I move as an unopposed motion—

I second.

Agreed to, and the Bill accordingly withdrawn.

By the direction of Mr. SPEAKER, the Married Women’s Property Bill [A.B. 29—’44], submitted by the Select Committee, was read a first time; second reading on 10th March.

I want to start this morning by reading a few quotations from the speech of the hon. the Minister of Finance, and I want to do so to point out how the Government approaches and handles the most difficult and most burning questions of the day. The first point I want to deal with concerns the difficult and burning problem of demobilisation. This is what the Minister said. I quote his words verbatim—

The Prime Minister in one of his prophetic moments predicted that this might perhaps be the last war session of Parliament. After this Session we shall meet again to celebrate victory. That means that we may perhaps be called upon during this financial year to demobilise on a large scale, and all the Minister could tell the House was: “I am not making any provision on the Estimates for demobilisation. Perhaps I shall be able to find the money on the Defence Vote but I am not at all sure about that.” No further comment is necessary on that point. Now, let me come to another quotation from the Minister’s speech. The Minister proposes a change in the system of taxing the farmers, and this is what he says—

The system of taxation in the way it affects the farmers is the result of many years of study of the farming industry in South Africa. To try and tamper with it in a hurry, and at the eleventh hour, may perhaps result in irreparable harm being done to one of the most important and most valuable industries in South Africa, yet that is what the Minister now wants to do. He tries to get at the farmer who does not farm. The danger, however, is that in his hurry he may perhaps also destroy the working farmer. I have looked in the Minister’s speech for one single word about this important question of inflation. I have been unable to find it. Perhaps other members will be more successful. In the Minister’s whole speech there is only one indirect reference to it, and if words mean anything then the one sentence which the Minister used is such that it makes us tremble for the future. Let me quote the Minister’s own words—those words are the only reference in his whole speech on the question of inflation—

That is to say, if words mean anything, the Minister expects the cost of living next year to go up to such an extent that his cost of living allowances will have to be doubled. The cost of living figure in September last year was 25.9%. That is to say about 26%. If this figure given by the Minister means anything, then it means that the Minister expects the cost of living this year to be doubled. That is to say that the increase may go up from 25.9% to about 50%. Do hon. members realise what that will mean? Do hon. members realise the dislocation it will mean in the whole of South Africa’s labour and economic life? And although that is the provision which the Minister is making in view of the cost of living, there is not a single word in the whole of his budget on the question of inflation. I said that I wanted to give a few instances to show how the Government was handling the biggest and most burning problems of the day. Since those days another thing has happened, and I want to mention it here. In his budget speech the Minister told us of a new tax which he was going to impose on transactions in fixed property. He was going to increase transfer duties on transactions in fixed property exceeding £1,000. The moment the Minister’s statement appeared in print the interested section of the public immediately realised how ill-considered the Minister’s proposal was. Every one of us received telegrams in connection with the Minister’s proposal, and the next day the “Cape Times” published a leading article in which it said this: “Surely this is an oversight that should be rectified.” It was an oversight. Fortunately the Minister did rectify it. But I mention these things just to show the House how the Government does things, the ill-considered manner in which it imposes taxes, the stupid half-baked way in which it approaches the biggest and most burning questions of the day, and that is the way it sets to work in every possible case. I mentioned demobilisation. We have the same thing in regard to the question of a post-war depression. People have work in this country today, but they remember what happened after the last war. They remember only too well what happened after the last war, and they are afraid of a repetition of those things, and one thing which every worker in South Africa is worried about is what precautions the Minister is going to take?

Jeremiah’s songs of sorrow!

It is because the Government knows what the people think of these things that it has gone out of its way to make strong propaganda everywhere, and the Government has told the country: “You need not be afraid, the Government has very extensive schemes; the Government is going to spend millions to prevent these things happening again.” The Government therefore is determined this time to create a new and a better world. And now let us come to the budget speech, in which the Minister declares his policy for the future, and I think everyone of us will have to admit that if this budget speech of the Minister’s proves anything, it is this, that the Government is devoid of any constructive policy so far as the big problems of the country are concerned. In regard to the question of social security, the Minister comes along with a big tray and one has to use a magnifying glass to find a small crumb on that tray connected with the question of social security, and that crumb is for the poor old aged pensioners. They are to be given another £6 per year. That is 10s. per month! The Minister says he cannot afford to pay them that before the 1st September. He says he has not got the staff to reckon out that £6 per year amounts to 10s. per month, so even that little crumb of comfort is put off to the 1st September. That big tray has a minute crumb on it, and what did we get from the Minister beyond that? Just words, words, words. The Minister is so prone to accuse others of eloquence. I must say that I admired his eloquence last Thursday. He is a master at painting a beautiful scene in words. He is a master at telling us of the great ideals we are fighting for, and of the sacrifices which every one of us must be prepared to make. He touched the tender strings of my heart. And while the Minister was up in the clouds, I could not help making a few comparisons. I could not help comparing the sacrifices which certain people in this House were making with the sacrifices asked of other people. In this House we have four people each of whom are drawing £2,500 per year—war earnings. All these incomes are incomes that have accrued to them since September, 1939, so all these are war earnings. One of these people is a Minister.

Pocket patriots.

The contribution which those Ministers are asked to make to the war effort is £292 per year. In this same House we have a young doctor who started practising in September, 1939. The contribution which he is asked to make is £803, also on an income of £2,500. In this House we also have a young industrialist who risked his capital and established a private company of which he is practically the only shareholder. His contribution on an income of £2,500 is £1,075. The contribution made by a Minister of the Crown is £292; the contribution by a young medical man is £803, and the contribution by the young industrialist is £1,075, yet the Minister dares to talk about equality of sacrifice! I ask whether the Minister who has created those anomalies has any right to talk about equality of sacrifice.

That is the cause of his “mental anguish.”

That is not the first time we have criticised the Minister for what he has done here. We criticised him two years ago, and the Minister then told me that I should not talk about those things. I must talk about them today, because the public talk about nothing else. The public are aware of the inequality of the burden of taxation. Since the Minister has delivered his budget speech I have been round among the people a bit, and it is interesting to hear what people have to say about the Minister. One English-speaking man expressed his views very tersely. He said, “The Minister of Finance is always going about with his conscience in his one hand and his resignation in the other. He ought to be had up for indecent exposure”. If I may be so bold as to give the Minister a modest bit of advice it is this, don’t try and always deliver sermons. If there is a good thing you want to do, do it. One just and good action is worth more than 100 sermons. Now let me come to the budget itself. [Interruptions.]

It seems that you people are getting sore.

Notice the mental anguish.

I don’t think I am doing the Minister an injustice if I sum up his speech as follows: The Minister says this to us: The Government wants to win the war. That is priority No. 1. That is the Minister’s first point. Secondly, the Minister says: “In order to win the war we need £102,500,000 this year.” That, so the Minister says, is the inexorable amount which we need for the war this year, and that is what the House has to give him. And then the Minister says: “The present system of taxation will give us that money.” He admits that our system of taxation is full of errors. There are hardships under it, there are anomalies, but the main thing is that the taxation system will produce the money, and that being so the Minister has no intention of altering the system. The basic premises on which the Minister builds his whole case is this: “I need £102,500,000 this year for the war; that is what I need, and not a penny less”. Now let me pause for a moment at this proposition of the Minister’s I don’t intend today discussing the principle of war expenditure. That can be discussed on a later occasion. I know that the hon. member for Vasco (Mr. Mushet) will tell me that since Parliament met last time there has been an election and which the Government won. They regard that as a mandate to carry on with their policy and to carry on with the war. And yet, Mr. Speaker, I make bold to say that if the Government wants the House to understand that the fact that they won the election also means that the people, generally speaking, approve of every penny that is being spent by the Department of Defence.…

Who says so?

Yes, now we come to the kernel of the matter. If the Government wants to tell the House that the people approve of all the waste of money and of manpower in this country, then the Government is very much mistaken, and the first proposal I am going to make in the form of an amendment deals with that point. We know that the Government during the first years of the war had a good deal of difficulty in getting people to join up, and because they wanted to make a good show with their army they took practically anybody who offered his services.

But you did not help us.

It was shown before the Select Committee on Public Accounts that the Government in those years took on men who were in receipt of invalidity grants.

What about it?

Before a man can get an invalidity grant the medical men must have declared him to be a hundred per cent. unfit. In other words, in those years the Government took men into the army who had been declared a hundred per cent. unfit by the doctors, people who could be no use to us in our war effort.

You are now attacking the army, the soldiers.

I admit that among them there were men who were good soldiers, but year after year it was found before the Select Committee on Public Accounts that thousands and tens of thousands of men had been taken into the army who were useless as far as helping the country in their war effort was concerned, who were not physically fit to go into the field, and since that time they have been sitting here in South Africa doing nothing, bored stiff. They are not just C.3 men, but C.4 and C.5 men according to the evidence which we have had before the Select Committee during the past few years. I want to ask the House whether it would not be best to start today on the demobilisation of these people.

You are again attacking the army.

I am today going to mention the headings under which money can easily be saved. First of all money can be saved by demobilising that class of people. Today is the best time to take them back into civilian life as there is plenty of work.

And then we have to recall our good men.

These people are useless for the war effort and they should be demobilised. Secondly, we know that there are in the army some C.5 men who have had experience of office work, and there is a great demand for people of that type in the Auditor-General’s department, in the Pensions Department, and in the Paymaster-General’s department. Those departments are on the Government’s doorstep every day asking: “Please give us those people, they are useless to the Department of Defence”. I put that question to the Minister on the additional estimates. I asked him whether he would not be prepared to get the Department of Defence to release sufficient men for the Auditor-General’s Department. The Minister replied in the affirmative, but the Auditor-General tells us that the position today is even worse than it was a year ago. These men are there, they are useless for defence purposes, or for the war effort, but the Government refuses to release them.

