I move as an unopposed motion—

Last Wednesday, after the Minister had reviewed his Administration of our financial affairs, for the past year, and after he had told us about his plans for the new year, he found it necessary at the conclusion of his Budget speech to pause for a moment to behold his own handiwork and then strangely enough the Minister himself started calling his Budget names. He called it a drastic Budget for instance. I should like to tell the Minister that the public in this country have also found it necessary to call the Budget names, and they have been applying some epithets to it. They have even called the Minister himself some names. Some of those names I do not wish to mention in this House, but there are a few which I do wish to mention. One hears it so often, that it seems as though it is going from mouth to mouth. First they talk about the Minister as Hofmeyer, the spendthrift; Hofmeyr, the extravagant and Hofmeyr, the man of fine words but of very weak financial administration. No Minister of Finance has ever inherited as much, no Minister has ever inherited under such favourable circumstances as he has. When he became Minister of Finance four years ago he found the Exchequer in perfect order. Everything was in perfect condition; everything was provided for. Only four years have passed and nothing is left of his heritage. Everything has slipped through his fingers; everything has been spent. If in life a man inherits wealth and he dissipates his heritage in the course of a few years, he is judged most unfavourably. A man like that is looked down upon with contempt, and that is the judgment which the public are beginning to express in regard to the Minister of Finance. But it does not stop at “Hofmeyr, the spendthrift”. Since his last Budget speech his tone has become more bitter. I was surprised to hear it said by prominent commercial people in Cape Town that the Minister had introduced a “scavenger Budget”.

Are you referring to last year’s Budget or this year’s?

I do not want to describe the Minister’s Budget today in that language, but this is what I want to say today. In this Budget of his the Minister does not prey on the big people, he does not prey on the rich and the strong, but unfortunately he preys on the weaker ones. He preys on the people who cannot hit back, not on the people who have at their disposal a powerful Press in this country. Those people he is afraid of. Here in his Budget he only preys on the little man, the man drawing a small salary, the type of man who is spread over the whole country, who is unorganised, unable to defend himself, or to look after himself. Those are the people on whom the Minister preys. And he does so apparently in the form of small amounts, a ½d. on the letter of the poor man, a 1d. on his glass of beer, 2d. on the cigarettes he smokes.

Bits and pieces.

Yes, bits and pieces. If one wants to go to the seaside every year for the sake of the health of one’s family the Minister taxes such a person. His income tax is increased by 66 per cent. That is the small man. The Minister at the beginning of his speech said that his Budget was a challenge Budget, a challenge to the men and the women of South Africa, and he put the question: “Do you prefer to be treated lightly and to be handled with kid gloves; do you prefer to be led through green pastures, or do you prefer to pass through dangers and privations, to show ever increasing courage and willingness to sacrifice.” Let me in turn put a question to the Minister. When he spoke of a challenge to the men and women of South Africa, whom was he thinking of? Surely not of the people up North who are already braving dangers and privations—without there actually being many of the children of Ministers and others in the fighting lines.

How dare you say that?

Or did he, when using those words, think of the people drawing double salaries? Was the challenge directed to them? Was the challenge directed to those people drawing double salaries who during the last four years have been strolling through pastures green and who today are earning more than they have ever done before, and of whom many are probaly hoping that the war will continue? Can the Minister tell us whom he challenged in his Budget? I have visited the ammunition factories in Johannesburg; young girls are working there under the Department of Defence for 3s. 6d. per day, but under the self same Government there are building contractors who made £36,000 profit in one year without running the slightest risk. Those are some of the people who for four years have been enjoying life in pastures green. If the Minister wants to challenge anyone why does he not challenge those people? That is the charge, that is my indictment against this Minister and against the Budget. No, the Minister does not challenge them. In times of peace we are accustomed to inequalities among the population; we are accustomed to contrasts between poverty and wealth, abundance and want, but we cherish the hope that in a moment of danger, in a moment of war, in a moment of emergency, some of that inequality would disappear. All the war has brought us, however, is that those inequalities have aggravated a hundred times, have been doubled and re-doubled. It is not the children of the rich man who have gone. As a result of political influence they have been given soft jobs in the offices; it is not the people who are making money in their shops—Jews and others—who are at the front. No, they are here, and the inequality and injustice which we are fimiliar with in times of peace—these things are aggravated today, and they are being perpetuated in this Budget. All this Budget is doing is to aggravate the position. The poor man who suffered hardships in the past as a result of the war is having greater hardships imposed upon him, but the rich man who was making money before the war is making twice as much today. For the one it is blood, tears and sorrow; for the other, money, money and more money. That is my indictment of the Government and the Budget. Now, let us deal with this Budget in a little more detail. The Minister got up here last Wednesday and said that he was closing the current financial year with a surplus of £1,420,000. He did say that he did not really want to call it a surplus. Even the Minister was ashamed to call it a surplus and I can quite understand that the Minister was a bit ashamed to call it that, but still the impression has been created in the public mind that £1,420,000 is over, and the impression in the mind of the public is that everything in the garden is lovely. And now we come to the new financial year, and the Minister told us that the country’s administrative expenditure, its current expenditure, was £100,000,000 and the revenue on the existing basis of taxation was estimated at £91,000,000, thus leaving a deficit of £9,000,000. So the Minister last Wednesday, wanted to give the House and the country this impression: “Now the task before me is this—I am £9,000,000 short, and if I can find that £9,000,000 then it means that we are paying cash for our current expenditure.” I tried last Monday, and I want to again today to show that the time has come for this House to object most strenuously against this continuous misrepresentation of the country’s financial position. There is only one way, one correct way, of drafting a balance sheet — even though the Minister pretends to be the only man who knows anything about balance sheets. And that way is to put current expenditure on the one side, and only capital expenditure on the other side. I feel that business men, like the hon. member for Maitland (Mr. Mushet) and the hon. member for Pretoria, Central (Mr. Pocock) will agree that that is the only business way of making up a balance sheet. All current expenditure on the one side and capital expenditure on the other side. That is the way we have kept our books so far. We have only known two types of expenditure, capital expenditure for the development and building up of the country—they are usually investments in something productive and interest bearing—and we feel that this is something which one can borrow, and for that reason we have had the loan estimates. But on the other hand there is the current expenditure. As against that one puts the current revenue for the year. Everything that is short is a deficit for the year. The balance sheet has to show this honestly if it wants to be honest and correct, and I want to tell the Minister that that is the way his predecessor set about things. Although we on this side of the House differed from Mr. Havenga in certain respects, because to our mind he was too orthodox and too conservative …

In times of peace.

We are coming to that. We found fault with him because he was too orthodox and too conservative, but we always had the feeling that Minister Havenga submitted a balance sheet to the country which was true and honest. He knew something about business, and there we have his successor. We know, of course, that he has a very high opinion of himself. He imagines that he is the one man who knows something about finance—that is the present Minister of Finance, and he does not hide his light under a bushel. But that high opinion of himself is also restricted to himself. Business men and traders outside say openly today that the Minister knows as much about business as I know about the moon. He may perhaps have studied all kinds of text books, and he may be able to quote from those text books, but that is the judgment which people have formed of his practical knowledge. That we experienced very forcibly in this House last Wednesday. The Minister got up here last Wednesday. It is the great event of every session when the Minister of Finance gets up, not as a party man, not as a politician, but as the head of the Exchequer, to make his budget speech. That is the occasion when he speaks to the people. The people know that he has in his hands the fate of the whole of commerce and industry in the country. They all sit and wait to hear what he has to say, and what did we get last Wednesday? I must say that so far as I was concerned it was nothing short of a comedy. The Minister got up and in a most arbitrary manner fixed his current expenditure at £100,000,000. He was dubious first of all as to what he should do. He was not sure. He firstly wanted to fix it, at £92,000,000. I don’t know what happened. I don’t know whether the Minister’s conscience worried him, I believe that at the bar the lawyers contend that if one wants to tell a lie one has to do so in a genial manner. The Minister felt that if he had put his expenditure at £92,000,000 everybody would be able to see through it. He thereupon finally decided to fix it at £100,000,000. Well, his revenue was estimated at £91,000,000 so he had to find £9,000,000 and then the game started. I must say it was amusing. The Minister tried to give us the impression here that he was a man struggling with a great problem. He was determined to do his duty as Minister of Finance. He was only £9,000,000 short, and if he could find that, all was well. And then we had this comedy; there he was labouring and sweating to try and find this £9,000,000. He takes a bit here and a bit there and the £9,000,000 disappears in front of our eyes. It becomes less and less, and after he has announced the final tax he exclaims, “Ah, look, now there is only a bagatelle of £500,000 left, my task is over.” And then the Minister sat back in his chair and he expected all of us to enjoy the game with him. Now, what is the true position? I think it is right that we should say clearly what it is—we closed off the last financial year with a so-called surplus of £1,420,000. The actual position is that our total current expenditure, apart from capital expenditure, was £150,000,000. Of that we paid in cash from revenue funds and from loan funds an amount of £106,000,000 with the result that there was a deficit on the ordinary balance sheet—not a surplus of £1,420,000—but a deficit of £44,000,000. That is what the balance sheet looked like in reality, there was a deficit of £44,000,000. And what of the New Year? The current expenditure does not amount to £100,000,000 but it amounts to £148,000,000. The cash which the minister expects to get to pay for that by means of his new taxes is £100,000,000. That is to say, that he starts the new year with the prospect of a huge deficit on current account of £48,000,000. We are closing the year with a deficit of £44,000,000 and we are starting the new year with an expected deficit of £48,000,000. There is only one way of representing our public finances honestly and frankly to the people and that is not by talking about a surplus, not by talking about a bagatelle of a deficit, of £500,000. Every business man, if he means to be honest, will put up his balance sheet in a different way. And if the Government wants the people to know what its war policy costs South Africa then it can only be put before the public in that way. On our current account there is no such thing as a small surplus, but there is a huge deficit of £44,000,000 on the year drawing to a close, and an expected deficit of £48,000,000 for the year which is commencing. These facts naturally must direct our attention to our public debt and I feel that nobody in this country can fail to get uneasy at the tremendous size of our public debt. When the war started we had a public debt of £287,000,000. At the end of March of this year it will have increased to £426,000,000; the Minister told us that he expected that he would have to borrow £55,000,000, and the prospect therefore is that our public debt at the end of the new financial year will stand at £481,000,000. As against that there is £8,000,000 in the Redemption Fund at the moment. Probably £1,000,000 will be added to that in the New Year, so that there will be a total of £9,000,000 which can be deducted from the public debt on the 31st March, 1944.

The Redemption Fund is £10,750,000.

The Auditor-General’s report says that it is £8,000,000.

His figures are for the previous year.

He has saved a drop out of the bucket.

Very well, let us put it at £10,000,000. What is the position? When our total public debt was £287,000,000 the annual interest charge from Revenue Funds amounted to £11,600,000. At the end of the financial year it will be £426,000,000 less £10,000,000, which is in the Redemption Fund, which leaves a little over £410,000,000. Calculated at 3½ per cent. it means far over £14,000,000. And at the end of the financial year for which we are estimating now the public debt will be £470,000,000. At 3½ per cent. the interest charge is more than £16,000,000.

Why 3½ per cent.?

That is the average. There is not much foreign debt. So far as that debt is concerned the figure at the moment stands at £3.7 per cent. The average interest according to the Auditor-General’s report, is 3.378.

An amount of £14,250,000 is asked for on the Estimates in respect of interest of which the Railways pay £6,000,000.

I am talking about the position at the end of the new financial year. If the Minister is correct, that he will have to borrow £55,000,000 in the new financial year, then the debt at the end of the year will be £470,000,000. I should like the House to realise that everything that has been added to our public debt since the outbreak of the war has been unproductive debt; it is not production debt—it does not produce any revenue.

Not all of it.

Since the start of the war our debt has increased by £148,000,000. We have £10,000,000 in the Redemption Fund today. Consequently, our unproductive debt has increased by £138,000,000. Now, there is an important point in this respect and the House cannot get away from it, and that is the question as to what provision we intend making for the redemption of the unproductive debt. In 1926 our public debt was £220,000,000, and our unproductive debt — part of that total debt — was £55,000,000. The Nationalist Party Government of those days felt that we could not allow that unproductive debt of £55,000,000 to remain in the air, but that we had to devise a scheme so as to put aside every year sufficient from revenue funds in order gradually to wipe out that unproductive debt over a period of years, and as a result of that policy Act No. 50 of 1926 was passed. That Act established a redemption fund and the intention was that three different kinds of contributions were to be made to that Redemption Fund in order to cause it to grow,—first of all a fixed amount was to be put to that Redemption Fund every year; secondly, an amount equivalent to the interest on the money in the Fund was to be paid in, and thirdly, any surplus which the Government would have would be paid in to that fund. All this money was to be put into the Redemption Fund. Minister Havenga, the present Minister’s predecessor, was particularly keen to try and wipe out the unproductive debt, with the result that he paid all his surpluses into the Redemption Fund. Some years the amount was large. In 1937/38 Mr. Havenga paid in an amount of not less than £3,698,000. What is the position today? When our public debt was £220,000,000, our unproductive debt was £55,000,000, and the then Minister was very anxious to get rid of it, and he paid one year alone £3,698,000 into the Fund. Our public debt today is £426,000,000 and of that the unproductive portion amounts to £138,000,000, and the amount which now-a-days is paid into the Redemption Fund does not exceed £900,000. When the unproductive debt was £55,000,000, £3,600,000 was paid off in one year; now that it is £138,000,000 we are only paying in £900,000. If we want to increase the Redemption Fund in the same way as the Nationalist Party Government was prepared to do, then our contribution to the Redemption Fund today should not be £900,000 but £1,750,000, and if the Minister wants to place a clean balance sheet before the country in accordance with the Act of 1926, then he has to show this on his balance sheet. All I want to say is that we cannot be indifferent in regard to the ever increasing unproductive debt. One thing is certain, that the provision we are making for redemption is quite inadequate. We must be prepared to make greater provision, and if we are unable to pay in cash, then at least we should be honest in our balance sheet.

How can we fight the war without it. Surely you should take account of hard facts.

Now let me come to the war. What is the position today? But before I deal with that, just let me summarise the position again and say that our public debt today amounts to £426,000,000 less the amount of money in the Redemption Fund, and of that total debt £138,000,000 is unproductive debt. On the present basis of our provision for redemption it will take us 138 years to pay off the unproductive debt which we have at the moment.

Rather that than be under Hitler.

As soon as we show up the true financial position of the country the hon. member for Kensington, and the others who follow him, shout “war, war.” Even the Minister of Finance in his Budget speech felt that he had to beat the big drum. That is why he said: “This is a war which not only touches the root of our political principles, but also of our conceptions of life.” “This is a war of the greatest importance, not alone for humanity as a whole but our freedom and our very life are at stake.” It is because the Minister feels himself constrained to drag in the war question that I am going to try and say in a few words what the attitude of this side of the House is in regard to the war and the war expenditure. When war broke out we said it was not our war. England wanted to make war about the Danzig Corridor and if England wanted to do so well, it was England’s war. That was our attitude, and we said that we were going to remain neutral.

Like Holland and Belgium.

We on our side did not hope or did not wish for an out and out victory for one or other side, because our experience has taught us that no great nation if it wins a war out and out knows how to conclude a just peace. England in 1918 together with America won the war out and out. England had the opportunity but they did not take their opportunity and they made an unjust peace, and the world and humanity are suffering from that today. And we do not know whether Germany will do any better. All great nations are selfish and ambitious, and once they have won they don’t know how to make a just peace. But I must say honestly that my attitude towards the war has changed somewhat. Russia has come into the war in the meantime, and Russia has not only shown her power but her preparedness for war. The Prime Minister cannot deny the fact that Russia today dominates the world position so far as the Allies are concerned. Now, let me explain my attitude. We know that if Germany loses the war then Russia wins it, and if Russia wins then Russia is not only master of Europe but it will soon be master of the whole world which will mean a world revolution, and in South Africa it will mean a black revolution. My attitude today is, and I do not hesitate to say it to the Prime Minister, that when he asks me to give my vote in favour of £96,000,000 for the war I feel that every penny I am voting for the war is a contribution by South Africa to let Russia win; every penny is a contribution by South Africa to bring the black revolution, nearer day by day, in our own mother country. That responsibility I am not prepared to take upon myself. I refuse to do so, and I know that all of us on this side of the House refuse to accept that responsibility. I want to say this to the Prime Minister, that when the day comes when, with Russian help the non-Europeans will try in South Africa to get control over the Europeans in South Africa, the day the black revolution bursts out here, when our churches will be burnt, and our people’s farms taken away, and the Natives will dominate this country, the Prime Minister will stand condemned before the Tribunal of History. The Minister of Finance read some beautiful words to us. I agree with him that those things are at stake, but the position is this, he is fighting for the destruction of all that is dear and sacred in our national history, whereas we stand for the preservation and maintenance of all these things. I hope I have now answered the hon. member for Kensington as far as the war is concerned. Now let us come back to our war expenditure. I want to put forward two contentions in regard to our war expenditure. My first contention is that our war expenditure is excessively high, and my second contention is that the country’s total expenditure to-day exceeds the ability of the population to bear it, and if we go on in that way I have no doubt that South Africa is going to be faced with an economic collapse. I said in the first place that our war expenditure was too high. In the first six months the war expenditure was £4,000,000. Then it went up to £60,000,00 in the first year, then the next year £72,000,000, and for the past financial year £80,000,000 was asked, and that turned out to be only a instalment, because the Minister afterwards asked for another £16,000,000 which brought the war expenditure up to £96,000,000 for one year; and the Minister admitted in a reply he gave to me to a question that other money was also paid into the war revenue account, to an amount of at least £5,500,000. In other words, for the past year our war expenditure has been over £100,000,000. I want to put forward this contention here today, that this expenditure has gone up not because our army up North has grown so much, but because the spongers (“kribvreters”), the double salary drawers, have increased in number. That is why our expenditure has gone up. The Government can bring down the expenditure to £60,000,000 tomorrow without doing any harm to our fighting forces up North. It is those people feeding at the manger of State (“kribvreters”) who are costing the country such a tremendous amount of money. I am grateful that I had the opportunity of serving on the committee which investigated those cost-plus contracts. My experience has shewn me that if the Defence Force does anything in connection with the war it does so in the most expensive, the worst and most extravagant way. If any military work has to be undertaken they use a system which in every other country of the world has been rejected as wrong and bad, but we adhere to it. We use the worst of bad methods. The Government has decided to abolish the cost-plus system, and I understand that a conference is now to be held in Cape Town in consequence of the threat by the Society of Masterbuilders not to accept the system recommended by the Committee. I think we shall be grateful if the Prime Minister will tell us whether he is going to give way, whether he is going to capitulate to the threat of the Masterbuilders, or whether in the interest of South Africa, and in the interest of pure administration, he is going to stand firm. Everything Defence does is expensive, extravagant and bad. That is my experience, and that does not only apply to military work. One official occupying a key position in the Defence Force complained that he had to do his work with the sick, the lame and the lazy of this country. He said he had all the sick, the lame and the lazy to do his work.

That’s because he cannot get anyone better.

It is spongers whom I have been speaking about. It is my considered opinion that the Government can bring down the expenditure to £60,000,000 without doing the least harm to the army forces, if he does want to carry on the war. [Time extended]. The second point I want to make is this, that the country’s war expenditure has exceeded the ability of the country to bear the burden. I have here two white papers which the Minister issued in the past two years. I have scrutinised the figures very carefully, and what conclusion can one come to? I think the Minister himself also feels it, and at the back of all his boastfulness in this House the buoyancy of our revenue and the inherent soundness of the figures, he also feels that we have reached the peak of our revenue and that the revenue is dropping.

Of the mines, yes.

