laid upon the Table:

1. (1) Sales Tax Amendment Bill [No 111—85 (GA)]—(Deputy Minister of Finance).
2. (2) Revenue Laws Amendment Bill [No 112—85 (GA)]—(Deputy Minister of Finance).

announced that the Chairman of the Standing Committee on Private Members’ Bills had reported to Mr Speaker as follows in regard to the proposed Prohibition of Political Interference Repeal Bill, submitted by Mr C W Eglin, the proposed Prohibition of Political Interference Amendment Bill, submitted by Mr J A Rabie, and the proposed Freedom of Farming Bill, submitted by Mr J V Iyman:

HSCHOEMAN,

Chairman.

Committee Rooms

Parliament

4 June 1985.

as Chairman, presented the Fifth Report of the Standing Select Committee on Co-operation, Development and Education, relative to the Laws on Cooperation and Development Amendment Bill [No 89—85 (GA)], as follows:

H J TEMPEL,

Chairman.

Committee Rooms

Parliament

5 June 1985.

Bill to be read a second time.

as Chairman, presented the Sixth Report of the Standing Select Committee on Co-operation, Development and Education, relative to the Laws on Co-operation and Development Second Amendment Bill [No 112—85 (GA)], as follows:

H J TEMPEL,

Chairman.

Committee Rooms

Parliament

5 June 1985.

Bill to be read a second time.

as Chairman, presented the Seventh Report of the Standing Select Committee on Finance, relative to the Land Bank Amendment Bill [No 103—85 (GA)], as follows:

CH W SIMKIN,

Chairman.

Committee Rooms

Parliament

6 June 1985.

Bill to be read a second time.

Mr Chairman, I move:

Mr Chairman, I move:

BUDGET SURVEY

In spite of the usual wide variety of opinions expressed by experts as well as laymen, we have in fact been encouraged by the general acceptance of the Budget this year. This can be attributed to the fact that the Budget was stringent, realistic and fair, but restrictive, and that it contained the necessary balance in order to supplement the monetary policy as far as taxes, expenditure and loans are concerned. The acceptance of the Budget is also a manifestation of a new sense of realism which has entered the economy. The Budget emphasizes the Government’s willingness to commit itself to certain justifiable and responsible acts—whether they are unpopular does not matter—as long as they have merit and enable us to achieve the objectives we have set ourselves in the best interests of South Africa and its economy in the long term.

GENERAL ECONOMIC CONDITIONS

As regards the internal economic conditions and developments since the introduction of the Budget, there can be no doubt about the fact that matters are taking a favourable turn at present. In fact, the current tendencies augur well for the rest of the financial year, and especially for developments in the longer term.

Total Expenditure in the Economy

As you know, Mr Chairman, priority is given in the Government’s present economic policy to strengthening the balance of payments and combating inflation by means of control over expenditure. It is gratifying to be able to report to this House today that this policy has already produced considerable results. As far as the balance of payments is concerned, we have succeeded in turning around the deficit on the current account to such an extent that the seasonally adjusted deficit of R2,8 billion in the first quarter of 1984, and RO,9 billion in the third quarter, has been converted into a surplus of R4,2 billion—each figure calculated at an annual rate—during the first quarter of 1985.

As far as domestic spending is concerned, I am able to report to this House that since the introduction of the Government’s deliberate policy of curbing overspending in the economy—ie since GST was increased to 10% as from 1 July 1984—total expenditure in real terms has gone down considerably. Expressed as quarterly percentage changes at a seasonally adjusted annual rate, after successive drops of 5%, 6,5% and 3,5% during the last three quarters of 1984, the real gross domestic expenditure showed a further decrease of approximately 14% during the first quarter of this year. Real private consumer spending—one of the components of gross domestic expenditure—decreased by 3,5% during the first quarter. This drop was caused mainly by a sharp decline in spending on luxury goods. As hon members know, this decrease was one of our most important targets in the process of putting a stop to overspending in the economy and ensuring that we would start living within our means again as a country.

State Expenditure

Another important component of the total expenditure in the economy is of course Government spending. With regard to this aspect, too, I am able to announce today that the Government intends to keep its expenditure within the limits that have been set.

During April and May 1985, the total issues from the Treasury amounted to R2,9 billion and R2,6 billion respectively, not taking into account the discount on stock issues, and in spite of our early and express warnings in this connection some critics have already noted that the figure for April exceeds one-twelfth of the budgeted figure for the total expenditure and have thus tried to create the impression in their reporting that the government will not be able to keep its expenditure within the prescribed limits. In actual fact, exactly the opposite is true. When estimates of expenditure during the first three months of the financial year were made for the purposes of the Part Appropriation Bill—the so-called mini-budget—it was estimated that amounts of R3,2 billion and R2,8 billion respectively would be spent during April and May. The actual expenditure, therefore, is not only considerably less than this initial estimate, but also corresponds exactly to the cash flow projections for April and May received from Government departments since the introduction of the Budget.

Hon members will recall that I dealt with this matter in the Budget speech. Although these projections were obviously carefully prepared, they will only be regarded as fully reliable after they have been implemented for a reasonable period, and after problems affecting their accuracy—such as contracts ending earlier than expected—have been solved. It may even be possible in future, when the success of these projections has been clearly established, to consider publishing quarterly projections of Government spending in advance. This would provide the private sector with a basis on which actual expenditure could be evaluated, while still allowing the monetary and fiscal authorities sufficient flexibility in their financing activities and monetary strategy. Meanwhile the public would be informed as far as possible of every factor which could cause major discrepancies between projected and actual expenditure.

Although only two months of this financial year have passed, these have been two decisive months, given the traditional seasonal expenditure high during April. By means of a particularly successful financing programme—by means of which securities to the value of approximately R1,6 billion have been sold up to now, not taking into account the Public Investment Commissioners, an amount which already exceeds, therefore, the total comparable amount for loan financing mentioned in the Budget Speech—expenditure has been financed during April and May without any recourse whatsoever to bank loans or credit creation. It has been possible, therefore, to overcome a particularly difficult problem with regard to control over expenditure and the non-inflationary financing of the Budget. I am confident that this success will not only encourage us to persevere in our present endeavours, but will also remove any doubt which the business community and economists and other observers may have concerning our intention to adhere to the objectives we have set ourselves in so far as this is reasonably possible, thus enhancing the credibility of Government’s actions.

However, this achievement is only one component of the strategy for placing the economy on a sound basis. Other components of this on-going process have been the increase in GST in July last year in order to correct our financing and also, as hon members will recall, to curb expenditure, and the restrictive monetary measures introduced in August last year. We have almost returned to that level as far as our interest rates are concerned. Another component was the fiscal cut-backs in September 1984. Hon members will also recall the balance of payment measures taken in January this year and the various revenue and expenditure proposals announced in the Budget for 1985-86.

Top priority is being given to the process of monitoring Government spending on a monthly basis. In this connection I should like to emphasize the fact that we still have little latitude in respect of the Budget. The value of any additional expenditure on whatever function, over and above the amount appropriated for it in the Budget, will therefore have to be measured in terms of the potential negative implications which its financing in particular could have for the economy as a whole. If the Treasury cannot be kept within the limits that have been set with regard to expenditure, the country may inevitably be faced with several negative consequences, such as higher taxation and/or greater recourse to loans, resulting in higher interest rates, and, what would be worse, a constant increase in the money supply, a weakening rand and eventually a higher inflation rate. Each of these factors in turn could start a further vicious circle.

Taking into consideration the potential problems, the Government has already taken several responsible steps aimed at avoiding, in spite of serious opposition, any additional expenditure over and above the expenditure as set out in the main Budget, unless it proves to be absolutely essential.

It is extremely important that we bear in mind that any expenditure which has to be financed in addition to our printed figures would represent an intervention in the capital market, because it would have to be done by way of loans, unless we were prepared to increase GST, something which would be unwise.

†Fiscal monetary mix

It is generally accepted that the balance between fiscal and monetary policy has now been restored and that fiscal policy is carrying its full share of the burden of financial policy. This in no small measure has been instrumental in the decline in interest rates over a broad spectrum resulting in the Reserve Bank being able to decrease its discount rate on two occasions by 1%. Longterm interest rates have dropped by as much as 1% since the Budget, while in the money market rates have dropped by close on 1,5%.

Although the turning point in respect of interest rates has now been reached and rates are on the way down, we must make haste slowly in this regard. What is particularly significant is the fact that the most recent reduction by 1% was actually brought about by the Reserve Bank which followed certain well-established market trends at that stage. The Reserve Bank is not artificially leading the decline in interest rates, and this is a very significant point because it indicates clearly that there are certain fundamental variables in the economy which are now stabilizing and which are making market conditions possible under which interest rates can decline even further.

Under no circumstances should we allow rates to decrease now at too rapid a rate or to fluctuate too wildly. In the longer-term perspective the country certainly needs to raise its savings propensity. This would in fact take place if we could guarantee a net positive rate of interest after tax. This, however, is not on the cards at present in view of our still constrained Government income. The whole question of incentives to save which I addressed in the Budget, albeit modestly, is also receiving the attention of the Margo Commission of Inquiry into the Tax Structure of the RSA.

In this regard I can state that we are most pleased with the progress the commission is making, enabling it to remain within its set timetable. We are diverting as much of our own departmental resources as possible to facilitate the commission.

Inflation

Closely related to interest rates is the problem of inflation. If inflation persistently remains at a high level, interest rates will not be able to decline on a sustainable basis. Although we have succeeded in arresting the excessive public and private consumption spending, certain cost elements remain present in the economy and result in an upward inflationary pressure. In this regard I need only refer to the depreciated value of the rand and the effect this has on the prices of imported commodities, including capital goods, and its effects on, for instance, the fuel price; increases in GST; private-sector demand for domestic credit to repay foreign loan commitments; and wage increases granted in certain sectors in excess of the inflation rate, where the difference is not compensated for by increases in productivity. Most of these inflationary pressures will in due course undoubtedly diminish and some will eventually even peter out. Therefore, as I have stated on previous occasions, we have to accept that the rate of inflation will remain relatively high in the months to come before it starts decreasing, as it inevitably must, with the current mix of fiscal and monetary policies in place.

In fact, as regards the three main pillars supporting the inflation rate, I think we can safely say that we have cracked the demand pillar in respect of both public and private expenditure. We have also achieved very good results with the money supply. I am afraid that the old question of the money supply and the velocity factor is not properly understood by commentators yet. In any event, in the near future I will be receiving an advance copy of the De Kock Commission’s report on monetary policy and we shall release that report as soon as we possibly can with a view to having it properly discussed and taking any action that may possibly flow from it. I am confident that the instruments that will become available through this report will enable us to control our money supply further. As matters now stand, expenditure, which is equivalent to the money supply multiplied by the velocity of turnover, is down. So, that is the second pillar that is cracking, although that is not really of great significance at this stage.

The third pillar, the cost pillar, is the one that is really proving very tough to crack. One of the main components of this is labour costs. There is no way in which we can escape the reality that, unless we accept the responsibility to close the gap between our productivity and our remuneration patterns on the average, we shall not be able to crack that pillar which is keeping inflation at an inordinately high level. Unless we accept that responsibility, we shall have to live with an inflation rate and at the same time we shall have to allow our currency to take the knock and then we shall have to live with a depreciated rand. If we allow this adverse set of circumstances to prevail, we must accept that we shall be pricing ourselves out of the international commodity markets and, secondly, that we shall lose our attractiveness as a country to which foreign investors can bring their factories and investments. We shall then have to accept the fact that we will forfeit the job creation that flows from foreign investments. It is, therefore, absolutely imperative that we address as soon as possible the whole issue of average salary and wage increases. We shall do well to bring into our formula for negotiations with trade unions and everybody else who is arguing for increases in salaries and wages a percentage based on an increase in productivity. We look forward to the day when a person will have to achieve something in terms of increased productivity before he can ask for an increase. Too many people rely on a regular increase. This lies at the root of this very strong upward pressure in our inflation rate. If we are serious about this matter, we shall have to crack this third pillar.

It is important, however, to guard against action that will result in a renewed build-up of inflationary pressures, for instance by way of renewed wage demands. The Government has already shown its resolution to prevent this happening, and I wish to assure hon members of our continued commitment to responsible action in this regard. Co-operation is, however, essential on as wide a scale as possible in order to sustain our anti-inflationary pressure.

A further and final word on inflation is perhaps not inappropriate, and in this regard I wish to refer to recent remarks made by an eminent visiting academic from the USA at present at the University of Stellenbosch, Prof Basil Moore. This also relates to the whole question of wages and prices. Prof Moore likened inflation to a kind of negative public good like pollution. Whenever, for instance, a firm grants wage increases above productivity gains and as a result is forced to increase its prices, it imposes inflation pollution on the rest of the economy. This normally has the effect that other groups of workers and firms simply follow suit, or have to follow suit in order to remain competitive in the labour market. In the end the situation is the same as when everyone stands up during a rugby match and no one sees any better, but no one has any incentive to sit down as long as all the others remain standing. It is important in the struggle against inflation to ensure that no group in the economy loses out relative to others, but that all share in the benefits of price stability and productivity growth. I find myself in agreement with this exposition and it should be clear to all well-formed observers that the performance of wage and salary policies, relative to productivity, needs serious and in-depth attention.

SOUTH AFRICA’S CREDITWORTHINESS AND FOREIGN BORROWING

Having recently returned from a very brief journey to Germany where I visited a number of leading banks and also spoke to the management group of bankers who participated in the Government’s recent $75 million Eurobond issue, I feel it appropriate to convey to the House some impressions on these deliberations. Not only were the banks able to confirm at first hand that the issue had been accepted very well in the markets but they also conveyed their respect for the actions that the Government had taken on the economic front in implementing stricter fiscal policies to augment the restrictive monetary policies already in force.

In a world somewhat beset by crisis in the banking community and especially with the still large overhang of debt in the international community, international bankers are obviously painfully aware of the financial prudence or imprudence, as the case may be, of debtor countries. It is therefore most heartening to take note not only of their support for the way in which South Africa runs its economy but especially their active and continued participation as evidenced by the loans raised on behalf of South African institutions, and more especially the rates and terms at which they have been willing to do business. It underlines their openly stated faith in the creditworthiness of this country, even taking into account the political difficulties they read and see so much about in the world’s sensation-seeking media. As a matter of fact, the continental banking community has no hesitation in offering further facilities to the RSA, especially following our clear resolve to keep our financial affairs in order.

You say that every year!

Offers to raise loans continue to be received unabatedly. The hon member should take note of that. In view of the relatively modest amount we have set ourselves to raise in the foreign markets and the need to continue doing business with the widest possible spectrum of banks, we have since my return had to turn down some extremely attractive offers.

The fact that we have such good relations with the world’s pre-eminent banking community is of course no coincidence or quirk of fate. These banks are all actively engaged in this country and most have their own domestic representatives who keep them fully informed about financial and political matters in South Africa. Their senior executives visit our shores regularly to talk at first hand with responsible South African business and political figures and observe for themselves exactly what developments are taking place. They are therefore personally in a position adequately to judge the responsible way in which evolutionary constitutional changes are taking place in this country and the initiatives that the State President has initiated in this regard.