They are part of the war machine.

Now I want to mention a third class, the coloured men and the natives who are in the army. I want to draw the Minister’s attention to the fact that the mining industry is languishing for lack of labour. The number of workers has dropped by, I believe, 60,000. We know how badly the farmers require farm labour. The country is crying out for labour, yet these men who are quite useless so far as the war effort is concerned are in the army.

You are again attacking the army.

Let me go further. We know that the Government’s programme of works in regard to the war has been completed. We know that the Government today has built all the aerodromes, all the camps, all the hospitals and all fortification works which it requires. We know that last year a certain building programme was approved of, orders were placed overseas, and by the time the goods ordered arrived here it was decided not to proceed with the work. The programme of works in connection with the war has been completed. I feel it is quite easy to save £10,000,000 or £15,000,000 in our war expenditure, and because I feel that I am going to include a proposal to that effect in my amendment. The first part of the amendment I am going to move reads as follows—

1. (a) to appoint a commission, consisting of members of this House, the commission to have power to enquire into all war expenditure, to take evidence and call for papers;

That is the first part of my amendment.

We shall do it after the war.

Yes, that is all the Government’s supporters (“stemvee”) can say. They say: “We are busy fighting the war, but after the war we shall do things.” They are just like a gramophone record, and a rotten record at that. Now, in regard to that part of my amendment I just want to say that it is an undeniable fact that every belligerent country needs such a standing committee of parliament and most belligerent countries have such standing committees of parliament. In England, America and other countries they are doing excellent work. Now, if those countries considered it necessary and indispensible to have such committees, then surely they are just as necessary in South Africa, in our national interest. Now I come to that part of the Minister’s speech in which the public are greatly interested, namely that part where he deals with his taxation System. I think all members will have noticed that the Minister on this occasion was obliged to put up a strong plea in defence of the taxation system. A large portion of his speech was devoted to that. I just want to tell the Minister that all his trouble in that respect was in vain. There are certain things which one cannot put right by talking. One cannot argue toothache away, and the public today are suffering from a taxation ache—one cannot argue it away by means of words, no matter how fine one’s words may be. At one time it was only this side of the House which used to talk about the inequality of the taxation scale, and of the burden of taxation on certain sections of the population. That no longer is the case today. Today the taxation burden is so heavy and is hurting to such an extent that inside the Government Party large numbers of people are complaining about it, and one man, who lately had the courage to tell the Government openly in public that it should alter its taxation system as it would otherwise do irrevocable harm to South Africa’s future, was Dr. van der Bijl. Nobody can accuse Dr. van der Bijl of being unsympathetically disposed towards the Government. Nobody can accuse Dr. van der Bijl of being unsympathetically disposed towards the Government’s war policy, and nobody can accuse Dr. van der Bijl of talking without a knowledge of affairs. Dr. van der Bijl does not want to hurt the Government, he does not want to embarrass the Government, he does not want to harm the war effort, but at the same time his relationship towards industries in South Africa is a, special one. Parliament has appointed him as the guardian of our industrial development. He sees what is going on, and although it may be unpleasant to him, he feels the time has arrived for him to speak, and he feels he can no longer keep quiet.

He talks too much.

It may perhaps not be in the interest of the Party but it is in the interest of the people. There is no need for me to quote what Dr. van der Bijl has said, but there is one sentence we should remember—which every one of us who has some responsibility towards the country should remember: “A new basis of taxation must come about if the national income of South Africa is to increase.”

We agree.

At the same time he said: “The present system of taxation has a stifling effect on all such enterprises.” He is refer ring here to the establishment of new industries, and the expansion of existing industries, and he says that the Government’s taxation system has a stifling effect on such development. He says this: “I cannot believe that the Government will continue it.” The Nationalist Party takes Dr. van der Bijl’s words very much to heart, because we consider that South Africa’s industrial development is the work of the Nationalist Government, the fruit of the Nationalist Party’s actions in South Africa.

You are making boots for soldiers.

If it is necessary to answer the hon. member then I may just say that it is untrue, just as untrue as most things the hon. member says. There are sufficient good citizens in this country who need good boots. I do not sell boots to the army. But I am not going to allow myself to be diverted from my course, because my time is limited. The Nationalist Party looks upon itself as the Party which built up the industrial development of South Africa by its protective policy. During the last war there also was a revival in industrial matters, but after the war a stifling competition came in from outside, and our young industries in South Africa could not stand up against that competition. In those days already I was a member of Parliament and I can well remember how the South Africa industrialists from Port Elizabeth, etc., lay on the Government’s doorstep asking for help, because without help they would go under. The then S.A.P. Government was under the influence of the importers—of men like Mr. Jagger and others, and they did not listen; the people thereupon threw out the S.A.P. Government and put the Nationalist Party into power. The Nationalist Party did not only come to the aid of industries, but by the establishment of Iscor and by taking other measures, brought about industrial development. Today the Government and the Government supporters are ploughing with our oxen—they are deriving the benefit of what we started. Let me say that the Nationalist Party of today is just as well disposed towards the development of secondary industries in South Africa as it was before, but everything goes to show that the Government has no sympathy for secondary industries in South Africa, and the time will come when those industries will again have to approach the Nationalist Party for help.

It was due to the Labour Party.

There are two ways in which the Government can meet the needs which exist today to assist secondary industries. The first way is an easy one—it is what Dr. Van der Bijl proposed, namely the revision of the existing system of taxation; and my amendment deals with that. I therefore propose reading the second part of my amendment, namely—

1. (b) to revise the existing system of taxation with a view to simplifying it, reducing the incidence of taxation and removing anomalies and every impediment to sound economic expansion;

In my amendment I first of all asked for a simplification of the taxation system. I believe that on that point we are all in hearty agreement. I have an extract here from “Commercial Opinion” in which an accountant says that before a business can be started, before any plans can be devised in regard to the starting of a business, the business man has to make provision for fourteen different kinds of taxes which he has to pay, either to the Minister of Finance or to the Provincial Administration, and he says there is no business man who can do so today. That is why we are advocating the simplification of the taxation system. In the second place we are asking for relief of the burden of taxation, and I have already told the Minister how that can be achieved. Cut out the dead wood so far as the Department of Defence is concerned, save £10,000,000 or £15,000,000 there; if that is done steps can be taken to do what is necessary for the secondary industries of South Africa. But in the event of the Minister not being prepared to cut out the dead wood from the Department of Defence, I shall make another suggestion as to how he can obtain the money. Let me put this to the Minister: Collect the arrear taxation due. And when I speak of arrear taxes then I want to say it appears that not only is there a large amount of taxation in arrear, but a large number of assessments are outstanding—as far back as 1942. It is peculiar that the assessments which are in arrear are only in connection with large and strong companies, in connection with people who have to pay thousands of pounds in taxation, And what do those people say? They say that the Minister refuses to collect their taxes because he wants to hold back a nest egg in case of anything going wrong. Nobody knows what the exact amount is, except the Commissioner for Inland Revenue, but it is estimated that it is at least £6,000,000, and that in fact it may even amount to £10,000,000. [Extension of time granted.] I do not want to elaborate the morality of the fact, that an amount of £6,000,000 and more is in arrear, which the Minister can collect. The fact remains, the money is there. All the Minister has to do is to see that the assessments are completed. These are rich companies, many of them have already invested the money in tax redemption certificates, and they expect to pay it, so the money is there. If the Minister collects the money he will be able to give relief where the shoe pinches most. This question of arrear taxes is a very important one. We are not in favour of an increase of taxation; we are anxious to see the taxes reduced. The burden of taxation on the people is a heavy one, but if the Minister is looking for a means to get in some money, then there is one place which he started tapping this year—he started doing so in a very, very trifling way; that is on speculation and shares. I feel that the tax which the Minister has imposed under this heading is an insult to any one with common sense. We have two classes of speculation in South Africa today—the one in land and the other in shares. I have tried to work out comparative examples to show how speculation in land is taxed, and how speculation in shares is taxed. Let us take two people who have made some money out of contracts in connection with the war. The one speculates in land, and the other in shares. Now the money these people have made has been made out of transactions since March, 1942. If the one man sells some land today which he has bought since March, 1942, the Minister takes two-thirds of his profit Assuming the profit is £300, he has to give the Minister £200 of that £300; now the Minister has put an additional 1% on transfer duties which means that this man will have to pay another £20 on a £2,000 transaction. So that altogether he will have to pay £220.

The buyer pays that.

Now let us take a share transaction. I know of people in Cape Town who in a few months have make £15,000 profit on the share market.

And how many have lost?

