Before calling upon an hon. member, I wish to refer to a point of order raised by the hon. member for Zululand on Tuesday, that the hon. member for Middelburg had to accept his word that he had not uttered certain words during a speech made in this House in 1964, as claimed by the hon. member for Middelburg.

On 10th April, 1947, the Chairman of Committees gave a considered ruling during which he stated that it was the rule that a member could make an explanation during debate if a material part of a speech he had made had been misquoted or misunderstood (see S.O. 142 (1)) and that the practice was that whatever a member said in explanation—whether relating to the words or the meaning of his speech—had to be accepted as true and not afterwards called into question. I feel however that this rule can only be applied to an explanation made at the time the statement to which it was directed was made or at the conclusion of the speech which called for the explanation, which according to May’s Parliamentary Practice (18th Edition) at page 409, is the proper time for making such an explanation. The rule regarding the acceptance of a member’s explanation can also be extended to a personal explanation made under S.O. 142 (2) with the prior consent of Mr. Speaker at a subsequent sitting during the same session (see also May, page 249).

In my opinion, however, it cannot be applied to explanation in respect of speeches made during previous sessions as this would create the quite untenable position that in a subsequent session a member could disavow statements which the Official Report of the Debates of the House show him as having made, while the member himself had offered no explanation in respect thereto during the session in question.

In this particular case the point at issue is whether the hon. member for Zululand used certain words which do not appear in the Official Report for the 1964 session. Here I consider that, bearing in mind that the accuracy of the report of any speech may be disputed by means of the usual procedure when the weekly edition of the Official Report containing such speech appears or within a reasonable period thereafter, it will create an equally untenable position if words can thereafter be attributed to an hon. member, despite the fact that such words are not reflected in the Official Report of the Debates which are issued under the supervision and control of Mr. Speaker.

I rule therefore that it is not in order for a member to attribute to another member words that do not appear in the Official Report of the Debates.

The last speaker last evening was the hon. member for Pietersburg, who I see is not in his seat now. He was referring to the question of devaluation and the attitude of this side of the House to devaluation. I would like to say to the hon. member for Pietersburg that we regard devaluation as having been resorted to as the result of deeply-seated weaknesses in the economy.

Order! I appeal to hon. members not to converse so loudly. The hon. member may proceed.

Who is the ringmaster?

Sir, I do not think anyone would have been able to hear me above that noise.

Sir, I cannot hear what the hon. member is saying.

Order! It is impossible for me to hear the hon. member for Constantia. Will hon. members kindly not converse so loudly?

I was saying that in the opinion of this side of the House devaluation was resorted to as the result of basic weaknesses in the economy resulting from Government actions and Government policy. These main weaknesses are, first of all, a lack of growth and a lack of productivity, particularly in comparison with the productivity in other countries, both of which have been caused by our failure to use our resources which are available to us to the full. Now, if I can be heard, Sir, I would like to refer to the imposition of control over interest rates on deposits with the banks and building societies which the hon. the Minister announced in his Budget speech, and the control of interest rates on participation mortgage bonds, and other specified types of investments. First of all I would like to say that I regard this control as being bad in principle. In South Africa we have a sophisticated and highly developed money market and banking system which performs the function of bringing into equilibrium the supply of funds from lenders and the demand from borrowers who have a use for these funds. The money market and the banking system establish an interest pattern which is a delicately balanced one and a very complex and intricate one, an interest pattern which in some respects is fairly firm and fast, but in other respects is flexible and can change as conditions require; an interest pattern which ensures that the supply of funds from different types of lenders with different types of requirements is brought into balance with the demand of different types of borrowers with different types of requirements. Essentially this is a free enterprise system which requires freedom of the market and the discipline of the market if it is to function properly. It is the market mechanism which ensures that the available funds are used where they are most wanted, and this broadly means that they are used for the most productive purposes. If you interfere with any part of the system, a system which is working perfectly satisfactorily, then you interfere, as the Minister has decided to interfere, with the whole mechanism. If you interfere you prevent interest rates from fulfilling their function, which is to bring into balance the supply and the demand of funds, and you distort the flow of funds in the money and capital markets, so they tend to flow away from the uses where they are most required and flow to uses where they are uncontrolled, such as on the grey market. What I have just said was also said by the hon. the Minister himself in August, 1970, when in his Budget speech of that year he announced the withdrawal of the requirement from the banks that they give an undertaking to limit their deposit rates. I would suggest that what the Minister said then, is applicable to the circumstances now as well. I would like to give an example of how the flow of funds becomes distorted as the result of import control. The control of the interest rates over participation mortgage bonds, is effectively going to lower the interest rates on those bonds by about 1 per cent, from a gross 10 per cent to a gross something like 9 per cent. That lowering of interest rates must discourage investors to invest their money in that type of investment. There are other types of investment which offer higher interest rates, and it is natural that investors in participation mortgage bonds are likely to switch their investments now to those other types of investments. That is going to mean that there will be a reduction in funds available for flat development. I do not know what the hon. the Minister of Community Development is going to say to that because participation mortgage bonds have been one of the main sources of finance for flat development. Now if the availability of funds is going to be reduced as the result of the lower interest rates, either flat development is going to slow down or flat developers are going to look for other sources of funds. If they look for other sources of funds, such as from direct mortgage bonds, they will create greater competition for those funds and force the interest rates on those funds up. You cannot have it both ways. You cannot force interest rates down on the one hand without them bursting out higher somewhere on the other hand. I think it is virtually impossible to foresee what the effect of the interest rate control is going to be, and I am not even confident that it will have the effect of encouraging deposits in building societies, which the Minister wants it to do. But of one thing I am quite sure, and that is that if funds are not put to their most productive use—and they will not be put to their most productive use if you interfere with the interest pattern-then productivity suffers, and if productivity suffers you will get an increase in the rate of inflation. The Minister himself in August, 1970, said more or less what I have said in that respect. [Time expired.]

Mr. Chairman, during the Second Reading debate I said that the hon. the Minister had presented one of the best Budgets of all times. And do hon. members know who also agrees with me? 6 666 voters of Oudtshoorn also agree with me. Those who do not agree come to a meagre 1 818, not even 18 per cent. Therefore it is obvious what a good effect this Budget has had.

The hon. member for Constantia said interest control was a very bad instrument. But does that hon. member not know that we are living in a country in which there is a controlled economy? Does he want to free everything? Does he not want this Government to take action when rates of interest are out of hand? Does the hon. member really want to tell us today that the Government should not have taken any steps? Should the exploitation of the poor man and the man who has no capital, be allowed then? The hon. member cannot come forward with something like that.

When did you say so?

It is a fact that one does not like this control, and that one would have liked to have it determined by supply and demand. However, where there is exploitation, the Government must take action. I may just tell the hon. member that this Government will in fact take action.

I want to refer to what was said yesterday afternoon by the hon. member for Parktown. The hon. member for Parktown again levelled an accusation at the Minister in connection with certain things he had said during the Second Reading. This relates to the amount of R140 million, being the relief granted in respect of the ceiling of the banking sector. That hon. member acts as though the hon. the Minister does not know what is going on in the country. Then he also maintained that the hon. the Minister did not know how to control the financial position of South Africa. The hon. member will concede that a certain restriction was imposed on the credit ceiling as at the end of the month. There is no restriction on the operations in the course of a particular month. If these people over-lend during any month, they may see to it that it is back before the end of the month. But these banks cannot lend an impossible amount. Let me illustrate this by way of an example. Let us suppose the ceiling that is fixed stands at 100 and the banking sector allows it to rise to 120. If these banks are again within the limit of 100 at the end of the following month, they are complying with the legal requirements. This is, after all, a legal requirement which has been laid down. Now the hon. the Minister says that they may go up to 120. In other words, now the banking sector need not reduce to 100 the 100 which went up to 120 in the course of the month. They are now able to go up to 120. In other words, in the course of the month the ceiling may rise to 140. It happens. That is why an extra R140 million has been pumped into the private sector. Surely the hon. member does not want to tell me that he does not know this. So how is it possible for the hon. member to argue that there is not that amount of extra money? I really do not want the hon. member for Parktown to be unworthy of his position. As a financial expert he knows the position is not as he gave it out to be.

The hon. member also raised another point by asking why there were no borrowings in the dollar area. Hs wanted to know why everything was borrowed in Europe. It most definitely is a fact, surely, that the Government tries to borrow where it is cheapest. If we were to borrow in the dollar area it would come out much more expensive for us. The dollar position is such that it has been possible for us to have borrowed more cheaply on the German and Swiss markets by as much as from 1 per cent to 1½ Per cent. Does the hon. member not know this? Now I want to ask the hon. member what the position will be in 15 years’ time; this is what is important with a view to the repayment of these loans. The hon. member asked me what my opinion was. I told him that we were borrowing in the right place. No one knows what is going to happen in 15 years’ time. The dollar may revalue tremendously. Anything may happen. We trade mainly with Europe. The hon. member knows what our position is as regards trade with Europe. In 1971 we imported goods to the value of R1 323 000 000 from Europe. Imports from America amounted to only R440 million. Consequently it is logical and understandable for us to negotiate loans from those countries with which we trade most.

What is the position in respect of international investments in South Africa? The sterling area has investments to the value of R3 371 million in South Africa. That was the position in 1970. The investments of Western Europe amount to R1 406 million. Over against that, investments by America and its companies amount to only R855 million. Then there is such a thing as interest and dividends paid out to these countries. As against our imports of R440,7 million from America, our exports are R135 million. To some extent the difference is made up by way of interest and dividends we pay over to America in respect of its investments here. But in respect of Europe there is a bigger difference as far as this is concerned. I want to point out to the hon. member that it is the position, after all, that we have to pay in Europe for our large imports from Europe. We cannot pay in dollars, because that would involve extra conversion costs. We use these loans we obtain in Europe to pay for the difference between imports and exports. Our gold is not sufficient to pay for that. Consequently we obtain cheaper loans in Europe.

The hon. member also spoke about the latest loans entered into in February, 1971. From what I heard the full amount of those loans had not been used up. At the time of our devaluation, we still had some of that money in Switzerland. It cost this Government nothing extra and neither did we lose anything when we used the balance of those loans to pay for imports. There was no loss in dollars, nor any loss in respect of conversion.

The hon. member must take one fact into account, and that is that South Africa and Europe—and I include England in this —are closely interwoven. We have been trading for centuries and we have our trade relations. This makes a great difference to where one borrows from. Does the hon. member want to give us to understand that henceforth we should borrow all our money from the East, i.e. from Japan, Russia or China? I think there are certain economic laws which apply. Apart from these trade connections with Europe, however, there are also some other additional factors which apply.

Hon. members said we were so badly off. In this regard a survey has been conducted by Market Research of Africa. Hon. members have probably seen it in the Press. It shows how well-off South Africa is with this National Party Government and the implementation of its policy. It establishes the fact that South Africa’s standard of living is of the very highest in the world. For example, the survey shows very clearly that 68 per cent of the Whites in South Africa have telephones as against 34 per cent in Great Britain. It must be remembered that Great Britain is a developed country, while we are a developing country. Over against that we have Western Germany with 31 per cent, Italy, 27 per cent, France, 19 per cent, the Netherlands, 43 per cent, and Belgium, 33 per cent. There is only one which has a higher percentage and that is Luxembourg with a percentage of 78 per cent. When we look at all these figures and these facts, we see that the Government’s policy is the right one and that our approach to the economy is the right one, i.e. that we consider what is in the best interests of our State overseas and in what way we may best serve the poor man in South Africa by controlling rates of interest and at the same time assisting this country to grow economically so as to keep within the 5½ per cent objective envisaged by the economic development programme. When I speak of a 5½ per cent growth rate, it does not mean that that growth rate should be 5½ per cent every year. Surely it cannot be established as specifically as that. One year it may be per cent or 4 per cent or whatever. The next year it may rise to 6 per cent, but the average throughout will have to be approximately 5½ per cent. [Time expired.]

Mr. Chairman, I find nothing more distressing than listening to the hon. member who has just sat down. Every time he speaks, I fear for the economic future of South Africa, because some of his arguments really are depressing. For example, he is apparently very keen that we should contain our growth rate at 5,5 per cent. Then he goes on to say that this is of course an average. He has, of course, worked out that in 1970 the growth rate was 4,8 per cent. In 1971 it was 3,7 per cent and this year it is expected that we might have a 5 per cent growth rate. Therefore, for the two following years we will have to have a 7 per cent growth rate. We are building up a position on this theory of averages that if we do not have 7 per cent in 1973, we might have to go for 9 per cent or 9½ per cent growth in 1974. I am not impressed with averages; I like to see my profits now.

The hon. member makes another fatal error when he talks about interest. It is all very well to stand up and say that the public are being exploited, that the man in the street is being exploited by high interest rates. There are cardinal principles in economics which have taught us that we have to be very careful of controls because of the distortions they create. What the hon. member has not given any consideration to, is what is the likely impact on lending to be of a lowering of the interest rate and not allowing free market mechanisms to operate? Are people going to say: I cannot get an interest rate that I really want; therefore I am going to find some entirely different form of investment? We may well have it in the Stock Exchange over the next six months, depending on what the attitude of England, particularly, is with buying on the South African market. You may have people who normally would have been prepared to invest in participation bonds getting a shade under 10 per cent, who will say: “No, 8½ per cent does not interest me, I will rather have a little gamble somewhere else and see if I can make a capital profit.”

These are the factors that surround these things that one has to take into account. One always gets the feeling that there is not sufficient examination in depth. One takes an attitude, one takes a stand, and as our lawyers’ friends say, one does not always become mindful of what the consequential amendments might be.

The third item the hon. member discussed was the question of foreign currencies. I am not having an argument with the hon. the Minister on the issue as to where he should have borrowed and where he should not have borrowed. What I am trying to find out is the reasons for what we have done, because on the face of it it can cost us a considerable amount of money. I repeat to the hon. member that I learnt one very important lesson when I was a young man and went into business. A chap came in to see me one day. We were doing shipping in those days and we had a standard rate which we applied to all our customers. What was a potentially big client came to see me and said that he was considering moving his account and asked whether we would take it. He said that he would not like to pay the normal rate, but that he wanted to pay a little less, any way in the beginning, during the first year of our doing business together. I went to my senior partner, the chairman of the company, who was a canny gentleman. I will never forget what he said to me, namely: “My boy, make your money out of every transaction. Do not wait for the next one to make your profit. Make it in each deal.” It is the same with these overseas loans. To suggest that they are being entered into on the basis that things might change over the next 15 years, that the Deutsche Mark and the Swiss franc and the French franc may decrease in value and that the rand may increase in value, is not a very sound basis for operating. There may be a modicum of correctness in what the hon. member says when he talks about our dealing commercially very heavily with the Common Market today and that this is one of our natural sources of flow of goods to and fro. On the other hand, there is an awful lot of business being done in the United States and an awful lot of capital coming into this country from the United States. We hope that it will continue. We hope that the Americans will never change their minds about investing in South Africa. All I want to get from the hon. the Minister —and I am sure he knows that this is the attitude in which I ask these questions— is the basic reason for the way we are doing it.

There is one other matter, namely the question of the Lodder report and the question of interest rates and investments. The hon. the Minister in his Budget speech said that he could not deal with the Post Office side of investments, because they were waiting for computerization. But there is still one aspect of the Post Office which I think should be changed and be changed immediately. I have raised this matter previously. If I deposit money in the Post Office after the 2nd of the month, I do not receive any interest for that month. If I withdraw any money from the Post Office prior to the last two days of the month, I do not receive any interest for that month. I unfortunately had to withdraw a little money out of the Post Office yesterday. So I have lost my interest for this month. I do not like it. I do not think it is sound investment. I think the hon. the Minister, through his colleague, who merely acts as an agent, should pay me my interest from the day I put my money in up to the day I withdraw my money. It should not be incapable of being calculated without a computer. I hope the hon. the Minister will see if something cannot be done here. Further there is another foolish regulation which, as far as I know, is still in existence, namely, that I cannot deposit more than R4 000 into the Post Office in any one year. That is in my savings account. I am not talking about the other investments where they act as an agent. So, if I have deposited R4 000 in the first two or three months of the year and I want to draw it out because I want to use it for some other purpose and if I then receive more money to invest, I have to go somewhere else for a short-term investment. I think this is foolish. Why this embargo? The basis of borrowing money is to encourage people, not to discourage people. To say to a person that because he has already deposited R4 000 during one year, he cannot deposit any more although he has already taken it out, seems to me absolutely ludicrous. I can understand if the hon. the Minister wants to control the situation and says that no person shall have more than R4 000 in his Post Office savings account at any one time. I do not know the pros and cons of a figure of R4 000, but this may have some merit. But to say that a person cannot deposit more than this figure, does not seem to make any sense to me. The Post Office used to be and still is to a great extent the place where the small man puts his few rand for short periods of time. He has moved away from the Post Office to a large extent over the years to the building societies because he gets interest on his daily balance. These shortsighted rules cannot be deliberate, because when these rules came into operation, we did not have the problems of the building societies. It may be that it is benefiting the building societies at the moment, but it is on a very short-and today, but there term basis and the building society is a long term lender. I do not think it is very sound policy that we should encourage this type of borrowing by them for long-term lending. It is true that they will always have a sort of reservoir which will turn over. I wish the hon. the Minister would give a little consideration to this issue. I do not think the position has changed since I raised it. Maybe I am wrong. I will be glad to hear that I am wrong. I have not gone into it. I have looked at my old savings bank book which sets out these rules and regulations. If these are still extant, I would like to see them changed as soon as possible.

Mr. Chairman, during his Budget speech the hon. the Minister placed particular emphasis on the fact that the main object of the Government’s policy in this Budget was to improve our balance of payments and, more particularly, to reduce the deficit on our current account and increase the level of our foreign reserves. This is, of course, to be welcomed. It is also the main object of any businessman to watch his bank account and always see that everything is right as far as that is concerned, that that balance of payments is correct. There are various ways for one to keep such a balance of payments in order. One of the ways is, for example, to take cognisance of our exports. There are also other ways, which were particularly emphasized last year, i.e. saving, hard work, etc. When we think of the exports, we think at the same time of the statement of the President of the Reserve Bank, i.e. that banks should be allowed to exceed their ceilings applicable to their discounts and surpluses by 5 per cent and their investments by 10 per cent.

I want to come back again to what the hon. member for Parktown said in his Second Reading speech, and again yesterday, in connection with the R140 million. This was also raised here again yesterday and today, but there is one point the hon. member for Parktown loses sight of. The hon. the Minister placed specific emphasis on the fact that this concession was made with a view to, and for the purpose of, making a greater volume of credit available for our production and export purposes. When the hon. member for Parktown says that R140 million has already been loaned by the banks, i.e. that they have already exceeded their powers by R140 million, he loses sight of the object the hon. the Minister of Finance laid down, i.e. that we must take note of our production and our exports. If there were in fact transgressions by the banks, then this was also done in respect of other sectors of society, for example in respect of ordinary businessmen, farmers and perhaps also private persons. The object of this concession is specifically for that one purpose which the hon. the Minister laid down.

Mr. Chairman, the Budget indicated very clearly to us what has again been plainly reflected in Oudtshoorn, i.e. that the Opposition members have absolutely lost contact with the man in the street. They do not know what his needs are. I particularly want to refer to one member on that side, and to the hon. member for Houghton. In his speech the hon. member for Yeoville mentioned that the Government does not listen to the United Party or to businessmen. The hon. member for Houghton again said that “economics is stronger than politics”. This points out to us that these people think solely of the big captain of finance, the capitalist. In this House they speak only for the big financier, the man who is already well-endowed with capital. They lose sight of the fact that there is also the man in the street, whom they must also look to.

What does the average man in Brakpan say?

Oudtshoorn gave us a very clear reflection of this. Oudtshoorn showed us that the Opposition cannot work with figures and that they have no idea of figures. Through Oudtshoorn we have pointed out that we are increasing our figures. Our majority there is twice the majority we had in 1948. In addition we also showed that we are the very best cricket players in this House—we hit four sixes in a row. I think that tonight the hon. Opposition would do well to switch on the radio and listen to the 1818 overture, so that next year they can perhaps make a better job of speaking about finances here.

What has the Opposition actually been advocating in this Budget debate? They have advocated that the credit ceiling should be lifted completely. In whose favour is that going to be? Surely not in favour of the man in the street. They have advocated that there should be uncontrolled economic growth. For whose benefit are they lodging that plea? Not for the man in the street, but for their own businessmen, their own capitalists. What more did they advocate? They advocated that interest rates should not be controlled. For whom was the hon. member lodging a plea a few minutes ago? For the capitalist! They also advocated that job reservation be completely done away with, of course so that there could be an uncontrolled influx of non-White labour to the urban complexes and the industries …

That is not true. You ought to know that.

… so that the person who has money can make even more money.

Order! The hon. member must withdraw that.

Mr. Chairman, I said that the hon. member “ought” to know that it is not true.

The hon. member may proceed.

Oudtshoorn proved to us that it is true. I do not know where the hon. member gets his figures from.

With reference to Oudtshoorn, I should like to ask the hon. the Minister something. When we think of the extent to which our majority in Oudtshoorn increased, we must also think of the future and, in particular, of our young people. In that connection I want to ask the hon. the Minister if he cannot consider making a further concession as far as the young people are concerned, next year or perhaps even in the course of this year.

By that I mean with reference to maternity costs. Maternity costs are a tremendously expensive item these days. Last year a concession of R100 was made.

Order! I want to point out to the hon. member that at the moment he is not really discussing the Votes which are under discussion. He must not go into that too deeply.

No, I am not going to do so. We want to ask the hon. the Minister whether he will not consider making more concessions for maternity costs, particularly with respect to special maternity cases. I want to leave it at that. This is perhaps a subject that belongs more to tax proposals.

I want to raise another matter, which is also of cardinal importance, with the Minister, i.e. the competition amongst our financial institutions. In that connection I am thinking particularly of the competition to obtain savings from the public. I am told that in Pretoria alone there are 54 registered financial institutions. Each of them has some or other kind of public relations officer sent out into the field to get money from the public. They come along to the public with many good proposals and consequently persuade them to invest the money with their institution. It frequently happens that when the money is invested with one body, the next public relations officer comes along and again persuades that investor to take away the money and invest it with another body. So we eventually find that money becomes tremendously expensive. In every transaction there is commission involved. Every public relations officer gets a commission for the money he obtained for investment in that institution. If we think of the tremendous pumber of oublic relations officers on the move throughout the country, we wonder why this good manpower is being wasted. Can this manpower not be applied elsewhere with greater efficiency? Can some or other restriction not be placed on these public relations officers who criss-cross the country to obtain money from the public for the purpose of investment? Money is made tremendously expensive by these people, specifically because commission is paid two or three times. We can, as it were, describe these as flight funds. If the hon. the Minister sees his way clear to imposing some or other restriction on this, I think it would serve a very good purpose on behalf of the saving slogan we appended last year and also for the making available of money and the cheaper money we are going to get.

Mr. Chairman, the hon. member for Potgietersrus touched on quite a wide variety of subjects during his ten-minute speech. I cannot deal with anything like all those subjects in the time available to me, but there are two aspects I should like to mention. Firstly, there was his reference to the man in the street. I should like to remind him of certain facts from which he cannot run away. The first is that the cost of living, namely the consumer price index, rose during 1971 by 7 per cent, which is a very high rate of inflation. The second fact I should like to remind him of is that while many consumers may have been able to protect themselves against that rise in the cost of living through bargaining and demanding higher remuneration, there are classes of the population who are defenceless against inflation. Pensioners, in the main, are defenceless against inflation. They do not have any bargaining power with the authorities that give them their income. In the main, the non-Europeans, and particularly the Bantu, are defenceless against the rising cost of living, because they too have no bargaining power.