Mr Chairman, this also brings me to the whole question of disinvestment that we have heard so much about of late. Quite obviously this is not an issue that we should take lightly or accept with acquiescence, whether it is purely a domestic political issue in the United States or part of a broader and more diabolical onslaught to destabilize this region of Africa. It can surely never be the intention of the “do-gooders” of the international community to cause hardship and suffering to the poorer sections of the South African community or, for that matter, for the less affluent neighbours of the Republic of South Africa, but that is what will inevitably be the outcome of any successful disinvestment or trade sanctions policy. In fact, it can hardly be better put than in the words of the South African journalist who spoke to Walter Mondale during the press conference he held when he made himself available as vice-presidential candidate. This South African journalist who was in Washington at that time—when Mr Mondale said that sanctions and disinvestment were the answer to South Africa’s problems as far as overseas policy was concerned—got up and said to Mr Mondale that what he was in effect saying, was: “Starve the Blacks until the Whites surrender.” This is exactly what is going to be the outcome of their policy if they are successful, from their point of view, in terms of disinvestment. The Black people will starve but they make a grave mistake if they think the Whites will surrender in the process.

I can speak at length to the House on the evils of such a policy of disinvestment, but let me rest my case immediately by referring to the irreparable harm that such a shortsighted policy could do to the millions of people outside the borders of South Africa who, for their very existence, depend on the earnings of those who work within the economy of South Africa, be it on the mines in general, the gold mines in particular or in the industrial and agricultural sectors.

Such an attitude of mind can hardly prevail if politicians, bankers or businessmen know at first hand what the current position in South Africa really is. This then too is the reason why banks on the continent act so differently and responsibly in respect of this matter.

Another interesting thing happened when I was over there. There were a few hundred people busy with their demonstration, which they ran strictly according to a schedule—they even had a break for lunch! The Germans are very disciplined in this regard. These demonstrators also started their protest via the church. The next day there was a report in the Frankfurter Allgemeine Zeitung about the whole affair. The tone of the article was very much tongue in cheek and, if I remember correctly, referred to people dancing around a golden calf, like the Israelites of old.

But you are not a golden calf?

I was definitely not the golden calf!

I think the effect which a report such as that one has on the people who read it is extremely important, when that bunch of demonstrators is compared to the idolaters who danced around a golden calf in Biblical times.

†In conclusion I wish to give hon members the assurance that the Government will do its utmost to fulfil its commitment to keep the economy on the right track. We shall closely monitor developments and make adjustments as and when required. The Government is determined to act responsibly in these trying times and it deserves the considered support of all responsible and committed people so that we can ensure a better and more prosperous future for all the peoples of this bountiful land of challenge and of opportunity.

Mr Chairman, the hon the Minister has covered a large variety of subjects during the course of his address, and I am going to try and cover most of them, although I will not be able to cover all of them in the short time that I have.

The occasion of the Third Reading debate on the Budget is of course a little too early to judge the Budget in its entirety because, quite obviously, in regard to the credibility of the figures, for instance, we will have to wait and see what develops. I agree with the hon the Minister that it would be wrong to judge him on the first month’s figures because that is not a fair judgement and certainly not one I would try to make. I am pleased to hear that he is working on a proper cash-flow basis, provided we keep to that and provided there is the adequate control. Therefore I reserve my judgement, as I think people generally will reserve their judgement, until we actually have the figures for the year available.

It worries me a little that we have already used some of the R400 million which we put aside for contingencies. I do not want to be a pessimist, but I have very little doubt in my own mind at the moment that that figure of R400 million is going to be exceeded. If it is not, I will be the first one to congratulate the hon the Minister, but I am a little fearful that that amount is not going to be adequate in so far as the future is concerned.

The other point he made was that he said he did not mind if measures were unpopular as long as they were necessary. We will not have any hesitation in supporting him in unpopular measures which are necessary to safeguard the economy and the security of South Africa. However, we are not going to be caught in a net by supporting measures which we feel are wrong for South Africa and which will do South Africa irreparable harm. We will therefore judge everything on its merits. Something may well be unpopular but if it is necessary we will give it our support.

The hon the Minister also laid claim to some success in the raising of R1,6 billion in these early times. With great respect, I want to point out to the hon the Minister that if he is in fact right that interest rates are going down, he has made a mistake again. He should in reality have raised the money later on this year—after all, it is not all required at this time—because then interest rates would have been lower. From that point of view then, the success in getting the money quickly may well be due to the fact that the investors knew or thought they knew that interest rates would go down. They were thus very happy that the hon the Minister was rushing into the market to issue Government Stock at the higher rates. From that point of view, I think that we will have to wait until the end of the year before we can assess the shrewdness of that move in the business context. Only then will we be able to judge whether that move was indeed so clever or whether it was not so clever in the circumstances.

My other concern relates to the question of savings. The hon the Minister has found it convenient to refer the question of savings to the Margo Commission. The insurance industry has some views on whether certain matters in regard to savings should be referred to the Margo Commission or not. So may I ask the hon the Minister to tell us in his reply how the Government determines what should and what should not be referred to the Margo Commission. In this context, the hon the Minister says that the question of savings should be referred to the Margo Commission. Changes in regard to the insurance industry are not referred to the Margo Commission but are announced now. New taxation measures in respect of turnover taxes and payroll taxes are not referred to the Margo Commission. They are decided on by the Government. What then is the actual policy? In other words, when it suits the hon the Minister he enjoys the shelter of the Margo Commission. [Interjections.] When, however, it does not suit the hon the Minister and his Government, they say: “Oh well, we cannot wait for the Margo Commission. We have to get stuck in and deal with this now.” I would like him actually, when he replies, to give us the principle that guides him in relation to the Margo Commission. [Interjections.]

Let me tell hon members about another matter which I think needs to be spoken about and needs to be put right. The hon the Minister is trying to project a particular sort of image, namely that of a new boy who is now going to put right the mistakes of the past. However, there is a government which has been in power for a long time and of which he has been a member and supporter. What he is doing amounts to making a virtue out of correcting the mistakes of his own Government. That is what he is really doing; unless of course we are seeing what my hon colleagues on my left, physically speaking, or on my right, politically speaking, say is actually the case, namely that there is actually a new party in power with a new concept and a new idea and that the hon the Minister does not accept responsibility for the actions of ex-Minister Horwood or for the mistakes of the past. I think this business of making a virtue out of correcting one’s own mistakes—which is the characteristic of this Government—has been carried just a little too far.

[Inaudible.]

He has a lot of correcting to do.

Let us look at the reality of the situation in South Africa. If the hon the Minister wants to talk about correcting, let me ask him a very simple question. What does reform mean in South Africa? I ask the question seeing that the hon the Minister wanted to interject on the correcting of mistakes. So far reform in South Africa has meant the repeal of laws which this Government—not somebody else but this Government—introduced. Reform has in fact meant the repeal of laws which have been opposed by many of us ever since they were introduced. That is the reality of reform in South Africa. So let us not pretend that they are not correcting their own mistakes and that they are not really making a virtue out of trying to correct their own mistakes. We will help them correct those, let us make no mistake about that!

[Inaudible.]

What is that hon Minister muttering in his beard there? [Interjections.] Well, Sir, even under the new constitution I am prepared to be led astray, for a moment by the hon the Minister of Communications.

I can remember the time when there were Coloured people who had the vote in South Africa and who had the right of having representation in this Parliament, and who took them out of this Parliament? Who took them out? He, the very man who sits there. When we were fighting against it, they were the ones who took them out. So those hon members should not talk to me about these things because they are actually living in the past.

Let us get back to the economy. The newly promoted Minister who used to be the Minister of the Budget and who now has a new portfolio says that we are going to have a positive growth rate of 2% this year. I should like to know whether the hon the Minister of Finance would back that by saying in his reply whether we are going to have a real growth rate of 2% in the GDP. There is a minimal growth rate in South Africa.

The hon the Minister touched upon the inflation situation in South Africa. Let there be no mistake, we have common cause that inflation is at an unacceptably high level. What the hon the Minister is forgetting, however, is that the money supply, even though the rate of increase has slowed down at this stage, is still at a level which to us, at least, and I hope to him, is unacceptably high. He will also know that the effects of a high increase in the money supply now is going to be felt 12 months and more from now. It is not something which has an immediate effect. One cannot say that if one controls it now it will be okay tomorrow. It actually takes a year or two to work its way through. So we still have not been able to deal adequately with the money supply. I hope some of the new measures that are going to be introduced will enable us to do so.

The hon the Minister, in what he has said now, has also taken credit for the co-ordination of fiscal and monetary policies and the harsh medicine that has been administered. In this regard I think a few things have to be said about matters which cannot be left as they are. The first is that there are alternative methods that could have been adopted which would not have had the harsh effect that some of the measures that the Government has introduced have had. Those alternative measures have not even been considered. The result of the Government’s policy has been bankruptcies, increased unemployment and the permanent destruction of jobs in South Africa. We have had a situation where the high level of unemployment has been a contributor to endemic unrest in South Africa. With all this we have not tackled the real structural problems that lie at the root of our inflation problem and the result will be that when the next business upswing comes we are once again going to experience a high inflation rate and consequently many of the sacrifices which we have now made will prove to have been made in vain.

The illustrative example which is the classic and of what one can do wrong in these circumstances is one that I have referred to before. I should like to quote it to the hon the Minister. It is the example of the Sudan. The situation was that it was important for the West that President Numeiri should remain in power in the Sudan. In the United States President Reagan was doing everything in his power to see to it that he was helped with arms and supported internationally. Everything was being done to keep him in power. While he was doing that in the White House, however, three blocks away, in another building, economic conditions were being imposed upon the Sudan as a condition of aid as a result of which there was a revolution by the people of the Sudan and President Numeiri was thrown out. The reality is that in the kind of circumstances in Africa, which unfortunately, in many respects apply here in our country, one must bear in mind that one cannot apply the economic measures here which one can apply in highly developed Western countries such as the United States, West Germany and Great Britain because one does not have the social benefits which can cushion unemployment. Secondly, in South Africa, one unfortunately has the potential of unemployment being exploited causing endemic unrest which, if it is not controlled, can turn into revolution. I must therefore say to the hon the Minister that it is a matter of grave concern to us that we have a situation in South Africa where the policies applied contribute towards this kind of unemployment. This in turn contributes to an instability which can affect the security of the whole of South Africa.

The other matter in this context to which I would like to refer is that a climate of taxation that is becoming burdensome to the people of South Africa is being created in South Africa at the moment. There are many contributors towards that climate of whom not the least is the hon the Minister of Constitutional Development and Planning. It is no use saying that the Margo Commission is going to deal with everything. I come back to the payroll taxes and the taxes relating to turnover.

I want to put this question to the hon the Minister of Finance: In all seriousness, does it not mean that by creating new forms of taxation there will have to be new mechanism to control, collect and monitor that taxation? On the one hand people in businesses will have to fill in forms, send cheques and keep controls, and on the other hand the bureaucracy will have to be created in order to collect these taxes. Is that what we want in South Africa?

I thought that the idea of the Margo Commission was that we would have an equitable and simple system of taxation. The terms of reference of that commission include taxation at all levels of government in South Africa. I ask the hon the Minister of Finance: Is what is now being done to us in accordance with sound principles of taxation? Is it logical to say that one must investigate the whole of the taxation structure in South Africa on the one hand and introduce a new taxation on the other hand? If the hon the Minister does not do something about the climate in this regard, people’s incentive to work will be harmed as well as the incentive to save and to invest in South Africa. That is not in the interests of this country. [Interjections.]

This is the first working session of Parliament under the new Constitution and perhaps it is fair to ask whether the system is working or not. What benefits, if any, have come from it? What has come in particular from the new constitutional structure?

I want to say at the outset—perhaps the hon the Minister of Communications and of Public Works should listen instead of walking out of the House, as he was the one who talked about the Constitution—that I believe that there are fruits from this new dispensation. People may differ in regard to the degree and the importance of the fruits but there has been action. It has occurred both in the financial and legal fields where we have moved away from apartheid and where discrimination has been removed. I think there have been degrees of co-operation and understanding which have been generated in general terms among hon members of the three Houses that constitute Parliament. This has happened on a House and a party basis as well as an individual basis. I think that bodes well for race relations in South Africa. That is one of the benefits of the new system.

There is also a fair movement in respect of the possibilities of Black participation. Perhaps it is all a little vague at the moment but there is an acceptance that somehow there is the need to negotiate and create a structure in acceptance of the principle that Blacks need to be in government at all levels.

The problem which, I think, is developing increasingly in this Parliament, is a question of timing—the timing of actions which the Government has taken. The issue that I want to put to the hon the Minister is whether there is not a difference between pro-active policies and actions and reactive politics and a resultant reactive situation. We know that the process of change is a self accelerating one and that the tempo of change is going to increase. However, I want to say to the hon the Minister and his Government that to change because of pressure is going to result in more pressure. On the other hand, to change as a result of negotiation having taken place is going to enable the people who have conducted the negotiations to claim the credibility for that negotiation.

I want to deal just briefly, if I may, with the question of disinvestment upon which the hon the Minister also touched. Congressman Solarz said yesterday that history shows that without pressure no privileged group was going to give up privilege and therefore there had to be pressure on us. Of course, historically this is quite wrong. If he had looked at history, he would have seen that there are communities which have changed on their own by sorting themselves out. The best example is Great Britain. However, as the question as to whether or not there should be pressure on us is going to become a major issue, I think we should make our position clear.

We think there is a process of reform taking place in South Africa at the moment. It may not be fast enough for us or in the right direction, but a process of reform is taking place. South Africans have got to take the initiative in this reform. The risk of outside influence and pressure is a matter which we are going to have to take into account, but the people of this country are going to make the changes themselves—Black, Coloured, Indian and White are going to do it themselves. That is what we are going to do.

On the other hand, I do not believe that the people of this country want to be isolated. By the same token, however, I do not believe either—and I think this should be brought home clearly to the people who are attempting to isolate us—that isolation from world thinking is in fact going to accelerate the process of change. The pace of change is not going to be accelerated by isolating us from the cultures of the rest of the world; on the contrary, such contact would in fact accelerate that process.

Let us take another example namely the question of new investment in South Africa. The idea appears to be that new investments should not be made in South Africa so that Whites should be encouraged to change. However, if the argument is correct that wealth is presently in the hands of the Whites and that Whites are presently employed to a greater extent than Blacks then, in those circumstances, if there were new investment, there would be a greater degree of wealth available for redistribution to Blacks. Furthermore, there would be more jobs available for Blacks, because until the recession started there was certainly no unemployment problem in regard to Whites although there was an unemployment problem in regard to Blacks. Certainly, if the Sullivan Code were to be employed, there would in fact be better employment practices in the companies which employed it than in others, and if that were the case, then there would be benefits from having American investments in South Africa as far as those good employment practices were concerned.

The reality is therefore that when one examines all these arguments, one finds that there is an emotional feature in it—an objection to apartheid which I can understand, because we in the PFP have the same objection to it—but there is also a party political situation in America and we are the unwilling victims of that. I want to say now so that there should be no misunderstanding, that I believe that anything which hinders economic progress in this Republic will hamper job creation. If that happens, it is going to become far more difficult to bring about political change. In fact, if one seeks to hamper job creation in South Africa, one is fuelling the fires of potential revolution in this country. I doubt whether the ordinary, average, clear-thinking American actually wants to do that in South Africa at all.