We don’t tax people who have lost, we are only talking of people who have made profits on the share market. The Minister has told the country that he is now going to tax these people. Do hon. members realise what his tax amounts to? Under the old scheme, under the old stamp duty, a transaction of £2,000 carried a stamp duty of 20s. which has now been increased to 50s.—an addition of 30s. or £1 10s. The man who speculates in shares has to pay an additional £1 10s. in taxation, but the man who speculates in land has to pay the State £220. It is a scandal. One can hardly believe it. There the Minister has an opportunity of increasing his revenue. The people concerned are individuals who produce nothing in this country; they create nothing new. If the Minister wants to tax, let him tax them. The Minister always tells us that we should make constructive proposals, that we should not simply put up destructive criticism. Now let me tell the Minister how he can take steps during this session still to encourage young industries in South Africa, and it is his duty to do so. The Minister has told us that the excess profits duty levied in England is higher than that levied in South Africa. I doubt whether that is in accordance with the facts. It is true that in England they pay 20s. in the £, but 4s. of that is in the form of a loan, so that the tax is 16s. The 4s. is held in reserve, and that money can be used to build up. In South Africa we pay 15s. in the £, but on the 5s. we have to pay all the other taxes, and it is calculated that the taxation on the 5s. takes more than 1s.—some people say 2s. or 2s. 6d. off the 5s. Consequently, the taxation in South Africa amounts to 17s. or 17s. 6d. in the £, while in England it only amounts to 16s. Now we put this to the Minister: What we propose is a small change, but it will be an enormous concession to our young industries, those war industries which have arisen since 1939; the basic rebate in connection with taxation is 8% on the capital investment. All the Minister should do—that is the minimum we can ask for, and every hon. member in this House should support us—is to increase that 8%, even during this session, to at least 12% for young industries. Then there will be 2% to build up a reserve and 2% will enable the factories to improve the position of the workers. Today they have not got the capital to do so. We are not pleading only in the interests of the young industries; we are also pleading with the Minister in the interest of the people employed in the factories. Now I come to the final part of my motion. I want to cut my remarks short, and I shall just read it—

1. (c) To take steps immediately and create the necessary machinery for the establishment of industries calculated to increase national wealth and welfare and to prevent post-war setbacks.

We on this side of the House believe in industrial development. This part of the amendment is our confession of faith. We believe that there is only one way to secure the future of the citizens of this country, and that is to increase our national wealth and welfare. One cannot do so by means of the gold mines; they are a vanishing asset. One cannot do it by means of agriculture, because agriculture has to wait for secondary industries by which local markets are created. It is essential for us to develop our secondary industries and that is what we want the Government to do today. There are two things which prevent that development today, the first is the taxation system and the second the Atlantic Charter. People are afraid that under the Atlantic Charter we are going to have a recurrence of what happened after 1918. The only way the Government can create confidence in the industrial development of South Africa is to take the lead itself. The Industrial Corporation was intended for that purpose but unfortunately—I don’t know what is wrong—the Industrial Development Corporation has been a disappointment. The mere fact that £90,000 of its capital has been invested in the Imperial Cold Storage shows that there is something radically wrong. We ask the Government to take steps. The Minister says we must make suggestions. Well, I am going to make a proposal. Last year the Minister imposed a surtax on the income tax. We want that surtax to be taken off. If the Minister is not prepared to do that then I suggest that henceforth he should not regard that surtax as a tax, but as a loan to the State. Let him put that money aside and use it to develop industries. Let him start at once to take the initiative by establishing State industries. Give shares to the citizens who make loans to the State. Let every citizen be a shareholder in the industries of the State. If that were done the Minister would see a different spirit among the people in this country. Use the money for the establishment of an industrial fund. Let the Minister go further than that and buy out foreign capital which has been invested in many enterprises in South Africa. That is a suggestion which I put forward. The public are afraid of the effects of the Atlantic Charter. People have become nervous. The obligation rests on the Minister to take the initiative in order to restore confidence. The people want the Government today to see to it that no harm shall be done to the industries of the country after the war is over. We have two roads before us today, and this House has to decide. One road is the one which the Government is following—it is a road without any spirit of enterprise, and without vision so far as the future is concerned. We suggest the other course. We say: “Ask the people of South Africa to assist in the great task of building up the nation. Make every citizen a shareholder in our secondary industries”. If that is done a different spirit will show itself among our people and the future of the country will be secured without any Government money being involved. I now move my amendment as follows—

1. (a) to appoint a commission, consisting of members of this House, the commission to have power to enquire into all war expenditure, to take evidence and call for papers;
2. (b) to revise the existing system of taxation with a view to simplifying it, reducing the incidence of taxation and removing anomalies and every impediment to sound economic expansion; and
3. (c) to take steps immediately and to create the necessary machinery for the establishment of industries calculated to increase national wealth and welfare and to prevent post-war setbacks.”

May I say that possibly during this debate a further amendment will be proposed by this side of the House. I know of that other amendment, and I accept it in anticipation.

I second the amendment of the hon. member for George (Mr. Werth), for the express purpose of lodging a serious protest against the intentions of the Minister of Finance and the Government to destroy the wine industry—to destroy the wine industry wholly and completely. The wine industry has passed through very bad times before today. In its history, as one of the branches of farming, it has passed through very dark days; but the darkest days of all will be those which are now going to be experienced as a result of the proposal of the Minister of Finance. When the Minister of Finance last year increased the excise on brandy from 25s. to 35s. I felt so much concerned about it that I did not even feel inclined to discuss the matter. Today I have got up to lodge a protest, but my feeling is one of sorrow because I am convinced the Minister does not realise what he is doing. I feel sad because I know that he has given the industry a blow from which it will never recover. He does not realise what he is doing. History has taught the wine farmer that an excise once imposed is never taken off again. There is only one case on record where it was taken off and that was in 1886 when the Minister of Finance realised how unreasonable his excise was and he partly took it off. Has the Minister of Finance ever considered the question of a tax on wool? No, he has not, and it would be an unfair tax because what would be the reason for taxing one branch of the farming industry? The wool farmers talk of their good contract. The position of the mealie farmer is satisfactory, so my question is why must this one branch of farming be selected for taxation? I shall quote a few figures just now to show what the war has done to the wine farmers. I say again that the Minister of Finance does not realise what he is doing. He comes here with a proposal to impose a tax of 4d. per bottle on table wine. That means a farmer will get 2d. per bottle, and the Government 4d. per bottle. The Minister will tell me that this is war time and that he must have money because this House has voted for the war. I realise that he must have money but what I feel is this. The Minister of Finance knows that the wine industry only takes up a small part of the country, and for his own purposes he now wants to try and hurt this small section of the population. That is why this industry now has to suffer. We know that the gold mines have threatened the Minister of Finance, and apparently they have pushed him so hard that he has decided to look for some industry where he only has a small handful of people to deal with and that handful of people will now have to pay this tax. The only consolation we have, the only light in the darkness, is the fact that the Minister is not married, so there is no likelihood of our having to put up with his offspring in days to come.

That’s cheap.

The hon. member who has just interrupted is the cheapest of all; the best thing he can do is to keep quiet. The position is perfectly clear; the Minister of Finance does not realise what he is doing. The wine industry occupies only a small part of the country, but it is a very important part. It occupies a part of the country from Cape Town to Oudtshoorn, and it is not only the wine farmers in those areas who are dependent on the wine industry.

And they are big taxpayers.

Yes, that is so. It is not only the farmers but the communities as a whole in the towns and dorps in those areas which are largely dependent on this industry. It is the biggest industry we have of its kind, and it keeps a large number of people employed. Now, I want to explain to the Minister what this war has done to the wine farmer. At the outset I want to say that in most branches of agriculture prices have gone up. I know that costs have also gone up, and I don’t want to say for a moment that the prices have gone up to the extent they should have done. Let us see what we get for our distilling wine. The Minister told the House that a tax on wine “has been knocking at the door.” I don’t know at whose door it has been knocking because last year when one of the abstainers here asked for a tax on wine the Minister replied that he could not lay a tax on table wines because he was already taxing distilling wine as heavily as it could be taxed. Does not the Minister realise that there is not a single country in the world which has imposed a tax on table wine? It was done in Australia, but it was done to assist the farmers because the money was paid back to them. The wine farmers have never yet asked for assistance, they have always tried to work out their own salvation. It seems to me that the Minister of Finance is not going to be satisfied until he has the wine farmers before him on their knees. Now let us take the position of distilling wine. In 1926-’27 and 1928 the price of distilling wine was £5 per leaguer. In 1924 it was round about £5. In 1932 it was £4 9s. 3d. per leaguer. The price then dropped until in 1941 it was £3 11s. 10d. In 1942 we were able to pay £4 2s. In 1943 we paid £5, more or less the same price as we got in 1926-’27 and 1928.

What was the price in 1942?

It was £5 0s. 6d. The price did not go up to such an extent that the farmers could say they were being compensated for their increased costs. All their requirements went up in price. I need not elaborate that point because we all know it. In these war years, when everything has gone up, we are getting smaller prices to all intents and purposes than we were getting in 1926, 1927 and 1928. That is the wine farmer’s position in regard to distilling wine. Distilling wine is taxed so heavily that while the farmer gets 7d. per bottle for brandy the State takes 25s. per gallon in excise, or round about 4s. 2d. per bottle. That means the farmer gets 7d. per bottle whereas the State gets 4s. 2d. per bottle. In regard to table wine the farmer now gets 2d. and the State gets 4d. Now the Minister will say that this is a voluntary tax because if people do not want to drink they need not pay the tax. Can the Minister mention a single tax which is not voluntary in that sense? If I don’t want to pay income tax all I have to do is to see to it that I don’t have the necessary income, or otherwise I have to do something to evade the tax. We can even say that income tax in that sense is a voluntary tax. I should like the Minister to be in some of the canteens on a Saturday to listen to what the coloured people have to say. If he were there he would not have so much to say about a voluntary tax. The Minister knows that he is simply talking nonsense if he adduces arguments like that and says that this tax is a voluntary tax. Nobody pays a tax like that voluntarily, one is simply forced to pay. We are forced to pay this tax in the same way as we are forced to pay any other tax. The Minister cannot say that this tax which he has imposed is a voluntary tax. If people don’t drink wine then the wine farmers will be ruined, and what is more, the people’s health will suffer. The wine farmers produce a commodity which is much healthier than the black lemonade which the Minister drinks all day long. If he goes on drinking that his health will suffer while if he were to drink good healthy wine he would be much healthier and would feel much better, and let me also tell him that good wine is good for one’s brain.

