geographic context. I noticed in the week-end newspapers that there were reports about Iscor having succeeded in obtaining the necessary money. I do not know whether those are speculative reports, but they are, naturally, encouraging. I now realize that with these very subtle negotiations—because there is a tremendous amount at stake—it is probably impossible for the hon. the Minister to go into too much detail. We cannot expect this of him. As a result of this speculation and the expectations that have been roused, I do want to ask the hon. the Minister to again give us the facts of the matter very clearly on this occasion.

The second matter I should like to refer to here concerns our marine industry. Our marine industry is going through a difficult period at this stage. The marine industry, with all its various facets, is a very colourful one. It is one that has its risks. Just as one experiences droughts inland from time to time, so this industry also has its difficulties at various times. But it is a colourful industry, and it has been a good source of foreign exchange for South Africa in past years. There is one matter that J am very sorry about today, i.e. that the hon. member for Simonstown has specifically chosen a period such as this lean period in our marine industry to go out of his way to break down its image as he has done in recent months. I do not want to react in detail to what he has said, but I want to tell him that I think it lamentable. I can tell him that the fishing public reproaches him for the fact that he has tried to break down this industry's image as he has done in recent months. In fact, Sir, I gained the impression that he was engaged, on a fulltime basis, in conducting a campaign against, and spreading gossip about, the generally fine image this industry has had. I have a small, old white schipperke. He is a dear little dog. He has grown old—I think he is now about seven or eight years old — but as lovely and cute as the little dog is, there is one habit he has never broken himself of throughout his life, i.e. the habit of carrying everything with a bad smell into the house. The hon. member reminds me of him.

May I ask a question? Are there any misrepresentations

You will have your chance. That is the way in which this hon. member has tried, virtually on a fulltime basis these past few months, to break down the image of this industry. I leave him at that. I am not going to react to it any further.

I want to say that in the past few years the State has done more than its share for our marine industry. The Minister and senior officials of the department have now recently had the opportunity of visiting only one section of our 2 000-mile long coastline, the part within which my constituency lies. Through Fishcor the State has really gone out of its way, in the past number of years, to support this industry. [Time expired.]

The hon. member for Moorreesburg has, as did other hon. members opposite, criticized me, being both rude and personal. However, nowhere did they react to the specific allegations I made. I have made certain allegations in this House and I have challenged certain hon. Ministers, the last one being the hon. the Minister of Economic Affairs earlier last week. He said that I misrepresented the position. I challenged him then and I challenge him again now to prove it. I have sent him my Hansard and have challenged him to point out to me where I had misrepresented the position. I shall be only too glad to apologize to him as well as to members on both sides of the House if he can find any substantial error in any of the speeches I made.

I do not concern myself with rubbish.

Order! The hon. the Minister must withdraw those words.

I withdraw them, Sir.

In the Fishcor report which has just come out, the rock-lobster industry is dealt with. This is what it says—

In Port Nolloth the industry is being subsidized On the 14th of May the Minister, in reply to a question I put to him, told me that because of the service the two companies concerned rendered to Port Nolloth it was found necessary to subsidize them to the extent of R10000 per annum. I do not want to go into details now apart from pointing out that the question was replied to on the 14th of May.

Let us deal with the present rock-lobster catches in South-West Africa as well as in South Africa. The position in South Africa is that 3 500 000 lb. tails have so far been caught this season, almost a fulfillment of the quota. This sounds very good indeed. However, let me remind hon. members that the existing quota is one that has been substantially reduced from the quota which was in existence a couple of years ago. Three years ago there was only an export tail quota while there was no limit whatsoever on the local rock-lobster market. Let us deal with the position of catches in 1965, for instance. Then the export catches of rock-lobster amounted to 6 800 000 lbs. tail weight. In 1969 this had dropped to 2,1 million lbs. There was, as I have already said, no restriction on the catching of rock lobster for the local market. On the East Coast in 1965 615 000 lb. tail weight was caught. In 1969 it had dropped to 3 000 lbs.

These things add up to the fact that the present quota is completely unrealistic unless related to previous catches. So, when the Minister pointed out to me that the quota had almost been filled, he meant the present quota which had had to be reduced after the rock-lobster industry had been over-exploited over the years.

Let us deal with South-West Africa now. In the Minister’s answer to me in May he said 1 259 000 lbs. tail were caught up to the end of April. I want to ask him what the present picture is at Lüderitz. There is no mention of the South-West African rock lobster industry in Fishcor’s report. Are they also being subsidized like Port Nolloth is being subsidized? I want him to tell us whether the 2½-inch length still applies to rock-lobsters being caught off the South-West African coast, whereas the 3-inch length is imposed on rock-lobsters being caught south of the Orange River. Does the hon. the Minister realize what happens? I am now addressing my remarks particularly to the hon. the Deputy Minister. Boats from Lüderitz, and South-West Africa generally, come down to South Africa and take 2½-inch lobsters which they then offload in South-West Africa. That is what is happening. I want to ask the hon. the Deputy Minister when he is going to introduce uniform legislation concerning the fishing industry of South Africa and South-West Africa. A different policy to that applied in South Africa, appertains to South-West Africa.

My time is terribly limited; so I must move on to the pelagic fishing industry. Here we have a very sad story. Let me again deal with the Fishcor report. Here it says, as regard the pelagic fish in South Africa—

This is a pattern which has repeated itself throughout the West Coast and the South-West African pelagic fishing industry, in spite of warnings to the Government.

I now want to deal briefly with the Cape Cross Survey, which is the most recent authoritative statement on the fishing industry of South-West Africa which has come to hand. In a summary on page 5 of the survey's report, it says—

On page 6 it states—

They omit to say “and the fall”.

On the next page, in conclusion, it states—

These are very serious aspects of the Fishcor report and of the Cape Cross research programme. They also make various recommendations. I would like to ask the hon. the Deputy Minister—it is for him to say—which of the recommendations in the Cape Cross Survey have been put into effect and what is the present position of the pilchard industry off South-West Africa. Do not forget that the Cape Cross Survey recommends that there should be further reductions of pilchard quotas if the resource is to be saved. In the light of the Fishcor and Cape Cross reports, the majority report of the Fishing Commission that the South-West African fishing industry can sustain an annual catch of 1 million tons of pilchards is absolutely laughable. What has the Government done? The hon. the Minister said recently in a speech in the House, according to Die Burger—

I want to ask him what actual steps he has taken.

Let me move on briefly to Dr. Lochner. In reply to a question I asked the other day, the hon. the Minister said that they are considering closing down for pilchard fishing the area between Palgrave Point and the Kunene River. I want to ask him whether that has been done and if it has been done, then let him admit that Dr. Lochner was right. Because if it has been done, the effect will be exactly the same as if they had originally accepted Dr. Lochner’s theory and Dr. Lochner’s warnings. If that is the case, why did they not test his theory and accept his findings in the first place? What about Dr. Lochner's recent warning? His most recent warning was made about 10 days ago, in Die Oosterlig. He says—

These are serious warnings, and I should like to ask the hon. the Deputy Minister whether he is going to heed or ignore these further warnings. [Time expired.]

Mr. Chairman, the hon. member for Simonstown is now almost making a habit of attacking the hon. the Deputy Minister and the Executive Committee of South-West Africa about certain allocations in South-West Africa. There are predictions at every turn, as has now been the case again, about the collapse of the pilchard sources. Tremendous importance is attached to Dr. Lochner’s theory, but there is no reference at all to our own Division of Sea Fisheries, which has been doing excellent work for years. Apparently the hon. member is not interested in the facts he can obtain from them. In actual fact, one is left with the impression that the hon. member and the Opposition are overjoyed at the problems being experienced at present. I want to tell the hon. member that if by this conduct he thinks to make an impression on the fishermen of Walvis Bay, he is making a very big mistake.

I have the privilege of knowing those people much better than he does. They are hard people, but also people of faith and honesty. I have the privilege of sharing the same language and culture with those people. I want to tell the hon. member that he is making a big mistake if he thinks he is going to get any sympathy from those people in this way.

Sir, the hon. member for Simonstown phones people in Walvis Bay at every turn. I want to tell the hon. member that those people again phone me and tell me about it. If one stays the night on the banks of the Kavango River in the north of South-West Africa, one is woken early in the morning by a deafening noise. That noise is caused by a little bird, known as the fishing eagle, because it lives on live fish. However, when one lives on dead fish, I think one must then be granted the dubious honour of being called a fishing vulture.

I want to refer very briefly to the allocations in South-West Africa, about which such a tremendous fuss is now being made. When the National Party accepted the reins of government in South-West Africa in 1950, no research had been done up to that stage. Only four fish factories existed, with an average annual quota of about 31 000 tons of fish. In co-operation with the Division of Sea Fisheries of the Republic, the National Party then immediately began to do research. On the recommendation of these researchers, our marine biologists, they step by step and year by year granted more quotas and increased the quotas. Those biologists are the people who undertake research in connection with the living resources of the ocean, their ways of life, quantities, food supplies, migratory habits, etc., and on the basis of that they determine the maximum economic level of exploitation. I now ask: What more can a Government do than to appoint such people to do all this research, and then act according to their advice?

What are you going to do with the factory ships?

We shall ask you United Party M.P.s to sell the shares you have in those factory ships. Sir, hon. members are laughing at the moment. There is shouting and screaming because the two additional licences, issued in 1963, were allocated to Afrikaans institutions.

Which two?

Angra Pequena and South Kunene. The hon. member attacked Federate Volksbeleggings, Bonuskor, Volkskas and Trust Bank. These are, strangely enough, all Afrikaans institutions.

That has nothing to do with the matter.

If it has nothing to do with the matter, the hon. member must tell me why he never objected to the latest allocation, i.e., that made in 1968. Is it because the hon. member knows that not a single Nationalist has any interests there? If that is not the reason, the hon. member must please tell me why he singles out Angra Pequena and South Kunene, but is quite happy with the allocation made five years later.

Are you now speaking about the White Fish Consortiums?

No, it is a licence for 90 000 tons of fish, just like all the others.

For whom?

For their own consortium. I do not have the time to go into that now. I just want to tell the hon. member that it is as plain as a pikestaff that this is a matter of Afrikaners who hold shares. [Interjections.] The hon. member is just like a dog: if he gets hurt, he whines. The United Party always reminds me of the Wafra. They are on the rocks, and just like the Wafra they are polluting and besmirching everything and everyone. The hon. Opposition and its newspapers, supported by the Hertzog newspaper, succeeded in scratching out the names of 100 Nationalists from amongst the names of 2 800 shareholders. But the hon. member has never told us if he agrees with the fact that supporters of the hon. Opposition also have shares there. Does the hon. member agree that that is in order?

I was speaking about the factory ships.

Is it in order that hon. members on that side of the House should hold shares in factory ships? The hon. member must tell us if it is only a question of Afrikaners. It is, after all, the National Party that brought prosperity and progress to this country. Must the Afrikaners now always remain the hewers of wood and the drawers of water?

Mr. Chairman, the hon. member for Simonstown again referred to the theory of Dr. Lochner. He is trying to get at the Fishing Commission and that commission is not here to defend itself. I am not here to speak on behalf of the Fishing Commission. I am not going to venture into the potholes. I just want to tell the hon. member that as a fellow member of the commission I do not propose to cross swords with Dr. Lochner. I want to ask the hon. member whether he has taken the trouble to read the December issue of Shipping News?

It contains Dr. Gulland's article.

No, the hon. member is wrong. It contains Dr. Lochner’s article. Dr. Gulland’s reply appears in the February issue. If the hon. member has read it, he will have seen that Dr. Gulland reacts very briefly to it and that he says he would like to see the theory. One fact he mentions is that if Dr. Lochner’s theory is correct, he is of the opinion that a pilchard can live to be 100 years old. The hon. member has probably also taken note of that. In the March issue of Shipping News, Dr. Lochner replies and says that Dr. Gulland, whom hon. members opposite probably acknowledge as an authority, does not understand his theory. With reference to the comments of the chairman of the commission of inquiry into the fishing industry, which appeared in the same issue, he says that the Fishing Commission does not understand his theory either. I concede that I am not a scientist. I want to ask the hon. member if he has studied Dr. Lochner’s bulky theory?

Yes.

Does the hon. member understand it?

Not quite.

In the Fishing Commission’s third report, which was tabled. Dr. Lochner himself, in his minority report, quotes the words of the Fishing Commission—

Mr. Chairman, may I ask the hon. member a question? Why did they not have Dr. Lochner’s theory tested.