Mr Chairman, the hon member for Yeoville has the exceptional ability of saying basically nothing with great eloquence—as happened again this afternoon.

On rereading his speech of 50 minutes in the Budget debate of 9 April it was very clear to me again that in his verbose statements, questions and so on he really said nothing new and in fact made no constructive contribution to a better Budget. His speech this afternoon is further proof of this. He referred to inflation again and I wish to quote a telling example to hon members in support of my standpoint. In col 3043 of Hansard, 9 April 1985, the hon member said the following:

The hon member said exactly the same today. I read the hon member’s speech and the only other reference I could find in it to a solution to inflation offered by the hon member—although he said he would deal with it—was in col 3051 in which he said the following:

That is all the hon member had to say about inflation.

Many contradictions also occur in his argument, however. In col 3047 the hon member had the following to say for instance:

Only a few moments later, in col 3050, the hon member contradicted himself by saying the following:

The hon member first contended that job creation in the homelands, decentralization and deconcentration had failed and been a waste of money. Immediately after that he requested that infrastructure be created in the areas where it did not exist. Involuntarily one gains the impression that the hon member always wants the best of both worlds and in addition attempts to get away with eloquent clichés.

A few characteristics were very clearly spelt out in the introduction of the Main Appropriation this year. In the first case it was a tough budget aimed at surmounting the economic problems of South Africa in the long term. Secondly, there was an appreciable pruning of State expenditure; thirdly, a sharp decline in the deficit before borrowing in the balance of payments and, fourthly, a small part of Government requirements was taken from the capital market to provide against a drop in interest rates. Indications are very clear now, as appeared again this morning from the hon the Minister’s Third Reading speech, that the South African economy is being put right. If the hon the Minister and the Government proceed with their current strong, conservative economic policy, I have no doubt that the recovery will be even sounder and more rapid.

The record surplus of R1 187 million for March 1985 was occasioned by the fact that the exports of the country amounted to R2 858 million in contrast with the R2 421 million in February. The March 1984 surplus was only R263 million against an export figure of R1 960 million. In addition, the import figure for March 1985 was also exceptionally low at only R1 670 million against an export figure of R2 858 million. Only a few months ago the surplus on the South African’current account for this year was still being estimated at between R1 000 and R2 000 million in the economic projection. The scene is now being reviewed, however, because experts realize to what great extent imports have declined and indications are that the surplus can amount to more than R4 000 million this year at the current tempo. South African exports of merchandise and minerals in the non-gold sector are exceeding the most sanguine expectations whereas imports are also declining drastically. Export earnings of the non-gold sectors are now adequate to cover total South African imports. This means that gold exports are actually a bonus if the price remains above $300 because South Africa will then show a large trade surplus this year.

Other plus points are the decline in the demand for bank credit, the levelling off in the growth of the money supply and the fact that interest rates are starting to fall now. Loan capital is also being redeemed which ensures creditworthiness with foreign banks. In addition, not only the Government but also the private sector is commencing repayments of its foreign debt; Government expenditure is declining in real terms as well; further measures of policy are also being introduced to curb inflation while the Government is exhibiting greater willingness to take unpopular steps to right the economy.

This brings me to the credibility of the Government and especially of the hon the Minister to which the hon member for Yeoville referred so contemptuously during the Second Reading debate and also this afternoon. I wish to state unequivocally that the credibility of the hon the Minister and the Government has been proved incontrovertibly over past months. On his appointment as the Minister of Finance he was faced with new challenges. Nevertheless the hon the Minister and the Government immediately took the bull by the horns and within three months there was an increase in general sales tax because State expenditure was too high. The next step came before the new Budget when the salaries of Members of Parliament and Members of Provincial Councils and the service bonuses of Public Servants were pruned. This was followed by a tough Budget with tax increases in all spheres and the promise that State expenditure would be restricted—steps welcomed by well-known economists.

In adopting its firm standpoint on the maize price the Government furnished further evidence to convince internal and international communities of its serious intention to restore its creditworthiness. This step was welcomed and supported on all sides as well.

The steps already taken to bring the economy into line again should be welcomed but much more needs to be done and this requires understanding. The hon the Minister and the Government should receive our full support in this.

I read the following in the official organ of Nampo, Mielienuus, of April 1985:

As the chairman of the Select Committee on Public Accounts I am obliged to repudiate and correct Mr Von Abo’s inaccurate and misleading statements. In paragraph 7 of the Auditor-General’s report on the Maize Board accounts for the financial year 1 May 1982 to 30 April 1983 the Auditor-General points out that, as indicated in statement 2(a), a deficit of R11 734 711 arose in the barter transaction of maize for urea and that this deficit was calculated only on the quantity of urea disposed of up to 30 April 1983. In paragraph 8 of the Auditor-General’s report on the accounts of the Maize Board for the financial year 1 May 1983 to 30 April 1984, that is for the following year, the Auditor-General reports as follows:

I wish to quote further as follows from the reply of the Treasury to the second report of 1984:

Therefore only a few months ago

According to the Auditor-General and the Treasury it is therefore very clear that there was no question that a saving of R6,7 million—or still worse, R25 million—had resulted for the maize industry.

What is the factual situation? The barter transaction account of maize for urea showed a total loss of R15,2 million on 30 April 1984. The estimated loss already amounted to R18,2 million on 28 February 1985 and the board still had 20 180 tons of urea in stock at the time which it had not yet been able to sell.

Mr Von Abo then continued and made the following statement:

The point at issue is not what is of importance to the so-called hon parliamentarians. The question is what the functions of the Select Committee on Public Accounts are and whether that committee fulfils its terms of reference—that is the point of importance. The principal function of the Committee is to investigate the accounting and financial questions especially raised by the Auditor-General. For this purpose the respective departmental heads and representatives of control boards appear before the committee and are questioned on the basis of the comments and the particular criticism and irregularities pointed out by the Auditor-General in his report.

I wish to quote further from Notes on Select Committee Procedure which unfortunately is available in English only. I shall quote from page 204 as follows:

1. (a) To ensure that there has been compliance with the law by the boards and their managements, and that the intentions of Parliament are being given effect to in the general scheme of administration;
2. (b) to act as a check on extravagant, irregular or unauthorized expenditure, and, within limits, upon unwise methods of management;
3. (c) to build up a sound system of financial procedure and practice, with a view to safeguarding the moneys and assets which come into the hands of the boards, and to having proper financial administration of the affairs of these bodies.

The question is therefore how the committee acted. The deputation from the Maize Board appeared before the committee on 8 May and 15 May 1984. The Maize Board was, in fact, well represented by, for example, the chairman, Mr Von Abo, the deputy chairman, Mr Viljoen, the adviser, Dr Gouws, the general manager, Mr Nel, the assistant general manager: marketing, Mr Wayland, the assistant general manager: finance, Mr Malherbe, the chief of legal and secretarial services, Mr Van der Schyff and the chief of the accounts section, Mr Odendaal. I do not believe we have previously had better representation from a single body before that particular commitee. Those gentlemen were granted the fullest opportunity to put their case on the barter transaction system. The evidence is available and I wish to recommend that hon members and maize farmers in particular make a study of the second report of the Select Committee on Public Accounts SC 1B-84.

After due, in-depth consultation and with all the evidence before us, the committee made the following factual findings:

1. (i) That the Department of Industries and Commerce had on 23 February 1982 fully informed the Maize Board of the conditions on which it was permitted to import the aforementioned urea and that it would be set off at the same landed price as that at which imported fertilizer had been set off in the 1982 fertilizer price;
2. (ii) that the Director-General: Agriculture and Fisheries had in a telex dated 25 February 1982 pointed out to the General Manager of the Maize Board that the Minister of Industries, Commerce and Tourism had approved that 208 000 tons of fertilizer could be imported on the understanding that the importation of the fertilizer was handled by the fertilizer industry. In the same telex the Maize Board had also been informed that the Minister of Agriculture and Fisheries had approved that such a tonnage of maize as would be necessary to settle the barter transaction for the 208 000 tons of fertilizer could be exported by the Maize Board on the said basis. In a further telex of the same date to the General Manager of the Maize Board the Director-General: Agriculture and Fisheries had specifically drawn the attention of the General Manager of the Maize Board to the fact that the Maize Board had no legal power to trade in fertilizer and that it had been accepted that the Board would only be the intermediary as far as the fertilizer part of the barter transaction was concerned and that arrangements would at that stage already be made with the fertilizer industry to discharge and take delivery of the fertilizer for distribution;
3. (iii) that when the Maize Board on 3 May 1982 signed the relevant barter agreement in terms of which the urea would be imported, it was fully aware of all the conditions, including the storage and distribution conditions, under which it would act;
4. (iv) that before the barter agreement (dated 3 May 1982) was concluded the Maize Board had not made any objection or expressed any dissatisfaction in respect of the conditions or price determined by the Department of Industries and Commerce; and
5. (v) that in spite of the above-mentioned facts the Maize Board, after a dispute had arisen between it and the fertilizer industry about the manner in which the fertilizer was stored by the latter, took possession of the urea and exercised full control over it.
6. (c) In view of the above-mentioned evidence your Committee wishes to draw attention to the fact that the Maize Board contravened the Marketing Act, ignored certain conditions laid down by the Ministers concerned and proceeded to trade with the imported urea, knowing full well that this was contrary to the provisions of the Marketing Act.

I think the hon member for Yeoville summarized the position very clearly when he put the following to the Maize Board:

These findings and recommendations—this is very important—were accepted unanimously by all the members of the NP, the CP, the PFP and the NRP. It was therefore an unanimous recommendation.

Mr Chairman, may I ask the hon member whether it is correct that the reason the then Minister of Industries did not wish to give his consent was that the fertilizer people stored the fertilizer outside at R13 per ton while the agricultural cooperatives stored it in sheds at R10 per ton?

The hon member was present. He knows the whole story so why is he putting the question to me? What I want to know is whether he underwrote these factual findings and recommendations. I stress they were approved unanimously. No political games were played here. All the members present supported them; they were accepted unanimously. I note the hon member wishes to put another question to me. He is free to do so.

Mr Chairman, may I ask the hon member whether it is true that I had total changes made to that first motion which was proposed?

I think hon members should look at the evidence. The word order was changed here and there but I do not know whether it was a question of a first motion or not. As I said, there was a change here and there but I shall leave it at that. I could say more but then we would again embark upon the polemics which we had at the beginning of the year.

I honestly hope this will be the end of the unpleasant dispute and polemics in which members of the committee, actually through no fault of theirs, were involved and that the Maize Board will sell the 20 180 tons of urea as soon as possible.

Mr Chairman, the hon member for Smithfield, who is the chief NP spokesman on finance, devoted his entire speech today to an attack on the Maize Board … [Interjections.] …on a group of farmers in South Africa which at the moment is suffering under the most difficult circumstances imaginable. He devoted his entire speech to this. Before the referendum the NP told us that if we voted “yes” and the new constitutional dispensation became operative, this country would experience unprecedented prosperity. One would therefore have thought the gates of Utopia would have opened. All the hon member for Smithfield did today, however, was to launch an attack on the Maize Board. One of my colleagues will probably have more to say later on the hon member’s allegations.

Since 1948 South Africa has not fared as badly in the economic sphere as at present. One need only look at the value of the rand and the high interest rates which are strangling farmers, entrepreneurs and home owners. Since 1948 South Africa has not fared as badly as at present. It was also said that our Western friends would be satisfied but our Western friends have never been as opposed to us as at present. At the moment there is a group of people in America wishing to apply disinvestment against South Africa. Two thirds voted for disinvestment from South Africa and one third against it. I want to say the hope of South Africa lies in that one third in America which voted against disinvestment.

The NP majority in the referendum was two thirds, the two thirds which said “yes” to this constitutional dispensation which landed us in the mess in which we currently find ourselves. Now I want to say the hope of South Africa also lies in the one third of the people who said “no” to the new dispensation.

The Progs!

I am referring to the Conservatives who said “no”—and those numbers are increasing daily.

In 1982 Mr Harry Oppenheimer invested R2 000 million in America and Canada. They say he was the largest foreign investor in America and Canada at that stage. Last year State President Botha awarded him the DMS, the Decoration for Meritorious Service. It was awarded to this man who removed R2 000 million from South Africa to invest in other countries.

Conditions created by this Government cause the foreign investor and also South African investors to have no confidence in the future of this country. That is the trouble we are involved in today. We have a Government we cannot afford. When Adv Vorster retired, his Government consisted of 17 Cabinet Ministers and 6 Deputy Ministers, a total of 23. President Botha’s Government as announced, however, will consist of 42 Ministers and Deputy Ministers. Can you believe it, Sir? Whereas Adv Vorster governed South Africa with a Cabinet of 26, the present State President has enlarged his Cabinet in spite of the horrendous conditions in which South Africa finds itself so that we now have a total of 42 Ministers and Deputy Ministers. Each is entitled to a ministerial residence in Cape Town and in Pretoria, a motor car and a chauffeur, a private secretary and secretaries, typists and offices. [Interjections.]

Will your homeland have Ministers?

That hon Deputy Minister making so much noise may rise and talk presently because he is a member of this expensive Government.

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

No, I am busy. [Interjections.] I regret we did not propose decreasing that hon Deputy Minister’s salary by more than half. [Interjections.]

Under present circumstances can South Africa afford such an expensive Government as that of State President Botha? Who can still say a mixed government, power-sharing and integration are cheap? I wish to state that South Africa is faring far worse than at any time before these constitutional matters arose.

When we wished to become a Republic, the following question was posed: “What will the economic repercussions be for South Africa when she becomes a Republic?” In other words, what would the foreign investors’ viewpoints be if South Africa became a Republic? Listen to what this NP—the good old NP, for which I had the privilege of marking my first cross to assist in making South Africa a free, independent Republic—had to say at that stage:

Then follows the most important … [Interjections.] The hon the Minister of Communication who thinks old people can live on R20 a month, should listen to this. [Interjections.] The NP said further:

Dr Verwoerd and the NP said foreign investors would have the assurance that there would be a stable government here and that it would be a White one. [Interjections.]

Since the NP instituted a mixed government for South Africa and began taking the road of political integration, there has been trouble. They said there would be peace in South Africa if we voted “yes”. I have Die Burger of 4 September 1984 with me. One of the captions runs as follows: “Bedrywige Eerste Dag vir Nuwe Bedeling”, but the headline runs: “Onluste Eis 14—Meer as 200 beseer”. Since 4 September there has not been a single day when one has opened a paper not carrying reports on revolts, bloodshed, stone-throwing and the burning of schools and facilities. Damage running into more than R50 million has already been caused since people voted “yes” to the new constitutional dispensation.

Before the referendum—it was about two years ago—the hon the Minister of Constitutional Development and Planning made a speech here in which he lanched an attack on the hon the leader of the CP. The headline in Die Transvaler ran as follows: “Skoolonluste in 1976—Treurnicht se Skuld”. Then the hon the Minister said the following:

He said Dr Treumicht was responsible for the 1976 riots which looked like a Sunday School picnic compared with those we are currently experiencing in this NP Utopia. Whose clumsy hands are responsible for the riots we are having in this country at present?