Are people going to drink less as a result of the tax? They are smoking more, as a result of the tax on cigarettes and tobacco.

I can tell the hon. member that we have made an experiment in that regard. Witzenberg is sold by the farmer at 1s. per bottle, although we know in the hotels it is sometimes sold for 3s. to 5s. per bottle. In Paarl we fixed the price at 2s. and the result was that twice as much was consumed there than when the price was 3s. We can quite understand that if a man has to pay a 1s. for a drink and if he has to pay 4d. by way of tax he is going to drink less to the extent of 4d. because he has no more money. We have tested that at Paarl, and we have found that the sale of that class of wine has gone up nearly 100 per cent. Hon. members can get the statistics from the K.W.V. I am just mentioning this. I have not got the statistics with me because I do not think that it would be necessary to prove that if a commodity is cheaper it would lead to larger quantities being sold. We as wine farmers feel that the Minister of Finance has gone out of his way to impose this tax on wine. In all the difficult times we have passed through in this country it has never yet been found necessary to impose a tax on wine, yet the Minister steps in now and imposes this tax, and we not only know that the tax will remain but what is more we know that it will be increased as time goes on. Next year the Minister will again feel that an increase is knocking at the door. He will tell us that the Government is now getting 4d. per bottle, but that the bottle stores have not increased their prices from 1s. to 1s. 4d. but to 1s. 6d. with the result that the merchants are taking half his profits, and he wants that back. And then he will increase the tax to 1s. 6d. The Minister did the same thing in the past in regard to brandy, and we know that he will do it again in the case of wine, and if he does so it will mean killing the industry. It is no use the Minister telling the wine farmers that the consumers will pay this tax. He can go to the simplest wine farmer of the country and that wine farmer will tell the Minister the whole history of the wine industry; he will tell him exactly what has happened with all these excise impositions. The Minister is simply making an excuse to find some way of taxing the people and thus destroy the industry. The industry means nothing to him. He does not drink, and consequently the industry has to be taxed. We know that when a tax is levied every individual is on the lookout to find some onse else to pay that tax for him, and now the wine farmers are to be destroyed. The wine industry is an industry which was started under great difficulties, but the wine farmers learned in those difficult times to stand together. They co-operated and that is how they saved their industry. I can mention the figures which I gave before. In 1924—115,558 leaguers of wine were produced at 20 per cent. proof. In 1917 only about 90,000 leaguers were produced, and in 1943 the total produced was 440,000 leaguers—four times as much as in 1924. And in spite of the fact that since 1924 the farmers have been getting £4 4s. 8d. per leaguer, and in spite of the fact that the production has increased, the farmers co-operative organisations have been most careful, and the wine farmers have been able to get a decent reward for their work through the price of distilling wine. Does the Minister of Finance realise that in 1942 we had a surplus of 50 per cent.—a surplus of 47¾ per cent. We have had that all those years but as a result of control and by carefully nursing the farmers over their difficulties, we have been able to make it possible for them to carry on. But how are we going to manage when the war is over? I asked the Minister of Finance whether he would take off the excise when the war was over and his reply was that he could not, and would not, give me such an assurance. The wine farmers know that they will have to pay if bad times come. If the wine farmers are faced with bad times in days to come we shall send them to the Minister of Finance, and he can supply them with food and clothes. Thousands of people are dependent on the wine farmer. I have already told the House that this is an old industry and an industry which has justified its existence. If the Minister now thinks that this industry must be destroyed, then why does he not do so? Last year the Minister was very much concerned about the excise on brandy. He was very much afraid that he would not get as much as he had expected—he was so concerned that he brought down the age standard in order to get his excise. He did that, not because he wanted to do it, but because he wanted to get his excise. Now I want to ask the Minister this: according to his estimates he expects to get £3,800,000 from the farmers through the excise on brandy. That is what he takes every year. I understand that the revised estimate is £3,500,000. Now he estimates that he is going to get £600,000 from the wine farmer from the excise on wine, on the table wine for which the farmers get 2d. per bottle. Let me tell the Minister that on the basis of last year’s sales he will get more than £600,000. He will get £700,000, and he knows it as well as I do. The fact that he has put his estimate low shows that he himself expects that there will be a drop in the consumption. Now, why is the Minister putting his estimate at £600,000? The whole of the wine crop of the farmers amounts to about £1,500,000. The Minister takes £3,500,000 in excise on brandy. That is the position. As against that let us look at the diamond industry which is having a very prosperous time. At the moment there is a big market for diamonds: why cannot the Minister take that £600,000 from the gold mines and the diamond mines? The Minister estimates that he will get an additional £368,000 from the diamond mines. Why cannot he get this £600,000 from them as well? They are able to make big profits. The Minister says that those people are flourishing. Well, I am glad to hear they are flourishing.

Just look at De Beers shares.

He can take this money from them, but it seems to me, judging from the speeches and the reports I have read that those people have scared the Minister. Take the people who speculate in shares. An hon. member opposite told the House that they were also losing money. I am not talking of those who lose, but why should not those who make big profits pay the State for the profits they make? We know that there is a lot of cheating and intriguing on the share market. Some people lose all they have, while others get rich, yet the Minister does not tax these speculators. The tax he imposes on them amounts to practically nothing. The money he takes from them is insignificant and the Minister could have taken more from them. Why does he not compel the gold mines to pay more?

He says he cannot find a formula.

If he cannot find a formula he should give way to someone else who can find one. To me it seems an absolute scandal that the Minister should be allowed to pass all those people and that he should come here and impose heavier taxes on the wine farmer. The wine farmer is not going to forget it, and when difficulties arise and people suffer hardships after the war they will come to me, and the Minister will have to stand the racket. As I have said, this whole position is due to the fact that the Minister does not realise what he is doing. The wine farmers have been among the most loyal people in the country so far as the Government is concerned. They have never asked the Government to come to their aid, but now the Government steps in and taxes them so that their industry will be destroyed. The Minister has no doubt noticed in the Press that a big protest meeting is to be held. It is a pity that we cannot get arms, because otherwise we would have armed the wine farmers to call on the Minister at his office. We have not got the influence which the gold and diamond mines have. We have seen the way De Beers shares have gone up; surely the Minister could have taken some of their profits? Take this £600,000 that is needed in order to pay old age pensions to the natives from the diamond mines, but don’t take it from the wine farmers. The mines use the natives, so why should the wine farmers pay for this? The amount which the Government is taking from the wine farmers happens to be the amount required to pay old age pensions to the natives, and I say it would have been more fitting if the Minister had made the gold mines and the diamond mines pay for that. The natives have to produce the riches out of the soil for the mines—well, let the mines pay for it. But no, the Minister will not do that—he is much too frightened of them. He lives in Johannesburg, his constituency is there, and the gold mines have been complaining for years. They get more privileges—they are making bigger profits than they have made at any other time. The Minister could even have got his money from the rich. A man making £20,000 per year at a time like the present should not be allowed to keep more than £5,000 for himself. If he has as much as that left he can live in luxury. Our soldiers have gone to the front to fight on behalf of those people. The poor man has nothing to lose. The poor man has to submit to everyone, bend his knees to everyone. The war is fought on behalf of the rich. Why does not the Minister make them pay if he needs this money? No, it’s the poor wine farmer who has to pay, despite the fact that he only constitutes a very small section of the population. But that small section is an important section. It is one of the best organised sections of the agricultural industry; it is an educated section of the population, and if the Minister continues to do the things he is doing today, the day will dawn when we shall take him to task.

I have listened with great attention to the hon. member for George in his opening of the debate from the Opposition Benches, and I am sure the House was struck as I was with the fact that he started and finished his speech without criticising once any of the new taxes that the Minister has put on in this budget. Now, I think that is a record unparalleled in this House. Here is the Minister of Finance. He comes here and puts on an extra £5,000,000 taxation, and the leading critic on the Opposition Benches has not a finger to point at one of these taxes.

Were you deaf?

You must have been outside the House.

No, that is a fact. I am talking about the hon. member for George. It appears also that the Minister of Finance has now converted him with regard to mining taxation. Ever since I remember the hon. member speaking on finance on the Budget in this House he has always rounded on the Minister for not taking more from the gold mines.

Did you read the amendment?

This time not a word about the gold mining taxation. In fact he goes so far as to say that the gold mining industry is a “verdwynende nywerheid”. Exactly what we have always maintained from this side of the House. We don’t say it is disappearing immediately, but we do say that in taxing the mines we have to take into consideration that they have a definite period to their lives. They are not like other industries—they are not like agriculture, and now the hon. member for George agrees with the Minister of Finance.

He has a funny way of showing it.

Well, the hon. member for George is really making progress. For something like twenty five minutes he entertained this House to a most enjoyable speech, and during that twenty five minutes he never said a single word about the budget. It looks to me as if he is very, very pleased with the Budget.

Did you really understand what he said?

As a matter of fact the Opposition is really not disappointed with this Budget. As I said before they were not disappointed with the bad condition of our finances.

Yes, they are disappointed …

Yes, but the disappointment which they felt—the tremendous disappointment, is that this Budget is so good.

Exactly.

Not that it is so bad but that it is so good; so good indeed that the chief financial critic of the Opposition has not a single word to say about it.

You really make us laugh.

We heard about the period of taxation—the taxation for the war period—and there we could see that the hon. member has not completely cut away from his past yet, because it is evident that in the matters which he referred to this morning the hon. member for George still remembers the text of his last year’s budget speech, and the text of his budget speech the year before last.

And the year before that.

Oh no; he had not started then. The slogan which I am going to refer to is only two years old. “Die onnodige oorlog”. That was the text of his speech. But he did not say a word about that today. So he is really improving now.

Oh, won’t you tell us something?