I should now like to return to the subject I was speaking about when my time expired previously, namely the control of interest rates. The hon. member for Sunnyside felt it was necessary to have this control to prevent the public being exploited. I believe, as I shall indicate in a moment, that control is, in present circumstances, more likely to keep interest rates up than it is to reduce them, but before I develop that theme, I should like to give one further example of where the flow of funds is likely to be distorted as a result of interest control. Up to the time when this control was imposed, financial institutions were offering up to per cent on deposits subject to three months’ notice. They were also offering up to 6 per cent on call deposits. Now, under the regulations regarding the control of interest rates, three-month deposits are limited to the same rate of interest as call deposits. The result of that is naturally going to be that depositors are not going to keep their money in accounts requiring three months’ notice; they will either put it on call, where they can get the same rate of interest, or they will look for other investments, and possibly earn higher rates of interest at longer terms of notice. The point is that this control of interest is going to change the pattern of deposits with the financial institutions and because it changes the pattern of deposits, it must also change the pattern of lending; there is a correlation between the length of commitment you can have for lending and the length of commitment you have in respect of borrowing. Interest control is therefore going to have the effect of forcing the financial institutions to lend in different manners and for different purposes. I believe that there is also quite a chance that interest control will change the pattern of deposits, and tend to make them shorter term and call deposits, rather than deposits subject to longer terms of notice. That seems to be the pattern of the regulations. If that happens, the building societies are going to become even more vulnerable than they are at present—and they have some difficulty on this score at present as a result of the fact that they are lending “long”, and will be borrowing “short” to a greater extent.

Even if there were justification for the imposition of control on interest rates—and I do not for one moment agree that there is any justification—I find it difficult to agree that there could be any justification at the present time. The hon. the Minister gave as his reason for this control the fact that he feared the competition between the deposit-receiving institutions when the credit ceiling was raised would lead to higher deposit rates. Surely, at this point of time all the indicators are in the opposite direction. The indicators are that the money supplied is going to become freer, not scarcer, as a result of the improvement in the balance of payments, and that competition is therefore going to tend to force interest rates down, rather than up. If that is so, then I think that control can only have one effect, and that is that it will hinder the drop in interest rates. With a market that is artificially distorted by interest control, maximum interest rates, such as we have imposed, tend to become minimum interest rates.

Finally, I should like to ask the hon. the Minister this question : Would it not be appropriate at this point of time to use the normal instrument of the bank rate, the Reserve Bank discount rate, to keep the interest pattern in check, rather than to impose an artificial control over certain types of interest rates? To me it seems that an adjustment in the bank rate at the present time would be in harmony with the Minister’s decision to raise the credit ceiling, and it would also be in harmony with the general tendency that we foresee, of money becoming easier as a result of an improvement in the balance of payments.

Mr. Chairman, I do not want to venture onto the path of the hon. member who has just resumed his seat. I have a matter I should very much like to bring to the attention of the House. I think we must focus our attention on this very important matter. Quite a lot has been said here about the balance of payments, bank accounts and the revenue and expenditure that must tally. I specifically want to link up with that by saying that we must ensure that certain people’s income and expenditure also tally. I should like to take up the cudgels for our physically handicapped people, our paraplegics; we must ensure that the State also thinks of giving them financial assistance.

I have had the privilege of living in Kimberley for the past 20 years, for 18 of which I have represented that area here and in the Provincial Council. During that period I have had the opportunity of visiting those institutions at Alexanderfontein and Diskobolos hundreds of times and seeing what is being done there by the State. We are grateful for what the State is doing there. The first few times I visited those places my heart and soul were filled with revulsion at the sight of how much human suffering there is, particularly in respect of people who are so retarded, but in recent years it has been a pleasure for me to visit there. Pride was kindled in my heart at the sight of what those people are trying to do for themselves. They are self-supporting and they help themselves. I have never seen more courageous people than those one encounters there. I have never seen people displaying greater bravery than those physically handicapped people. I have never seen prouder people, people imbued with one characteristic, i.e. to help themselves and to make themselves self-supporting and self-sufficient. Those people decided not to burden the State and ask for charity. They have tried to hold their own in life, to earn their own money and to perform a service for their fellow men and the State. But they have gone much further, Sir. Those people have placed South Africa on the map. They have shown us that on the sportsfield they can do as much as the ordinary person; they have shown us that they can be better ambassadors than the average sportsman, because the eyes of the world are focused on those people only because there is a measure of sympathy for them, although they do not want that sympathy. Sir, what do we do to help those people along? Most of those people, who could sit back if they wanted the State to look after them, decided to help themselves, and today they earn money for their own provisions. Because those people are retarded to a certain extent—because they are crippled, if I may use that word— they earn much smaller wages than the ordinary man in the street or than they themselves would have earned if they did not have those handicaps. That is the first handicap they have. Apart from that handicap, their expenditure is relatively much greater than that of the average man in the street. Sir, those people cannot simply walk into a shop or a place of business and buy a suit of clothes like most of our men; the clothes must be specially made for them, and that also applies to the women. But, Sir, one of the cruellest aspects of all is that a large portion of those people need special footwear, and this specially manufactured footwear for handicapped people is one of the most expensive items I have yet come across in this country. They have a third handicap. Most of them must be transported in wheelchairs. This is something they must purchase for themselves. At times they obtain help in that connection, but largely those people are self-sufficient in that respect. The fourth aspect that troubles me is that those people must make use of their own transport. They cannot, like the average man in the street, make use of a bus service; they must have their own cars to transport them. And then I come to the matter I should like to put to the hon. the Minister : Those cars must be purchased on the ordinary market and then modified to adapt to those persons’ handicaps. This costs up to R1 000 and more; and because those people earn less and must pay more for their clothes and other articles, and for their cars, I want to ask the hon. the Minister and the State this morning whether we cannot help those people with a subsidy so that they can purchase a car every third or fourth year. Sir, I know of some of those people driving cars that are 12 years old because they cannot afford to buy a new one. Their expenditure on the maintenance of that car is tremendously high, much higher than in the case of the ordinary man in the street. In that respect they also have a big handicap, and therefore I feel that I must ask the hon. the Minister today whether we cannot help those people by giving them a subsidy, equal perhaps to the value of the modifications to the cars, or perhaps by making the purchase tax a little lighter for them, so that those people can at least buy a car once in four years instead of once in eight or 10 years, so that their maintenance costs will not be so high, so that they can get to their work more easily and so that, to a certain extent, they can enjoy in life what we enjoy; and that they do not have to spend their hard-earned money on the maintenance of cars, etc. I trust that in our State capacity we shall assist and help these people who support themselves; that we shall do something in return for what they do for us, for what they do for themselves and for what they do for their fellow men. I advocate that the hon. the Minister should see whether in the next Budget, or even in this Budget, he can do something for these people in connection with the purchase of motor cars, perhaps by way of a subsidy or perhaps by way of a lower purchase tax.

The hon. member for Kimberley North delivered a plea here for the paraplegics. I have no objection to the plea he made. It was done in an exceptional manner and I trust the hon. the Minister will listen to the plea the hon. member made on behalf of these people, who have already won great fame for South Africa on the international sportsfield.

Sir, I should like to speak to the hon. the Minister about the Land Bank. On behalf of the farming group on this side I want to say that we welcome the fact that the hon. the Minister has thought fit to make R18 million available to this institution this year. This amount is, of course, a little less than in the previous year, and one laments the fact because of the difficult financial circumstances in which so many South African farmers find themselves today. The hon. the Minister is aware of the fact that we on this side of the House have repeatedly in the past advocated that the Land Bank ought to be the financial institution to help the farmer, because of the fact that the ordinary financial institutions today are apparently no longer particularly interested in the financial needs of the farmer for various reasons. In many other investment fields they can obtain a much better return on their investments in our agricultural industry. I am told that in certain districts there are private financial institutions who are calling in farmers’ mortgages. There are only two other institutions, i.e. the Land Bank and another institution, which I may not discuss here, which can help the farmers. Up to three or four years ago the Land Bank was still in a position to make considerable long-term loans available to individual farmers and private companies for the consolidation of debt, for mortgages, etc., and I lament the fact that now, apparently as a result of a shortage of funds, the Land Bank has been placed in a position where it cannot consider any application for a loan in excess of R50 000. I wonder whether the hon. the Minister realizes what the present-day position of many of our farmers is in this respect. In its latest report the Land Bank mentions the fact that applications have decreased slightly in the past year, in comparison with the previous year, but this does not mean that the demands of the agricultural industry for long-term loans has decreased. I agree with them wholeheartedly; the number of applications has in fact decreased slightly. I should like to know what steps the hon. the Minister can propose to place the Land Bank in such a position that in the course of time it can grant more and more assistance to agriculturists on a broader level; particularly with its linked insurance scheme, the Land Bank is pre-eminently the institution which can enable future farmers, who must take over farms, to do so free of mortgage or free of mortgage to a large extent. The Land Bank is therefore the ideal institution in this respect. In spite of the assistance the hon. the Minister is granting this year, and the help he has given in the past, we are concerned about whether in future the Land Bank will be in a position to have more funds at its disposal to be able to help more farmers. As I see the picture— and I am sorry to say this—there is no other way out than for more and more farmers to make representations to the Land Bank for financial assistance. It worries us that the Land Bank was compelled —it is not the bank’s fault; I think it is an excellent institution—to restrict applications for long-term loans to a maximum of R50 000 and also to restrict their hypothec loans to a maximum of R5 000 per application. We want to know from the hon. the Minister what he proposes, and whether he and the Government agree with us that in the course of time the Land Bank will spread its wings ever wider to be able to be of assistance to more farmers in this respect. What I find illuminating in the latest report of the Land Bank, is that a large number of farmers must undoubtedly be in a very difficult position because the Land Bank finds that the fact that the farmers do not quickly enough pay back loans, redemption and the repayment of interest in arrears, makes it impossible for the bank to help more farmers. This is proof that the situation of our agriculturists at the present moment is by no means an ideal one; on the contrary, that it is alarming as far as the future is concerned. Therefore we want to know whether the hon. the Minister can hold out any prospects of the Land Bank’s being able to help us, and of the chances of obtaining more money on the open market in future being good, so that many more farmers in agriculture can be helped, because we are worried about the situation.

The hon. member for Parktown is feeling a bit guilty about the allegations he made the other day in regard to the bank lending ceilings. He today tried to push the guilt on to me and tried to tell the House that I am really the man who made the insinuations. Sir, I made no insinuations at all; I made a positive statement to the effect that the banks had by the end of February exceeded their lending limits to an amount of R8 million or R9 million. In so far as they have done that they have been in the wrong; it was wrong of them to do so, but I think it is almost impossible for the banks, with their vast organizations and their hundreds and hundreds of branches, completely to be able to control bank lending to a definite limit. Previously the banks always had a cushion between the ceiling and the actual lending. Nowadays they are pushing against the ceiling and sometimes they exceed the ceiling and go higher, but I think it is a very difficult matter for them to administer, to be correctly at or below the ceiling. In any case it is not the case, as the hon. member said, that the banks had exceeded the limit by R120 million to R140 million. If that had been the case, if it had been possible at all, as the hon. member suggested, that through booking and overbooking and all kinds of procedures they could evade this regulation, then naturally this control of credit would have been completely unnecessary. I can assure the hon. member that it is not the case that the banks have exceeded their limit to that extent, but if it had been the case, and the Reserve Bank became aware of the situation, the Reserve Bank would have had to force them back to the actual lending limit. What would the position have been if the hon. member had been right in saying that the banks had exceeded the ceiling by R120 million or R140 million, and the Reserve Bank had become aware of it and had forced the banks back to the ceiling where they should have been? That would have meant that they would have had to withdraw R120 million to R140 million, which would have created a very difficult situation. So, even if he had been correct in his statement, I think it still serves the purpose that the Reserve Bank with the consent of the Treasury has increased the ceiling by R120 million to R140 million.

The hon. member also asked me about the devaluation and the foreign borrowing by the Government, and referred to a question he put to me last year about borrowing on the dollar market, and said that I had also said that I thought it was good that we should borrow in the dollar market. But now he asks me why we in the last year borrowed mainly in the Deutsche Mark market or the Swiss franc market. Of course it is quite easy to go back and see what was done in the past. We did exactly what the hon. member suggested. In our borrowing we look at the position then obtaining. He took the hon. member for Sunnyside to task because he had been looking to the future and he quite rightly said that we should look at the position as it is at the present moment. We looked at the position when we borrowed the money We looked at the position petaining at that particular moment. The fact is that at that particular moment last year the interest rates of these various currencies varied considerably and we borrowed in the cheapest market. I quote from a schedule I have here which shows that in certain cases the U.S. dollar was 7 6/16 per cent whereas the Swiss franc was 5¼ per cent; so that was the actual reason why we mostly borrowed Deutsche marks and Swiss francs. Another fact I might mention here is that in many of these cases we had borrowed these Swiss francs and Deutsche marks after revaluation, so that in the case of repayment we do not lose the full amount of the devaluation and the revaluation. Thirdly, I wish to mention to the hon. member that a large percentage of the money we had borrowed from the German and Swiss markets had been retained by the Central Bank; it was not spent, with the result that we had a profit. When there was devaluation we had a book profit on the francs and the marks and the other foreign currencies.

The hon. member also asked me about the Sidarel affair. I am sorry too. We are very sorry about these things which often happen in the capital market, but it is quite impossible for the Treasury to control all these new financial companies that are formed. As I said in reply to a question put to me a few weeks ago, we as the Treasury and the Financial Institutions Office have no control over such an institution like Sidarel because it does not fall under the Banking Act. The hon. gentleman was quite right when he said these institutions which arise like mushrooms and offer high interest rates are often very dangerous. For that reason we are now going into the matter to see whether there is any way in which such institutions could be brought under our control. Of course, the hon. member will agree with me when I say that we do not want to spread our control too broadly. We do not want to control everything. It is impossible; it is unwise to control everything, but still we are going into the question to see whether it is at all possible and feasible and correct to exercise some control over the formation of financial institutions of this nature.

About forward covering the hon. member asked me a few questions. I can just say that the Central Bank provides forward covering for the corporations. They are performing a public function and for a percentage, something like ¼ per cent, the Central Bank is providing forward covering —not for private institutions but for the State corporations. But it is not possible for the Central Bank itself to procure cover for its own purposes. We do not know of any cases of this nature, and I do not think it is at all possible to do that.

The hon. member also asked me about borrowing by the private sector in their overseas market. Well, we shall in the course of time, and from experience, be able better to lay down guide lines. There are no fixed guide lines. As the hon. member knows we have in the past allowed State corporations like Iscor and Escom and the Rand Water Board and the municipality of Johannesburg to borrow abroad. We shall start with the larger corporations. After all, it is impossible for a small business or corporation to go overseas to borrow money. It will mostly be the national organizations which start something in the mining or the industrial field of national importance. The hon. member will realize that we shall have to be very strict in these matters. In the first place it would frustrate and stultify our whole monetary policy if we were to allow too many institutions to borrow too much money in the foreign market. We will therefore have to exercise some control there. In the second place it is not good for South Africa’s name when there are too many institutions or companies borrowing on the foreign market. We therefore have to exercise a very strict control. In the beginning it will be mainly the national companies which start projects in the mining and industrial fields of international importance.

Arising out of that, is it the intention to control the interest rates as well in respect of South African companies borrowing abroad?

Oh yes; these foreign companies will have to apply for the right to borrow overseas. We of course will look into the matter concerning the conditions of the loans. If the interest rates are too high or if there is any other factor that might distort the local market, we shall have to look into that too. In any case, they will have to fall into the whole pattern of foreign lending. We will see to that.

The hon. member for Constantia just in passing mentioned that our problem in South Africa was low growth and low productivity. Of course I do not want to enter into the Budget debate again. This is the complaint we get from hon. members on the other side, namely that South Africa’s economy is in dire straits as a result of low growth and low productivity.

Per head of the population.

That is the general statement by hon. members. I again wish to remind the hon. members, although they do not want to accept this reminder, that not only South Africa but the entire world today is in a state of so-called recession. This low rate of growth about which we are complaining is not only to be found in South Africa; it is prevalent all over the world today. I received yesterday the brochure News Week from America. It is dated 24th April and therefore still has to appear. In an article I read the following: “Western Europe’s over-all production last year rose by only 3 per cent.” We are being accused in South Africa for bad economic administration and that type of thing because we have an over-all production rate of just over 3 per cent. But here we find that the whole of Western Europe’s over-all production last year rose by only 3 per cent.

But our population is growing twice as fast.

I will come to that. I read further—

They have not committed themselves to 54 per cent.

I read on—

That is what they expect for the coming year. May be. It is therefore not so extraordinary that we in South Africa do not have the high rate which we all want to have. We are in a period where there is a low rate all over the world. The hon. member for Parktown, and I think my hon. friend for Pietersburg, mentioned the other day that South Africa was not impregnable. They said we were vulnerable and that if something happened in the outside world we felt it immediately. It is true. South Africa has an open economy. We are not an isolated community which is not affected by happenings in other parts of the world. We have an open economy. America’s economy is only affected by its outside trade to the extent of 6 per cent. And America was first last year not only to close the gold window but also to impose the 10 per cent surcharge on imports. We have an open economy to the extent of 25 per cent. So we are very vulnerable. We are affected to a very large extent by happenings in other parts of the world because we import and export a very large percentage of our gross national product.

The hon. gentleman’s complaint actually is in regard to interest rate control and participation bond rate control. I think we could have discussions here for hours on this particular point. There are two distinct viewpoints in the world and in South Africa in regard to interest rate control. We had it once in South Africa after which it was abandoned officially. Later on it became a question of moral persuasion. We talked to the banks and the building societies and in this way tried to impose a ceiling in regard to interest rates. We think it is necessary at the present moment again to impose interest rate control, mainly for the reason which the hon. gentleman has mentioned, namely that there is a softening of rates in the world. We want to help that softening in South Africa. We do not want the competition between the banks for liquid funds to prevent that softening and the coming down of interest rates in South Africa. I recognize that this is probably a point on which we could talk for hours without being able to convince each other. After very serious consideration of the matter it was the opinion of the Reserve Bank with the concurrence of the Treasury that the time has come that we should do something in regard to interest rates. But it is not as easy as the hon. gentleman said. He said that we distort things now and that, if we leave matters, money, in accordance with the market economy, will always flow into the best directions. It is not always so. We have seen in the last few years that interest rates had no effect at all on consumer expenditure. Consumption went higher and higher no matter what the interest rate was. We have seen during the last few years how much money went into the building of offices. I believe that in Johannesburg there are hundreds of offices standing vacant at the moment. We had this big building boom in the big cities of South Africa. Particularly participation bond funds went into big building projects. But we did not get money in the actual housing sphere where we wanted the money. It is not so easy to say that these things distort the economy. Interest rates do not play the part they did play in the past. The hon. gentleman asked me whether we could not simply have used the bank rate. The bank rate no longer has the effect it had in the past when we studied economics. It no longer plays the same role as it did in the past.

The hon. member for Parktown asked about the Post Office savings bank. As far as I can understand this matter, the payment of interest on your daily balance is not possible before the computerization of the bank. In any case, this is a matter we shall go into. I believe, however, that that is the position and as soon as that is provided they could pay on a daily balance. There are things which worry me too in regard to the whole Post Office savings bank system. We shall go into these matters.

*The hon. member for Potgietersrus made representations in regard to more assistance for young couples. We shall look into the matter. In regard to the hon. member’s request for maternity benefits, I just want to point out to him that in the year in which a child is born, there is a deduction of R100 from taxable income in respect of medical costs, as well as a child rebate of R100. There is already a reduction of R200 in the taxable income.

The hon. member for Kimberley North referred to certain physically handicapped people. This is a matter which also deserves investigation. In certain circumstances the persons concerned already receive a rebate in respect of the customs and excise duties on imported articles. If these persons have an income of R5 000 or less, they are also allowed to subtract R600 from their income in respect of apparatus used by them and in respect of travel expenses. Something is already being done for these persons, but I can give the hon. member the assurance that we shall investigate the matter again in order to see whether something more can be done for them.

Votes put and agreed to.

Revenue Vote No. 8.—“Provincial Administrations”, R774 291 000:

Mr. Chairman, when we deal with this Vote I think the adage “the proof of the pudding is in the eating” is a correct one. The House will remember that last year there was a tremendous fuss, on the part of the Opposition, about the new dispensation which, from that date, we implemented in respect of the provinces in terms of the new Financial Relations Act. Hon. members opposite made a tremendous fuss. The hon. member for Durban Point actually asked what hope there was for the continued existence of the provincial system. The hon. member for Salt River made the classic statement that as a result of that dispensation he would not take part in this debate again this year, that he would say nothing this year. It does not look to me as if he does not want to say anything, because he cannot say anything in that connection. What do we find if we review this Vote? May I specifically tell the hon. member for Salt River that as far as the Cape Provincial Administration is concerned, there is an increase of almost R25 million. This applies to each of the other provinces. In Natal there is an increase of almost R10 million. In the Transvaal there is an increase of R23 million and in the Free State an increase of R5 million, a total increase of more than R63 million. We remember that last year the Opposition said that the Provincial Administrations would become secondary advisory councils. I think the hon. member for Salt River was the person who made the absurd comparison with the homelands, the Transkei, etc. What was the guarantee? The guarantee of this side of the House was a complete guarantee that consisted of four parts. The first was that the amount voted to the provinces in future would be the subsidy plus their tax potential and that this must be equal to their needs. The second guarantee was that they would obtain this allocation; in other words, that in all respects their needs would be met in the case of a slump or a recession. If we now analyse the Vote, the guarantee specifically applies this year when we have had a difficult time of it, financially speaking. This year the guarantee given by this side of the House is being implemented in all its consequences. This year the position is such that the provinces do not have to come to the Government with their hats in their hands so that it embarrasses them; that their capital needs have been determined by a scientific basis and that now that we have experienced a financial slump, now that there is a slight scarcity of money and a recession, they can specifically come to the Central Government in a steady and independent way and the Central Government is in a position to meet their needs. I say that their capital programme is now being drawn up completely scientifically in all respects. It is being based on our economic conjuncture, the conditions, the gross product, the growth rate, etc. As far as we are concerned, it embodies this immediate benefit, i.e. that as a result of this there is no visible increase in the provincial rates. The provincial rates curve is actually evidencing a downward trend. This speaks volumes. It actually proves the success of the new dispensation granted to the provinces. In this period of capital scarcity, with the Government perhaps having had to curtail the subsidy, the provinces would have been compelled to supplement their revenue by additional taxes if the old dispensation had been adhered to. I am convinced that if given the choice today of going back to the old subsidy system, and the supplementing of subsidies on an ad hoc basis, as was the case earlier, the provinces would be the first to say that they accept the new dispensation with great delight and satisfaction. But this also has another advantage, as proved by the fact that the provinces have disciplined themselves—because they know that their representations are dealt with sympathetically—to this extent that they come to the Government in a disciplined way with a very clear and more scientific stipulation of their needs. Therefore it is particularly gratifying to see this appropriation and to see to what extent it works successfully in the light of the amendment brought about last year by the Financial Relations Act.

Mr. Chairman, if I am permitted to do so, I want to give a reply in this debate on the provinces to a question put by the hon. member for Newton Park on the previous Vote, a question to which I unfortunately failed to reply. The hon. member for Newton Park pointed out to me the position at the Land Bank. He said that the Land Bank restricted its loans to a maximum of R50 000, and that many farmers could not obtain assistance. He said the funds of the Land Bank were limited, and wanted to know whether there were any prospects of that situation being improved. I want to tell the hon. member that we ourselves feel it is a pity that the Land Bank is obliged to curtail to a large extent its powers to grant loans. This is the case as a result of the scarcity of funds. The scarcity of funds is partially attributable to the things we mentioned here, namely that funds are being channelled in certain directions, where they can earn very high interest rates. The Land Bank cannot offer those high interest rates since it cannot charge the farmers high interest rates. Therefore, interest rate control may eventually benefit the Land Bank as well.