What do you say?

I say power-sharing and a mixed government are the cause. [Interjections.] It is a government in which there is no confidence abroad because they have seen that, if they exert pressure on it, it gives way. It is seen abroad that the Government yields where the Coloureds make demands. When Blacks throw stones, the hon the Minister of Co-operation, Development and Education says they have freehold rights—in Crossroads as well. Small wonder that people have lost confidence in South Africa as a result of this weak Government we have at present. The hon the Minister of Home Affairs and National Education is a person who, during a previous discussion of a Vote and on various other occasions, accused the CP of disseminating distortions and untruths as regards NP policy.

Hear, hear!

And here someone says: “Hear, hear!”

The hon the Minister of Home Affairs and National Education and other MPs of the NP proclaim this story from platform to platform and especially at those closed “oeloe-oeloe” meetings they hold. I wish to cite a beautiful example now and quote from Die Transvaler. The headline runs: “Die NP wil nie magsdeling hê nie. FW sê leuens oor die Nasionale Party moet end kry”. The report reads:

This report appeared in the paper of 14 March 1983. That is what Mr De Klerk said then. On 4 February the hon the Leader of the Official Opposition asked the hon the Minister of Constitutional Development and Planning whether there would be power-sharing in the new dispensation—yes or no—and the hon the Minister of Constitutional Development and Planning said “yes” there would be power-sharing. The hon the Minister of Home Affairs and National Education was sitting next to him. On 4 February 1983 the hon the Minister of Constitutional Development and Planning said next to this hon Minister that there would be power-sharing but on 14 March he told the youth the CP was spreading blatant lies that there would be a mixed Government and power-sharing.

The hon member is playing with words.

I wish to tell that hon Minister that the truth is catching up with him. That is why they demoted him to where he is now and why they stripped him so that he retains only National Education as his portfolio now. [Interjections.]

If the hon member has finished with me, …[Interjections.]

No, remain seated for a while—I have not finished yet.

The hon member is wasting my time.

The hon the Minister has wasted our time long enough.

He said it was blatant lying that the NP was in favour of a mixed Government but I said the truth was catching up with him. At the moment South Africa is already being governed by a mixed coalition. The Coloureds and Indians are not only represented in the Government for their own affairs but the new Minister of Health and Welfare, Dr Willie van Niekerk, and the hon the Minister of Environment Affairs will be assisted by a Coloured and an Indian deputy minister appointed over the head of a capable member like the hon member for Innesdal—they were appointed over his head. [Interjections.]

That hon Minister is a master par excellence of the art of presenting distortions as truths. Another example is the atrocious way in which he recently put words into the mouth of the hon leader of the CP which were sent into the world in newspaper reports with banner headlines reading: “KP-leier beledig Bruines”. The hon the Minister apologized for this. The hon the Minister also gave his distorted interpretation of an interjection aimed at the hon member for Bryanston by the hon member for Rissik.

Mr Chairman, on a point of order: As a decision has already been given on the second matter mentioned by the hon member, is he entitled to say that it was a distorted interpretation? I stand by what I said as regards the hon member for Rissik’s words.

Order! I am not sure whether the hon member for Kuruman is referring to a matter in which words were withdrawn and an apology tendered. In that respect the Rules of the House are clear that, as soon as this happens, there may be no further reference to it. I can unfortunately not remember too well what happened on that occasion. I wish to point this out to the hon member for Kuruman.

Mr Chairman, we also requested that the hon the Minister should apologize to the hon member for Rissik as well and this was not done. He apologized to the hon leader of the party only.

[Inaudible.]

I have Hansard with me if we have to debate this.

That hon member gave a distorted interpretation of an interjection and he can read his words in Hansard himself. In Die Burger of 13 May a report was sent into the world reading:

That is an incorrect interpretation of what he said.

The hon the Minister linked the connotation of race to it in his speech. He distorted those words again.

Order! It is unparliamentary to say an hon member distorts words. The hon member must withdraw that.

I withdraw that, Sir. He bent them. [Interjections.]

Order! Matters cannot continue like this here. The hon member may proceed.

The hon the Minister knows there were good racial…

Mr Chairman, on a point of order: In his last ten sentences the hon member said more or less six times I had distorted matters. Is that parliamentary?

Order! No, that is not parliamentary. The hon member withdrew his words in one case, however, and I assume he withdrew them in the other cases too.

Yes, Sir, I said he had merely bent them a little.

Order! The hon member must withdraw that unconditionally.

I withdraw it unconditionally, Mr Chairman.

The hon member may proceed.

Sir, I want to say the hon the Minister surely knows …I meant to ask a question but now he is running away. [Interjections.] The hon the Minister knows full well there was no racial and colour connotation in the hon member for Rissik’s interjection. The hon the Minister knows that he is the person who linked a colour connotation to the interjection, hung it round the neck of the hon member for Rissik and sent it into the world like that. In so doing he bruited abroad a total untruth as regards the hon member for Rissik and the CP. [Interjections.] I think that hon Minister who has just run away should be ashamed of himself and ought to apologize to the hon member for Rissik as well. Unfortunately the hon the Minister has made himself scarce and I shall leave it at that. [Interjections.]

The 4 October 1979 issue of the NP Skietgoed carried the following:

Then they quoted Pres Botha:

The State President said he had been appealing over the years for the actions he was carrying out at the time. I should like to refer to a few of them.

He has deviated from Jan van Riebeeck. [Interjections.]

In 1982 the present State President was still saying in this Assembly:

The NP says it does not grant independence to territories but to states. Their hand-out continues:

Let us see what the South African ambassador is saying in America. On 4 June 1985 he said:

That is something proclaimed by the State President.

When he acted as Prime Minister in 1972 the present State President had the following to say on the Prohibition of Mixed Marriages Act.

He said that in 1972. Now, as the State President, he is abolishing these laws.

This hand-out states:

What other than a unitary state of Whites, Coloureds and Indians in one Parliament is governing South Africa at present? What other than a unitary state is now granting black people their rights to citizenship here, where at present political rights are being negotiated for them by a Cabinet Committee on which the hon Leader of the Official Opposition will assist the hon the Minister of Constitutional Development and Planning. [Interjections.]

The State President says he does not believe in a federation but our Ambassador says:

A federal system, Sir! We have not yet been informed about this; I do not know whether the NP caucus has been informed but we know what has happened to the Immorality Act. There Mr Brand Fourie was giving them the relevant information three months before the abolition of the Immorality Act. Now they are being informed that a federal system may be instituted.

Hear, hear!

Yes, the PFP will say “hear, hear” to that. I want to predict that before long those two parties will become one.

He also said he did not believe in powersharing. Power-sharing is a reality in this Parliment and is being expanded continually.

My time has expired. [Interjections.] Rev Hendrickse said:

If I believe that Ambassador, we are also on the way to it. He said:

Almost all these laws have already been discarded and the Group Areas Act is being investigated by the President’s Council.

The CP says the only true solution for the sake of peace in this country is that we should get rid of this government as soon as possible and establish the different peoples, which are a reality at the southern tip of Africa, in their own fatherlands so that they may govern themselves. The CP will go from here and fight that this House of Assembly may ultimately again be the instrument through which White self-determination can come into its own in this country.

Mr Chairman, I want to tell you it was an experience to see the new CP chief spokesman on finance in action. I immediately wish to express my sincere sympathy to the hon member for Sunnyside who has now lost his post.

The hon member for Kuruman is known as the sea lion of the Cape. Today he showed us exactly what a sea lion will attempt doing on dry ground. He spoke of the role played by Mr Harry Oppenheimer, who received the DMS. I should very much like to know what the economy of Morgenzon will look like. [Interjections.]

The economy of South Africa because we are going to rule South Africa and not only Morgenzon.

Sir, we have been trying for three and a half years since the members of the CP absconded to find out what their economic policy is. The nearest we have come is to the absolutely closed economy of a small town like Morgenzon. The most important financial contribution the hon member for Kuruman made this afternoon was to prove to us what a third of a third is—a third of the voters who voted “no” of which a third or perhaps half were CP supporters. At the end of my speech I should like to return to another matter broached by the hon member for Kuruman.

The hon member spoke specifically—and I think it very important that the House should note this—of the situation as regards South Africa and foreign countries today. I shudder to think what the foreign attitude to South Africa would be if that hon member’s party were to be in power in this country. Let us forget about it meanwhile.

I think we should view the entire situation as regards foreign investments in South Africa against the background of the Budget the hon the Minister introduced a month or two ago which has passed through the entire process and now reached its final stage. I believe it has been a long while since there has been a budget on which a Minister of Finance could look back with so much satisfaction. He set himself three standards. One was that State expenditure should not rise by more than 11,4%—that is to say considerably less than the rate of inflation. Secondly, that no current expenditure should be financed by loans and that the deficit before borrowing should not constitute more than 3% of the GDP. It is very clear to me—I must admit it is early in the year—that the Minister is going to succeed in this or approach it very closely.

What influence does this exert overseas? It curbs expenditure; it improves the balance of payments; it strengthens the exchange rate; it builds our reserves and it inhibits rising inflation.

Seen against that background, what do overseas countries say about us? At the end of his speech the hon the Minister described what he had just experienced in Germany. In spite of everything said in America and the American House of Representatives or wherever, the Germans and people in Europe who really know what goes on in South Africa and what the economic and financial position is in this country, are prepared to invest a great deal of money in South Africa. We have proof of this.

We should be thoroughly aware that overseas investors have a very important role to play in the economic development of South Africa in current circumstances as well. Historically South Africa is a country which has drawn a great deal of investment finance from overseas and the importance of this finance in the development of South Africa should not be underestimated. Traditionally this finance was required to supplement domestic saving in order to maintain a high economic growth rate.

Let us examine the disinvestment situation for a moment. Today 150 000 people in South Africa work for American companies; of these 20% are Whites. Apart from these 150 000 people, there are 700 000 other workers in South Africa dependent on those companies. Now I am not speaking about the few million people related to the employees of the American and related companies.

Foreign companies play a very important part—let us admit it to one another—in the evolutionary development process of South Africa. They exert an influence on our labour relations, our education, the training of our workers and the elimination of discrimination in this country.

From a foreign point of view South Africa has always been very stable economically and the Budget has to exhibit this again. It is of no avail for us to tell the outside world our economy is strong while it is not the case. Consequently it is the primary duty of the hon the Minister of Finance to ensure that South Africa will be stable economically and financially.

The influence of foreign companies and the adverse effect of the disinvestment campaign should not be ignored but South Africa will have to go out of its way—we are busy doing so already—to rectify what is wrong in its internal social structure. We should also take care that the economy of the country is strong and sound; so strong and so sound that countries overseas will not be able to afford to ignore what is happening in South Africa as an investment field.

A further point to which I want to refer is that privatization and deregulation also have a major part to play in South Africa in strengthening our economy and attracting additional foreign investments. Much was said about this last week in the discussion of the Trade and Industry Vote and there were warnings that we should be careful not to remove a monopoly from the State only to place it in the hands of the private sector. In spite of what was said, I wish to give the House an example of what has become very clear to us on the Select Committee on Public Accounts over the past few months and also the past two years. This is the State monopoly concerning the grain sorghum industry of the administration and development boards. There are many positive signs that we are privatizing that industry but today I wish to tell the hon the Minister involved I do not think we are going far enough and not moving rapidly enough.

This is a very large industry today. Sorghum beer is produced at the rate of 775 million litres per annum with a turnover of R210 million. Today the capital invested in that industry is worth a quarter of a billion rand at market value. I think it essential that we attempt to privatize that industry as fast as possible but then it should be entirely privatized. At the same time we should ensure that we do not create a second monopoly in the private sector. I wish to state this very clearly. Nevertheless there is no reason why that industry should be a State affair today. It is a consumer-orientated industry and has no strategic value. Private initiative in South Africa is eager to obtain an interest in it and has, in fact, already shown that a great success can be made of it in other countries.

I welcome the decision taken by the Government in 1984 to move in the direction of privatization in this industry but I am worried that this has not been taken nearly far enough. I think the privatization of this industry should have two results in particular. Firstly we should obtain the very best know how in that industry. It could be a large industry but is dwindling at the moment. Secondly—and I consider this more important—we should remove the image of a State undertaking from that industry. We should get it entirely into the hands of consumers and the man in the street as soon as possible. I am thinking especially of Black people, who are the actual consumers.

In order to accomplish this, development boards should withdraw entirely from this industry. The potential loss of income is often held up with concern but I do not think this a problem. If we could release that capital and apply if for housing and other infrastructure, it would assist us greatly. We could impose a special levy for instance—and the hon the Minister should arrange this—to be specifically applied for development in Black areas. If this were done, I think we would be saving an important industry and carrying out privatization in a very practical way. We would then give the Black consumer a wider choice than he has at present. The problem of personnel employed in this industry remains but I say this is no problem whatsoever—we can easily accommodate those people.

I should now very much like to return to the hon member for Kuruman—if I could draw his attention for a moment. I am so sorry there are only five hon members of the CP in the House at present. [Interjections.] On this occasion I wish to thank the hon the Minister of Home Affairs and of National Education on behalf of this side of the House for an extremely laudable, beautiful function held in Paarl last week in commemoration of the official recognition of Afrikaans 60 years ago in this Parliament. [Interjections.] I think hon members who were there will agree it was truly a beautiful function. [Interjections.] Nevertheless I wish to express my disappointment at the same time that the CP as a whole boycotted that fine function. [Interjections.] Not one of them took the trouble to attend that function. [Interjections.] It is very clear they had no desire to attend it. [Interjections.] In fact, they sought excuses to absent themselves. [Interjections.]

You honour the language but you are destroying the people!

Sir, that hon member Mr Theunissen called me a jellyfish the other day. All I did was to mention a report to the House which appeared in The Argus and was truly shocking. On behalf of this side of the House I dissociated myself from that report. [Interjections.] What happened regarding the hon members of the CP, however? They did not want to dissociate themselves from that decision; on the contrary, one of the hon CP members said to me: “Hou julle jul liberale volksfeeste maar in die Suide; ons sal ons suiwer volksfeeste in die Noorde gaan hou.” Is that not shocking? [Interjections.]

The hon member for Yeoville responded to this very positively and I have his Hansard here. I lift my hat to the hon member for Yeoville for his positive reaction. I wish to say here today that by that boycott the CP showed themselves to be a bigoted, selfish, shortsighted, arrogant, selfrighteous group of “verkramptes”. [Interjections.]

I wish to close by saying that people of this country who are not even prepared to share their language with others in the country have little hope of living here in peace.

Mr Chairman, the hon member for Paarl will excuse me if I do not follow his example by participating in the usual argument between the NP and the CP, which we prefer to keep out of.

When the debate on this Bill started some two months ago, the situation in the business world was pretty bad and businesses were folding at the rate of about 14 per day. Now, some two months later, it does not look as if the situation has improved very much. In fact, the last report I read stated that they are folding at the rate of 20 per day at the present moment. This is very serious and more serious than it sounds, because at that time many of the businesses closing down were small mushroom businesses, those which were not very efficient etc. However, lately some of the businesses that have had to close have been old, established, very large businesses and large employers of labour. This is very perturbing indeed because with these people going out of business more people enter the labour market. We cannot afford to allow this to continue.