As a matter of fact, Mr. Speaker, speaking after he delivered his Budget speech last year, I suggested that we should have a fight, that he should go into my constituency and preach to my constituents about this “onnodige oorlog” and I said: “If you do that I will go to George and tell the people there about the war, about your ‘onnodige oorlog’.” I said: “I shall not lose Vasco, but you will lose George.” He did not take up the challenge, and in some ways I am glad he did not.

Now you are here.

Yes. I am glad he did not take it up, because he is here; I would have been here in any case. Can you imagine it—in the name of the Opposition and in the name of the war, he asks for a committee to go into war expenses! Mr. Speaker, the hon. member has no sense of proportion. Every shilling we spend on the war is “onnodig” as far as the hon. member for George is concerned; and then he wants a committee to enquire into war expenses. I want to say this also, that there is no realisation on the part of the Opposition of the life-and-death struggle we have been engaged in in this country. There is no apparent realisation of the life-and-death struggle that has been going on in the world. This war has been a serious matter to us, and if it had not been a serious matter to us it would have been a serious matter today for hon. members opposite. No, Mr. Speaker, you cannot get that into their minds; and one reason is that with all the taxation the Minister has placed on the backs of the people of this country, we have not been taxed nearly heavily enough, particularly in comparison with our Allies, the United Nations of the world.

We don’t agree with you.

I speak on this occasion for a volume of opinion greater, perhaps, than the hon. member represents. The hon. member has quoted from a speech by the Minister of Finance in introducing his Budget. I want to quote from the remarks of the Minister of Finance in Canada in introducing his last budget—

Have we come to that in this country—that the taxation is so heavy that the standard of living of the taxpayers in the country has had to be reduced? These remarks, too, apply only to the 1942 budget in Canada. I may say this in passing, however, that the Canadian Government lays great stress on preparation for the after-war period, and a great deal of the burdens they are imposing on their citizens today will be taken off after the war in the sense that money that has been paid into the Treasury will be refunded to them. But they start taxing incomes, directly, in Canada at £156. At £156 they tax them £9; at £189, £26; at £232, £28; at £278, £59; at £333, £82; at £389, £105; at £444, £134; at £500, £158; at £556, £184 and at £660, £236. I will not go further than that, because that means to say that a member of Parliament who has only his parliamentary allowance in Canada would have to pay back to the Treasury out of that parliamentary allowance the sum of £236. I admit that there is an off-set; after the war some of that money will be returned in respect of insurance policies, etc., as part of this policy. But there it is, Sir, that as a result of this taxation the people of Canada realise that there is a war on; it is touching their pockets. That is one reason why here in South Africa, despite the measure of taxation we have had to face, somehow or other it has not come home to the man in the street, because it has not touched his pocket to any considerable extent, and he has not realised that we are at war, and that we are engaged in the grimmest struggle that we have ever faced in our lives. That is the point, Mr. Speaker. Having emphasised that point to our Opposition friends, having asked them also to remember this, that the war is not over, that the Minister of Finance has still to find millions and millions of pounds, I want to go a little bit further in my speech this year than I have done even in the past in regard to the point made by the hon. member for George (Mr. Werth) about something being done in regard to our industries, more particularly in the interim period and in the after-war period. I suggested the other day in the course of a few words that I said on the Board of Trade Bill, that perhaps under the aegis of that Board such a committee as I should like to see set up, might function. Here I want to say this, that the Minister himself has agreed in his Budget speech, if I understood him correctly, that there are unjustifiable anomalies in our present system of taxation. He has agreed that the burden placed on industry today is too heavy. He has agreed that the incidence of taxation, particularly of the excess profits tax, sometimes falls unjustly. On all these things he is agreed. Further, he has agreed also that after the war he is going, so to speak, to put his own house in order, and he is going to redress these anomalies and inequities, or burdens, that fall unequally on the shoulders of various people. So he has agreed to the principle I wish now to bring to his attention. I say that right through the country the only criticism of his Budget is this, that he intends to wait; he has told the country, as a matter of fact, that he is going to wait until after the war before he sets up this relief.

Why not support my amendment?

As a matter of fact, the House knows very well this is a matter I have spoken on in this House for years on end. I would ask the Minister whether it is possible how to set up—if you like through the Board of Trade and Industries, seeing the terms of that new Bill make provision for special committees and the calling in of experts to assist these committees in dealing with certain features of our industrial life—I am asking the Minister whether it is not possible under the aegis of that Board, to have such a committee appointed to go into this question. There I agree with the hon. member for George. In the English system of taxation you have 4s. in the £ that is held by the Government, so that after the war period, during the time of reconstruction, the Government of Great Britain can hand over that money to its industrialists, which will perhaps make all the difference to industry. Our industries will be in competition, too, with other countries that are making similar provision. I believe that Canada is working along these lines, and also New Zealand and Australia. In order to safeguard our own industries it is necessary that something of that sort should be done, and I say that it should be done now, that the committee should be set up now. I do not want a committee to be set up now merely to collect evidence. It may, of course, prove the hon. member for George wrong in some respects. But I do not want that; it merely supports or rejects contentions. What is required is a committee that will be able to act on the evidence it collects, a committee that will not need to wait for something else to happen before it can itself achieve results. The Minister may say of such a committee: “Well, if that committee works, I shall have to surrender revenue.” I say that in the interests of the industries of this country every pound he may have to surrender in revenue will be worth at least £5 in view of the country’s general economic life. When industry is flourishing he will get back this money. In the meantime he will set at rest the minds of business people who have been grappling with problems of this sort all day long. What industry in this country can, so to say, make a blueprint for its future? And yet you will find in America and England that people who are going to export goods to be sold in competition with goods we are manufacturing in this country, are blueprinting for the after-war period. I say that is very largely because of our taxation policy; it is left, as it were, without any definite promise of relief. We are left handicapped, hamstrung. The country, so to say, is waiting not for a promise but for a definite undertaking by the Minister in this respect. I know this, I have supported the Minister through these dark war years because I realise that our Minister has had a very difficult problem indeed. I shall deal later with the question of the enormous sums of money he has had to get for the war, and I shall show from his figures, I hope, that the Minister has been justified up to now in showing a very stiff upper lip. If we had a Minister that did not know his own mind and having made it up stuck to it, the finances of this country might have been in a very different position today. The Minister knew what he wanted, and the Minister knew what he had to get, and he has stuck to his guns. It is a very fine thing during a war to have soldiers who will stick to their guns, but it is even more difficult to find a Minister of Finance who will, in such difficult times as these, stick boldly to his guns. For that I give him full marks.

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

Afternoon Sitting.

When business was suspended I had stated that the country really had a great admiration for the Minister of Finance for the way he had stood by his guns right through this very difficult period. On that ground I want simply to say this, the suggestion I make which I understand is more or less in accord with one clause of the amendment of the Opposition, if that suggestion is carried out by the Minister, it will not detract from the great reputation he has made as a Finance Minister. Not only in this country is he known as a great war Minister, but abroad he is also looked upon as one of the great Finance Ministers of the war period; and in that respect we are very proud of him. He is on the bridge of the ship, and having steered our ship of finance during these war years, it is for him naturally to decide, but I can tell him this: If the suggestion is accepted, he will add enormously to his prestige and to the reputation he has built up. I have been astonished during the luncheon period at the number of members on both sides of the House who have spoken to me on this matter, and I can assure him that he will have unanimity from all sides of the House over a favourable decision on this question. As far as the services are concerned which the Minister of Finance has rendered to the country during these war years, I should like to review the position. Sometimes, Sir, we cannot see the wood for the trees. In the battlefield the achievements of our South African boys are well known to us; we are proud to know of the high reputation that South Africa has achieved as a fighting nation. The reputation of our country, Sir, stands equally high regarding its finances, and in respect of how we have conducted them during this period of the war. It may be asked whether the Minister of Finance has tried to derive any help from our past experience. Take for example, the last war period. I am sure that he has found very little help there. We talk about the last Great War, about the enormous upheaval it made in the economic life of our country, about the aftermath of that war and the vast sums of money we spent during that period; and we take that as something that can guide us in the after-war period that will follow this war. But it is astonishing to realise that when we look at these figures there is very little we can find to help us. Let me make a comparison of the two five-year war periods. It is true that we have only been in this war for a little over four years, but with the present appropriation before the House, we are covering ourselves for a five-year period of this war. Well, from 1915 to 1920, we spent from revenue account £7,369,876—£7,369,876 from Revenue Account was spent for war purposes during that five-year war period. From Loan Account we spent during the same period £31,414,000. Although the sum required was less than £40,000,000 for the whole war period of the last war, from Loan Account no less a sum than 80 per cent. was found for our war requirements, leaving 20 per cent. to be financed from revenue account. In the first full war year during the present struggle, 1940-’41, we took from revenue alone £20,500,000, and from Loan Account £39,500,000, a total for the one year of war of £60,000,000 compared with less than £40,000,000 for the whole period of the last war. Can you imagine a Minister of Finance faced with a position like that, when the expenditure of the country had been swollen, where the needs of war were so tremendous compared with anything previous in our history. And yet the Minister of Finance faced the position sternly; and splendidly did he accomplish the task. In the whole period of the war, including this appropriation, we have spent during five years the colossal sum of £331,791,870—astronomical figures. There it is; and if we appreciate the significance of these figures we appreciate the stiff upper lip of our Minister of Finance. The Minister of Finance had to find these vast sums, and he had to be firm. He had to be a tough fellow. On that side I want to give full marks to the Minister for the way in which he has stuck to his guns. He has got us the money, and when the bills fell due the cash was there to pay them. I submit that this record of ours in South Africa is something that should make every true South African proud, proud, proud! Also, when we consider the full expenditure during the war period and mark that no less a proportion than 44 per cent. has been taken from revenue account, whereas during the last war, as I have said, the paltry sum of 20 per cent. was taken. On this occasion 44 per cent. has been taken from revenue account, and the balance of 56 per cent. from loan account. In these circumstances I think it ill becomes the members of the Opposition to belittle our Minister of Finance or to try to make him look small. For my part I find it very difficult in his presence to say what I would like to say about him, but I assure the Minister that the people of the country take off their hats to him for the great job he has done. Now there are some other interesting points. In the financing of this country, where vast sums of money have been spent, unprecedented sums of money, undreamed of sums of money, one would have expected that the whole financial fabric of the country would have been weakened as a result; instead of which one finds that the position has been enormously strengthened. During the last war, in 1920, we were paying for our money at the rate of £3 16s. 9d. per cent. During this war, in respect of the whole of our public debt, which represents today well over £400,000,000, we are paying on an average something like 3¼ per cent. That is a test of the soundness of the finances of this country, and again I think that we have to congratulate ourselves as South Africans, for a record in that connection. Another very important thing is this: We find that in 1920 70.95 per cent. of our public debt was held in London, and 29.05 per cent. was held in this country. Our public debt, as you know Mr. Speaker, has grown enormously, but the corresponding position today is that only about 4 per cent. of our public debt is held in London, and 96 per cent. is held in South Africa. Mr. Speaker, I ask the Opposition to say in all fairness, is not this a magnificent record that South Africa has provided? Are we not all proud of this record? Hon. members opposite talk about this Government; is not this a marvellous record that our Government has achieved for us? You talk about our Minister of Finance. It is not a marvellous record that he has to show today? I say this …