The answer to that is very simple. It is not the task of the Fishing Commission or the Government to judge the work of any scholar. It is the right, the privilege and, what is more, the duty of the author himself to have his work judged. In this issue of the Shipping News one reads that the chairman of the commission of inquiry into the fishing industry again invited Dr. Lochner to publish his work or to submit it to Dr. Gulland or any other authority. [Time expired.]

The hon. member for Omaruru will forgive me if I switch from the crisis in which the Government has landed the fishing industry and deal with another and more serious crisis, the one which now faces the motor industry in South Africa. I have a report in front of me which says that 45 000 new cars wait to be sold. The ineptitude with which the hon. the Minister has handled this, the largest industry in his portfolio, is typified by a comment coming from the Cape Times, where he is reported to have said—

He mentioned that he had called for a detailed report on the situation. Sir, the motor industry is a rugged one. It controls the lives of almost every one of us in this country. Its total number of employees is some 113 000, of which some 45 000 are concerned with the manufacturing industry. Surely, if the hon. the Minister had followed the comment in the financial and industrial Press, he would have known and would have foreseen that what is happening now is merely the result of the Government having tampered with the free market mechanisms of the motor industry, he and his department having introduced severe hire-purchase measures this year and last year, and the hon. the Minister of Finance having clamped down excessive sales taxes at a time when the industry could not bear it. If the motor industry was used as a catalyst in 1962 in order to reinvigorate our then stagnating industry after Sharpeville and after we had just left the Commonwealth, it may well be that the same industry today, in the situation in which it is placed now, could well lead to an explosive situation which will affect the whole of our industrial life. We will see that this will trigger off a chain reaction.

Already, only last week, we see that a major car ferry firm is in financial difficulties. The manufacturers of motor-cars cannot be seen in isolation. There will be ripple effects on the component manufacturers, on the foundry industry, the tyre industry, the plate glass industry, the battery industry, the service industry, and on sales personnel. The Minister is treading on dangerous ground. Not only is the whole economy involved, but our workers’ careers are also at stake. Families will suffer. There will be unemployment with the approach of winter.

Sir, we had the same signs in America when the Pennsylvanian Railway Company crashed, and we had the same signs in Britain when the Rolls Royce Company collapsed and brought down with it many ancillary branches of the industry. One does not play with an industry of the size of our motor industry. One does not set it up like skittles and knock it down and then put it up again. The hon. the Minister must realize that according to Dr. Kuschke, the total investment in all the facets of the industry involves some R10 000 million. In the motor industry long-term planning is involved, not merely the putting together of motor-cars but contracts for the supply of parts and raw materials and labour are placed with other ancillary industries months beforehand. Delivery schedules can be as far as six months to a year ahead. Short-term cut-backs of the nature now envisaged can well result in long-term delays, and the policy of this Government at the moment may well bring this, our third major industry, to its knees. The hon. the Minister is bringing ridicule upon his department by his handling of the panic hire-purchase measures which brought the furniture industry into chaos last year and which may well have the same, and even worse, repercussions on the motor industry as things stand at the moment.

In the brief time at my disposal I want to put certain propositions to the Minister and I hope that he will reply to them in some detail as I will motivate them more fully later in my address to the House. Firstly, the plight in which the motor industry now finds itself, was anticipated by Opposition speakers during the no-confidence debate, by the Leader of the Opposition himself, and in the Budget debate, and by the motor industry as early as March of this year. Secondly, the present position is the result of the Government’s having introduced unnecessarily harsh hire-purchase measures and curbs last year, excessive sales taxes on motor vehicles and the untimely enforcement of phase III of the local content programme upon the motor industry in January of this year, in spite of rigid warnings from the industry. I challenge the hon. the Minister to react to a plea by this side of the House that (a) he should halt the implementation of phase III now; (b) that he should abandon its implementation for the foreseeable future; (c) that he should revert to the 1970 phase II local content situation; (d) that he should repudiate the Franzsen Commission’s third report recommendation favouring the recognition of only one popular utility family-type vehicle per manufacturer; (e) that he should repudiate the recommendation that there should be a drastic reduction in model numbers; (f) that he should re-state existing Government policy that the choice of model numbers will be left to the free market influences as reflected by manufacturers’ decisions and public choice; (g) that he should comment upon the effect on the prosperity of the motor manufacturing industry of the disproportionate number of light commercial vehicles today entering South Africa in either C.K.D or C.B.U. condition; and (h) that he will come to the rescue of the component manufacturing industry by introducing provisions for light commercial vehicles components to be phased into the local content programme at an early date.

I also challenge the hon. the Minister to prove that the Government’s local content programme has effectively and realistically resulted in a material saving of foreign exchange to South Africa. I challenge him to refute the Opposition’s contention that the Government’s present policies calling for the implementation of phase III and the introduction of harsh sales taxes and hire-purchase curbs are responsible for the high cost of motor cars, resulting in higher transport costs and higher cost of living for the man in the street. Sir, if the Cabinet’s decision to enforce the implementation of phase III in the motor industry in January of this year is not causing concern to the hon. the Minister, then it should be. The Leader of the Opposition in the no-confidence debate this year, warned that the implementation of phase III would add fuel to the fires of inflation, and the hon. member for Yeoville, taking part in the Budget debate, called on the hon. the Minister of Finance seriously to consider postponing the third phase of the local content programme in South Africa because of the pressures which were being exerted on the supply of skilled labour and our limited and expensive supplies of capital.

Now we come to the Franzsen Commission, a Government-appointed commission. In its Third Report the commission calls upon the Government to delay the implementation of phase III as a matter of urgency, and recommends that the whole issue of the local content programme be investigated by an inter-departmental commission, comprising representatives of the Departments of Finance, Industry, the Economic Adviser to the Prime Minister, and the Board of Trade and Industry, and that this commission should have due regard to the representations of both the industry and the consumer.

Sir, in quick succession during the last few weeks the motor trade itself has reacted. One has only to study the headlines in recent papers—

One must realize that phase I which was introduced in 1962 was to be a catalyst to an industry which was then stagnating. It was introduced to enable our economy to be revitalized by making the maximum use of the then surplus supply of skilled labour, raw materials and capital. [Time expired.]

Mr. Chairman, I do not want to reply to the speech made by the hon. member for Gardens, because I want to react to the speech made by the hon. member for Simonstown. However, I want to tell the hon. member for Gardens that if he had been more knowledgeable about this fishing industry, he would not have found it so easy to make the statement that the Government had plunged the fishing industry into a crisis. If he had been more knowledgeable he would have known how difficult it is to determine when over-exploitation is taking place, and how difficult it is to discover this in time. He would then have known, for instance, that to this day people are quarrelling and arguing about the reason for the disappearance of pilchards in the Californian waters. To this day there are many people who do not want to accept, or are still not convinced in their minds, that this was caused by over-exploitation and not by other causes. I think the hon. member’s statement was rather wild and meant to be cast to the winds and to be blown away.

Now I want to refer to the speech made by the hon. member for Simonstown. I want to express my satisfaction at the fact that the hon. member acted in a more positive manner today. He acted more positively and did not arouse any suspicions here, as he did in the past. I think the hon. member for Simonstown has probably found out that his source of information, his political associates in South-West Africa, are not as reliable as he may perhaps have thought. I am referring here to the hon. member’s spiritual associates, but what the actual position of these people is today, I do not know. As far as I know, they are living together as two parties, but they are not lawfully married. It would there appear to me as though they are living together in sin, and what may emerge from their living together in sin, any person can but surmise. In the short time at my disposal I want to reply to the points raised by the hon. member. As regards the position of Port Nolloth, I may tell the hon. member that the subsidy granted, is not an annual subsidy of R10 000, but a non-recurring subsidy, which is only meant to help the company during the transition period.

As far as the sizes of rock lobster in South-West Africa are concerned, I may tell hon. members that it is still 2½ inches.

Did the hon. the Minister refer to “quota”?

The hon. member for Simonstown asked me what the size was that was going to be permitted in South-West Africa. The size will still be 2½ inches. I want to tell the hon. member at once that in my own mind I still have many misgivings about what happens to rock lobsters that are thrown back into the sea. I have my misgivings in that regard, the simple reason being that it is not possible for the Sea Fisheries Division to exercise proper control over each of those boats. What I am concerned about, is that many of those rock lobsters which are thrown back into the sea, are actually in such a poor condition that they cannot recover again. If this were the case, I must tell the hon. member that I do not attach so much importance to the size restriction. If they are going to die in the sea in any case, it would be better for us to bring them ashore instead, for then the number of bigger rock lobsters that are caught, would be relatively smaller. I shall accept that catchers from South-West go further south than the Orange River. My information is that this happens. However, it also happens just as often that catchers from the Republic, in turn, go further north than the Orange River. It is difficult to control this situation, and since a measure of reciprocation does apparently take place in this manner, I do not think it can be regarded as being serious. The hon. member also wanted to know when similar legislation was going to apply to both territories. The intention was to do so during the course of the present session, but lengthy negotiations had to be conducted with local authorities in South-West Africa in order to reach agreement. It is being expected at present that it will be possible for this consolidation to take place next year.

Must the legislation come before this Parliament?

Yes. I expect this to happen next year. The hon. member also wanted to know which of the recommendations of the snap investigation had been accepted. I think the hon. member is familiar with them, but if I have to name them from memory, they are, firstly, that because of the results of the snap investigation, the catching season was not curtailed by one month, as was the original intention, but by two months; secondly, nor was the pilchard quota restricted to 45 000 tons, as was originally intended, but to 30000 tons. We shall have to wait until the end of the present catching season in August to see how these measures have worked out in practice. We shall also have to assess the results in the light of the second phase of the scientific investigation which is being conducted there at present. At the moment serious attention is also being given, and I hope to be able to implement this, to determining a northern line—I cannot remember the exact degree of latitude at the moment—the intention being that, with a view to protecting young fish in the north, South African catchers will not go beyond that line. Another step that has flowed from the first phase of the investigation, is that negotiations have been entered into with the Sarusao Development Corporation in order to freeze for the time being, in view of the possibility of overexploitation, the development which would have commenced there this year. Those negotiations have as yet not been finalized completely, but progress has already been made in that regard. In the meantime the operations there have been frozen and discontinued until such time as we have more clarity on what could happen there in the future. I may just tell the hon. member that in my own mind—not on scientific grounds, but pursuant to information and communications that have reached me—I nevertheless take the very optimistic view that even if it would not be possible to exploit a pilchard industry there, it may in fact appear to be possible in the future to start a horse-mackerel industry there. It is possible to catch horse-mackerel without catching anchovies and pilchards as well. However, these are matters which are still being investigated, and in the meantime further operations there have been frozen. Then the hon. member also said it was ridiculous that South-West Africa could supply one million tons of fish. However, these were the findings which were arrived at on a scientific basis, and I am not in a position to add anything to them. With the knowledge at my disposal I cannot say that that scientific finding is ridiculous. Furthermore, the hon. member once again referred himself to Dr. Lochner’s point of view, but I think that we have really thrashed out that matter sufficiently. I said in the past that I had respect of Dr. Lochner. We are good friends and we keep up a regular correspondence. However, we may not cast our own scientific research to the winds before Dr. Lochner’s theory has been proved with absolute certainty and in a satisfactory manner. We may not expose our fishermen in this manner to the serious financial position in which they must necessarily be landed as a result of further curtailments. They already have problems, and further curtailments cannot be made merely on the strength of information for which there is no conclusive scientific proof.

Mr. Chairman, I think the time is opportune for me to deal with just a few topics which have already been discussed here. The topics I should like to deal with now, are matters relating to our negotiations with the G.A.T.T., followed by a few thoughts on the exports and our large volume of imports. Having done that, I could perhaps, with further reference to our attempts at increased exports, take the opportunity to deal with the question of Saldanha and the export and promotion of other minerals.

May I put a question to you? Are you also going to discuss my “misrepresentations”?

I would rather not reply to the hon. member.

Precisely. In that case, do you withdraw your words?

I shall discuss the hon. member’s misrepresentations, but I shall do so when it suits me. The hon. member says here whatever he pleases, and then he expects to be able to get away with it.

You made the allegation, not I.

I have enough information on the hon. member’s misrepresentations, and I shall deal with them when it suits me, and not when the hon. member tells me to do so.

