I move—

I second.

Before this Motion is put and before the House proceeds to appoint a Select Committee on Public Accounts, it is my duty to bring to the notice of the House, and to your notice, Mr. Speaker, the unsatisfactory manner in which the Select Committee is asked to function. I know that this is a complaint which is voiced here year after year, but unfortunately things are going from bad to worse. This Select Committee is asked to work under conditions which turn its labours into a farce, and I appeal to the House as a whole to assist me in preventing those conditions from being allowed to continue. The Select Committee on Public Accounts, let me say, is an essential link in the system of Parliamentary control. In order to give Parliament control, the following practice has been laid down; in the first place this House votes money for the administration of the country. An Auditor-General has been appointed to see to it that the money is properly expended. He has to check all expenditure and he has to report on all expenditure, and he particularly reports any irregularity or anything out of the way that may have occurred. A report is submitted to Parliament by the Auditor-General every year. The annual report itself is not dealt with by Parliament, but it is referred by this House to the Select Committee on Public Accounts, and that Select Committee is expected to enquire into what is contained in the Auditor-General’s report and to go into every irregularity in the presence of the Auditor-General and the official concerned. Thereafter, the Select Committee has to report to the House and the House then takes action in accordance with the report. Now, what happened last year? More than a month after the prorogation of the House the report of the Select Committee on Public Accounts appeared in print for the first time. Parliament had dispersed and members had returned to their homes more than four weeks before the report made its appearance. I shall mention the dates. This House was prorogued on the 18th April and the main report of the Select Committee appeared in print on the 21st May—more than a month later. The second report, which was also an important document, made its appearance on the 23rd May—that is to say, Parliament had been prorogued for more than four weeks before this report of this important Select Committee, a report which should have been considered by Parliament, made its appearance. All I need do is to put the position in that light to prove how farcical matters have become. What we particularly object to is this. If, when the Auditor-General’s report is published, we claim the right to discuss it in this House before it has been dealt with by the Select Committee upstairs, members opposite immediately get on their hind legs and they immediately tell us that we must not do so. The hon. member for Kensington (Mr. Blackwell) over there is only too keen on every occasion to tell us so.

He is the chief sinner.

And then we are violently attacked and we are held up as people who are committing some henious offence. But what is the alternative? We keep quiet until the Select Committee has dealt with the matter, and when the Select Committee has disposed of its investigations there is no Parliament here to discuss these matters, or to look into them. What are we to do in those circumstances? May I just be allowed to say this? It is the duty of this House to take up a definite stand on these matters. Either we have the right, immediately the Auditor-General’s report makes its appearance, to discuss all irregularities in this House, or some other arrangement must be made. We simply cannot carry on in the way we are doing, because if we do carry on in this way it means that this House is losing its principal hold on the country’s administration. I should like to suggest an alternative. We are not anxious to discuss matters here before they have been dealt with by the Select Committee. We reserve unto ourselves the right to do so if necessary, but if there are other means then we prefer to avail ourselves of those other means, and I think the Minister should tell the House what his views are on what I am going to suggest. We on this side of the House ask that as soon as the Select Committee meets upstairs, an agreement shall be arrived at in consultation with the Auditor-General as to what are the main principles involved in the report. Then we can deal with each of the main principles involved in the Auditor-General’s report in sequence of their importance as they appear to us in the Committee rooms. And then the Select Committee can present interim reports from time to time in this House in connection with those matters. But if the Select Committee presents an interim report to the House, we want to ask the Minister, and we particularly want to ask the Leader of the House, the Prime Minister, to allow us the opportunity of discussing those interim reports of the Select Committee in this House as soon as possible. That assurance we are anxious to have. The Auditor-General, in consultation with the Select Committee, will determine which are the main principles involved in this report. We shall then report from time to time on the important issues involved, but then we want an assurance from the Prime Minister that he will be prepared to give the House the opportunity of discussing those interim reports within a reasonable time. If the Leader of the House is not prepared to do so, if he is not prepared to concede our request in that regard, then we shall be obliged immediately the Auditor-General’s report makes its appearance, to discuss it on the floor of the House. I am anxious that the House should realise that the responsibility for this would rest with the Government. We are not in the majority in the Select Committee. The Committee is so constituted that the Government has a majority on it, and we are in a small minority. All we can do is to say what should be done, and the responsibility rests with the Government to do what is right. And this House is responsible to put matters right if the Government does the wrong thing. I feel that in the past we have been content with merely voicing our protests on this subject. We should now arrive at clarity and know where we stand, either one way or another. We cannot carry on in the way we have been doing. The whole position has become a farce. It is very convenient for the Government to kill the Select Committee’s work upstairs, but that does not suit us, and the House cannot allow it. The consideration of the report of the Auditor-General constitutes an important link of Parliamentary control and of National Government. Remove one link and the whole chain disappears. If we carry on in the way we have been doing it means killing all the interest in that Committee, and if we kill interest in that Committee then hon. members will realise what it will lead to. I only want to say that we on this side are determined that that shall not happen. I say that I am a believer in National Government and in Parliamentary control. This Parliament is the master and must retain control.

I am glad to hear you say that. I thoroughly agree with you.

For once in our lives the hon. member and myself are in absolute agreement on a question. I am glad that during the recess he has made up his mind and has seen the light.

So you also want to have Parliamentary Government, and you don’t want a New Order.

I have raised this matter in the interest of this House, in the interest of the best traditions of this House. If there is one man who pretends to be a great constitutionalist, it is the Minister of Finance, and I appeal to him to assist us in putting this matter in order.

The hon. member for George (Mr. Werth) quite rightly stated that the Select Committee on Public Accounts, particularly so far as the consideration of the report of the Auditor-General is concerned, constitutes an essential link in our financial activities and in the control of our finances. I am in entire agreement with him on that point and I want to assure him that the Government desires to maintain the position of the Select Committee on Public Accounts, and does not wish in any way to detract from it, and does not wish to destroy the Committee. Neither this Government, nor any previous Government, has ever had any desire to destroy that Select Committee. It is an essential link and it is desirable that that Select Comittee should function as effectively as possible. My hon. friend referred to what happened last year. I think he will agree with me that last year the position was somewhat unusual. The Committee last year had a great deal of work imposed upon it. My hon. friend is aware of that, and the Committee did its best to keep pace with all the work entrusted to it. But one of the reasons why one of the reports—it was not the only report—appeared in print very late was the exceptional pressure of work. But even in ordinary years the difficulties to which my hon. friend has referred do make themselves felt to a certain extent. We are always prepared to give consideration to any proposal made by the Select Committee or otherwise to meet those difficulties. My hon. friend has suggested that the interim reports should be presented from time to time. That was done last year already. Last year a report from that Select Committee was presented even before the Budget debate. Special facilities were granted to get that report published before the Budget debate. My hon. friend wants to go further in that direction. I have not the slightest objection to it. If the Committee can arrange its business in such a manner that it will be possible for it to present a report, or if it can so arrange its work that as much of it as possible can be brought before the House before the Budget debate, or during an earlier stage of the’ Session we shall always be prepared to co-operate in that direction. If such a report is submitted before the Budget debate takes place, the debate on the estimates is probably the best occasion for the discussion of the matter. But there may be cases where a special opportunity should be created for a discussion and where it may be considered desirable to grant special facilities for a discussion. If the Select Committee feels strongly on the matter and if on some particular point it feels that it is of such importance that we should grant special facilities, and if it is not possible to discuss it during the Budget debate, the Government will always be willing to consider such a suggestion. We are anxious to have the assistance of this Commitee in regard to our financial activities, and it may be that in certain circumstances we shall be able to act on the suggestion made by my hon. friend.

I move—

I second.