Carry on, you have said nothing yet.

I am sorry I had this interruption. With the lunch break interrupting my speech, it is very difficult, to say what I had to say in the time at my disposal.

It is a case of dining well but not too wisely.

I want to say this, that this war period means this to South Africa, that we have said good-bye to a past financially that we will never know again, and we see the dawn of a new day for South Africa economically. Out of evil has come good. We never knew before what we could do in South Africa. Now we do know, and on this note I close. I also agree with the Minister of Finance that you cannot say that because you can raise vast sums of money by a loan to carry out the war, that similarly you can raise vast sums of money to carry out a peace programme. My time is too limited to go into that matter today, but I think the hon. member for Fauresmith (Dr. Dönges) will agree with me here, and I think even the hon. member for George (Mr. Werth) will agree that it is so. These loaned millions, after all, are the savings of the people and that purse has not an unlimited bottom. That is the whole position; but apart from that we have shown that we in war have a very high earning power compared with what we had in times of peace, and if we can go on producing and working as we have done during the period of war, and still keep our machine in order, and produce as much wealth after the war as we did during the war, then we are prepared for a new social era in South Africa, and that, I agree with the Minister, is something to which we should look forward. From these great war efforts we have made, from these results we have achieved, we should carry an inspiration into the future and see that we make South Africa a better South Africa than it was before the war. In fact, we should make of South Africa one of the happiest and one of the most prosperous countries in the world.

The budget and the speech of the hon. the Minister of Finance has apparently given satisfaction to commerce, industry and finance, with the exception of that little undercurrent in regard to excess profits. I want to assure the Minister and this House that what has caused satisfaction to the various sections of the population that I have mentioned, causes a great deal of concern to the workers of South Africa, not because of what was in the speech but because of what was not in it, and I want to put this to the Minister and the Government, that unless some more decided action is taken, some more determined and clear-cut action, then we can only tell the Government that the workers of South Africa, the great mass of the people of South Africa, will begin to feel discouraged, lose confidence and feel what I have already heard from the Opposition benches, what we have heard all over the country, that it will be the same story after this war as it was after the last war. We on these benches demand that some concrete show must be given during this session. The Minister stated when he referred to social security—and by the way I want to say that usually the Labour Party has always put forward a list of the proposals that we considered essential for the welfare and the prosperity of the great mass of the people of South Africa—we find on this occasion that the social security code contained all the things that we have asked for for years in this House, and in reply to the demands and aspirations of the ordinary citizen, the Minister said—this is where he referred to the £100,000,000 that we have frequently asked to be set aside for social security—

I felt very depressed when I listened to those words, I asked myself whether this was again a case where money could be found for the war but could not be found for the homefront after the war. I want to say this, and I want to say it in this sense, that it cannot be idly set aside, and that is that this House and the Government is part of the war effort, and that when we have defeated Germany and Japan, as we assuredly shall do, the war on the home front will not have been won until the fullest measure of social security is achieved.

Hear, hear.

Before I go on to the points that should have been included in this budget, I want to say a few words particularly with regard to the financial position as it stands today. As you are aware, figures have just been quoted by the hon. member for Vasco (Mr. Mushet) and also by the hon. member for George (Mr. Werth) to show that on the 31st March this year the total national debt will be £475,000,000 in round figures, less £11,639,000 which is in the sinking fund, leaving a net figure of nearly £464,000,000. Side by side with that we have the position of the Reserve Bank which has an increased note issue during the past twelve months at the rate of £1,000,000 per month. The Minister told us that the reason for that was the activities in the black market. It does seem to me that the black market in South Africa is far better organised than any price control or any ministerial office, and that I say is a bad thing. I say it is a wicked thing, but in my opinion it is true. But where the Minister gets that figure from, I do not know. We are also told that the commercial banks’ deposits increased by £40,500,000 in twelve months. Now we are told, against the figures I have given you, that the amount to be borrowed for the coming year is £45,716,000. That is going to bring us up to that grand total where the public indebtedness through loan funds is going to be £463,944,000. But the Minister says quite glibly—and trying to put it in this way—and I do not blame him for it—he says that we are financing the war 50% from revenue and 50% from loan. In other words, he says, we are paying for half of the war and posterity will pay for the other half. I have no objection to posterity paying the other half but I have a quarrel to this extent, that this is not quite the true position. The true position is this: In the way we are financing this war from loan funds, a section of posterity, and a substantial section, will pay the minority for many years to come, that the majority of posterity will pay the interest on these loans and will pay the capital, if ever the capital is paid, to the successors of the small minority of our present generation. When we speak glibly of posterity let us see what it means. As far as I can see there will be no change made in financial methods, and after a period of years there will be a funding of the debt, which means that if we accept the figure at £476,000,000, the interest on that amount, not at 3¼%, which the hon. member for Vasco is so proud of, but at 3%, will amount to £15,000,000 per year in perpetuity. That means that posterity would receive from us the very questionable heritage of having to pay this sum of £15,000,000 per year in perpetuity. Of course, hon. members opposite will say: “But what is the alternative; the war had to be fought, the money had to be found.” The hon. member for Vasco has told us how well the money was found and I entirely agree that it was easily found, and on top of it all only £11,000,000 today is owing outside the boundaries of South Africa, which means that we owe the difference between £11,000,000 and the figure of £464,000,000 to people in this country. I agree that the strength of a nation is in having a small external debt, but on the other hand if you are going to put a very heavy weight round the people in your own country by having a large debt inside your country, it is not going to make the ordinary citizen very happy. It might appear in international politics to be a wonderful achievement, but is it giving a real opportunity to the people to rehabilitate themselves after the war with this heavy weight round their necks? At least—and I say it with all due regard to the fact that South Africa has always met her commitments, and so have other countries, but not many—even Great Britain herself in order not to dispute her debts paid a token payment and the same thing applied to every country in Europe with the exception, I think, of Finland, which paid 100 per cent. of her debt to the United States of America—but as far as South Africa is concerned, if we found ourselves in difficulties, at least we could pay a token payment. I am not suggesting that we should evade our responsibility. I am not suggesting that at all, so that from the ordinary outlook of the citizen there are two points of view.

What are you suggesting?

It is a question of morality of course. But let me say this in regard to that question. It is a mythological conception of something that has not worked out the way you would have liked it to work out.

But what exactly do you suggest?

That is rather a good definition.

That is not my quotation.

What do you suggest?

I am coming to that. I am glad the Minister is impatient to hear what I have to say. It shows that he is interested. I suggest that we should as a State use our own credit, and the only way to use our own credit—and do not forget this, and the Minister must not forget it: Private institutions are using State credit today—I say that the only way in which we can use our State credit is to have our own State Bank. Of course, I know that hon. members on both sides of the House will smile when I say this, but I say that it can only be done by having our own State Bank.

Your own printing machine?

I can assure the hon. Minister that the printing machine in this country has worked overtime, rather more than it should have done. I do not want to go into that but I can go into it if the Minister would like me to do so. I have not got much time.

It would be very interesting to hear your views on this subject.

It is not that I do not want to, but I have not the time. However, if we set up our own State Bank we shall then be in a position to use our own credit. We can by that means not use the printing press, but I would say this, that we only require to use the ordinary bank credits used today by the ordinary commercial banks. That is all we have to use, and then we would not only be controlling our own credit, not only would we be financing the war, but on top of it we would be in this position that instead of handing over a great burden to the majority of posterity to pay to the minority, there would be certain loans that would be set off and paid to the State itself in the years to come—to the State Bank. It would be paid by every section of the community. You could still under a State Bank issue your Union Loan Certificate. You could still carry on that business, but on top of it all you would be in this position, that you would shift the burden of that weight from the mass of the people on to an institution that could utilise all the financial opportunities that private banks have used to the benefit of the taxpayers of South Africa.

John, you are bluffing.