The hon. member says of the mines. Let me just mention a few figures. I am first of all going to compare the mines, the revenue from the mines. In 1941—’42 the Minister of Finance got revenue from the mines to an amount of £15,000,000. That is what he expected in his Budget. What does he expect today under that heading? He is only expecting £12,000,000. The estimated revenue under the one heading has dropped by £3,000,000. The special gold mining contribution has also come down by £1,000,000. So far as the gold mines alone are concerned, therefore, the Minister’s revenue is coming down by £4,000,000. The hon. member for Kensington says that it is only the revenue from the gold mines which has come down. He has not studied his white paper very carefully. Take the income tax. The Minister in his Budget for the ensuing year expects to get £450,000 less; so far as Companies Tax is concerned he expects to get £533,000 less; in regard to Super Tax he expects £250,000 less; Excess Profits Tax, £450,000 less; stamp duties, £25,000 less; customs duties, £600,000 less; he is only expecting increases under a few headings and the one heading is excise.

Yes, people are being taxed to death.

From the post office the Minister expects to get a little more money; he expects to get a little more from the diamond mines, but speaking generally there is a drop, a considerable drop. We have reached the peak and we are now going downhill. And the most serious position is that in regard to the Excess Profits Tax. To date we have got £20,000,000 from the Excess Profits Tax, and in the new year—the ensuing year—the Minister expects £11,000,000. The Excess Profits Tax was imposed for the first time in respect of 1I94O—’41, and up to the end of the new financial year it will therefore have produced £31,000,000. That looks very fine, and I can quite understand that the Minister does not want to make concessions to any new enterprises in the country in view of the fact that this tax is producing so much. But what does the law say? The law says that if a trader or an industrialist pays excess profits tax in one year and he has a loss in the ensuing year, the Minister has to repay him and the Minister has to make up his losses. The Minister has not built, up a Reserve Fund for that purpose. He has been using all the money he has received, up to date, the whole of the £31,000,000 which he hopes to get up to the end of the new financial year — he is spending it all. What’s going to happen if these business men are going to show losses now and the Minister has to make refunds? All our sources of revenue are going back. The only source of revenue which is still a good one is the excess profits tax, but a very large proportion of that will perhaps have to be refunded. I have tried to ascertain among trader and industrialists in this country what the position is and they are very much concerned. The traders and the commercial people are afraid of the future. Their stocks are empty. They are unable to import. I am grateful to the Minister for the figures which I have obtained from him. It will be interesting to the House to learn that in the past six months there has been a tremendous drop in imports. In the first six months of 1940 goods to the value of £50,000,000 were imported; in the second half of 1940, £44,000,000; in the first half of last year the value of goods imported was still £47,000,000, but in the second half of the year only £33,000,000. Our traders and commercial men cannot get anything in. The shipping position is getting worse and worse on account of the fact that South Africa to-day is low down on the priority list. South Africa no longer holds the position of strategic value which it had when everything had to go round the Cape to get to the Mediterranean. The difficulties of the trader are getting bigger and bigger. So far trade has been able to bear a considerable proportion of the burden, but commercial people today are deeply concerned about the future. We also know that the mining magnates in Johannesburg are very worried, and we know that people are afraid that the building industry in South Africa will not be able to keep many people going unless the Minister undertakes a programme for the building of houses. The position is alarming. All Government sources of revenue are beginning to drop. The Minister is still talking big to-day. I should like to hear him in Parliament in a year’s time. Now, I should like to be allowed to say a few words briefly about the Minister’s taxation proposals. I don’t want to say too much about these as I do not want to take up too much of the time of the House. The first complaint of the tax paying public against the Minister’s taxtion system is the multiplicity of taxes. The second complaint is that the burden of taxtion is an uneven one. The Minister has now announced new taxes. What is the result of those taxes? The result is that the existing inequalities are being aggravated, and secondly, that new inequalities are being created. The Minister has aggravated the existing inequalities by 15 per cent. Just let met show the House, and I hope the hon. member for Kensington will also take notice of this, how unequal the taxation burden in South Africa is. These figures have been drafted by two separate accountants. I therefore assume that they are correct. I have taken the trouble, because I am anxious to show the House how unequally the Government’s taxes fall on the people today.

Income tax?

Let me take the income tax. In the first place I have the figure for a married man without children and without any prewar standard, I have taken the case of people who since the war have suddenly got an income or whose income has increased, people who had no pre-war standard. Let us as an example take the case of the Minister of Labour. Suddenly from the 4th September 1939, he got a salary of £2,500. But I now want to take the case of a man who suddenly got such a salary, a married man without any children. He now gets a salary of £2,500, and without the Minister’s new tax without the surcharge, he pays £292, that is to say for the current year 1942-43, without the new surcharge.

That includes the provincial tax?

Normal income tax, super tax, and provincial tax.

And personal tax.

Yes, that is so; he has to pay an amount of £292. Now, let us take the doctor who started after the 4th September, 1939, and let us also take the case of the advocate who started after the 4th September, and who earned a similar income of £2,500. He pays £798.

You mean income and not salary.

The man with a salary pays £292, the doctor with the same income pays £798.

That includes the excess profits tax.

That is the tax which he has to pay. I am showing the way people are being taxed if they have an income of £2,500 and if they got that income since the 4th September, 1939. That is all that counts now. If people have to suffer hardships let them all suffer alike. That is all. A man who starts a business and who has established a private company with a capital of £10,000, if he has an income of £2,500—I had to fix an imaginary capital—then his tax is £1,087. And if he has started a public company and he is the principal shareholder then his tax is £1,247. Now, in all these cases the income of these people is the same, namely £2,500. But if a man becomes a Minister and he suddenly gets that salary then he pays £292; if he is a doctor he pays £798, and if he starts a business as a private company then he pays £1,087 or if he starts a public company he pays £1,247. Now, take the case of the “idle rich.” The man who becomes rich as a result of an inheritance, and assuming the money he inherits is invested in public companies—he pays £97 by way of taxation. Two firms of accountants have made these calculations. The idle rich pays £97 on an income of £2,500. He only pays super tax.

But the companies tax has already been paid.

He inherits an income of £2,500. That is all that counts.

Yes, but he pays £292 in addition.

No, he does not pay income tax on dividends.

It has already been paid.

Now, take an income of £5,000. The man drawing a salary of £5,000 pays £1,100; the professional man pays £2,600, and the private company pays £2,034. If it is a public company then he pays £2,600. Now, let me submit another figure to this House. I am now referring to people drawing the same income today as before the war. Take the man who has an income of £2,500. There has been no increase in his income, I first of all take the case of a man earning £5,000. Before the war he paid £970, and today he pays £1,341. If he is a professional man he paid £970 before the war and today he pays £1,726. I am only drawing attention to this. The point I want to bring out is this — if hardships have to be suffered everybody should share these hardships alike. I make this indictment against the Minister, that he has not got the courage to introduce such a proposal. He is afraid to touch his friends, the political patrons of the party opposite, and that particularly applies to the gold mines. The small man’s tax is increased from £3 to £5 — an increase of 66 per cent.; from £5 to £7 10s.—an increase of 50 per cent.; but the patrons of that party — the gold mines — the Minister is afraid to tax them in the same way. He expects to get £2,000,000 less from the mines. He adds a little to the special contribution which will produce £900,000. That is how he makes it up. That is our complaint, and we refuse to approve of this budget until the Minister has divided the war burdens equitably and equally. Other speakers can deal with the other points and I now wish to move the following amendment—

1. (a) provision is made for expenditure on a war in which South Africa has not the slightest interest;
2. (b) the war expenditure is in any case excessive and out of all proportion to the carrying capacity of the people;
3. (c) the incidence of the taxation proposals is unevenly distributed and the capacity of the different sections of the people to pay is not taken into account;
4. (d) the Government is utilising the railways as a means of taxation in conflict with the Act of Union; and
5. (e) the Government has failed to present to this House a constructive policy for the solution of the economic and social problems of our country.”

I second.

When I was preparing notes for my budget speech, I made a resolution. I decided that the House was tired of the exchange of verbal exchanges between the hon. member for George (Mr. Werth) and myself, in connection with financial matters, throwing financial criticism backwards and forwards across the floor of the House like a tennisball; and I thought I would confine myself to constructive criticism on the Budget, leaving any reply to the remark which I knew my hon. friend would make until I reached the end of my speech. I hoped I might have time at the end of my so-called constructive criticism to deal with the speech of my hon. friend …

“So-called” constructive criticism.

… but I will pay my hon. friend this compliment, that after listening to his speech this morning I have decided to deal with his speech first, and to leave my own to follow. I have done that because the hon. member has been unusually challenging and provocative this morning. I think it is a speech which calls for an immediate reply from these benches. I can only express the hope that if in my reply I am equally provocative, I will receive the same hearing which the hon. gentleman has received from us. The hon. gentleman devoted ten minutes of verbal fireworks to telling the country what he thinks of the present Minister of Finance. He exhausted every vituperative adjective in his extensive vocabulary in saying what he thinks of the hon. gentleman and what the country thinks of the hon. gentleman. I have no doubt that he is entirely accurate if he speaks for the particular brand of political thought which he represents in this House. I have no doubt that in Nationalist circles and in the National Press and amongst the Nationalist taxpayers, the present Minister of Finance is looked upon as a gentleman with cloven hoofs and a long tail. But when the hon. gentleman professes as he did, to speak for English-speaking opinion and for the opinion of the commercial community generally, then I take leave to doubt whether he is a prophet whose teachings we can follow. Personally I prefer to stand up in this House and to say that I, rather than the hon. member for George, express the commercial and mining opinion of this country. I will tell him this.

“I”—“I”—

There you are, the hon. gentleman is getting offensive. I repeat, representing a Rand constituency, being in touch with mining and commercial opinion, that I can express their opinion in this House better than my hon. friend, and as far as I have been able to ascertain that opinion is not shocked by the present budget. The country does not regard the budget as a drastic budget, although the hon. minister of Finance seemed to think it might be so regarded. The country regards it as a normal budget introduced in war time to meet war conditions and war expenditure.

Are you speaking for the gold mines now?

The hon. gentleman’s whole speech is based on the careful evasion of the real issue of this budget. Read his speech. He will no doubt read it afterwards, and I believe he will be struck by the same thought that has struck us. He has blandly ignored the actualities of the position. Only when I succeeded by an interjection in bringing him back to realities did he face up to the fact that this is a war budget introduced in the fourth year of the most dreadful war the world has ever seen. What is the use of harping on budgets introduced by Mr. Havenga in the piping times of peace, when we could treat the paths of orthodox finance? What is the use of his talking of measuring this budget with the yard-stick of Mr. Havenga? As the hon. gentleman spoke—he was pretty rude to the Minister of Finance and he will forgive me if I am pleasantly rude to him—I could not help thinking of a critcism of the London Daily Mail in its earlier days. Someone said that it was a paper written by office boys for office boys. I could not help thinking that despite his facility of expression, three-quarters of his speech and nine-tenths of the financial criticism of the hon. gentleman, can be branded: “Spoken by an amateur for amateurs,” spoken to an admiring audience behind him who is determined to ignore the war issue, vainly declaring that there is no such thing as the war, and if there is a wax there ought not to be a war. Well, sir, there is a war and we are in that war, and we have to frame our budget on the understanding that we are in that war. The doctrine that my hon. friend now preaches, that we are faced with a Russian victory and that that portends worse things for South Africa than anything else, could have been made the substance of the main resolution at the beginning of the Session by the hon. Leader of the Opposition. But the Leader of the Opposition preferred to move a motion on social security. He left this issue to be dragged by the hon. member for George as a red herring into this budget speech. Let me get back, sir, to these adjectives the hon. member hurled at the Minister of Finance, “the spendthrift.” He painted a picture in almost Biblical language, of a Minister of Finance who four years ago became the successor to a goodly heritage left to him by his predecessor, Mr. Havenga, and this “spendthrift Minister,” in the course of four years, has wasted this heritage and landed this country into bankruptcy. I hope I am correct interpreting his language. Again he plainly ignores the supreme issue that this is war.

War, war!

Of course; can the hon. gentleman bind a bandage round his eyes and fail to tell the country that rightly or wrongly we are in this war, and for four years we have been in the war, and for another year or two we are likely to remain in the war? What is the use of saying that if we were not in the war we would do this, that and the other? I venture to predict, sir, that if we had followed the path of neutrality, we would still be faced in this war with a war budget, but I am not going to be led into a discussion this morning of the rights and wrongs of the war policy. When you tell me that the Minister of Finance is a spendthrift because he has to budget, taking his revenue and loan together, for a deficit, which I admit, then I again say, as I said to the hon. member for George by way of interjection when he was speaking: What war is fought but on a deficit? What war in modern history has not increased the unproductive debt of the country waging it. What is the use of going back to 1926 and telling us what a wonderful edifice we built then? Why, sir, we will spend in one year in this country twice the amount or almost twice the amount of our unproductive debt as fixed in that year. If I remember rightly, I think we fixed our unproductive debt in 1926 at £65,000,000. Well, this year we are budgeting for a war expenditure of £96,000,000, 50 per cent. more than that amount, and the hon. member for George comes forward and moans that we are increasing our unproductive debt. Of course we are, and we will go on doing it.

But show the deficit.

My hon. friend is barking up the wrong tree. He says that an honest budget would show the deficit. Ministers of Finance have always presented two accounts in this country, the Revenue Account showing expenditure from revenue, and a Loan Account showing receipts from loans and other sources. I agree that when your loan account is so unduly inflated by war expenditure, the distinction between revenue and loan ceases to have any practical meaning. We are borrowing and we are spending. That is innate in the very fact that we are in the war. If the hon. member will suggest to the hon. Minister that possibly for the war period we put in cold storage this distinction we have in normal times between revenue and loan, we shall have something from him. But the hon. Minister made it perfectly plain that last year we spent £160,000,000; this year we shall have to spend more, and that our income to meet that will fall very short. I think the figure is between £30,000,000 and £40,000,000 short of that figure. Dealing with the question of public debt, I took out some figures which may interest my hon. friend and the House, on this question of the deterioration of our financial position through our participation in the war. No sensible person will think that we would end the war financially as well off as we were before the war. No sensible person will think that we can participate in the war without largely increasing our public debt. Of course, that is common cause; we admit it; why the hon. member for George professes to be shocked about it, I do not know. Once you accept the fundamental fact that we are in the war, not with one foot, but with both feet, what is the use of complaining that our war debt goes up? However, let me give the figures. In 1939—’40 this country’s war expenditure amounted to £4,250,000; in 1940—’41 the war expenditure was £54,500,000; in 1941—’42 we spent £81,250,000 on the war, and in 1942—’43 we will have spent £96,000,000. I speak only of direct expenditure on the war, and not indirect expenditure such as war pensions, and so forth. That makes a total of £236,000,000, of which a total of £94,000,000 came from revenue, and the balance had therefore to come from loan votes and other recoveries. The hon. member for George has given certain figures about the growth of our public debt. My figures agree with his, except that I have taken the nett public debt and not gross public debt. On the 31st March, 1939, our total nett public debt stood at £285,000,000, whereas on the 31st March, 1943, the figure was £416,000,000, showing an increase over four years, and after 3½ years of war, and spending a total of £236,000,000 on the war, of £131,000,000. Let me sum it up. In four years we have spent on the war £236,000,000, and our public debt has increased only by £131,000,000. And, sir, you must not forget that that figure of £131,000,000 includes our normal expenditure on non-war objects. I have made a rough calculation, and it comes to this, that the total increase in our public debt, because of our participation in the war over four years, is something between £100,000,000 and £110,000,000. That is a large amount of money. It is trifling compared with other belligerent countries, but I admit that it is large for this country. But let me remind the House of two facts. The first is that in this war we pay only 3 per cent. We pay less than 3 per cent. on a good deal of our current borrowing. The Minister of Finance put out a short term loan the other day at 2¼ per cent. This £100,000,000 added to our public debt, is a loan at 3 per cent. or less. And, secondly, we have repatriated virtually all our external debt, and what we pay is not to a foreign creditor, but to South African investors. Our external debt will be down to £7,000,000 this year out of a total of £416,000,000, and virtually the whole of this debt is owed by our Government to our own people. It is a debt to the investing public of South Africa, so the position is not so horrifying as my hon. friend makes out. After four years, we have added something like £100,000,000 to our public debt, but we have repatriated our external debt by something approaching that amount. We owe the money to our own people, and we owe the money at 3 per cent., compared with 6 per cent. or 6½ per cent. we paid in the last war. Let me return to the hon. member for George. He characterises this Budget as a bad Budget because, so he said, it presses more heavily on the poorer classes than on the rich, that it presses unfairly on the poorer classes of the community. He did not give any facts to support that; I take it that will be done by speakers who follow him. In the absence of those facts, I can only say myself that, although there are increased taxes which will have to be paid by the poor people, there is no doubt whatever that the poorer classes in South Africa, compared with the poorer classes in other countries, are very lightly taxed. I have taken out the figures of the taxes in this country compared with the figures in other belligerent countries.

Compared with Australia.

I do not know whether the hon. member for George saw the new war time taxes in Australia. If not, I would like to give him the effect of a cable we had from Australia as to the new war time Budget introduced by the Commonwealth Treasurer, Mr. R. Chifley. This is what it says—

The hon. member for George portrayed this country as “gasping”—

Don’t forget that this is Commonwealth expenditure—

Let me pause here. Australia is a country of 7,000,000 Europeans. South Africa is a country of 10,000,000 people, 2,250,000 of whom are Europeans, and another 1,000,000 coloured and Indian, who must be taken into account. We spend £8,000,000 a month; Australia is spending £40,000,000 a month. I take it that is £40,000,000 Australian money, and a certain adjustment will have to be made for that. Then I want to come to the burden on the ordinary wage-earning classes in Australia. Perhaps I should go back a moment and recall to the House what I said last year in regard to the position of Australia. I said that twelve months ago a new tax was introduced in Australia of 6d. in the £, starting on £150 and reaching 1s. in the £ at £300. In New Zealand, they had almost from the outbreak of the war a defence or security tax of 1s. in the £ on all incomes, not starting on £150, like Australia, but all incomes, and the whole of every income. This tax has been increased to 1s. 6d. in the £. It may interest the hon. member to know that every wageearner in New Zealand pays 2s. 6d. at the source of his income. It is deducted by his employer, 1s. 6d. for defence, and 1s. for social security. Now we get back to Australia.

What about getting back to South Africa?

When does the constructive speech start?

May I appeal to the hon. member for Humansdorp (Mr. Sauer) not to interpose objectionable remarks. I do ask the indulgence of this House to protect me, not against interruptions, because I welcome interruptions, but I do ask the House to protect me against offensive remarks such as these.

On a point of order, sir, may I just say that I made no interruptions, either offensive or otherwise. The only member who is making offensive remarks is the hon. member who is speaking.

I am so accustomed to interruptions from the hon. member for Humansdorp, that I assumed that that interruption came from him, but if I was wrong then I apologise to him. In Australia on an income of £150, the tax is £7. I am now going to give the figures on the old Australian budget, not the new one I have mentioned. In the old budget the man with a wife and two children earning £400 a year paid £76 4s., that is Commonwealth and State. In New Zealand he paid £70. The man in Australia with a wife and two children earning £600 a year paid £137; in New Zealand he paid £126. On £1,000 a year he paid £288 in Australia, and £255 in New Zealand. On £10,000 a year he paid £8,209 in Australia, and £6,696 in New Zealand. Now, sir, that was the old budget, the budget which was passed twelve months ago. I now want to give the figures under the new Australian Commonwealth budget. A married man with one child earning £400 a year now pays roughly £60 a year—these are figures for Commonwealth alone. If his income is £500 a year, he pays £95. On £650 a year, he pays £145. Now I will tell you the position in South Africa. These figures that I am now going to give the House are official, and they include all of the taxes which a man can pay on his income in South Africa. They include Union and Provincial taxes, including Income Tax, Personal and Savings Fund Levy, and the new 15 per cent. sur-charge proposed by the present budget. The man with a wife and one child in South Africa, with an income of £200 a year pays £1 10s., not to us but to the provinces in Poll Tax. On an income of £250, he pays £3 2s. On an income of £300 he pays £3 2s. On an income of £400 he pays £4 15s. In Australia he now pays roughly £60 a year on that income plus State tax. On an income of £500 he pays £11 19s. 2d. On an income of £800 he pays £39 16s. 10d. On £1,000 he pays £59 0s. 5d.; on £1,500, he pays £109 0s. 4d.; on £2,000, he pays £161 15s. 4d.; on £2,500 he pays £320 6s. 1d. On an income of £5,000 he pays £1,251 7s. 2d.; on £10,000 he pays £3,862 16s. 2d. A man earning £15,000 will pay £7,473 3s. 4d. On £20,000 the tax is £12,082 12s. 5d. On £25,000 the tax is £17,120 7s. 2d. On £50,000 he would pay in taxes £35,601 9s. 2d. In Australia no man is allowed to retain more than about £2,700 a year. No matter what his income is, he is left with that. In this country if a man earns £50,000 a year, we still leave him with £15,000 a year of his own. Now I want to return once more to the hon. member for George and his speech. He says that the hon. Minister of Finance described his budget as a challenge. Then the hon. member—I thought this was the least worthy portion of his speech—then went on to say: “A challenge to whom, a challenge to Ministers whose sons did not go to the firing line?” Did I understand his Afrikaans aright when he said that? If so, I can only say it was hitting below the belt in the worst possible way. I am sorry that the hon. gentleman made that remark, because it is definitely not true. I am not going to enter into personalities, but I can definitely say it is not true. The hon. member has been hitting at us for three and a half years, and saying that we are sending others to fight while we stayed behind; but at least we are here to defend ourselves. But I do think the hon. member is bringing politics to a very low level when he starts attacking our sons.