I wish to move—

The purpose om my amendent is to bring the appointment of this Committee strictly within the Standing Rules and Orders of this House. In the Standing Rules and Orders is is laid down that the Committee should deal with the granting of pensions not provided for by law and should deal with these pensions in a certain manner. There is no reference in the Standing Rules and Orders to the introduction of Minutes and recommendations for pensions. All that is dealt with in the Standing Rules is the method of deciding upon petitions and my objection is based on the fact that under the Minister’s motion one set of supplicants are treated in one manner and the ordinary petitioner is treated in a distinctly different manner. I maintain that everyone approaching this House should do so by way of petition and should have to come to the front door and not avail himself of the back stairs. There have been too many cases in which petitions have been smuggled in by this entrance for favourites and members have awakened to find undesirable pensions granted to persons who in the ordinary course would never have received those pensions had they had to take their chance with the mass of the petitioners who approach this House every year.

What sort of cases are you referring to?

I need not specify them. The cases have become to numerous to mention. I strongly object to any method which savours of favouritism towards petitioners approaching this House. The House in its wisdom has prescribed how petitions shall be dealt with and I object to any method being introduced by a Notice of Motion which departs from the strict rules laid down by the Standing Rules and Orders. I think every hon. member would prefer that all petitioners should stand on the same footing. No hon. member wishes to have to apologise to his constituency for the fact that some petitioners have received their pensions through a method which has not been prescribed by law, and which does not conform to the rules laid down by this House. We know very well that there are laws dealing with every kind of pension from old age pensions down to war disabilities, and if the law does not permit of anyone receiving a pension people can apply by petition to this House and the form of petition and the method by which the petition is to be dealt with is prescribed by the Standing Rules and Orders. I object to recommendations emanating from the Government being smuggled in through this method.

I wish to second this amendment, and speaking from my experience on the Pensions Committee I know that a large number of Minutes from the Treasury come before the Committee and have to be dealt with by the Committee. I feel that the procedure is wrong and I agree with what the hon. member for Illovo (Mr. Marwick) has said, and I feel that the forwarding of recommendations from the Treasury in this way is wrong.

I am afraid I cannot accept the amendment proposed by the hon. member for Illovo (Mr. Marwick). The hon. member made two statements in the course of his remarks. In the first place he suggested that the proposal contained in the original motion which is in accordance with the procedure which has been followed by this House for a long period is not in accordance with the Rules of the House. I do not see how he can maintain that. The Rules of the House say that petitions submitted by hon. members shall be submitted to the Select Committee on Petitions. The Rules certainly do not prevent this House from referring other things to that same Committee. Further, the hon. member used the word “favouritism.” He suggested that there was something wrong about these Minutes coming from the Government to the Select Committee on Pensions. Well, I want to know—am I, as Minister of Finance, not also a member of the House? Why should other members be allowed to submit petitions and why should I not be allowed do so, and why should the Government not be allowed to do so?

Because they are not petitions.

It comes to the same thing. The Government has the same rights as other members. Sometimes there are questions where the interests of the State are involved, and the Government must have the right to act. The Government’s recommendation does not finalise the matter. These Minutes are considered by the Select Committee just as petitions are. I cannot allow therefore the use of the word “favouritism”, which has been employed by my hon. friend, to pass. May I just make this further comment? Often petitions are referred to the Government for further consideration. The Government then reports on these proposals. The Report goes back to the Select Committee, it goes back by way of a Minute. Would my hon. friend exclude from consideration these matters also? I don’t think he would. I therefore suggest that the House does not accept the amendment but follows the same procedure as it has done in previous years.

I move—

I move—

I move—

I move—

I move—

I move—

I move—

Mr. HIGGERTY seconded.

I move—

From one point of view I find myself in somewhat of a difficulty in submitting this motion to the House. The amount involved in these Additional Estimates is a large amount, and it would therefore be appropriate that I should explain them in some measure of detail. But on the other hand, in large part that explanation would have to be an anticipation of what I would normally say in my Budget speech, which probably will fall to be delivered in six or seven weeks’ time. I do not therefore propose to go quite as fully into details in proposing this motion as I might have done if there were no Budget speech lying ahead. But I trust I shall succeed in giving the House sufficient information to enable it to deal adequately with these proposals. We are asked, Sir, in these Estimates to vote an additional expenditure from revenue funds on eleven different votes, a total of £4,158,000 in all; an additional expenditure on Loan Account on six votes, totalling just under £17,390,000. Of these two amounts £3,500,000 on Revenue Account is in respect of defence, and £12,500,000 on Loan Account is also in respect of defence, totalling therefore £16,000,000 in all. Now, Sir, it is not necessary at this stage for me to go into details in regard to each of the votes. That can be done more effectively by the Ministers who are responsible for these votes, and many of the matters that might be raised can be dealt with more completely at the Committee stage. I merely confine myself at this stage to the main points which arise from these estimates, and I propose to do so under three heads. In the first place, I want to refer to the proposed additional expenditure from revenue funds apart from defence. I shall then deal with the proposed expenditure from Loan Funds, apart from defence, and then finally I shall deal with the two appropriations for defence together. Firstly, then, the revenue items which apart from defence amount to £658,450. There are only two of these items—I think hon. members will agree with me as they look at these Estimates—which are of such magnitude as to call for comment at this stage. The first is the additional provision asked for in respect of agriculture generally. There the House is asked to vote an additional amount of £579,000 which indeed accounts for the great bulk of that amount of £658,000 to which I referred a moment ago. In speaking of this vote I do not propose to deal with questions of policy; I merely want to give the House the financial facts. In the latter part of 1941, at the commencement of the wheat season for 1941—’42, the Government decided to take steps to stabilise the price of bread at 6d. per standard 2 lb. loaf. Before the new type of loaf had been introduced, the price of bread had been 7d. for the 2 lb. loaf. It had come down to 6d. and we felt we ought to take steps to stabilise it at that figure, despite the increased price of wheat. We, therefore, to make that possible, agreed in respect of the 1941—’42 season, to make certain funds available. The total cost of the subsidies paid out in respect of the 1941—’42 season, including the millers’ and bakers’ subsidies, amounted to £1,134,000. Of that the Wheat Industry Control Board provided £153,000, leaving £981,000 to be provided by the Government. Of that we voted £600,000 on the Additional Estimates at this stage of last year. That amount was expended in the financial year 1941—’42 and the balance of £381,000 was provided on the main estimates for the current year. That figure hon. members will see in the column headed “original estimate” under Vote 23. We did not then make any provision in respect of the season 1942—’43. It was still too early to do that; we did not know what the position would be. Ultimately, however, we decided once again to make funds available for the stabilisation of the price of bread. It was no longer possible, as we felt, after full consideration of the matter, to keep the price at 6d., but at least we felt it should not go back to the old price of 7d., and therefore the price of bread was stabilised at 6½d. per 2 lb. loaf. Now, on the basis of a five and a half million crop, we assume that that will cost the Government and the Wheat Industry Control Board £1,152,000, of which the Board will find £187,500, leaving £964,000 to be found by the Government. Of that amount the bulk must be found before the end of December of the current year, and it is that bulk, namely £579,000, that the House is being asked to vote now. I would ask hon. members to remember that the remainder will still have to be found, but will not be paid out before next year. The balance therefore of £385,500 will be provided for on the Main Estimates for next year. The only other item of significance under this heading is the item in respect of Government garages. It has become necessary to provide additional motor vehicles to a considerably larger extent than was originally anticipated. That is not due primarily to an increased amount of Government travelling, but it rather due to a change of system. The system of subsidising cars has been abandoned, and under present conditions the use of private cars on official business is very much diminished, and the Government have to have more cars of its own, and on that account the House is asked to vote £46,000 on Vote 28. That is all that I need say on the revenue votes other than defence. I now come to the Loan Estimates, and there, leaving out the defence provision, there is involved an amount of just under £4,900,000. There are three votes here to which I think I should refer, and the first again is agriculture. During last session it was decided to appoint a Controller of Food Supplies.