Another matter to which I want to draw the hon. member’s attention, is that many of the boards of control of the bodies closely connected with the Land Bank, some of which are supported by the Land Bank, do not invest their funds with the Land Bank. I think that in the future we shall have to make a plan and do something to ensure that such bodies invest their savings with the Land Bank in order that the Land Bank may by those means obtain more funds for loan purposes. As hon. members know, the State has granted the Land Bank an amount of R10 million for its own purposes at an interest rate of 2 per cent. Because the Land Bank gets this amount at an interest rate of 2 per cent, it is possible for that body to borrow approximately R40 million at the current interest rates so as still to be able to fix its own interest rate at the current interest level. Therefore, in this way the State helps the Land Bank, by way of a low interest rate, to be able to borrow a large amount of money at a higher interest rate in order that it may maintain its lending rate at a fixed level. This is one of the methods that are used.

The second important question to which I replied in the Budget debate, was that some financial institutions feared that the bonds of the Land Bank would no longer count as liquid assets. In my reply to the Budget I said that that fear was unfounded and that, until the Government had taken a decision in that regard, all the bonds taken up at the Land Bank would still count as liquid assets. I expect this also to be of assistance in inducing banks and other institutions to invest more money with the Land Bank. The Land Bank is going public shortly, and in view of the increased liquidity which exists and which is going to come about in the finances of the country, we expect the Land Bank, with the money allocated by the State, to be in a position to attract more funds for its purposes, also because the current interest rates are showing a downward trend. I have hopes that in the years or year ahead the Land Bank will find it a little easier to operate. However, it is not my expectation that it will very soon be possible for the Land Bank to be placed in a position where it will be able to meet all the demands of farmers as far as agricultural financing is concerned. That is going to require a great deal of money, and therefore it will still take a very long time.

The farmers are becoming fewer; so there will be more …

In any case, the chances are there, and the prospects of a better state of affairs and increased capacity on the part of the Land Bank to accommodate the demands of agricultural financing to a greater extent, are better for the years that lie ahead.

Vote put and agreed to.

Revenue Vote No. 9.—“S.A. Mint,” R540 000 :

Mr. Chairman, I would like to deal with a subject which I have taken up with the hon. the Minister over the years. When we began with decimalization, naturally a new coinage was introduced into South Africa. With that, we saw the disappearance of the pound note, or afterwards, the R2 note. The hon. the Minister replied to one of my questions I put to him at great length. Today we are in the position that we have a R10 note, a R5 note and a R1 note. I do not know whether the R1 notes are printed on paper of a very low quality, but tellers in banks and other people who handle large sums of money in bazaars, etc. will tell you that, through the absence of an intermediate note, the R1 note is undoubtedly used to excess.

Unfortunately the banks keep on reissuing these old notes and one has to deal with these dilapidated, dirty notes. Those people who handle currency and have to pay out large sums will find it very convenient if there is an intemediate note between the R1 note and the R5 note. If it will make it convenient for decimalization, say, a R2,50 note can be introduced. However, there is no doubt about it that the R1 note today is used to a great extent with the net result that you have this very dilapidated piece of paper to deal with. I know of some people who say that they would like a million of them, never mind if they are dilapidated. But I would like to ask the hon. the Minister to give consideration to the introduction of another note. I know that the Chambers of Commerce have put forward a request to him but that he has turned it down. Maybe he feels that it is not convenient or warranted. I feel that he should give consideration to the introduction of such a note. I think that the hon. the Minister should look to the quality of this R1 note. If he feels that the paper on which it is printed is satisfactory then he should print these notes in greater quantities than they are printed at the moment and withdraw these very dilapidated notes. I have often taken it up with the banks and asked them whether we could not get cleaner notes, but then they tell me that they are only issued with a certain number of notes by the Reserve Bank and accordingly they reissue these dilapidated bank notes. I think it is wrong to ask people to handle these dirty, filthy notes, because one does not know what sort of disease you may pick up. I feel that if there were intermediate notes it would reduce the handling of the R1 notes and would make it easier as far as carrying currency is concerned. The person who is carrying money around today finds difficulty at times to get change. If you have to change a R10 note you have to carry a packet of R1 notes with you. It is not easy to get change for a R5 note either. If one wants to buy a small article you find difficulty in getting change for a R5 note. In regard to the intermediate note, I would like to see the R2 notes reintroduced. If the hon. the Minister feels that that is not convenient as far as decimalization is concerned, let us have a R2,50 note.

I want to leave the question of notes and look at the coinage. Firstly, I refer to the R1 coin. I do not know whether the Minister has the statistics available as to the circulation of this particular coin, but from my experience and the enquiries I have made, it seems that it is not a popular coin. It is a heavy coin which is becoming a collector’s piece in some cases. It is not a very popular coin. I wonder whether the hon. the Minister could give consideration to either withdrawing it or making it lighter in weight. I do not know whether that could be done, but I do not think it is a coin that is very popular. Then you come to the 50 cent coin. It is another coin that does not have the circulation you would expect it to have, also on account of its weight. It is a heavy coin and is difficult to carry around. When people are extracting change from the bank you find that comparatively speaking there is very little demand for this particular coin. One only has to go where they handle big amounts of cash to find out what coins are used. You find that you very seldom see a R1 coin. And if you do see one turning up in a cash box, you wonder where it comes from. As I have said, it is becoming a collector’s piece. The 50 cents piece is also a heavy coin. Then there is very small coin which has come into existence, the ½ cent coin. I know it may help the poorer sections of our community, but I have yet to see an article which is marked down to a half cent. You have this little coin which is more of a nuisance than it is worth. One wonders why it was ever reduced to the size it is at the moment. It is not a coin which is very popular. It has a nuisance value, and is apt to get lost.

I want to ask the Minister to give his serious consideration to the question of the note issue. We have now had experience of the note issue, and I think it is time we reconsidered the whole matter, to see whether we cannot reintroduce a note in-between the R5 and the R1 notes. Further, I should like to ask the Minister to consider having these notes printed on better quality paper, because they do not last. I am sure that the number of notes handed in to the Reserve Bank for exchange must be very large indeed—much larger than it is necessary. I feel that the use of better quality paper or an intermediate note would improve the position.

Mr. Chairman, all I can say at this stage is that we shall consider what the hon. member for Salt River had to say in this regard. I do not have any definite information about the demand for the particular notes he mentioned, for instance the R2 note. I also do not have information regarding the 50 cent and R1 coins. With due respect, I am of the opinion that this is a matter which should be taken up with the Reserve Bank and not with the South African Mint. I do not think the decision is taken by the Mint. In any case, we shall bear in mind the points raised by the hon. member.

Vote put and agreed to.

Revenue Vote No. 10.—“Inland Revenue,” R10 444 000, and S.W.A. Vote No. 3.—“Inland Revenue,” R224 000 :

Mr. Chairman, I want to take up with the hon. the Minister the question of the method of tax administration, with particular reference to the assessing and collection of taxes. I think it is common cause that the Department of Inland Revenue, as is the case with most departments and many business organizations in South Africa, is suffering from a continual shortage of staff. I doubt very much whether this situation is going to change. South Africa is, we hope, a country which is going to expand, and our economy is going to expand. We are going to have as a natural process of evolution a shortage which, I think, will remain. I do not think we are going to get over these staff shortages. Our population may grow, but our industries will also grow, and therefore the need for workers and people of management calibre will also increase. We shall therefore always have shortages. At the present moment I doubt very much whether the hon. the Minister or the department will be prepared to say that they are happy about what checking is being done, what inspections are being done, what assessments are being done, and, from the Controller and Auditor-General’s point of view, what audit is being done, of income tax returns. I do not say this in any spirit of criticism because it is a factual position and I think one must face it to see if we cannot change the position with the means we have at our disposal. I remember, for example, that in the good old days when I was in practice, if a dividend was paid by X Company to Mr. Y, a notification of the payment of that dividend always arrived in Mr. Y’s file, and if that dividend was not returned by him, the Receiver of Revenue was able to say, “You have not declared this dividend which we have been advised by X Company has been paid to you.” This may be happening today, but I doubt it very much. I do not think that cross-checking is taking place today to the same extent as before. We have gone some way in trying to solve our tax administration problems by the introduction of P.A.Y.E., which at least ensures that there is an automatic deduction of a portion of a man’s tax, and by the introduction of provisional payments which force the taxpayer to some extent, and to some extent only, to assess himself twice a year and to make his tax payments in advance. I wonder, Sir, whether the time has not come for us to take another step forward. We know that in the United States and in some European countries—my colleague, the hon. member for Pinetown, tells me that it happens in Switzerland—there is and has been for many years a system of self-assessment. In other words, when you or your accountant prepares your income tax return, you in effect do the work of the Receiver of Revenue; you prepare your assessment and you assess yourself. The hon. member for Pinetown and I last year had an interesting visitor, who was one of the assessors of the American inland revenue department. He had come to South Africa to help Americans living in South Africa with their assessments, because they are obliged to complete their own assessment and to assess themselves. In Canada, I understand, there have been some great steps forward. There they had the Carter Commission and they changed their whole system of taxation very considerably. They seem to have advanced to a considerable extent in the logistics of tax collection. What seems to be happening is that these countries are moving towards a system whereby you assess yourself. This assessment is then fed into a computer and then the computer would set up a norm for you. Most of the people who pay tax in this country are salary-earners with a reasonably fixed income. A norm is set up for each taxpayer. If the income of Mr. X is R10 000 a year, the computer would record this as his norm. When his next return comes in, the computer looks at his assessment within certain limits, a plus on the one side and a minus on the other side. It may be 5 per cent or 10 per cent either way. If his return for the following year does not differ by more than 10 per cent up or down from that for the previous year, which the computer has already recorded, then this is regarded as an assessment that does not require investigation each year, and a period of time is set, after which everybody’s assessment is dealt with regularly. I do not know what the period is; it may be every three or five or seven years; I do not quite know how they operate, but I understand that there is a set period of time. This would therefore mean that assessments that really require looking into, could be handled much more effectively and much more efficiently by the available staff. You would then be able to place the emphasis on the assessment of individuals and companies whose incomes vary considerably. I fear that unless we move from the individual assessment of every taxpayer to a mechanized system through the computer, we are going to find that the efficiency of our tax system may well break down. Just as it has become necessary today in every aspect of business life to computerize, so has it also become necessary to computerize in the sphere of taxation, and I hope that some consideration will be given to this suggestion.

There is one other small matter that I want to raise, and I want to raise it in the hope that the hon. the Minister will be able to allay some fears. I have had representations from certain accountants who are very concerned with the fact that whenever they object to an assessment they find that their client’s tax position is investigated over a period of three to five years. We know that a lot of assessments are not examined very carefully today. This is the point where I came in. But what they say is that if you object to any assessment from the Receiver, then you will find that there will be an investigation into your affairs. I doubt whether this is the case but I think it is important that the hon. the Minister should be able to tell us what the position is. One cannot have any objection to this. The Receiver is obviously entitled to examine anybody’s income tax returns on any occasion if he cares to do it. That is his function and his job, but it would be a sad thing if a special situation existed today where, if you object to your assessment, all your asessments for the last two or three years come up for re-examination. I hope the hon. the Minister will be able to give us some assurance that this in fact is not taking place.

I want to raise with the hon. the Minister what appears to be an anomaly or an irregularity in the collection of income tax from children. I refer to this as an apparent anomaly, because it may well be that there is machinery to put right what seems to be wrong. If so, I am not aware of it and I believe most taxpayers are not aware of it, and it is because of that that I raise this matter.

It is a fact that many children, particularly older children, do in fact try to make some contribution to the family income, or on their own merits earn a small income from their own activities. It is provided in the Income Tax Act that amounts so earned by children up to the amount of R600 per annum, shall not be taxable. These earnings are not taken into account in the assessment of their father, the taxpayer, and only if the amount so earned by these children exceeds R600 per annum do they themselves become independent taxpayers. This, in effect is the instruction given in this very excellent brochure issued with the income tax forms.

Let us take first of all the case of a university student. It may be that during his university holidays he goes out to try to earn some money in order to make a contribution to his own education and thereby to assist his family with their budget. If he is employed by a firm such as a department store, or he works for a newspaper, his pay cheque for the few months in which he works will be subject to an automatic PAYE deduction of 10 per cent. If he earns R300 during his school holidays he does not become a taxpayer and he does not render a tax return, but R30 has been taken off his remuneration at source by way of PAYE. This tax credit to the family, the R30 which he has paid, cannot appear in his father’s income tax return, because the amount could not be shown, being under R600; nor does it appear in his own income tax return, because he has none, having earned under R600. Therefore, this R30 accrues to the State to whom it is in fact not due. It comes from a person who is not liable for tax, nor does it accrue to his family as a credit against his family’s tax. This is the case where one member of the family is in fact a taxpayer.

I think perhaps a more serious anomaly arises in the case of the poor families, the low-income families, of whom there are many in this country, particularly in the non-White group. There, for example, you might have the father, the wage earner, earning some R2 000 per annum. You have the children making some contribution, possibly, to the income of the family. If the family is large enough, if there are sufficient minor children in the family, the abatements will in fact make the father a non-taxpayer. If he makes no income tax return, he is not liable for tax and he does not come within the purview of the Receiver of Revenue. His children who are each making their contribution of possibly a few hundred rands to the family budget, are themselves not taxpayers, but nevertheless each one of them is being taxed at source. In spite of its poor circumstances, the family is in fact paying tax where none is due. I do not know how many such cases there are, but there may well be very many in this country, particularly when one has regard to the Coloured community, the Indian community and a large part of the urban Bantu community. In the urban areas, such as Soweto, you have instances where the entire family goes out to try to make some contribution to the family budget. In total they might well fall into a tax class, but because the children are excluded, the total income of the family does not fall within the taxable bracket. These children’s contributions are nevertheless taxed at source as if they were liable, by means of deductions by way of PAYE.

I want to ask the hon. the Minister, if he agrees that this anomaly does arise, whether there is any machinery by which the anomaly can be rectified. It must be remembered that these families make no return of tax, or if they do, then these earnings are not shown as part of the income of the family. How can the matter be remedied? How can these people be assisted not to pay taxes which are not due, or how can they recover taxes which have been paid while they were not due? It seems to me that this is an anomaly, an injustice if you like, which was not intended by the fiscus, but which should be put right because it bears most hardly on those children who, where it is needed, are making a contribution to the family income. It bears even more hardly on those families which are in dire need of contributions by their children, or on those families where every member has to earn as much as he can in order to survive. These hardships are aggravated in cases where the family is not liable to tax, but pays the tax through the PAYE system without an obvious remedy for the recovery of tax incorrectly paid.

Mr. Chairman, I shall not reply to that question which was put directly to the hon. the Minister by the hon. member for Von Brandis, because I should like to return to something said by the hon. member for Parktown. I give him my full support if anything can be done to promote the collection of our funds and the control which is exercised over it. We are all of one mind about that and we are glad that the hon. member raised something like this. Attention will most certainly be given to something of this nature.

The hon. member also said, however, that accountants had drawn his attention to the fact that when a person objects to his assessment, his affairs are investigated. I must say that I have received no such objection in Pretoria. The hon. member also said he did not believe that this assertion was worth much. I want to put it pertinently that when a person objects to his assessment, he should not, after all, be afraid of having his assessments for the previous years gone into as well, for if his assessments were correct and he did not meddle with the information, he need not be afraid. So I should not feel concerned about such an investigation at all. If it is true that it has become customary for the department to act in this way—I do not believe that it is the case—the department will stop doing so very quickly, because if it finds that all the assessments were correct, it cannot afford to waste manpower on examining such assessments. I also want to say that my experience in the past was that the department does not have the necessary manpower to conduct inspections on a large enough scale. As far as I know such inspections, where they

were in fact conducted, have always proved successful and have always been to the advantage of the State.

Mr. Chairman, the hon. member for Parktown has raised some interesting points in connection with our system of tax assessment and collection. The amount spent on the collection of taxes is an important consideration. According to a statement which I have in my possession, the cost which we incur to collect taxes runs into a fairly large amount. In 1969-’70 the cost to collect taxes amounted to R7,99 million, and in 1970-’71 to R8,4 million. I also have here a comparison with the cost of collection in the United States. In the case of South Africa, it is 0,4 cents. It was 0,4 cents in 1969-’70. In 1970-’71, when a larger amount was involved, it was 0,39 cents. In the United States, to which the hon. member has referred, it appears to be 0,5 cents per dollar, which means that the cost of collections in the United States was roughly about 40 per cent to 50 per cent more than in our instance. But, Mr. Chairman, that does not convey necessarily that we can sit back and be satisfied with our position. In any administration, I will admit, one will always find that there is room for improvement. That will be the position in our administration as well. That will always be the case where one has to deal with human beings. In view of this, inter alia, I may mention to the hon. member that in October and November, 1971, two members of the Department of Inland Revenue, the Secretary of the department, Mr. Schickerling, and Mr. Schweppenhausen, spent two months in the United States, Canada and the United Kingdom in order to make a study of their systems of taxation, collections, and what is involved.

*In a memorandum Mr. Schickerling described the purpose of the visit as follows—

† As a result of this visit, a rather comprehensive memorandum was compiled by Mr. Schweppenhausen. I have it here and makes for very interesting reading. The matter was not left at that, but Mr. Schickerling states here—

That was the other point raised by the hon. member.

… maar die basiese voordele wat dit inhou, kan nou reeds met aanpassings van prosedures deur ons benut word.

Then the hon. member also raised the question of objections and special investigations in the case of objections. The explanation seems to be very simple. The reason is that an objection is dealt with by a more experienced officer, who may see more errors in a return than a junior who dealt with the return originally. I think that is probably a reasonable explanation.

The hon. member for Von Brandis raised the question of children’s income, where some of them may work during school holidays, university holidays and so forth. The explanation I have here is that PAYE is not necessarily deducted from a student’s wages. Instructions appear in the PAYE deduction tables that if employers are satisfied that the employee is a fulltime student, they need not deduct. When deductions do take place, the student himself is given a refund and a shortened procedure for such a refund is in fact in use. I understand that it is only a small form that has to be completed and sent in to the collector for refunds.

Mr. Chairman, I thank the hon. the Deputy Minister for his explanation. I think it is perhaps not widely enough known that there is a method for the recovery of such money improperly collected by means of PAYE from students. However, this was not the whole of my question nor the whole clarification which I sought. I did, in fact, refer also to families where the children, being minors, make a contribution to the family income. These children are not necessarily full-time students. They may be part-time students. They may not be students at all. There is, surely, an anomaly in a situation where minors, who are not themselves liable for tax as individuals, and whose fathers are not liable either for tax despite the contribution which these children make to the family’s income, if only in the degree of self-support which they offer as their contribution, may nevertheless be taxed at source. It is a fact that they are taxed at source. I have personally seen, in the case of my own family, where my children have earned some small income by means of writing a magazine article, that the tax is in fact deducted by way of PAYE. This is universal practice. It happens everywhere in this country, and it happens most particularly, I would say, in the case of those families who are hard-up and whose children have to go out to make some contribution to the family income. The question whether they are students, full-time students or part-time students, is irrelevant. They do, in fact, make a contribution to the family income. That family, as a whole, is not taxable because of their low level of income, but these children are in fact being taxed. They are not aware of their remedy, the means by which they may recover this tax, a tax which is not in fact due to the State.

My information is that the same applies to the instances now mentioned by the hon. member for Von Brandis. In any case the fact is that, if a person is not liable to taxation, he can always claim a refund; he will get that refund if he is entitled to it.

Votes put and agreed to.

Revenue Vote No. 11.—“Customs and Excise”, R35 989 000, and S.W.A. Vote No. 4.—“Customs and Excise”, R135 000:

Mr. Chairman, the hon. the Deputy Minister will deal with this Vote, but I want to ask you first to allow me to say a few words in regard to Mr. D. J. van N. Groenewald, Secretary for Customs and Excise, who is retiring from the service as from 1st July, 1972, and will not be with us for the next session of the House. On this date Mr. Groenewald will have more than 44 years of service behind him. He has served in the South-West Administration, the Department of Bantu Administration and Development and the Public Service Commission, and at the time of his retirement he will have been the head of the Department of Customs and Excise for almost 13 years. I want to avail myself of this opportunity to convey the thanks of the Government and of the House to Mr. Groenewald for the valuable services he has rendered, and in particular for the serious and objective way in which he performed his duties at all times, as well as for the loyalty which the State and I have always received from him. I should like to wish him a very pleasant period of retirement.

Mr. Chairman, on behalf of this side of the House I should like to associate myself with the remarks of the hon. the Minister.

Votes put and agreed to.

Revenue Vote No. 12.—“Audit”, R2 259 000 :

Mr. Chairman, we now come to the last of the Votes of the hon. the Minister of Finance and possibly the most important one of the whole lot. We are dealing here with the voting of money to the department under the control of the Controller and Auditor-General. The Controller and Auditor-General is the person who is the watchdog of this House, in the same way as we are the watchdogs of the public of South Africa, to see that moneys voted by this House are properly expended and that proper control is exercised over moneys that are voted for use in this country. I want to start by expressing the appreciation of this side of the House to the Controller and Auditor-General, Mr. Kotzenberg, and to his staff for the job that they have done. They have done a good job under extremely difficult circumstances. One only has to go through the reports of the Controller and Auditor-General to see the difficulties under which they have worked and to see the magnitude of the task that they are being asked to carry out under these difficult circumstances. We can sense a frustration in the report of the Controller and Auditor-General in that he is not being allowed to do the job that he should be doing.

Who is stopping him?

No, I am not fighting. There is nothing to fight about. He is not being allowed, through circumstances beyond his control, to do the job that he would like to do. We find that he is required to audit the accounts of 261 Government departments, Government agencies, statutory bodies and boards, Bantu authorities and so forth. This is a tremendous task which he has been asked to do. But in addition to this he is expected to carry out in loco inspections of cash, revenue, stores, in offices and institutions spread throughout the whole of the Republic. If we put this in another way, what it amounts to is that he should every year, inspect 2 556 different offices, institutions and depots. We find that in the last financial year he was able only to inspect 1 090. In other words, something under 43 per cent. This means that in effect what we could imagine from this is a 43 per cent effective audit. But we find that this is not so, because even in the 43 per cent of the offices that he has visited, he has not been able to conduct a 100 per cent audit of each of those offices. What he has had to do was to do spot checks in different places. What do we find is the situation? I quote from his report for 1970-’71 on page 16, paragraph 15 (3).

From which report?

The report of the Controller and Auditor-General, part I, page 16, paragraph 15 (3). It reads as follows—

He continues to say—

This is as a result only of spot checks. What would the result have been of a full audit? This is a question I should like to put to the hon. the Deputy Minister of Finance, who is handling this Vote and of course also to the hon. the Minister who is also present here.

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

Afternoon Sitting

Chairman directed to report progress for member to be sworn.

House Resumed:

Progress reported.

Mr. Chairman, I am sorry but there is so much noise that I cannot hear what you are saying. I assume that you have put the vote “Audit”, which we were debating before the House adjourned for lunch, because it was impossible to hear what you said. I want to say that it is nice for the Government to be able to rejoice. Let them enjoy it now, because it will be shortlived. Brakpan is coming again. We will talk to them then.

Let us now get down to the Vote which is before the House, the Vote Audit, of the Minister of Finance. Before we adjourned for lunch I was saying that the report of the Controller and Auditor-General showed a degree of frustration on the part of the Controller himself and his department in his failure to carry out his duties as we would expect him to carry them out and as he himself would like to carry them out. He failed to do so because of circumstances beyond his control. I have quoted where he said that it was impossible to carry out a more thorough investigation as a result of the difficult staff position in his department. He goes on page 51 of his report—I hope you can hear me, Mr. Chairman—and he says:

He goes further and says that he has lost certain officers, but that he has been able to recruit others. A most revealing statement he makes is where he records that of the officers who were concerned directly with audit work, 51 per cent consisted of officers who had less than four years’ service or who were there in a temporary or part-time capacity. How can the Controller and Auditor-General be expected to carry out the duties, which he himself would like to do and which this House expects him to do, under these circumstances? I want to ask the hon. the Minister and his Deputy what they are doing to assist the Controller to do the job he is supposed to do. Are they satisfied with the circumstances as we find them here today? I must say that we on this side of the House are not satisfied.