I said I would like to discuss matters relating to the G.A.T.T. I think we are very familiar with the background in this regard, but I just want to refer to it in one or two sentences. If we go back to 1947, when we entered into our G.A.T.T. tariff agreements, we shall appreciate that at present the circumstances are quite different. In fact, we find ourselves in a very difficult position. Circumstances in South Africa have changed tremendously, and one could perhaps say that the negotiations in 1947 were short-sighted, especially in view of the fact that it should have been foreseen that South Africa’s economy would change over the years. However, I think these are facts which we simply have to take into account today and on which it is unnecessary to speculate further at the moment. We experienced problems in 1949, and at the time we obtained permission to apply import control. We applied it from 1949 until recently, i.e. 1969. At that stage we were informed that we could no longer obtain the exemption under section 12 of the G.A.T.T. agreement to apply import control. At the time we said that we ourselves preferred to grant protection by way of tariff determinations. On the other hand, however, the tariffs to which we are committed, are such that they do not provide us with the necessary opportunities for protection which we should like to have. Therefore, until such time as we have conducted negotiations on the necessary tariffs, we shall continue to apply import control in respect of certain matters, especially in respect of those particular commodities over which we do not have the necessary tariff control. In this regard I merely want to reply to the reference made by the hon. member for Parktown when he spoke about commodity control, i.e. those articles over which we have no tariff control for making the necessary adjustments in that regard. But, to cut short a long story about the G.A.T.T., I merely want to say that we are in the process of conducting negotiations with various countries where we should like to have better tariff enforcement in respect of the present circumstances. But I should also like to mention that this is not an easy passage. In fact, these are very difficult and complicated negotiations. I think the negotiators of the United States of America are arriving here in South Africa today. In Pretoria they will proceed with their negotiations with us in regard to the tariff determinations between us and the U.S.A. These are extremely difficult negotiations. Whenever one asks for a concession in regard to the tariffs on certain commodities, one is expected to make in return concessions which are equal in value. Now, if one does not have much, naturally one cannot offer much either. That is the case with us. That makes it particularly difficult for us. But we are carrying on with our negotiations in order to secure the protection we want by way of tariffs rather than by way of import control, as it was done in the past.

All of us are concerned about our large volume of imports and, as against that, the fact that our exports are not increasing in volume. In the past year our imports have reached the record figure of R2 545 million. This is, of course, a tremendous amount. If I have to mention the reasons for this, I must accept that the relaxation of import control was one of these reasons. One could perhaps add to this the fear amongst importers that import control may be re-introduced, but as far as that is concerned, I want to make it very clear here today that it is not the Government’s intention to intensify or extend import control again. I hope with all my heart that in so far as there has been obscurity in this regard, it will now have been removed. Furthermore, our large volume of imports is also attributable to the particularly high level of domestic spending. Another reason is the particularly favourable facilities which importers have been able to obtain.

As far as our exports are concerned, a number of factors are involved. In the first place, there is the fact that we are still to such a large extent agricultural exporters, and that such exports are, in turn, subject to climatic conditions in this country. The hon. member for Vasco also mentioned a reason, namely the downward trend in the foreign demand for diamonds. Another factor is the downward trend in the price of wool. Wool used to be a very good earner of foreign exchange, but during the past year there has been a downward trend in the price of wool. Another factor is the fact that to a certain extent there has been a shortage of transport and port facilities, especially as far as the export of mineral ores are concerned. Another factor in regard to our exports, is the high level of domestic demand. That has been the cause of fewer goods having been available for export.

The hon. member for Parktown referred in particular to minerals, and wanted to know what we were doing in that regard. He referred to the export of iron ore and also to the Saldanha and Port Elizabeth schemes. Other hon. members also referred to these matters. Before dealing with specific matters, such as the Saldanha project, I should like to emphasize that the question of exports is not only the responsibility of the Government. It ought to be a joint effort between the Government and the private entrepreneur. I think one may just as well refer to the fact that it is the industrial sector which in fact carries the major responsibility for our large volume of imports, as so many of our industrial materials which are processed, are imported for the benefit of our industrial sector. Recently I made some kind of analyzis of our imports. It appears that out of the grand total of approximately R2 545 million, which I mentioned as being the total of our imports for this year, approximately R400 million only was in fact in respect of consumer goods. The major part of our imports consists by far of raw materials, components of vehicles which are assembled, etc. In fact, the imports for the industrial sector, to which we must look for export purposes as well, play a major role in our large volume of imports. The task of importing is the task of the Government along with the private entrepreneur. As far as the Government is concerned, it will provide the necessary specialized auxiliary services for promoting the exports as far as it is at all possible to do so.

The hon. member for Parktown spoke to me and referred to what he had said here last year in regard to what we had to do in connection with our exports. Amongst other things he referred last year to the expected adverse effect on our export trade to Britain as a result of its entry into the Common Market. He put forward certain proposals on the basis of which we could promote our exports. In the first instance, he said that the Government had to remove all factors which could hamper the full utilization of the country’s export potential. Then he referred inter alia to the infra-structure, the facilities essential for the export of our products, and to our labour position. I doubt whether it is necessary to explain once again why we did not do what he had asked us to do in regard to the labour position, for the matter has already been discussed so thoroughly. Hon. members on that side of the House want us to open the doors more widely to the employment of non-Whites, but that is something which cannot be discussed in isolation. That is something which forms part of the greater economic development as a whole, which involves a variety of facets of our society. As this has already been thrashed out to such an extent, it is probably unnecessary for me to refer to it any further.

As far as our infra-structure is concerned, I think that a great deal has been done in recent times. The hon. member is probably aware of the fact that the large-scale export of refined coal was recently decided upon. For this purpose it was decided to build a special railway line from the Witbank area to Ermelo. We hope that this will earn for us millions of rands in foreign exchange. In so far as it is my department which has to contribute a share and do something in regard to the promotion thereof, I just want to tell the hon. member that in the negotiations my department acted as the co-ordinator and tried to co-ordinate the various departments and bodies. To be quite honest, this one under taking alone occupied my department for months in tying up the various loose ends in order to conclude the contract for the export of coal. Negotiations had to be conducted with the Railways and with the private bodies in regard to the export, etc. I make bold to say that if it had not been for the kind offices of that department in regard to this case, it would never have been possible to carry this undertaking into effect. So, this is our task, and, indeed, it is also our endeavour to promote export from time to time.

In regard to the proposals made by the hon. member for Parktown, I want to mention, finally, that he said we had to strengthen our foreign trade representation, especially in the Scandinavian countries, I may just add that our office in Stockholm is within reach of Copenhagen, Oslo and Helsinki. Of course, the hon. member will appreciate that the necessary manpower is not always available to such an extent that we can provide with such offices all the various cities where we should like to have trade representation. Recently the establishment of new trade offices in Teheran, Taipeh, Beirut and Los Angeles, and also in Wellington, New Zealand, was approved in principle by the Government. As soon as the necessary manpower, the trained people, are available, we shall staff these offices in order that we may by those means do the necessary in that respect as well. I may add that that hon. member is not the only person whose aim it is that our trade representation should be strengthened; it is definitely mine as well.

In respect of mineral exports and, more specifically, the question of a choice between the Saldanha scheme and the Port Elizabeth scheme, I should like to mention a few points. It is by no means my intention today to weigh these two schemes against each other and to compare their merits once again. The hon. member for Port Elizabeth Central championed the Port Elizabeth scheme, and the hon. member for Moorreesburg, in turn, stated the merits of the West Coast. What I want to try to do in respect of this matter today, is to remove as far as possible every uncertainty. The uncertainty which has been prevailing recently in regard to the choice between Port Elizabeth and Saldanha, and about which so much has been written, has undeniably caused damage to our case. I do not have the slightest doubt in that regard. In the minds of those people with whom we have to negotiate and with whom we have to enter into long-term contracts, in which millions of rands are involved, we caused damage to our case, because so much was written about this matter and because the impression was gradually created that there was no certainty in this regard. Why this was taken up in that manner, I cannot quite understand, but the impression was created that the Government had not taken definite decisions in terms of which steps could be taken. The unambiguous truth is that on 16th July, 1970, the Government decided that the Saldanha scheme had to be developed, that a railway line had to be built from Sishen to Saldanha and that Saldanha had to be developed as a harbour for the large-scale export of iron ore. That was done subject to two conditions. The first condition was that the necessary financing had to be arranged by Iscor. I do not want to enter into the details of the matter now. The second condition was that the necessary contracts had to be obtained in order that the scheme might be viable. As far as the progress of the scheme is concerned, I must inform the House now that, according to information that was made available to me, Iscor has already succeeded in making the necessary financial arrangements for the implementation of that scheme. I do not want to elaborate on the details at all, for it is not my task to do so now. Nor would it serve any useful purpose; it would only take up our time. Over the past week-end a report in this regard appeared in the newspapers. The full particulars of that report were not brought to me first. What it amounts to in broad outline, is that the necessary financial arrangements can be made. This is also the information that was given to me by Iscor before the weekend. As far as the viability of the scheme is concerned, and especially the date to which the hon. member for Parktown referred, i.e. 31st March, which will be the final date, I should like to furnish the following explanation. My personal view is that we have already made a fair amount of progress. I feel fairly optimistic about the progress that has been made in regard to obtaining this viable contract with Japan. But at the moment we are also conducting negotiations with certain steel mills in Britain and also in Europe in regard to sending our iron ore there. Japan is particularly interested, because at the moment is importing, on a large scale, its iron ores from Australia, South America and India, and it is anxious and keen to branch out as far as its iron ore supplies and provision are concerned. Japan is keen on obtaining a fourth source of iron ore as well. Hon. members are probably aware of the fact that in recent times the steel industry in the world has gone through a difficult time. Indeed, I would say that these negotiations had come a little late in the day. If they had taken place earlier, our progress would probably have been easier than was our experience at the time. Because there was a downward trend in the world demand for steel and the planning and expansion of the steel producers throughout the world was upset as a result, these negotiations did not proceed very smoothly. But Japan has nevertheless shown a great deal of interest. It asked Iscor for a tender to supply steel on a large scale. That was given in December, 1970, and the return date—in other words, the date to which the hon. member for Parktown referred—was 31st March, 1971. That is to say, before or on that date Japan had to say whether it accepted that offer. Before that date, before 31st March, the negotiators asked for an extension of time on behalf of Japan because of the uncertain conditions which prevailed and to which I referred a moment ago. They asked for the due date to be extended to October or December of this year, and because we were aware of the problems experienced in the world and especially in Japan, Iscor felt favourably disposed to the due date being extended to October and, if necessary, perhaps to December of this year. We take the optimistic view that further progress will be made in this regard and that the necessary contracts with Japan will be obtained.

Now I should just like to refer to the British and European interests in our iron ore. The British have asked for tests to be conducted in regard to our iron ore, and subsequent to that it was agreed with steel mills in England and also in Europe that certain tests would be conducted in blast-furnaces in Germany. Some of our iron ore was sent to Germany for this purpose, and it is expected that these tests will be conducted in July or August of this year. This does not cause us any concern, because we know; that our iron ore is probably the best in the world. Our iron ore has already been tested on a large scale in Japan, and there is no doubt about the fact that we have good iron ore. As far as the merits of the various schemes are concerned. I discussed them last year, and the hon. the Minister of Transport, who is of course concerned to a large extent, also furnished on 18th March of this year a very full explanation on the merits of the various schemes that had been considered. But as the Government has now decided on the Sishen-Saldanha scheme, I should like to make the position very clear today, for it seems to me that there is some confusion in that regard as well.

In the first instance, this does not mean that if the Sishen-Saldanha scheme is carried into effect, the existing exports through Port Elizabeth, which may be extended, will be discontinued. In fact, this is one of the conditions on which the Government agreed to the Saldanha scheme, namely that Port Elizabeth, with its exports, should not be prejudiced by this scheme. In other words, the exports going through Port Elizabeth at the moment, must be continued.

There is a second consideration which I stated very clearly in the Press statement I issued. In that statement I explicitly said that others would also be able to avail themselves of the Saldanha scheme; that is to say, as soon as the Saldanha-Sishen railway line has been built, not only the exporters of mineral ore, but also the exporters of other metals will be able to avail themselves of the railway and other facilities of Saldanha. Sir, personally I doubt whether South Africa can at this stage afford two schemes for the large-scale export of iron ore or minerals, i.e. schemes of the magnitude of the one envisaged in Saldanha. In the light of all these circumstances I think that, whereas the Saldanha scheme has now been decided, upon, it goes without saying that the Saldanha scheme for the large-scale export of iron ore should be proceeded with, and that it would probably not be economically justifiable to bring about at the same time extensions to Port Elizabeth for the large-scale export of minerals.

As far as this matter is concerned, I should like to say that negotiations of this nature, in which millions of rands are involved, are protracted and difficult. It is not something which can be completed within a few days. The hon. member for Parktown gave me the impression that he thought that we should strike while the iron was hot and settle the matter now. In the first instance, these negotiations in respect of major contracts are not being conducted by the Government, but by Iscor. On the other hand, we realize that major problems are involved and that time is needed for carrying such a scheme through. Articles and statements by uninformed persons appear in various publications from time to time. I want to ask these persons to stop this and, instead, to cooperate with us in our efforts to bring this matter to finality. I hope with all my heart that the few explanations I furnished here will help to remove all the speculation that existed in respect of this matter.