What a pity.

When we passed our estimates it was still impossible to gauge his requirements with any certainty. We provided £200,000 on Loan Estimates as capital for the working of the operations of the Controller of Food Supplies. We also included under Section 3 of the Finance Act a provision for the issue of special warrants to the Food Controller outside the normal provision for such warrants. Well, sir, the Food Controller’s activities, his beneficial activities, may I say, have been such as to require quite a lot of financing. The Food Controller has assumed control of the ground nut crop, he has purchased large quantities of foodstuffs to maintain regularity of supply, he has bought seed potatoes from the British Ministry of Food for re-sale in the Union, he has acquired large quantities of eggs, and in various other ways he has embarked on a large number of beneficial activities. It has therefore been necessary for him to have working capital amounting to £400,000 in all. An amount of £46,000 we have been able to save on other sub-heads on the vote, and we are now asking for the balance of £154,000. In the second place, I want to refer to the Loan Vote Commerce and Industries, where there is a provision of £250,000 for the purchase of additional B shares in the Industrial Development Corporation. On our main estimates we provided £500,000 for the purposes of the Corporation. The Corporation at the time suggested to us that we should provide £1,000,000. Their schemes at that time, however, were somewhat inchoate; we could not be sure they would need as much as they asked for, and we therefore provided £500,000 with the undertaking to make further provision if circumstances necessitated it. It is that undertaking which we now are asked to implement. That means, of course, that the development work of the Corporation is proceeding more rapidly than we anticipated when we framed the Main Estimates, and to that extent I feel, therefore, this provision will be welcome. Perhaps I may mention some of the schemes of development in which the Corporation is interesting itself. There is the salt industry, the plastic industry, animal foods, the heavy engineering industry, the paper industry, and perhaps most important of all from the point of view of the future, cotton and wool textiles. I think the House will welcome the fact that this additional provision is being made, and will be prepared to accept this vote as being really in the nature of an investment for the future. Finally, under this head, I come to Loan Vote Q, where the House is asked to vote £4,400,000 for the taking up of B shares in Iscor. Hon. members will remember last year there was passed an Act which inter alia provided for an increase of the capital of Iscor. Up to the passing of that Act the authorised share capital of Iscor was 500,000 A shares and 5,500,000 B shares—6,000,000 in all. That capital has been fully issued. The Act which we passed last year authorised the issue of a further 6,500,000 B shares. The condition was laid down that the existing holders of B shares should have the first right to acquire any additional B shares that might be issued. Of the existing 5,500,000 B shares, the Government holds just under 5,380,000, that is just over 97 per cent. It has now been decided, with the consent of the Governor-General, to proceed to the issue of an additional 4,400,000 B shares. The issue price is to be 30s., which in the light of all the facts appears to us to be a reasonable figure. That would mean that by the sale of 4,400,000 shares at 30s., an amount of £6,600,000 will be available to the Corporation. Generally, the purpose of this new issue is to provide for an increase of the output capacity of the Corporation to about 600,000 ingot tons per annum, and to extend at the same time the range of finished steel products turned out by the Corporation.