I want to draw pertinently to the attention of the hon. the Minister the concluding paragraph on page 51 of the Controller and Auditor-General’s report. He says:

I had a look at past reports and I find this cropping up over and over again. In fact, this is the third year that an almost identical paragraph has been printed and what has the hon. the Minister done? Has he done anything to assist the Controller and Auditor-General, to improve the situation so that he can do the job of work as he would like it done? I am aware that a certain amount of local auditing is done within departments by the departments themselves. I am also aware that a certain amount of control is exercised within those departments by the departments themselves. However, I am afraid that that is also unsatisfactory, especially if we look again at page 16 of the report, paragraph 15 (1) where the Controller and Auditor-General reports:

Because of the instance which we have discussed in this House in the last 18 months or more, instances of complete lack of control on the part of departments —I refer to the Agliotti scandal and others which we have had here; I refer to the case which was revealed yesterday of a certain Mr. Gouws who had sole control of a tremendous fund of money while there was no supervision over him—I raise this matter today. We are perturbed. How many other instances are there which are not being found through lack of audit control, where the Controller and Auditor-General wants to do the job of work, but this hon. Minister and his Deputy are not giving him the tools wherewith to do it? When I started, I likened the Controller and Auditor-General to the watchdog of Parliament. It is no good having a watchdog who is old and mangey and whose teeth have been ground down. We need to give our watchdog teeth and it is only this hon. Minister and his Deputy who can give that watchdog the teeth he needs to do this job of work. It is three years now that the Controller and Auditor-General has been asking for this, but the hon. the Minister has still not given it to him.

Let us go further with the question of local control. If we look at the Controller and Auditor-General’s report for 1969-’70, we find on page 16 that it is not only the Controller and Auditor-General himself who is worried about this lack of control, but also the Treasury. On page 16 it is recorded that—

I want to say that, unless the Cabinet tightens up at that level and assists the people who should be exercising the control to carry out the control measures required of them, we are never going to have proper control of this matter. In the report for the year 1970-’71, mention is also made of the Department of Defence, the department which falls under the Minister of Defence, the leader of the Nationalist Party in the Cape, who has been so jubilant about the success that he attained on Wednesday. What do we find there? We find that there is internal audit provided for in his department, but that this appears to be unsatisfactory. We have had a similar statement in last year’s report. The one that appears in this year’s report reads that eight of these reports of which three were brought to the attention of the Commandant-General were noted as unfavourable and that even internal audit within the department is not satisfactory. We have had our scandals, and we have had losses of public money due to insufficient control and supervision. Here is a department which should exercise the control. In my days in the Service if there was one thing we dreaded it was the visit of the auditor, because he went through everything with a fine toothcomb. Nothing was left out, but today, I believe, it is not happening because he is unable to do the job which he has been given because he does not have the tools to do it. I want to ask the hon. Minister pertinently : If he was a director of a private concern would he be satisfied and does he think that his shareholders would be satisfied with the type of audit the Government is getting today? I want to say categorically that I do not believe any shareholders of any concern with which I have anything to do with would be satisfied with this amount of auditing. In fact, in the private sector the hon. Minister knows no firm is satisfied with anything short of a complete and total audit. I accept that in an enterprise as vast as this Government administration it is impossible to do a total audit: I accent that. However, I believe that we should do more than we are doing now. I want to appeal to the hon. Minister to give to our watchdog, the Controller and Auditor-General, the teeth which are necessary for him to carry out the job of work he would like to.

Mr. Chairman, the hon. member who has just resumed his seat professed here that he was coming along to ask for assistance for the Controller and Auditor-General, but instead of that he came along to sow suspicion here. I want to tell the hon. member tha the said a few things he should preferably give second thoughts to. He says there is no control over, and management of, certain bodies, or that there is a great lack of it. I think that the lack of control is from those hon. members’ side in respect of their voters in Oudtshoorn.

That is very feeble.

I just want to point out to the hon. member that the inspectorate of the department and its control and management begins within the department itself. If one’s management and control in one’s department is good enough and adequate, there is virtually no work for the Controller and Auditor-General and his staff. This hon. member ought to know that two years ago this matter was before the Select Committee on Public Accounts. We examined the question of staff thoroughly and adequately, and at a very high level the Cabinet increased the salaries of the public servants at the time. This was done specifically to retain the staff. What happened in the past? As a result of this National Party’s good economic policy and its good Government, the country was so prosperous that the Public Service staff was completely drawn off. This hon. member now says, and this is correct, that people who are in the Service have very little experience. The reason is that the staff of the State is drawn off to the private sector. I think it is a compliment to the Controller and Auditor-General and all the departments that as far as their inspectorate is concerned they can exercise as much control as they do. Of course, one can never be completely satisfied, and I want to concede to the hon. member that one must do everything to obtain adequate control. However, one must not try to achieve this with insinuations, as he tried to do. I want to say, in addition, that when the Controller and Auditor-General carries out an audit he does a 10 per cent inspection. If from that sample it appears necessary to carry out a more extensive inspection he would do so. Then a larger audit is carried out. This could perhaps cover 50 per cent or more, depending upon circumstances, if the Controller and Auditor-General’s staff enters a department, carries out a 10 per cent sample check and finds nothing wrong, must a complete audit then be done? The hon. member said :

That is not necessary, and it is not done, The hon. member says that if the Minister has a private business, he would never be satisfied if a complete audit is not carried out. It is not done, because a total audit is not always done. It depends on circumstances. If a total audit had to be done it would be an impossible task and the Controller and Auditor-General would never finish his work. I just want to state something very clearly. I think that the Controller and Auditor-General is giving us an impartial report. He reports clearly and unequivocally; he is not hiding anything and not patching anything up. That is his task. The hon. member said he is Parliament’s watchdog. That is so, and I agree. For that reason all those matters are dealt with by the Select Committee. It is the Select Committee which is again Parliament’s watchdog and which has all those departments before it and listens to witnesses. Decisions are taken accordingly. The hon. member himself is on the Select Committee with me.

Not any more. They threw him out.

Well, that is true, but at least he did have a seat on that Committee. Let it be as it may, he knows that the matters are thoroughly investigated. We ferret out whatever we can and the Select Committee’s report is presented in this House annually. We therefore also have that report before us. Since we do believe that the Controller and Auditor-General must have adequate Staff, and I want to state this clearly, it is ensured at Cabinet level and by the Public Service Commission that this section of the Public Service is properly looked after. As I have already said, the salaries were increased for that reason, and for that reason there are so many other additional facilities given to the officials. In that way we try to retain the people and prevent their being drawn away by the private sector.

Mr. Chairman, of course, I should very much like to agree with what the hon. member for Pietermaritzburg District said at the beginning of his speech. It is quite appropriate that this came from a member of this House itself, since it concerns, as was pointed out, the Controller and Auditor-General and! since he is one of the most responsible officials of this House who is accountable to this House. Then, to my mind, the hon. member for Pietermaritzburg District went further than was necessary. In the first place, he tried to imply that things in connection with Government expenditure were in the process of collapsing. I must deny this absolutely. We know that there are problems as a result of staff shortages, but where would one not find such problems? This is the case everywhere and in all Government departments. In the private sector, too, they have the problem of staff shortages, and adjustments have to be made. However, to try to create the impression that chaos is developing, and that is the impression one gains from the hon. member’s speech, is to my mind totally unfounded. Nor do I think that that conclusion could rightly be drawn from the observations which were made by the Controller and Auditor-General in his report and to which the hon. member referred. For instance, the hon. member dragged in here incidents such as the Agliotti affair and the Gouws affair, which was raised in this House yesterday. After all the hon. member may not argue that these things would not have happened if the Controller and Auditor-General’s staff, for instance, had been in full strength; besides, he may not even argue that if there had been an irregularity in regard to the Agliotti affair or the Gouws affair, that would have been something which the Controller and Auditor-General would have discovered. Here it was not a case of Government moneys being embezzled or removed, where it would have been the normal function of the Controller and Auditor-General to point this out. I would readily grant that the tendency for people to lay their hands on Government moneys, might be strengthened if it were to appear that the Controller and Auditor-General was no longer able to exercise his functions properly.

That is precisely what I said.

Yes, but the hon. member raised instances such as the Agliotti and Gouws affairs, which are not relevant here at all, and which actually, do not concern the functions of the Controller and Auditor-General at all. These were simply dragged in here by the hair. I do not think that the hon. member may rightly argue that in our administration, in our spending, in the keeping of accounts and in the examples of internal audit mentioned by him, a state of affairs has at all developed which may give rise to a tendency towards the conditions to which I referred here. It is not being denied that problems do exist. There are staff problems, and the Controller and Auditor-General has rightly pointed them out, but when he does so, I do not think that we should try to create the impression that we are heading for chaos. I think the hon. member has gone too far in that respect.

Vote put and agreed to.

Revenue Votes Nos. 13.—“Agricultural Economics and Marketing: Administration”, R3 650 000, 14.—“Agricultural Economics and Marketing: General”, R110 396 000, 15.—“Agricultural Credit and Land Tenure”, R3 734 000, 16.— “Surveys”, R3 650 000, and 17.—“Agricultural Technical Services”, R47 000 000, Loan Votes C.—“Agricultural Economics and Marketing”, R1 250 000, and D.—“Agricultural Credit and Land Tenure”, R32 500 000, and S.W.A. Votes Nos. 5. —“Agricultural Economics and Marketing”, R1 937 000, 6.—“Agricultural Credit and Land Tenure”, R3 800 000, and 7.—“Agricultural Technical Services”, R5 444 000 :

Mr. Chairman, may I have the privilege of the half-hour? Year after year on this Vote we very specifically bring certain problems which affect most farmers in this country, to the attention of the hon. the Minister. I hope that in this afternoon’s debate I will not be disappointed, as I was in the past, with the replies of the hon. the Minister in respect of the problems facing the farmers of South Africa.

What does Oudtshoorn say?

Sir, the hon. member for Vanderbijlpark may go ahead and be proud of the result in Oudtshoorn, but let me tell him that with every Nationalist member of the House of Assembly who comes to this House from the rural areas, the responsibility resting on this side of the House to put the case of the farmer in South Africa, only becomes greater. In spite of the Oudtshoorn result and in spite of the fact that the Nationalist Party candidate was elected, I want to say to the hon. member that we on this side of the House will not neglect our duty in respect of the farmer and in respect of the people living in the rural areas. Sir, I have already said that we come here year after year to bring certain problems of the farmer to the attention of the Minister. Today we on this side once again want to isolate some of these cardinal problems very clearly, so that the hon. the Minister may give us an idea of how he sees the future of the farmer. In the first place, I believe that there is a general lack of confidence among most agriculturists today. My proofs are, in the first place, the fact that the average age of the South African farmer is increasing all the time. The place of those older farmers is not taken by younger people. In addition I can prove this statement by referring to the number of students enrolling at the agricultural faculties of our universities every year, and I believe I can also prove it by referring the hon. the Minister to the number of students at our agricultural colleges. Sir, this situation should definitely be a tragic one to anyone interested in agriculture, in the sense that, while most young people are qualifying themselves for a particular direction today, fewer and fewer young people are qualifying themselves for the agricultural industry. To me this is an alarming position, and I believe that in the course of time this country will lament the fact that for so many years we have neglected to do something in regard to this matter. I believe that this lack of interest in agriculture is due to the lack of confidence in the future of agriculture; that is why the father is no longer prepared to influence his son to have himself trained as an agriculturist; that is why fathers are no longer prepared to see to it that their sons attend agricultural colleges. The young people, who are all striving for a high standard of living and who want to earn the highest possible wage or salary, are influenced by the fact that the general and economic situation in agriculture is not attractive enough for them. I want to refer the hon. the Minister to page 2 of the report of his Secretary for Agricultural Economics and Marketing, where the debts of the farmer are compared with his assets and the following is stated—

This is what the Minister’s Secretary says in his report.

Read what he says about droughts as well.

Sir, I can read out the entire report to the hon. member if he wants that, but I do not think it is necessary. I want to make this point specifically : The financial position of the agriculturists is such that it must necessarily exert an influence on the young people. But one need not look at this report only; let us also look at page 184, paragraph 10.2.1.6 of the most recent report of the Commission of Inquiry into the Agricultural Industry, where we read the following (translation)—

They went on to say—

I do not think one can obtain more convincing evidence for the statement I made when I said that the financial and economic position of many farmers helped to bring about a general lack of confidence. Consequently these people are not prepared to influence the next buyer, even a son, to take up this profession. In other words, one finds now that nobody is exceptionally optimistic about the future of the agricultural industry. There are also people in very important positions who continually say that we have too many farmers in this country, and when one gets bodies which should be taking the lead—I am very sorry to say this, but there is one person in particular who, in my opinion, is making a tremendous mistake by persisting with his stories that there are too many farmers in South Africa, and this is a certain Prof. Kassier of the University of Stellenbosch, one of those people who should be training our young people and giving them confidence in the future. But he is one of the people who has repeatedly pointed out that we have too many farmers and who has even gone so far as to say that the figure of 30 000, representing the number of people who will possibly have to leave the agricultural industry, has been conservatively calculated and that this figure should be much higher. Furthermore, I am sorry to have to say that even a person such as Mr. Chris Cilliers, who is the Director of the S.A. Agricultural Union, and also a person such as Dr. M. B. Marais. who was chairman of the Commission of Inquiry into the Agricultural Industry at one time, continually say that there are too many farmers in South Africa and that we should have fewer. I have already raised this point with the hon. the Minister previously, and unfortunately his name is also linked with it in a report which appeared in Rapport, a report to the effect that the hon. the Minister allegedly agrees with these statements.

That is actually the point you wanted to make.

If the hon. the Minister does not agree with that, I would be very glad to hear it, and I want to say to the Minister today that I believe this debate could do much to inspire confidence among the agriculturalists if the hon. the Minister would tell us very clearly that he disassociates himself from the statements made about the number of farmers who have to leave the land, so that we may know exactly where we stand with the Minister.

Are you aware that this is a world phenomenon?

Of course I am aware that it is a world phenomenon, but I am also aware that although it is a world phenomenon, people in those countries where this is also found are prepared to pay attention to this point and to think in terms of reversing the process instead of having fewer and fewer farmers on the land. I think that unless we state very clearly what we mean by the number of farmers or the so-called uneconomic farmers who are to disappear, unless we say very clearly how many we have in mind, unless we state by what scientific method the decrease of 30 000, or whatever the number may be, should be brought about, and unless we can put forward a very clear scientific basis for it, I believe that that sort of statement, which is often unfounded, serves to reduce the confidence in our agricultural industry. Sir, you need simply read the agricultural publications and magazines. Responsible farmers and authorities on the industry have repeatedly asked what this means, these 30 000 farmers who are to disappear; in the first place, where are they to find a livelihood, and, in the second place, if their land is to be bought out, by whom is it to be bought and where are the finances for it going to come from; and, once they have been sold out and one has, say, 60 000 farmers left in South Africa, would the process not repeat itself within one or two generations? I think the hon. the Minister should take this House into his confidence in regard to this matter so that we may inspire greater confidence in the industry. The hon. the Minister has a responsibility towards the farmers of this country.

Another very alarming fact which I believe gave rise to this lack of confidence in agriculture, is that the fight we have had against inflation in recent years, has hit the South African farmer hardest. Once again, I do not want to furnish my own figures or facts. I think the person who may quote par excellence, is Mr. De la Harpe de Villiers, who said the following at the congress of the S.A. Agricultural Union in Windhoek in October of last year (translation)—

Mr. Frans van Wyk, also a member of the Du Plessis Commission, said the following—

Surely it was not supporters of the United Party who levelled this criticism. After all, this is criticism which the hon. the Minister and members on that side of this House should consider seriously in examining the problems of our farmers.

On a point of order, Mr. Chairman, is an hon. member entitled to make the same speech every year?

Order! The hon. member may proceed.

I shall not apologize for repeating many of the points I made on previous occasions, but every year I have to listen here to the same excuses being made by the hon. the Minister, which is no solution to South Africa’s problem. That is why it is our duty to bring these problems to his attention time and again and I believe that at some or other stage we shall achieve something and the hon. the Minister will come forward with a plan and not merely search for excuses for his lack of action. It is very clear to us that the lack of confidence is caused by the fact that there is a shortage of working capital for the farmer, and when there is a shortage of working capital, capital is tremendously expensive as well. In a previous debate this morning I pointed out the situation in the Land Bank to the Minister of Finance. I pointed out that the situation was by no means adequate, and that today increasingly fewer farmers could be helped by those institutions when they were in financial difficulties in respect of bonds held by them. I believe this is the heel of Achilles of our agricultural industry today. And this is causing a lack of confidence. If one’s other financial institutions are no longer interested in agriculture, who is to take care of the function of financing agriculture? Nobody else can do it except a State institution, institutions such as the Land Bank and the Agricultural Credit Board. If the farmer is able to absorb production costs, or if a situation may be created in terms of which prices may be adjusted regularly as the production costs rise, the farmer may most certainly just like any other person, appeal to the private financial institutions. Then he may be helped there and pay the normal interest rate. However, because he is not in the position of being able to do so, there is no other alternative but to expand the scope of the Land Bank so that it may play that role. It is the attitude of this side of the House that we should have a division or a department of agricultural finance which will have to play this role and which will be a master body in relation to the Department of Agricultural Credit and the Land Bank as the two most important institutions in this respect.

That is a very fine story.

The hon. the Minister says it is a fine story he has just heard. The hon. the Minister will know that on previous occasions already the South African Agricultural Union asked whether it was not possible for us to have such an institution.

Are you going to save the farmer who is unworthy of credit by those means?

Nobody wants to help the farmer who is unworthy of credit.

In that case, how do you intend keeping him on the land?

We want to help the farmer before he becomes unworthy of credit; that is the difference between your approach and ours. That hon. gentleman allows many farmers who are worthy of credit, to go on until they are on the verge of bankruptcy. And then, when they approach the Department of Agricultural Credit for assistance, the Department says—and this is in fact its function—“We are very sorry, but your position is such that we cannot help you.” He may also receive the same reply from the Land Bank. Now the hon. the Minister wants to know whether we want to help the farmer who is unworthy of credit.

Are you going to have a body which will determine whether a farmer is worthy of credit or not?

I have always thought that the hon. the Minister does at least recognize the problem, but merely does not have a solution to it. However, it seems to me now that he does not even recognize the problem. I have already mentioned the problem as far as the farmer is concerned. The private financial institutions are no longer interested in the farmer today, because of the fact that they can invest their money much better in so many spheres other than in the agricultural industry. If this is the situation, surely something else should be substituted. This is all this side of the House is pleading for. If a problem develops in a particular direction, make sure that an answer can be given and that a body can be established or that the scope of certain institutions can be extended in order to fill that vacuum which has been caused. This is all we are asking of the hon. the Minister in this regard.

In the second place, we believe that confidence in our agricultural industry may be considerably restored if we got away from an ad hoc assistance mentality. We must get away from the idea that the farmer can be helped by the department every year, and that there is financial assistance for him whenever he has to contend with economic or climatic problems. If we could get away from that ad hoc assistance mentality, and could think instead along the lines of long-term planning for our industry, we would inspire confidence in it.

Such as?

The hon. member asks me: Such as? I want to say to him at once that we on this side fully agree with the findings of the Commission of Inquiry into the Agricultural Industry, namely that advisory agricultural planning councils should be established. The only point on which we differ with them, is that we do not want the body to be merely an advisory one. There has already been an agricultural advisory council, but this did not meet the need at all, because those persons had no power. They could merely advise. They did not even have the right to talk about the price policy or to make recommendations. We would rather see an agricultural planning council being established so that it may place the general planning of our agricultural industry on a sound footing.

Is that your solution?

The hon. member has asked me whether this is a solution. I believe it would be the first step. One must have experts who are able to do these things for one. One must be able to have the experts of the Department of Agricultural Technical Services, of Agricultural Economics and Marketing and of Agricultural Credit. They may consolidate all those functions so that we may know exactly, and be able to determine, what the future holds for agriculture in South Africa. One can do nothing without proper planning. Only an agricultural planning council could meet this need. When the farmers see something of this nature being established for them, I believe there will immediately be increased confidence in our industry. I am not advocating an Industrial Development Corporation, or a similar body, for agriculture. However, I want to take it as a precedent. The Industrial Development Corporation has helped us to place the industrial life of this country on a sound basis. I see something similar in the establishment of an agricultural planning council. Even when surpluses and shortages arise, one may have such a planning council which may channel one’s production in a particular direction. It would consist of people who could predict the future accurately. It is not impossible to make such predictions if they have the correct information and data and the right technical people. The United Party sees the basis of our agricultural future in the establishment of such a body. If not, we shall just have to accept that it is not only the so-called uneconomic farmer who will have to leave the land. It will even include the young productive farmer who, as a result of circumstances beyond his control, finds that his profit margin is becoming increasingly smaller and consequently has less and less confidence in the industry.

Could the hon. member define an uneconomic farmer for us?

We have had discussions here before about the definition of an economic and an uneconomic farmer. However, I want to point out to the hon. member what happened in recent times. I want to quote from the Landbouweekblad, in which a farmer indicated how his production costs have increased in recent years. He said, for example (translation)—

He also mentions the case of tractors and says—

He points out, for example, that the price of bags has increased tremendously. A combine, for which he paid R11 200 last year, costs more than R14 000 this year. A 10-ton lorry, for which he paid R9 500 last year, costs more than R12 000 now. When this situation develops, it is not only the position of the so-called “uneconomic” farmer which becomes increasingly difficult— it also applies to the bigger farmer, the so-called “prosperous” farmer, and the economic farmer, as we are supposed to know him. The position of those people is also becoming progressively worse. I believe an agricultural planning council could pay attention to matters such as these and make good recommendations to the hon. the Minister. In this way we would find that the profit motive would return to the agricultural industry. In this way we would see greater confidence in the industry. I believe this is the first step which should be taken.

I want to look at a few other steps as well. If we want confidence in our agricultural industry, we should eliminate the additional bottle-necks in the industry. Where bottle-necks arise in the marketing, whether it be of meat or whatever, those bottlenecks should be eliminated immediately. If they are not eliminated, it only causes a lack of confidence on the part of the agriculturist. The result of that is that he becomes less and less interested in his industry and in making a success of it. [Time expired.]

Mr. Chairman, I am rising to furnish an immediate reply to the speech made by the hon. member for Newton Park, and I am doing so for a number of reasons. In the first place I find it interesting that the hon. member has asked me questions today about what my standpoint is on certain matters. The questions he has asked here now he has himself furnished replies to in the past in political speeches made outside Parliament. These were accusations which he made without checking up, and now he wants to come and check up afterwards. He and his leader on the opposite side went about in the country and made statements to newspapers to the effect that I had said on one occasion that 30 000 farmers should disappear off the land. He did not try to check up on his facts then. He did not then take the trouble to ask whether the report, as he read it in the newspaper, was correct. He simply went and used it as an item of gossip, saying that that was what the Minister wanted to do. He did this himself a few days ago. It was not very long ago, it was when he and his henchmen were addressing a meeting in Oudtshoorn. He then did the same thing and told the farmers of Oudtshoorn stories. There are many small farmers, smaller farmers and big farmers in Oudtshoorn. There is probably no other constituency in which farmers of different categories are better represented than they are in Oudtshoorn. There he tried to tell the farmers, in all manner of ways, that the Government, with its Minister of Agriculture, wanted them out of the rural areas. Nor did he hesitate to mention the figure which the Minister had allegedly mentioned. He mentioned the figure of 30 000, and Oudtshoorn gave him his reply. Just as the other farmers in the country do not believe him when he claims that I had said that, so the farmers in Oudtshoorn did not believe him, and proved it. I now want to tell the hon. member this: If he wants to discuss agricultural policy I am quite prepared to accommodate him. If the hon. member is prepared to convey and interpret correctly the standpoints which I state. I am also prepared to discuss them with him. But if the hon. member does what he has always done in the past and interprets statements made by people or standpoints adopted by them in such a way as to derive benefit for the United Party from them in a dubious way, then the farmers of South Africa will never accept him. Then he will remain a shadow Minister all his life. [Interjections.]