Why should other people’s sons go?

Have you sent a son to the war?

No, I have too much to do.

Let the hon. member then keep silent.

I did not keep him out of it.

Let us disagree about this war, but let us remember that we are South Africans, and that we have to live together in this country after the war is over. Let me say to the hon. member for George, for whom I have a high regard, that this is not what we expected of him; we did not expect him to descend to that soap box level. Then the hon. member once more dragged in this question of double salaries. I must say I did expect this sort of thing from the hon. member for Mossel Bay (Dr. van Nierop), but I did not expect this sort of tripe from the hon. member for George. He knows as well as I do that there are certain functions of State which are performed by members of Parliament outside the sittings of Parliament for which they are paid. He has just performed one himself. He has just sat with me on a Commission to enquire into war expenditure, and he has been paid for it, and no one thinks any worse of the hon. gentleman for doing it. But surely, when he agreed to draw pay to serve on a Commission on war expenditure, he must have known that he was getting something beyond his own salary. I do not hold it against the hon. gentleman. It was a perfecly legitimate duty, and just as he drew fees for sitting on that Commission so did I; but why, then, does he talk about double salaries? Look at the hon. gentleman sitting next to him, who draws £1,000 a year over and above his Parliamentary salary for advising the Government on its native policy.

And very badly, too.

Advising the Government on its native policy, and opposing the Government by every means in his power. And the leader of the Afrikaner Party does the same. The whole thing is preposterous; it won’t bear examination.

The objection is to these jobs artificially and specially created as a compensation to war supporters.

I am grateful to the hon. member for that interruption. What he means is this: that in principle there is no objection to a member of Parliament who is a genuine soldier drawing a double salary.

Yes, a genuine soldier, but show me a genuine soldier; where are they?

I am glad we have this admission at last. They are now changing their ground, if I can accept the hon. member for Gezina as their mouthpiece. Now they say they do not object to a member of Parliament, who is a soldier, drawing a soldiers’ pay.

If he fights.

I have got your point, and I am now going to try and deal with it.

Put a little brandy in it.

When I try to discuss this matter seriously, the buffoons on the opposite ranks keep on interrupting. The answer is that every member in uniform in our ranks would go North tomorrow if he were allowed to go, but they have been held back here by the Prime Minister because of my hon. friends opposite. That is an elementary truth, and no amount of interjection will get away from that. In the last war we had the same Prime Minister, but we had an Opposition which was friendly to the Government.

[Inaudible.]

I cannot answer 20 members at once. I was saying that in the last war, when we had exactly the same circumstances, the Prime Minister said to all of us: “Go, and go with my blessing”, and I was one of those who went, and I have no doubt that my colleagues will go tomorrow if they were allowed to go.

Why wear a uniform at all?

And the whole of the Labour Party.

Why we should have this criticism from the hon. member for George and the hon. member for Gezina, is beyond me. I have not heard that either of them has ever distinguished himself on the field of battle. If we had some real fighting men like the hon. member for Wolmaransstad, who was a fighter in his day, making that criticism I could understand it ….

He is still a fighter.

… …. but I really would advise the hon. member for George and the hon. member for Gezina to keep quiet on this.

They are for the home front. Excuse me, I did make that interruption.

Then my hon. friend went on to introduce a note of sob-stuff into his speech. He said that the poor in this country are getting poorer and the rich are getting richer.

Quite right.

I say that such nonsense has never before been talked in this House. If there is one thing which is apparent in this war-time period, it is that the poor are richer than they have been in the last 25 years, that unemployment has disappeared from this country, that high wages are the rule, that many people in South Africa are thinking this is a wonderful war and tens of thousands will be sorry the day this war ends. The rich people are being-taxed more heavily than they have ever been taxed before. They are being cut down by heavier income tax, and I welcome it. They are being met with Excess Profits Duty and Trade Levies and God knows what.

And cost-plus.

Who do you think is meeting this budget? I have shown that your man under £500 is practically free from income tax.

Continuing his speech this morning, the hon. member for George (Mr. Werth), referring to the hon. Minister of Finance, said in effect that his motto was: “If you tell a lie, let it be an ingenious lie,” and he used that elegant introduction to criticise the Minister’s budget speech on the question of a surplus. He said: “Here is a Minister coming along, parading a surplus of £1,250,000, but when you analyse this surplus it is found to be a deficit of £44,000,000.” Well, Sir, where are we getting in this House? For 20 or 25 years, or even further back, it has been the custom in this House to preserve a wide distinction between Revenue and Loan Account. The hon. getleman may have been out of the House up in South-West Africa, but I and the hon. members were in the House when year after year Mr. Havenga used to produce a surplus. He was acclaimed as the “surplus king”. Every year he came to this House with a wonderful surplus. That surplus was on Revenue Account, but if you take into consideration his loans on Loan Account, there was actually a deficit as there is today.

Except that Loan Account was not used to cover current expenditure.

With that I entirely agree; in war-time, unless you can finance the whole of your war expenditure out of revenue, you must go to Loan Account, but my hon. friend’s point was that it was really a case of suppressio veri, that the hon. Minister was presenting a’ false picture to this House and to the country. What the Minister said was the perfect truth. He said that on Revenue Account he had a surplus of £1,250,000. Then he went on to say that the country will be spending £96,000,000 on the war. Does anyone think that we can pay that out of Revenue Account? The hon. member for George is making a song about nothing. As a criticism that argument of his is entirely worthless. I repeat that even in the piping days of peace, Mr. Havenga could not present a balanced budget, if you had to take into account his borrowings for Loan Expenditure. Now let me come to my hon. friend’s outburst on the subject of war; this revelation of a changed mentality on his part, and possibly a changed mentality on the part of his friends. Today he is the mouthpiece of the party and I must take it that he is declaring his party’s policy. I take it therefore that he spoke for the party. In effect, he told us he has changed his attitude about the war. For years hon. members on the other side have been telling us that Germany had won the war; they did not say that Germany would win the war, but they said that she had won the war. My hon. friend was one of the people who proclaimed, with differing degrees of exultation in their tone, that it was not a case of Germany going to win the war; it was a fait accompli; Germany had already won the war. Now on the 3rd March 1943 their spokesman gets up in this House and says that Russia has won or is about to win this war.

He never said that.

If he did not say that, I would be glad to know what he did say. He said that Russia had concealed her real strength, that Russia had been preparing for this war, that Russia was not the “pushover” that he thought, that Germany thought. He is using much the same language that Goering used some six weeks ago when he complained with almost naive pain that the Germans had been deluded by the Russians, that they had been led into a trap, that they had expected a six weeks’ campaign against Russia, and now they found what they are finding. My hon. friend now expresses the same view. As I understood his speech, he said that Russia is going to win this war; a victory on the part of Russia means a world revolution, and a victory on the part of Russia means a black revolution in South Africa.

If Russia wins the war.

If the Allies win the war, then Russia wins.

Now it is “if.” He began by saying he had changed his mind.

No, I am prepared to stand by Hansard.

And I am prepared to accept any corrections my hon. friend makes. Did he say Russia might win the war?

Surely you understand English.

If I cannot find out what the hon. gentleman did say, I will have to continue with my notes made at the time, although they may be incorrect. The Opposition have now thrown in their hands. They have been fighting in this House, they have been saying in the country for the last 3½ years that Germany would win the war and that this country would be governed by the grace of Germany. The hon. leader of the Opposition wanted to make his peace with Germany and to get the best terms possible, and my hon. friends confess that as far as that issue is concerned, they have thrown in their hands. I ask the country through you, Sir, what sort of guides are they on war policy, people who stand here publicly today, through their mouthpiece, and tell us that they backed the wrong horse, that they had their money on the wrong horse, people who say that they now find they are wrong. But leaving that aside, I want to come to my hon. friend’s fears and apprehensions. What does he in effect say? In effect he says that Russia may win the war, that if Russia wins the war, it means a world revolution and in this country it means a black revolution. Just let me remind the hon. member of this, if I can get his attention for one moment.

You must be careful; I will make another interruption. Do not think you are so important.

After the last war Bolshevism was in its infancy and it was proselytising and aggressive force. [Extension of time granted]. Bolshevism was a proselytising and aggressive force, but that phase of Bolshevistic history lasted only in the ’20’s, and not even the whole of the ’20’s, and one knows that for the last 20 years Bolshevism as a proselytising and aggressive force has been unknown.

Nonsense.

For the past 20 years they have been concentrating on the task of developing their own country.

Will you tell us why England did not resume diplomatic relations with Russia?

I have no time to answer all these questions. I am trying to reply to the hon. member for George. This Bolshevistic bogey is to be the new political weapon of a bankrupt Opposition, an Opposition which in the last three and a half years has shown itself to be completely bankrupt as far as the war issue is concerned. South Africa wants neither Nazism or Bolshevism. We want to retain the good old Parliamentary system we have had in the last 100 years. The hon. member’s own followers will say to him: “You have been hopelessly wrong in every statement you have made about the war, and we are not going to start by believing you now.”

You give the Prime Minister a chance to finish the debate on Friday; then you will get your reply.

The hon. member for George next says that our war expenditure has reached far too high a level, that we are spending money wastefully and extravagantly on this war. I have not the remotest doubt that in this war, as in every war in the history of the world, there is waste and extravagance. I cannot deny that this is the case. But I have no doubt that a vigilant Opposition and a vigilant Government will be able to put their fingers on waste and extravagance. But I want to deal with my hon. friend’s reasons for the increase in war expenditure. The war expenditure has risen from £6,000,000 to £8,000,000 per month, and now he says that that increase is not due to any increases in our forces up North, to any increases in our fighting army. He says it is due to the increased number of people in funk holes in safe jobs.

“Kripvreters”.

Would funk hole be the correct translation? The hon. member was talking by and large—he had no facts to support his statement. Now, let me give one or two facts. Little South Africa with a white population of 2,250,000 has maintained two divisions up North, in Somaliland, Abyssinia, Libya and Tripoli, almost since the fighting began—almost since June, 1940—that is, for over two and a half years. In addition, it has had air forces, the engineers, and all the other troops. Do hon. members realise that New Zealand, loyal little New Zealand, with a population of 1,600,000, has had only one division overseas.

Shame!

And Australia had either two or three divisions—which they recalled rightly, I believe, when the threat arose to Australia through Japan. So I say that South Africa’s external war effort is comparable with that of any of the other Dominions among the Allies. And I say that instead of our army shrinking, it has grown. Only a month ago we passed a resolution which will enable our fighting forces to go beyond the limits of Africa. It is quite untrue—it is one of these general statements—that this increased war expenditure is due to people in the funk holes, and the hon. member knows perfectly well that for every man in the army there must be ten people at the base doing all the ancillary work. He referred to a picturesque phrase used by one of the members of the army—we don’t know where the phrase comes from—but he said this man complained that he had to carry on his work with “the sick, the lame, and the lazy”. Well, that is true. But my hon. member want’s it both ways. Surely the people who go North are the men who are fit and active and patriotic, and people like those who work in that department have to be left behind.

And members of Parliament, of course.

People who are left behind are neither fit, nor able, and perhaps not willing to go North.

And then they draw double salaries.

You cannot have it both ways. If you send the flower of your manhood to go to the fighting line, then you have to leave the others behind, others who do not measure up in fitness, and so on, to the men who have gone to the front. My hon. friend will pardon me if I do not follow him through the remainder of his speech. Of course, a good deal of what he said may have been constructive—possibly it was—but the hon. member was “anomaly chasing”. You get hold of a tax and you compare it with another tax. You say: “This man pays so much, and another man so much, this man gets so much, and another so much—why does this man pay so much in tax and the other man so much?” And then the hon. friend refers to inequalities of taxation. I agree and I have been fighting that all through, together with my hon. friend. But I feel that it is almost impossible in war time to avoid getting anomalies. I am prepared to support a plea, together with my hon. friend, for more simplification and more uniformity in our scheme of taxation. May I conclude in dealing with some of the points which I had prepared before my hon. friend by his remarks forced me to turn away and deal with him? The hon. member has described this as a scavengers’ Budget. He says it does not come from him—although the language does sound like his language. He says it comes from his friends. Of course, any Budget which has to draw additional sources of taxation will be described by persons who do not like it in uncomplimentary terms. I say this—if the Minister goes to the country, as he probably will in a few months time, he will be going on this Budget, and he drew this Budget, a perfectly courageous one, with his eye on the country. And my hon. friend will have to face that, and it is something which this party will have to face, and we are quite prepared to do so. Once we start out on this fundamental difference that the war is to be fought to a successful issue, then money has to be raised and additional taxes have to be imposed. Now, I want to mention some satisfactory features of the Budget, and then I shall deal with one or two unsatisfactory ones. Now, the first point I want to deal with is that we are still trying to maintain in this country—not always successfully, I admit—the fifty-fifty basis as between loan and revenue. Forty-eight million pounds is on the Estimates for the war. And that measures up with an equal amount from loan to £8,000,000 per month. If our expenditure increases, as it may, then we shall not be able to keep that fifty-fifty basis, but at the moment we are still approximating to that fifty-fifty. This Budget has had a good reception from the commercial community. It has had a good share market reaction—the share market reaction has been distinctly good—and that is something my hon. friends do not like.

Of course, it has.

Yes, your friends like it.

Oh yes, I know, my hon. friend’s ideal of a good Budget is one that creates another “Black Friday”. But that is not ours.

Q.E.D.

Now, I congratulate the Minister on his decision taken at last to contribute on the £ for £ basis to the Governor General’s Fund.

On loan.

That will relieve this Fund from the stigma that it is a charity. People having to go to the Fund will now know that they go to a Fund which is supported as to fifty per cent. by Government money. I congratulate the Minister on having taken up the point made in the debate on soldiers’ pay by agreeing to eliminate for income tax purposes the allowances to soldiers for uniform or other forms of allowances. I can assure the Hon. the Minister that that will be greatly appreciated in the Army. I congratulate him on the other social benefits. There is not a man in the House who does not feel that we are drawing closer to social security when we know that there is to be a meal today for school children in South Africa.

When?.

Practically at once. A meal provided for school children irrespective of their colour. That is what appeals to me. I congratulate the Minister that he is now handing the native tax in full to the Native Trust instead of only the five-sixths. I congratulate him on what he is doing for burnt out war veterans. These are points on which the Minister deserves commendation. But I am disappointed that the Minister has not found himself able—true, it is in the middle of a war—to do something to remove the inequalities some of which were mentioned by my hon. friend in taxes such as special trades levy, excess profit duty and so on, and frankly, I do not like this proposed new tax on railway fares and I shall tell the Minister why. He is proposing to impose a 15 per cent. levy on first and second class railway fares. Of course, this is a war tax to raise war revenue, and as such it has my blessing, but the tax itself is open to this criticism, it is a tax specially on the people of the Interior. The movement in South Africa—the movement of traffic is from the Interior to the Coast, and not from the Coast to the Interior. It is a tax which penalises the poor and middle class section and leaves the better off class untouched. Let me go into that a little more deeply. The intention behind this tax is first to raise revenue, but secondly, to try and by an indirect method to ration railway travel’, to try and reduce the strain on our Railways of passenger traffic. I venture to suggest that it is a highly illegitimate way of rationing, to increase prices. Supposing the supply of sugar were adequate only for two-thirds of the population. If you double the price of sugar, what do you do? The rich man still has a full sugar basin, but the poor man has to go without sugar. This tax tends that way, and to the extent that it does tend that way I consider it a bad tax. Anyhow, I hope the Minister will bear in mind that there are classes of the community which must travel. It has become part of the life of the people who live at high altitudes to have an occasional holiday for themselves and their families at the Coast. There are sick people who must travel, there are people who must go to hospital, and there are other classes who simply must use the Railways. I beg the Minister, when he comes to the details of this tax, at least to consider an exemption for the family man travelling with his wife and family, of shall I say at least two children, or even the woman travelling with two children. They are not travelling for pleasure, but because they must get away. And I hope he will also consider the case of invalids and persons travelling to and from hospital. I am disappointed—the Minister will forgive my frankness—that we have not been able to increase the pensions to old age pensioners. I don’t think there is any necessity to wait for reports from social planning committees, or any other body, before dealing with this matter. Some four or six months ago the Council of the United Party on the Witwatersrand, with three or four hundred delegates present, unanimously passed a Resolution in favour of raising the old age pension limits from £3 10s. to £5 per month, with a corresponding raising in the permissible limits of income. I hope that is the goal which the Government will set because I do not think that our old people can possibly exist on the pensions which are paid to them.

That is rather a belated request.

Now, I want to deal with the question of taxation. In 1939—’40 our yield from excise on beer was £340,000. The estimate for this year is £1,650,000. In 1939 the beer drinker paid £340,000. Now he will be paying £1,650,000—an increase of 500 per cent. Now, take cigarettes and tobacco. In 1939—’40 the yield was £1,500,000. Today it is £6,000,000, an increase of 400 per cent. I come back to what I said to the Prime Minister and the Minister of Finance two years ago. When every other form of luxury spending in this country is taxed there is one commodity which by some magic appears to go scot free, and that is wine. Throughout South Africa the trend of our fiscal policy appears to be to drive the people of South Africa to leave the beer and to leave the brandy, and to drink wine.

It is our own product.

There is wine and wine in this country. There is good wine and bad wine. But all alike go free. Even spirits which go into the fortification of the wine go scot free. Every ounce of spirit which goes into brandy pays tax, and still more tax. Every ounce of spirit which goes into the fortification of wine goes scot free. The time has come to ask the public conscience of South Africa: “Why is this? Why is there an unwritten rule in the taxation policy of this country, that whereas everything else is taxed, wine is to go scot free? I say it is in the interest of the wine growers that there should be an excise to try and drive out bad wine.

Why is there no tax on cigars?

In conclusion, I plead for a simplification, if we can have it in the scheme of taxation. I want to read to the House a list of taxes which the taxpayer of South Africa is paying under the heading of income tax. He pays the Union normal tax, the Union super tax, the Provincial poll tax, the Provincial income tax, and the tax which was imposed last year—the personal and savings fund levy, which, curiously enough, is a tax based on entirely different concepts and worked out on different methods to the ordinary income tax.

Anyhow, it’s a rotten tax.

On top of that we have this 15 per cent. surcharge. I don’t want the Minister to misunderstand me. None of us object to the amount or the yield.

Don’t apologise.

I am surprised the amount is as low as it is, but this multiplicity of taxation is unsound.

It is worse than unsound; you are complimentary.

I consider it unsound, moreover, to get your extra taxation from income tax by a mere surcharge. It means that you go on taxing the same people. The time may come, as it has come in other parts of the world, when you will have to lower your income tax limits, and make every class of the community pay according to its means, but simply to add a surcharge as is done in this Budget—well, it is all-right for one year, but as a permanent policy it is unsound. Finally, there is only one other matter not immediately connected with finance, but a matter which I have very near at heart, and I am glad to see the Prime Minister is here.