I sometimes feel that the Government has a certain ambivalence towards the business sector. It wants the business sector to succeed and to create money to be able to pay taxes etc but at the same time the very taxes that it is trying to get out of them are curtailed by the business going broke for various reasons. The general economic structure of the country is such that it is not conducive to a businessman taking business risks and making money, and unless he makes money he is not going to carry on with his business. If he does not make a profit he is certainly not going to be in a position to pay company tax. This is of course where a substantial part of the revenue of the country comes from. If his employees are out of work, instead of contributing to the income of the country by way of income tax they are drawing on the funds of the country by way of unemployment insurance, if they are in a category where they are entitled to such payments.

I therefore believe that it is going to be very important during this period of depression—I do not suppose it can be called very much else—that this matter be looked at very seriously. As I mentioned in a previous debate during the discussion of this Budget, many of the businesses which are closing down are doing so because of a temporary cash-flow problem. Many of them are closing down, not through any deficiency on the part of the business as such but because other businesses have gone under which owe them a great deal of money. I know of one instance where a very large contractor had to close down. Three fairly substantial subcontractors folded up immediately purely and simply because of the huge sums of money the major contractor owed them. I raised the issue with the hon the Minister of Trade and Industry and he indicated that a certain amount of assistance was given in this direction to assist such businesses. Frankly, this is not well enough known. He indicated that assistance of about R30 million is available. Firstly, it is not known to the general public how this money can readily be available.

The second point is that relative to the money which is being spent on decentralization and on creating new jobs, the R30 million that was mentioned is an absolute drop in the ocean, and I am sure that the tax collector will more than get his money back by making sure that these sound businesses are enabled to remain operational—in other words, to make cheap money available to them or even money with interest moratorium attached to it—over a period in order to allow them to remain operational and to keep people in jobs. I therefore sincerely appeal to the hon the Minister of Finance to give attention to this matter because it is becoming not only serious but even I believe dangerous to allow businesses to be placed in such a situation while at the same time allowing the employment situation to degenerate.

I believe that the hon the Minister is going to have a very, very difficult job preparing next year’s Budget because already I have heard hon colleagues in the other two Houses express the feeling that they have been given the short end of the stick since they had insufficient experience of lodging claims as big as they felt they were entitled to. However, I am not going to go into all the whys and wherefores of it, or to establish whether they are justified in making those claims or not. I do know, however, that the hon the Minister is going to have an awful job to satisfy their demands in the next Budget. That means that although we have had a relatively small increase in the overall Budget this year—and I believe we must be appreciative of the fact—the hon the Minister is going to have to spend a great deal of his time investigating how he can prune still further the excessive expenditure that we have experienced for a long time now. It does not augur very well for the hon the Minister’s efforts when one finds that with new legislation being introduced, the administration of the country on one level or another is going to cost a great deal more than is the case at present.

I am not only referring to the fact that there have been two new ministerial posts and two new deputy ministerial posts created together with all the ancillaries that go with them. I am not referring to that although that is of course going to increase administrative costs. I am referring for example to the new infrastructures that are going to have to be created for the regional authorities and the replacement of the second-tier system of government. As far as I can see there are going to be literally dozens of new boards and committees, and these cannot be established without heavy expenditure. I know that the proposal is that the costs involved are going to be placed on the shoulders of the businessmen again. This is already stated in the appropriate Bills, and I do not want to argue those Bills now. It is, however, already stated that the businessmen are going to have to meet the costs of these regional authorities. In all sincerity, Mr Chairman, how can they meet the costs if they are already finding themselves in a very difficult financial position which is worsening by the day and which, in the event of any sort of success in the disinvestment campaign which is already being waged, is really going to upset the applecart?

Although under normal circumstances the American financial contribution to South African trade is perhaps substantial, it is nevertheless relatively small when compared with other investments in South Africa. At this stage in our history—particularly during a period of depression—any disruption caused by a possible success of this disinvestment campaign could be a very, very serious thing indeed. This is why I believe we must all make every effort we possibly can to ensure that those people who feel that they must push for disinvestment are disabused in relation to its effects. Whilst it may be very good for their soft consciences and whilst it may make fife a little easier for them, I am afraid that that is not going to fill the stomachs of the children and the families whose breadwinners are going to be pushed out of work as a consequence of this disinvestment campaign. This is the level at which one must look at this problem.

I mention this merely as an indication that one cannot keep putting further burdens upon the back of businessmen particularly at a time like this. I know that the hon the Minister’s Budget is very largely geared to the income that he is going to get from commerce and industry. If they are not protected and allowed to remain operational then rather than getting more money from them he is going to get less.

Mr Chairman, I want to assure the hon member for Umbilo that the hon the Minister and, I think, all hon members on this side share his concern about the state of many businesses in South Africa today. I think he must appreciate—he has admitted it in past debates—that South Africa over the past few years has been overspending, and as a result there has to be a correction. There is this very delicate balance between consumer spending and the savings which the average consumer must make to feed the continual investment required in order for our economy to progress. In recent years there just has not been that saving, and that is the reason why this correction has to take place.

I should like to tell the hon member that there is hope for the future. Already the prime rate has dropped by 2%. There is talk in today’s Press that it may possibly drop by a further 1%. The balance of payments is now in a positive situation on the current account and is running at an annual basis of about R4 billion. There is an indication that productivity has started to rise. I believe that there is some hope for the future, as I have said. I believe business has to assess the economic realities of today, and they will have to adapt their operations in order to survive.

I particularly wish to address the hon members of the NRP today because this is the final major debate of the year and we are just about to complete our first session of the new tricameral Parliament. I should like to suggest to them and to all hon members that South Africa is now entering a period of reconciliation. It is entering a new period of reform. I believe that this is already leading towards greater national unity in South Africa. I believe that South Africa can look to the future with a certain degree of hope and promise.

The question I want to put to my hon excolleagues in the NRP is whether they as a party can look to the future with the same hope and promise. I submit to them that the whole reason for the NRP coming into being as was put across by Sir De Villiers Graaff—those of us who were in the old United Party know what happened—was the breaking up of the constitutional and political logjam that had existed in South Africa for so long.

What do we have now? We have the present Constitution plus the additional reforms which are coming about, and those which are in the pipeline may also be brought about. I must admit—I take pride in admitting it—that the NRP has made a major contribution in this regard. I believe that it achieved its first and major objective, namely the new Constitution.

I am sure that the positive role which it has played will be well recorded and acknowledged in future history books, not that it was always easy for either the NRP or its leadership. We know that in those early days many derogatory and snide remarks were made about the party. The hon member for Durban Point is not present, but he will remember a day in June 1982 when the State President, then Prime Minister, made a comment when speaking at Parow. There was a lot said about it. It fell to me during the Third Reading debate on the Appropriation Bill on 10 June 1982 to reply. I want to quote from my Hansard, Col 8912—I was speaking as a member of the NRP:

That is what I said when I sat in those benches. I want to say to the hon members of the NRP that the future of which I then spoke is now in the hands of the NP, this party. I believe, therefore, that the NRP members must support the NP in this very difficult task developing in South Africa as we move into this period. That is the reason why I sit in these benches.

I want to ask the hon members of the NRP What is the alternative—the CP or the PFP? I am sure that deep down in their hearts those hon members know that what I am saying is quite correct. After all, this is what I often stated when I sat in that party. In fact, I stated it from those very benches. In 1983 the hon member for Innesdal made a speech concerning the conflict with the CP. I happened to have the privilege of following him, and I want to quote again from Hansard. On 1 February 1983 I said (col 181):

Can we have some more, George?

Encore!

The hon members over there may carp as they usually do, like a bunch of baying dogs, but the facts are that the NRP’s philosophy has been accepted …

Order! The hon member must withdraw the words “baying dogs”.

I withdraw them, Sir. What South Africa needs today is wise and perceptive leadership and I submit that it is only the NP that can bring about the type of South Africa for which the hon members of the NRP have fought so hard. I say to them that the time has come to face these realities, as we are facing the economic realities in South Africa, and to lead our people into a new and prosperous future. The NP today—and I say this having sat in the NP caucus for one session—are positive, they are forward-thinking, and they are determined to reform South Africa by peaceful means. This is my first session in the NP and I am convinced more than ever before that for the sake of the future of South Africa and for the sake of the future and well-being of those who elected me to this Parliament my move to the NP was the right thing to do. [Interjections.] I say to hon members of the NRP that the time has come for them to reassess their position.

You just wanted to save your own skin.

Order! We have too many interjections. I am referring to the hon member for Durban Central.

That hon member has got to be kidding if he thinks that is the reason I walked over.

You would have lost your seat.

I would have lost my seat?

Yes. [Interjections.]

Order! I asked the hon member for Durban Central to refrain from interjecting and he has ignored my appeal. Will he please apologize for that?

Mr Chairman, I apologize.

Order! The hon member for Amanzimtoti may continue.

I would like to, Sir, but they have taken my time.

Mr Chairman, I regret to say that I am actually going to make a new speech today. I will not just be reading previous speeches I have made in this House. [Interjections.]

The hon member for Amanzimtoti is obviously on a courting mission today and is earning his NP membership card at the same time. However, I suggest to him that if he goes out courting, the best way to achieve success is not to spend lengthy periods reading his own poetry to the people he is hoping to win over. [Interjections.]

The circumstances in which we are debating this Third Reading of the Budget are serious in a number of ways, and the hon the Minister of Finance has referred to one in particular. That is the massive disinvestment campaign in the US which South Africa faces at present and which could have serious consequences for ourselves and our economy. At the same time we have serious racial polarization in South Africa. I believe that we need dramatic reform action, not just rhetoric, to catch the imagination of those who are disillusioned and depressed about the chances of real reform taking place in South Africa.

Few things would have greater impact than an announcement that influx control is to be scrapped. The hon the Minister of Cooperation, Development and Education is, I believe in London today and will be in New York tomorrow attending seminars, presumably promoting the cause of South Africa. Imagine the impact that he would have there if he were in a position to say: “We have decided to scrap influx control in South Africa.”

In the few minutes at my disposal this afternoon, I should like to look at influx control as rationally as possible. It has existed in various forms for centuries in South Africa, and has become a major obstacle to meaningful reform. I believe, that while the Government is doing certain things about it, mere tinkering with the pass laws will not solve the problem. In 1983 the Hoexter Commission noted that South Africa’s prisons were “full to overflowing” with:

… under the system of influx control. Such persons were not—

The scale of this—most members are aware of this fact—is considerable. The number of people arrested for offences relating to reference books and influx control was in excess of 262 000 in 1983. In that year, 142 000 people were convicted for those offences and a total of more than R11 million was paid in fines by Black people so convicted. Between 1916 and 1981, approximately 17,25 million Black people were arrested for contravening passlaw regulations in our country.

Firstly, I want to look at the case for continued influx control that is put forward from time to time. The Riekert Committee did not calculate how many Blacks would come to the cities if influx control were lifted. However, arguments in favour of influx control in the commission’s report seem to be that uncontrolled influx, and I quote:

Many Whites believe that some form of coercive influx control is necessary. Reasons given include NP ideological ones relating to separate development and the need to minimize the number of Blacks outside the homelands, as well as fears that if influx control were to be abolished, the anticipated “swamping” of so-called White areas would cause a host of social, economic and political problems and so threaten the security, the political stability and the quality of life of the White inhabitants.

Concern has also been expressed that the removal of influx control would result in an “overpopulation” of our major cities resulting in an overloading of their facilities and making them difficult, if not impossible, to manage satisfactorily.

That I think is the gist of the arguments that are generally put forward for continued influx control measures. I should now like to look at what I believe is the case against influx control.

Firstly I want to consider the rural impact of influx control. Poverty is most acute in South Africa’s rural areas due to low agricultural wages outside the homelands, and overcrowding landlessness and unemployment inside them—a situation which has been gravely exacerbated by the rigid application of influx control and population relocations. Greater urbanization is therefore not just desirable but an absolute precondition for proper rural redevelopment.

Secondly, I want to look at some of the urban considerations in relation to influx control. With the possible exception of the PWV region, by international and absolute standards, the South African metropolitan areas are small and there is no justification for curbing their growth.

The large cities are the major economic propulsive points in the economy, and they generate most of the income which makes any regionally redistributive programmes possible. Large cities represent private and public capital accumulation over a long period and therefore have considerable cost advantages.

Although rapid urbanization—particularly for which there has been no proper planning—brings certain problems, these are easier to tackle than the problems of mass rural overpopulation and poverty. In particular, the proper development of homeland agriculture will only become possible when the rural population is appreciably reduced.

Most of the problems associated with rapid urbanisation already exist in the rural areas and are merely being relocated elsewhere; for example, problems relating to poverty, health services, unemployment and malnutrition.

The hon the Deputy Minister of Constitutional Development and Planning recognized this when he said earlier this week:

It will be “relatively cheaper in metropolitan areas”, he said.

Thirdly, there are the economic effects of influx control. Despite the various problems, there are numerous advantages to be derived from large-scale urbanization, including faster economic development, increased agricultural output, greater productivity—something that was mentioned today in the report from Unisa—slower population growth, greater opportunities for small business and informal sector employment, and a reduction in rural environmental degradation.

This need for greater urbanization has recently been recognized by Mercabank as well in a recent report of theirs on economic growth. Throughout the world the fastest-growing economies are those which have a substantial surplus rural population which is rapidly absorbed into industry. By far the largest and cheapest increase in productivity is that which takes place when an individual moves from subsistence underemployment to industrial employment, even in the humblest of capacities. Furthermore, of course, the financial and other costs of operating the massive influx control systems that exist are enormously high, amounting to hundreds of millions of rand each year.

The fourth point in the case against influx control is the race relations aspect. Influx control is undoubtedly the most hated system in our country. It adversely affects the fives of millions of people and has been described by a DRC commission as “a cancer in our society”. The Government’s policies in this regard give rise to conflicts between the authorities and the people affected which will worsen as economic development occurs if they are not changed.

In the interests of good relations and longterm stability, a way must be found to abolish influx control.

Let us look at the numbers involved. Here I think we must be quite honest, it is not possible to give precise estimates. I know of no reputable academic who is prepared to do so. This is so, partly because it depends on one’s definition of urbanization, and also because of the possibility of inaccuracies. It has, however, been estimated—and here I am working on the best estimates—that between 1,5 and three million Black people would migrate to urban areas in the short and medium term if influx control were lifted. This compares with a current urban population of about 15 million of whom about 8,5 to nine million are Black people. However, it is anticipated that fewer than 20% of these potential new migrants would be the main family breadwinners seeking work.

Many studies in less developed parts of the world have suggested that “migrants are quite rational in their decisions to migrate to the cities, even where they have to wait some time in the labour queue for employment in the high wage sector”.

There are important non-coercive mechanisms which would moderate the rate of urbanization. For example, if urban unemployment were to rise, the incentives for potential workers coming to the cities would decrease. To the extent that free movement was permitted, people would be less reluctant to move back to rural or homeland areas if they so desired, because they would not fear jeopardizing their rights. Mr Gavin Relly, in an address to the Free Market Foundation during August 1983, had this to say:

Given this situation, what should be done? I would like to make certain recommendations.