I maintain, Mr. Chairman, that I need not furnish him with a reply this afternoon as to who censures him. I think Oudtshoorn has replied to him very strongly and without any doubt, for he also happens to be the Cape leader of his party, and not only the shadow Minister of Agriculture. But after he had listened to this and made such statements, I want to say to the Leader of the Opposition that I have held this position for approximately 14 years now, and during that time he has had four shadow Ministers of Agriculture. Some of them are still in the House; some of them have already left. I now want to say to him that if his shadow Minister cannot do any better than this, he should really see whether he cannot find anyone else to take over as shadow Minister. [Interjections.] The hon. member made a few statements, statements which I want to analyse immediately. One of the first statements he made was that people do not have confidence in agriculture and are not going into agriculture. But is that statement correct? He tried to prove here that the people in agriculture are becoming older and that not so many young people are going into agriculture any more. Is the statement the hon. member made, i.e. that there is no confidence in agriculture, correct? We can, in the first place, consider the production industries in the country, we can consider the prices which are being paid for agricultural land and, if a person pays that price for agricultural land without having any confidence in the industry, then he must either be a United Party supporter, or stupid. In the second place, if there is no confidence in …

Land prices have nothing to do with it.

Do not become nervous.

In the second place, Mr. Chairman, if a piece of land is made available by the State, land owned by the State which is made available for agricultural purposes, then there are hundreds of applications for one farm. The Minister, with the department and its board, then has to decide to which of those hundreds of applicants the land should be sold. In the third place, Mr. Chairman, hundreds of applications to the Land Bank and to the Department of Agricultural Credit are being made by people who want to purchase land in order to go farming. The hon. member has in fact just levelled the accusation that there is insufficient credit available from the Land Bank with which to undertake this financing, the financing of the purchase of the land for the young farmers. It seems there is not enough money available. But if there are no applications, if there are no people who are interested, why should that money then be made available? No, Sir, let us not merely stand here flailing the wind and do so just to try to prove a few political points. Surely this hon. member knows as well as I do that when agricultural land comes onto the market the demand for that land is usually far greater—there are far more people who make application for it— than the amount of land which is available. He mentions that the commission points out that there is an uneven financial distribution of income in agriculture. Of course there is an unequal distribution of income in agriculture. This is present everywhere, Sir. Then the hon. member states that there is a tremendous burden of debt in agriculture. He quoted last year’s figure of R113 million—the total fixed debt in agriculture. But what was the farm income from agricultural produce? The farm income from agricultural produce in this country is more than R1 700 million per annum—in other words, one year’s income from farm produce is more than the total debt in agriculture—only one year’s income. Mention to me another industry which has a better ratio. The hon. member must not shake his head now. After all, we are arguing this matter out now. I am replying to the statements made by the hon. member. Of course there is an unequal distribution. The hon. member now says that the Minister must state his policy in respect of the measures which are being adopted to rectify this situation in agricultural industry. The hon. member then stated his solution. The solution which he presents for this situation is a council which will plan agriculture as a whole, which will plan its production patterns, its sales patterns, its marketing patterns, and so on. I do not want to say that such a co-ordinating council will not be able to achieve a little co-ordination. However, I cannot see how such a board would be able to accomplish more than the advisory council we have at present. But what is the present situation in South Africa? The present situation is that agriculture is being planned in absolute terms on the various levels. It is being planned on the research level according to the need for research in respect of every product which is being produced. In the sphere of marketing it is being planned by different control boards which are co-ordinated by means of a marketing council composed in terms of a Marketing Act passed by this Parliament. The hon. member is now proposing an overall council which will undertake the planning. He says that the problem is that the advisory council does not have powers and that it can only act in an advisory capacity. When the hon. member has established the council which he has in mind and has conferred upon that council the powers which he wants to confer upon it, and when this wonderful planning has now been accomplished—that planning which was also proposed by the commission of inquiry, to which the hon. member referred—what will happen then? But the hon. member reads only those portions of the recommendations in the report of the commission of inquiry which suits his purpose. He does not read further. He does not read what action the commission proposes. That side of the House now wants to establish a council, but as I see the matter, this is only likely to happen by about the year 2040. However, that is not relevant now. Is this council which that hon. member is now proposing going to have the power to prescribe to farmers what they may produce, and what not?

The board will give them the right guidance.

I am not asking what the guidelines are going to be. Those guidelines are being given to the farmer every day.

No, the right guidance.

The right guidance is being given to the farmers every day. The Department of Agriculture informs the farmers that certain areas are more favourable for the production of certain products than other areas. The farmers are told that certain areas, for example, are more suited to maize. This is analysed by means of research, and indicated to the farmer. They are being given all the information they need. Once the hon. member has established this council, upon which he wants to confer powers, is he also going to give that council the power to determine for the farmer what he should produce in certain regions, and what not? What powers does the hon. member then want to confer upon the council if he does not want to confer that power upon them? If all the planning has been done, if all the recommendations have been made, and if the guidance, as the hon. member is now proposing, has been given to them, and the farmer does not act upon that guidance, what is the hon. member, with his council, going to do then? These replies the hon. member must give us this afternoon.

First give us the council, and then you will see what happens.

But it is easy to level criticism here, and to say that this, that or the other is not being done. I now want to say to the hon. member that if the State is held responsible for planning and the implementation of planning in agriculture, it will have to take powers to restrict farmers to what they may produce and to how much the expenditure has to be which may be incurred in that connection. That will have to be done. If that is done, the matter will have to be carried through to its logical conclusion and the prices will also have to be determined. I want to know what the hon. member’s replies are. It was a fine story he told the House here, but I should like to know how his story is going to work if it is ever implemented.

But surely you said that I am only going to govern in the year 2040. Why do you want to know now already?

But you are now proposing that you want to tell the farmers at this early juncture what you are going to do. After all, you are interested in what is happening at present in agriculture. I know of course that the hon. member will never have an opportunity of implementing his policy. That is just by the way. The hon. member made certain allegations and statements here, and said that one of the causes of the unequal distribution and the fact that the farmers are not interested in agriculture is because credit facilities for the farmers are inadequate.

Yes, and in addition to that they are too expensive.

He says that this planning council of his, which he had in mind for agriculture, will tackle this problem as well. It will ensure that sufficient credit is made available. He envisages an overall body which will include the Land Bank and the Agricultural Credit Board.

Under the planning council.

Yes, under the planning council, but which will provide the financing and credit on an overall basis. At the moment this is being done by the Land Bank and the Department of Agricultural Credit. Apparently the hon. member is not satisfied with the fact that there are two bodies which are doing this, but I must point out that these are two different kinds of financing. However, the hon. member says that he will have a council which will be consolidated, and which is going to undertake the provisions of credit. I want to ask the hon. member one question: Will the council which the hon. member is going to appoint for that purpose provide credit without taking into consideration the financial position of the person who is making application for credit?

That may seem strange.

No, I am merely asking the question. Is the hon. member going to have a norm according to which farmers are going to be provided with credit, or is he not going to have any norm? If he has a norm, the hon. member probably has the sound common sense to acknowledge that there will be people in agriculture who do not comply with that norm, or is it so that under the policy of that member everyone will comply with the norm? If there are people who do not comply with that norm, the hon. member has still not solved the problem to which he referred. That same commission of inquiry referred to the fact that in some cases there is too much credit available in agriculture. Even if the hon. the Minister of Finance were to remove the credit ceiling over the banks completely and the Land Bank had an additional amount of R100 million at its disposal for providing credit, but an Act still existed in terms of which credit has to be supplied—in other words, if the norm is not eliminated—there would still be a large number of people who would not qualify for that credit. Surely that goes without saying.

However, the hon. member wants to create the impression that under his scheme every farmer in South Africa will qualify for credit; only he has to be on the farm. That is the impression the hon. member is trying to create, for his argument proceeds from that point. He says the farmers are leaving the farms and he wants to know what my policy is and what I am going to do about it. I maintain that the farmer who does not comply with the norm imposed by this Government or any other Government in regard to the provision of credit to farmers, will disappear from agriculture. Is the hon. member satisfied with that?

What is the norm?

That is the question. The norm which the Government accepts is that cognizance should be taken of the total situation of the farmer. Consideration has to be given to the total investment made in the land which he purchased. Consideration has to be given to his total investment in agriculture. These facts have to be taken into consideration so that it may be determined whether the credit which he has available for that purpose will enable him to move from that situation to a better one. That is the norm. I am asking the hon. member what other norm he is going to accept, for there is another norm which goes further than that. The Government goes further and we adopt the standpoint that we in the Department of Agricultural Credit and Land Tenure are prepared to run an even greater risk with such a farmer than that specific norm, and to finance him over and above that norm. I want to ask the hon. member what his norm is going to be if he has to undertake agricultural financing by means of the council which he is proposing. Let him tell us what his norm will be. Is he going to finance any farmer, regardless of the size of his property, regardless of the extent of his farming operation? As soon as that farmer needs financing, is the State going to supply it to that farmer by means of its institution, regardless of whether that farmer owns 100 morgen or 20 000 morgen, or whether he produces 1 000 or 1 million bags of maize? Is the hon. member also going to have a norm in that case in that he will say that he will only finance farmers who do not own more than a specific quantity of land? Is he going to undertake unrestricted financing? I want to ask the hon. member this question : If he undertakes unrestricted financing, regardless of the size of and the investment in that farming enterprise, how is he going to keep those small farmers on the land, which he implies he is going to do? How is he going to keep them there? I say that it is very easy to make statements here. But I want to point out that the norm of the Government is as follows : When the State intervenes financially, when it is expected of the State to undertake financing, it does so within the norm of the economic farming unit. I must agree with the hon. member that that farming unit can vary. It can err slightly to the wrong side—although it cannot go as easily to the left-hand side as it can to the right-hand side—but the fact remains that it can err. The opinion can be that that land is a little larger than the established norm. It goes without saying that one cannot cut off a piece of that man’s land if he is above that norm. However, one does have a norm. The hon. member has asked what an economic unit for the farmer is. I want to say this to the hon. member. An economic unit for a farmer is a unit which, in the opinion a body established by the State, can allow a farmer to make a reasonable subsistence on that property according to the capital investment which is being utilized on that property. This is stated very simply. Within that norm the opinion of the board may vary. The board may sometimes arrive at one conclusion and sometimes at another, but that is the basic norm. Now I want to ask the hon. member, if he comes into power one day and he appoints this council of his and establishes a norm for it, what is its norm going to be? I am asking this question because he is criticizing me, and he is criticizing the Government’s standpoint. What is his norm going to be according to which he is going to do this, or is he going to have no norm whatsoever? Is he going to allow any farmer unlimited credit, regardless of the size of his enterprise? Is the hon. member going to do that? If the hon. member is not going to do that, he must not say that this Government is doing nothing, and then he must not say that he put certain questions to the Minister and that the Minister had not replied to those questions. I have stated my reply repeatedly, and I am furnishing it again this afternoon. It is that when the State is expected, in any industry, whether it is in agriculture or in any other industry, to undertake financing, it undertakes that financing within the economic limits of the person whom it has to finance. The State is not there to finance big farmers. The State is not there to encourage capitalistic farming, and that is why it has to have that norm. On the other hand, the State is not there to finance people whose financial burdens are such that they will still be unable, despite all the auxiliary measures the State is able to put at their disposal, to remain on the land. After all, one cannot spend the taxpayer’s money in such a manner. The hon. member is creating the impression, and I may be wrong …

How much of the taxpayer’s money is the Land Bank spending?

The Land Bank still has the norm to which I referred. The Land Bank is not going to finance a person who is already bankrupt; nor is it going to …

First it used to help people to a maximum of R100 000, and now it is only helping people to a maximum of R50 000.

Very well then, but that is not what is at issue here; that is not what we are discussing now. We are discussing the accusation the hon. member made, i.e. that the Government is doing nothing to keep farmers on the land by means of State financing. That is what is at issue here. If a farmer is able to obtain financing elsewhere, the State is, after all, not responsible for him. I am not talking about the …

The State has to help other people.

The policy of the National Party is that the State helps the farmers as much as possible, but it has to be done within a norm according to which one is able to keep a farmer on the land. I want to repeat that it is not the duty of the State to finance people in agriculture who want to expend their enterprise to an exceptional extent. Nor is it the duty of the State to finance people in agriculture who have no hope of being rehabilitated. Nor is it the duty of the State to provide financing to every person who wants to farm and who wants to purchase land, regardless whether he will be able to make a decent subsistence on that land. If that is the policy, and if there are such norms, it unfortunately has to be the case in agriculture. The total income from agriculture is not equally distributed among all farmers, just as the income in other sectors is not equally distributed among the different companies. In the business world the income of the different companies and the people who participate in those industries, is not evenly distributed among them, and there are people who are leaving those industries as well because what they are able to derive from them is insufficient. The position is the same in agriculture. For that reason the commission found that one of the major problems is in fact what the hon. member referred to and which he accused the Government of. He said namely, that there is an unequal distribution of income. I now want to ask the hon. member whether he maintains that the Government should ensure a more even distribution of income in agriculture. Is it the task of the Government to ensure a more even distribution of income in agriculture? Is that the hon. member’s standpoint. Sir, there will always be an uneven distribution, even if the United Party were to be in power; or is there not going to be an unequal distribution of income under a United Party government? There will always be people in agriculture who derive too little from agriculture to make a decent living, and there will always be people who will disappear from agriculture, now and in the future, and if that is not a logical argument, then the hon. member must tell me what is. The Government appointed a commission of enquiry, and that commission of enquiry found that this will be the position in agriculture in spite of all the auxiliary measures introduced by the State. People will, from time to time, disappear from agriculture. Whether it is 30 000 or 10 000 or 2 000, has nothing to do with it. What is relevant to this matter is the following: If they were to disappear from agriculture as a result of Government action, if the Government were to make it its policy to oust them, then it would be different, but if they are disappearing from agriculture as a result of economic circumstances, then I ask to what extent is it the responsibility of the Government to keep those people on the land? Must the Government finance them in full in order to keep them there? The Government cannot do this, and therefore a certain number of them will always disappear. Sir, because this is the situation and people will disappear from agriculture, which creates a problem for the rural areas, the commission of enquiry recommended that a committee be appointed to go into the whole question of rural reform, a committee on which different departments would be represented, which would have to investigate how people who leave agriculture may be absorbed elsewhere and what policy should be followed in order to retard rural deterioration. Sir, what did the hon. member do when this committee was announced? He went to Oudtshoorn and told the voters there: “This committee which the Minister has appointed to investigate rural reform is part of the Government’s policy to get rid of 30 000 farmers.” The hon. member is shaking his head now, but surely that is what he said.

I never said that.

He said that it was part of the Minister’s policy to get rid of 30 000 farmers, and that the Government had already appointed a committee to see how it could get rid of them.

I was talking here about rural reform …

I am not talking about what the hon. member said here; here the hon. member speaks a different language to the one he speaks outside; outside he gossips; here he speaks a little differently. He makes speeches here solely to be able to use them outside and to be able to gossip with outside. There his Party says that the appointment of a committee of inquiry to investigate rural reform is a means which the Government will utilize to get 30 000 farmers off the land. The hon. member knows that that is what he said.

It is the H.N.P. that said that.

Very well then, the H.N.P. said that, but the hon. member joined the H.N.P. in saying that. Hon. members on that side have taken this semi-suspicion-mongering and this semi-gossip-mongering, which one cannot pin down and say who said it, so far that the public outside, particularly the voting public, have become so fed-up with them that they have turfed them out, as has now happened at Oudtshoorn. With these insinuations and with this gossiping, the hon. members have taken the game a little too far. This is what the hon. member is doing again now. He sat together with the H.N.P. The H.N.P. sat in the shade of his tent.

They were hatching out the same eggs.

Now the hon. member says that the Minister does not have long-term planning for aid. Every time a problem arises the Government provides ad hoc aid; we (the United Party) are now going to plan on a long-term basis. But is that true? The Government’s entire marketing policy is based on long-term planning. Our entire research policy is geared to long-term planning, to determine what commodities might become scarce, and the production of which products could be encouraged. Our entire research, our spraying and our control of fungus diseases is geared to the long term. Our financing for interest rates on Land Bank loans is planned on a long-term basis. All this is planned on a long-term basis. Does the hon. member now want to tell me that they will never give ad hoc aid? Take something like the wool industry, of which the hon. member has a little knowledge, for he shears sheep himself and sells the wool. Otherwise he would not have had much knowledge about this either. Suppose he had a wool enterprise which had obtained good prices over the years, and suddenly there was a collapse of the overseas market. Now the hon. member states that one should have had long-term planning in order to deal with this position, one should not merely make ad hoc aid available. What long-term planning could the hon. member have had in that case? Would he have begun to plan ten years ago, so that if the wool prices dropped in ten years’ time, he would have been able to do this, that or the other? I now want to ask the hon. member a second question. In the circumstances which we had along the Orange River and the Gamtoos, where there were floods …

That is ad hoc aid, yes.

I am very pleased to hear the hon. member say that that is ad hoc aid. Now one finds the situation in the Gamtoos valley that the river comes down in flood and large areas are inundated, but who was it who was there on the third day after the floods, looking for political gain? It was that hon. member. Do you know what the argument was which the hon. member used for those people? He said that it was typical of this Government: there had been floods there and they had had no long-term planning with which to deal with the crisis. But now he says that it is ad hoc aid.

You are simply talking politics now. You are playing the fool.

No, I am not playing politics. That is what you did. There are members in this House, such as the hon. member for Humansdorp and Graaff-Reinet, who know that the hon. member went there, like a political vulture, to look for political gain three days after the floods.

May I ask a question?

Yes, in a moment. After I had been there, the hon. member went and told the farmers that this was typical of the Government; the Minister did not have a long-term policy.

Will the hon. the Minister deny that I said that the hon. gentleman came there without a plan in order to tell the farmers immediately what kind of assistance they could expect under those circumstances?

The hon. member will recall that the floods were still in full spate when I was there. The trains were still stranded along the lines, and these were still under water. I arrived there and I told the farmers—and the hon. member knows this—that the normal, easily payable damage which they had suffered, they should begin to restore immediately and the Government would subsidize them by 50 per cent. As to more extensive damage, however, we would let them know what we would do. Then the hon. member went and told them that the Minister had only provided ad hoc aid.

They say they will have a long-term policy; they will have a blueprint in the case of every possible earthquake or flood which may occur, regardless of the circumstances and the extent. That is the kind of nonsensical statements the hon. members make. The hon. member criticized ad hoc measures; he said the hon. the Minister must not come along with ad hoc measures; he must come along with a long-term policy. That is what he has said now. Now I am asking the hon. member this question. Suppose one experiences a sudden collapse of the market, such as the wool market, or a gradual collapse, suppose one suddenly has a situation which may have been caused overseas by a strike, or by something else. Possibly the hon. member will not even understand this fully. Then there are, for example, circumstances caused by floods, such as we experienced here. I can enumerate hundreds of cases of this kind. What type of assistance other than ad hoc are the hon. members going to offer the farmer? I am talking about the impression the hon. member created. I know he knows better. The impression he wants to create is that when a situation arises this Government, the Department of Agriculture, and the Minister of Agriculture, are totally unprepared to try to do something about the situation.

I said “ineffective”.

The hon. member’s argument is that it is ineffective. In every case where circumstances of this kind arose the machinery of the Department of Agriculture was put into operation immediately. Are they going to offer assistance to the farmers without any investigation, or without any determination of the extent of the damages, and without any control? Or are they also going to control it, and offer assistance under certain conditions? If the hon. member then states that there has to be control, how is he going to do this without spending time on it? In that hon. member’s impetuous haste to try to be disparaging and to start gossiping he asked the farmers in the Gamtoos area, two or three days after the flood : “What is the Government doing for you?” Should we then have remedied that whole situation in a day or two?

The policy of the Government is very clear, and the policy of the Government in agriculture is very clear. The government has its Departments of Agriculture which undertake production planning in all the attendant facets. The Government has its financing institutions, within certain limits, and in accordance with certain norms. The Government has its institutions which assist and advise it in regard to the marketing of products which are co-ordinated by means of the Marketing Council. The Government has its schemes for coming to the aid of the farmer financially when he finds himself experiencing problems of a particular kind. In this way there is in many cases subsidization of interest rates, contributions by the State and the Land Bank, and agricultural credit loans at 5 per cent interest. In the same way there is also provision by the Land Bank for the harvesting of crops. The hon. member asked what the Government and the Land Bank are doing. The Land Bank will within the next two months make financing available to an amount of almost R400 million for harvesting the maize crop. But the hon. member says there is no credit for agriculture. The Land Bank has just had to make financing to the value of R100 million available for harvesting the wheat crop. But the hon. member stated that nowhere were there facilities available for the financing of credit for agriculture. The hon. member should not make such wild statements. He should qualify his statements.

I did qualify them.

You did not. What qualification did you attach to that? The hon. member did not qualify his statement. The hon. member said that there was no provision for credit, and that it was completely inadequate. That is what the hon. member said.

I was talking about mortgages.

But what is a mortgage? A mortgage is money which someone lends on the value of a property. That is why I asked the hon. member whether the Land Bank should grant mortgages regardless of the value of a property or the size of a property.

Our request is that it should spread its wings wider.

Very well then. If it spreads its wings wider then that hon. member comes to this House and gossips about those people in respect of whom the Land Bank spread its wings wider. If he would confine his gossiping to this House one could still rap him over the knuckles for it. But he gossips outside. When the Land Bank spread its wings wider a few years ago and financed bigger farmers the hon. member tried to drag the Prime Minister into the Land Bank scandal.

But he knows that that is untrue.

But how can it be untrue?

The hon. member must withdraw that.

I withdraw it, Mr. Chairman.

Sir, can the hon. member say it is untrue? The hon. member expressed an opinion.

I welcomed it. If you had done it decently …

No, Mr. Chairman, he did not welcome it. He did not welcome it in the sense that a certain Mr. Kolver received :it.

He only criticized Jan Haak’s.

He criticized it because a certain Mr. Kolver received it. As I know the hon. member. I know very well what he had at the back of his mind when he referred to Mr. Kolver. Now he comes along, very piously, and says that the Land Bank should spread its wings. When the Land Bank wants to spread its wings, however, the hon. member says that it has spread its wings too far. It may spread its wings to these people, but may not spread its wings to other people. Sir, we have said too much about this matter now.

May I ask the hon. the Minister a question? Is the Land Bank at the present moment approving loans to farmers who have not been summonsed for debt?

But the Land Bank at the present stage is surely not geared to taking over every single mortgage. After all, the Land Bank did not say to those farmers that they should take mortgages on their land through private institutions. Now that they find themselves in difficulties, he wants the Land Bank to take over. I want to concede one thing to the hon. member. The Land Bank and other semi-State institutions will in future have to play a far greater role in the financing of agriculture, particularly the financing of mortgages, than in the past for the simple reason that the original financers of agricultural mortgages are no longer willing to do this to the same extent today. They have far more attractive investments outside agriculture. That I want to concede to the hon. member. But I cannot expect the Land Bank to ignore at this stage a liberty the investor had of obtaining mortgages from a lot of financial institutions, and be prepared to take all those mortgages upon itself all at once. But when a farmer comes to the Land Bank for a loan for the purchase of land, etc., it is available. If the Land Bank should now say that it is going to take over all the mortgages in South Africa, regardless of whether those farmers are in difficulty or whether their mortgage has been called in, surely the hon. member will understand that the Land Bank will immediately be burdened with mortgages to the amount of R300 or R400 million and more The Land Bank has to get its money from investments from elsewhere, or by means of contributions by the Government. Now I want to ask the hon. member this: Does he expect the Government to have to make an additional R300 or R400 million available to the Land Bank, so that the Land Bank can give the other financial institutions the money to invest in other directions?