We subscribed 4,400,000 …

I will come to that later. Among the items which it is intended to proceed with as the result of this additional capital of £6,600,000 are the extensions of the mine at Thabazimbi, the erection of a third blast furnace with a capacity of 500 to 600 tons of pig iron per diem, the extension of the plant in the steel melting department, the erection of a cogging mill to handle the output of the extended plant, and a plate mill which is to be erected on the new site at Vereeniging. Well, sir, the Government considers as a matter of policy that we should retain the same measure of control over Iscor as we have today, and therefore subject to the House voting the money, we desire to exercise our option to subscribe to the full extent of what is permitted to us in respect of this new issue of shares. That means under the Act passed last year that we have the right to take up just over 97 per cent. of the new shares, and that would mean an expenditure by us of £6,453,000. Of course, it is possible that the holders of the balance of 3 per cent. of the shares may not exercise their option, in which case we might want to take up those shares as well, and we are therefore providing for the contingency of having to find the whole amount of £6,600,000. Two-thirds of the amount to be paid has to be found before the 31st March, and we therefore have to vote £4,400,000 now, and the remaining £2,200,000 will have to be voted in the new financial year. That is the answer to my hon. friend the member for Kensington. Now I think the House is aware that for some time Iscor has been, paying a dividend of 6 per cent. on its shares. It is anticipated, and I think with good reason, that it will still be possible with the extended output, to maintain that 6 per cent. dividend on the increased capital. We are buying these shares at 30/-, and therefore a 6 per cent. dividend means a 4 per cent. return to us. I think, therefore, that this provision also may be regarded from the investment point of view. Now I come to the last part of what I have to speak about namely the provision for defence. There, as I have said, we are asking the House to vote an additional amount of £16,000,000, which brings the total expenditure of defence on the year to £96,000,000. I have on a previous occasion pointed out that the estimation of defence expenditure in present circumstances, is for a variety of reasons exceedingly difficult. Wars do not go according to plan. You cannot, twelve months ahead, be quite sure what you are going to spend. Last year we were fortunate. We voted £72,000,000, and we came out on £72,000,000. This year we have not been so fortunate. We cannot come out on the £80,000,000 which this House voted during the main session last year, and we cannot be sure yet that we shall in fact come out on this increased amount of £96,000,000. I can only say that in the light of the information now available, it appears to be a correct figure to budget for. The House will want to know what are the main factors which have led to this increase of our defence expenditure. In the first place, an increased amount of money is necessary for pay and allowances. We are spending actually more than we anticipated under that head. It means that we are paying more men and women in our army than we expected we would have to pay. In other words, we have a larger army, I need hardly tell hon. members that a very large factor in bringing that about was the disaster at Tobruk. That disaster was a heavy blow to South Africa, a blow which the people of South Africa, under the inspiring leadership of the Prime Minister, bore with courage and resolution. It also involved financial consequences. Several thousands of additional men were recruited and these had to be equipped and paid. Our expenditure has gone up by several millions as a result. The second main reason for the increase in defence expenditure is to be found in the change brought about in the war situation by the entry into the war of Japan, and by the successes which Japan attained during the first three months after her entry into the war. As the result of these things the threat to the Union became a very real one. The conquest of Madagascar to which our troops made a notable contribution, relieved that threat to some extent, but the threat is still there and the intensification of the submarine campaign is a very important factor in this particular connection. For these reasons it has become necessary to reorganise our system of home defence, and in particular to extend considerably our coastal reconnaissance. Very heavy expenditure had to be incurred as a result, and that has left a deep impress on the Defence Vote. We would however have failed gravely in our duty if we had not taken the precautions which we did take and are still taking. The net result, of course, is that we have now to vote £16,000,000. The House will want to know where that money is coming from. An amount of £3,500,000 has been provided on the revenue votes. We have done that because I believe that our revenue, our buoyant revenue may, I say, will be able to stand that additional amount of expenditure this year without our closing the year with a deficit. May I put it differently. But for this increased defence expenditure I would, at this stage, have estimated our surplus for this year at £3,500,000. That is a provisional estimate, it is a rough estimate. I have not the figures available to give more than a rough estimate. It may not be reached, it may be exceeded, I do not regard myself as bound strictly to that figure, but it is a good enough figure to use as a basis at this stage. Let me emphasise that but for the increased expenditure we would have closed the year with a surplus of £3,500,000. When we remember the effect of the restriction of our imports on our customs revenue-, when we remember certain other factors which have played their part in relation to other heads of revenue, I think we can find a good deal of satisfaction in that fact. Then there is £12,500,000 on the loan vote. Let me assure the House immediately that this does not mean that we shall have to borrow £12,500,000 more for defence than we originally thought we would have to borrow. There are various factors which come into operation at this point. In the first place, we started the year with a balance on loan account which was unexpectedly large. When I submitted my budget last year I did so on the assumption that we would just about break even as far as our loan account was concerned on the 31st March of last year. As a matter of fact we did very much better than that, there were considerable savings on loan expenditure, there was a considerable measure of buoyancy in our loan recoveries, and actually our balance on loan account, on the 31st March last year, was no less than £1,917,000. In addition to that, during the financial year we have had surrenders in respect of 1941—’42 loan votes £981,000 the result being that we have £2,900,000 to start with towards the £12,500,000. Then in my budget speech I put down the surplus for 1941—’42 at rather more than £6,000,000 and proposed that £6,000,000 should be transferred to loan account. Actually our surplus was very much bigger, and ultimately we were able to transfer £7,500,000 to loan account. So, there we have £1,500,000 more than we thought we would have. Then we have done exceedingly well this year as far as loan receipts are concerned. We estimated loan receipts at £7,866,000, and I now estimate those receipts at £11,466,000. In other words, we are getting £3,600,000 more than we expected by way of loan receipts. Finally, sir, we have been able to effect fairly substantial savings in our expenditure on our loan votes. We estimated loan expenditure at £12,332,000 apart from defence; we now estimate loan expenditure, apart from defence, and leaving out those items for the Industrial Development Corporation and the Iron and Steel Industry, which I regard as investments, at £10,332,000. Therefore, we hope to have a saving of £2,000,000. If hon. members will do some quick mental arithmetic, they will see that we have available towards the £12,500,000, £10,000,000. That means that we have to find £2,500,000. Well, sir, for the financing of such an amount, I do not think there is any call on us, especially at this stage of the financial year, to impose additional taxation. It means, of course, that we must borrow £2,500,000 more than we meant to for Defence. But it is certainly a matter for graitfication that we can finance an additional defence bill of £16,000,000 without increased taxation, and with additional borrowing only to the extent of £2,500,000. Now it is only necessary for me to make two further remarks of a general character. In the first place, I would like again to refer to the buoyancy of our revenue, apart from Customs. I do so because of the statements made from time to time which may have led people to believe that our revenue is drying up. There are certain financial experts in this country—I am not referring to anyone in this House, I am referring to some of our newspaper scribes whose effusions I read with great interest and with great amusement—they are people who are always—I am only referring to some newspapers—they are people who are always trying to misrepresent the figures published in regard to our financial position in such a way as to put the worst possible construction on them. They are trying to create the impression in people’s minds that we are heading for bankruptcy. They are constantly crying stinking fish in regard to the financial position of this country. Allow me, sir, to give one instance of this. Some time ago, in one of these newspapers, there appeared an article, almost a column in length, which very ponderously proved that our scheme of Tax Redemption Certificates was a complete failure; no one was buying those certificates; they were not sufficiently attractive. As it happened, just at that time, that system had been in operation for a year and the Treasury had happened to take out figures of the working of this scheme. All that the Treasury needed tot do to rebut that ponderous three-quarter column article was to publish a statement that during the first twelve months of the operation of the system, we had sold Tax Redemption Certificates’ for £27,000,000. That is characteristic of these gentry. I say again, I am not referring to anybody in this House. But to score some petty party point, they do not hesitate to misrepresent our financial position, even at the expense of impairing public confidence. I think they really want to impair public confidence, but I think by now the public has found them out. The other general remark I want to make is in regard to the increased rate of our Defence expenditure We shall this year, on the basis of these estimates, be spending £96,000,000 on defence, which is well over twice as much as we spent on everything, defence included, on Revenue Account, before the war. I make my hon. friend opposite a present of that calculation. Against that figure there should be viewed in the first instance the hopeful anticipations which are sometimes expressed as to possible downward adjustments of taxation. I am not referring now to minor rectifications which we are always prepared to consider, which we are now considering, but I do refer to anything in the way of large scale surrenders of revenue for which it must be obvious the omens are not particularly good. But against that figure there must also be viewed the equally hopeful demands which are made for the immediate adoption of proposals involving considerably increased expenditure. These are days of easy money. Money is plentiful. At such times the customary sense of financial values tends to lose its stability. Perhaps the fact that we are now spending on Defence at the rate of just under £100,000,000 a year will help to bring us back to a sense of reality. We have had a by no means easy task so far in financing war expenditure on a scale which I do not think many people would have believed to be possible three years ago! We have had to call on the country to bear heavy burdens. I think we can say that we have come through pretty well so far. Again, I think I can say we have come through much better than most people, perhaps than everybody, believed to be possible. But let us not think that the pressure is easing up nor that the hard times are over. It may be that from the financial point of view the hard times are only beginning. There is still a heavy burden to be shouldered, but in the knowledge of the greatness of our cause and of the magnitude of the issues at stake, I believe that the House and the people of South Africa will be prepared to go forward on the path which we have hitherto followed.

I second.

The hon. the Minister of Finance a few minutes ago stood here and boasted of the tremendous expenditure we were able to incur; he boasted of the millions he was able to spend without at the end of the year having to face a deficit. He is terribly proud of that fact. I only want to ask those members of Parliament who represent commerce and industries in this House what they think of the way the Minister has put his hands into their pockets. One can say of them, as the Hollander said, “I don’t say a word, but God can hear me grouse.” This is not the time to do so, but I say this to the Minister today, that he is taxing certain classes of the population to such an extent, he is squeezing so much money out of them, that our business concerns in South Africa are prevented from building up anything in the nature of a reserve for the years that will come after the war. South Africa will yet have to pay a very heavy price for the Minister’s system of taxation, although perhaps those results may not be immediately noticeable. I was reading an American journal the other day in which the Minister of Finance was being discussed, and one sentence struck me particularly. It was in English, and this is what the journal said: “The Minister of Finance in South Africa is a very eloquent man. But in one respect he is peculiar. He has his feet planted firmly only in the air.” And that is what we have here today. The Minister of Finance has so accustomed us to think in terms of millions that the House is perfectly unconcerned when at the end of the financial year he comes here and talks about an additional £21,000,000. I only want to say this to the Minister, that the whole of the Estimates of Expenditure during the 1914-T8 war, including war expenditure, did not greatly exceed £21,500,000. The danger of the situation is that our financial conscience in regard to expenditure has become so blunted that we are no longer worried if millions and millions of money are spent right and left on defence. The danger there is the outlook of the Minister of Finance himself, as well as the outlook of the people who control our defence expenditure. The danger is that those people no longer have any conception of the value of money and the result is that money is being wasted today on defence. This is not the occasion to go fully into the country’s financial position. The limits of this debate are very restricted and you, Mr. Speaker, are very vigilant in watching that we shall not exceed those limits and we have learned from dire experience that it does not pay us to try and get past those limits. We shall therefore wait until this House is in Committee before dealing with the different points which are enumerated in these additional estimates, and I can assure the Minister of Finance that there are quite a number of those points, especially under the Defence Votes on which we shall require a great deal more information. We shall require more information about the Industrial Corporation, about the expansion of the Iron and Steel industry and so on, but we shall wait until the Committee stage before putting those questions. On the subject of Defence expenditure I should like to say a few words. The Minister has told us that the major portion of this £16,000,000 which he is asking for is in the first place required to increase our armed forces, but in the second place the money is required to pay for the expedition to Madagascar. That position we propose discussing in Committee, but we have the Prime Minister here today and I should like to say this to him: Right throughout the country, not merely among the people who support this side of the House, but also among those who support members opposite there is a feeling that the Prime Minister, when he undertook that expedition, broke the pledge which he had given to this House and to the people of South Africa. We in this House and in the country outside were given the impression by the Prime Minister that none of our men were going to be sent overseas.