My hon. friend may be a good judge of bluffing, I do not know; he may be. Perhaps his own method may make him an expert in that direction, but as far as I am concerned, if I am bluffing, it is quite within the bounds of the hon. member to show where I am wrong. But let us examine this position. In this country we have nationalised the railways. Our post office is a national institution. On top of that we are busy instituting a national fisheries industry. Shipping is accepted as a national institution. Some years ago Iscor was set up. It is true that it comes under a company but it is essentially a State industry. As the hon. member for George correctly said it was set up by the National and Labour Government in 1927.

And now they are starting hotels.

I agree with that, but that is a matter that can follow later. I can say that in regard to electricity as well. All the key industries are gradually coming under State control and rightly so. Having accepted the position of controlling all this; we ignore the key to these key industries, namely finance, the key to all our well-being, and we accept the position that private banks, private finance, must manipulate—and I use that word advisedly—our finances, because we dare not do it ourselves because of the old bogy of inflation. Inflation has already been created by private banks and other interests. If we controlled the key to these key industries, namely finance, we would not have to work the printing press to the detriment of our moral and social future. I am sometimes amazed, when I see the knowing and supercilious way that some members smile when one speaks about a State bank. But the whole history of the world is moving in that direction, and the world is going to get itself into much more difficulty if it ignores the lifeblood of the control of all these other controls, and that is finance. I put it to this House, to the Government, that they will have to be very wary in the piling up of internal debts in the sense that a big section of our people will have to pay to a smaller section of our people in perpetuity. It can be rectified, and it can only be rectified by controlling our own credit by means of our own State bank. The Minister stated that the rehabilitation of the returned soldier was priority No. 1. I entirely agree with him. I do not propose to say more at this stage, because I understand that the Minister concerned has a Committee working on that, and I am looking forward to see what that Committee brings forward, but I say this with regard to that, and that is that the returned soldier is a problem of the greatest importance not only to the returned soldier as a returned soldier, but also from our own national point of view, to see that whatever we do, these men, particularly the younger men who left school to join the army, who left school at the age of 18, who have never started work of any kind and who have three or four years’ war experience, will be able to settle down after the war. They will find it most difficult to settle down to normal occupations after the war. Many of us have gone through war. I had that experience over 40 years ago. I know how difficult it was for us to settle down after the war. The Minister of Native Affairs said they were prepared to finance different schemes, to lend so much money to the returned soldiers, and to give so much by way of a gift. There is only one way of dealing with these men and that is to see that they are placed in suitable apprenticeships and that they are placed in universities, and then to subsidise them by a weekly wage until they have completed their apprenticeships or their university careers. If you do not do that you are going to do a great injustice to the young men who have joined up without having started their apprenticeships or without having completed their university careers. It is a problem that must be faced, and must be faced quickly, and whatever the scheme is it should come into operation now. It should already be in operation. It is long overdue. It is overdue, long overdue. We take up the attitude on these benches that it is absolutely essential that “post-war reconstruction” be changed to this “reconstruction now.” Reconstruction now, so that there can be no question when the war is over but that we are proceeding with the programme and with the promises that have been made to the people of our country. The question has been raised in regard to whether we are verging on inflation, or whether it is that we cannot control cost of living. The hon. member for George (Mr. Werth) has put forward the point of view that the cost of living has gone up 100 per cent., because he says the figure given by the Minister has to be doubled—that would be the logical deduction to make. But whether that is so or not we at least have the figures of the statistician of the Trades and Labour Council for whatever his opinion is worth. He says that whereas the Government cost of living figures show an increase of 26.2 per cent.; according to his investigation it is just over 42 per cent. This much we do know, that if you take certain outstanding things, the rise has been very high indeed. Certain figures were quoted in the Sunday Times of the 20th February. They show that suits have gone up 223 per cent., sports coats 223 per cent., shirts 120 per cent., hats—though we do not need to wear them—127 per cent., rain coats 223 per cent., underwear 100 per cent and so on. These all indicate two things. Either we cannot control the cost of living position, and that the black market is flourishing as well; or that we have accepted the position and that we are helping inflation by paying increased figures. You cannot get away from it; if you have increased cost of living figures you cannot escape inflation. It must be so; it is a vicious circle. So, one can appreciate the difficulty there. I have one complaint to make to the Minister; it is in regard to what I believe some of my hon. friends call “tickey-snatching” although here it happens to be “twopence-halfpenny snatching” and that is the duty on cigarettes. I think I can speak with a certain degree of impartiality on this matter, because I am not a cigarette smoker myself. The Minister said that there had been several increases in the taxation of cigarettes in recent years, but these had had no effect on the quantity of cigarettes consumed, and this tended to show that a further increase was feasible. In other words, if the people of South Africa, even if they are cigarette smokers, take things lying down, they can make up their minds there will be another 2½d. on cigarettes later on. In that respect I appreciate the action taken by the wine and brandy people. They are kicking up a row because they have to pay a total sum of £600,000 under the budget. The cigarette smoker, however, has to pay twice that amount, namely £1,250,000. But up to now no organisation has come into existence on the lines of the organisation built up by the Cape wine farmers, for the protection of the interests of cigarette smokers. In consequence they will have to pay. And what I am complaining about is this: Here the Minister is again taxing the great mass of the poorer people. Cigarette smoking, as I see it, is always synonymous with drinking tea in South Africa, that whereas perhaps you may drink four or five cups of tea, some people, I am told, can smoke 50 cigarettes a day. So I am warning the Minister that he will not be popular with cigarette smokers, and he has to bear in mind that today women, as well as men, must be classified as cigarette smokers. So his unpopularity will be on a considerable scale. I want to put it to him, as a suggestion, that he should indicate that he is not going to accept this position in his next budget, that because the consumption of cigarrettes has not decreased, that means that he can snatch another tickey out of the pocket of the unfortunate cigarrette smoker. I have to draw my remarks to a close now, but in concluding I should like to put my points in this way, that we as a party demand that although the Minister has told us that he has put £50,000 aside for a preliminary act of good intention with regard to social security, that does not satisfy us. He has also given us this concession in regard to old age pensioners. I appreciate the fact that he has raised the value of the property excluded from consideration from £400 to £800, and that also apparently the means test has been eliminated. To that extent I appreciate what he has done. But he has not done enough. I say this, that we demand that this Session we shall have a widow’s pension, that we shall have an adequate old age pension, that we shall have a substantial commencement of health services with a maternity grant to every mother. Those are the three points that we regard as fundamental in order to show the true and real intention of the Government and of the Minister of Finance. I put it, Mr. Speaker, to the Government and to this House, that if they are going to convince the people of this country that the promises that they made, irrespective of Select Committees set up, irrespective of commissions set up, that they can furnish proof of their intentions during this Session, then we must have some practical start in the shape of the proposals I have just mentioned which must be given effect to before this House adjourns.

I think when hon. members opposite were listening to the hon. member for Vasco (Mr. Mushet) who got up here to defend the Minister of Finance against the criticism of the hon. member for George (Mr. Werth), a sigh must have gone up in their hearts: “Oh, let us have Blackwell back.” Whatever one might have said about the previous member for Kensington (Mr. Blackwell) he always tried to answer the criticism which this side of the House levelled against the Minister. The hon. member for Vasco, whatever good qualities he may possess, certainly failed very badly in this respect. Imagine! What does the hon. member tell us here? He comes here and tells us that the hon. member for George had not levelled a word of criticism against the Government’s taxation proposals. Although the hon. member for George pointed out how unfairly the one proposal compared with the other, the hon. member for Vasco still told us that the hon. member for George had not criticised the Minister’s taxation proposals in any way.

He did not criticise the new taxation proposals.

It really makes one think that the hon. member for Vasco does not realise what has been going on here, and that he does not understand the criticism which been levelled here. It appeared to me that he listened with a certain amount of intelligence to the hon. member for George, and all we can do is to ask whether he really understood what the hon. member for George said when he comes and tells us that the hon. member did not bring any strong criticism to bear on the Government’s taxation proposal. And what was more astonishing in the attitude of the hon. member for Vasco was that he tried to lay down this proposition, that because we had asked for the appointment of a standing committee of this House to control and check the war expenditure, to define what was necessary in regard to the war effort, he could deduce from that that we were no longer opposed to the war. Have hon. members ever heard anything more nonsensical and ridiculous than that? Although we are opposed to all the war expenditure we say that if they want to make war, let them only spend as much money as is necessary for the war because it is perfectly clear to us that it is unnecessary to spend all the money that is being spent now.

The Opposition says that all the money which is being spent on the war is being unnecessarily spent.

Yes, from our point of view it is unnecessary but we want to help hon. members over there from their point of view. If they want to wage war let them do so, but let them only use the money for essential purposes. It is because we are convinced that millions of pounds are being wasted every year on war expenditure that we say it is essential to keep a check on that expenditure in this way. Canada has done exactly the same thing. Is the hon. member not aware of what is happening in the United States? Is he not aware of the clash that has taken place between the Congress, the Senate and the President, because in their opinion money was being wasted on the war.

He does not read things like that.