Do you expect the farmer to go under first before he is able to obtain a loan?

But as long as his loan has not been called in, surely no pressure is being exerted on him. Who is exerting pressure on him then? The only pressure to which he is being subjected is that he has to pay 7 or 8½ per cent interest. For the rest he is being subsidized. He is not under financial pressure so that he is unable to obtain credit. Surely he has the credit. As long as he has the credit, and it is not called in, then surely he still has credit. Now I want to ask the hon. members the following question : Should the Land Rank now undertake to take over the mortgage of every person who wants to transfer it from a private organization to the Land Bank? Must the Government provide the funds for that purpose? Surely it is absurd to argue thus.

May I ask a question? Is it not also true that the Land Bank does not grant anything beyond R50 000?

Of course, Sir, this is in order to help all the farmers with the available funds as far as possible. When more funds become available it will be able to assist to a greater extent. The State contributed R10 million. The hon. member for Newton Park levelled the accusation that the Land Bank does not have enough money to finance all the farmers who approach it.

No.

Who did the hon. member mean then?

The point I made was that the other financial institutions are not interested, and that the interest rates are so high. The Land Bank should therefore spread its wings in order to help more farmers.

There the hon. member is making the same generalization again. It should spread its wings wider. How wide should it spread its wings? I have certain funds at my disposal. Now I say that I am prepared, with these available funds, to spread my wings to include the calling in of mortgages, to help people who have found themselves in difficulties, but not wider than that. Now I want to ask the hon. member: How does he want to spread his wines wider now? Does he want to spread them so wide that any person who comes to the Land Bank for a mortgage, has to receive financial assistance? That is the question.

Their wings were clipped at Oudtshoorn.

I agree with the hon. member that I should also like to see the Land Bank being able to finance all the mortgages in agriculture, within reasonable limits—I am not referring to people who want to expand capitalistically—but then the Land Bank must have the funds for that purpose. But I shall not be in favour either of the State making a total contribution to agriculture for financing mortgages, regardless of the problem of that mortgagor. That would be the wrong policy. The hon. member made quite a number of accusations.

Do you think a financial institution will give someone a mortgage of R100 000 if he is only worth R10 000? We do not expect that of the Land Bank.

No, but that is not the question. That is not the issue. If a person wants a mortgage of R100 000 from a private institution, and he is refused, and he does not want to divide it up, should the Land Bank, under these circumstances, give him that loan, and then perhaps not have money available for another farmer whose mortgage is being called in? That is the question I am asking. The hon. member states every year that he does not receive replies. I need not furnish him with replies to all these questions. He knows the answers just as well as I do. He knows what different auxiliary measures this Government has introduced. He knows the problems which arose as a result of droughts. He knows about the livestock withdrawal scheme, and the financing schemes. He knows about all these things. But the hon. member states that this Government is not interested in keeping alive an interest in agriculture and in trying to keep people who are engaged in agricultural activities on the land. The Government is interested in only one thing, he says, and that is to see whether it can get them off the land. That is what the hon. member says, and he knows it is not true. I shall give him another opportunity later. I want to discuss this with him again. He must give me further information about this council of his, for example what its powers and its norms are going to be, so that I can hear what his standpoint is in regard to this matter.

Mr. Chairman, the hon. the Minister has attempted to reply to the hon. member for Newton Park. One of the first statements he made was that Oudtshoorn had given the answer. Now I want to say: In respect of agriculture, the by-election in Oudtshoorn taught nobody anything, because agriculture played a very small role in the by-election, although we all know that Oudtshoorn is an important agricultural district.

Of course it is.

Well, we saw two ostrich eggs being laid here this afternoon. The hon. the Minister in his speech gave the impression that, under his administration, all is well in agriculture.

Who said so?

That is the impression one gets. Well, Sir, we have just had, after waiting for four years, the final report of the inquiry into agriculture. If one studies that report, one will find hundreds of instances where the administration of agriculture in South Africa must be improved. If this hon. Minister was correct and we had no problems there would hardly have been the need for this inquiry and there would not have been the many recommendations which we find in that report.

I did not say we had no problems. I was talking about the solution of the problems.

Of course there are problems and the Government has not come forward with the solutions.

The report is trying to produce some answers so that the Government can act and improve the situation of agriculture in the country. The hon. the Minister talks about planning. What do we want to do with a planning council? “Wat gaan ons beplan?” he asks. One thing it would do is to save this potato glut that we have today. Another thing it would do, it would obviate the fact that lots of people are growing wheat where wheat should never been grown, if you had proper planning and proper co-ordination of the agricultural industry in South Africa. There is a very real need for a planning council. I would like to say more about that later on, Mr. Chairman.

I ask you what powers you are going to give …

I shall tell the hon. the Minister. I only have 10 minutes, but I will tell him in due course what powers we are going to give to it. There is no doubt in my mind as to what powers it will have. Mr. Chairman, he asks what norm we will establish for granting loans by the Land Bank or the Department of Agricultural Credit. Can the hon. the Minister explain to us what norm his department adopts? The only norm I know about at the present time is that the loan must not be more than R50 000 and that a farmer must have been summonsed before he can get a loan. I think that is the norm. [Interjections.] The Land Bank is the biggest grantor of agricultural credit in the country at the present time and that is the norm of that hon. member’s party. It would not be our norm. We would grant a loan from the Land Bank to any farmer whose farm is potentially viable and whom we believe to be an asset on the land or a credit to the country.

May I ask whether it is allowed for the Land Bank to be discussed at the moment—should it not be discussed under Finance?

That is not a point of order. The hon. member may proceed.

Mr. Chairman, the hon. member must not waste my time. [Interjections.] That is the norm that we would adopt, i.e. that he should be potentially viable, hardworking and industrious, that he has a knowledge of agriculture and that he will be an asset to the country on the land.

What size?

This party will see that that man is helped irrespective of size, for size is an irrelevant factor. You can farm successfully on 10 morgen with sheep if you use self-feeders and other forms of intensive feeding apparatus … [Interjections.] Some of the biggest farmers in South Africa are the worst farmers and some of the smallest farmers are the best. And we in the United Party have an interest in the small farmer who is prepared to work.

Hear, hear!

We would see that he would be helped. That is what our attitude is, Mr. Chairman, The hon. the Minister raised this question in the Gamtoos River Valley. I was there. We went there, and we had every right to go there to see what was going on, to see that this hon. Government, this hon. Minister, was doing their job. I visited the home of the M.P. for Humansdorp to tell him I was there, to discuss the whole problem. I presume that is 100 per cent in order? And I believe that in future there should be a long-term plan in respect of disaster assistance. It should not be on an ad hoc basis. These floods will recur, Mr. Chairman; they will occur again and again. It is high time the Government had a blueprint of the way in which it will assist disaster-stricken areas. And I made a speech on this subject to indicate how it should be done.

Mr. Chairman, the hon. the Minister is talking about long-term planning for the sheep industry. The best really long-term planning that has been done by this Government in respect of the small stock industry was the “veeverminderingskema”, the stock reduction scheme. Now, what has happened? The hon. the Minister knows that this scheme had a great potential to save the small stock industry in the Karoo and the Free State and the other small stock grazing areas. What happened the moment the scheme got under way? This was a long-term scheme—and I wish the hon. the Minister would listen, because he has accused us of many things and I am trying to give an answer. The stock reduction scheme was a good long-term plan to rehabilitate the sheep industry, the pastoral industry. Tremendous propaganda was made to get it under way and just at the moment when it was going full steam ahead, the farmers had got interested and the propaganda had been successful, the Minister makes a decision without discussing it with organized agriculture and says the scheme is now off and that there could be no new members.

After we allowed it for two years?

Now I want to ask the hon. the Minister: Does he intend reinstituting this scheme as a long-term plan to rehabilitate the sheep industry in South Africa?

Why not?

Mr. Chairman, this hon. member should know more about it than to ask such a silly question. I just want to tell him that one of the items in one of these agricultural reports says—

This is what is happening now, and the hon. member knows it. I say this scheme should go on; it is good long-term planning.

Do you want it to go on for ever?

I did not say for ever, but it is good long-term planning. And this is my answer to the hon. the Minister.

We would certainly introduce long-term planning into our agricultural policy. And now I want to say that we are fortunate to be able to conduct this debate this year at a time when, generally speaking, the whole of the country has had good rains. Production is on a high level. I think we are all very grateful that this is so and that we can conduct this debate not under the pressure of the extremely difficult circumstances we have had in the past. And another factor which makes it easier to conduct this debate, is that we had the Report of the Commission of Inquiry into Agriculture—we have now had the Third Report—and in passing I want to convey my congratulations to the chairman and the committee who wrote that report. I think it is an outstanding job of work. I think it can be used as a guide for many years to come to try to get our agriculture on a sound footing. I hope the hon. the Minister will follow much of the advice that is contained in these various reports.

Mr. Chairman, so far the Government has done only one thing, and this is the passing of a Bill for the control of subdivision of agricultural land. That was easy enough. That cost nothing. What has the hon. the Minister done to try and consolidate agricultural land, and make farming units more viable? We have heard nothing about that. That would be a more positive contribution than the negative act of passing an Act to stop the subdivision of agricultural land.

And, Mr. Chairman, we are grateful, too, that during recent months there has been a revival on the wool market. I want to say with gratitude that the wool farmers of South Africa go forward with far more optimism than they could do in the years gone by. [Time expired.]

Mr. Chairman, I have a great deal of respect for the hon. member for Walmer, but let me say at once that as far as Oudtshoorn is concerned I do not have much respect for his knowledge of agriculture. Now that he has lost Oudtshoorn, he comes along here and says that Oudtshoorn is not an agricultural district.

I said it is an agricultural district.

Oh, it is very good that he says so now. Very well, then I withdraw that, then he does say it is an agricultural district. There is fruit …

And he also got his answer from an agricultural district.

Then the hon. member surely got the answer from an agricultural district as far as the agricultural policy of South Africa and of the National Party is concerned. I want to state very clearly to hon. members that I am standing up here specifically because you speak about Oudtshoorn the way you do. I stood up to test the agricultural policy. I want to discuss one of the most important branches of the agricultural industry in South Africa, and that is the ostrich farming in Oudtshoorn.

Mr. Chairman, the youthful member was introduced here today and listened with interest to this agricultural debate. Because of the etiquette in this Parliament, we could not immediately give him a chance to speak.

He is impetuous.

No, he is not so impetuous. But I want to tell those hon. members that their candidate, Myburgh, will never ever get a turn to speak in this House. I refused that young member a turn to speak and told him that I know he made many promises to his voters, that I know he will carry them out and be an industrious member. He then asked me to say at least something about Oudtshoorn and the ostrich industry, since I am one of the boys from that district. I now want to say at once that if there is anyone who knows Oudtshoorn, it is I.

And now you are farming with fruit.

Yes, I shall come to that hon. member and the Land Bank in a moment. He must just give me a brief chance. Oudtshoorn is a district I know better than many hon. members do. For example, I know Oudtshoorn, Calitzdorp, the portion at Ladismith and Vanwyksdorp. Do hon. members know where I was born? There on the other side at a small place called Langverwag, where 99 per cent of the ostrich farmers voted. I was the only absentee! Do you know how many ostrich farmers there are in Oudtshoorn? I think that 85,9 per cent of the ostrich farmers in South Africa live in that district. It is a wonderful industry. Hon. members must not pretend it is not an agricultural district. On the contrary. A very important branch of the agricultural industry is encountered there. This ostrich feather industry …

They should have had you as M.P.

If you would now keep quiet you would perhaps find out that you know nothing. I want to state very clearly here that I know that district very well. But do you know what? I know its people just as well. I know the English-speaking people there. They are ostrich farmers. There are the Edmeades and the Barrons. But I also know the Afrikaars-speaking farmers there: The Le Roux’s, the Myburgh’s, Grundlineh’s, the Fourie’s, the Ferreira’s, the Streichers and the Potgieters. Let me say that we have economic units there. The hon. member spoke of economic units, but I know three important farmers to whom we gave equal chances in Oudtshoorn to farm with ostriches. They all began with economic units exactly equal in size. The one farmer now has 6 666 beautiful ostriches. The other farmer farmed badly; he went downhill; he did not farm scientifically and he only has 1 818 birds left. The good farmer now has 4 848 more ostriches than the bad farmer. Then there is still the third farmer. I want to tell the hon. member for Walmer that he was a sheep farmer. The hon. member for Walmer is also a sheep farmer, but he is a good sheep farmer for whom I have a high regard. The other person who went farming there with ostriches was a real sheep, and his name is van der Merwe; he now owns only 259 ostriches. What is going to happen to that ostrich farm I do not know, because he farms only with male ostriches. Of course the logical consequence is that he will disappear altogether from the scene.

I say it is a lovely district; it is a district where there is fine co-operation between the farmers. I went to school there. We played football with our Jewish friends, English-speaking people and Afrikaans-speaking people pushing in the same scrum. You speak of a national unity, but you must see how we scrummed there politically. That is an example of national unity in South Africa. [Interjections.] The hon. member for Kensington, who has just interrupted me, who is such an advocate of national unity and then says that we are racialists, must tell me why they did not nominate Mr. Barron, who is a Jewish friend of the farmers, as the candidate at Oudtshoorn. He was, after all, good enough for the provincial council and there he obtained many more votes. Then the United Party would have had a candidate. Then they would at least have had a candidate that could have meant something to the ostrich feather industry in South Africa, not so? Our Jewish friends, the English-speaking people and the farmers, formed a close unit. You know that the farmer is the co-operative society and the co-operative society is the farmer. You speak of the co-operative, binding together, grab-each-other principle, but yesterday we saw the results of that. Pardon me, Mr. Chairman, if I am now a little out of order, but I am now coming back to the point.

Yes, if another ostrich gets in the hon. member’s way, he will again wander off the point.

Mr. Chairman, I was there and I made an intensive study of the ostrich farming in Oudtshoorn. I was very upset.

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

No, please not. Do you ask me what the majority in Oudtshoorn was? I shall tell you that. I am answering no other questions.

No, I just want to know whether you know how many eggs a female ostrich lays at one time?

If it is a United Party female ostrich she lays a wind-egg.

When I got to my friends there in Oudtshoorn, where I was born and grew up, I discovered that the ostrich farmers were in heavy rebellion against the United Party. English-speaking people, Afrikaans-speaking people and our Jewish friends were all in revolt. Do you know why? I remember that with the First War, when there was a collapse after the ostrich feather industry had made a great contribution to the State’s economy and filled the State coffers, an economic depression occurred. Our Karoo farmers are independent people, but they subsequently had to go to the Land Bank. When I got there I saw that they were feeling despondent, that they were angrily heart-sore. They said that the fine Land Bank, with its fine prestige, had been slandered out of existence by the biggest political gossip-monger in South Africa. That Bank, from which they should have obtained assistance, had been slandered out of existence. They told me that the farmer who had done that gossipmongering, was called Myburgh or Streicher. That is what happened. By the conduct of the hon. member, who makes use of the half-hour in this debate, through his speeches and his outside campaigns, the prestige of the Land Bank in South Africa was undermined. Nothing is private any longer. Certain peoples’ records must be examined at the Land Bank. He pokes his nose into the internal affairs of the Land Bank.

Pottie, there is something wrong with you.

No, there is nothing wrong with me, but there is something completely wrong with your party’s result in Oudtshoorn. You will see what kind of a caucus you are going to have. That is what you must be worried about.

But I also want to say that there in Oudtshoorn they have a fine ostrich feather industry. As the son of an ostrich farmer I want to say today that I am exceptionally grateful for the development of the ostrich feather industry in Oudtshoorn. Fantastic development has taken place. They need it.

The same applies to the tobacco farming there. We also have it there in Brits. Die Burger did some fine advertising for the ostrich industry in South Africa recently. I have never seen such advertising ability before. Politically speaking those ostrich heads had familiar faces. They were seen throughout the country. This had such a captivating effect that there is now an “upsurge” in South Africa as far as the ostrich industry is concerned.

One should also slaughter them.

Slaughter them ! They also have abattoirs there. And do you know they slaughter 120 ostriches per day in Oudtshoorn. The Hertzog candidate’s ostriches would not even last two days. Divide the United Party’s 1 818 ostriches by 120 and you will see how many days they would last.

100 days.

No, not as long ?s that. I do not know how many days they would last, but I know that as surely as those 1 818 ostriches will be slaughtered, as surely is it logical in South African politics that the United Party will vanish from the scene as a result of its agricultural policy.

As far as agriculture there is concerned, I also want to say that Oudtshoorn has produced a great deal.

Will you still be coming to your nonsense (twak), or are you already talking it?

Let me tell you that I am speaking about tobacco, but you normally sneak the biggest lot of nonsense (twak) in this House. The tobacco in Oudtshoorn was too strong for your party and politically you were smoked out of Oudtshoorn. Talk about prophecies! It is not necessary for me to be endowed with prophetic talents like Mr. De Goede. Honestly, have you ever heard of a prophet like that De Goede? He prophesies badly, he prophesies wrongly. That side of the House has no future in this connection.

I want to say that I saw that the ostrich farming was developing. I want to thank the Department of Agriculture from my heart of hearts for the research which this Minister and others had done as far as the ostrich industry there is concerned. It is the department, in particular, which is engaged in research there. I see that the officials who concentrate on research are also looking at me. I never thought that the research into ostriches would allow such a large ostrich egg to be laid as the one I saw in Die Burger. [Time expired.]

Mr. Chairman, one feels one has to give the hon. members on the other side the satisfaction they have had from the result in Oudtshoorn. I must say that though they raised the Devil in Oudtshoorn, they will not settle for many a day.

A devil?

Yes, a devil. Let me tell them that they may smile today and enjoy themselves, but this will turn to dust and ashes in their mouths before much longer. [Interjections.] As far as Oudtshoorn is concerned, I want to say that they may well be blessed in one thing. They have a Cabinet here which has reduced our country to a shambles. I think it is the worst bunch we have ever seen, but at least they have a man who may be able to pray for them.

But you are a “Boerehater.”

I say that you have a man …

What are you insinuating?

I am not insinuating anything at all. What do you mean with: “What are you insinuating?” I do not like the tone of the hon. the Minister at all.

The hon. the Minister must stop putting tags around people’s necks.

That is right.

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

Yes, certainly.

Are you referring to the hon. member for Hillbrow, who is a man from Heaven?

Mr. Chairman, the hon. member is wasting my time. I want to say that I hope they are enjoying themselves today, because something will come along one of these days. If the hon. the Minister calls me a “Boerehater,” I want to say that if ever there were people in this country who are “boerehaters”, then these are the hon. the Minister, the hon. the Deputy Minister and the Nationalist Party. If you look at the shambles to which farm labour, for instance, has been reduced in this country by this Cabinet, if you look at the Cabinet’s actions over the past 25 years, if you see how the interest rates have risen against the farming community in the past 25 years …

For whom do they vote?

“For whom do they vote?” I will not be led into temptation. We shall have a time when we can discuss this matter in a far less impassioned way than is possible here this afternoon. However, when you consider the way farm incomes have gone, when you consider the absolute lack on the saving potential throughout the whole of the farming community today, when you consider the massive pauperization of the platteland that is taking place under the control of this Nationalist Party, how can you have people who sit there with a self-satisfied and smug expression as you see on the other side?

You are really very bitter. Oudtshoorn has made you feel very sad.

Did you not rejoice about Brakpan? [Interjections.]

Have you finished now? Thank you. The hon. the Minister was talking about the position of a farmer, the price which is being paid for land. One of the things that worries me more than anything else today, is the fact that there is coming into farming in this country a practice, a tendency, which occurs overseas. It is the fact that companies are buying more and more agricultural land.

What is wrong with that?

I will tell the hon. member what is wrong with it and why I am concerned about it. I am very concerned indeed because in South Africa there is an indispensable link in the control of South Africa, in the control of the platteland, and that is the White farmer and his family. That link is the White farmer and his family, the individual farmer, the holder of ground, the person who rears his family among the people of the countryside, the person whose roots go down deep and not the person who can be transferred about, who can be shot from one place to another, a person who is merely a paid servant of a company, a company which in many cases is interested in agriculture for what it can save itself on taxation, a company which in many cases is prepared either just to break even or even in some cases to lose money on an agricultural operation in order to save on taxation.

Give us an example.

I need not give you examples; it happens in countries overseas and it is happening in our country today, and the hon. member knows it as well as I do.

The whole future of South Africa depends to such a tremendous extent on this individual unit that I really and honestly believe that we have to look to the viability of the individual farming unit and take the utmost steps, the most extreme steps that we can, to prevent the company movement into agriculture in South Africa.

What is your solution? The hon. member for Newton Park wants to hand it to the Land Bank …

The hon. the Minister is one of the most demonstrative Ministers we ever have seen; one of the tenderest Ministers. If you only tickle him with a word, then he blows up into an effervescence and you cannot get a word in edgeways. I think if he would simply sit down calmly, quietly and wait until people …

May I ask you a question?

No, you cannot ask a question. You can just sit down. You have a long time to talk and I have very few minutes left. It comes down to the basic question of the price structure in agriculture in South Africa today. I want to say that that hon. member talked about the Land Bank. My constituency is one of the best and economically strongest farming constituencies in South Africa, and in this constituency we have always regarded the Land Bank as one of the last resorts to which a person can go. I want to say that I have been absolutely shaken rigid in the past couple of years by the farmers in my constituency who have had to have recourse and who have sought to have recourse to the Land Bank for financial assistance. Some of them were members of old families who have inherited farms. This does not account for any of the people who had to buy farms at today’s prices and who had to pay the sort of interest they have to pay today.

Is it not because of the low interest rates?

It is not a question of low interest rates. The problem today is that the structure of prices is such that a farmer cannot make a profit on his operation and save money for the bad days, which we know are coming in farming.

There is another snag to it.

I appreciate the contribution by the hon. members …

… the low interest loan from the Land Bank is invested elsewhere at a higher interest rate

Hon. members must give the hon. member a chance to make his speech.

We have mentioned the question of wool. In England for over eight centuries if you study the wool trade, wool has been a cyclical operation. I am sure that anybody knows that there is going to be a time when wool is going to plummet. It has happened before in our own experience. It will happen again. Surely it is time that we had the sort of mechanism which is going to be able to read the economic indicators that are manifesting themselves overseas. It is also time that we had the permanent sort of operation which will be able to support the price of wool. I make absolutely no bones about saying that to support the price of wool to keep the farmer on the land and to keep the farming community prosperous is very important. This is important because the whole of the primary business throughout the whole of South Africa, throughout the platteland, depends upon the farming community. The hon. member knows as well as I do the privations and the hardships and the difficulties which have come not merely to farmers, but also to every small business throughout the length and the breadth of the Karroo during the time of the drought we have just experienced.

That is exactly what we have been doing.

The Minister came along after the whole thing had collapsed, after he was approached by …

Nonsense.

You do not know what you are talking about.

The hon. the Minister had to be approached and had to be worked up by the South African …

Nonsense.

All right, I shall come with the facts. I shall prove that the hon. the Minister had to be worked up. All we get from him is that everything we say is nonsense. In connection with the 30 000 farmers, he says it is our fault because we go around saying that the 30 000 … [Interjections.]

Order!The hon. the Minister must withdraw the word “lie”.

What did I say, Mr. Chairman?

The hon. the Minister told the hon. member “Do not lie.” The hon. the Minister must withdraw that.

I withdraw it, Mr. Chairman.

The hon. the Minister says that the matter of the 30 000 farmers had been raised by us. Here I have a publication of the Natal Agricultural Union where the figure of 30 000 had been accepted by the Secretary of that union as being authentic and as having come from the Minister. It had nothing to do with the United Party and nothing to do with any of us. It has been accepted by the agricultural union as an accepted part of the policy of the Government. Surely, if the fact is that there has been “skindered” about the Minister, why did he not at least go out to the agricultural union which is one of the organized bodies of agriculture in this country? He has direct access to them which he can use. [Time expired.]