That was not an impression, it was a promise.

Yes, and if we have got to the stage that this House and the public can no longer rely on the Prime Minister’s word of honour—what is the position then that we have got to? But the Prime Minister will hear a good deal more about these things. Now I want to say that if there is one thing the country demands of him it is that money which has to be spent on Defence must be well spent. Last year this matter was brought before a Select Commitee of this House. We were not satisfied that the money was being well spent, and the Select Committe on that occasion made a recommendation to this House that a Special Committee should be appointed to go further into the question. The recommendation that this should be done was passed unanimously and consequently that side of the House, together with this side, asked for the appointment of such a Committee, and as a result the Government decided to appoint a Committee. I had the privilege of serving on that Committee. Now, I should like to put a few questions to the Minister of Finance arising out of the matter. The first question I want to put is whether that Committee has already reported to him on any part of its terms of reference? In the second place I want to ask him when he received the Committee’s report. If I am not mistaken it was towards the middle of November. Consequently, there was that report which the Minister must have received which dealt with the principal part of the matter referred to the Committee. It was in his hands towards the middle of November. So there was time for it to be printed, to have it ready so that it could be laid on the Table of this House immediately after the opening of Parliament. Why has that report not yet been laid on the Table? I understand that it has been printed. I further want to ask whether the Minister intends placing that report on the Table of the House? Now, my third question is this—millions of pounds are involved in this matter; I dare not mention the figures but the House will be astounded to know it—I want to know why there is this delay, because every moment of delay in giving effect to the Committee’s recommendation may mean tens of thousands of pounds and hundreds of thousands of pounds to South Africa. If the Government really intends to spend the people’s money wisely and carefully, it should immediately give effect to the Committee’s report. I therefore want to ask the Minister whether he has taken any steps to give effect to the Committee’s recommendations. Then I have a fourth question namely whether he will give this House ample opportunity for the discussion of that Committee’s report. I am very anxious to have a reply to those questions. I am speaking subject to correction but I have heard a rumour that there is an intention to refer the Committee’s report to the Select Committee on Public Accounts. If the Minister proposes doing that then it proves to us, and I think the country will afterwards also say so, that it is done with the sole intention of shelving this important report. I shall be very pleased if the Minister will get up and give us an assurance that this Committee’s report will not be referred to the Select Committee on Public Accounts simply to pigeon-hole it in that way. I hope I have made myself very clear. I attach very great importance to the work of this Committee. The country is full of rumours as to what is going on in the Defence Force. Here we have a Committee which has enquired into a certain part of these matters. It is the prerogative of this Parliament and of the public to be enabled immediately to acquaint itself with the results of this investigation and the Minister will be doing an injustice to this House and to the country if he refrains from placing those reports immediately before this House and if he refrains from making them available to the country. As I have said it is not our intention to conduct a long debate at this stage, but I shall be very pleased if the Minister will avail himself of this opportunity to reply to these questions.

I wish to associate myself with what the hon. member for George (Mr. Werth) has said. The hon. the Minister of Finance talks very lightly about the increase of expenditure which he proposes, expenditure which has to be borne by the taxpayers of the country. When the Minister of Finance last year introduced his Budget I pointed out to him that the Estimates which he placed before us were of such a nature that he was going to get more than the amount which he was estimating for, and that his real revenue would be considerably more than the estimated revenue which he had submitted to the House. I pointed out to him that he was in a tricky way trying to get money out of the taxpayers, in an indirect fashion, so that the taxpayer would not notice it, and that he was trying to make the taxpayers believe that the position was altogether different from what it was. I also pointed out to him that he was following in the footsteps of his predecessor, by trying to show large surpluses in that way, and I told him that it was bad finance to come along with large surpluses. It is not in the interest of the people and of the taxpayers. In view of the fact that the taxpayer is already bearing a heavy burden it is not the right thing to do to impose even further burdens on him.

Can the hon. member tell me which vote he is speaking on.

The hon. Minister has told us that there is going to be a surplus so that there will be no need to impose any further taxes. There will be a surplus of practically £3,500,000. The Minister has obtained that money in an indirect fashion. This is an additional amount he has taken from the taxpayers; he has taken more than he requires. He has given us reasons to show why this additional amount is there, why we are now asked to vote this additional amount. The money has to be used for the purpose of equipping soldiers and for the purpose of increasing the number of men in the Defence Force. That is what has rendered the additional expenditure necessary. Now, I should like to know from the Minister whether this additional expenditure is going to be followed by further additional expenditure and whether this expenditure is going to be recurrent or whether it is only required at the present juncture. If we bear in mind that he is now asking this House for an amount of £16,000,000 under the Defence Vote, every member will agree with me that it is a huge sum to ask by way of additional expenditure. It is 20 per cent. of the original amount which was voted by this House for the purpose of Defence. That being so you will agree with me that the taxpayers of this country have every reason to become nervous if expenditure in similar circumstances is increased from time to time in this way, and the taxpayers of the country not only have reason to be nervous, but they have also come to the conclusion that the time has come to put a stop to this huge expenditure which from year to year is increasing in this manner.

And the taxpayer has also found out that it has become highly necessary to get rid of this Government.