Has it anything to do with the war?

We have today sitting in enforced idleness in prison camps in Italy something like 12,000 of the flower of South Africa’s manhood. There is scarcely a family in Cape Town, Johannesburg or anywhere else in the Union who has not got some relatives amongst these prisoners. I am very troubled about the lot of these people, and I want to know what this country is doing for them. I put a question to the Prime Minister on the 12th February. I just want to read portion of my question and the reply. Now, this is my question—

And this is what the Prime Minister replied—

In polite language they are not clothing our prisoners adequately. And then the Prime Minister says this—

And then he gives a number of other details. Then, on the question of food the Prime Minister said this—

And then the Prime Minister went on to say this—

I pause to say that when Mr. Keeling, a member of the British House of Commons, and representing the British Red Cross, was here a few weeks ago, he told us that it meant that our prisoners in Italy were only getting half rations, because this is what the Prime Minister said—

Mr. Keeling said that this 10 lb. per week was meant to make up the other half of the rations. In other words, without the parcels they would starve. And then I put this question to the Prime Minister—

And this is what the Prime Minister replied—

Which I have read—

Now, in effect the Prime Minister admits that the Government as Government, the State as State, is doing nothing so far as the food parcels to the prisoners are concerned—they are being supplied by the Red Cross, and, as I understand the position, our Government as such makes no contribution to the Red Cross. I was told that there was something in the Geneva Convention which forbade our Government sending money to prisoners of war. I have read the Convention, and I can find nothing of that sort in it. But, in any case, there is nothing to prevent our Government from subsidising the Red Cross in regard to its parcels of food and clothing. I want to conclude my speech by appealing to the Government to treat the Red Cross Organisation on the same footing as the Governor General’s Fund. It will be said that if you go beyond the Governor General’s Fund to the Red Cross nobody knows where you are going to stop. Well, there are luxury funds—like Ouma’s Gift and Comfort Fund—that is a fund for luxuries to the troops—and there are other funds of the same kind, too. I say that we have a duty to those boys of ours in Italy which transcends any other duty, and public opinion will respectfully and reasonably ask the Government to include in its £ for £ contributions, something which is calculated to assist the Red Cross in sendling these parcels. At present the Red Cross make an appeal to the charitable public, and let me say that that appeal has never been ignored, and will never be ignored, and it has resulted in adequate money being found to meet the cost of these parcels. But the time has come for the Government to assume its share of the responsibility.

What do other Governments do?

The British Government contributes, I think, £40,000 per month to the Red Cross. I believe that International Comity or regulation will not permit sending parcels direct by the Government, but there is nothing to stop a subsidy to the Red Cross, and as the Red Cross has undertaken the responsibility of looking after these men—these men who are our soldiers, these men who are prisoners of war—I hope that the Government will treat the Red Cross on the same footing as the Governor General’s Fund, and that it will subsidise it on the same basis.

I am very glad that I can today support the amendment of the hon. member for George (Mr. Werth). That does not detract from the fact that in our view the hon. member does not go far enough, and we shall therefore move our own amendment. Before I go further, however, I want to express my appreciation for the friendly remarks that came from the hon. member for George in connection with my Leader, the former Minister of Finance, Mr. Havenga. We on this side of the House are very glad that the time has at last come when the Opposition openly acknowledges the good work Mr. Havenga has done and the great services he has rendered the country. I trust the time is not far off when not only the House but also the country outside will look forward longingly to his return to pluck the country out of the swamp in which the present Government has dumped it. Whether he will succeed in returning I do not know, but I think the country will desire it.

What about the gold standard?

I would like to stop at that for a minute, since the gold standard has been mentioned. On 4th September, 1939, a majority of this House accepted the war policy, and now the argument of hon. members on the other side is that we as a minority must abide by it and must support them. Now I want to tell hon. members this: When the House almost unanimoulsy decided to maintain the gold standard the present Prime Minister returned from overseas shortly thereafter and said that we must depart from the gold standard—then all the members there swung around and supported the Prime Minister, and they fought Mr. Havenga and Gen. Hertzog step by step on the gold standard. Nevertheless a great majority of the House had decided to maintain the gold standard. Why did hon. members then not stand by the majority? What is good for the goose, is good for the gander. We differed on the war policy, and it is our prerogative to fight the war effort in accordance with our conviction until the war is over. I am grateful that the hon. member for George admits that Mr. Havenga has left the finances of the country in such a sound state, that the world outside was jealous of us. The present Minister of Finance came to the head of affairs when the money coffers of the country were overflowing, not as a result of extra taxation, but from normal income. He took over full coffers, but after four years of rule what is the position today? I want to compliment the hon. member for George on his clear exposition of the financial position. I think if ever there was a man who showed up the Minister of Finance and who revealed to the world that the present Minister of Finance juggles with figures, then it is the hon. member for George. The Minister of Finance borrows millions and millions, and this year he spent £96,000,000 on the war alone of which about half is from Revenue. They admit that they will have to borrow the rest. In other words, the Minister has said here that there is a surplus of something over £1,000,000. That is the impression he created. Let us take the farmer with a normal income of £500. He takes a bond of £1,000. He uses the £1,000 to do productive work, and at the end of the year he has £100 left. Then he says that he has a surplus of £100. In other words, the Minister of Finance uses not only the half of our normal incomes to cover war expenditure, but he borrows more than half in addition, and if he then has a million pounds over at the end of the year then he says he has a surplus of £1,000,000. I endorse and emphasise what the hon. member for George said here: If he continues in this way he will soon discover that he has contracted so much debt that he will no longer be able to obtain credit on South Africa. The hon. member for Kensington (Mr. Blackwell) has been put up by the Government to refute the criticism on behalf of the Government. He himself admitted that he originally considered delivering a different speech here. That is proof that the hon. member for George has pierced through to the root of the evil, because at the eleventh hour, the hon. member for Kensington somersaulted and altered his speech, and what an exposition that was. He gave an egg-dance, but he could not refute the facts. His only excuse was the war. The sooner our friends on the other side realise, and the sooner they admit, that when they voted for war on the 4th September they were wrong and that we looked farther ahead, the better it will be for the country. The friends there on the other side are war-drunk, and they can no longer think clearly and soberly. We saw farther than they did at the time. We saw that it was not a South African war, that it was not necessary for us to go into the war—at least not at that stage. In the second place we saw that to go into the war at the time would land this country, a small nation such as South Africa, into a financial swamp, from which the first succeeding generation will not be able to emerge. That is precisely what we have to face today. They are beginning to discover it, but they are too obstinate to admit that we saw farther than they saw at the time. We said on the 4th September that this is a European war, and that South Africa is not involved in it. We said that South Africa would probably not hear a single shot. The war has been in progress for three and a half years, and where is the danger that was supposed to have threatened us at the time. They will now say that they have stopped the Italians.

That is indeed so.

The troops that have returned from the North have told me that wherever they clashed with the Italians, they were one as against four Italians, but as soon as a bomb burst among the Italians, then the Italians hoist the white flag. Now, is that a danger? We said that if it should happen that our country should find itself in danger then we on this side would be prepared to defend our country. Today they are in trouble. The Prime Minister, as the result of the adoption of his motion, has divided the country in such a way that they can in no circumstances expect us to support them in their policy of seeing the war through.

Did he also divide the Opposition?

The sound of that empty tin answers itself. What is now the result of the position in which we find ourselves? The hon. member for Kensington, who must defend the Government, could not help himself, the half of his speech was criticism of the Government instead of defence of the Government. I wonder if he will receive the thanks of the Government. The Prime Minister walked out in disgust when he began criticising. I say he admitted a good few things. He admitted for instance that money is being wasted. But he says it is war. He admitted that the war had to be continued with, as he called them, “the sick, the lame and the lazy.” That is his opinion of our boys who have gone to fight in the North.

No, who said that?

The hon. member said that the Prime Minister must continue the war with “the sick, the lame and the lazy.” No, then I have a much greater and higher opinion of the persons up North.

May I rise, sir, to a point of explanation? I was referring, of course, to a remark that came from my hon. friend, the member for George (Mr. Werth), relating to a particular Department of Defence here in South Africa. If my hon. friend thinks I refer to people up North as “the sick, the lame, and the lazy”, he could not have listened to my speech.

I accept the explanation of the hon. member for Kensington, but that makes the matter still worse. Then it is a reflection on his friends there with him. Let me say this to my hon. friend. If he says that he meant the people here in South Africa, then it is a still worse reflection. If he meant the people who have to do the work on the platteland, the members of Parliament who wear uniforms, then his criticism is even worse than our criticism. Our big grievance against them is this: They voted for war; they have now again voted to send our boys overseas and they donned uniforms.

Even the hon. member for Troyeville (Mr. Kentridge).

Yes, he also wears a white band around the arm. He is one of them. I understood that he stood on duty one night, and someone round the corner smacked him on his trousers, and then where was the member for Troyeville? Completely gone!

The hon. member must leave such personalities.

Our great grievance against them …

You should rather go to the bioscope.

Our grievance against that member who speaks about the bioscope—he is one of those who dons a uniform—is that they voted for war, and then they went out and encouraged and indirectly victimised, or permitted to be victimised, innocent people to join up to go and fight. If they are so zealous about seeing the war through—we perpetually hear about a General Election—let them then cause a General Election to be held. We welcome it. And then I want to give them this advice. Those of them who today wear khaki uniforms must not offer themselves for election. Let other people be elected in their place, and then they can go to the war. That is my challenge. Let us then see who of them will go. They have not the courage of a little bird to do that. The Prime Minister knows what is going on here. He sees how the see-the-war-through policy of his is landing this country in a financial swamp. The time of reckoning will come. If he gets his way—I have said it before, and I am going to emphasise it—he will exercise compulsion. He has promised that no compulsion will be exercised on soldiers to go overseas. He also promised that on the 4th September, and indirectly compulsion was exercised. I have here two letters that I want to read out now. These are letters that have come from the University of the Witwatersrand, of which the Minister of Finance is Chancellor. The two letters are of equal tone. They come from the Registrar of the University, a certain Glynn Thomas. I will not quote the whole letter, but only those parts of importance, and I am prepared to hand the letter to the Minister—

It may be said that the student was perhaps too weak. But listen further—

And now we get the sting at the end—

Now, I want to ask the Minister of Finance, as Chancellor of the University of the Witwatersrand, if he knew that such letters were being written to students?

What about Stellenbosch?

Can the Minister of Finance tell us if he knew about this? I ask him again if he knew that such letters were written to students, whereby they were indirectly intimidated?

No, I did not know.

Then I accept it, but I put this question to him: If I give him the letters will he, as Chancellor, take steps against the Registrar? The Minister indicates that he will not do so. He was honest enough to say that he knew nothing about this, but is he now going to take steps? This Parliament gives the University of the Witwatersrand £103,000 per year. If he as Chancellor now gets to know of this treatment, how can he refuse to take steps in connection with the matter? And if he refuses to do so, am I then wrong when I say that the Minister of Finance and the Prime Minister know about the victimisation, and they are sitting dead still; and where this is the case, is it then not a breach of faith on their part to this House? Can the Prime Minister then blame us if we refuse to accept his word in connection with this matter? We have once before been so deeply disappointed, that we refused to accept the Prime Minister’s word as regards this matter, namely, that it will be a voluntary matter that will be left to the soldiers whether they want to go overseas or not. The Prime Minister must now expect, if trouble originates in the interior as the result of the action that is being taken, that none but he and his Government shall bear the responsibility.

Is that another threat?

Take it as a threat if you like. But if the Prime Minister wants to abide by his word, then he must take steps and issue instructions that no indirect compulsion shall be exercised. If he does that, then I do not believe that, this sort of thing will happen. But if it is quietly permitted by the Minister of Finance as regards the University of the Witwatersrand, then I say, that if trouble comes, then he bears the responsibility for it. Now I come to the war itself. The hon. member for George was right when he said that in the event of Russia winning the war we must expect a revolution throughout Europe and throughout the world. If Russia wins the war, then it does not mean that England has won. The hon. member for Kensington has tried here on the floor of the House to distort the words of my hon. friend. We have evidence of it. I emphasise that in the event of Russia winning—I do not say she is going to win—but in the event of Russia winning, then my friends on the other side who today have Joseph Stalin as an ally will find themselves encumbered with the fruits of a black revolution in our country. We already see the flames flaring up everywhere. Just look at the newspapers. Just look at what is going on and how the natives are being incited. The Prime Minister will remember that I gave him a warning last year when he said that if it is considered necessary he would arm the natives. Has this become necessary? He did it. But he went further. I remember that in 1922, at the strike in Johannesburg, the Prime Minister went there to shoot down the strikers. He returned here with banners flying and in the first speech in this House he said: “We were on the verge of a volcano—Bolshevism.” Then he saw the danger of Bolshevism. He must now realise that his alliance with Joseph Stalin promotes Bolshevism. I warn him again today that it is more than time for the Prime Minister to take steps to put a stop to that propaganda of Bolshevism before it goes too far. I have a further amendment that I now want to propose as follows—

1. (a) the Government expends moneys for military purposes solely on the defence of the Union;
2. (b) the Government carries out a native policy in accordance with the laws of the country as against a policy which leads to equality and unrest, and South Africa is safeguarded against the menace of the efforts of our allies which aim at the destruction of the traditional relationship between white and black in our country;
3. (c) the Government so amends the taxation measures that the agricultural and industrial life of the country is not stifled and that—
   1. (i) the rebate in respect of normal income tax for married persons be increased to £400; and
   2. (ii) paragraph (a) of Sub-Section (1) of Section 7 of Act No. 40 of 1942 be so amended that the amounts of £250 and £300 be substituted by £300 and £400, respectively; and
4. (d) the Government treats internees as ordinary citizens in so far as the administration of justice is concerned.

Now, that is the amendment I want to propose, although I support the motion already proposed by the hon. member for George. His amendment does not go far enough, and we want these matters in addition. It will be seen that as regards military purposes we are prepared to vote adequate money for the defence of our country.

Against whom?

Even if it is against those people who draw double salaries. We are consistent. Since 4th September, 1939, we realised that even if we had to remain neutral we would still have had to bring our country into a proper state of defence. The Prime Minister said the other day that Africa will be cleaned shortly. Then he will have attained his desire. Why then must we spend another £160,000,000 per year? It is clear to us that this is now a European war. I go so far as to say—if it should happen that the friends on the other side who are so bellicose want to go and fight in Europe, then I would vote for it that we give them a free passport and perhaps also pay their passage so that they can go to England to help England. But then England must pay for it and not we. That is very clear. I just want to say to the Prime Minister that we are prepared to meet him on the platteland among the population of the platteland. There we will fight out the matter with him. As regards the war take this from me: No matter how great the difference is between us, when it concerns the war and when it concerns a Republic for the future, then this Opposition will stand as one man. We shall meet the Prime Minister. He must not think he is going to frighten us. Why is he afraid to say in what month he is going to hold the Election? If he is so strong let him say it. That is the first point in the amendment. Then we come to the second point, namely the native policy. The Prime Minister delivered a speech a few weeks ago to the natives and coloureds, and then he said this: “Segregation has failed.” The Minister of Finance has said: “Segregation is a failure.” Was it then surprising that the hon. member for Cape Eastern (Mrs. Ballinger) came here with a substantive motion in which this House is asked to upset and to amend the Native policy of the country? Is it surprising, after the Prime Minister has armed the natives, that the natives and coloureds here in the City Hall should have said: “We shall join up conditionally—we ask equality; take away the colour bar.” I ask the Prime Minister this: Did he not vote for the Native Acts of 1936; did he not vote wholeheartedly for them? I ask my friends on the other side to note the results of the utterances of the Prime Minister, namely that the natives are already in revolt in Pretoria and Johannesburg. The Prime Minister has even called out his troops to calm them. He should be warned. The unfortunate thing about the Prime Minister is that he scracely comes to the head of affairs when blood must flow in our country. He is not satisfied if he does not get the smell of blood. I come to the third point. Our taxation laws must be so amended that agriculture and industry shall not suffer. The taxes which the Minister of Finance levied last year have functioned wrongly. They have not worked out as he intended. Take the young farmers who perhaps have 300 morgen of land. As a result of the prevailing prices and because his land is too small he sells some of his stock. He perhaps wants to purchase additional land but then his income from his cattle falls under the Excess Profits Tax. The Minister must realise this. I do not blame him for not realising it. He knows nothing of farming. But the Prime Minister knows farming, and he should know how detrimental such a tax is to the young farmer. Now, he comes with the other taxation proposals, that friends on this side will explain. I want to deal with the last point, namely the treatment we receive in connection with the internment of persons. You know that we have said perpetually that we do not identify ourselves with sabotage. But a young man is what he is. I was also young. I rebelled. I do not regret it, and I do not apologise. But I say this, whether a man is young or old, if he transgresses the law of the land then he is at least entitled to a fair hearing. The proof has been given that hundreds of these people have been set free without a hearing, and then the young Minister of the Interior interns those people again. I want to warn the Prime Minister. All these are points that chafe. You know, if a harness chafes, then it is not the horse’s fault. It is the fault of the harness, and if we now allow the harness to go on chafing, then the horse ultimately becomes obstinate. I want to warn the Prime Minister. These are all chafing points, injustices and unfairness is. If a man transgresses a law, punish him, but give him a hearing; he has a right to it. The Minister of the Interior and the Minister of Justice have to do with this matter. They are still very young, and just as Mr. Henry Burton was the cause of the downfall of the S.AP. Government these two will probably be the cause in future of the fall of the Prime Minister.