Mr. Chairman, now that we have heard these three speakers from the Opposition side, it is very clear that these gentlemen are trying to transmit to the world outside as poor an image of the agricultural industry as possible. I want to refer briefly to certain matters mentioned here by the hon. member for Mooi River. He said, amongst other things, that the fact that companies could now participate in the agricultural industry, constituted a dangerous trend. I want to tell him that if it is to the advantage of the agricultural industry and the farmers in South Africa, I think it is a good thing if they can mobilize their capital and administrative talents, etc. One of the problems we have in the agricultural industry, according to the commission of inquiry, is that certain uneconomic units have continued to exist. Therefore I do not see anything wrong with our wanting capital mobilization to take place in the sphere of agriculture. But, Sir, the following is an interesting fact which I should like to bring to the attention of the hon. member. When we in this House discussed certain legislation aimed at combating certain monopolistic trends which had begun to crop up in the company world in the agricultural industry, legislation such as the Egg Production Control Act, it was that side of the House which took this amiss of us. I fail to see what the hon. member’s argument is in this regard. He now wants to pretend to be the patron of the agriculturalist over against the large companies.

Sir, I want to come back to the hon. member for Newton Park. The hon. the Minister has almost completely ploughed him under here, but I can still see something protruding and I want to deal with him further. In his customary manner he went on to present a poor picture of the agricultural industry. He quoted, amongst other things, from the report of the commission of inquiry into the agricultural industry. I want to say at once that the report that was tabled here, reveals a very profound study of our agricultural industry. I am sure that the study of this report ought to contribute to an enhancement of the standard of debating in this House, especially as far as the United Party is concerned. Sir, as was to be expected from the hon. member, he did of course stress the most negative aspects in this report. Now I want to quote to him from the same report, from Chapter 3 : “The financial position of the South African farmer and circumstances influencing it”. On page 35 the commission said the following (translation)—

Then the commission went on to say that notwithstanding certain problems experienced in the agricultural industry, the latter had made a tremendous progress, and then it mentioned the problems, inter alia, the instability of the agricultural industry, the problems of climatic conditions, the disproportionate distribution of personal income, which the hon. member also mentioned, and the high incidence of uneconomic farming units. The commission went on to say—

Sir, this is the problem of hon. members of the Opposition; they always see only one part of the farming picture, and then they want to present a picture of total weakness in the agricultural industry. The commission had something to say about this as well; it said—

Sir, hon. members of the Opposition referred to the slender confidence people have in the agricultural industry, and then the hon. member said, because there were not enough people who enrolled as students at the agricultural faculties of our universities and at the agricultural colleges, that there was no confidence in the agricultural industry, but I want to level the accusation that this is so because of the poor picture of the agricultural industry presented by the United Party.

In that case we do have a great deal of success after all.

The commission of inquiry said that one of the basic reasons for the problems of a certain percentage of the farmers, was uneconomic farming units. Another reason mentioned by the commission, was maladjusted farming enterprises. I want to tell the hon. member that this year we once again discussed in Parliament, in the course of the debate on the Subdivision of Agricultural Land Amendment Bill, these problems which give rise to uneconomic farming units, and what was the standpoint taken by hon. members opposite? They were opposed to it. When the hon. the Minister asked for certain powers in order that he might cope further with these problems, it was that side which fought the Bill tooth and nail in all its stages; they were opposed to it in principle as well.

Furnish the reasons as well.

Yes, we know what the reasons are. The reason is quite likely that there were a lot of land speculators behind those arguments. But, Sir, I am going further. The poor image of the agricultural industry created by hon. members of the Opposition, gives rise to a general feeling outside, even with the consumers of agricultural goods, that too much is being done for the farmer. I want to make the statement here that the agricultural industry should not be seen as a social institution for keeping certain people on the land. It is true that when disaster conditions develop, one has to grant individual assistance to certain farmers hit by such a disaster, but basically the object of the large amounts of money which are also made available under this Vote, is, in the first instance, to place the agricultural industry on a sound production footing and, in the second instance, to spend these amounts of money for the sake of soil protection and soil conservation. One of these schemes, a scheme which is being discussed widely and will probably be discussed in this debate as well, is the stock withdrawal scheme, which is not only aimed at helping the farmers specifically, but also at conserving and protecting the soil so that it may recover from the catastrophic droughts we have had in recent years. Sir, the moment an election is fought, one finds that it is the standpoint of the United Party’s candidate, inter alia in Brakpan, to talk about the “mutton scandal”, and when that hon. member pays a visit to the Karoo districts, he complains about this scheme and says that enough is not being done in this respect.

Who complains?

Sir, these points will still be argued further. Nowadays, if one is a member of the United Party, one can say anything; it merely depends on where one is; one is free to say contradictory things.

Sir, another aspect I want to mention in regard to funds made available by the Government to this industry, is that of food subsidies. In this respect, too, it is being said that too much is being done for the farmer. But, once again, this is not a subsidy made directly to the farmer; it is a subsidy made to the agricultural industry as such, which implies benefits to the country’s economy as a whole, not only to the farmer, but also to the consumer as well as the secondary industries. [Time expired.]

These difficult times which the agricultural industry is experiencing at the moment in view of the depopulation of the rural areas as a result of the increasing production costs as well as the cost of living, and consequently the reduced profits of the farmer as well, are also in particular the very times when the farmer badly needs the Department of Agriculture to help him and to support him. But unfortunately there are several matters prejudicing mutual confidence, incidents prejudicing in particular the image of the Department of Agriculture as a result of the poor control and weak discipline found in those departments at the present stage. We had the case, known to numerous farmers, at the agricultural college of Glen, where vegetables are produced and sold by the store to various employees of the department at a nominal price. Nobody can object to that; in fact, if the department looks after its workers, we welcome it. But I wonder whether the hon. the Minister is aware of the fact that bunches and bunches of carrots and bags of potatoes are loaded onto vehicles to be sold outside to the public at a profit. And this is not the only case of this nature. There is also the case at the Koopmansfontein experimental farm, where milk was made available to the officials at a very reasonable price. One of the officials recognized the business possibilities this presented, and he bought a cream-separator, sold separated milk to the non-Whites and sent away the cream, and so he received a substantial cheque every month, supplementing his normal salary. As a result of this weak discipline other officials were in due course encouraged to go even further. One of them borrowed some of the Dorper rams there and kept them on his farm nearby in his own flock. However, then he made the mistake of removing some of the ear-tags and also of chasing three head of cattle belonging to the Koopmansfontein experimental farm into his own pen. I think the Police caught him when he wanted to sell the third head of cattle. That is the type of thing that is going on as a result of the weak discipline in his department.

What happened to those officials?

I should like to know. I would be glad if the Minister would give me a reply to it.

I thought you said the Police had caught him.

Now I want to come to an important matter which also came about as a result of the poor control and the bad discipline in the department. A great deal of publicity was given to it in the newspapers, and we know that it cost the taxpayers thousands of rands. The Minister need not become fidgety, for I am not going to raise the Agliotti affair now. This is a matter of quite a different nature.

What is the hon. member’s insinuation?

I am not making any insinuation. I just want to say that this particular matter had a lengthy sequel in the courts.

Foul-mouth (vuilbek)!

Order! The hon. the Minister must withdraw that word.

I withdraw it.

This matter concerns the purchase of two Siementhaler bulls by the Glen experimental farm from a certain farmer, Mr. Ben Scholtz, of the farm Vlakpan near Douglas. Two officials of the department were sent out to select bulls, and eventually one bull was bought for R700 and was immediately sent to Glen by rail. Six months later this breeder was informed by the Department of Agriculture that the bull was sterile and that they would like him to replace this bull by another. The breeder was quite willing to replace this bull by a bull of similar quality, and asked them to return the first bull at once in order that he might subject the bull to fertility tests to see what had really happened. Seven months went by, after he had originally supplied the bull to Glen, before he got that bull back, and when the bull was unloaded he immediately noticed that this bull had undergone a change, that there was a tremendous thickening of his breeding organs and that this bull had very obviously caught a venereal disease while it was at Glen. Then Mr. Scholtz immediately sent a letter to the head of the O.F.S. region and asked them to send back immediately his second bull, the substitute bull, or else they had to be willing to pay for the second bull as well, for he did not consider himself to be responsible for the condition of the first bull. It took six months before the substitute bull eventually reached the breeder again, after the Glen experimental farm had used the bull and bred several calves from him. Any honourable farmer who buys a bull or gets one from a breeder, sends it back again and gets calves from such a bull, would be willing to pay for such a bull, but in this case the State refused to pay any compensation for that second substitute bull. I just wonder what the policy of the department is. I should like to know from the hon. the Minister whether it is not his policy to have bulls and rams purchased by the department tested the moment they arrive at these experimental stations. Why was the test not conducted in this case? We should like to know whether this was attributable to the negligence of officials. The farmers in the vicinity of the Northern Cape region believe that all the departmental herds are infected with venereal diseases, and consequently they are not willing to buy departmental bulls and rams, something which has an adverse effect on the reputation of the department.

You are becoming quite irresponsible now.

This particular breeder had to wait for eight and a half months for a reply from the hon. the Minister to his letter, to try to settle this matter.

Not the Minister; you are making a mistake.

He immediately took the original bull to the veterinary surgeon in Kimberley. There it was slaughtered and its breeding organs were sent to Onderstepoort for examination and to get a report on them. Once again he had to wait for eight and a half months before he eventually received a reply from Onderstepoort, and when he received the report, the reply was that as a result of exposure the specimen had become unsuitable for bacterial examination. It had stood there on a shelf for such a long time that it went bad. That was the situation, and we should like to know from the Minister what happened in this case. The unreasonable lawsuit which the department subsequently brought against this particular breeder in order to get back the original R700, cost this breeder quite a few thousands of rands to defend. The case became prescribed, and in order to fight the prescription they eventually went as far as the Supreme Court in Bloemfontein, and this cost the taxpayers of South Africa thousands upon thousands of rands. I should like to hear from the Minister what the taxpayers had to pay up in order to prosecute this lawsuit.

You are a gossip-mongering little bullock (skinderbulletjie).

In the meantime this particular breeder, who is not a member of this party but a member of that party, once again tried to settle this matter with the Minister. He tried to see the Minister during a co-operative society conference. Once again he received the message from the member for De Aar that the Minister would not be there. When he arrived at the co-operative society congress in Pretoria, he found that the Minister of Agriculture was in fact there, but was simply not willing to see him so that this matter might be settled out of court. [Time expired.]

The hon. member will forgive me if I do not follow him in his bull story.

The hon. member for Newton Park set out to us the planning council which is the pivot on which the policy of the United Party hinges. He mentioned several pertinent facets. First of all, I should like to know from the hon. member for Newton Park, since he wants to bring non-Whites into this Parliament, how many non-White representatives he is going to appoint to this planning council so as to implement his party’s policy. Surely, if he does not do this, his policy is quite wrong from the beginning. The hon. member for Newton Park is very concerned about cost increases, but, as is the case with a great many of his arguments, this does not go beyond generalizations; he never arrives at a specific point. The hon. member for Mooi River referred a moment ago to “company movement into the platteland”. Have these two hon. members ever given any thought to where cost increases and “company moving into the platteland” hook up with each other? I have here the annual report of the largest fertilizer manufacturing company in the country. I notice that the annual report was signed by a Mr. Oppenheimer, who is also a member of the managing board of “Soetvelde van Suid-Afrika Beperk”. This is one of the “companies” which are “moving into the platteland”. I notice that this company’s profit before taxes amounted to more than R21 million over the past year. Profit after taxes amounted to R13 million. We examined this matter somewhat more closely and looked at the approximate profits yielded by this company’s fertilizer products. The percentage of profit-worthiness of the fertilizers was estimated as follows: powdered supers, 54,20; granulated supers, 55,07; and ammoniated supers, 55,39. It is known that urea costs R25 per short ton to manufacture. It is also known that the selling price per metric ton is just over R86 per ton. Even if my figures are 100 per cent too low, it means that it costs R50 per ton. Then the profit is still approximately 36 per cent per metric ton. Why does that hon. member not complain about the cost increases of this product, which is to a very large extent essential for the agricultural areas?

1 mentioned that the price of fertilizer had been increased.

Why does the hon. member not penetrate to the crux of the matter? Why does the hon. member stop at generalizations?

The same story remains valid in respect of fuel prices in the country. The hon. member does not furnish specific data. Whereas I am pleading here for a thorough cost investigation to be instituted by the hon. the Minister into fertilizer and fuel, I am furnishing specific particulars. That hon. member, on the other hand, does not go beyond generalizations and blames the Government for the cost increases. The agricultural sector takes approximately 26 per cent of all the diesel and oil products brought into the country every year. Ever since January and February we have been reading in the newspapers that these fuel companies want to increase the fuel price by between 13 per cent and 15 per cent. That would provide them with an extra profit and cost the consumer an extra R20 million on the country’s estimated order of R160 million. Fuel is one of the means which the agricultural industry cannot do without. Price increases may simply not take place. Outside the area of control a case is being built up with a view to an increase in prices. It is my view that fuel profits are being concealed under a very large number of disguises. Therefore I ask that, for the sake of the agricultural industry and for the sake of the profit margin of the farmer, very profond thought be given to the matter before the Government grants any increases in the price of fuel. According to the Petroleum Press Service of July, 1971, which reflects the price increases and the prices per barrel of the various Persian Gulf sources, the actual increase in the price of crude oil, after the local 1971 increase, was already 0,23 cents per litre. The increase in the price of crude oil in April as against the increase in the price of petrol of 0,53 cents per litre at the bowser, at landed cost, was already 30 cents per litre. This could not possibly represent the technological loss through waste products. I am making out a specific case here today for the South African farmer and the consumer, and I trust that the hon. the Minister of Agriculture will take cognizance of the fact that we in this sector cannot bear an increase in this cost item. I should also like to ask the hon. the Minister of Agriculture to lend his support to an inquiry into the whole fuel distribution industry in our country. Tankers of different firms drive past the same farms to different tanks erected on those farms. One finds that every now and then marketing people from different companies pay visits to the same farmer on the farm. We believe that this practice necessarily forces up the cost of fuel. We therefore ask the Government to look into this matter.

let us come back now to the inconsistency of the hon. member and his party. On 16th February the hon. member for Von Brandis complained in col. 1214 of Hansard that the price of fish had risen by 12,8 per cent and those of milk products and eggs by 11,4 per cent. Then the hon. member for Von Brandis went on to make a big fuss about the voters of Brakpan having to vote against the Government because of these high agricultural prices. In the course of the same debate, on 17th February, the hon. member for Newton Park attacked the Government because agricultural prices were too low. I should very much like to know how that party reconciles the two. The one member complains that the prices are too high, while the other member complains that the prices are too low. What else did the hon. member for Newton Park say? A moment ago he made a big fuss about surpluses. What did he go on to say? He said—

Because there are surpluses in the agricultural industry today, he levels accusations at the Minister and wants to undo the work of a number of boards of control, the Marketing Council and several Government departments, and replace them by a planning council which he vaguely identified Mr. Chairman, I see my time has expired, and I thank you for this opportunity.

Mr. Chairman, the hon. member who has just resumed his seat, attacked the hon. member for Newton Park because he had told us about the high prices the housewives have to pay for certain products. The hon. member for Newton Park was complaining about the consumer prices and not the prices received by the farmer. That hon. member will admit that, in respect of many products, there is an enormous gap today between the price the farmer receives and the price the housewife has to pay.

Mr. Chairman, it was the hon. member for Von Brandis to whom I referred.

Then I shall defend the hon. member for Von Brandis. I agree with the hon. member in regard to the rising costs we have in agriculture today. I should very much like to discuss this aspect at a later stage. At present, however, I should like to say something more about a matter which was raised in this House this morning by means of questions. We are confronted with an enormous problem in regard to the home industry association. This is quite a sound principle the hon. the Minister of Agriculture initiated. It gives the farmers’ wives as well an opportunity to make some contribution towards agriculture and the progress of the farmer on the farm. Furthermore, it provides them with an additional income and, as I see it, this movement he initiated is quite a sound one. However, we have this difficulty that, in terms of the Health Act of 1919, the powers of the Minister of Health are delegated by the Administration to the local authority. We are experiencing difficulties with the agricultural industry in this respect. I am very grateful that the Minister of Health is here today to give us some clarity on this score. The specific case I am discussing now is that of Grahamstown. But this is not the only local authority in regard to which we are experiencing difficulties.

In his reply the hon. the Minister of Agriculture said today that the hon. the Deputy Minister discussed this matter with the town clerk there. The Registrar of Cooperative Societies discussed this matter with them. The Department of Agricultural Economics and Marketing also discussed the matter with the provincial administration. As far as I know, the Wheat Board was in favour of these ladies doing the baking in their own kitchens and selling their produce on a commission basis for their co-operative societies. In view of the fact that this local authority now says that these ladies may not do any baking unless they run a bakery according to bakery standards—this was also said in other towns—it would cost these housewives at least R15 000 to build a new bakery. Their kitchens are spotlessly clean. Every farmer’s wife in South Africa is proud of her kitchen, but these ladies are not allowed to do their baking there when they want to sell their produce on a commission basis. But what upsets the Whole argument is the fact that if these ladies want to bake for charity, they are allowed to sell their wares anywhere, even on a street market.

When the local authority says that it is a health regulation which prevents those housewives from baking in order to sell their produce in a clean little shop or in their co-operative society, it is quite absurd when compared with the unlimited selling which is allowed for charitable purposes. I should like to ask the Minister of Agriculture to discuss this matter further with his colleague, the hon. the Minister of Health, so that we will not experience any further snags. Is it not possible for a definite guideline to be laid down by law for this kind of baking in order to give the town councils some guide to determine, under the law, that this can, in fact, be allowed in these towns in question? I feel very sorry for these ladies, particularly those in my constituency. They embarked on this venture with the idea as described here in the report of the Secretary for Agricultural Economics and Marketing. Unfortunately I only have the English version of the report here. Under the heading “Home-industries Co-operatives” I read the following—

The purpose is to sell home-baked produce and here we have struck a snag with the local authorities. I wonder whether the hon. the Minister could do something in this connection for the sake of the housewives and in the interests of agriculture.

I now want to deal with other matters. In this connection I should like to refer to the rising agricultural costs. In the same report I quoted a moment ago, we find at the bottom of Table 5 certain figures in regard to farming requirements. The basis of 100 applies to the years 1958-’59 and 1960-’61. The figures have been furnished up to this year. We now find that there were increases; for example, there were increases in respect of fuel, which was mentioned by the hon. member for Pretoria District. According to this table fuel was placed at a base of 100 at that time and today, or rather in 1970-’71, it was 102. This is probably a mistake, because the hon. the Deputy Minister, according to Agricultural News of 27th August, 1971, furnished different figures when opening the silos at Kaalfontein, near Kempton Park. The figures he furnished, there were much higher. He complained about the high production costs of the farmers, and said that during the last quarter of 1970-’71 this increased by 5,4 per cent compared with the corresponding period of the previous year. He then went on to say—

How could it be correct when it is stated in this table that, as against a base of 100 in respect of the years 1958-’59—1960-’61, the figure in respect of fuel is now 102?

It is possibly a printing error.

It is most probably a printing error. I should like to know from the Minister whether it is in fact a printing error. But the hon. the Deputy Minister went even further. He said—

We now see in the table that spare parts through all those years increased from 100 to 122 from 1959-’60 up to the present. Probably this is also a printing error, because it cannot be correct when there is an increase of 11,7 per cent in costs in one quarter. I do not know whether the figures of the Deputy Minister were perhaps incorrect, or whether the figures in the table are incorrect, but I should like to know from the hon. the Minister what the position is. I quote further—

This speech was made before devaluation and our tractors are imported. A large percentage of the spare parts also have to be imported. On top of that we have to pay excise duty on them. I think the hon. the Minister should go into the import of equipment, particularly tractors, thoroughly. He should discuss this with his colleague, the Minister of Finance, to see whether we could not have an excise duty rebate in respect of these goods. The production costs of the farmer are constantly rising, they are rising by the day and every quarter. If we do not succeed in containing these production costs how then will the farmer be able to market his produce at a lower price? This is what is being expected of him. We heard over the news that the mealie prices were now lower. The farmers have to pay more for everything, and yet they receive a lower price for their produce. [Time expired.]

Mr. Chairman, the hon. member for Albany will pardon me if I do not follow up on what he said. I think that the Minister will in due course furnish proper replies to his questions. I want to say today, on the occasion of this Agricultural debate, that for the first time in many years we are in a position to participate in this debate in a spirit of gratitude. A spirit of gratitude in the sense that where we still had barren plains last year we now have plains of waving grass. Where we had poor stock last year our stock, almost throughout South Africa, are in a good condition this year. That is why we are grateful for being able to participate in this debate in this spirit.

I have listened attentively to all the Opposition speakers and I formed the impression that it is the aim of the Opposition to try to establish a perfect agricultural economy.

Yes, of course !

Just as one cannot achieve perfection in any other facet of the national economy, one cannot establish a perfect agricultural economy.

You simply do not want to rectify the mistakes.

No, it is not a question of rectifying mistakes. I have the highest regard and respect for our farmers in agriculture. The hon. member for Mooi River mentioned his district, the district of Mooi River. It is a district I know fairly well. But why is that district experiencing a shortage of funds today? Why are the people having a hard time of it there? The same applies to the district of Mount Curry. To my mind quite a good comparison can be drawn between these two districts. It is as a result of the fantastic drought the people have had there. Our wool industry lost more than R40 million. The rains brought grass but no money.

And the high costs.

Yes, there are also costs attached to it, but the prices have also increased to a certain extent. As a result of the drought our agricultural economy is experiencing difficulties today; our people are struggling, because it will take them quite a number of years to pay for the effects of the fantastic drought we have had there. We will have to adapt ourselves to it; the people will have to adapt themselves to it. But in due course, just as has happened in the past, the people will adapt themselves to circumstances economically, and they will find their feet again.

What is the function of agriculture at present? Its function is threefold. The first function of agriculture is to provide food and raw materials. The second function is to ensure a livelihood for the farming section of the community. The third function is the utilization of the natural resources in such manner that they are preserved for future needs as well. This function is naturally a very important one. A healthy agricultural system is economically essential for the development of South Africa. Agriculture can with justification be called one of the key industries of the Republic.

To come back to the function of agriculture, I just want to say that as a result of the evolutionary process which is taking place in agriculture today, there exist certain problems which have been identified and recognized. In the short time at my disposal I should like to deal with one of these problems. This is a very important aspect in agriculture. In order to allow the threefold function of agriculture to succeed, mortgage capital is absolutely essential to a very large portion of our agricultural population, particularly in view of future consolidation which has only begun to be applied in earnest. The more this is applied the more mortgage capital will be required. Surely, this is understandable. Now, it is a fact that much of our mortgage capital in agriculture goes back a long way. We know that many mortgage bonds as they exist in agriculture today, are even transferred from one generation to the next in the private sector. I am not talking of mortgage loans from the Land Bank or the Agricultural Credit Board. The result is that, under these circumstances, the working capital available to our younger farmers is always inadequate, particularly when the young man inherits the farm which carries a large or medium mortgage bond. In that case there is very little or virtually no security available on which to obtain capital to continue his agricultural activities on a healthy economic basis. I want to make the humble suggestion today that particularly in view of future, large-scale consolidation—a start has already been made—a scheme should be worked out comprising compulsory insurance cover for all mortgage bonds on fixed property in agriculture. This should not only be obtained in respect of existing mortgage bonds, but also in respect of any bonds which are registered in future. I shall tell hon. members why I say this. The Land Bank initiated a scheme such as this about 11 years ago. This is a scheme of compulsory insurance applied by the Land Bank, and this is being applied quite successfully. On 30th December, 1971, there were 25530 farmers who were covered by insurance for an amount, in round figures, of R3 004 million. According to surveys there are approximately 90 000 farmers in the country. When the figure of 25 530 farmers who are already covered in terms of the Land Bank scheme is subtracted from the total number of farmers, approximately 64 470 farmers remain. Between 1955, when the mortgage insurance scheme of the Land Bank came into operation and 1971, 4706 farmers have died. The amount of debt redeemed in this manner exceeded R30 million. This is a very large amount of money. When it is taken into consideration that the total burden of mortgage bonds in agriculture last year was estimated to be R941 million, the debts amounting to R3 million written off over the last 11 years, represents 3,3 per cent of the total burden of mortgage bonds in agriculture. When we take the 25 000 farmers whose land was covered by the Land Bank by means of insurance, we find that 28 per cent of our farmers are already being covered by means of mortgage insurance. In other words, 72 per cent is still not covered.