His own commonsense will tell him so. But that is not my point at the moment; the point I am dealing with is that this amount of £16,000,000 is a huge amount, and now the Minister gives us a reason for this further expenditure, and I feel that if that is the reason then we have every right to know whether that amount is going to be further increased, and whether it will be a recurrent expenditure in days to come. Naturally, if things are to go on in this way and we have a setback in the war, such as we had at Tobruk, then we may assume that there will be a recurrence of such expenditure which will make the position intolerable for the taxpayer of this country in days to come. I also want to draw the attention of the Minister of Finance to the law which was passed last year dealing with the iron and steel industry. He asked for special leave then to increase the capital of Iscor, and let me say at once that I was not opposed to that. I am of opinion that such a great industry should be expanded. If there is one industry in this country that should be developed and expanded it is the iron and steel industry. But now we find that the Minister comes here and asks for an amount of £4,400,000. It is unnecessary for him to do so and it is unnecessary for him to impose this burden on the taxpayers on this country, and I say so for this reason. It is clear that the Minister has learnt a lesson from Hoggenheimer, because I notice that he is now adopting Hoggenheimer’s tactics. He issues shares at a higher price of issue than the face value of the shares. In other words, these are £ shares—from his point of view, of course, it is pretty good business—and he suggests that the shares should be issued at £1 10s. per share. In other words, a profit of 50 per cent. is made on every share. Those shares are taken up by the Government. A very fine way of carrying on, because last year we gave the Minister the right to take up shares, and this year the Minister comes here and asks for money to take up the shares at £1 10s. per share. In other words, the Government at once makes a profit of £2,200,000. It may be good business from his point of view, but is it the right sort of thing to do so far as the public are concerned? Is it the right sort of thing to do to those people who bought shares in this industrial concern at the time when the Minister and his supporters fought that industry tooth and nail? Now, they are selling their £1 shares for £1 10s. I from my side want to ask whether it would not have been better if the Government had given the general public the opportunity of taking up the shares? If we look at the interest on those shares, their value is not £1 10s. but £1 15s. or £2. The Government is able to get the money from the public at the moment. There are a great many people who have money and who do not know how to find a good investment for it, and the Government should give those people the opportunity of taking up those shares and it could then have raised the price of the shares. In other words, the Government could have been in the position that it would not have been necessary for it to borrow £4,400,000 for the purpose of taking up those shares. I want to put that suggestion to the Government. I have not worked this out very carefully, but I think the Minister will agree with me that the interest basis today is 3 per cent. The Government proclaims issues at 3 per cent. Consequently, those shares could have been issued to the public at 3 per cent. That is to say on the basis of 3 per cent. or at £1 15s. or £2, and this would have been taken up without any trouble. The public should have been given an opportunity of taking up the shares in that way, instead of the Government borrowing the money as is now proposed. It would have been of great benefit to the State, and tn addition to that if the public had taken up these shares, the interest of the ordinary man in the street in this industry would have been considerably increased and he would have felt that he must support that industry. It would have encouraged him further to assist in future in the establishment of other industries. The Minister now proposes to carry on in this fashion, but I want to point out to him that his proposal of issuing the shares at £1 10s. is not good enough, and that in that way a large amount of money is lost to the State. In regard to the other portion of the shares which the public can take up I would like to know whether it is his intention to give the Hoggenheimer group an opportunity of getting hold of those shares cheaply. I think the Minister should consider the question of giving the public an opportunity of taking up a large amount of those shares which would mean at the same time that the interest in the industry on the part of the public would be greatly developed. I want to revert to the expenditure in connection with the sending of soldiers to Madagascar and I want to associate myself with what the hon. member for George (Mr. Werth) has said on this matter: We protest most strongly against responsible Ministers and especially the Prime Minister saying things or making statements in this House which we cannot rely upon. One must be able to rely upon statements made by the Prime Minister. That, so far, has always been one of the first principles in this House, and in the past we have always found that if a member of the Government made a statement in public, the people could rely upon that statement. But gradually we have come to find that this Government has begun to violate that good principle, and that it has departed from it. This Government has commenced to depart from that sound principle. I want to express the hope that the Prime Minister as well as other Ministers will take note of this. It seems to me that there are Ministers in the Cabinet who act very frivolously. For instance, they make statements about the forthcoming elections which are absolutely unheard of. They contradict each other and this sort of thing is not only unfair towards this House but it is also unjust to the public as a whole. Even though people may differ from a Minister politically, they still want to be able to rely on the statements made by a Minister. I am sorry that the Prime Minister has misled us so greatly in this respect. He gave us a definite undertaking and in spite of that undertaking he sent troops to Madagascar. I don’t want to go into the merits of the case, I don’t want to go into the question as to whether it was necessary or not, but the Prime Minister should have called us together and he should have given us the opportunity of expressing our opinion. A large amount has now to be voted by us as representatives of the taxpayers without our knowing where we stand. Possibly we may be asked again shortly to vote money for the purpose of sending troops overseas. Are we not to get the opportunity then of expressing our opinion and of voting against it if we consider it necessary to do so? I am not criticising the Prime Minister’s policy very much, but I do feel here that as a matter of fairness and justice to the public and the electorate of South Africa we should be able to rely upon any statement he makes in future, we should be able to rely upon his word. The Prime Minister today is creating a feeling of distrust and suspicion among the electorate and among the public in respect of any statement he makes. Surely that is unsound, it is unfair, and it is unjust towards this House and towards the country.

The only item in the Additional Estimates in which I feel some concern is that which involves the control price of bread and the additional amount which we are asked to vote on that account. This matter, of course, arises out of the policy which was adopted last year. Many of us felt a good deal of concern on this subject last session, and expressed our concern, and I am sure that that concern has been intensified by the fact that the Government on the advice of the Control Board has found itself obliged to increase the subsidy, and not only to increase it but in spite of that increase to allow the price of bread to go up by ½d. per 2 lb. loaf, and that at a time when we are very much worried about keeping down the prices of commodities and the cost of living generally. The public generally, and the poorer sections of the public in particular, to whom the price of bread is a matter of the greatest concern, find that the price of bread has gone up and that in addition the taxpayer is called upon to pay an additional tax to stabilise the price of bread. We have the fact that an additional sum of money is required to subsidise probably the farmer, probably the miller and probably the baker so as to prevent the price of bread going up beyond this extra ½d. per 2 lb. loaf. Last session many of us were concerned and expressed a desire to know to what extent the subsidy then granted was justified. Today the position is even more serious, and I think we are entitled to know to what extent the Board and the Government at the instance of the Board was justified in allowing firstly the price of bread to go up by ½d. and secondly, to subsidise the miller to prevent the price going up further. We are entitled to know whether the price of food, whether the costs to the miller, have gone up to such an extent, and whether the costs to the bakers have gone up to such an extent as to justify the payment of this subsidy. I feel that if these difficulties have arisen the proper course was to take over the whole of the wheat production and the rationing of wheat to the millers, and the rationing of flour to the bakers, and then see whether by limiting the profits to the millers and the bakers the price of bread could not have been kept down, rather than putting an additional tax on the public. At any rate the public are very much concerned and I think it is the duty of the Minister to give us the fullest possible information to show that every possible penny has been justified by the additional costs of production, and that not a single penny will go into additional profits.

When I study these Additional Estimates of Expenditure they rather tempt me to compare them with last year’s Additional Estimates of Expenditure. Last year this self-same Minister came along with his usual air of self-satisfaction, patting himself on the back because he claimed to have achieved certain things in his Additional Estimates. But if one were to apply that same test to this year’s Additional Estimates then I do not know whether there can be the same degree of justification for such a feeling of self-satisfaction by the Minister as he displayed here today. Let us first of all look at the savings effected in the Revenue Account. If we look at those we find that there has been a steady deterioration, that there has been a sort of rake’s progress, a sort of progress in the wrong direction in the past three years. In 1941 there was a saving of £1,700,000 on the Revenue Account. In 1942 it dropped to £1,365,000, and if we look at the Revenue Account of this year we find that although a large additional amount is asked for, there is not a penny which can be placed against that amount by way of savings. Last year the Minister came here and said that all the additional things which he had to ask for, both on Revenue and Loan Account, were more than compensated for by savings which had been effected. And it was so. Last year the savings were sufficient to cover all the additional expenditure; this year the savings are short of £19,340,000 to achieve the same object. If one looks at another aspect of the matter one finds that the Minister was very proud of the fact that out of war expenditure of £80,000,000 last year, £40,000,000 came from Loan Account, and £40,000,000 came from Revenue Account. Now that we see these Additional Estimates we find that the original magnificent division has not been maintained at all; we find a difference now of about £9,000,000—£9,000,000 more has been placed to Loan Account than to Revenue Account, so far as war expenditure is concerned. Last year the Minister came here and boasted that out of the total estimate only 30 per cent. had come out of Loan Account, but we now find that in actual fact 42 per cent. came out of Loan Account, namely £67,500,000 out of a total estimate of £160,000,000. Surely these are the estimates for the same year, but originally the Minister represented the position in a manner which has now been proved to be totally wrong, and his representation of the position which he was so proud of now disappears like the morning mist before the sun. We therefore find that if we make this comparison we are going backwards so far as the Ministers estimates are concerned, so far as the soundness of these Estimates is concerned. Now he comes here and he gives us to understand that he is very proud of the fact that we can get this extra £16,000,000 expenditure in respect of the war without imposing an extra penny by way of taxation and by only borrowing £2,500,000, and he pretends that the achievement is a very great one. To him it proves the soundness and the buoyancy of the country’s finances in a most wonderful way, but if we analyse the reasons why it is not necessary to obtain the £16,000,000 in the usual manner we find that there is nothing meritorious about it, and that it does not go to prove the buoyancy of the country’s financial position. The Minister said that in the first place he had a balance on Loan Account which he had not expected. That, therefore, is one of the unexpected things which helped him. He further said that he could use last year’s surplus. Furthermore, he had apparently completely under-estimated his loan receipts to an amount of £3,600,000. Surely it is not to the credit of the Minister of Finance to get up here and to admit that he has under-estimated his loan receipts by such a tremendous amount. A fourth factor which has assisted him in achieving this result is a saving of £2,000,000 on Loan Account. Now, I should like to know whether this saving of £2,000,000 on Loan Account has been in respect of other than war expenditure?