The first is to recognize that influx control does not come to grips with the problems of urbanization. It does not even stop people going to the cities—it merely tries to do something to them once they get there. The reality of urban migration should be accepted. The hon the Minister of Co-operation, Development and Education has admitted that the question is not whether Black urbanization is to take place but how and under what conditions. A rational urbanization policy should be developed in which scarce resources are used to assist people in urban areas rather than to harass and persecute them for being there. Innovative and creative policies are required to maximize the potential of our urban areas. I think the hon the Deputy Minister of Co-operation put this very well in an interview when he said:

Secondly, I recommend that the rapid phasing out of all forms of coercive influx control which limit freedom of movement, should be commenced immediately.

Thirdly, urban migration should be facilitated as rationally and effectively as possible by guiding people to where the best opportunities for work and housing exist. This should be done voluntarily and not forcibly.

Fourthly, a vigorous policy of rural and environmental renewal and development should be pursued, including the provision of more agricultural land for Black farmers.

Fifthly, freehold title should be available to everyone, and well-located land should be set aside in urban areas for low-income emergency housing where basic services are provided by the State.

In the sixth place, positive policies to encourage the development of small businesses and the urban informal economic sector, which can provide gainful employment for people, should be implemented.

In the seventh place, regional economic programmes embracing urban and rural development should be introduced. Decentralization should be pursued on socio-economic and resource grounds where justified, but not as an attempt to achieve ideological objectives.

Finally, poverty and other socio-economic problems must be tackled with greater vigour than ever before in both the urban and rural areas.

An alternative to influx control is a multipronged strategy where no simple formula can be found to cope with the consequences of decades of mismanagement and lack of planning. The issue cannot be ducked. Squatters in the Cape Peninsula bear testimony to the fact that even vicious and punitive influx control policies will not stop people coming to the cities. The question is a simple one of how Government is going to allocate its resources—either spending its time and money trying to prevent or slow down an inevitable process or using those resources to make Black urbanization as productive as possible in human, economic and political terms.

We must tackle the problems of Black urbanization positively and the sooner we get rid of influx control, the better.

Mr Chairman, in my opinion the hon member for Cape Town Gardens made a speech which was imbued with the seriousness with which most of us surely want to approach the matter of influx control. The hon member put the matter very idealistically and one appreciated that. If one can handle the humanistic aspect of the Black people in South Africa in such a way that one can get by without influx control, in my opinion this will to a great extent be to the advantage of South Africa. It will certainly be a very important step towards improving relations and recognizing the human dignity of everyone, Black, White or Coloured in South Africa. Consequently I do not want to quarrel with the hon member regarding his approach from a humanistic point of view and his evaluation of the situation.

But I must point out to the hon member that it is very easy to say: “We have to tackle poverty.” Nowadays there is also poverty in our urban areas, however. It does not only exist in the Black homelands. It exists throughout South Africa and it is not unique to South Africa either, but exists in many Black countries around us where the NP is not in power.

The influx problem is not unique to us either, but occurs in other countries too. In Harare they have also had to use bulldozers to get rid of people who were squatting and did not have work. I want to put a question to the hon member for Cape Town Gardens, however. I do not want to quarrel with the hon member regarding the matter of orderly urbanization, because I feel we are all ad idem about this. But if one already has an unemployment problem—and the hon members are so fond of telling us that there are half a million unemployed Blacks—how can one simply throw open the doors without making provision for work and housing? After all, by doing this one is making the problem ten times worse. In South Arica one must take a broad view of this matter.

Consequently one cannot simply think of doing away with influx control, but one must try to stimulate the development in and around the Black areas as much as possible. The hon member admitted this; he said: “We must tackle poverty not only here but also in the rural areas. We must not only tackle orderly urbanization where we have cities today, but we must see to it that we have orderly urbanization in the rural areas as well.” Consequently I do not know what the big point is that the hon member was trying to make. After all, the Government has said repeatedly that they were investigating the influx control issue and wanted to promote urbanization in the Black states as well.

Today I want to repeat what has been said so many times already: We cannot do away with these measures, unless we make proper provision for work and housing. If we do not do that we will not have orderly urbanization in South Africa, but the greatest chaos. It will be ten times worse than is the case in many of the Black states to the north of us. We want to prevent that at all costs in South Africa.

I must say, the hon member made a fine speech. One could listen to him and he had a serious approach towards a problem which in my opinion is very close to all our hearts.

I should also like to say a thing or two about the Appropriation. It is only natural for us to evaluate the performances of the different political parties in this House at the end of the session. The different political parties each leave certain impressions. The session began with the dramatic opening speech of the State President. Its contents attested to new initiatives, particularly as regards our prosperity, security and relations. As far as change is concerned, the Government is now stronger than it was at the beginning of the session in spite of the unrest and the drastic steps to stabilize our economy.

Economists of high repute believe that the Government must not slacken the reins. The fiscal and monetary measures are certainly making their effect felt and loan rates are dropping. One would just like to see investment rates for the investor and saver not dropping as quickly as is the case at present. If one wants to borrow money, it does not drop that quickly, but if one has money to invest, it drops extremely quickly.

By limiting the money supply and avoiding the unnecessary creation of credit, the rate of inflation is being controlled and our balance of payment is being protected. There is more and more light at the end of the tunnel. Pessimism is being replaced by optimism regarding our chances to recover economically.

The economic soothsayers feel that preparations can be made for an upturn in the economy within the next 12 months. That is good news. It is not necessary to be in despair for much longer. But we must just not get the worst of both worlds again, namely the constant increase in inflation and a decrease in the economic growth rate.

†It is appropriate to quote the words of Prof David Rees, Associate Professor of Economics at the University of Cape Town. According to The Argus of 11 May he said the following:

With the sporadic outbreaks of violence in many parts of South Africa during which we have experienced riots, looting and arson, and often also murder and physical harm, the spotlight has centred on the many differences that exist, also among the Black groups. Violence obviously harms the good name of South Africa. However, the non-violent groups in South Africa must be protected at all times. Nobody who embraces civilized standards can justify mob rule. That element must be stamped out. Continuous violence in South Africa is the best method to bring about disinvestment in our country. The Government must act strongly at all times, and efforts to decry the use of our Defence Force in assisting the Police Force must, in my opinion, be ignored. This practice of calling upon the Defence Force to give auxiliary assistance is not detestable; on the contrary, sometimes it is essential to show that we will neither be intimidated nor allow the country to go up in flames. Those who are employing violent means in an attempt to make South Africa ungovernable and to achieve so-called freedom have an ultimate aim of making this country and all its people the slaves of a foreign ideology.

Our freedom will surely have a price in the form of sacrifices; perhaps we will even lose lives. It is a risky business, especially with regard to international relations. However, our duty is to our people in this country—whether Black, White or Brown. Therefore, neighbouring states which harbour elements that have an objective to destabilize our country internally must realize that they take a greater risk. I also believe that common partriotism among all people in South Africa is a guarantee that the Government has nothing to fear from a serious backlash.

*I believe that one of the most important reasons why the Government will be even stronger is because it is looking after the safety of all the people in this country.

Mr Chairman, I can find no fault with the forceful speech made by the hon member for De Kuilen—especially not with the last part of his speech. I want to agree with him in particular that we must not hesitate to take action when action is necessary. I want to tell him, however, I think one of the problems at present is that there is a great deal of talking and promising, to such an extent that all the Houses of Parliament are called together and told how order is to be maintained, but then order is not maintained. I also want to tell the hon member I think he must look over his shoulder at the hon the Deputy Minister of Law and Order, for he is the man who went and told the people in Harrismith how the CP had itchy trigger fingers, but that the NP preferred to talk. If the hon member for De Kuilen keeps on talking in that way, I think he may feel more at home in our ranks than where he is at present. [Interjections.] The old die-hard UP men—and that hon member is one of them—do not feel at home amongst the die-hard NP men they fall in with the CP in their thousands. [Interjections.]

The hon member for Paarl was shuddering again this afternoon. It is not a strange phenomenon for some people to shudder fairly often. [Interjections.] The hon member was shuddering this afternoon, and in my opinion his shuddering was the weak echo of the pre-1948 shudderings. I think perhaps the hon member for Houghton and possibly the hon member on my left will still remember it. They shuddered about what would happen if the National Party were to come into power, and said the banks would empty and money would flow out of the country. They wondered what the outside world would do. These are the real old, old stories of the shudderers. [Interjections.] The tremblers did the same thing in America just before Nixon was to come into power. They told the same stories then as the old liberals had. Nothing shudders as easily as a liberal when he sees a conservative.

The hon member made mention of the fact that CP members did not attend the language festival in Paarl. I do not know why other members were not present there, but I want to say that no decision was taken by the CP caucus not to attend. I am not apologizing for not being there. We held a language festival, which was exclusively for members of Parliament, in the Gallery Hall of the Houses of Parliament a few days before that occasion. Why was another exclusive festival for members of Parliament only held in Paarl then?

Where were you at the time?

I was where I was. I was busy.

You were not there.

What business is that of yours? I want to tell hon members on the opposite side that we do not attend their exclusive festivals. If we have festivals, we have them with our compatriots and those who speak the same language we do; the people who are going to remove them from office. Today again we heard we must spend less, but the Government sets us no example. There are only splendid, extravagant and exclusive festivals for the small, ruling NP governing fraternity. “Siegs Parlementslede is genooi en lede van die publiek kan die geleentheid nie bywoon nie”. This is how it was made exclusive by means of Die Burger of 24 May 1985.

We are nearing the end of this session, a session which is an interesting one precisely because it is the first full session of the new dispensation. Under normal circumstances it could have been the last or second-last session before a general election. We do not think the possibility of its being a last or second-last session before a general election is ruled out, for we believe that if the Government has any grain of self-respect left, with the plans it has up its sleeve, it will have to test the people in some or other way before implementing its plans. What do things look like in South Africa at present? I think it is time, at the end of the first session under the new dispensation, for us to see what the situation in South Africa is after the people have had the first taste and the Government and the NP have seen their new dispensation functioning for the first time. I know that the Government, and particularly certain members of the Government, always look yearningly at the president of the United States of America for whom I have very great respect and compare themselves with him. In his acceptance speech on 7 November 1984 the president of the USA could say, inter alia, to the people of America:

In his inaugural speech he expressed inter alia the following sentence, which I believe should also be heard here today:

The question I want to put, is how matters stand with the White people in South Africa today. I am speaking now of the White people—not of CPs, or Nationalists or PFPs. I am speaking of the Whites as such. Hon members of the National Party know—indeed, their facial expressions in this House reflect this often, when certain speakers amongst them rejoice so at times—that there is a general spirit of despondency and depression in South Africa today. [Interjections.] Instead of expectation, there is confusion. Instead of hope, there is despair. Instead of enthusiasm, there is despondency. [Interjections.] The National Party’s own newspapers and their own State television service reflected the results of an opinion poll—an opinion poll on how the separate age groups in this country see their future. Those people who see the least hope for their future, are the youths of South Africa—those in the 16 to 23 age group. They are the pessimistic group in respect of their future in South Africa, according to the mentioned opinion poll.

That is because they think the CP will be there forever! [Interjections.]

Sir, those young people will state that in their groups they have become virtually uninvolved in politics; that they stick together in groups and are not interested in one another’s political convictions. It even happens that when one of them begins to talk politics, the others withdraw from the discussion. They simply no longer see any future for themselves in this country.

They simply do not feel like abuse!

What do we find amongst businessmen in this country, Sir? What do we find at their parties in Sandton, in Houghton and elsewhere?

What happens at your champagne breakfast parties?

Even amongst columnists and bankers there is precious little enthusiam in respect of the long expected economic revival which was to come. Hon members need only watch the Sunday Press if they want to discover this. [Interjections.]

How do matters stand with South Africa and its overseas relations? Instead of a fulfilment of the promise of embracing Western countries and smiling African communities, South Africa’s position has deteriorated by the day.

You are an old prophet of doom, aren’t you!

All this contributes to the despair of the Whites of South Africa; to such an extent that it is reported—and hon members of the NP know this—that emigration has become the topic of discussion in many home circles and other discussion groups. [Interjections.] It is the topic of discussion amongst industrialists and businessmen at their parties in Johannesburg. Someone—I am not sure who—published a book—a guide to South Africans on how to attain citizenship of another country; on how to obtain passports from another country.

That book is selling like hot cakes! [Interjections.] It is not at all the normal seasonal phenomenon of people wanting to get out of South Africa—something that was quite typical of people from the ranks of the official Opposition and their followers at one particular stage. These are Afrikaners—young Afrikaners, intellectuals, the Broeders and the Ruiters—who are making plans in respect of where to go. [Interjections.] There is only one thing that spurs them on. That is that they have no confidence at all in the new dispensation which the National Party has brought about for them. Neither have they any faith in their security, which has been placed in the hands of the present Government.

Do they trust you, Tom? [Interjections.]

Why is this the case? What is the reason for this, Sir? The reason for this is the shock to their confidence that has hit the Whites of this country as never before. They are told in the “oeloe-oeloe” meetings, however, of so-called mistakes that were made. We know, for example, what happened during the discussion of the State President’s Vote in the House of Representatives. Rev Hendrickse said there, in the presence of the State President, that the State President had told them as early as 1980, when he was still Prime Minister, that their history was a mistake—or our history was a mistake.

He apologised to them!

The State President said as early as 1980 that when the Coloureds were removed from the joint voters’ roll by one of his predecessors and removed from this Parliament—of course they were represented here by Whites then—it was a mistake; They should have been represented here by Coloureds. This is the man who fought an election the year afterwards on the platform of non-power-sharing, but he told that to the Coloured leaders behind closed doors. That is the kind of leadership South Africa has been subjected to.

We have heard now that the homelands are a mistake too.

Who said that?

I shall come to that in a moment. [Interjections.]

What are we still hearing from the oracle of Helderkruin? We hear from the oracle of Helderkruin that the vision of Malan, Strijdom, Verwoerd and Vorster was illusory, and that when this NP under the leadership of the State President came ever closer to the vision, the scales fell from their eyes and they saw the vision was an illusion. [Interjections.] That is what the hon member for Helderkruin said in this House, that the NP’s erstwhile vision was an illusion. That is what shocks the people of South Africa to its foundation

We tell these gentlemen we know they are introducing a legislative system according to which the Blacks, the Coloureds and the Indians are going to share power with the Whites. [Interjections.] The hon member for Helderkruin is saying already that this party has a mandate for a federal system.

Where is that said?

Where is what said? I shall tell him in a moment.

We have developed a certain method in our South African politics: The ambassadors announce the changes in America a few months before they are announced here in South Africa. Brand Fourie made an announcement about the abolition of section 16 of the Immorality Act and the Prohibition of Mixed Marriages Act. According to the Cape Times, and this newspaper quotes him, Ambassador Beukes—the hon members must listen now, as must the hon member for Winburg …

But you …

I know the hon member for Winburg has one problem: He cannot understand English.

Come now!

He must ask the hon member over there to translate for him. This is what ambassador Beukes is quoted as saying:

He is quoted further:

This is what ambassador Beukes announced in America on behalf of this Government, and he was not repudiated. I ask the hon the Acting Chairman of the Ministers’ Council of this House whether or not this is true. [Interjections.]

The hon member for Helderkruin says they already have a mandate for this federation.

I did not say so.