In conclusion there are two more points which I should like to emphasize. I think I can say without any hesitation whatsoever that the Government is in earnest about carrying the Sishen-Saldanha scheme into effect. The Government regards it as a scheme which, if it is at all viable, must be carried out. Speaking for myself as the Minister of Economic Affairs, whose involvement in this matter is probably greater than that of any other person, I am enthusiastic about the implementation of the Sishen-Saldanha scheme. My personal view is that with such a scheme one should be prepared to take risks. I have asked myself what should come first: should one first be placed in a position to deliver the goods through a scheme such as that one, or should one obtain the contracts first and then proceed with the implementation of the scheme? I do not think that the latter alternative is feasible. We shall be obliged to take some risks in regard to a major undertaking such as this one, and I think we shall simply have to content ourselves with taking some risks. My personal view is that soon as we can get our iron ore to the harbours and load the ships—in other words, when there is certainty about the delivery of the goods—there will be no lack of the necessary contracts for making this scheme a viable one. From the nature of the case it is, however, extremely difficult to negotiate for contracts and sales when one may only be able to deliver the goods in five or six years’ time. However, from the nature of the case one cannot be reckless, but I am afraid that we shall have to take some risks.

The second point I should like to emphasize, is that we should actually aim at exporting our ores in a semi-processed or semi-refined form, be it in the form of cast iron or in the form of steel. No matter what scheme we may have in view, we must equip ourselves in such a way that the necessary provision will exist for processing our ores halfway in order that everything will not be exported in the form of raw materials, as we have been doing for so many years.

I want to conclude by telling the hon. member for Parktown and those who are interested in this matter that this is the state of affairs as fax as the negotiations are concerned, and that I still take the hopeful and optimistic view that we shall be able to conclude viable contracts when we proceed with that scheme.

Mr. Chairman, I want to return to the plight of the South African motor industry. To the extent that the Government was right in introducing phase I in 1962 during a period of slack economy it was irresponsible and seriously wrong in its implementation of phase III in January of this year. This is borne out by a comment of the Franzsen Commission, which was detailed to give serious thought to this matter, when it reported that the commission found that it could not accept that from the national viewpoint, the capital involved in phase III, that is R160 million over the six years, was being utilized in the most advantageous way. If we have regard to the original concept of dr. Norval which appears in report No. 613 of the Board of Trade which initiated the first concept of local industry content, we find that the main purpose was and still is, to increase the local content of motor vehicles progressively without affecting the country’s economy or the cost structure of the motor industry detrimentally. Just how detrimental it is we all see today from the high price of motor vehicles. Then we have dr. Kuschke, who again, speaking to an audience in Johannesburg said:

That is from a man who is a proponent of phase III, but a purely subjective one, because dr. Kuschke, as chairman of I.D.C., merely wants to push his ferroform casting industry irrespective of the cost either to the motor manufacturing industry or to the man in the street.

The hon. the Minister has been guilty of arrogance. The Government must now stop pushing around the motor industry. It must stop pushing around the car user. It must stop pushing up transport costs, and it must stop pushing up the cost of living for the man in the street. In fact, the Government is in a complete mess over its present policy for the motor industry. Too many of its spokesmen, too many of its departments are at sixes and sevens. The hon. the Minister knows very well that we can only have a viable motor industry if those manufacturers on the market can have reasonably long runs and reasonably infrequent model changes. But what do we find? The hon. the Minister enforces phase III implementation, concomitant to which is the necessity for long runs, and high capital investment. Profitability is possible only if there are long runs. But the hon. the Minister of Finance comes in February of this year and says that the consumers must be disciplined, we must cut down consumer demand. We must not buy motor cars. So what have we? This fantastically large industry is told to go ahead in one breath and to stop in the other. The result is the chaos which we have today.

The fact is that phase III of the local content programme in the motor industry can only result in excessive cost escalation forcing up car prices, transport costs and the cost of living unwarrantably. The following is a comment from paragraph 565 of the report of the Franzsen Commission. It is stated that capital is being employed wastefully through unnecessary in-plant manufacture of items such as bodies, axles, gears etc. and through costly tooling for uneconomic runs. I put one plea and that is for the public of South Africa. Because it we must have long model runs, then we cannot take advantage of the tremendous technological advances which are taking place in the motor industry in Britain, America and on the Continent. Let us not rob the public of the tremendous technological advances which are taking place in the motor world today. Let us rather insist more on the quality and finish of South African manufactured cars delivered to the car buyer with special reference to safety of design and technical efficiency.

I put forward what may be a novel concept. With the assistance of the Bureau of Standards and the C.S.I.R., would it not be possible to introduce the concept of a vehicle star rating similar to the existing hotel star rating, whereby the car purchaser could be reasonably protected against shoddy finish and mechanical defects in new cars? Then we could have tough supervisory regulations which could be policed by the South African Bureau of Standards. Then I want to put forward another concept which may appeal to our pollution-minded Minister. Would it not be possible, and could we not well give thought to the introduction of a surcharge on the price of each new vehicle at the time of purchase of R5 or R10? This could provide for the automatic removal of any abandoned or derelict vehicle. Thereby we could introduce a very necessary protection against the disfigurement of our countryside by the many motor graveyards and individual vehicles which litter our landscape to present.

The Franzsen Commission has recommended that there should be a drastic reduction in the number of models. It has introduced the concept of a popular utility family car or a car we could call a box on wheels, in other words, an absolute austerity car. They suggested that each manufacturer should be allowed to produce only one such car for local manufacturers. I submit that in this the commission has erred grievously and that it has taken no account of the fact that in 1962 the Government, the motor industry and the Board of Trade and Industry rejected this concept of a limited number of models in favour of the market mechanism influencing decisions on how many models should be produced at any time or by any one plant. I put forward a plea that we should allow the motor industry in this country to be guided only by the free market mechanism. The choice of the consumer and the decision of the manufacturer should dictate the number of models which should be available to the public. If this is not done, many quality vehicles may vanish from the scene. Vehicles with an annual production of 4 000 units may in that case vanish from the scene and these could include some of the highest quality cars. I do not want to mention trade names, but many users would then be without the vehicle of their choice. I would like to ask the hon. the Minister to reject the concept of a popular car which is tantamount to the licensing of the industry and which is anathema both to the public and to the motor manufacturers.

Then I would like to ask the hon. the Minister to halt phase III, in other words, to accept the recommendation of the Franzsen Commission in that regard. He should revert to the 52 per cent concept arrived at by 1970 and he should allow a five year moratorium which would allow all parties interested to reassess the enormity of the problems involved in bringing the total component content from 52 per cent up to 66 per cent, largely through 201C;in-plant201D; manufacture. I ask the hon. Minister to reject any in-plant manufacture which involves an uneconomic waste of capital and which is high cost inducing.

Finally I would ask that these recommendations which I have put forward today be given serious consideration. It is the public which is not represented in talks concerning the motor industry. The motor industry is, the Government departments are, Dr. Kuschke, the Chairman of the I.D.C. is, but the ordinary consumer has no say whatsoever. He is seeing the cost of living going up exorbitantly through no fault of his own. We must realize that in this country the motor industry provides a basic necessity for the man in the street.

In Conclusion I would like to refer briefly to the impact of increasing light commercial vehicle sales on the profitability of the motor manufacturing industry as a whole. The hon. the Minister’s department has not been able to supply up to date figures, but I would submit, and the Minister may correct me, that between 75 000 and 95 000 commercial vehicles were sold last year of which some 65 000 were light commercial vehicles. How many of these vehicles were imported on their wheels or CKD, free of import duty, free of sales tax and free of H.P. restrictions, I do not know and the hon. the Minister does not know either. I do understand that this trend is having a tremendous impact as these light commercial vehicles are so cheap in relation to the vehicles manufactured by the motor car industry, with the result that this industry does not stand a chance; hence the short time the industry is working today.

The hon. member for Cape Town Gardens devoted two speeches to the motor industry. He elaborated on that topic at very great length, but I think I am correct when I say that he did not succeed in really diagnosing the state of the disease as it should be seen. What he did in fact do, and there can be no doubt about this, is that he uttered a whole series of sweeping statements.

Oh, no!

That hon. member was not here when the hon. member for Cape Town Gardens made his first speech. The first sweeping statement made by the hon. member I want to deal with is his allegation at the beginning of his first speech that as a result of the tremendously difficult position in which this industry now finds itself, there is going to be great unemployment. He also referred to other crisis situations which are now going to arise as a result in the decline in the sales of motor vehicles. In the same breath the hon. member advocates, however, that phase III should be postponed, and if I understood him correctly, what he actually wanted to sec was phase Ill being abandoned completely.

Of course, yes.

Phase III is in fact calculated to create greater opportunities of employment.

Nonsense!

Let us see what Dr. Kuschke said. He said that phase I would require a further investment of R80 million.

But the Minister said RI60 million.

So much the better. The greater the investment the greater the number of opportunities for employment that are going to be created must also be. The hon. member’s allegations were merely intended to chase up a hare, but there were really no hares. On the other hand it is also true that although there are problems, and I shall indicate in a moment why those problems have arisen, and there has been a decrease in the number of motor vehicles sold, it is nonsensical to think now that there is going to be a total cessation of sales and that no more motor cars are going to be sold. No one will deny that there are problems. It is also true that the motor industry is a very important enterprise in this country. When one considers what Dr. Kuschke said, one sees that 14 per cent of the total industrial investment in this country is represented by the motor industry. As the hon. member said, the motor industry provides 113 000 people with work, of which 43 000 are in the manufacturing sector. It is also true that the investment in motor component plants increased from R20 million in 1964 to R150 million. The total investment in the 14 assembly plants amounts to R180 million. It is therefore true that it is a very important industry, but we may not lose sight of the fact that there is another side to the picture as well. What is disturbing is the fact that the annual sales since 1954 have increased more or less sixfold. In 1970 alone the total number of vehicles sold was 202 000. Almost R1 500 million was spent in 1970 on the purchase of new and second-hand motor cars, spares and repair services. This is alarming in the sense that it was one of the greatest contributory factors to the tremendous inflation we are faced with today. I do have a little contact with the motor industry. The standpoint of those people has been throughout that they do not mind about these measures having been taken by the Minister. All that they say, is that the Minister could have done it sooner, because then they could have recovered sooner from the shock. The public has in fact become accustomed now to continually purchasing new motor cars in this luxurious way.

I want to mention another disturbing fact. Something drastic will have to be done to reduce the number of models on the market. There can be no doubt about that. There are far too many models. I want to advocate at once that the hon. the Minister should give consideration to taking other steps besides those which have already been taken in order to rectify this matter. I think that if the number of models were to be restricted, the increase in the number of vehicles sold would also be restricted.

But it is not enough to discuss the problems being experienced by the industry. One should also discuss the problems the public are experiencing with the industry. These problems are very seldom raised. I want to say immediately that I realize that in the retail trade the profit margin on vehicles is very limited. I understand it is only 16½ per cent, from which certain deductions still have to be made. However, if we look at the profits made by the retail trade in motor vehicles, one is astonished at the extent of those profits. Listening to the jeremiads one cannot but ask oneself whether it is possible to make so much profit. I want to allege this afternoon that it is only possible to make those profits by means of what I want to call the shameless exploitation which occurs in the workshops in this country. I want to say at once—let there be no doubt about this—that it is not the employee who is responsible for that. It is the employer, the man who eventually pockets that money. Do you know what happened recently here in the Cape? To quote only one example, in a particular case the wheel alignment on a motor car had to be adjusted. What happened? After the work had been completed, there were two figures on that work card which I want to quote this afternoon. It said there that the time allowed for that work was 3½ hours. The time taken, which had been entered there, was 1½ hours. I do not want to discuss that now—it was far less. But when it came to paying, those 3¼ hours’ work had to be paid for. I say it is a disgrace that the public of South Africa should be exploited in this way. I want to advocate very seriously to the hon. the Minister this afternoon that steps should be taken by his Department to put an immediate stop to this kind of exploitation of the public, which contributes to the soaring cost of living in the country. I think we owe it to the public of South Africa. I want to say again that I do not blame the worker—I blame the employer because he is the man who, after all, exercises control over that work and who pockets those profits.