Do they all have mortgage bonds?

No, I said 72 per cent were not covered yet. Not all of them have mortgage bonds. A large proportion of those farmers do not have bonds. What I am pleading for is that the farmers who do have mortgage bonds, whether in the private sector or wherever it may be, should be covered by insurance in order to place agriculture on quite a different economic basis within a few decades.

Mr. Chairman, the hon. member for Aliwal has just delivered a plea here for an improved financial scheme for the farmers as he is concerned about the financial position of the farmer in South Africa. He has fully agreed with us, because we, too, are concerned. We appreciate the fact that he is so concerned and that he has at least made or submitted plans for effecting an improvement to the situation.

In this regard I want to come back to the Minister. The hon. member for Newton Park asked the hon. the Minister here for his view regarding the future of the agricultural industry. The hon. member tried to point out the bottle-necks and to show the Minister that we had to put our heads together in order to eliminate those bottle-necks. What did we have from the hon. the Minister? The first matter on which the hon. member for Newton Park touched, was the financial position of the farmers and the lack of confidence in the agricultural industry. He proved his statements. To give you an example, I want to mention that only 16 students are taking the course in sheep and wool farming at Grootfontein. And yet the Minister comes forward and says, “But there is confidence. In the first instance, see how many applications there are for more land”. Mr. Chairman one also has something called love of the land. It is true that there are rich people and that 16 per cent of the farmers of South Africa are not in debt. They are able to pay expensive prices for land.

It is not the rich people who are applying for land.

Then the hon. the Minister said that bottlenecks did not exist and that there was sufficient finance. He was perfectly satisfied with the position. If we are to continue in this vein of the hon. the Minister being unable to see the bottle-necks, we shall get nowhere. Every farmer in South Africa is concerned about the financial position of the agricultural industry. The hon. member for Newton Park indicated here what Mr. De la Harpe de Villiers and Mr. Frans van Wyk had said. But what did the Minister say? The Minister was satisfied with the position. He said the farmers’ debt of R1 380 million was merely one year’s revenue.

Of course it is.

The hon. the Minister says it is one year’s revenue. The hon. the Minister said the revenue amounted to R1 710 million. I made a note of that. It is not R1 710 million, but R1 510 million, i.e. if his own report is correct.

That is what it is going to be this year.

Oh, you said that was going to be the revenue this year? Very well, so the hon. the Minister has made an advanced estimate, but that still is not the revenue of the farmer. It is the gross revenue.

I said that.

The net revenue is only R601 million. What is strange, is that the volume of production of the farmers of South Africa increased by 7 per cent last year and by 7.8 per cent this year. This only goes to show how hard-working the farmers are. Now, what is the position as regards the net revenue? Last year it decreased by R73 million and this year it increased by only R10 million. Debt, however, increased from R1 340 million last year to R1 380 million. In the past four years debt increased by approximately R400 million, but the hon. the Minister is not concerned.

Surely you are talking nonsense now. When did I say that I was not concerned? I was replying to the statements of the hon. member for Newton Park.

Very well, so the hon. the Minister is concerned. Every agricultural report indicates that the major bottle-neck is high rates of interest. If the hon. the Minister is in fact concerned, I want to ask the hon. the Minister once again what he is going to do about the high rates of interest.

Don’t you know what is being done?

The debts of the farmers grow each year. The hon. member for Newton Park indicated what the hon. the Minister’s own report says, i.e. “It has a crippling effect on the farmer”. Last year the report said, “It is alarming”. What does the hon. the Minister say and what is he going to do about it? It does not help us to say that things are going well with the agricultural industry. The desk of each member in this House who is doing his job, is piled high with applications for financial assistance. I shall tell the hon. the Minister what is happening now. The rates of interest are increasing all the time.

The other day I had a case which I referred to the hon. the Minister, and I hope he is going to help me with that. This case relates to a farmer whose rate of interest was increased to 10,5 per cent by Sanlam. He has to be covered by insurance and he will therefore have to pay 13 per cent. What man can make an existence if he has to pay 13 per cent, with the prices of agricultural produce being what they are? Surely, he just cannot make an existence! But if the hon. member for Newton Park advocates a financial institution for the farmers of South Africa here, the hon. the Minister has nothing but criticism. The hon. member said the financial schemes had to be under one umbrella so that we might investigate a farmer’s case who had been shown away by the Land Bank and assist him at a lower rate of interest. Otherwise the farmer must be subsidized. This side of the House has advocated that since 1966 when the hon. the Minister of Finance came forward with anti-inflationary measures, which included higher rates of interest. Remember, that was one of his fundamental points. This side of the House said they had to be subsidized.

By 2 per cent.

Yes, by 2 per cent, but at that time interest was lower. Then the hon. the Minister came forward with a half-baked scheme and increased interest by 1,5 per cent. As rapidly as the hon. the Minister increases it, the financial institutions increase it too. So it goes on. As a result of this some of the best farmers in South Africa are being ruined. There is no point in telling us that it does not matter. A plan will have to be made if we are in earnest with the agricultural industry in South Africa and this side of the House is. When we look at the figure, we see that the number of farmers decreased by 24 000 in recent years. Now it is being said that the number has to be decreased by a further 30 000. The hon. the Minister said today that he did not agree with that, and I am extremely pleased that he does not agree.

All the same, he is working in that direction.

I know that he is not going to take them by the scruff of the neck and push them off the land. I want to tell hon. members that if the Minister is not going to do something about interest, these people are slowly going to be strangled to death. They will gradually be drawn from the agricultural industry as a result of these rates of interest. That is why we are making this plea and that is why we shall continue doing so. Surely it is not an unheard of thing to speak here of a subsidy. Surely the agricultural industry is the most important sector, a sector which has to provide food to the people of South Africa cheaply. It is the sector which produces the character building section of the population of South Africa. That is why I am in earnest about it, and if it is worthwhile, surely this must be done. Surely these subsidies are nothing strange. This hon. Minister voted R14 million for the transport of the urban Bantu in order to assist the industrialist. Does he agree?

What subsidies are there in the agricultural industry? Why don’t you mention them? You speak as though there is none at all.

Order!

I shall come to that.

What is the matter now?

I beg your pardon, I thought Mr. Chairman had said that my time had expired. [Interjections.]

Order!

These points mentioned by the hon. member for Newton Park are the bottle-necks. The major problem is the financing of the farmer of South Africa.

I asked you what your norm was going to be. But you do not tell us. Is yours an unlimited norm?

Our norm is not only R50 000. Our norm is not one which calls for a man to receive letters of demand first, in other words, one which calls for him to be bankrupt first. That is not our norm; that is the norm of the hon. members on the opposite side. That will not be our norm. I do not want to be mean today, but I do want to say that it is alarming when we see today that farmers cannot be assisted with more than R50 000, whereas there were Land Bank loans of R412 000 and R118 000 to very wealthy people. Having regard to that, I want to tell hon. members that it hurts very deeply.

But what is your norm? Tell us your norm.

Order!

We shall come to that on Monday.

Order! The hon. member’s time has now expired.

Mr. Chairman, we have listened today once more to the lamentations of the hon. member for Newton Park and the hon. member for King William’s Town. I want to tell hon. members in all honesty that when listening to the members of the Opposition, one gets the impression that they want to talk the farmer in South Africa out of agriculture. They try to talk him out of it. I just want to tell the hon. member for Newton Park that he is doing agriculture a disservice, and that he is telling an untruth when he says that the hon. the Minister of Agriculture said that the number of farmers in South Africa have to be reduced by 30 000. This is not true. The hon. member read that report in a certain newspaper, but the hon. member only read the headline of the report. He only read the caption; the hon. member can go and check up on his facts. I now want to give the hon. member for Newton Park some good advice. Surely, he has a friend who can read well. This friend can decipher this report for him and we shall then see that the hon. the Minister did not say that the number of farmers in South Africa have to be reduced by 30 000. The hon. member also said that we should make correct predictions as far as the future of agriculture is concerned. I really do not know why the hon. member wants the Government to make predictions on that score, because the hon. member has an hon. member on that side with a crystal ball, the hon. member for Hillbrow. Surely, that hon. member is able to make all the predictions for the hon. member for Newton Park.

What about De Goede?

Yes, or that man in Oudtshoorn. Then the hon. member for Mooi River said that he was concerned about the fact that large companies are buying up land. He went even further and said that the reason for this is that the Land Bank does not make adequate funds available to agriculture.

Who said so?

You said so. With that the hon. member implied that, because the Land Bank does not want to help the farmers, companies are in a position to buy them out.

I did not say anything about the Land Bank on that score.

This is quite a misrepresentation of the facts. I want to be a little more positive about agriculture. There are certain economic pointers one can look at when one wants to see whether or not the industry is doing well. As a farmer one cannot but feel proud of the fact that agriculture today is one of the major earners of foreign exchange for South Africa. It is interesting to note that, during the year 1970, we imported agricultural produce to the value of R60,5 million while we exported agricultural produce to the value of R431,9 million. In other words, agriculture was responsible for a surplus of R371 million in foreign exchange for South Africa. When we compare this figure with the total imports of South Africa for 1970, we shall see that the total imports of goods amounted to R2 540 million while exports amounted to R1 421 million. We then see that agriculture is one of the major earners of foreign exchange in South Africa. When one considers an industry and when one wants to see whether an industry is healthy, one surely has to look at the gross production value. All hon. members on that side of the House will agree with me if I point out that, since 1950 to 1970, the gross value of agricultural production increased from R618 million to R1 510 million. In other words, the gross value of our agricultural production has increased by 144 per cent during the past 20 years. We may also consider another aspect of agriculture in order to determine whether it is doing well or whether it is on the downgrade, as was suggested by hon. members opposite. For that purpose we can take the physical volume of agricultural production. Contrary to the psychosis the hon. member for Newton Park and other hon. members opposite want to create, i.e. that all is not well in agriculture and that there are people who are leaving agriculture, we find that the physical volume of agricultural production increased by 112 per cent over the last 20 years. I think one of the best pointers to see whether an industry is sick or healthy, is to consider the value of the capital assets in that industry. In that respect we see that agriculture presents an equally glowing picture. We see that the capital assets increased from R2 900 million to R6 690 million between 1950 and 1970. In other words, the capital assets in agriculture increased by 126 per cent. I think there is a good reason for this. I think the major reason for this is the fact that the National Party is governing the country, because the National Party has confidence in the country and in South Africa. It constantly expresses its confidence in agriculture and does not try to kill it with words. The following aspect we look at, is the value of land. Hon. members know that it is quite interesting and significant to consider the tendency we have in land prices. During the past 20 years, from 1950 to 1970, we see that the price of land has doubled every ten years. In other words, this is further proof of the confidence the people have in agriculture in South Africa. When we look at the index of the value of land, we see that, between 1950 and 1960, the index increased by 122 per cent and by 74 per cent between 1960 and 1970. The overall increase in the value of land in South Africa during the past 20 years is 287 per cent, and this represents an annual rate of 14,3 per cent. Sir, when one looks at these aspects, it proves only one thing, and this is that there exists great confidence in agriculture; that agriculture is not on its way out, but that it is on its way in. Sir, hon. members on the Opposition side made a great fuss here about the question of production costs in agriculture and about the increase in producers’ prices. Sir, when one listens to the complaints and the lamentations on that side of the House, one gets the impression that production costs in agriculture are increasing out of all proportion to the increase in the price the farmer gets for his produce; but when one looks at the real figures, the hard facts, one sees quite a different picture than the one the hon. member for Newton Park would like to hold up to us here. We see that the producers’ prices of agricultural produce increased by 26,4 per cent between 1960-’61 and 1970-’71. If over against this we consider the increase in the prices of requisites such as material and implements, we see that the price increases in production means amounted to only 16,9 per cent. As against this we had an increase of 26,4 per cent in the producers’ prices of agricultural produce. One can go further and say that we in South Africa are quite fortunate when we consider the tendencies in the prices of agricultural produce. We are in a quite fortunate position in having a Government who looks after the interests of the farmer and agriculture.

Mr. Chairman, the hon. member for Lydenburg paints a rosy picture here; he tells us that everything in the agricultural industry is fine. Sir, have we ever had a Minister of Agriculture who was booed at an agricultural union meeting before? Have you ever had as many reports in the Press as you have today about farmers who are unhappy with prices, about farmers who cannot get loans, about farmers who are getting loans but paying 10½ per cent interest and, Sir,—do not forget the other side of the picture—about the housewife who is paying too much for her products. The hon. member for Newton Park spoke about this price gap earlier here this afternoon. But the hon. member for Lydenburg says that everything in the garden is rosy. He talks about exports and about the wonderful contribution that agriculture has made to exports in the country. But, Sir, why did he not do his homework properly? If he had, he would have seen by how much the value of agricultural exports has gone down, expressed as the percentage on the total exports of this country?

Why?

It has gone down because of the policy of this Minister and because of his Government; that is why it has gone down. This is the country which could produce far more than we need; which could be exporting almost every product, but because of the policy of this Government we find ourselves with shortages in this country. As I say, Sir, the hon. member spoke about exports, but why does he not tell us that in 1968 exports of agricultural products made up 36,8 per cent of the total exports of this country, but that in 1970 it dropped to 30,4 per cent? I believe it has dropped even lower since then. But he does not tell us that; he simply tells us what agricultural exports were worth, and then he speaks about the appreciated value of land. If he had known anything about economics, he would have known that the value of land has only gone up because the value of money has gone down. That is the only reason why you are paying more for land today; it is because the value of money has been depreciated under this Nationalist Government.

Sir, I want to come back to something more positive and deal with the control boards that we have in this country. Unfortunately, the hon. member for Pretoria, who is not here, spoke a little earlier and took my colleague, the hon. member for Von Brandis, to task because, as he put it, he had complained that prices of agricultural goods to the consumer were too high. He tried to equate this with the statement of my hon. friend, the hon. member for Newton Park, who had complained that the prices received by the farmers were too low. Sir, that is precisely the message that we are trying to get through. The message seems to have got halfway to the Government, but only halfway because they still do not seem to understand what we are trying to say, and that is that the function of the control board has broken down. Sir, for how long has the United Party been asking that the Government should reform the entire system of the control boards to ensure that more attention is paid to the primary object of the control boards, and that is price stabilization and orderly marketing? Let us get away from this policy that we have had and that has resulted in gluts followed by shortages. This country has either got too much or too little of everything; never does it balance out. Sir, I see the hon. the Minister of Finance laughing. I know why he is laughing. How often has he had this story thrown at him? We are now throwing it at his colleague, the Minister of Agriculture, because he is just as guilty of this stop-start policy. When there is an overproduction of butter and dairy products, he brings prices down, and what happens? We have to import from New Zealand. And, of course, the reverse is also the position. Mr. Chairman, if these poor boards were performing their functions, we would have happy farmers getting a fair price; we would have happy housewives who are satisfied with the quality of the goods they are getting and the price that they are paying, and we would not have gluts and shortages, but I am afraid that not one of those conditions is satisfied by these boards.

I want to deal for a moment with the potato Board. The Minister knows that he has had a series of questions to answer, and that he answered the last one here this afternoon. What did he tell us in this House on Tuesday when I asked him whether any offers to purchase potatoes had been received from South American countries? He said that offers had been received by the Potato Board and considered by the Potato Board. When I asked whether any potatoes had been exported as the result of such enquiries, the answer was, “No.” But, Sir, I asked further: “If not, why not?”, and do you know what answer he gave? The answer was—

Sir, what is the position in the country today? We have a tremendous glut of potatoes and the hon. the Minister knows it; it is no good running away from it. Our information on this side is that a very lucrative offer was made to the board …

Your information is wrong.

… not prices of 20 cents and 25 cents per 15 kg, which are the prices which are being realized on the market in South Africa today, but very much higher than that—in fact, almost double that price.

Oh, please!

The hon. the Minister says “Oh!”. Will he tell us what price was offered? I was told that between 45 cents and 55 cents was offered, but the Minister keeps the price as a State secret. If my information is right, Sir, it is scandalous that this Board did not accept that offer and export the surplus of potatoes in this country. The hon. the Minister has told us this afternoon, in reply to a question, that there is no surplus of potatoes. I asked what the surplus of potatoes was at certain dates—the 31st December, 1971, and the 31st March, 1972. The answer was: Nil, nil. Can he honestly say that there is no surplus of potatoes in this country at the moment?

You did not frame your question correctly.

The chairman of the Potato Control Board said in a statement on 25th February—

Cape Town has an average weekly consumption of between 20 000 and 25 000 pockets, and do you know how much is being delivered to Cape Town, Sir? During February and March 120 000 pockets a day.

You asked what surplus the board had.

Sir, why does the hon. the Minister hide behind that technicality? He understood the question. The question was whether there was a surplus of potatoes in South Africa, and his answer was that there was not. It is no good hiding behind a technicality, as the gremlin has got into this thing between the time it left my office and the time it reached his office …

You asked what surplus the board had.

I know that the board does not buy in potatoes; we all know that the board does not buy in potatoes. But if the question was incorrectly phrased, the Minister knows what the intention was behind the question, and he ran away from it. It is no good running away from it. Sir, what is happening with these potatoes? While we have this glut, he fails to export because he is still negotiating with regard to the price and because packaging requirements could not be met. What does he mean by that? Are we so inflexible in this country that for ideological reasons we will not even re-pack for other countries? Because that is exactly what happened and the Minister knows it. In the meantime, while we are sitting and not exporting for various reasons, the housewife is still paying too much for potatoes. She is still paying between 11 cents and 15 cents a kg in Cape Town where small ones are being sold on the market for 20 cents per 15 kg and larger ones at between 50 and 60 cents and a top price is 70 cents per 15 kg. This is how the Control Board is operating. Is this Control Board operating efficiently? Is the Minister satisfied that it is operating efficiently? And it is not the only one. What about the Milk Board? We have a report here of 12th April that it is apparent that the Witwatersrand Milk Distributors Association will try to increase the price of milk to shops to counteract the trend as the profit margin on delivered milk is higher than that on milk sold to shops. You have two systems for the supply of milk today; the one where the dairy suppliers deliver direct to the housewives at a high price, and where they deliver to retail outlets at a lower price. Those retail outlets are using milk and are selling it to the housewives at a lower price. Is he going to allow the Dairy Board, the Milk Board, to do this and to increase the price to the retail outlet so that they will compel the housewife to buy under the other system where it is going to be delivered at the higher price? I ask this because he knows that the Milk Board allowed that very thing to happen here in Cape Town two years ago where we had the situation that the consumption of fresh milk in two months rose by nearly 6 000 gallons a day and when this new system was introduced and the Milk Board allowed the distributors to jump on this one, to restrict the supermarkets and the retail outlets in their distribution of milk, with the result that the farmer got less for his milk and the consumer had to pay more.

How did the farmer get less?

Does the Minister not know the system under which the Milk Board operates? He knows of the pool system, and the more milk that is sold as fresh milk the higher the price the farmer gets and the higher is the “agterskot” that he gets afterwards. He ought to know it, and if he is an efficient Minister he would know it. [Time expired.]

The hon. member for Pietermaritzburg District said at the beginning of his argument that the exports of agricultural produce had decreased. Does the hon. member not know how much wool there is in this country which has not been sold?

Has it been exported?

The Wool Commission has retained 260 000 bales of wool which were not sold and which remained in the country because of the slump in the price, but the hon. member will not know that because he is interested only in the scandals of agriculture. He will not trouble himself any further by investigating matters.

I should like to deal with the stock reduction scheme and I am pleased that the hon. member for Wahner recommended it so highly. I know that he has the scheme at heart, because he is a farmer in my constituency, and one of the fairly good ones, and I am glad he has it at heart. The hon. member said the department made a sudden end to the scheme. But the scheme was introduced and came into operation as long ago as September, 1969. It was suspended in February, 1972. Now I want to tell the hon. member that any farmer who has soil conservation at heart and who, as a result of this drought, has seen his land deteriorate to such an extent that he will have to employ any means to bring about its recovery, should surely have decided in this time what he wanted to do. The people who have soil conservation at heart and the future farmers of this country have all, without exception, joined in the scheme. The man who wants to leave land to his descendants, participates in this scheme. The man who has been forced to his knees by drought, as, for example, in the Steytlerville district—where 72 per cent of the farmers participate in the scheme—has joined the scheme because he has soil conservation at heart. If a person cannot make up his mind in three years’ time to go in for a scheme, I really do not think this should be laid at the door of the department.

What about the person who buys now?

But I want to proceed. I am pleased hon. members spoke about this scheme in this House as they did. In this regard I want to read to you what was said about this scheme by a United Party candidate in the Brakpan election, and today I want to challenge the hon. member for Newton Park, who is the leader of the agricultural group of the United Party, to repudiate what this person said in Brakpan—

He now relates the quota system to the stock reduction scheme—what utter nonsense !

Then he went on to say—

I want to read another few extracts from this article before dealing with them—

I say I challenge the hon. member for Newton Park to repudiate this article. Here we have the two heads of the United Party. In the city it speaks one language, but in the rural areas and here, from where it will be relayed to the farmers, they speak another language. The hon. member for Walmer commends the scheme as one of the best ever in agriculture, and I am in complete agreement with him, but here we have a United Party candidate who slandered this scheme.

If he did say that, he was misinformed.

I challenge the hon. member for Newton Park to get up here and to repudiate him.

But I do say that he was misinformed. [Interjections.]

The hon. member for Newton Park held a meeting at Graaff-Reinet at which 13 farmers were present. I must say that it was an extremely large meeting. [Interjections.] He told the farmers of Graaff-Reinet that the Government should do the following—

“Pay higher compensation”! In Brakpan Mr. Civin said that we were draining the taxpayers’ money for a scheme which allowed the farmers not to farm but at Graaff-Reinet the hon. member for Newton Park told the Government: “Pay higher compensation”.

I accuse you of making a misrepresentation.

But he went even further and said that we should allow the farmer to withdraw a maximum of 75 per cent of his stock, but we should compel him to stay on his land. Now I want to know from the hon. member …

May I ask the hon. member a question?

The hon. member may speak in a moment. If a farmer withdraws 75 per cent of his stock and he is left with 100 or 200 animals, what is he doing on that farm?

Yes, what is he doing on that farm? He can earn more outside.

I want to ask the hon. member for Newton Park to state matters he stated in the rural areas in the same way in this House as he stated them there.

I stated them in the House last year as well as during this debate. [Interjections.]

Today I want to squash once and for all the notion which exists in the country that the stock reduction scheme is responsible for the increase in meat prices, because that is not so. The stock reduction scheme has nothing whatsoever to do with the increase in meat prices. The fact of the matter is that the per capita consumption of mutton increased from 8,7 kg in 1960-’61 to 10,4 kg in 1970-’71. This is an enormous increase in the per capita consumption of meat. Over, the same period there was an increase from 141 metric tons to 225 metric tons per year. Over the same period the total number of slaughterings increased from 4 900 000 to 9 300 000. This illustrates the tremendous increase in the consumption of mutton as a result of the higher standard of living. I say we should stop blaming the stock reduction scheme as being responsible for the increase in meat prices, because that is not so. I do not begrudge the farmers the meat prices they are obtaining at present, because I think it is necessary for the stock farmers of South Africa to get an injection.

Chairman directed to report progress.

House Resumed:

Progress reported.