I welcome this opportunity to second this amendment which has been introduced. Looking back at the history of South Africa, it is very clear that the previous regime of the Prime Minister was marked by certain outstanding characteristics. The first of those was that in the history of South Africa there was never a period in which there was greater extravagance than during the period when the Prime Minister occupied that office. The second characteristic was that South Africa, except in the case of the war of 1899-1902, was never in a state of greater commotion than in the previous period when he was a member of the Government. Thirty years ago, with the assistance of the Prime Minister and his colleagues at that time, South Africa was plunged into its first great trouble after that great shock of 1899, and it is during that period—also thirty years thereafter—that for the first time this country was burdened so heavily financially that for nearly thirty years thereafter it struggled under a dead State debt of £65,000,000. If that had been all, we could have submitted to it, but that was followed by bitterness, misunderstanding, suspicion as well as poverty and economic dislocation. These were the bitter fruits which followed that period, and now for four years we have again been subjected to the policy of a second regime of the Prime Minister’s, and again we find South Africa in a state of great commotion; again we are placed in a financial position which must convince every person with common sense that we are rapidly moving in the direction of complete financial ruination. In the year 1939—’40 expenditure of South Africa stood at £45,000,000. In 1940—’41 it had risen to £63,000,000. In 1942—’43 it had risen to £95,000,000, and during the year 1943—’44 it is going to rise to approximately £155,000,000. The expenditure is increasing at a surprising rate, and if South Africa asks itself what advantage it is reaping from this reckless expenditure of money, I think there can only be one reply: Nil, nil, nil. If we look back at the rate at which the national debt has increased, it is even more astounding. In 1911 the State debt stood at £116,000,000. In 1939, when the Havenga regime came to an end, it was a little less than £280,000,000. Thereafter it rapidly increased until in 1940 we find that it stands at £292,000,000. In 1941 it increased to £346,000,000; in 1942 it rose to £381,000,000, and in 1943 it increased to £426,000,000; and, as was estimated this morning by the hon. member for George (Mr. Werth), it will be in the neighbourhood of £470,000,000 next year, and that with a small European population of scarcely 2,250,000 which has to bear the greatest portion of this burden, which has to pay the taxes, and which is responsible for the colossal sums which are spent. I also want to add that I appreciate the manner in which the hon. member for George brought these things to light this morning. I appreciate it all the more because the financial expert on the other side, next to the Minister of Finance, argued until he was blue in the face in an effort to refute those arguments. The gist of his reply, as was indicated here, was that this is war time. Must one then, because it is war, simply abandon the reins to the horses and allow South Africa to career recklessly along the financial path? Is that his argument? No, unfortunately the hon. member cannot look at the interests of South Africa from a South African point of view. He will forgive me for saying that. On every conceivable occasion when this argument has arisen in connection with the interests of South Africa, his trump card has been: “Yes, but you must remember that in Australia the position is this, that and the other”. I want to ask the hon. member whether Australia is the only moral and financial yardstick that he knows? Will he not concede that the background of South Africa’s history is totally different to that of Australia? I want to ask the hon. member to spare us—I am tempted to say—the annoyance of continually holding up Australia to us as an example. What is good for Australia may be good for that hon. member, but it is by no means good for us in South Africa. Then we come to the war expenditure of the past four years. There we find an equally astounding position. In 1939—’40 the war expenditure amounted to £4,000,000; in 1940—’41 it had risen to £44,500,000; in 1941—’42 it had risen to £80,250,000, and in 1942—’43 it rose to £96,000,000 plus a further £4,000,000—a total therefore of £236,000,000. If these monies had been spent on the national development of South Africa or in the national interests of South Africa, we would not have objected to this expenditure, but these colossal sums were spent largely by the Department of Defence with recklessness bordering on criminality. It is generally known that in respect of the first two years of the war the Treasury or the Department of Defence has not yet been able to check and to find the warrants covering the expenditure of a sum of approximately £60,000,00 which was spent during that period. £60,000,000, to the Union of South Africa, is not a small sum, and we expected, when the Rt. Hon. the Prime Minister declared war and he did not immediately take up arms, that in the first instance he would have seen to it that he got a sound, thorough grip on the Defence Department, as far as expenditure was concerned. On the contrary, we found this state of affairs, that for the first two years that department charged over the financial plain with the reins abandoned to the horses. It is due to that fact that no warrants could be found to cover a sum of approximately £60,000,000. We expected that the Rt. Hon. the Prime Minister would immediately form his tried heads of departments into an authorisation body which could control our financial matters in a proper way. Today South Africa has to pay the piper. The accounts are there, but the warrants have not yet been found, and, as one witness from that department stated, “they have simply regarded the matter as closed; apparently there is nothing to be done about it.” In the meantime our country has been flooded with men and women in uniform, men and women, who, as was indicated this morning, are spoon-fed, a great percentage of whom must convince even a blind man that their military value cannot be assessed at more than the figure nil. Those people are a burden to the country today and a burden to the Prime Minister. I want to ask the Rt. Hon. gentleman whether the time has not arrived for him to sweep his stables, so as to restore to some extent this country’s confidence that there is yet hope for the future. I think the Rt. Hon. the Prime Minister owes that to the national interests of South Africa, however inerested he may be in the war which he is waging. I want to tell him that he must save South Africa in time so that all its resources will not be wasted and lost for ever. I just want to touch upon one other matter. An announcement recently appeared in the Press that already South Africa stands committed to a sum of approximately £50,000,000 in respect of the Lease and Lend Act. The Prime Minister’s reply on the floor of this House in connection with that question was that South Africa had no part in the Lease and Lend Act. I think he owes an explanation to the country as to the extent South Africa is committed under this lease and lend system. Are we simply treated as an integral part of England or are we still functioning as an independent State? If we are committed to an extent of £50,000,000 we have the right to ask the Rt. Hon. member on what conditions we were made a party to that agreement. To what extent does it threaten our economic and political freedom, and if we are committed, where did the Prime Minister get the authority to do so without the consent of the people and of this House? These are things which create uneasiness in the country, and which make us feel concerned about the financial and political freedom of this country in the future. The Prime Minister owes a very clear and straightforward statement to the country. Now I just want to say that in these times the country is definitely in a state of anxiety. A feeling of dissatisfaction amongst the people is coming into being, even amongst the supporters of the Prime Minister, in regard to the wreckless manner in which innocent people are being detained in internment camps. On three different occasions the Afrikaner in this country has been put into camps. It happened for the first time in 1899-1902; the second time was in 1914-1918, and now again since the Prime Minister has assumed office. I know of pathetic cases where people were interned on nothing but the statement of a commercial traveller in the country. I know of other cases where the poor wife is alone on the farm with three children, at the mercy of natives for her living. I say that at this stage’ the hon. Minister ought to appoint an impartial committee to investigate the matter, and he ought to ask himself whether it is still necessary to detain those people. Has the time not arrived to release them on parole? Today some members of the Cabinet reveal a hardness of heart which is unknown in the history of South Africa, and we want to make an appeal to the Prime Minister to see to it that these things are rectified. The time will arrive when South Africa will again experience calmer days, and when a large section of this nation will again have to assist in building up what has been destroyed. These are factors, which, if they are not rectified in time, will tend to plunge South Africa into chaos when these abnormal times are past. Then I just want to conclude by saying this to the hon. Minister of Finance. There are only two sections which will be grateful to him for his taxation proposals; the first section is the gold mining industry, because he has increased their contribution by 2½ per cent. in comparison with a tenfold increase in the case of other people, and the fact that there was an immediate improvement on the Stock Exchange in Johannesburg is the most striking evidence of their gratefulness. The other section which will be grateful to him are the coloured people and the natives. Heaven alone knows why they were excluded from the travelling tax which the Minister has imposed, and I do not know how he can justify it. But I do think that the hon. Minister of Finance is establishing a dangerous precedent here in converting the Railways into a taxation machine. It is an extremely dangerous principle, just as dangerous as the land tax which he introduced last year. These things are creating dangerous precedents and standpoints as far as the future is concerned. I want to conclude by saying to the Rt. Hon. the Prime Minister that he must not hold it against us if we cannot become enthusiastic about the war zeal which he displays. We on these benches are convinced that this war is not in the interests of South Africa, that it is a war which is being waged in Europe once again in the interests of England, and that South Africa, with its 2,250,000 Europeans, can only burn its fingers and ruin itself by participating in that war. I heartily support the amendment as introduced by the hon. member for Vredefort (Mr. Conroy).

I think the Minister of Finance is deserving of congratulation on the ingenuity which has been shown by his Department in picking up the unconsidered trifles which are going to make up the sum of his taxation in this Budget. He has taxed a variety of things, but I do wish that the incidence of his tobacco tax had fallen on the profiteers in that particular industry, rather than on the consumers. It is unfortunate that at this time a further tax on cigarettes and other smokes should fall on that large body of soldier taxpayers, numbering probably 100,000 in one class, whose daily bread is almost inseparable from cigarettes and other smokes. And I should hope that with the ingenuity that is inherent in his Department it will not be too late for the Minister to change the incidence of this tax, so that it falls upon those who make huge profits from the industry, and not on those humble smokers who make no profits at all. There is no doubt that there is room for a change in the incidence of this tax. We know very well that the raw product is so regimented that there is very little profit to be made in the growing of tobacco. The price is so adjusted that the users of the raw product are the people who largely benefit, and, that being so, I should have thought the Minister’s well-known sense of justice would have directed him to those people for the globular taxation he has to draw from the tobacco industry, and that the consumer would at least have been allowed to go comparatively free. I think that this is the time when the Minister should seriously consider that aspect of the matter, because there is no doubt that a very large proportion of the pay of the soldiers goes into tobacco, and I think it would relieve the soldiers from the burden of the additional taxation contemplated in the Budget, and it would be a gesture which they as a class would very much appreciate—if the Minister were to change the incidence of this tax. Then, for the first time in the history of the Union, the Minister of Finance is using the Railways as a medium of taxation. He seeks now to get the Railways to hold the tourist taxpayer, whilst he collects a tax from him for having used the Railways. In other words, no person may travel on the Railways until he has satisfied the Minister’s demand for his 15 per cent. tax from the tourists and travellers who make use of the lines from time to time. I doubt very much whether the South Africa Act permits such a misuse of the Railways, and whether tourist-travel has become such a tax on the capacity of the Railways that we ought to impose a penalty or an impost on those who travel. I think the traveller on the Railways is a very valuable asset of this country, as long as we are able to handle the volume of traffic, and as long as we are able to do that profitably and with satisfactory results to the State. The kind of tourists I should like to see taxed are the gentlemen who travel round the country very often under cover of darkness, with stolen petrol and a packet of stolen dynamite, prepared to destroy the lives of peaceful citizens, and to commit all sorts of vile offences. That is the sort of man we should be taxing and whom we should be imposing penalties on, in which a rope should play a final part. There is far too little attention given to that class of tourist, there is far too little tendency to punish him, and yet, as the Minister’s Budget indicates, there is a very ready tendency to use the Railways to tax the tourist who is really of benefit to the country. The Minister’s proposal to increase by 6d. in the £ the existing tax of 1s. in the £ upon dividends by foreign investors, chiefly resident in Great Britain, calls for some comment. It is estimated that the increase in the tax will yield £400,000, and if this is added to the £800,000 which accrues from the existing tax of 1s. in the £ a total of £1,200,000 is arrived at. This represents a tax of 1s. 6d. in the £ on money earned by foreign investors—foreign to South Africa—many of whom are resident in Great Britain. This tax is imposed on dividends payable to investors not resident in South Africa at a time when Great Britain follows a much more generous policy towards dividends earned by investors in British companies, living, say, in South Africa or other Dominions. In the year 1942, in Great Britain, income tax was levied at the standard rate of 10s. in the £ on certain incomes. But where the incomes were earned by way of dividend, and was payable to a South African, a rebate of 4s. 4d. out of the tax of 10s. was conceded to the South African by the United Kingdom Government under the Dominion Tax Relief Act. There seems to be a want of reciprocity on the part of our Treasury towards the British Treasury. The increase in the discriminatory tax on nonresident shareholders has provoked some ill-feeling among investors in South African companies living in Great Britain, and although the Minister has sought to justify the tax on the ground that he is merely extending to the non-resident shareholders some of the additional burden placed by the budget on South African shareholders, that argument has failed to carry conviction as shareholders in Great Britain bear the heaviest burden of all. In fact, it is argued by investors in Great Britain that the tax is contrary to the priciples of the Atlantic Charter. I need not go into that, as the Charter is hackneyed enough, but that point has been used as an argument. In any case, it seems likely that South Africa will again need capital from abroad, and the policy of provoking investors to withdraw their capital from this country, may prove to have been an unwise one. I hope, Sir, it will only be carried out where it is fully justified, and not merely to provoke or encourage the repatriation of capital from this country to its country of origin. I agree with those who maintain that the budget, though drastic, has been well received by the public, and I would merely add that any lightening of the burden on those least able to bear it, and an increase on those who are reaping profits, would be welcome. I am all for relieving the profiteer of some of his fat profits, and I hope the Minister will explore every avenue in order that some relief may be granted in other directions.

I regret that the hon. member for Kensington (Mr. Blackwell) is not in in his place, and I shall therefore come to the budget immediately. The Minister of Finance has created two new records with this budget. The first is that he has introduced a £100,600,000 budget for the first time in the history of the Union. I wonder if the growth in the national income justifies that there should be such an astonishing increase in the expenditure of the country. The other record which the Minister created last Wednesday, is that for the first time in the history of the Union, of this legislative body, an attempt is now made to exploit the Railways as taxing machine. If there is one thing the framers of the Constitution had in mind when they drafted the Constitution then it was that the transport system, of which the monopoly has been placed in the hands of the Government, must be used for the development of the country, and particularly the interior of South Africa, and that it may not be used to pour revenue into the Treasury. In Clause 127 of the Constitution it is stated very clearly what the position is. I would like to quote the clause:

The Minister of the Railways admitted the other day that a rebate of £1,400,000 was allowed in one year on the transport of soldiers alone, with the result that on this item a loss of £200,000 was suffered by the Railway Administration. I want to know if this is “business principles”? Then the clause proceeds:

If there is so much money, if money can be taken out, even if it becomes necessary to ration travelling by the public, then any money taken out must be used for the purpose of Clause 127, namely the development of agriculture and industries in the interior of South Africa. That is the other record the Minister has created here, and now he comes and pictures to us the position of the country. Now I want to say in the first place that where we live in time of war, where you draft a budget or if you want to judge a budget intelligently, then you must do so in the light of two facts particularly. The first is that you must admit that in a time such as this artificial prosperity prevails, and any judgment or any estimate formulated must rest on the recognition of that fact. And another fact that must also be taken into consideration, either at the drafting or in assessing the budget, is the certainty of a post-war depression. When listening to the budget speech of the Minister last Wednesday it struck one that he has kept count with neither of these two facts. As regards the first, the Minister again acknowledged his gratification at the buoyancy of the revenue of our country. He has revealed that gratfication before, and I say it is an unhealthy sign that the Minister should try to lull the people to sleep with this fine representation of the buoyancy of our revenue. Where he does this, in the time in which we live, in a time of artificial prosperity—as he himself called it last year—it is an ominous sign. One would have expected the Minister to sound a note of warning at this juncture, and not that he should come forward to try to lull the people to sleep with the idea that everything in the garden is lovely. He wants to try and make the people believe that he is leading them in green pastures—as he expressed it—but he must realise that the day will come when we shall have to contend with the heat of the midday sun, and then the green pastures in which he is trying to lead us this year will avail nothing. Therefore, if one ponders the speech of the Minister then it appears that he neglected entirely to draft the budget of the Government in the light of the nation’s budget. What one has to envisage at this time are not only financial statements but also the whole economic background, with an eye to the future of the country. For that more data is necessary than the Minister provided in the budget which he submitted to us last week. I would like to bring to the attention of the Minister a few sentences from the “Economist” of 9th January this year, the latest issue—

And I would particularly recommend the following words to the Minister—

That is the first criticism I have on the Budget of the Minister; but he did not give us the figures and now compels us, as regards the broader position of the country, to grope about in the dark still further. I tried to put the point clearly last year. I asked the Minister if it was not possible to obtain estimates of our national income, precise estimates that will place us in a position to know what the actual position is, and the Minister said that provision has now been made for the payment of an allowance to a certain Professor of the Witwatersrand University. Well, the latest figures I can get were published in December, 1941. I asked the Minister’s Department and the Department of Census in the course of this week if there are any later figures, and they replied that no later figures were available. If an allowance is made for the work, then what is the value of it if the result is dished up to the public like mustard after a meal? Figures and data are the things that must be available to the people and the country before one comes to the treatment of the Budget. A further criticism is the manner in which the Minister represents matters. In his representation for the new year he wants to create the impression that he, after making provision for extra taxation, has merely to contend with a deficit of £549,000. The hon. member for George has already pointed out that this is absolutely misleading. It is not correct; it is no precise representation. The Minister is making use of the psychological fact that the ordinary man in the street is not so concerned about what happens on loan account and looks principally to the position of the revenue account. Because the Minister knows that psychology he has tried to exploit, and it has not told the people the whole truth. We say that in any business the truth should be made known, war or no war. It must appear in the balance sheet in such a way that one can see clearly what is being paid out on current account, and what cannot be paid from it—it must be clearly shown in the current expenditure. The hon. member for Kensington (Mr. Blackwell) came and said: “But it is now war time.” We know that this is today the cloak under which all the evils of the Government must be covered, and if we reveal something then the cry is: “War, war.” It is precisely our criticism of hon. members on the other side that they have become so shortsighted that they cannot see beyond the war. They forget that there will be a period after the war, and that is not noticed by the hon. member. We know what the Prime Minister has said. He said: “Don’t bother me with accounts in war time.” But the aftermath of the war lies ahead, and because we possess a feeling of responsibility we have to point to this. It is a pity that the hon. member for Kensington is not here, because he spoke a great deal about being “realistic”. We want to be realistic, and to face up to the position that will prevail after the war. We do not wax sentimental about the war, and forget what posterity will have to pay for it. We want to be realistic, and therefore we focus attention on these matters. War is no reason why misleading balance sheets should be laid before the country. Whatever the position may be, the actual position, if the Minister wants to reveal it nakedly and truthfully, is that he must reveal that he budgets in this Budget for a deficit of £48,549,000. We want the public to know that this is the estimated deficit for the year now at hand. It must not be hidden under loan account, as is done now, to create the impression that the current expenditure is not much greater than the current revenue. We also desire openheartedness—that the deficit on the revenue account be estimated at £48,500,000. Then the people outside will know the price that they must pay for the senseless war in which the Government has plunged the country. They will be able to see that this is the price that is exacted, and the people will be able to ask themselves if this price is worth while when we see that the victory of the Allies must mean a victory for Russia, and if we know that, then the sluice gates of Communism will be opened over the whole world. Then the people will be able to judge whether we are prepared to pay the price, and thereby get Communism in the country—the system that has no longer any respect for God or His Commandments, the system that has abolished the Sabbath, the system that transforms churches into anti-religious museums.

What about National Socialism?

It seems to me that the Minister of Lands has National Socialism on the spot where his brain should be. We have to do here with the position of South Africa. I will not allow myself to be deflected from the danger of Communism by the bogey of National Socialism. It is an actual danger here. With the great ratio of coloureds and natives in our country to the little handful of whites, the danger of Communism is a hundred times worse for white civilisation than National Socialism.

What wisdom!

The hon. the Minister is perhaps a little jealous.

He has never known what National Socialism is.