Mr. Chairman, I want to plead with the hon. the Minister that he should take the House and country into his confidence about the attitude of the Government to the phase III programme for the motor industry, the programme to raise the local content of cars even further. This matter was first raised during this Session by the Leader of the Opposition during the no-confidence debate. I raised it during the Budget Debate. It has also been raised today. But we are still awaiting an answer. I do not think that the hon. the Minister will ask us to accept the contribution of the hon. member for Springs, who did his best in the circumstances, as an answer to our arguments. I think the hon. the Minister should seriously consider whether it is wise and advisable that for reasons of prestige only—and those are the only reasons we can find adduced for this policy—we should continue with the phase III programme at a time when there is inflation, at a time when the Government is deliberately trying to reduce consumption and is forcing the sellers of motor cars to accept a reduced turnover. That is a simple question that we should like to put to the hon. the Minister. We can find no merit for it in the present circumstances, however much our patriotism and desire to achieve things in South Africa may counsel us to accept phase III. We can find no advantages in the present circumstances in this policy. We can only see that it must increase inflation because at a time when other factors as well are inducing inflation the Government comes with a deliberate policy to have motor cars constructed up to almost 70 per cent by using components which have to be produced in short uneconomic runs in South Africa where the sales of motor cars must necessarily be small.

I will show the House the effect of this. I have given the House certain information before, but I now have later figures. I again would like to remind the hon. the Minister of the tremendous difference in price between motor cars in South Africa under the phase II programme and the price users pay in the countries of origin. I have here a few examples in various price classes. I repeat that the price of those cars manufactured in Germany does not include the German purchase tax which is about 11 per cent. It does not, however, alter the tremendous differences. For the two-door Opel Kadet sedan the German retail price is R1 114. If that car is landed in South Africa—and this is a just comparison and the cost of shipping, insurance and South African taxes are added, we find that it could sell in South Africa for R1 364. We pay for the South African model R1 652 The Ford 20M sedan, a medium priced car, landed from Germany and subject to our taxes, etc., would cost R1 960. We, however, pay in South Africa R3 009. There is an increase from R1 960 to R3 009, or of more than R1 000. Let us take the little Volkswagen 1300. This car can be landed in South Africa and sold here including the necessary costs, for R1 284. But if you buy the South African made model without phase III, the price is R1 598. The Audi Super 90 if imported and sold in South Africa will cost R1 861. We, however, pay for the South African assembled model R2 880. A car in the luxury class, namely the Mercedes, imported from Germany, would be sold for R4 140. The South African consumer, however, pays R6 055 for that car. That is the present position. It is a high price to pay for the achievements under phase II. But South Africa is willing to pay that; we are facing an accomplished fact. It does give us satisfaction that so much of motor cars can already be manufactured in South Africa. But phase III, which will now put up these prices further and which will deprive South Africa of important developments in the motor car industry, does not make sense.

If the Government can succeed with its policies to restrain and eliminate inflation and inflationary pressures, a new situation would arise and we could talk again, but to continue with it now does not make sense,

Before I go further, I have here also the price of the Volkswagen 1300 in Germany, with sales tax. In Germany it costs R1 147, with sales tax, and in South Africa it costs R1 750. There is R600 difference on a small car like that, and in view of that a further increase in price for the sake of prestige only cannot be justified. Sir, what advantages can we get? We are told that the plan is not of strategic importance, and indeed it is not. It is not of strategic importance at all because passenger vehicles are the vehicles least used in times of emergency and in times of war. If you had strategic considerations, you would concentrate on trucks and chassis which can be used for armoured cars, tanks and things like that. You would concentrate more on commercial vehicles which could transport armaments, and passenger cars would be restricted. But the commercial vehicles and the other things are excluded from phase III.

It does not make sense. This will not mean that prices will come down. It is not of strategic importance. It will not save currency, because with our limited resources, if we want to have any sort of motor car which complies with modern requirements, frequent and vast investments of capital will have to be made and the machinery and the capital goods required to make these cars will have to be imported. So what are the advantages? But look at the disadvantages.

One of the most important disadvantages is to increase inflation. The other is that it will limit the number of models. By some strange quirk of thinking which I cannot explain, there are some so-called experts who advise a limitation of models in South Africa, but what will the result be? Here I have in this afternoon’s newspaper a speech by the chairman of the Schus Motor Organization at his annual general meeting, in which he says—

It is very nice for them, Sir—

What does this mean? Because as the result of Government initiative and Government compulsion, the number of models will be restricted, prices will be increased, and components will be more expensive because of the short runs. The Government is going to be under pressure from the remaining car manufacturers to exploit the public even more than is the case today because the Government cannot deny responsibility for the fact that we have fewer and more expensive motor cars. That is what we are getting.

And, more important, the South African public will be denied the full benefit of modern developments in the technique of manufacturing modern motor cars. Already I have this example, that a Volkswagen 1600 in South Africa is a motor car inferior to the one made in Germany. The Volkswagen 1600 has a completely changed body and a technically far more advanced and considerably more expensive front and rear suspension. It is a safer car; it is a better motor car, but we do not get those benefits because of the phase III programme. They cannot afford the new tooling and the new machinery to give us these immediate benefits. But, including taxes, the superior model sells in Germany for R.1 233 and the inferior model sells in South Africa for almost R2 000. That is what we are being landed in.

We are on the eve of tremendous developments in the manufacture of motor cars. Anti-pollution measures are going to change the whole concept of the internal combustion engine. Already we know about the Wankel rotary engine, which may revolutionize the motor car industry. What we are doing now in terms of phase III may have to be redone in a year or two. The whole investment may have to be made over again. It is therefore not only the question of an inflationary period which counsels against the continuation of this scheme; the possibility of major developments in the engineering technique of motor manufacture tell us that the Government would be stupid to go on with this. Therefore, hoping against hope that for once the Government will not be stupid, I beg them to delay this plan until we have conquered inflation and until we know more clearly what the future developments will be in the manufacture of motor cars.

Sir, I do not want to talk about Volkswagens; I should like to return to the general economy of this country. In this connection I want to refer to a statement made in a survey by Union Acceptances Limited (UAL) in which they say that the signs for our economy, generally speaking, are now favourable (translation)—

Sir, we are grateful for this, but we are also grateful for the fact that over these past 10 years this country has, under the care and management of the National Party, risen to heights it had never known before. We need only in passing refer to reports such as that of Mr. S. R. Back, president of the Federated Chamber of Industries, who states—

Then there is the statement by Mr. W. B. Hotels, general manager of the S.A. Foreign Trade Organization—

Then there is a statement by Dr. Frans Cronjé. He was a United Party man in his day; I am aware of that, but even be could not endure staying in that United Party and that is why he moved in another direction. His statement reads—

It is clear therefore that during these 10 years of the Republic our economy has progressed in this wonderful way.

I know that we are now facing bottlenecks. The hon. the Minister posed the question of what we should now do. I am aware of the fact that the entry of Britain to the European Common Market is going to constitute great problems for us; we are aware of the fact that it will result in bottlenecks for us. Precisely for that reason I think it is our task—and the hon. the Minister asked us to turn our thoughts in this direction—to establish what course we should follow in the absence of those benefits which we will have to forfeit in the process. I think that in this connection our country should think of a broader economic community. In fact, there are very clear indications that our economy and our economic boundaries already extend much further than our political borders; we are thinking of the trade it is already possible for us to conduct with satellite and other states around and with us here. We realize that the entry of Britain to the European Common Market is merely a materialistic move, that it is not a sentimental move. That is why it is also our duty and task to find new clients for ourselves, to open up the prospects of new resources for ourselves.

It is correct, as the hon. the Minister said, that this European Common Market idea is primarily economic; that is so, but secondarily, it also constitutes a politico-economic idea in the more general sense. That is why I think that we in South Africa, with this brilliant economy of ours, must also think and give substance to the idea of the establishment of a South African Common Market here at the southernmost point of Africa. Sir, on that score I agree with Minister M. C. Botha who was quoted in the Argus, when he spoke along these lines, as saying—

I want to suggest that we in South Africa, in this sphere, already have at our disposal a common basis in relationship to our neighbouring states. When I speak of neighbouring states, I am thinking in particular of our immediate neighbouring states, such as Swaziland, Lesotho, Botswana and others. When I speak of a common basis, I am referring to the Customs Union Agreement which was concluded in December, 1969, which is also know in common parlance as the “toll agreement”. This agreement provides in very specific terms for quite a number of matters of common importance in the sphere of the economy between these areas and the Republic. Inter alia it is clearly accepted in this agreement that there will be no inter-State restrictions in regard to local products which are cultivated, produced or manufactured in the common area.

This ensures that we have an unlimited flow of our goods which are produced in this country to these areas, because there are no real customs borders. This will, and this must stimulate our industries. 1 think that we can extend this idea on a much wider basis than it is on at present. I am saying this particularly in regard to Swaziland where there is a tremendous amount of White capital, and also because Whites in that area already have rights of ownership. I think that it is a completely natural deduction that the economy of the area of Swaziland, for example, can be totally integrated as being dependent on an interstate basis with the economy of the Republic of South Africa.

We recall that recently the hon. the Minister of Forestry told us that we were heading for a tremendous shortage of timber, and we are aware of this. We are thinking of the potential resources which exist in Swaziland which we could incorporate with our marketing of timber, and of the great benefits this could bring us. with a view to the shortage which is going to arise, we could spare our own supplies in this way. I have read in financial journals that there is already talk of a possible power link, with Swaziland. There is talk of a possible rail link with Swaziland. I want to support this idea. I think it is a sound idea because it can be comfortably implemented. In this way we already have good and convenient tarred roads, etc., and in my opinion, if we think in this direction, i.e. the supply of electricity and of rail facilities, will probably constitute great benefits not only for that area but also for us as the principal partner in this constellation.

I now want to conclude. It is necessary, when one has interests in common, to have common protection. Inter-dependent economic ties create in their turn sound relationships. These countries adjoining and near us will not for many years be self-supporting, and this could lead to something very interesting and of major significance in the interests of the Republic of South Africa,

Mr. Chairman, the hon. member for Ermelo made a number of interesting remarks concerning a South African common market. In general that proposal has considerable merit in my opinion. It is a matter which may well be discussed further to great advantage, if not in this debate, then, indeed, on national level.

I have two matters I should like to bring to the attention of the hon. the Minister. The first will probably come as no surprise to him, because it concerns television and the task entrusted to him and his department. As he will recall, he was asked on 29th April to nominate members of the Departments of Commerce and Industry to serve on the technical advisory committee. This committee is going to be a kind of management committee for matters concerning television. I want to know whether he has done this, and who those persons are.

†One of the more important tasks of this committee will be to safeguard the public against exploitation through the manufacture of obsolete television sets. In this connection the Cabinet, according to the Minister of National Education, gave the hon. the Minister a directive on the 27th April that he should promote, in cooperation with other interested parties, the establishment of a local industry for the manufacture of television receiving sets. I do not necessarily agree with that directive. As a matter of fact, I find some ominous overtones in it. The hon. the Minister must have applied his mind in the meantime, during the past month or so, to this important directive which he has received, and I should like to know what steps he contemplates along these lines. We would have no objection if he were to lay down certain standards of safety and specifications for the manufacture of such sets, but he has now been given the task, with interested parties, of establishing what is almost a television set manufacturing system in this country. One would like to know how far he intends going, because we on this side believe in the free enterprise system. We would not like to countenance anything which would interfere with that system, a system which has been working well in the past. I am thinking, for instance, of some arrangement which might give to the Industrial Development Corporation or an allied body almost monopolistic power in the manufacture of television sets. The hon. the Minister must have applied his mind to this matter, and I hope that we shall have a reply from him in this regard. It is almost a Gilbertian situation, and it is almost ludicrous to think that this Government, which attacked television at one time as one of the greatest evils and menaces of the modern civilization, is now to go into the manufacture of these little evil black boxes. It is almost the same as a church going into the business of drug peddling. All the same, Sir, the hon. the Minister has a task, and I do not want him to do nothing. He has the task of helping to make the introduction of television easier by laying down certain necessary specifications and by opening the way for free enterprise in the manufacture of these television sets.

Another subject I wish to raise with the hon. the Minister is the whole system of subsidies paid to local film manufacturing companies, and the conditions under which these subsidies are granted. I agree with some of these conditions, which are excellent. For example, the first condition is that the company must be a South African one, for the purposes of income tax payments and so forth. Secondly, some 75 per cent of the wages paid by such a film company, apart from certain high wages which might be paid to an imported star or producer, must go to South African subjects. What I do find strange, however, is the way in which these subsidies are calculated at present. The subsidy is not based on the cost of the film, on the wages paid or anything of that nature. The subsidy is based on the gross receipts at the box office, and that is what I find strange and in certain respects, almost indefensible. A condition has been laid down that no subsidy is to be paid to a film company if the box office receipts of the film it has made do not reach R50 000. This means that if a film grosses R49 000 at the box office, the company receives no subsidy. On the other hand, if the film raises R51 000 at the box office, the company can receive a subsidy of R27 000. Once a film gains gross box office receipts of R50 000, the film company receives a subsidy of 44 per cent of the total box office receipts, including that R50 000, if the film is in English and 55 per cent of the box office receipts if it is in Afrikaans. Then, for some inexplicable reason which I should like the hon. the Minister to explain, it receives, in the case of an English film, 56 per cent of the box office receipts in the Cape Province and 70 per cent of the box office receipts if the film is in Afrikaans. Why is there the difference between the box office receipts, as a basis for the calculation of subsidies, in the Cape Province and that in the other three provinces?