Yes.

Exactly. It is non-war expenditure. So there we have a further retrogression of non-war requirements for the sake of war expenditure. These £2,000,000 are simply taken and although the money was voted for other than war purposes it was simply transferred to war expenditure. During the last few years the war has overshadowed all our Budgets. The increase in war expenditure has been tremendous and totally out of proportion to the increase in normal services. The position is alarming. We find that £2,000,000 are simply taken from the Loan Account and are used by the Minister for war purposes and we find that an expected surplus of £3,500,000—again an under-estimate of which the Minister surely cannot be proud—is taken for war purposes. The poor taxpayer feels very differently about this matter, because it means that an additional £3,500,000 for war purposes has been taken out of his pockets and if we look at the way the money is taken out of the taxpayer’s pockets we see that it has been done in a way which does not give proof of any farseeing policy in regard to finance. It has been done in a most shortsighted manner, in a manner calculated to kill the goose that lays the golden egg. On the one side the Minister wants to encourage the development of industries, and a Development Corporation is established, but on the other hand he is by means of his taxation proposals destroying the new industries, and that at a time when those industries should be strengthened so that they will be able to meet the depression which undoubtedly will come after the war. They should be placed in a position to enable them to build up reserves during a time like the present, out they are being deprived of that opportunity. On the one hand the Minister wants to promote industrial development, but on the other hand he is engaged in placing obstacles in the way of such development. For instance by the way in which he has squeezed this £3,500,000 out of the taxpayers’ pockets, and then he comes here and he proclaims that the country’s finances are in a flourishing condition. I should remind the Minister of his own words when he introduced his Estimates last year, when he warned the House that the existing prosperity was a false prosperity and was not a real prosperity, and he used these notable words that the Union of South Africa was living on its capital. Those words are just as true today. This so-called prosperity is a temporary prosperity, it is only a sham prosperity and the Minister of Finance should be the very last on the ground of such a temporary prosperity to put a picture before the country such as he did today, to give the impression that the country was in a flourishing position, and that anyone who warned the people that we were following the wrong road so far as our finances are concerned, was voicing ill-founded and unsound criticism. No, we expect the Minister to be the very man who should—I don’t say proclaim a pessimistic doctrine—but who certainly should not be guilty of over optimism in regard to the finances of the country and the country’s financial future. The Minister stated that so far as our finances were concerned we had done “fairly well so far.” It is typical of his whole attitude—he used the words “so far”. He forgets the bad times which are ahead of us. “So far” we have done fairly well, but at the expense of the financial future of our country and the results of this policy of ours which he is so proud of will be that we shall have to pay very heavily in the years after the war when the depression sets in, because that depression will come as surely as night follows day. Here we have an additional amount of £21,000,000 of which £16,000,000 is to be spent on Defence only. And that may not even be the end of the story. That will bring our Defence expenditure for the year to a total of £96,000,000. Surely it must make any individual who takes an interest in the economic future of South Africa feel uneasy and alarmed. If we reckon that the total expenditure in respect of the 1914-1918 war was less than half of the amount which is now being spent in one year on the war, we can see no cause for satisfaction, we can see cause only for anxiety and care so far, as the future is concerned. Although the Minister last year intimated that he realised that this prosperity was only temporary and false, he has now done much to dispel that impression and to make the public believe that all is well, and that the financial future of this country is safe, and that we can go on spending and spending. He, who is the Apostle of thrift, today by his words created the impression that there is no need for thrift, and that all is going well. By what he said today he has taken all meaning out of the serious words which he addressed to the country last year.

I have not risen with the object of criticising the figures of the Hon. the Wizard of Finance, but I do want to refer to item D, Vote 23, Agriculture, controlled price of bread, £579,000. Now, the Minister will recollect that in the draft estimates submitted last year there appeared an item “Assistance to wheat farmers,” which he subsequently altered to “Expenditure in connection with the stabilisation of the price of bread”. I took exception at the time to that change, and I take exception again to the nomenclature of the item under consideration. It is within the recollection of most of us that we saw statements in the Press during the last Session to the effect that the wheat farmers of the Western Province had passed a resolution that they would not put a plough into the ground until the Government had guaranteed them 30/- per bag for their wheat. Subsequently to that there was an announcement to the effect that the price of wheat would be 30/6d. per bag and in the estimates for last year we passed quite a large amount of money in that connection. Now, during October of last year, there was a statement to the effect that an additional £2,000,000 was required for assistance in some way or another to wheat farmers of which £1,000,000 was to be found by the Government, and another £1,000,000 would be raised by increasing the price of bread by ½d. per loaf from the 1st November. Now, we have the figure of £579,000 here. I understand that a further amount is contributed by the Wheat Control Board and that on the estimates during the past year and now this estimate an amount of £1,750,000 is involved. Now, who gets this money? Is it the consumer? I don’t think so. Is it the miller? I don’t know. Or is it the wheat farmers who get this?

The hon. member must confine himself to the reasons for the increase.

I think I have done so so far. The only conclusion I can come to is that the reason for this increase is that the wheat farmer is getting a larger price than 30/6d. for his wheat. One must assume that the increase is due to extra payment to the producer and if that is the case then the description of the vote “controlled price of bread and stabilisation of the price of bread” is not correct, and it should appear under its proper heading, “Assistance to wheat farmers.”

May I first of all just say one word in regard to the remarks of the last speaker, and in regard to the remarks of the hon. member for Troyeville (Mr. Kentridge). That one word will merely be to the effect that I do not intend to deal with these remarks, but they will be dealt with by my colleague, the Minister for Agriculture, during the Committee stage.

†*It was clear that my hon. friends opposite were not disposed to conduct an exhaustive debate on this motion. The hon. member for George (Mr. Werth) quite rightly remarked that this was not really a suitable opportunity for a general debate. There will be other opportunities for that and we shall probably hear a great deal more from our hon. friends about the financial condiditions of this country. I therefore take it that it is not his wish that we should now go into the general question but that we should confine ourselves to the details of these estimates, which necessarily can be better discussed during the Committee stage. He made a few remarks, however—and the hon. member for Fauresmith (Dr. Dönges) followed him in doing so—about the position in connection with taxation. He spoke about the manner in which we were squeezing everything we could out of commerce and industries, and he said that our taxation system was such that business concerns were no longer able to build up any reserves. I wonder whether my hon. friend has ever looked at the figures of bank deposits. If he looks at those I should like to know from him how he can reconcile that fact with the contention that commerce and industries are being so squeezed that there is no money left for the purpose of building up reserves. Where did those deposits come from? If all the money goes into taxation those deposits could not increase in the way they have been doing. My hon. friend also referred to the subject of our having sent an army to Madagascar. May I in this connection put him right on one point. I did not say that that expenditure in itself was the most important factor in the increased expenditure that had been incurred. I referred to the general expenditure in connection with coastal defence. It was a factor, however, although not a very important one. In regard to the general question connected with the sending of an army to Madagascar there will be another opportunity for the hon. the Minister of Defence to deal with that matter himself and I do not propose dealing with it. The hon. member also put certain questions to me about the Committee on which he is still serving today, namely the Committee on Defence Contracts. The position is that that Committee presented its first report in November. It presented its second report in December, so I believe, and I was notified at the time that its third report would also be presented probably before the opening of the Session of Parliament. This third report has not yet reached me, but I learnt from the Chairman that it is almost complete and that it will probably reach me shortly.

Tomorrow.