Let me revert to a calmer atmosphere, away from the Minister of Lands. We know that he is not accustomed to a calm atmosphere. How does the Minister of Finance get the fine figure of £549,000? By the application of a purely arbitrary principle that he calls the fifty-fifty principle. And now I want to say to the Minister that instead of fifty-fifty, he might equally well have taken sixty per cent. on income and forty per cent. on loan. Then he would have had a deficit of £19,350,000 today, and he would then have had to levy extra taxation to a sum of £19,000,000 instead of £9,000,000. Or he could have done it the other way about forty-sixty, and then he would have been able to come here and say: “My accounts balance beautifully, no extra taxation is necessary.” Or he might have taken thirtyseventy; then he would have been able to say: “I have now a beautiful budget and we have a surplus of nine million pounds that we can deduct from the taxation.” He could have done that. Now he comes with a magic wand and wants to lull the public to sleep. It simply depends upon what figures you take, whether you conjure up a deficit or a surplus. This is the sort of method we have had from the Minister for the past few years. The Minister comes here and represents the position as if he, just as a Saul, the campaigning hero, has a difficult task to fulfil, and then he goes through the task and he sweats and labours; but the Minister can avoid that task by taking only forty-sixty instead of fifty-fifty. One wonders why the Minister assumes such an enormous exertion. One cannot describe it other than a farce, now in progress for the third year—so far a comedy in three acts. That is the arbitrary figure the Minister uses, in accordance with which he can show a surplus or a deficit through arbitrary manipulation. And if we go further we find that the figure fifty-fifty is not even being maintained; that is also wishful thinking on the part of the Minister. The hon. member for Kensington has quoted figures and I accept them as correct. He said that during the last four years the war expenditure has amounted to £236,000,000, of which £94,000,000 has come from Income and £142,000,000 from Loan Fund. Does that look like fifty-fifty? And in the same time the net national debt has increased by £131,000,000. In other words, therefore, the rise in the national debt is due to war expenditure, and over and above this, there is still an extra £11,000,000 that was spent on the war and put to Loan Fund in another way. The whole increase of £131,000,000 in our national debt was spent on the war. But now I say that the fifty-fifty principle has not been able to prevent inflation in this country. It is astonishing that the Minister has simply left the all-important question of inflation aside, without saying anything about it. He admitted in passing that the economic position in the country is characterised by increased supplies of money, and decreased supplies of commodities. But he did not try to explain to the country the measure of the inflation. Let me give a few figures. Cost of living has risen by 21.2 per cent. Wholesale prices have risen from 1,115 in 1939 to 1,625 in 1942, a rise of 45 per cent. And this has happened in spite of the adoption of the usual measures against inflation, namely price fixation, rationing and taxation. Now, I say that in a country such as South Africa inflation in war time with a consequent deflation in peace time, is of greater importance than in any other country of the world, because we have here a mining industry that is on the wane. For that reason it is more important to counter inflation in South Africa, so that after the war inflation may be avoided. The inflation gap, to call it such, must be as narrow as possible. But the Minister lays no facts before the country, and says nothing in connection with the inflation position. For that reason I say that the Minister must look the true position in the face. He must realise that the only effective brake on the inflation position is to create an equilibrium between the money that is made available for spending on Government works and war expenditure, and the money withdrawn from spending by taxation on the other hand. In other words, if the Minister wants to bring the position of inflation under control then he must release less money for spending—in other words, he must curtail Government expenditure, or he must increase taxation still further. That is a sound policy; that is the only sound policy. He must do one of the two things, because he must find the equilibrium if he wants to check inflation. It is quite clear that the policy of fifty-fifty—or rather the lack of policy—has not been able to establish that equilibrium. If the Minister wants to proceed with war expenditure at the present tempo, then there is only one way, and that is to change his fifty-fifty policy and to tell the country honestly and open-heartedly: “I want to keep the position sound, and where I want to maintain war expenditure on the existing level I must increase taxation.” He must do that if he wants to be honest, even if he has to get 60 per cent. or 70 per cent. or 80 per cent. from revenue funds. The people must know what we have to pay for this war. We must not push off the burden on to posterity, and, in addition, camouflage the position before the people. For the same reason, namely, to check inflation, it is also important to employ all measures against wastage in war expenditure. Even on the Minister’s policy of fifty-fifty it means that every £ saved in respect of war expenditure is 10s. less in taxation. If we put out war contracts for £50,000,000 and these can be put out at £49,000,000, then by spending £50,000,000, £500,000 extra taxation must be paid on the Minister’s principle. The more care that is exercised against wastage, the less will be the expenditure, and the easier it will be to obtain the equilibrium without levying great additional taxation. And yet you have a peculiar position, that the man who must care for the soundness of the financial position thwarts every attempt by this side of the House to combat wastage in war expenditure. Every attempt we make to counter wastage by the appointment of a committee of investigation is thwarted by him. I have spoken about the lack of important figures for a proper judgment of the financial position of the country. For instance, the figures regarding the national income that are available for consumption calculated on the 1920 Index, should be available. The latest figures we have are for 1940—’41. But these are already significant. It appears from this that the national income available for consumption on the 1928 index has been decreasing since 1940, in spite of the fact that the gross national income is still rising. In other words, the increase in the national income caused by war production has already been overtaken by the decrease in the purchasing power of our money, and the result of it is that the actual revenue per head of the population has been on the down grade since 1940, and to 1941. In that measure inflation has already got out of hand! Now, I would like to know from the Minister if this disquieting tendency has also been maintained for 1941—’42? Is there a progressive dicrease of the national income available for consumption, as between 1(940 and 1941? If the Minister can show that there is a rise, then he can speak of the prosperity of the country, and of the sound financial position in which we find ourselves. But he must pardon us if we totally reject this test of the buoyancy of revenue, which is apparently his measuring stick, as the measure of the financial prosperity of the country. As regards the other point, namely, a consideration of the certainty of a postwar depression, this shines by its absence in the Minister’s speech. In this connection there was only one valuable observation made by him, namely, that for every £1,000,000 we can borrow, there will be available £30,000 less for social services after the war. That is the only inkling of recognition he gave of the position that will prevail after the war. But this admission lost something of its value because it was made in self-defence against the charge that he has made such meagre provision for social services. The admission did not come as a warning against the ever-growing war expenditure, but in self-defence, because so little money is provided for social services. But, despite this, the Minister of Finance is optimistic. He speaks of £30,000 per year for every £1,000,000—and here I want to reply to what the hon. member for Kensington (Mr. Blackwell) said. He also spoke about 3 per cent. interest. What assurance have we that the State, when these loans expire, and when other loans must be contracted to repay these loans, will still be able to get money at 3 per cent? It may happen that that £30,000 has increased to £40,000 and even to £45,000 per year. I just want to give the Minister these few consoling ideas in this connection: That the money he borrows this year, namely £55,000,000, will mean that after the war £1,350,000 less will be available for social services. We can also put it differently. For the money borrowed this year, £1,350,000 more will have to be paid in taxation every year after the war. Those who plead here so regularly for social security, must think of this. When we have increased our national debt by £200,000,000, which will be the position on 31st March, 1944, it means that after the war £6,000,000 per annum less will be available for social services. The Minister and the members on his side who plead for social security must think of this when they come here and vote that ever-increasingly large sums of money must be poured into the bottomless pit of war expenditure. I see the hon. member for Kensington is now here. He has drawn a comparison between taxation in our country and taxation in Australia. The first thing I want to ask him is this: Has there been an increase of indirect taxation by 400 per cent. and 500 per cent. in Australia?

That I cannot answer.

The hon. member spoke only about direct taxation, but indirect taxation must also be taken into consideration. It is scant consolation to the taxpayers in the Union to be told: Remember that in Australia there is a man who pays more than you do. That is scant consolation, particularly if he looks to other countries where the taxation is much less than in South Africa. For every country the hon. member can mention to me as having higher taxation than in South Africa, I shall be able to give him a country in which there has been practically no increase of taxation during the war.

What country?

Let us take a country such as Portugal. I shall briefly give figures in connection with Portugal. In Portugal there was a national debt of 7,145,000,000 escudos at 31st December, 1939. A year later the national debt was 6,489,000,000 escudos, and the following year 6,614,000,000 escudos. During the two war years Portugal decreased its national debt by 7½ per cent., and in the same year Portugal did not levy higher taxation according to the national income. I shall give the figures in respect of income during those years. In 1939 it was 2,565,000,000 escudos; in 1940, 2,614,000,000; in 1941, 2,782,000,000 and in 1942, 2,857,000,000 escudos. Now let us compare this with South Africa. In the same two years in which Portugal decreased her national debt by 7½ per cent., our national debt increased by 20.4 per cent., and if we take four years, it has increased by 52 per cent., and if we take the position at 31st March, 1944, then the increase will apparently be 73 per cent. Our national expenditure increased during the past three years by 63.5 per cent., 81 per cent. and 94 per cent.

But South Africa is in the war, and Portugal is out of the war.

Precisely. I must congratulate the hon. member that he now grasps the point. That is precisely what makes our mouths water so much to be out of the war. I want to deal with another aspect of the comparison that the hon. member made with Australia. He merely took one position, namely the position of the salaried person. The salaried person in South Africa is the person who pays the least taxation on any income scale. Now the hon. member compares the salaried person in South Africa, the person who pays the least taxation, with the figures for taxation in Australia. It is quite correct that the salaried person with a salary of £5,000 in South Africa pays £1,250, but the same person, if he is a professional person, does not pay £1,250 in South Africa, but £2,680. His comparison is therefore absolutely worthless. It surprises me that the hon. member for Kensington singles out the salaried man. That is, the man who pays the least taxation relatively; and that he has not taken the professional man, and also the one-man company. His figures mean nothing. This is typical of the argument of the hon. member. He always speaks without his book. As regards wealth of words, his speeches are good, but that is all. Then there is another point. He says it is not an unheard-of thing that there should be loan funds. The criticism of this side of the House is not that there are loan funds, but the criticism of this side is that the loan funds are not used for capital expenditure. The hon. member misrepresented the position of this side. Our position is that capital expenditure must be made from loan funds, and not from ordinary expenditure. That is a big difference. It really astonished me that that hon. member could make such a remark. I now want to proceed with the budget. Another respect in which the Minister of Finance has shown that he is not keeping count of the post-war period is the Excess Profits Tax. The figures show that the Excess Profits Tax has now reached its peak, and that it is on the down-grade. This taxation must be continued for a few years after the war—that the Minister has promised—and it is being continued precisely for the purpose of making provision for the people who are now paying Excess Profits Tax so that they can recoup their losses of later years by their profits in the first years. Losses will come that he will have to repay, and what provision does the Minister make for this? The Minister is now making full use of the Excess Profits Tax on his revenue account, and if repayment has to be made later after the war, then it will have to be covered from loan funds. This will also be debt that will be loaded on to posterity. He has made no provision for a reserve fund. He uses the entire revenue from the Excess Profits Tax for his current expenditure. He does not put a portion of it into an auxiliary account, and where is his successor going to find the funds to pay for the losses, because this taxation must continue for a few years after the war for precisely that purpose. Not only has he made no provision through the medium of this senseless Excess Profits Tax, as he handles it, for that period, but he has also made it impossible for new industries and businesses to build up reserves to enable those industries and businesses to contend with the storms of depression after the war; yet he should have allowed industries to build up reserves, because they are the potential taxation sources of the future. If we go through this budget of the Minister, we find it to be a budget that provides only for the present moment, and that no count is kept of such a thing as a post-war position that the country will have to meet, and for which our country should be strengthened. Let me quote a few figures to show how dangerously high war expenditure is running. At the beginning of the past financial year, our national debt was £381,100,000. During the past year £96,000,000 has been devoted to war expenditure. This means that we are spending about 25 per cent. of the amount of the national debt in one year on war expenditure. At the end of the financial year, our national debt will have increased by more than £200,000,000. Our estimated national income for the year 1941—’42, less payments overseas, was £480,000,000. [Time limit.]

The hon. member for George (Mr. Werth) started off the debate from the other side, and he quoted, so I understand, commercial opinion with regard to the Budget. Now, I claim the right to be able to speak for commercial opinion in South Africa, and what I have to say, with regard to the reaction of commercial opinion to the Budget, does not at all compare with the report which the hon. member for George gave us this morning. Last year I described the Minister’s Budget as a brave Budget. I think I shall describe this Budget as a “battling on” Budget, because one would certainly get the idea from the criticism of the other side that they would wish to see an end to the battle, and that they would wish to “hands-up”, that they would wish to finish, as they call it, the whole sorry business. It is very difficult to argue with the Opposition, seeing that they take up so different an attitude from us on the war, as to the necessity for the war and so forth. We went into this war with our eyes open, and, knowing that this war was going to cost us lots of money, we went into this war realising that it might cost us, as the Prime Minister himself said, the whole of the capital which the country could put up. We went into this war in a spirit of neck or nothing, and our attitude has not changed in the interim. The hon. member for Fauresmith (Dr. Dönges) has talked about Portugal and other countries which are out of the war. I remember the hon. member for Piquetberg (Dr. Malan) at one time making an extremely telling speech in this House about Norway. He said: “There was a country which for hundreds of years had followed a policy of neutrality, whose income was this, and whose defence vote that,” and he told us that in every sense there was a country which we should follow. Where is Norway today? In other words, if we in South Africa had taken up the attitude which Norway did at the beginning of the war, perhaps in some other Parliament, someone would be asking the Speaker of the House: “Where is South Africa today?”

Is Norway 6,000 miles away from the war?

My friend has had his say; he might let me have mine. My hon. friend quoted Portugal. Would he give me any assurance that in two years’ time he will be able to speak of Portugal as he does today? Portugal is still in the danger zone, and it is very risky to make comparisons of that kind, as, for instance, the comparison of the Leader of the Opposition about Norway.

What about the Argentine?

I started off by saying that we went into this war prepared for the worst, but hoping for the best, and this Budget which has been so drastically criticised by the other side, this Budget has been a surprise to the commercial and industrial people of this country. I can tell my hon. friend that.

Yes, a very unpleasant surprise.

They were surprised at it not being as drastic as they thought it was going to be. I had a telegram the other day from a large body of taxpayers—not people who do not pay taxes—and it reads: “Every tax levied hits us”; these men believe that South Africa is in the war to stay in it, and that it could not do anything but be in the war. Now, this body of public opinion said, continuing in their wire: “Budget not at all drastic, view with favour income tax, super tax, cigarette tax, liquor tax, railway, and telephone tax.”

Yes, they favour everything that hits the small man.

This is the first time I have ever heard of the small man as an example having to pay super tax. But that is just like the hon. member for George. He makes these airy remarks and when you examine them—they are like his criticisms—airy. I thought this morning when the hon. member for George brought up this matter about the loan funds being used to cover our Budget that I would have a lot to say about that. But the hon. member for Kensington (Mr. Blackwell) has dealt with that position.

Do you deny it?

I say this: you take a country like England. We must not, of course, according to the Opposition, compare any countries which are in the war on our side. Unfortunately we have not got the figures about Germany. If we had I think I could read some lessons to hon. members over there. Nor have we the figures about Italy, but some figures we have got. Now, in the case of England, I believe their revenue expenditure alone last year was roundly £2,627,000,000. And their loan account was £2,659,379,000. I know I must not make comparisons with other countries because they say it is their war and it is not our war, and when they say “our war” they mean the gentlemen on the Opposition benches. But now about this watseful expenditure of ours, I believe that the per capita rate in terms of today’s budget, so far as the white population alone is concerned, amounts to something like £70 per head of the white population. The taxation for the same period for England is something like £118. Now, hon. members say that in England people should pay. Well, I am only using this figure from this point of view. Hon. members opposite give the country the idea, or they try to give the country the idea, that we are the most wasteful country in the whole of the Universe and that we spend money like water.

And so you do.

The hon. member for George was on a Commission and the more he tells us about cost-plus, the more the House understands how little he understands about it.

You are the last man to say so.

This is the hon. member’s method. Here is a great soldier and a great engineer. He is asked to build fortifications and he is told he has to build these in five months. This wonderful engineer and soldier builds these fortifications in five months, and along comes the hon. member for George and says: “Very fine works indeed. The job is done, but let me look at your vouchers now. What about your vouchers?”

Is this a cost-plus debate or a budget debate?

That officer may say: “Well, look here, this is a job, here is the proof, we have officers from abroad who tell you that a work like this was never built overseas in less than 18 months.”

Twenty-two months.

They tell you that a job like this was never constructed abroad for less than it has been constructed here.

Where did you get that?

That is in evidence.

In what evidence?

The hon. member is not a bit impressed with that, he wants to see all the vouchers. In other words, when we went into this job we went in to do it. The thing was to get these fortifications built to time.

Tell us the profits made by the contractors?

As I said, when we went into this war it was neck or nothing. The acute danger seems past, and that is why my hon. friends can talk so glibly. I should like to see my hon. friend put on an investigation after a big battle in the North. Let us take El Alamein. We won that battle and now the hon. member would say: “Yes, I see you have won the battle but now I want to see the vouchers.”

If the soldiers on the battlefields do a good job ….

Yes, but we have a battlefield here in South Africa.

Everyone must do a good job.

Does the hon. member realise that it was quite probable when we were putting up these works, while we were doing the work, the enemy might have appeared at our door—and he might have bombarded us … it was quite probable that this House even might have been shelled by the enemy ….

Yes, pigs might fly.

They don’t seem to realise it. In fact, the whole trouble with the Opposition is that this Government has so well looked after the people, has made them so safe, has made South Africa so safe, that for the life of them they cannot understand our past or present dangers. Now, at El Alamein my hon. friend would have said, “Yes, you won the battle, how many guns have you taken, how many prisoners ….”

And how many shirts?

Yes, quite, how many shirts. And then he would have put a wet towel round his head and burnt the midnight oil, and the next day he would have said, “Yes, it’s all very well, I have examined the vouchers but there are two vouchers short and 100 prisoners short. And I want all your vouchers, not two short.” And he would make such a song about it that the people would forget that there had ever been a victory. Oh, yes, that is his technique. And that is the kind of atmosphere the hon. member wants to create, he wants to create the impression both in this House and in the country that we are squandering the people’s money.

Of course you are.

Now, I have had the opportunity of investigating many accounts. I have had opportunities of investigating methods of accounting, and I say this, that whether it is a question of building fortifications or buying supplies of whatever kind, we are getting these goods delivered to us on better terms and at better prices than any other country in the world whose methods we have examined. Now, my evidence so far as the hon. member for George is concerned may not be very valuable, but there it is. I for one say this, that we in this country should be proud to have men who could step into the breach as they did, when who gave us the results which they have given us. I say this in regard to these missing vouchers which we hear such a lot about. Of course, if you have men chasing missing vouchers and possibly losing the war the hon. member would rather do that than lose the vouchers. What can you do with such a fellow? The hon. member for George would rather say, “I have lost the war” than “I have lost a voucher.” He would rather lost any battle than lose a couple of vouchers. Well, I repeat what can you do with a man who takes up an attitude like that? Precious little.

Tell us about the £50,000.

Now, I say that commercial opinion in South Africa views this budget—not as a drastic one; commercial opinion expected to have more to pay than they are asked to pay, and what commercial South Africa would say to this Government and to the Minister of Finance is this: “Go on with the battle, go on with the war, and get it finished as early as you possibly can, and we, the taxpayers, the little taxpayers, the big taxpayers, the super taxpayers, will give you all the money you want.” That is the message of responsible opinion in South Africa, with regard to this Budget of the Minister of Finance.”

Oh, no; that is not what responsible opinion says.

Now, I want to say a few words about this matter which the Minister of Finance raised himself the other day. The hon. member for Fauresmith said that he raised it in his own defence, and that is that for every million on loan in connection with the war we shall have £30,000 less after the war for our social services. That, of course, is a matter which gives every thinking man in this country food for thought. When we entered this war the charges on loan account amounted to something like £11,000,000 per year. If we add to our loan account a sum of, say, £300,000,000, and we are fortunate in getting that at 2½ per cent., which I think we might reasonably expect, or make it 3 per cent., then we shall have something like £19,000,000 per year to meet in interest charges. Now, sir, we are not saying that that is not a serious sum of money for this country to pay. It is, but we do say that the necessity for that payment was such that we could not do otherwise than incur the expense. We must bear in mind when we are talking about better conditions after the war—and I am one of those who entirely support the Prime Minister in his reconstruction policy—we must bear in mind that we have to face on loan account another £8,000,000 or £10,000,000 every year in interest charges. That I have no fear about, that I think we will easily meet, because in the meanwhile the £50,000,000 or so that we are raising from revenue for war account, will steadily dwindle year by year until it comes to very little. We shall not wipe it out altogether, because I trust that we shall always have in future in South Africa an adequate Defence Department; that is to say, I hope we shall always have money spent on the defence of our country. Incidentally, sir, that is a point that our friends in the Opposition constantly lose sight of; I mean that this Government had to face an expenditure that would have been very largely unnecessary if the previous Government had done its duty. This is especially the case in regard to particular thinks like fortifications, which we had to build, aerodromes, hospitals, and we had guns to get, and so forth and so on. If ten years before the war the Opposition when they were the Government, had done their duty by this country, the present Government would not have needed to spend all the money that they have been compelled to spend. That is a point that the Opposition conveniently lose sight of. After the war I hope that we shall not simply let the defence side of the country be scrapped. Now, then, sir, we have got to find that money, and, in closing, I would like to say this. A lot has been said about money we are to spend on social services. But I, as a business man, feel that what we should be concentrating upon more and more today is an increase in the national income. Now, sir, the Prime Minster has done a great deal in getting information; he has appointed a Planning Council, and he has other bodies at work which will in due course give us a volume of information of great value to the economic life of the country. Now, as to the application of that, I would ask the Government, at the earliest possible moment, to set up machinery, so that we can use that information. I am not going to suggest new departments of State, because that is unnecessary, but I would give one example that seems very clear to a business man. We have today the Agricultural Department, which is becoming a great distributing agency. The Minister of Agriculture today is not so much a Minister of Agriculture as he is a kind of wholesale corn merchant, a wholesale green grocer, a wholesale butcher, and so on; and he is so taken up with that side of his work, that he has no time for the other side of his work, which is very necessary. I would make fundamental to the economic development of this country, the putting on its feet of the agricultural industry. I make that fundamental to our national development, and I say that today our Agricultural Department has all its work cut out if it only attends to matters of the land. There is the great question of erosion, and also the question of cattle diseases, the proper use of the soil and so on. We know that we have farmers today that are really land-diggers, and yet they are called progressive farmers. We have farmers who grow crops, where those crops should never have been grown, and on that side of agricultural development there is a great deal of work to be done. It is a very remarkable thing that in a country like England, which previously almost entirely ignored the agricultural side of its economic life, is today specialising on agriculture as never before. They are going in for research, and I would point out that the Minister responsible for that side of agriculture has nothing to do with food control or the marketing of products of the farm. I give that as an example to show that the time has come when we have got to break up departments and devote ourselves to preparing organisations to meet the new economic conditions that this country has to face after the war. I do not say that in any spirit of despair. My hon. friends opposite talk about us having reached the peak, and have pointed to the Customs duties having gone down by £2,000,000. Mr. Speaker, if we could get the goods. I promise the Minister that his Customs duties would jump up to twice the present figure. To talk like that is to talk despair. We in South Africa should be optimistic, we should believe in our country, and I am one of those who do believe in South Africa, and I do say this, that we must apply ourselves to the creation of the proper machinery. In that connection I would strongly suggest to the Minister of Finance that when he is thinking of wide schemes of social betterment, he must consider the means to get the money from growing national income that will be necessary. I firmly believe as an experienced commercial man and industrialist, that we in this country can develop for our people a standard of living second to none in any country in the world. But to do that we must do it scientifically; we must not only tell the people to use their brows to sweat with, but we must use our brains to think with if we are going to do the job of work that this country needs to be done. Unfortunately my time limit has now expired.