I will now show hon. members how strange this subsidy is. If the costs of the manufacture and distribution of an Afrikaans film plus the wages were R60 000 and the box office receipts were R250 000, that film costing R60 000, is subsidized to the amount of R137 000. That is apart from the box office receipts of R250 000. In other words, the film costing R60 000, gets a total income including the subsidy, of close on R400 000. Of that amount, R137 000 is being paid by the taxpayer from money that we vote in Parliament. There is something wrong with this system. I think it should be revised. I am afraid that this system, at the moment, is encouraging the making of cheap, popular and low grade films. I admit that we have made some excellent films. But this type of subsidy is encouraging the making of unsatisfactory films. It can also lead to large interests which control production, theatres, cinemas and other distribution points breaking a producer by refusing to show a film or limiting its distribution in order to gain these huge and strangely calculated subsidies for their own products.

There has been another development in regard to the film and distribution industry in this country which I should like the hon. the Minister to go into. I do not want to mention any names, but a company has been formed in South Africa which is an associate of a huge American film distributing organization. This huge organization and its affiliate have been buying South African films for distribution on foreign markets and, as a quid pro quo, they obtain the right to distribute those films locally, In other words, this big American combine now has the right to distribute these films locally in return for the right of distributing them abroad. It means that this big company is getting much of these very large subsidies which are being paid in respect of those films, because these subsidies are paid on the gross box office receipts. Those moneys go to the distributor and not to the person who made the film and sold it to this distributing company.

I mention these matters because I feel they do need investigation. Basically I do think it is essential that the whole basis on which the subsidies are calculated should be investigated. There should be an immediate revision of them. It is strange that a subsidy is paid on an article without taking into account what it cost to produce that article. It is based on an entirely different factor, namely the gross box office receipts. The greater the gross box office receipts are, the bigger the subsidy. The less need there actually is for a film manufacturer to be assisted, the greater is the help that we as taxpayers give him. I believe in the encouragement of the South African film industry. We supported that. We still support it. If there have to be subsidies, I agree that there should be. But let us please consider the way in which the subsidies are calculated and let us see whether a more logical and more economical way cannot be found in which these subsidies can be calculated than basing them simply on gross box office receipts as at the moment.

Mr. Chairman, I am really not equipped to follow up on what the hon. member for Orange Grove said. My knowledge of films is limited to the few films one goes to see. I must agree with him that there is little that satisfies one in the films one sees.

However, the subject I want to touch upon is one that has repeatedly been raised by the hon. member for Simonstown. The hon. member for Simonstown and I have got to know each other well over a number of years because we have opposed each other in elections. Because I would willingly lose to a man I respect, I should very much like to accept the fact that the hon. member made his remarks in this House with the object of promoting this industry, and that the hon. member intended to make a contribution here in the interests of the nation and to find a solution to the problems we are faced with in this fishing industry. I must concede that this afternoon the hon. member conducted himself with greater responsibility in this House than he has done previously. But if I look at the way in which he tackles his crusade, it appears to me that his motive is not always in the interests of the nation, in other words his motive is not always the promotion of our fishing industry. It seems to me as if his motive is rather to get in a few jabs and to unburden himself of a bit of gossip about fishing. The hon. member must forgive me, but that is the impression I gained from his first three speeches about this subject in this House. This afternoon the hon. member challenged the Minister to mention a few misrepresentations to him. I want to tell the hon. member that in the process of delivering his speeches, and in the remarks he made here, he was guilty of quite a few half-truths and untruths. I hope I shall have enough time to get around to them and point them out. I think that this conduct on his part was solely intended to offend leaders of the National Party, leaders on this side and a previous Minister, and to try to place them in a bad light. However, one thing upsets me, and that is that his colleagues in the United Party allow him to continue in this vein without contradiction. In precisely the same way the hon. member for Port Natal was allowed to make a lot of offensive remarks last week. He was, to tell the truth, encouraged by his gallery behind him. Such conduct is apparently regarded as being heroic by the United Party. I should like to know how the United Party feels about such offensive conduct in this House. Where does the hon. the Leader of the Opposition stand in this matter? He did not reply to the hon. the Minister of Community Development's challenge last week, and this causes me to wonder where he stands in respect of this particular matter. We should like to hear about it, because we want to know what the United Party’s attitude is in respect of remarks that are solely meant to be offensive and are solely meant to be gossip.

But let us go on. The hon. member for Simonstown has apparently set himself the task of getting at ex-Minister Jan Haak in his penultimate speech. He succeeded to such an extent with his remarks that he gained a broad, front page heading in the Cape Times of 15th April, 1971. It reads: “Diedericks, Haak accused by Wiley.” I must say that he gained good newspaper headlines. However, we must now look at this complaint he had against my predecessor in the Bellville constituency. What is his complaint based on? In passing he simply mentions, inter alia, and this is one of the untruths he uttered …

Is the hon. member reading from the report of the debate?

No, but I could quote from the debate, because I have the report here. In passing he simply mentions, inter alia, that Mr. A. J. Marais is Mr. Jan Haak’s partner in a firm of attorneys. This is devoid of all truth. The hon. member could easily have ascertained the facts, because he could have asked me. After all, I sit here with the hon. member and he and I know each other. Mr. Marais is my partner and not Mr. Haak’s. Mr. Haak left that firm as far back as 1958. Since 1958 Mr. Haak has had nothing to do with that firm. Now the hon. member comes along and blatantly creates the impression in newspapers and in his Hansard that this is still a fact today. It is, admittedly, not a very essential fact, but I nevertheless want to say that by these misrepresentations and distortions of the truth, the hon. member creates an impression that could well have been avoided. After all, he could have ascertained the facts from me. In column 4376 of Hansard of 14th April of this year, he accuses Mr. Haak of the alleged over-exploitation of our fishing waters. The best evidence he can cite in support of that statement is the simple fact that Mr. Haak was the Deputy Minister of Economic Affairs during the years 1961 to 1964. That is the only evidence he can cite to this effect.

I now want to say at the very outset that except for a small quota of 10 000 units of crawfish that was granted to live crawfish exporters in the 1969-’70 season, Mr. Haak never allocated any crawfish quota during his term of office. The hon. member has to concede this, and I think he will. However, he is trying to create the impression that it is Mr. Haak who allowed the over-exploitation as far as fishing is concerned. I also want to say that the fish meal concessions that were granted to Paternoster, Suid-Oranje and National Fisheries…

No, Orange River Fisheries.

Yes. These concessions were granted at a time when Mr. Haak was the Minister of Planning and had nothing to do with Economic Affairs. However, the hon. member is trying to create such misrepresentations. In fact, during his years of service as Minister of Economic Affairs, from 1967 to 1970, Mr. Haak did, in fact, take cognizance of the representations that were forthcoming during 1965-’66 for a proper investigation. In 1966-'67 the basic work was done in connection with the consolidation of the fishing industry, in respect of both South-West Africa and the Republic of South Africa. On 16th August, 1967, during his term of office, the commission of inquiry into the fishing industry was appointed and the first report was available by the second half of 1969. Immediately the very first report was received, the quotas were changed. The quotas, which were always granted on an annual basis, were changed and the balance of the quotas which had not yet been used at that stage, was cancelled and a new quota was then allocated for the 1969-'70 catching season, as it still applies today for a catching season. As the hon. member himself admitted, that quota was reduced to 280 000 units in the light of the report of the commission of inquiry. While the quota was previously 345 000 units, it is now 280 000 units. In the 1970-'71 season, that quota, as the hon. member knows, was reduced to 175 000 units. This was done in the light of the information that became available as a result of the commission’s investigation. What is more, the local market, which was previously estimated at 50 000 units, was included in the new quota from 1969. A further restriction on the catching of crawfish. In the meantime the export quotas to Africa were revised to such an extent that the 5 000 units of 1969 were reduced to 400 units.

I regard this as the responsible conduct of a Government and of a Minister. What did they do? They appointed a commission of inquiry and acted in terms of the recommendations of that commission. In terms of the recommendations of that commission there was a reduction in the quotas. [Time expired.]

Mr. Chairman, I do not intend to reply to what the hon. member for Bellville has said, because I am sure that the hon. member for Simonstown will deal with his speech at a later stage. I want to draw the attention of the hon. the Minister to border industries and to inquire from him what is his policy in regard to border industries, What criterion does he apply when he decides that an industry must go to the border? The industrialists are very concerned about the border industry policy, particularly old established industries. Many industries have established themselves over the years, some over 50 years. Over the years they have trained their staff in highly skilled techniques. They have a certain measure of non-European Labour although not a very high ratio. They get concerned when they contemplate any expansion plans, especially in regard to additional machinery or alterations to buildings. When they contemplate these operations they come up against the department's lengthy questionnaire asking them their number of employees, what they export, what their potential is, how many Coloured employees, how many Indian, how many European and how many Bantu employees they have. A long time usually elapses before they get a decision, and if they do get a decision it is generally made quite clear to them that they may be destined to go to the border eventually. It is a very serious matter if an industry has to dig up its roots and go to a border area, particularly an industry which has been established in one of our cities for many years, because not only do they have to transfer their capital and their capital assets out to the border areas, but they may have to realize assets and replace them at enhanced cost. For example, a factory which was established 40 or 50 years ago has its assets, buildings and land at a very nominal value in its books, but when they have to consider transferring those assets out to the country and realize their assets in the city, it is a matter of quite considerable moment to them. They are concerned with the cost of transferring their capital assets and transferring their employees and in many cases the employees refuse to go. A highly skilled technician, if he realizes that he has to go to a border area, must think of his family; he has to dispose of his house and endeavour to get a house in the border area, and he must arrange new facilities for his children. In some cases it involves taking the children away from school and sending them to a boarding school, all because of the fact that the factory concerned moves out to the country. On the border of my own area we have the border area of Hammarsdale, which has virtually been closed to further development. There are a limited number of industries there, but not 20 miles from Hammarsdale there is Pinetown, with over 170 factories, but Pinetown is not a border area. Although Pinetown on both flanks has large Native Reserves, it is not regarded as a border area. The City of Durban, which has two large Reserves on its border, is not regarded as a border area either, but Pietermaritzburg, which is some 40 miles from Pinetown, is regarded as a border area. So when an industry in Pinetown or one in Durban contemplates development and increasing its size, they are faced with a departmental query which in many instances gives small industries the jitters and they have to decide what they will do next. Building up an industry is a lifetime’s work. We have seen the clothing industry, which was mainly White, become virtually Black today. And what concerns industry is the fact that lower standards are applied in the border areas. Lower wage rates are paid, and in consequence an industrialist is faced with the problem of deciding whether to remain where he is and take the chance that he will be able to live through the difficult days ahead, or to uproot his factory, go to the border areas and face the consequences of losing many of his best friends.

There has been more than one case in this country where the best men have chosen not to go out to the country, and I know of more than one case where they have left this country and gone overseas. Sir, we cannot afford to lose technical people; we cannot afford to lose artisans, and it is essential that the country gets some indication from the Minister of what the policy is with regard to forcing industry, not encouraging it, to the border areas. I can understand the Minister’s desire to get industries established in the border areas in those cases where new industries are to be established; I can understand it where it is done by mutual agreement, where it is considered advisable to move an industry away from a big city out to the country. But we had the case in Durban of a very large industry, the Dunlop Company, which has been manufacturing tyres in Natal for many years, where pressures were brought to bear on the company. It was indicated to them that their ratio of Bantu labour to White labour was such that if they contemplated any further extension it would be advisable for them to go to the Ladysmith area. They complied; they decided to divide their manufacturing and to move certain of their key men to Ladysmith and to keep the rest of the labour in Durban. But, Sir, that involved many hours of negotiation with the essential workers, workers who had acquired specialized techniques over the years. One gets the impression that the department regards workers in factories as labour units. They do not realize that it is essential, if industry is going to march forward in this country, to have a long period of training and the building of pride in the industry concerned, so that the worker in the factory will encourage his son to come and work in the factory. Many of the best industries in Europe have thrived because they have been there for many, many years, and there has been local pride in the industry. Today there is the tendency to break down that local pride because of the Government’s colour policy to force industry to go to the borders of the Reserves. One fails to understand how the Government comes to define a border area and a non-border area, particularly where, as in the case I have illustrated, we have towns which are flanked by border areas and these areas are no different from the reserves in the rural areas. There is no difference between a Bantu Reserve on the borders of Durban and a Bantu Reserve on the borders of Maritzburg; yet as far as tariff concessions are concerned, the Durban area is not regarded as a border area, whereas Maritzburg is regarded as a border area, and industrialists in Pietermaritzburg get all the benefits of low and special tariff rates. I suggest that it is high time the hon. the Minister made it clear to all concerned what criteria he follows in determining whether an industry is regarded as a border area industry or whether it is regarded as a non-border area industry, because we are having two standards in industry, border standards and a city standard. We have two standards with regard to labour and two standards with regard to factory organization. They are much slacker in the border areas than they are in the towns as far as factory requirements are concerned. We are having different wage standards. There is a lower wage standard in the border area, and if this continues over a period of years, the industries in the cities will eventually be killed. You will have a lower standard in the border areas, and at the same time the industries in the border areas will be at the mercy of the Bantu across the borders, who will be able to hold them up to ransom with regard to wages when they find that they are in a position to do so.