The hon member did say so. In his “illusion” speech his reply to the hon member for Jeppe’s question: “Do you have a mandate?” was the following: “I should like to get to the point.” He then referred to the little blue book The Constitution in a Nutshell and he said—this was his reply, and his reply was that they had a mandate. [Interjections.] I say the hon member said here he had a mandate, and I shall let that suffice. [Interjections.] He stood waffling with his usual play on words, and the hon member for Jeppe asked him: “Have you spelt it out?” He said: “Of course we have spelt it out. It is here in his Hansard. The hon members are welcome to have a look.” [Interjections.]

I have another blue booklet here published by the NP Government, actually in Prog colours. There is a solemn undertaking on almost every page in this booklet to the voters of South Africa that this dispensation they are voting for is a dispensation for the Whites, Coloureds and Indians. On page 1 of this booklet the Blacks are taken out of the dispensation explicitly. If the Government, under the leadership of a few liberal academics—and I am looking at the hon the Leader of the House—is going to tell the voters of South Africa that they have a mandate to share power with the Blacks in South Africa, they will make themselves guilty of greater political fraud than ever before.

Mr Speaker, I must really say it is very difficult to decide whether the hon member for Kuruman or the hon member for Soutpansberg made the poorest contribution this afternoon. I am convinced that the people of Tzaneen must also have listened to the hon member for Soutpansberg at some stage, for once one has listened to that hon member, one can truly not vote for that party. That is probably why they lost the municipal by-elections in Tzaneen in the hon member’s constituency.

Have a look at the school board elections and the co-operative elections.

The hon member must have a look at the school board elections at Louis Trichardt. He can tell us what happened there.

The hon member for Soutpansberg threw up a number of smoke screens here this afternoon to obscure the unreal standpoints of the CP. I should like to test their standpoints this afternoon, because the realities and the truths of South Africa are catching up with them. The time has come for the hon member for Waterberg and the people sitting there with him, to tell South Africa unequivocally where they stand in respect of their policy of partition. We have a number of vague statements from the far-right elements in South Africa and one has to put those standpoints together like the pieces of a jigsaw puzzle in an effort to find out the true alternative these people are presenting to South Africa.

Amongst others, we have two very clear standpoints. The first is that the CP has rejected separate development in favour of partition. This is a congress decision taken by them. In the second place the hon the leader of the CP made the statement in an interview with Leadership—I have used it on a previous occasion—

More land must therefore be negotiated in respect of KwaZulu, Lebowa, Gazankulu, Qwaqwa, KwaNdebele and KaNgwane. The hon the leader of the CP is still going to take part in the debate and I want to ask him to tell us whether or not we must accept that if the CP comes into power in South Africa, South Africa must prepare itself for a smaller but White South Africa as its ultimate object in terms of their approach.

Let us look quickly at the utterances made during the past few months by the Herrenvolk gurus on the far right in particular. We can begin with Prof Carel Boshoff who speaks of a “Blanke staat waarin Afrikaners en ander Blankes op eie grondgebied en owerheid geregtig is”. Mr Jaap Marais advocates a return to Verwoerd’s apartheid idea. Prof Hercules Booysen is striving for an “Afrikanerland” and Mr Eugène Terre-’Blanche’s ideal is a “herstel van die Boere-republieke”. Last but not least, “yours truly”, the hon member for Waterberg, speaks of a “Blanke vaderland”. At the Volkswag congress he said:

In addition it appears very clearly from the documents of the Toekomsgesprek people that there is talk of an “Afrikanerstaat” or an “Afrikaner- plus ander Witmense-staat” in South Africa. [Interjections.] We shall have to ask them where, when and how, for we want clarity. Will this White homeland—this partition—exclude the Cape for example? [Interjections.] Will it exclude Natal in the region of Durban? The third very important question is—they criticize the Government about South West and say this area should be incorporated in South Africa—once they have created the White homeland, where does South West fit into that homeland? No one knows, except if one looks at this pamphlet distributed by the CP in the Roodeplaat constituency about the “Boerestaat”:

Here it is! Here is the map of South Africa and this is the new “Boerestaat” which is to be created. Then they say:

This pamphlet was compiled by At van Dyk of the CP of South Africa, Roodeplaat and was printed by T G van Wyk.

I should like to know from the hon members: Is this the policy of the CP? If it is not the CP policy, I think the time has come for South Africa to be informed on the standpoint of that party. [Interjections.] If one looks at the map in this CP pamphlet, one sees they speak of Hexania—in other words, the whole of the Cape is probably given to the Coloureds—they have joined Ciskei and Transkei togther, and there is a Zulu state in the region of Durban. Only the three old Boer Republics of 1900 remain therefore. [Interjections.] This map is very interesting, however, for it confirms what one reads. I am sure all the people who wrote this book Witman, waar is jóú Tuisland? are members of Toekomsgesprek, unless they want to deny it. If one pages through this book quickly…

You are speaking of the Broederbond now.

Forget about the Broederbond, I am talking to the hon member about Toekomsgesprek. [Interjections.] I merely want to quote a few passages from the book:

The rest of the RSA is referred to as “bestemde of oorgangsgebied”. There is mention of a grey area which will be under White control initially. If one looks at this map, everything outside the green area is included in the rest of South Africa. They say the NP is giving two areas to the Blacks in South Africa. I quote:

A White homeland to which the Whites can move must now be created. [Interjections.]

What they have to say about Whites in the destined or transitional areas is very interesting. I quote:

This is the rest of South Africa which does not make up part of the “Boerestaat”:

Now hon members must listen to the answer. The answer is:

In addition they say:

These are the standpoints held in the dialogue amongst the right-wing elements of South Africa.

In my opinion the time has come for the CP, which advocates partition and a White homeland, to tell South Africa where that White homeland is to be. Which parts are to be included, and what is to be excluded? If not, the hon the Leader of the CP must tell us he repudiates every word in this book Witman, waar is jóú Tuisland?

Why are we trying to determine what the CP’s standpoint is? All they do is throw up smokescreens in South Africa’s politics, attack the Government and gossip, but we do not get the real answer from those people concerning where they stand in politics. [Interjections.]

I just want to make a last remark. The Kappiekommando is one of their satellite organizations. The CP are the people who hide behind the skirts of previous NP leaders all day and every day. Now the hon the leader of the CP must also tell us where they stop—with Dr Verwoerd, or with Mr Vorster? A great deal of criticism is expressed from that side of the House on the Government’s policy on South West Africa. In this Kappiekommando document, they say the following:

In addition the document says:

There is another interesting paragraph in which they say:

Hon members will remember who the Minister of Justice and Police at the time was. It was none other than Mr Jim Kruger who is now sitting on that side of the House with those hon members.

I merely want to tell hon members of the CP they should come out of their holes and tell South Africa what their standpoint and their politics are.

Mr Speaker, time does not permit me to respond to the hon member for Turffontein, and I do not think any purpose would be served by doing so in any event.

We have nearly come to the end of the session, and some useful purpose might be served by standing back and looking over the past six months to see what has been achieved since we met at the end of January. After the State President’s address at the opening of Parliament there were understandable expectations that the session would lead to exciting legislative reform. However, I think one should say that that simply did not happen, if one looks back on our legislative record this session.

The rhetoric of reform is still there, the State President and the hon Minister of Constitutional Development and Planning have from time to time inside and outside of Parliament still raised expectations of change and reform, but I must confess that as the months have passed the reform image of the Government has become blurred and the country still anxiously awaits news of some sign of a master plan and evidence of giving practical effect to it.

It is true that there have been commendable administrative actions towards easing tensions in the country, notably here in the Western Cape and elsewhere in South Africa as far as the recognition of the permanence of Blacks in the urban areas is concerned, but from a legislative point of view this session has produced very little evidence that the apartheid structure which is the root cause of racial tension in South Africa is being enthusiastically dismantled. For the most part, when Parliament has addressed itself to these structures, there has been a tampering with them rather than a direct assault upon them.

It may be claimed that the repeal of the Prohibition of Mixed Marriages Act and section 16 of the Immorality Act is tangible evidence of the dismantling of apartheid. Even these steps, however, must be seen in true perspective against the background of what is happening in South Africa at the present time. They may represent fundamental changes in NP thinking, but to be realistic we must accept that for the mass of people in South Africa they are seen merely as tokens, and the substance of discrimination which affects the daily lives of the mass of people remains unassailed at the present time. As far as they—the Black people of South Africa—are concerned, they still live under the yoke of apartheid discrimination and they are voiceless in regard to the laws in terms of which they are governed. Their disabilities remain. Their plight is of course made infinitely worse by the severe economic climate which prevails at the present time. There is unemployment. They are the first victims of economic recession, and they are the victims of escalating costs and of the unequal struggle to make both ends meet.

The result of all this is the growing unrest around the country which rests on these grievances, not least of which are the political question marks relating to their rights of citizenship and to the denial of meaningful political rights for them.

In all of this, however, we can, if we look at what is a dreary scene around South Africa at the present time, recognize—and I believe it is important that we do recognize it—that despite the real grievances behind the unrest and despite the fact that these are no doubt exploited in some instances “to make South Africa ungovernable,” as suggested by the State President, there is still that priceless asset of a mass of people in South Africa who are desperately committed to the need to seek peaceful change in this country. I think that is our great asset at the present time. It is these people whom we should be trying urgently to accommodate, while their patience and forebearance still last, if we are to retain and build upon that commitment to peaceful change in South Africa.

I want to say that we will achieve that accommodation not merely by indulging in the rhetoric of change but by taking urgent and direct steps to convert that rhetoric into tangible reality in this country.

Talk, Sir, is cheap. We need action at the present time—and very urgent action! For years now we have had talk from leading members of the Government about the demise of apartheid. One remembers the speech made by former Minister Dr Koornhof in Palm Springs some five years ago when he said apartheid was dead. Since then his Cabinet colleagues, the hon the Minister of Foreign Affairs and others, have made similar utterances from time to time. However, even that attitude is being blurred at the present time.

A few weeks ago the State President in an interview with a BBC commentator made a distinction between what he termed positive apartheid and negative apartheid. I want to say that it must be made clear to the world and to the majority of people in South Africa that to those people apartheid means discrimination and that all discrimination is negative. That is the fact of the matter.

Now we get to a subject that has been referred by my hon colleague on my left here, namely the ambassador to the United States. He has been quoted as saying “apartheid is nearly dead” in South Africa. He says:

That is what the ambassador said only this week. [Interjections.] The ambassador also indicated that the Government had made a mistake in believing that the homeland policy could provide a solution to the problems of South Africa. I do not want to pursue that matter any further.

In the time at my disposal I want to deal specifically with the situation in Natal and I want to address myself specifically to the hon the Minister of Education and Culture who is the Natal leader of the NP. I am grateful to him for being present in the House this afternoon.

I may say in passing that I note that he is offering himself as a candidate in the by-election in Port Natal, and I must say it is a new and refreshing experience for us in Natal to have a leader of the NP who is actually prepared to face the electorate. [Interjections.] That apart, however, I want this hon Minister to tell us what his Government intends doing in Natal. His hon colleagues from the State President down have thus far dodged the issue. I want to know what the future is of Natal and kwaZulu.

I spoke earlier about the mass of the people in South Africa who are committed to peaceful change. Nowhere is this more true than in the province of Natal. In the climate of unrest around South Africa it is very significant indeed that Natal has virtually been spared any real unrest, and that is due to the commitment, primarily of the Zulu people under the leadership of Chief Gatsha Buthelezi who are commited to peaceful change. However, I want to ask the hon the Minister, the leader of his party in Natal, when the Government is going to respond to that commitment. When is the Government going to respond to the commitment to peaceful change by the people of Natal and kwaZulu in particular, and what is the response going to be? They cannot expect a continuation of a commitment to change if no results are forthcoming as a result of that commitment to peaceful change. I have tried throughout this session and before to get an answer to this question. I challenge the leader of the NP in Natal to respond during the course of this debate.

The State President was quoted in Die Burger a few weeks ago as saying: “There is an open agenda as far as the future development of Natal/kwaZulu is concerned.” Yet when I put a question specifically on this issue to the State President earlier this week as to what the Government intended doing about Natal/kwaZulu I simply received the answer that there was a Cabinet Committee to discuss these matters and that the Chief Minister of kwaZulu and others were welcome to submit evidence to that committee. I want to ask a question which the Natal leader of the NP must answer. Is that the limit of the consideration which has been given to the special situation in Natal?

I believe it is high time that the Government stopped pussyfooting around the question of the furture of Natal and kwaZulu and came up with a clear response to the desire of the people of Natal and kwaZulu—Black and White—for peaceful change in dealing with the interdependence of the region as a whole.

If the South African ambassador to the United States is correctly interpreting Government’s attitude when he says that they erred in believing the homelands policy was a solution to our political problems, then that is particularly so in relation to Natal. That is so because it is clear, or it ought to be clear, that the people of kwaZulu are not interested in any separate independence. So if that has failed in Natal, as it has failed elsewhere in South Africa, what is the Government’s alternative to accommodate those people within the system which exists at the present time or which may be created in the future? Why are the NP dragging their feet on these issues? Why are they dragging their feet on the so-called proposed consolidation of Natal? There has been a consolidation committee meeting for years, and time and time again we are told that the Cabinet is considering these proposals but yet nothing is said. I believe it is the responsibility of this Minister as the leader of his party in Natal to come clean on that issue as well as the entire issue of the future of Natal and kwaZulu.

You are playing to the gallery.

No, I am not playing to the gallery at all. This is a matter of very real concern. If the hon the Minister is in touch with the people of Natal he will know that a wide cross-section of the public of Natal is anxious to know what the Government has in mind. I believe these questions have to be answered by the highest authority. If I cannot get the answers from the highest authority namely the State President then I call upon the leader of the NP in Natal to enter this debate and give us answers to some of these questions.

Mr Speaker, the hon member for Berea specifically referred to Natal matters and I believe that he will indeed be furnished with replies in this debate. But he also said that he was rather disappointed about this session. I want to tell him, however, that as far as I am concerned, this session was a very good one in the prevailing circumstances. I believe that a very sound foundation was laid for a good political and economic future for this country. It was also clear that the NP was prepared to look at the realities of the day and try to find solutions to the problems which might exist.

Today in his opening words the hon the Minister of Finance passed a particularly interesting remark regarding the three pillars of inflation. We can try, and that is our task, to seek big, interesting and responsible solutions to South Africa’s political problems, but there is one fact we must remember: Politics and the economy go hand in hand. If we do not find financial solutions together with the political solutions, we will have problems in South Africa. I shall refer to this again later in my speech.

I am grateful that we have a Minister of Finance who is prepared to say honestly and sincerely to this House, the voters outside and all South Africans: Let us identify the problems, but let us identify them so specifically that we can find solutions for them here in Parliament and there outside.

I found it interesting that the hon the Minister of Finance said today that the problem of inflation was based on three pillars, of which cost inflation was one. Many of us talk about inflation, but in my opinion many of us do not know what its specific components are. One of its components which is causing the biggest problems is demand inflation and cost inflation. I am grateful that the hon the Minister specifically pointed this out to this House.