The hon. member who has just sat down has referred to the need of capital development in agriculture, and I must say I agree to a large extent with what he has said. There is no part of the country where the need for capital expenditure on agricultural development, the preventioin of soil erosion and other matters, is so great as in the native reserves. I am coming back to that point in relation to the fact that during the past year there has been no provision on the Loan Estimates for development work on the native reserves, nor has such provision been mentioned by the Minister of Finance in his speech. The hon. member for Kensington (Mr. Blackwell) a little earlier today referred in commendatory terms to the fact that expenditure of war funds has been evenly balanced as between revenue and loan account. In other words, the Minister has promised that he will not, in meeting the mounting expenditure of this country, depart from the fifty-fifty proportion between revenue and loan account. Well, sir, perhaps that is something to be thankful for. I am aware of the fact that in Great Britain the proportion spent from loan account is very much larger than in this country. Nevertheless the conditions here are very different, and the hon. Minister recognises the fact that mounting expenditure from loan account does carry with it, on a large scale, the threat of a rise in the cost of living. He recognises that it does contribute towards the rising cost of living in this country, and yet he continues, whatever the proportion may be, he continues to pile up expenditure on loan account, he continues to increase it. I have said in this House before, and I repeat, that in the present conditions of this country, I am opposed to this increasing expenditure on loan account, because it tends to shift the burden of financing the war on to the shoulders of the poorest class by increasing the cost of living. I know it is very difficult to calculate what proportion of the rising cost of living is due to a shortage of goods and to what extent it is due to the financial methods of the Government. But the fact is—all the evidence goes to show—that the rising cost of living presses most upon the poorer classes who, for the most part purchase goods that are produced in this country, and therefore they are not affected to the same extent by a shortage of imported goods. It would appear, therefore, that the increasing public expenditure on loan account is having a detrimental effect upon the standard of living of the poorest classes of the community. The principle, which I am sure the Minister recognises, at all events, is that with conditions of full employment internal borrowing can only have the effect of raising the cost of living. It may be foolish to talk about full employment in this country with its untrained and disorganised labour force, and its undeveloped natural resources. Nevertheless, within the framework of our present economic conditions there is full employment, or something approaching full employment in this country at the present time. In these circumstances further borrowing is to be deprecated. I am opposed to it more particularly in view of the fact that we are still far from having laid the burden of direct taxation upon the shoulders of those who have the capacity to bear it to the extent of their ability to pay. The hon. member for Kensington (Mr. Blackwell) gave the House some comparisons to show how the burden of direct taxation is distributed, and its bearing upon the wealthier classes in relation to certain other countries. In that connection I want to ask the Minister what I have asked him in previous years, as to why he has not further tapped that obvious source of revenue, the succession and estate duties. The present rate of succession duty has remained the same for the last fifteen years.

No, it was raised a year ago.

Last year we raised it; the maximum is now 25 per cent.

Well, prior to that it remained stationary for 15 years and last year’s increase was very small. Yet in other countries, especially in Great Britain, the maximum rate on the larger estates is 50 per cent. I think I am right in saying that. The increase here last year, so far as the larger estates is concerned, is only a drop in the ocean compared with what could be got from this source in the way of direct taxation. Again, the amount of the exemption in this country is probably higher than in any other country in the world. And, Mr. Speaker, to maintain these rates of direct taxation either upon the larger incomes or upon deceased estates, when the lower income levels, more particularly the people whom I represent, are taxed in a way which I have always contended is out of proportion to their abaility to pay, is to make the position considerably worse than it need be. The point I want to make is that a very much higher proportion of the increasingly large public expenditure could have been got from the wealthier sections of the community of this country, and it would have the additional effect of safeguarding the standard of living of the mass of the people of this country. I want to speak on certain particualr items of expenditure which the Minister has referred to in his budget speech, and the first is that of native education. The Minister has told us that he has allocated to the Native Trust Account one-sixth of the poll tax which had previously gone into the consolidated revenue fund, and that he is appropriating that for the purposes of native education. That step has been taken and we have therefore come to the end of the possibility of that process which has been going on since 1925, by which every step in the development of native education has been paid for by the people themselves out of the direct taxation which they contribute. It has always been the contention of those of us on these benches, that the contribution to the country’s economy made by the native people as workers is the basis of all the wealth of the country, and we have contended that that gives them a claim upon the community in proportion to their educational and other social needs. We have contended that those services should be financial on the basis of what the people need, and not what they can contribute from their meagre incomes in the form of direct taxation. Now for the first time, the funds so contributed have been exhausted, and it will not longer be possible to finance the normal development of native education in that way. This being the case, I want to put certain questions to the Minister. The first is, whether it is contemplated that the normal development of native education shall continue along the lines it has done in the past six years? If so, is it admitted that it will have to be financed out of the general revenues of the country, as in the case of the education of the children of other races? If that is not to be the principle, where are the funds to come from? Because they cannot come out of the Native Trust Account. I say that for these reasons. The deficit on the Native Trust Account, as laid before the Native Representative Council last September, was so far as education alone is concerned, £328,020. A sum of £230,000, that is to say one-sixth of the poll tax, which we are now told will be appropriated, will reduce the deficit to £100,000. In other words, this proportion of the poll tax will not wipe out the education deficit in the Native Trust Account. Now, so far as the general account of the Trust is concerned, that showed last November a small surplus of £27,600. Deducting that from the £100,000 which is still the deficit on the education account, it means that the Native Trust estimates even after that £230,000 has been appropriated, will still be short to the extent of £70,000. So, in future years, if the normal development of native education is to continue, funds must be made available from sources other than the revenues of the Native Trust. To reinforce that contention, the normal revenue of the Native Trust for the most part consists of direct taxation, whether general tax, local tax, quitrent and so forth, contributed by the native people themselves. On the revenue estimates it is shown that the amount of £340,000 is contributed by the Government for educational purposes, that is in terms of the Native Taxation and Development Act of 1925. The total normal subsidy from general revenue to the Native Trust account is under £350,000, and, apart from that, the balance from revenue normally flowing into that account comes from the totally inelastic native resources. The development of native education in the future, if it is to go on, cannot be financed from the proceeds of the poll tax, or from any other revenue normally available to the Native Trust. That is why we want to be able to give the people an assurance on this point; we want to be able to give the people we represent the assurance that development will go on, and if it is to go on, there would appear to be no obvious way of financing it, except in the same manner as the education of the children of other races is financed. Again, there has apparently been no provision this year for any further capital funds for the purchase of land. Hon. members sitting in other parts of the House have already asked the Government and the Minister of Finance to reconsider this supply of funds which the Government used to provide in previous years, for the purchase of land. There are at present no loan funds available for native agricultural development. I need not dilate on the conditions pertaining in native reserves. The revenue which is available for agricultural development is something like £650,000 a year, and, as I have pointed out before, that sum is utterly inadequate for the large capital expenditure required in these reserves. As I have previously pointed out, £3,500,000 is required to fence the Transkei alone. Fencing is necessary if soil erosion is to be stopped, and public anti-soil erosion works on an unprecedented scale are also needed in these areas. Mr. Speaker, I therefore make this appeal again to the Minister to make provision on loan account for the development of native agriculture. It is no answer to say that £1,000,000 was voted two years ago, and has not been spent. The reason it has not been spent is that the Government released a number of officers from the department who were required for this development work, and allowed them to go to the war. These officers could be easily recalled, and if anybody should be regarded as key men, it is these officers who are needed to carry out urgent work amongst the people who constitute the majority of our population. Moreover, it would be fulfilling a pledge given by the previous Government and repeated by this Government in relation to the purchase and development of native land. Now, I want to speak about old age pensions. The provision of old age pensions for the native people was strongly recommended by the Inter-Departmental Committee on Urban Areas, and that committee did so in these terms—

And a little later they say—

Now, the committee estimate that it will cost £900,000 per annum to provide old age pensions on a modest scale for the native people. Over £3,000,000 is spent upon old age pensions for members of other races. That is the strong recommendation of this committee, and the need for it is fully made out in the passage I have quoted from the report. The burden which the native people have to bear in supporting their old people is one of their worst burdens. Further, the fact that they are discriminated against in this particular field, is one of the most unjust discriminations that exist in this country, and I would be very sorry to know that the Minister of Finance with his known sympathy for the aspirations of the native people of this country, is standing in the way of this recommendation being put into force. These are the main points that I wanted to bring to the attention of the Minister. There are many other social services which the native people urgently require, and which are available to other sections of the community. Invalidity pensions is one of those services. There is another important service which was recommended by the Urban Areas Committee, and that is the subsidisation of rail rates between locations and places where the native works. I understand that there is disagreement between the Treasury on the one hand and the Railways on the other, as to who should provide the subsidy, and what I feel is that that dispute should be settled, and settled in such a way that these subsidies will be provided. The native people in urban areas who live in these villages and locations outside the towns, are sent there because the European community of the towns do not want them living amongst them, and it is again a case of palpable injustice that they should have to pay the extra cost of this arrangement, which has been brought about at the demand of the urban European population of the country.

I do not propose, sir, to deal at any length with the criticisms of the budget which have been made up to the present, because many of them have been dealt with by other speakers. But there are two points which run right through the objections to this budget on the part of the Opposition, as well as those of the hon. member for Vredofort (Mr. Conroy). The one is the general reference to the fact that the poor are getting worse off, and some of the rich are getting better off. That may be largely true. Apart from making such a statement, however, none of the speakers; not even the hon. member for Fauresmith (Dr. Dönges), who usually contributes a reasoned and thoughtful speech, have indicated in the slightest degree what alternative methods of taxation they would submit to the country. Apparently, they do not so much object to the method of taxation as they do to the object for which the revenue is being raised, and after all, that is a matter we cannot deal with now. I quite agree that if my hon. friends in the Opposition were in a position to go along to Hitler and make peace with him and stop the war, some of this expenditure would stop. But what would the effect on this country be if they were able to do it? The fact remains that we are at war, and the budget introduced by the Minister of Finance has to be dealt with and examined in the light of that fact. On that very issue the Opposition have changed their ground. In the first place, nearly four years ago we were told that we must keep out of the war; in those days we were told by the Opposition that Hitler would win the war. Today the hon. member for George (Mr. Werth) tells us that he is not concerned about that. Anyhow, in these days we knew where our friends stood. We know that unless we had participated in this war and done what we thought to be right, and if by any possible mischance Germany had won the war, Germany and Italy would have been on the Continent of Africa and South Africa would have been, at the very best, a vassal state of the Nazis. That was a position which we were not prepared to face. Now, the hon. member for Kensington (Mr. Blackwell) has already dealt with one aspect of this matter. But the opposition has been changing its ground. Only last year we were told that the menace to South Africa was the United States of America, that we were in danger of becoming a vassal State of the United States, and that we should therefore get out of the war. But now they have come along with a new cry; they have come along with their talk about the danger to South Africa of a Russian victory. They are afraid of a Russian victory; yes, they are, because a Russian victory means an Allied victory, and the danger which they talk about of Bolshevism and Communism being spread in South Africa is not a danger which we have to worry about. And I say so for this reason. The Soviet Government is a party to the Atlantic Charter which lays down that the internal affairs of any of the Allied countries engaged in the war will not be interfered with. And, furthermore, Russia has a treaty for twenty years with Great Britain. And from our experience we can say that whatever criticism might be levelled against the Soviet, the Soviet so far has not shown any tendency of wanting to break its agreements. And let me remind hon. members opposite who have had such a lot to say about Russia’s part in this war—and they did not say anything about Russia during the Hitler-Stalin Pact that it was not Russia who broke the Hitler-Stalin Pact and attacked Hitler, but Hitler who attacked the Soviet. Whatever may be the result of this war, we hope that the Soviet may play a great part in the victory which the Allies are going to achieve. We have no reason to fear that the Soviet will interfere with this country, or with any of the other Allies. But supposing that even now Hitler were to win the war, and supposing you were to get rid of the Communist menace. What would be the position then? It would mean that Italy and Germany would be on the Continent of Africa, and we would be a vassal State of these countries with a Gauliter in charge.

That would be better than having Stalin here.

And Japan would be dominating the Indian Ocean and the Pacific Ocean, and we would be faced on the one side with Germany and Italy, and on the other side we would have Japan—do hon. members realise what it would mean?

Yes, you make our flesh creep.

That is the position, and we are therefore justified in saying that not only have we done the right thing, but it is our duty to continue supporting the Minister of Finance to raise the necessary revenue to carry on the war. Now, the hon. member for Vredefort talked about double pay here today. Well, well! The hon. member must have a very dull conscience—a conscience dulled by hatred and prejudice—with the £1,000 a year which he is drawing, to talk about double pay; and he had the temerity to refer to me as one of those drawing double pay, because I had served on the Cost-Plus Commission. He did not say anything about the hon. member for George.

No, he referred to you as a soldier.

The whole speech of the hon. member for Vredefort was a piteous appeal to the Opposition not to filch his constituency, as they have already filched a number of other constituencies. The Minister of Finance has had to budget on the basis of our being in this war, and on the basis of our continuing to be in this war until victory is ours, and therefore we have to raise the necessary revenue. Hon. members complain about the loans which are incurred, because the Minister is financing the war expenditure as to 50 per cent. from loan, and 50 per cent. from revenue. And they complain about having to pay interest in connection with these loans even after the war, and they complain of our opportunities for social services being limited as a result. I think it is right to say this—that if the Minister is right in pursuing the policy laid down by this House, then after all this war is fought in the interests not only of the people here today, but in the interests of future generations, who will be freed from the menace of Nazism; and therefore it is only right and proper that future generations should share some of the burdens in connection with the war. I believe and I think everyone on this side will agree that when this war is over we shall not be going back to pre-war taxation, we shall have to have higher taxation than before the war, because it will be essential for this Government and the country to deal with the social services which the Prime Minister has pledged himself to. The Minister of Finance has budgeted for the necessary revenue. He referred to this budget as a “challenging budget,” but I think it is rather a safe budget. I think he budgeted so as to create as little antagonism as possible.

Execpt from the Opposition.

I notice that my hon. friend opposite was only talking for the fairly well-to-do people—probably members of the Reddingsdaad Bond or such people. The Minister has introluced his Budget with a view to having as little criticism as possible. He is imposing a tax on tobacco, on liquor and on cigarettes. Well, there certainly does not seem to be any reason why there should be no tax on wine, except to please the farmers in the Cape. I don’t know whether they will vote for the Government—I don’t think they vote for the Government now.

And I suppose if they don’t vote for the Government they should be taxed.

Now these are voluntary taxes and it depends on the taxpayer himself so far as many of these taxes are concerned—whether he will pay the tax or not. There is a great advantage in his taxes on beer, cigarettes and so on, because under these taxes it is not only the loyal population who will contribute towards the war, but also these other people who under the misguided leadership of hon. members opposite are still opposed to the war. I am satisfied that our friends opposite, even those of them who belong to the Ossewa-Brandwag, will not sacrifice their cigarettes or their glass of beer because of their objection to the war, they will smoke their cigarette, they will drink their glass of beer and they will smoke their pipe of tobacco, and they will contribute towards the war expenditure, and I think we shall welcome their contributions even more than the contributions of the loyal section of the community. But so far as those in favour of the war are concerned I am sure they will not cavil at the additional taxation which the Government imposes. Every time they smoke a cigarette or drink a glass of beer they will feel: “We are not only enjoying this, but we are doing something towards bringing the war to a successful issue.” I have been told that as a result of this new tax a new slogan has been coined in South Africa: “Drink for victory.” Let us hope that the Minister of Finance and the hon. member for Kensington will set the pace.

Then the tax will not be very productive.

As long as it is beer and not wine.

I think the Minister is to be congratulated on maintaining this equilibruim between revenue and loan. Well, I don’t propose to go into this question of cost-plus again beyond saying this, that there was only one or perhaps two alternatives. We might have had the alternative of calling for tenders and wasting time, and possibly losing a great deal. But all the evidence which we had showed conclusively that even if we were able to get people to tender they would have loaded their tenders to such an extent that it is very doubtful whether the work undertaken would have been any cheaper. But apart from that they refused to tender. They would not tender for anything so uncertain. And then the only other alternative was for the Government to take over all plant in connection with this work and run the work as a State department. Well, I am not going into the merits. In principle I would favour the latter. But I don’t think it would have been very practicable because it would have taken time to organise. Would the hon. member for George really have favoured that? And I submit that there is no evidence that there was anything in the wastefulness to which the hon. member for George refers. Now I want to touch on another point and that point is one which perhaps may not be so pleasant to the Minister. The Minister in proposing taxation has to regard the position not only from the point of view of raising revenue but also from the point of view of applying taxation as a means of bridging the tremendous gap which exists at present between wealth and poverty. He has to reduce this gap. The Minister has not taken any steps in that direction. I take three taxes. Take the excess profits tax. The Minister comes along and tells us that he would not raise the excess profits tax beyond 15s. because it might interfere with the initiative of the business man and industrialist. My point is this, he has increased the excess profits tax to 15s., but that still leaves a profit of 5s., and therefore the incentive to make war profits still remains, and the excess profit is still loaded on to the public. If the people making excess profits, refused to carry on, or refused to invest their money in undertaking work which the Government might regard as essential, then surely the Minister could step in and tax idle capital. And secondly, we have the power under a regulation which was issued a time ago under Proclamation No. 108 of 1942 to go into any factory and any business which has the necessary things which we require, and take over the factory or the business and run it in the interests of the State. So there need be no fear of there being no incentive, because under Clause 7 of that Proclamation the Minister has the power to compel people to do what is necessary regardless of the question of whether they like to do it or not. Then I come to the fixed property profits tax. The Minister has admitted that it is a very serious problem, that people are investing their money—townsmen as well as farmers are investing their money in property for two reasons. The first is to evade taxation and the second is to escape the effects of a fall in the value of money by converting their money into fxed property. Last year the Minister introduced the fixed property tax with the object of stopping that. But now, what did he tell us last Wednesday. He said it had not had the effect he expected. Instead of raising £450,000 he has only received £160,000. And therefore I say that the Minister should seriously consider altering this tax in such a way that it should not be limited to properties bought subsequent to 1939 and sold thereafter, but that there should be a regular sales tax on every property transaction, whether it is farm land or town land. I suggest an increased sales tax against the seller and an increased transfer duty against the purchaser. And the Minister should also consider whether the time has not arrived to consider the feasibility of making a start with a tax on land. Now, there is one other point to which I wish to refer. We have according to the last available figures a national income of £329,000,000, for our whole population of over 10,000,000. Now, we find that in 1940 there were 76,000 income taxpayers in the Union, and they, together with 3,000 companies, which included the more well-to-do of these income taxpayers, between them received £144,000,000 out of this £329,000,000. The Minister should accept the principle, of fixing a ceiling beyond which incomes shall not rise. And to secure this object the Minister should step up the super tax so that when an income reaches £5,000, 20s. in the £ should be taken of anything over that. It is along those lines that the Government will be able to deal with the economic position; to remove the inequalities which exist, and to carry out an effective social security policy.