Mr. Chairman, the hon. member for Pinetown will pardon me if I do not follow up on what he said. You criticized the “kitchen”, but honestly, we cannot hear the hon. member speaking here. I therefore cannot follow up on what he said, and he will simply have to pardon me. I also want to say that the question of the fishing shares has been dealt with so thoroughly now and that the reply has been so adequate, that we on this side should now very much like to hear the reply promised us three days ago to the question of the shares of Ministers in public companies. I think we should like to hear what the reply of the Opposition side is going to be.

I should like to broach a matter today which gives me cause for much concern as representative of the wine industry and the wine farmers. It is the danger of a monopolistic trend in the liquor trade, which has clearly emerged during the last few years in particular. We are aware of the fact that there is a law which can control and prevent this phenomenon in the business life, but I do nevertheless want to try to show you that in the liquor trade a trend has developed during the last few years which is causing the wine farmer, the co-operative seller and the K.W.V. a certain measure of concern. It is true that as a result of the conditions prevailing in the liquor trade today, the lot of the wine farmer and the consumer of the product of the vine could fall into the hands of one or two major commercial groups. I read here in the 52nd annual report of the K.W.V. that the chairman of the K.W.V. has already expressed his concern about the fact, not only that the producer and the consumer may be harmed by this monopolistic situation, but that it has already been said that even the hoteliers are concerned about the possibility that they may become the victims of a cartel of wholesalers, and that this makes the question of price determination and price and other arrangements in the wholesale trade of real importance to the producer as well as to the consumer. I know that Act No. 61 of 1956, as I interpret and understand it, already places a prohibition on the acquisition of liquor licences by producers and manufacturers. The purpose of this Act was of course to impede the expansion of the so-called “tied house system”. I think that the legislature did this at the time to prevent this tied house system from developing further. But this absolute prohibition of 1956 was amended slightly in 1957 and 1965. After these statutory amendments a producer or manufacturer may in fact, with the consent of the Minister, obtain a licence now. After these statutory amendments a major change occurred in that very important take-overs in the liquor trade occurred. These take-overs were such that the Board of Trade and Industries expressed its concern, in its report No. 456M of 26th September, 1958, at the monopolistic conditions in the liquor trade.

Since 1965 we have experienced a process of take-overs and group formation in the liquor trade, which resulted in the formation of particularly strong and influential groups in the liquor trade. These groups have and control a large number of outlets. With this group formation something else occurred which gives rise to concern, i.e. the disappearance from the scene of quite a number of other wholesalers. Fundamentally there are only two strong predominant commercial groups left in the liquor trade today. The one has a predominant interest in distilling wine and the other in good wine. I say therefore that the possibility for monopolistic practices in the liquor trade are unlimited. This is a fundamental problem as far as we are concerned. May I refer again to the report of the Board of Trade and Industries. I am quoting from paragraph 78 as follows—

The hon. the Minister of Justice said something last week which did the hearts of our wine farmers good, i.e. he praised the good qualities of our natural wines and asked the northern provinces to make greater use of them. In addition to that, the hon. the Minister of Justice also said—I think I am quoting him correctly—that he thought the consumer prices of our natural wines were too high. I have already said that the hotel industry is worried about the possibility of its becoming the victim of a cartel of wholesalers, and that the question of price determinations as well as price and other arrangements in the wholesale trade is of real importance to us. This creates problems for us. The problem is such and so great that the chairman of the K.W.V., who is in fact the spokesman of our wine farmers in the Western Cape, posed a few questions. I should like to deal with three of these questions. On the occasion of his address to the K.W.V. annual meeting he asked (translation)—

His second question was (translation)—

The third question he asked was (translation)—

I think that those are very important questions which we as wine producers, and which the consumers are asking. In the past, for example, there were always various buyers who bought their wine from the wine cellars. Now there is the additional danger that the situation may arise here that the co-operative wine cellars will always have to try to remain in the good graces of one single major buyer of good wine. If they cannot succeed in doing so, they will have no alternative but to sell their produce to the K.W.V. as distilling wine at a reduced price. [Time expired.]

Mr. Chairman, I do not intend following the hon. member for Worcester. I feel pretty certain that the hon. the Minister is quite competent to reply to him. In any event, he probably has more experience of the wine industry than I have.

I see that the hon. member for Springs is not here. I am sorry about that, because I should like to reply to the charge of generalization which he made against the hon. member for Gardens, a sin which he in fact himself committed. We have heard this in the House before. I do not know whether it came from the same hon. member. Whether it is done with a view to cheap publicity I do not know. When the hon. member makes a statement about the motor trade to the effect that the public is charged for three hours in respect of one and a half hours’ work actually done, I want to say to the hon. member that unless he can bring the facts to the hon. the Minister we must reject such a statement. I think it is irresponsible and not the type of statement we ought to make in this House. The hon. the Minister's predecessor has told us about the set-up in the industry. Any motorist with a complaint has the right to go to the Minister with that complaint. The Minister in turn can pass it on to the industry. The industry itself has a complaints committee which deals with these matters. When you hear these irresponsible statements, such as that made by the hon. member for Springs, one wonders just what is behind it. Is it done for a bit of cheap publicity? Is it intended to damage the industry? Would he make the same statement about a member of the medical profession who charges a patient R20 for a visit lasting 10 minutes? Would he say that that patient was overcharged, He would not do those things, but because the hon. member wants to get a bit of cheap publicity he makes such a statement about the motor industry. I would say that every profession and every trade has its black sheep. We in the motor industry are very jealous of our position. We have tried to build it up to a very much higher standard than it was in the past. If the hon. member wants to substantiate his statement let him produce those invoices which he talked about in order that the Minister may investigate the matter. I am pretty sure that he will not be able to do that.

I should like to support the hon. members for Gardens and Yeoville in their appeal to the hon. the Minister to slow down on the Phase III production process in this country. I had a lot to do with the initial negotiations when the Government, in order to save overseas currency, encouraged local manufacturing of components for motor vehicles in this country. It was pointed out to the Government at that stage that unless there was a large overseas market for these components this would of necessity put up the price of vehicles to the customer in this country. I think the Government appreciated that at that stage. We felt that with the Government's efforts and if the climate was right, there would be a large overseas export market for the components manufactured in this country. It must be remembered that motor manufacturers are not philanthropists. While they have the interests of this country at heart, they are at the same time business men mostly controlled from overseas. They are here not for their health but in order to make money. They have the interests of the country at heart in that they would like to see South Africa prosper. Now, manufacturers of any item in the world today shop round for component manufacturing. Thousands of components are manufactured in countries miles away from the place of the final assembly of the unit, such as computers for instance. Computers may be assembled at certain centres on the Continent and in the Americas, but we know full well that the components for those computers and other intricate electronic equipment are not manufactured there. The manufacturers shop round where the market is cheapest. That forms the basis of their manufacture and production. In this country we should be in the same position. The hon. the Minister is no fool and knows that with the restrictions we have here we could probably become the greatest component manufacturers on this continent. The hon. the Minister knows that in Cape Town and in the rest of the country they are manufacturing highly technical components to assist in the defence of this country. The volume of orders that they receive makes it economical. They are also able to export these components. Unfortunately, as far as the motor industry is concerned, the runs are so small that it does not pay. Therefore the price must go up. The suggestion that we should cut down to a few models is a highly technical matter. This is something that should not only suit the factories, but should also suit the customer. We should not forget that it is the buyer who decides what you can do.

I should like to appeal to the hon. the Minister to have another look at this matter and to slow the introduction of third phase down. At this stage the buying public and the industry are not in a position to absorb the extra cost, Let us delay it. The greatest priority that we must have in this country is to increase our export markets. The hon. the Prime Minister referred to it in his address yesterday. The gap is too wide. We have to look around to see how we can do it. We do not accept that the market is saturated all over the world. I do not believe that the overseas markets are saturated. But what is wanted is an intensive sales campaign overseas, assisted by the Government. The hon. the Minister is going to spend a very small amount on overseas shows this year. We are being asked to vote the small amount of R416 000 in respect of “trade and publicity exhibitions”. It is a mere pittance when one takes into account that one country spent over one million rand to have a stand in Japan at the World Expo. I know we cannot afford such an amount of money, but R416 000 is a mere pittance. In order to survive in this country, we must export. We have been spoilt in this country by our gold reserves, our copper and our diamonds. But we have a vast mineral reserve in the form of iron ore, coal and other minerals. It is pleasing to see that the hon. the Minister of Transport has sanctioned the building of a line to open new Copperfields in the Prieska district. Next week we will deal with a Bill to this effect. All this copper will probably be exported. When I heard the hon. the Minister talking about the plans for the export or iron ore, it was pleasing. But what is happening in Australia? There they have dynamic plans for the export of iron ore from their vast iron ore mines. We should take a leaf out of their book and get on with the job. Do not let us plan for 1974, 1975 or 1976. Let us plan now. We must plan for 1971-’72. In Australia railway lines over a distance of something like 256 miles were built in 18 months by private enterprise, for the export of ore. In Australia docks are being built for the export of their vast mineral wealth, namely iron ore, not only to Japan, but also to the Continent of Europe. When we see all this, we realize the dynamic planning in Australia. But it does not only go for mining, it goes for everything. We in this country lack one thing, namely unity amongst our population and the will to get on with it. Let us please drop our ideologies and build our country to what it could be.

Mr. Chairman, I do not want to follow up on what the hon. member for Salt River has said, for although he spoke at great length he said very little to which one could really react.

Since the hon. the Minister has already referred to the iron ore transportation project between Sishen and Saldanha today, I want to tell him that we in the Northern Cape, and I think the people along the West Coast as well, are grateful to have heard from him that he is optimistic about this major project which is being contemplated. We want to tell the hon. the Minister that we are delighted that he indicated to us that Iscor, as we also saw in Rapport, had found a loan of R143 million in Europe for the establishment of this Sishen-Saldanha iron ore export project. It was envisaged by the former Minister of Economic Affairs that iron ore would to an increasing extent in future have to earn foreign exchange for South Africa. That is why this wealth of ours deserves to be closely watched. Although no intensive geological surveys have yet been made in the ore bearing areas of the Northern Cape in order to establish precisely what the full potential of our iron ore resources are, it has been announced that Iscor has almost 4 200 million tons of high grade iron ore available to it in the Sishen-Postmasburg area. Since South Africa is at present making preparations to export iron ore on a large scale, there are two problems which hamper South Africa when it wants to compete on the international market. Firstly, there are the high railage costs, and the harbour facilities which are inadequate for shipping ore on a large scale. Secondly there is the economic ore stopping methods in order to compete with international prices on the international market. For this reason we are grateful to hear that Iscor has made such excellent progress with their negotiations as to obtain funds for the establishment of facilities for the export of iron ore. Therefore we pray that they will be just as successful in their further negotiations with Japan and the other states the hon. the Minister mentioned today. Our prayer is that they will be successful so that the Sishen-Saldanha project as announced by the Government, will become a practical reality.