I am also glad that the hon the Minister referred to productivity. If we look at this problem of inflation further, in an effort to find solutions for it, we see that since 1965 productivity has risen on average by approximately 1,5% per year compared with an average annual incresase in salaries and wages of 12% over the same period. Although productivity can be improved significantly—let us say to 3% per year—this alone will not be able to solve the inflation problem. The roots of the problem lie in overspending and excessive increases in nominal wages. The 12% to which I referred must drop to 4% or 5%. These are the realities we are faced with in South Africa.

I want to justify this statement. I do not begrudge the worker outside an increase, a better livelihood and his being able to tell his children one day that he did something for South Africa and that he received remuneration for it. We must also look at the realities, however. In the present situation the worker does not benefit by a high increase in nominal wages, because inflation is eroding the buying power of his wages.

We can go and look at what countries such as the USA, the UK and Japan learnt from experience. In the USA and the UK price and wage increases continued, in spite of restrictive monetary and fiscal policies. This resulted in sharp drops in sales, production and employment opportunities. Eventually it led to lower inflation and wage increases. In Japan price and wage increases were moderated more quickly and inflation was brought under control fairly painlessly.

I can just say that restrictions on price increases and wage determinations make the transition from a high to a low interest rate considerably less painful as far as the loss of sales, returns and employment opportunities are concerned. What is more moderation in regard to wages will contribute towards the slow replacement of labour by capital equipment.

Here in South Africa we must realize one thing and I think in this session we had the confidence to say this to each other across this floor: South Africa must wake up politically with consensus and compromise instead of conflict and revolution. We must be honest with each other and admit that it is already very late. Economically we must also replace popular and emotional dreams with critical, rational realism.

A high inflation rate is like a high fever in a sick patient. If inflation is not controlled our standard of living is going to drop further. Our growth rate will decline completely, our country will be plunged into poverty and there will be many unemployed people. However, judging by the main Appropriation and other appropriations which were introduced earlier this year, I believe that the Government is serious about controlling these problems, ensuring that they they do not get out of control, and seeing to it that something is in fact done about this problem in South Africa.

I believe that we must stop trying to live like the Americans. Let us rather try to emulate the living pattern of the Japanese. Let us ask ourselves today whether South Africa is a capitalistic country in the true sense of the word, or whether it is not perhaps somewhat of a socialistic country as well. I believe that there is a mixture of these two in South Africa, and unless we can maintain a sound balance between them, we are going to run into difficulties. South Africa has a responsibility towards the majority of the population, and has created expectations which it will have to fulfil. We will all have to act very responsibly to maintain the balance.

Consequently it can be expected that in future bread and butter is gradually going to become a bigger political factor. But we cannot afford to allow the essential process of reform of the past year to be hampered by this. Consequently it is of importance to remember that we live in a country in which a favourable growth rate must be maintained, in which employment opportunities must be created and personal incomes and economic activities must be distributed more evenly.

It can be stated that the new dispensation and incentive measures which have already been put in operation, have led South Africa in a direction in which this country could be one of the most prosperous and thriving countries in the world. The imagination, enterprize and expertise which these policy directions attest to, are going to assure that in future South Africa is going to be recognized as a country in which people do their best to exploit resources effectively, and to bring about peaceful co-existence for everyone.

Mr Speaker, I appreciate the general tone of optimism in the hon member for Overvaal’s speech and have no doubt that everybody in this House would like to encourage that kind of attitude. However, there is quite a long way to go before we accomplish quite that.

Before I continue with my speech, I have a few messages to convey to the hon member for Amanzimtoti, which makes me feel rather like Pat Carr broadcasting on Force’s Favourites. The messages are very cryptic but the hon member will understand them. The first one reads: “Barlett on Barlett, you did not tell us about your people”. The second one reads: “Invitations to join a club usually come better from members of long standing”. The third one reads: “Personal expediency is the surest guarantee for a return to a sucrose filled future”. The hon member can sort out from whom those messages have come; I am sure he will recognize the style of the individual personalities.

My message to the hon member for Amanzimtoti is perhaps contained in what I have to say in the few minutes at my disposal in this debate, and it relates to the hon member’s very genuine approach to what he calls the moderate center in South African politics. I do not take his remarks concerning national unity or entering a period of reconciliation lightly in the least. Everybody should have those matters at heart but naturally there would be different perspectives. The perspective of a moderate center which that hon member has—and which appears to be limited entirely to White politics—is in our opinion an extremely shortsighted viewpoint and will be of very little use in the South Africa of the future because it will be the moderate centre of all population groups which is going to enable us to build a stable, well-governed country in which we will have to cope with the desperate needs in the socio-economic field. We believe that the limitations in his perception concerning the moderate centre are very serious. While there has been a degree of acceptance of the NRP’s policies, the area which the Government has entered is very definitely by far the easiest aspect of our Constitutional challenge of the future, namely direct representation by Coloureds and Indians in Parliament. The acid test will be the Government’s attitude towards the Blacks. He, as a member of this party of long standing, will understand that the NP’s attitude to Blacks up to perhaps the State President’s address at the opening of Parliament this year, was very definitely that they did not consider that there were any Black South Africans. They did not see a place for them at all in representation in Parliament. Even today they have not made it quite clear that in fact Blacks will be represented in this Parliament. We believe that to go about trying to create structures outside of this Parliament or to gerrymander any sort of structure in an effort to get them, one of the most vital parts of the moderate centre, to participate, will be absolutely shortsighted.

Until the NP come forward with very clear indications of what their attitude is toward Blacks, whom we believe have inherent rights in the country both in terms of ownership and participation in the economy and politically, quite obviously there remains a vast difference between us. I personally think that that hon member would agree with what I have said, as well as with many other aspects of my party’s policy which the Government has not yet but will have to adopt. I think it makes so much more sense for there to be more participants in the debate outside the NP than in the NP which cannot even express itself clearly of late in respect of the Black situation which is the most critical situation this country will have to face. The NP has not done so yet and, until it does, this country will remain teetered on the brink of whether or not we are going to enter a period of political stability and a movement towards the participation of all groups in a system which will allow for moderate people to come forward and moderate groupings to form, a system which will be largely underpinned by free enterprise and ownership.

The hon member for Cape Town Gardens spoke about influx control and urbanization. This was well received by the hon member for De Kuilen who in his reply proceeded to indicate that it was not quite so easy to deal with, etc. Granted it is not so easy but a word of warning I want to contribute to that debate is that unless we use the opportunity to plan for urbanization together with the other states that have been created by the NP, to debate with them and give them access to the urbanization process so that they will introduce land reform measures in order to better utilize their land, we will get nowhere. We will end up with a flood of people in our cities and we will find that we have not achieved anything at all regarding the upliftment of those people who are largely existing on an agricultural subsistence level in their own areas.

In the past the Government has a, ways maintained that we can do nothing about the matter at all because we cannot force anything on those people. I should like to submit that if we had a properly structured confederal arrangement in which the whole question of urbanization could be debated with a view to an agreement being reached by the constituent members of such a confederal arrangement in relation to a possible quid pro quo for the abolition of influx control and for embarking on an orderly process of urbanization, the whole matter could be resolved to the satisfaction of all the signatories to such an agreement. A possible quid pro quo for this could be the undertaking on their part of a movement of reform aimed at the proper utilization of land—in particular agricultural land. I believe that these things go absolutely hand in hand and that there is no way in which we can uplift Black people within their own national states and prevent the continuing excessive influx into our cities unless we improve the state of the economy and the standard of living of the Black people in those areas.

That is really what we should have been doing throughout all these years instead of wasting so much time with consolidation. That is exactly what we should have been doing. We should have been working together with those people on an acceptable and feasible urbanization policy whilst in the same process also introducing land reform. The millions that we have spent on consolidation, I regret to say, have very largely been wasted. I am not saying of course that it will never be recovered in future. At the moment, however, I believe that money has been wasted. Therefore we must not lose this new opportunity. We must not approach the process of urbanization in isolation. It is not a matter concerning the Republic of South Africa alone. All the Black national states must be made part of the whole process of reform on a confederal basis. They should be drawn into planning together with us, also in relation to the degree and the extent of their future participation in the process of reform.

Mr Speaker, of course the hon member for King William’s Town now finds himself in total darkness. Nevertheless he is now trying to give us advice, and in the process he is concentrating particularly on hon members who used to be in the NRP with him, but who now find themselves with us in the National Party. It is also quite clear that they are now very happy with us and are entirely conversant with what is going on in the ranks of the National Party.

Of course I can understand why the hon member for King William’s Town would like to give us advice. He is a very decent person. The fact is that he is now at long last also mourning the fact that he no longer has a hold on the people in his own constituency. The only MPC of his party in the Cape has now also joined the National Party. [Interjections.]

Now I can of course understand that the hon member would very much like to give us advice. But I must put it to him that the National Party is able to think for itself. There may be something in some of the things the hon member said. But those are matters that the National Party is already investigating. We will, however, introduce the necessary changes in our own good time—when it suits us, of course, and not because we are told to do so by whomsoever it may be. [Interjections.] The hon member for King William’s Town must, therefore, wait patiently for the time to come. The National Party knows what it is doing, and it is doing so in a sober and calculated way. [Interjections.]

Mr Chairman, I now want to address myself to the hon the Minister of Finance. Today I want to thank him very much for giving us a look into the future again. After all, one must view this year’s Appropriation in the light of the future. The hon the Minister told us about the favourable turn that the economy had already taken.

I am also very gratified that the hon the Minister made mention of capital projections for the future, in terms of which it appears that a revival in trade is not too far off in the future either. He also pointed out the restrictive monetary measures being followed, the fact that he has little room in which to manoeuvre and that high interest rates and increasingly large loans virtually go hand in hand. I was also gratified to learn from him that the De Kock report on monetary policy was expected in the near future.

The hon the Minister went on to warn that if productivity was not increased, and people persisted with increasing wage demands, we would experience very great problems. What also interested me was the reference by the hon the Minister to the disinvestment campaign. I shall get around to that somewhat later, however.

You know, Mr Speaker, nowadays I find the newspapers extremely interesting. It seems to me as if they are constantly looking for news. It seems to me as if there is far more money in the Cape than there is in Johannesburg, for example. I cannot understand certain things. One has to pay 40 cents for a thin newspaper here in the Cape, but one pays 30 cents for a thicker one in Johannesburg. I prefer to wait two hours in the aircraft and buy my newspaper in Johannesburg. In this way I save 10 cents.

It seems to me as if there is cost inflation in the Cape too. In this connection one can point out that the price of honey is sky high. I wonder whether the bees also maintain such a high inflation rate. One can very easily pay R2,40 for a bottle of honey.

The other day I told the hon member for Wellington that Safari made delicious moskonfyt. One pays R1,30 for that moskonfyt in Johannesburg, whereas although it is made here in Wellington, one pays R1,99 for it in the Cape. There are certain things in the economy which I cannot understand and which the hon the Minister must explain to me. [Interjections.]

To get back to the newspapers, I want to point out that I noticed certain words of wisdom in the Sunday Times, but this time not in a report but in the letters which they published. Here is one:

Why must he resign and be thrown away. Just listen to this:

Of course it is not true that these are not paid. The writer of this letter went on to say that the hon the Minister’s people in his department had never earned a single cent. Where did this letter come from? From a very poor area—the hon member will enjoy this—Umhlanga Rocks! [Interjections.]

The next letter in which the resignation of the hon the Minister of Finance was demanded, came from an equally poor area in the northern part of Johannesburg—Cyrildene. Another person who insisted that the hon the Minister should resign, lived in Waterkloof Ridge, which is not a particularly rich area either. [Interjections.] Earlier today the hon the Minister told us what was going to happen in the future. He reminds me of what Colbert said:

I think that nowadays a great many feathers are being plucked with a great deal of hissing, but the fact is that the hon the Minister gives and takes. This reminds me of the saying in the Bible:

We are enabling the hon the Minister to receive, and now I hope he is going to give us something in future so that the saying can also apply to him.

What particularly struck me in the speech of the hon the Minister was his finding that a sound economy must be able to withstand all onslaughts. In this connection I want to point out that the hon the Minister is in the process of deliberately building up our image in such a way so that we will retain our name as a good place to invest.

I do not know what is the matter with the Americans at the moment; they are saying a great deal about disinvestment, but in the meanwhile quite a number of banks are going bankrupt there. Recently almost 40 banks have had to close their doors. I think the Americans must sweep before their own door first and not constantly point a finger at us.

I have analysed the Appropriation somewhat, and on the basis of that analysis I can say that wonderful things are happening in South Africa. It is constantly being said that we are not economically viable, but do hon members know what happened in one month in the container depot in Johannesburg? In that depot 1 500 tons of goods from Malawi and Zimbabwe were handled. These goods were tea, coffee, sugar and tobacco. For whom were these goods handled? They were handled for the USA, Europe and the Far East. Do hon members know what the English newspapers said in this regard? I am quoting:

Then they gave the following information: In one month 200 tons of tea, 700 tons of cotton, 500 tons of sugar and 100 tons of tobacco were handled. The traditional trade routes through the harbours of Dar-es-Salaam in Tanzania and Beira in Mozambique are no longer reliable. The importers in the USA, in Europe and in the Far East are now choosing the more reliable but longer routes through the RS A. That is therefore what is happening in Johannesburg. We are now helping Zimbabwe, Tanzania and all those countries to transport their goods to Europe, the USA and the Far East.

Another report was brought to my attention this week. It concerned the wool farmers. This year the wool farmers of South Africa had a record income of R405 million. This is 40% higher than the R290 million of last year. Why is this so? Our product is so popular that 99,5% of the 669 000 bales of wool were sold this season. In Europe and elsewhere people are standing in line for the next season which begins on 28 August.

I want to say that something is happening in our economy. We must not be so pessimistic. I hope people will display more optimism. I know urbanization is taking place. The Blacks are also coming to our cities. But they are receiving better training than ever before and will eventually be equipped to get employment opportunities. A total of 1 500 new employment opportunities per working day will be created at a tremendous cost.

I want to say our people are living too luxuriously. I want to quote the following regarding the sale of motor cars in Johannesburg:

One dealer said:

This is what is happening at the moment. We must take cognizance of this. If there are hailstorms and insurance premiums become higher, it is surely not this Government’s fault. Must the hon the Minister be blamed for all those conditions? [Interjections.]

Sir, I have been told that my time has expired. I hope this does not encourage inflation.

Mr Speaker, it is a great pleasure to speak after the hon member for Rosettenville. I do not know whether he was quite fair in putting his question about the moskonfyt to the hon the Minister. But I want to give hon members the assurance that if the hon the Minister can give a satisfactory reply to the moskonfyt story, there will not be a question to which he will not be able to give a satisfactory reply.

Sir, if I look at the CP benches, it seems to me as if they have adjourned to decide what their reply must be regarding the map which the hon member for Turffontein talked about. [Interjections.] The hon member for Sunnyside, the shadow Minister of Finance, will really have to know what he is about with regard to financial matters if they want to budget for the Afrikaner state, Hexania, and everything associated with it on the map we now have at our disposal. I am glad to see that, although the CP detest my bench fellow, the hon member for Vryheid, Vryheid has nevertheless been set aside as part of that Afrikaner state. [Interjections.] I am very glad that as far as he is concerned, this matter has been confirmed on this map.

Since the hon the Minister was appointed to this post he has had many problems to solve, especially in recent months.