If the hon. member who has just spoken goes to the platteland and announces that his party now holds the view that a land tax should be levied, I wonder how long they will remain in power. I want to ask the farmers on the other side of the House to take the hon. member for Troyeville (Mr. Kentridge), and the hon. member for Kensington (Mr. Blackwell) to their constituencies. They should take the hon. member for Kensington, for example, to the Western Province to advocate the wine tax which he has advocated in this House. They dare not do it. Let him make these statements at Worcester and at Paarl. Every year he comes to this House and hammers on the wine tax. Let them make that a plank at the election. We would welcome that. What struck us two or three years ago when the Minister of Finance made his Budget speeches was the confident and boastful manner in which he spoke, saying that we were not taking the war so seriously and that we would pay as we went along. We on this side then warned the other side. When war was declared on the 4th September, we knew what the consequences would be. The other side of the House tried to make the nation believe that it would not mean a great deal to our country, that we would only take defensive measures. Today, after four years, the Minister introduces this drastic Budget. What has happened to his “pay as we go along” Budget? We on this side have a clear conscience. Since 1935 we have been warning against the war. In 1938 especially we pointed out that the war clouds were gathering, and we stated that if war broke out in Europe, and England participated in that war without having been attacked, our attitude would be one of neutrality. We still maintain that attitude, and for that reason the war leaves us cold, and we protest against every penny which is spent on the war. Today we see another great danger, and that is the manifestation of the tremendous might of Russia. Behind the Ural mountains Russia has built up a mighty State, with enormous industries, of which the whole world was in ignorance, and today that Power is revealing itself and is overrunning the whole of Europe, and the danger is constantly becoming greater that Bolshevism will also take root in our country. The hon. member for Kensington says that it is all “eye-wash”, that Russia is no longer the same. He also told us that the people in Johannesburg were quite satisfied with the Budget. But he forgot to say that recently there was a discussion in the City Council of Johannesburg in regard to a resolution to congratulate Stalin on his troops, and the majority decided against it. They are becoming afraid. A big protest meeting was then held against the decision on the City Council, and Stalin was then congratulated by the protest meeting. We are solidly against the war, and we warned the nation against what is happening today. Now, I come to the Budget itself. Let us first see on what basis we have to pay. In 1939, when the other side decided to declare war, our State debt amounted to £279,000,000. Today it is £426,000,000, from which must be deducted £10,750,000 which is in the redemption fund. The State debt has therefore increased by £145,000,000. It has increased by this sum after we have been in the war for two years. The interest on the State debt already amounts to £12,000,000, of which the Railways are paying approximately £6,000,000. Last year £45,000,000 was placed on loan account, nearly £45,500,000, and this year the Minister intends borrowing £55,000,000. Does that look like “pay as you go along”? It is as well that we should tell the people precisely how much we have to pay. I want to associate myself with the hon. member for George (Mr. Werth), and the hon. member for Fauresmith (Dr. Dönges) in protesting against the fact that the Minister does not tell the country what the deficit really is, namely, that last year the deficit was £44,000,000, and that this year, according to the Estimates, it will be more than £48,000,000. In contrast with that, let us see how much we paid in taxes. I refer the Minister to the White Paper which he issued. During the year 1939—’40 the taxpayers paid £45,496,846; in 1940—’41 £63,471,000, in 1941—’42 £81,556,000, and in 1942—’43 £94,484,000. And this year, all but £9,000, the taxpayer will have to pay £100,000,000. That is what this war, which the other side of the House started so lightly, has brought us. And what is more, this year a further £55,000,000 is being borrowed. It has already been said by this side that there has been a tremendous decline in certain big sources of revenue. Since the taxation amounted to £94,484,000 last year, 1943—’44 would have yielded £91,026,000, that is, if the same taxes had been levied this year. There would have been this decrease, if the Minister of Finance had not levied increased taxes. There would have been a decline of £3,454,000. That is definite proof that the revenue of the country is dminishing. The Minister himself said that the receipts in the Department of Inland Revenue would not be as much as it was this year. We say that the other side of the House has always been over-optimistic. We have now come to the limit, the maximum carrying capacity of the taxpayer, and there are sources of revenue where there has been an enormous decline. There has been a decline in the receipts in respect of the tax on persons and companies, but nevertheless the Minister has to find £99,991,000 in respect of taxation revenue. This is the picture I want to paint to the House, and then the other side of the House talks about social security! We have a nation which is taxed to the extent of £100,000,000 per annum and which has to borrow £55,000,000 per annum, and then members on the other side talk about social security. In his speech the Minister of Finance also had a great deal to say about social security and rehabilitation of the people, and then eventually he came forward with his main proposal. He admitted that the children of the nation represented the best asset of the State. He says that the State is going to look after them. We all expected a great deal. We thought that possibly a faimily allowance would be introduced, or that the Minister would say that higher education and technical education would be made cheaper. But nothing of the kind. His main proposal was that in addition to the £150,000 which is already spent in giving butter and cheese to the children, he would place the meagre sum of £50,000 on the budget, and this £50,000 is an indication that next year the State will give one meal per day to the school children, European and coloured. The Minister indicated that £1,000,000 would be made available for that. This million pounds will be far from sufficient. We estimate that the school-going population of all classes in our country numbers approximately 2,000,000. Let me tell the Minister that in one of our towns in the Karoo there was an association which wanted to feed the children. They undertook to give 100 children one meal per day. It cost them £4 per child per year, £400 in respect of the 100 children. If the Minister wants to give a meal to all the children, he will not be able to do it on £1,000,000, the costs will be approximately £7,000,000 or £8,000,000. No, what the Minister is doing here is practically nothing. If he gives the children only one meal at school, those children will still have to return to a hovel. Moreover, the children of people who are wealthy, need not get food from the State. We on this side say that that type of thing is patch-work, and that we must go to the root of the evil. The remedy is that the father must be enabled to earn sufficient so that he can feed his children properly. No provision is made for that. This one-meal system on the part of the Minister of Finance reminds me very much of the system which was in operation in England when I was a student there—the dole system. People get the dole and they do not work. We want to enable the father to support his family. He must be enabled to obtain employment and the State must see to that, so that he will be in a position to feed and clothe his family properly. We do not want the dole spirit to take root amongst the Afrikaner people. There is a very interesting saying on the part of the Minister of Finance, namely that he is spending such a terrific amount on social services and that the social services are not being curtailed. I took the trouble to compare the increases in respect of these services under his predecessor’s government with the increases under his government. I find that during the period 1933—’34 to 1938—’39 his predecessor spent an extra £1,652,980 on a social service, such as pensions. During the period 1938—’39 to 1942—’43 the present Minister of Finance spent an extra sum of £798,595 on pensions. But added to that figure there is a sum of £682,000 in respect of war allowances. He has therefore not contributed £100,000 extra to the pensions in the country. He has made no provision for an increase in pensions. His Government could not do it because they had to levy taxes to the extent of £100,000,000, and, in addition to that, they have to borrow a further £55,000,000. They have not got the money. But then the Minister must not say in this House that he has increased the social services to the same extent as his predecessor. Let us take, for example, the sum which was given to the Provincial Administration under this heading. The increase during the term of office of Mr. Havenga was £873,866. The increase under the Minister of Finance was £498,433. Then we come to hospitals. Under Mr. Havenga the increase was £171,947, and £110,000 under the Minister of Finance. The Department of Social Welfare was established during the year 1938—’39. During that year it was commenced with a vote amounting to £791,713. During the past four years it has increased by £510,587. No, the Minister of Finance cannot make the country believe that he is maintaining social services on precisely the same standard as his predecessor did during peace time. Let him tell the people that, as a result of the war position, he is compelled to curtail those services. Then there is a further matter which I want to deal with, and that is the distribution of the taxes. Let us examine which classes have to pay most heavily. In the first place, we have the mines. The increase there is from 20 per cent. to 22½ per cent. That is an increase of 12½ per cent. In the case of the diamond mines the increase is from 4s. to 4s. 6d.—also 12½ per cent. In the case of excess profits tax the increase is from 13s. 4d. to 15s.—also 12½ per cent. The tax on companies has been increased from 3s. 6d. to 4s.—14¼ per cent. The normal tax and the super tax on individuals has been increased by 15 per cent. The personal and savings levy on people earning over £300 and £400 has been increased from £5 to £7 10s.—an increase of 50 per cent. The personal tax, the savings tax on people earning between £250 and £300, rises from £3 to £5—an increase of 66-2/3 per cent. Now, compare the man between £300 and £400 with the overseas shareholder. The man between £250 and £300 is treated in a worse fashion than the stepchild of the State. The class between £250 and £400 represents 60,000 of the taxpayers. If the Minister were to increase the tax on overseas shareholders from 1s. 6d. to 1s. 9d. he would get this increase of £240,000, which this group which I have referred to has to pay. That is what we on this side suggest. Let those people who are overseas and who draw dividends make this sacrifice. They have a safe investment in this country; they are satisfied with it; let them pay this additional £240,000. Then just this point. Our statement that the poor people are becoming still poorer, and that the rich people are becoming richer, is ridiculed. The investigation into the system of costs-plus-a-percentage, showed that one person made £26,000 in ten months. A tight hand must be kept on that type of person, and they should be called upon to make bigger sacrifices to the State. There are certain people who wish that the war will never end. Why? Because today they are making more money and getting bigger contracts because a number of their competitors have been eliminated, and they are thriving on the misery in which the people find themselves, making as much money as possible out of a war in which we have no interest. The day is arriving when the poor man will be even poorer. At the moment there is a false prosperity in the country. This false prosperity is due to the extravagances of the Government. The Government has created a spirit of extravagance. But the day will arrive when those big capitalists, who are mainly represented by the other side of the House, will no longer want to give money so lavishly, when they will curtail their facilities, and the taxes will then soar higher and higher, the rates of interest will go higher and higher. For that reason we want this Government to follow a long-term policy and to make provision at this stage against that day. We on this side have a clear conscience as far as that is concerned. We have warned the people in connection with the war. We warned the nation that the war would cost millions of pounds. We do not know where it is going to end. We are not, however, going to shut our eyes to the fact that difficult times lie ahead. Already there are signs that certain sources of income are dwindling. And what is the Minister doing? He puts £50,000 on the Budget to give one meal per day to the children! We therefore have every right in the last portion of our amendment to say that the Government has failed to submit a positive policy to the House, and to provide a solution to the economic and social problems of the country.

Mr. Speaker, I must say I am rather tired of hearing members on this side of the House being described as “die groot geldbase.” It is about time that we looked round and saw what constitutes the Opposition, these “poverty-stricken poor representatives of the down-trodden classes of South Africa.” The hon. member for Graaff-Reinet (Dr. Bremer), a director of one of the greatest …

Order. The hon. member should not become personal.

Well, Mr. Speaker, I think that I can say that on that side of the House there are directors of some of the greatest insurance companies in this country, there are some of the greatest and most prosperous farmers in South Africa, not excluding mealie farmers; there are directors of some of the greatest distilleries and wine organisations in South Africa, and directors of some of the largest banks which have arisen for the last 20 years.

In other words, we are a very competent crowd.

A very prosperous crowd. I think it is about time the public realised that; and I doubt very much if there is more money on this side of the House than there is over there. The country’s reaction to the budget must have been a matter of great gratification to the Minister of Finance. There is a war on, and the taxation for war purposes is really not very much objected to in South Africa; it is looked upon as a necessary evil, and there is evidence in the country of determination among all classes of the people to see the war through to a successful end. It may be that the budget has been received in this manner because the man with a small income is almost entirely eliminated from any additional burden. In no other country is the exemption from income tax granted on so high a basis. In the Union the exemption means that many family incomes are greatly in excess of £250 a year, and there are cases where the father, mother and several grown-up children are all earning £20 a month, and the family income approximates to something like £1,000 a year, without any serious taxation being put on them. And, Mr. Speaker, while it is good that people are able to earn such high incomes, I think it should be brought home to them that the conditions are such that they must realise that saving must take place on a proportionate scale; that the conditions which exist to-day cannot go on indefinitely, and that some scheme should be devised by which saving can be stimulated. They should put away substantial amounts for the depression which will probably follow the termination of the war. One remembers that during the last war, in England, the large sums which were earned by people who had never earned such amounts before, caused an orgy of purchasing of all sorts of unnecessary luxuries, and it is a question whether in order to avoid that sort of thing in South Africa, something like the coupon system should not be introduced to limit the purchase of unessentials, excepting food and necessaries. I believe that if a coupon system were introduced it would not be received badly by the people, and it would have a great effect in stimulating saving, and enabling large sections of the people to put aside something for bad times or which will enable them to establish themselves as substantial units in the country.

What about coupons for barristers’ fees?

Oh, don’t worry about them. Now, Mr. Speaker, I just want to mention, en passant, the question of social security. A lot has been said about social security, but I do not think that people are alive to what the cost of social security must mean. In England the Beveridge Plan is estimated to cost something like £18 per head, or £800,000,000 per annum. If we had social security in South Africa for the European population at a cost of £10 per head, it would mean over £20,000,000 per annum, and if we had social security for the nonEuropean population at a cost of £2 10s. per head, it would cost us £20,000,000. I mention that to show that if we want anything like social security, we will have to be prepared to spend something like £40,000,000 per annum on it. On the face of it, there is no doubt that the emphasis which has been placed on the necessity for the South African people to increase their earning capacity, becomes particularly evident when these figures are considered. I would therefore draw attention to the necessity for the Government taking into consideration the advisability of appointing investigation committees, such as the Economic Planning Council has suggested. They should be appointed immediately. There seems to be an idea that the prognostications of the Council are unduly pessimistic when they anticipate that there will be no less than 215,000 persons unemployed as soon as the war ceases. But investigations should be started on the basis of no less than that figure being unemployed, and if it happens that less than that figure are unemployed, so much the better. Then there will be a shortage of labour instead of a surplus. I hope the Government will not hesitate to put into execution the suggestions of the Planning Council. It is not only industries and their expansion which should be investigated, but it seems to me the whole economic system of this country requires overhauling at as early a date as possible. Long before the war, control boards were establishesd which were virtually dictatorships. Only the other day in Cape Town there was a meeting of a number of people who were affected by these control boards. It was a meeting of the Grain Brokers Association, the grain traders, the retail traders, the small millers, and the Cape Province Market Agents Association. It was there stated that the Wheat Board regulations were of such a character that every small miller was gradually being eliminated, and the milling business was passing into the hands of a few of the greatest millers. Mr. Ross, the secretary of the Small Millers Association, is reported to have said that in consequence of the small people being eliminated, wheat was railed many miles from the place where it was produced to the centres where it is milled, and was railed back in the form of flour. Other goods which could be manufactured economically in the places where the material was produced, were treated in the same manner. He pointed out that between 1930 and 1940 no less than twelve small millers had been refused re-registration on the grounds that sufficient milling facilities already existed in their areas, and he went on to refer to the sort of thing that takes place when you find an industry passing into the hands of a few people. He said that the price of meal was advanced by 3s. 6d. a bag, and certain milling interests represented to the board and the Minister of Agriculture, that they would bear the increase themselves, and sell to the consumer at the old price. The reply was: “Do you want to ruin the whole industry? You must pass the price on.” And the price was duly passed on. I say that is a state of affairs which is a direct result of the policy of the Control Board to centralise industry as much as possible, and I say that is not in the interests of the smaller men, or of the people as a whole. Even today price control in some cases has had the result of penalising the consumer instead of protecting him. Take, for example, the position in connection with petrol. When petrol was put up 1d. a gallon, oil was increased to 1d. a pint, or 8d. a gallon. There was no justification whatever for the greater increase for oil. When the price of meat was fixed in the Transvaal, it resulted in absolute chaos as far as the trade was concerned. The price of meat was fixed at a certain maximum for certain grades, and the Government itself was the first body to break that provision. I cannot understand the action of the department concerned. It appears that the Agricultural Department wished to have meat, and they started bidding from above the maximum price fixed to the ordinary retailer. And the consequence was that the trade was plunged into a state of chaos. A protest meeting was held in Johannesburg by the butchers and one of their members said this.

Who did these things?

That does not matter. It is a Government matter. We on this side of the House are not afraid to criticise matters which affect the public generally, and I know that matters which are brought to the notice of the Government are, if it is possible, remedied. I do not want hon. members over there to go to the country and say that they have raised these questions and that we have done nothing. We are quite prepared to ventilate any matters which we think should be attended to. I want the people to know that we have brought these matters to the notice of the Government. What happened was that a meeting was held in Johannesburg, and a certain Mr. Gladstone made a speech, in which he said that it was incredible that University professors, political economists, and departmental officials were attending cattle sales, and buying cattle in competition with the trade. The trade went to the Government and said: “We shall do the buying, we shall buy according to the prices which rule. And we shall do all that is necessary to to meet your requirements without additional cost to you.” But for some unaccountable reason the Government refused that. I arranged a meeting with the Minister of Agriculture and some of the butchers, but unfortunately the Minister was indisposed and could not attend that meeting. These matters have now been remedied, but what I am quarrelling with is the want of foresight which brings about a state of affairs like this. The position seems to be that the last man in the world to be considered is the business man. His position is an absolute nightmare. He is covered is every movement by regulations and rules which might be considerably modified and simplified. Now, coming to the Budget itself, I want to say at once that the criticisms of this Budget are criticisms of previous budgets, any defects are the defects of previous budgets, and no serious new criticism can be made. Every point has been made, and all we can do is to say that we do not agree with some of the provisions. All we can do is to remind the Minister of some of the criticisms which have been made. The fact that income tax has been raised by a round figure of 15 per cent. simply means that the Minister has placed his blessing on the previous Income Tax Act. It is a pity that our income tax legislation is still in the very complicated form in which it is. I do think that the average man should be able, without any technical advice, to tell what his liability is. But I go further. It would be a very good thing on the part of the Minister if he were to instruct his department to advise the public—to advise them sympathetically and on a generous scale as to what their liabilities are when they seek advice. Generally my personal experience with the department has been a pleasant one, but I am not so sure that that is generally the position. I have, however, been told by people who formerly lived in England and who now reside in South Africa that the attitude of the income tax officials in this country does not compare very favourably with the attitude of the income tax officials in England, so far as the taxpayers are concerned. It is too unsympathetic here. Of course, the officials there do everything legally possible to obtain payment of what is due to the State. But on the other hand they do not hesitate to point out to the taxpayer that he can take advantage of certain provisions, and if he is not strictly liable he is advised what he can do in order to secure limitation of liability. Now, let me give a simple instance of what takes place here. I have been told of cases where liability was disputed, and the money paid in “under protest.” Subsequently when the matter was ventilated in the courts, or in the income tax court, it was found that the taxpayer was not liable, but the money was only repaid to those people who had paid “under protest”. The people who had not paid under protest were told: “You paid the money, you legally admitted your liability, so you cannot get your money back.” That is a very wrong attitude for the Department to adopt. I submit that whenever a payment of that nature has been made, and whenever a finding absolving taxpayers from liability is arrived at by any Court, any amount paid under corresponding conditions by taxpayers should be refunded when demanded. And I think our income tax officials should recognise that; while it is their duty to obtain from the taxpayer every penny due, they should not hesitate to advise him in the most sympathetic manner when there is any doubt as to liability on his part. Now, I come to another matter. I want to ask the Minister why is it that many people have not yet received their income tax assessments for the year ending 31st June, 1941? It seems a most unsatisfactory state of affairs that there should be so great a delay in regard to assessments. While I am entirely in favour of farmers being given considerable advantages in connection with their deductions from gross income, because one wants to see the farmer established on the land, you don’t want people living in the towns to invest their money in farming merely with the object of avoiding their just income tax liabilities. I think some scheme should be devised whereby the wealthy men in the cities can be prevented from evading income tax by buying farms and developing those farms virtually at the cost of the State. It may be diffiicult to distinguish between a bona fide farmer and the man who buys a farm with the express object of evading income tax liability to the State. But I think the position might be met by disallowing certain deductions allowed to farmers where the taxable income of the farmer exceeds a certain amount. Make the amount high—make it £1,200 or £1,500—but it is wrong that after that figure has been reached such people should continue to deduct capital expenditure on development of their farm.