I think that this unique project which is being envisaged will in future be a massive monument, together with the Verwoerd scheme and other major projects, to this National Party Government. It will contribute a great deal to the economic prosperity of South Africa. Once this project takes shape, the first-mentioned problem, i.e. the too high transport costs and inadequate harbour facilities will fall away. However, I should like to express a few ideas on the other problem, i.e. the economic iron ore stopping methods so that it can compete on the international market with international prices. At present iron ore can be economically exploited in the Northern Cape provided the stripping proportion is 1 to 1,5. That is to say, 1 ton of iron ore as against 1,5 tons of waste. At such a stripping ratio it means that only a quarter of the aforementioned 4 200 million tons of ore can at present be economically exploited for international competition. That is to say, only plus-minus a thousand million tons can be economically exploited. Every ton of ore stripped, has a clean yield of 75 per cent which can either be sent to domestic foundries or exported. At present, therefore. 25 per cent of the low grade ore is lost at the place of exploitation. We must turn our attention to the 25 per cent of the ore which is at present being lost, and to the great amount of ore which is at present not economically exploitable. We shall have to begin planning at this early stage already so that this may in future be of great benefit and value to South Africa.

Why should we, at this early stage already, give our attention to this matter? It is estimated that the quantity of iron ore which will have to be exploited annually for domestic use and exports, will be approximately as follows. Plus-minus 15 million tons will be required for export and plus-minus 10 million tons for domestic use. To obtain the abovementioned quantity of high grade ore means that plus-minus 35 million tons have to be exploited annually. Approximately 10 million tons are at present being lost in the process of mining and exploitation. This is the waste which is at present not being used, and in regard to which we must devise plans for processing it so that it can in fact be used. The result of this will be that this approximately 1 000 million tons of ore which can be exploited at economic prices will be depleted within the next 25 to 30 years. Then there will still be plus-minus 3 000 million tons of ore supplies left, and I am inclined to think, that there is far more than this. These ore supplies will then have to be exploited at a high cost and this will automatically have a negative influence on our own steel industry. It will also have a negative influence on the export of our ore. For this reason I feel that we should devise plans even at this stage to deal with the situation. During the past 15 years much has been written and said in the world about the refinement of iron ore, or the prereduction of ore to produce high grade crude products for the blast-furnaces and steel works. I am grateful that the hon. the Minister referred to this today and also gave his blessing to a great deal of attention being given to this aspect in future. Now I want to advocate that South Africa and the Minister should take the lead in regard to the refinement of iron ore; that South Africa should take the lead in the creation of a refined product which has no internationally competitive price and which will most certainly, with a higher profit margin, be able to earn much exchange for South Africa. If it should become a reality now that iron ore can in fact be refined, the 25 per cent of the ore which is at present lost, as well as the million tons of low grade ore which are present at greater depths and cannot at the moment be economically exploited, may be utilized.

Then I want to advocate to the hon. the Minister to consider the establishment of such a refining process at Sishen, the place where South Africa’s greatest ore resources are to be found. Here iron ore with a content of 65 per cent FE or a 40 per cent FE, that which is much deeper underground, may be refined into a product with an iron content of 95 per cent. From hence a far greater concentrate can at the same transport cost be brought to the blast-furnaces and export harbours. This will entail a saving and we would then have a product which is not internationally tied down to competitive prices. This would also entail that large quantities of ore which are at present being lost, will be utilized. At the moment there are four competing companies in South Africa exporting iron ore. Each one bids on the world market for its own price for ore. This prejudices South Africa and its competition on the international ore market. Now I am asking whether it would not be beneficial for our iron ore industry and for South Africa if a co-ordinating council were to be established by the Government which could bring about co-ordination between ore producers, which could formulate a uniform export policy and price, and which could co-ordinate this with the view to domestic consumption. That, I think, will result in the necessary planning and co-ordination in order to place this product, which has in future to earn much exchange for South Africa, on a sound basis.

I must say I find a great deal of gratification and satisfaction in listening to hon. members opposite talking about the export of iron ore. I remember so well in this House not so long ago that the then Minister of Economic Affairs or the Minister of Mines debated in this House whether we should give consideration to the export of iron ore, whether we should use this natural heritage of ours for export, or whether we should not keep it in this country for our own use in future. Well, even the Nationalist Party sometimes gets with it, and they have begun to realize that the export or iron ore can be something profitable for South Africa.

It makes me happy to hear that at least we want to export ore now, but I must say that I get very little happiness from what the hon. the Minister himself has told us this afternoon and the picture he has painted. That picture is rather a dreary one, and the reply he has given us to some of our problems which we have discussed we do not find very constructive. You see, Sir, the hon. the Minister, like the Nationalist Government, will not come to grips with the realities of the problem. The hon. the Minister knows as well as I do what our problems are in regard to exports, but he skirts around them all the time because the policy of his Government will not allow him to face up to what are the basic problems. I will come back to those problems in a few moments. For example, the hon. the Minister tells us that it is very easy to identify a problem. That is true, but he says it is very hard to find the correct answer. I think what he means to say is that it is very hard for him and his party to find the correct answer. But surely the role of government is to find the answer to these problems. What have we got a Government for? They are supposed to be a Cabinet of geniuses. Let us have some of this genius exhibited to us. Let the hon. the Minister tell us what the problems are and then let us see what answers the Government can find, because we are getting no answers; we have had none from the hon. the Minister this afternoon.

I was dealing with the E.E.C. Have you any suggestions for us?

The hon. the Minister referred to the suggestions which I made last year. I am going to compare those with what he suggests should be done. The hon. the Minister mentioned amongst other things that he did not believe that associated membership of the E.E.C. would be in South Africa’s interests. I agree with him. I said so last year. I thought that the state of our own industries was such that we could not afford to reduce our tariffs to a level which would open our market wide to other countries of the world. But I think the hon. the Minister must also take cognizance of another factor, which he did not mention.

That is that in terms of the Treaty of Rome there are certain labour provisions with which you have to comply once you become a member or an associate member of the E.E.C. In terms of Government policy one might suspect that the hon. the Minister is a little concerned about this as well. But there is another factor with which I think the hon. the Minister should have dealt and I hope he will deal with it. That is the position of Swaziland, Lesotho and Botswana in relation to the E.E.C. if the United Kingdom becomes a member. What is the position of these three countries on our borders? Are they going to be associate members? Are they going to be full members? Are they not going to be members? Will the hon. the Minister tell us what the position will be of these three old territories which are now independent countries because this might affect our position very considerably.

Mr. Chairman, we welcome the information from the hon. the Minister that we are sending an Ambassador to the E.E.C. Of course, we have only been pleading for this for about six years, I think. I remember when the previous Minister of Economic Affairs, Dr. Diederichs, eventually after nearly three years, said that he was going to send an official to the E.E.C., I said to him: “Please tell me what plane he is going to catch because I want to be at the airport to see that he really goes." This is how serious the situation was. But I do believe the hon. the Minister that he is going to send a representative to the E.E.C.

Frankie Waring.

Oh no! We also think, Sir, that there is some merit in a meeting of our Ambassadors in London, with the hon. the Minister, and I hope that the hon. the Minister will be able to persuade the Ministers of the E.E.C. to allow him to present his case to them. But I do not believe that these are the answers to our problems. What the hon. the Minister seems to be doing, as the Government does so often, is to take the line that if he goes on talking long enough something is going to happen; that the answer is going to fall from heaven into his lap. Because he can address the Ministers of the E.E.C., he can hold a meeting of our own Ambassadors in London about the E.E.C. and he can address the Minister of the E.E.C., but it is really not going to take his problem an awful lot further. I predict that he will still be left with his problem after all these things have happened. I want to ask the Minister what he is going to do then, because if he is going overseas now with only these three things which he has mentioned in mind, he may come back a very bitterly disappointed man. He should have another line of attack up his sleeve, if he is a good Minister of Economic Affairs.

Sir, the hon. the Minister has not told us this afternoon whether he is satisfied with what Safta is doing. We subsidize Safta to a considerable extent. I stand to be corrected, but I believe the figure is something of the order of R90 000. What has happened to the Export Promotion Council? Is it still in existence? I am told that it has been wiped out already. Is this still in existence? Is it operating? What is it doing? What advice is it giving the hon. the Minister? He has not told us this. These are the things that we want to know—the practical things, not about chats overseas, however important they may be. You see. Sir, it is no good telling exporters that they have to be more aggressive. It is no good at all. The hon. the Minister knows that appeals to people do not really produce results. Why should they be more aggressive?

Why not?

It is very simple. Because they can sell everything they produce in South Africa. That is why, and if the hon. the Minister thinks that he is going to get the businessman in this country to take the hard line of promoting sales abroad when he can sell everything the easy way in South Africa, he does not understand human nature, because this is not going to happen. It is no good blaming them. A businessman is in business to make money and as long as he has the local market to absorb all his production this is what is going to happen. Despite the enormous imports coming into this country, although only 25 per cent or one- third are consumer products, local output is still fully taken up. What we have to do is really very simple. We have to give the manufacturing sector of our community the tools to increase production. If production is increased two things will be achieved. You immediately have a hedge against inflation by more goods being available and secondly, you have a surplus of products which you have to export. These are the things we have to do —not have meetings, however useful and valuable they may be. We have to see that there is the right climate in this country so that the entrepreneurs and industrialists will invest in new capital goods and aim at greater production. We have to see that the climate is right for an expansion of existing businesses and that the basic incentive to export is present. What is the basic incentive to export? An overproduction of goods for the local market. This forces you to export. When you have goods that the local market cannot absorb, and they are exportable—and we have many—you will have to get on with the job of exporting. This incentive is not present at the moment. Whichever way we turn or twist we always come back to the one basic fact, namely that unless we increase our production, we are never going to solve the problems that are facing us. [Time expired.]

Mr. Chairman, I should now like to discuss a few matters which were raised by hon. members in the course of the debate. Right at the beginning of his speech the hon. member for Brakpan mentioned the possibility of price control on imported goods. The hon. member for Constantia elaborated on that and criticized me because I had at one stage warned about the large profits which were being made on imported goods. It is all very well to say that a relatively small percentage of our imports are consumer goods, but I am quite convinced that those imports, even of consumer goods, could to a large extent be decreased if we take greater care to buy South African. Any person who is indifferent to the idea or to the appeal that we buy South African manufactured goods, probably does not mean it sincerely with South Africa. In fact, I do not think there is any one of us here who does not want to support the idea that we should make a definite attempt to purchase our own manufactured goods. However, what happens in practice? It is as clear as daylight to me that imported goods are subject to a very high profit. I am convinced of the fact that in many cases the profit made on imported goods is 100 per cent, and more, and may even be as high as 200 per cent. This is of course guess-work, but I am convinced of one thing, the mark-up is exceptionally high. In our local business enterprises imported goods are to be seen on all the shelves. What is indicated on these goods, apart from the price? ‘‘Imported —Ingevoer201D;. In other words, disclosing the fact that it has been imported is regarded by that shopkeeper as an attraction, as if that would be something which would influence the client to purchase that article. That is the frame of mind which exists among our people. It is an unfortunate situation and it is a pity that this should be the case. I feel that South Africa is probably not the only country in the world where that psychological impression, of thinking that something which has been imported, is inevitably better than the local products, exists. Sir, this is not the case. Our South African manufactured goods are today probably just as good. and in many cases better than the imported article. But now those shopkeepers, whom the hon. member for Constantia mentioned, are as it were putting the South African goods away.

Nonsense,

How can the hon. member for Umlazi say that? After all, it is not his province. With respect, he and I may have something to say to each other tomorrow. But this is the position. You can go and see it for yourself. I have put it to the test. I have gone to local shops here in the city and asked for good South African towels. The truth is, I could not find any good South African towels there. I found imported towels yes, at twice, three times, even four times the price one would have to pay for a good South African towel. That is why I say that it is an encouragement for the shopkeeper to present the imported goods and neglect the South African manufactured goods. The profit he makes on the imported goods is so much greater than the profit he makes on the South African goods.

There is some merit in the argument by the hon. member for Constantia that, if one were to restrict those people to make the price so much higher, it would mean that the imported article would become more attractive to the client to purchase than the South African article. That is probably true. That depends on what profit one allows the shopkeeper to make. If he were to make that same profit on the South African manufactured article, he would probably not take the trouble of importing others. I do not know what his attitude would be. But I am aware that disturbing circumstances are being caused by the fact that an article is being made attractive for our people to purchase because it has been imported. I am aware of the fact that you can pay R12 or R14 for ordinary sports shirts, simply because it comes from America or some other country, while a shirt just as good which has been manufactured in South Africa is available at R7 or R8. These are the hard facts of the matter which one must take into account. We shall have to consider this matter. I do not want to say at this moment what we are able to do about it, but I should like to avail myself of this opportunity of making our shopkeepers, our importers of consumer goods, a little more aware that they must do something about this. I also agree with the hon. member for Parktown. Of what use would it be if I were to do this? For to them there is only one consideration, and that is to make as much as possible out of the transaction. It seems to me therefore that the only thing that can be done, is that something definite should be done in this connection by the Government.

Business interrupted in accordance with Standing Order No, 23.