Then it will still have to be translated. Anyhow, when I heard that the Committee’s work would probably be completed before the start of the Session I expected that all three reports would be presented and that it would be possible to lay them all on the Table of the House at the beginning of the Session. In the meantime the first and second reports have been referred to the Department concerned, namely to the Department of Defence, which in consultation with the Treasury, is going into the recommendations which have been made. This is of importance particularly in regard to the first report and not so much in connection with the second one. Meanwhile, all those points have been gone into. It was our intention to lay those reports on the Table at the beginning of the Session and to move that they should be referred to the Select Committee on Public Accounts. The whisper which my hon. friend had heard therefore was quite correct. The Select Committee on Public Accounts was the body which asked for the appointment of a Committee, and I thought that we should refer those reports to that self-same Committee. The Select Committee can then dispose of the matter as speedily as possible, and as soon as they have concluded their deliberations the matter can be discussed in this House. I don’t think my hon. friend will find that there will not be adequate opportunity for him to voice his views in regard to this matter. Then the hon. member for Fauresmith mentioned a few points which it is perhaps not necessary to say much about before the Committee stage. May I just say that he has made the mistake of confusing Loan Revenue with loans. The fact that we vote money on Loan Account does not mean that by doing so we have to borrow that money. If perhaps in the light of this fact he were to study the figures which I mentioned last year again, in the light of the figures which I have now mentioned, he will find that the position is not as he put it. As a matter of fact I have already told the House that although we are making an additional £12,500,000 available for Defence on Loan Account, we shall probably not have to borrow more than £2,500,000 for that purpose. Consequently, there is a great distinction between the Loan Account and the money which is being borrowed. Then my hon. friend complained that in conflict with what I had said in the past I had proclaimed now that the country was so prosperous. What I did refer to was the buoyancy of our revenue. He said that I had not given him proof of the buoyancy of the country’s revenue, but I did give abundant proof of this. If our ordinary revenue sources can produce £3,500,000 more than estimated, if our Loan Revenue resources can bring in £3,600,000 more than the estimate, and if our surplus of last year is £1,500,000 more than the Estimate and if we have a surplus on our Loan Estimate which we had not expected, then surely that is abundant proof of the buoyancy of our revenue.

But it is not proof of the soundness of our finances.

Well, my hon. friend said that there was no proof of the buoyancy of the country’s finances. I say again in the light of those figures that there is abundant proof of that buoyancy.

Buoyancy means that a shock can be resisted.

Where we are spending £16,000,000 and £13,500,000 of that can be found without our having to borrow, surely that is evidence of the fact that we can stand a shock. I only have to refer now to the points raised by the hon. member for Prieska (Mr. Geldenhuys). He asked whether the additional amount which we now have to find for the additional pay to soldiers is a recurrent amount. Well, insofar as the soldiers are there they have to be paid. And then we should not forget that the additional soldiers who are in service today have not been in the service for a full year yet. Next year they will be in service for a full year, and so far as that aspect is concerned my hon. friend cannot look forward to a reduction. But it would be premature to say now what the general Defence position is going to be and what the different items are going to be. My hon. friend will have to wait for the general estimates before he can get any information on that point in this House. My hon. friend also put a question about the iron and steel industry, and he said that by this proposal we were imposing a burden on the taxpayers of the country. But he also said that the shares which we were buying for £1 10s. were worth £2. These things cannot both be correct. If we are buying shares for £1 10s. which are worth £2, then the taxpayers are doing good business and we are not imposing any burden on the taxpayer.

Cannot you issue those shares to the general public?

But the taxpayers now get the benefit, and not the public, but my hon. friend doubted whether the issue price of £1 10s. was the correct issue price. If the price on the share market is taken then it would seem that the shares are worth more, but if we have to sell 4,000,000 shares, our doing so would have a very considerable effect on the market price. The price on the market may be £2 but if we throw 4,400,000 shares on the market we are not going to get £2. It practically amounts to this. Today the Iron and Steel Corporation pays 6 per cent. on its shares. As my hon. friend has rightly said, the Government can borrow money at 3 per cent., but then there is the guarantee to the investor that he will receive 3 per cent. every year. The Iron and Steel Corporation cannot give such a guarantee. There is an element of risk and my hon. friend cannot expect the general public to invest money at 3 per cent. in such an enterprise if they only get 3 per cent. The issue amounts to an investment of 4 per cent., and if we look at the matter in the proper light I think we must come to the conclusion that the arrangement made is a fair one. There is, however, a more important point which was raised in consequence of the remark of my hon. friend opposite, and that is this—whether we should have followed the policy of getting the public to take up the shares, or whether the Government should have done so. I believe it was the general feeling in this House last year that, if it was at all possible, the Government should retain the control over this industry. I think we acted in the spirit of the feeling of this House when we decided to avail ourselves of the option which we had. I think I can say this without going too deeply into the matter, that especially in the post-war period it will be very important for the Government of the country to be able to exercise such a degree of control over this great industry.

Motion put and the House divided:

Ayes—70:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Alexander, M.

Allen, F. B.

Bawden, W.

Bell, R. E.

Blackwell, L.

Botha, H. N. W.

Bowen, R. W.

Bowie, J. A.

Bowker, T. B.

Carinus, J. G.

Christopher, R. M.

Clark, C. W.

Collins, W. R.

Conradie, J. M.

Davis, A.

Deane, W. A.

De Wet, H. C.

Dolley, G.

Du Toit, R. J.

Egeland, L.

Fourie, J. P.

Friedlander, A.

Gilson, L. D.

Gluckman. H.

Goldberg, A.

Hare, W. D.

Hayward, G. N.

Henderson, R. H.

Heyns, G. C. S.

Hirsch, J. G.

Hofmeyr, J. H.

Howarth, F. T.

Humphreys, W. B.

Johnson, H. A.

Kentridge, M.

Klopper, L. B.

Lawrence, H. G.

Long, B. K.

Madeley, W. B.

Miles-Cadman, C. F.

Moll, A. M.

Molteno, D. B.

Mushet, J. W.

Neate, C.

Payn, A. O. B.

Pocock, P. V.

Reitz, L. A. B.

Robertson, R. B.

Rood, K.

Shearer, V. L.

Smuts, J. C.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Steyn, C. F.

Steytler, L. J.

Strauss, J. G. N.

Sturrock, F. C.

Sutter, G. J.

Trollip, A. E.

Van Coller, C. M.

Van der Merwe, H.

Wallach, I.

Wares, A. P. J.

Warren, C. M.

Tellers: G. A. Friend and J. W. Higgerty

Noes—44:

Badenhorst, C. C. E.

Bekker, G.

Boltman, F. H.

Booysen, W. A.

Bosman, P. J.

Bremer, K.

Conradie, J. H.

Conroy, E. A.

De Bruyn, D. A. S.

Dönges, T. E.

Fouche, J. J.

Fullard, G. J.

Geldenhuys, C. H.

Grobler, J. H.

Kemp, J. C. G.

Le Roux, P. M. K.

Le Roux, S. P.

Liebenberg, J. L. V.

Lindhorst, B. H.

Loubser, S. M.

Louw, E. H.

Olivier, P. J.

Oost, H.

Pieterse, P. W. A.

Schoeman, B. J.

Serfontein, J. J.

Strydom, G. H. F.

Strydom, J. G.

Swart, A. P.

Swart, C. R.

Van der Merwe, R. A. T.

Van Nierop, P. J.

Van Zyl, J. J. M.

Venter, J. A. P.

Viljoen, D. T. du P.

Viljoen, J. H.

Vosloo, L. J.

Warren, S. E.

Wentzel, J. J.

Werth, A. J.

Wilkens, Jan.

Wolfaard, G. v. Z.

Tellers: J. F. T. Naudé and P. O. Sauer.

The Committee has to consider the Estimates of Additional Expenditure to be defrayed from Revenue and Loan Funds during the year ending 31st March, 1943.

I move—