Now let me come to the general Budget. If ever we have had a most astonishing thing happen in a Budget debate we have had it on this first day of the debate. While the hon. member for Vasco, who we have to regard as the Government’s mouthpiece, gets up here—I don’t know what the hon. member for Pretoria (Sunnyside) (Mr. Pocock) has to say about it—but it appears that he takes it for granted that he has been put back a bit. I say while the hon. member for Vasco gets up here to defend the Government we have this most astounding thing, that in defending the Government he devotes the major portion of his speech to a passionate appeal to the Minister of Finance to accept the third point in the Opposition’s amendment. The hon. member delivered a passionate plea to get point 3 in regard to the establishment, of machinery for the creation of industries passed, and the hon. member told the Minister of Finance that if he did accept that proposal his reputation would grow even bigger than it was today. I only want to say this, the hon. member, as an industrialist, realises, of course, what it is leading to, and in spite of the fact that he sits on the Government benches he knows that this country can only develop industrially if the attitude and the point of view put forward by this side of the House is accepted. That has been the position in the past, and he knows that we will have the same position again in future; that is why he makes this appeal to the Minister of Finance: “In Heaven’s name accept the amendment of the Opposition.” We have seen a most remarkable thing here, namely that the second speaker on the Government side who got up, the hon. member for South Rand (Mr. Christie) instead of defending the Government, devoted his whole speech to nothing but a friendly but determined onslaught on the Government. He said he had listened in vain to the Minister of Finance in his Budget speech for any special concrete steps which the Government was going to take in regard to social security; he went further than that and said this: “I was very depressed”. The hon. member has reason to be depressed. If he continues to support that Government he will not only feel depressed but he will be buried, and he can speak from experience, he, as a man who co-operated with the Nationalist Party in the past, knows that it is only this side of the House which will do anything about industrial development. He knows that it is only this side of the House who will do anything concrete to bring about social security. No wonder he feels depressed in his present company. If he wants to feel happy and full of life again then I say the sooner he gets rid of his present company the better. So far as the Minister of Finance is concerned, every year, as regularly as clockwork, he comes along with ever increasing expenditure, with ever increasing taxation, and with more loans. All bounds have been exceeded, and along with his extravagance beats all records in that regard. If things are to go on in that way, with this increasing waste of public money, this country will become so impoverished that it will be impossible for us to face any post-war setbacks. Now, I want to say a few words about the taxation proposals of the Minister of Finance—those taxation proposals with which he is busy grinding down the poor. Before I deal with those matters, however, I want to refer to what the Minister called “the buoyancy of the country”. When I look at the expenditure and the resultant increase in the burdens imposed upon the people, when I notice how that increased taxation and those increased burdens keep on rising with an ever increasing tempo, I am not reminded of healthy financial conditions in this country, I am not reminded either of the buoyancy of our revenue which the Minister has talked so much about, but I am reminded of the buoyancy of a child’s balloon—the type of balloon which a child keeps on blowing up so that it keeps on stretching and gets bigger and bigger, without showing any greater strength, and in the end it gets blown up to such an extent that it bursts, and all that is left is just a lot of shreds. That is what I see in this vaunted buoyancy of revenue. Let me say this, that if the Government continues its reckless inflation policy, because what we are dealing with here is nothing but a reckless inflation policy, it means that we are making straight for a yawning abyss, we are making straight for a financial disaster, which, as everybody knows, like a vengeful Nemesis inevitably follows on a policy of wastefulness, false prosperity, waste of capital and extravagance in the using and borrowing of money expended not for capital purposes—that is to say not for the creation of undertakings which will contribute to the welfare of the country. To show the House how the Minister’s policy of extravagance simply encourages inflation, I want to bring a few figures to the notice of hon. members. For the financial year which ended on the 31st March, 1940, the year when the keys of the Treasury were entrusted to the present Minister of Finance, the total Estimates of Expenditure on Revenue Account as well as Loan Account amounted to £67,000,000. Now, five years later, after five years of the hegemony of the present Minister of Finance, our total expenditure on those two accounts has increased to the colossal figure of £180,000,000. This means an increase of £113,000,000 for those few years. I repeat that that to us is proof of inflation. The Minister of Finance who has had so much to say about inflation is in that way encouraging inflation. If the Government this year alone spends £113,000,000 more than it did five years ago in one year, then I ask what individual with any conception of finance can find the Government not guilty of the charge—that it is largely responsible for the considerable degree of inflation with which we already have to contend. Apart from this great increase in annual expenditure I want to refer to the taxes which are being levied. The Minister, however, does not get his money only from the taxes he levies, he also gets his money from loan funds, and that is why we must also say a few words about our loans and our public debt. The position in regard to the public debt and the money which the Minister has borrowed today is that the Government in the course of a few years has increased the public debt by an amount of £184,000,000. That money is loan money and debt. When the hon. member opposite talks about our strong financial position, then I want to say this to him: That this £184,000,000 after the war will be like a millstone round the neck of generation after generation of our impoverished nation. These are loan moneys which have been spent not for the development of sources of wealth and revenue, but they have been used to be shot away through, the barrels of big guns. The Minister has this borrowed money here which he is spending in this way, yet he boasts of the buoyancy of our revenue. He reminds me of the young man who spent money right, and left, and when he was pulled up to pay his debts he simply handed over an acknowledgement of debt and said: “Thank the Lord that’s paid”. I say that this borrowed money, not to talk about its repayment, will be like a millstone round our necks for many generations to come. Just let this war pass, let this false prosperity come to an end, and we shall see then where the Minister and the people get money to cover those burdens, or even to cover only the interest on those burdens. When the Minister came into power the interest on our public debt was £5,000,000. That was five years ago. In five years he has increased it to £10,000,000. Our interest burden today is £10,000,000 per year. If the war should go on for another two years, and if the Minister goes on borrowing money in the same way, say perhaps another £10,000,000, and even if he borrows that money at 3 per cent. it will mean that in another two years’ time our interest burden will be £13,000,000 per year, £8,000,000 more than it was when the Minister came into office five years ago, and yet there are people here who reassure themselves with the glorious thought that when the war is over we shall be in a happy position. I predict that if we carry on with the; present policy, South Africa, unless another Government comes into power, will be in such a condition that the people will moan and struggle to bear the taxation which the present Government is imposing upon them. Now let us look at those taxes.

The lamentations of. Jeremiah.

When the Minister came into office five years ago the State was getting £33,000,000 in taxation. Within five years the Minister has raised that amount, if one includes the indirect taxes, that is to say posts and telegraph tariffs and so on, to £90,000,000. Five years ago the taxes amounted to £33,000,000, and now they have gone up to £90,000,000. Let me put this question to the Minister: Is he getting those taxes from our real prosperity? If he were getting his taxes as a result of our real prosperity then hon. members could talk of the strong position in which we shall find ourselves when the war is over. I want to ask the Minister if there is a single politician or a single economist of any standing who in 1939 could have said without being laughed at that the annual amount of our tax receipts would within five years increase from £33,000,000 to £90,000,000? I say that there is not a single politician or a single economist who five years ago, without being laughed at, would have dared to say that it was possible. I again put the question: Has this enormous revenue come into the coffers of the State as a result of the country’s prosperity? If that were the case then there would be something to be said for it, but it is perfectly clear that the Minister is only getting this money as a result of his having created a condition of inflation in this country. He has only succeeded in getting all this money by borrowing more and more, by spending more and more, and then by imposing taxes on the money he has spent. Hon. members talk about our strong position, I want to ask the Minister what fresh sources of revenue have been created in this country out of which he gets this extra revenue? What new sources of revenue have been created here?

None.

Practically speaking, none. The Hon. the Minister has told us that the gold mines are deteriorating. Consequently, in that respect no fresh sources of revenue have been created. Now, let us take agriculture. Does the Minister want to tell us that the agricultural industry today presents a greater source of revenue than before? Let us look at the commodities which we used to export before the war. Let us take mealies and meat. The only article one can export today is wool. Can hon. members say therefore that any fresh source of revenue has been created in this country? Have our base metals been developed on a great scale since the beginning of the war? So far as new sources of revenue are concerned, sources of revenue which have brought about prosperity in this country, we cannot see any of them. This extravagant spending of money is no proof of prosperity, it is simply evidence of inflation, and it is this unhealthy inflation which is bringing about an increase in the cost of living. The hon. member for Vasco (Mr. Mushet) contended that the public did not feel the increase in the cost of living, and the increase in taxation. I wonder what class of people the hon. member associates with if he makes a statement like that? The hon. member for South Rand (Mr. Christie) quoted figures here to show to what extent the cost of living had gone up. I believe the figure is 26%. He quoted instances to show that there are certain things which the poor man has to buy every day, the cost of which has gone up by 200%. I want to ask the Minister how he thinks those people who draw wages, who work in the mines, who are employed in the Public Service, who draw wages in industries—I want to ask him how they are expected to keep body and soul together on the little extra war allowance they get? I say that these ever-increasing costs of living are largely attributable to the Government’s inflation policy, and that they are due to the faulty control of prices in this country. I haven’t got the time to deal with the question of control of prices in this country. I have to keep to a time-table, and my time is limited. Hon. members on this side of the House will deal with that particular aspect. I only want to refer to the Government’s lack of policy in regard to the control of prices of goods coming into this country from abroad. For clothes imported into South Africa we are paying 100% to 200% more than we would be paying if the Government had done its duty. I know the Minister cannot fix prices outside this country. The Government has taken all the control out of the hands of the farmers. Today it controls mealies, wheat, meat and other farming products. Cannot the Government exercise control over the importer of goods if a particular type of article is required in this country on a big scale? The Government can act with more power and more authority in regard to this matter, but in this connection I want to draw attention to one aspect of the matter which is the cause of the price of imported goods being so terribly and unnecessarily high. I am referring to freights and insurance. Freights and insurance are to a large extent responsible for the fact that imported goods are sold in South Africa at a terrifically high price. The freight from the Argentine to South Africa is round about £50 per cubic ton. From the Argentine to England it is £6 per cubic ton. The danger of sinking by “U” boats is considerably greater on the course from the Argentine to England. The distance from the Argentine to England is a good deal more. The freight between the Argentine and South Africa should therefore be much lower, but though the distance from the Argentine to England is much longer than the distance from the Argentine to South Africa, the freight from the Argentine to England is only £6 per cubic ton, whereas it is £50 per cubic ton from the Argentine to South Africa.

Whose fault is that?

It is the Government’s fault, as I am going to show. Let me give an instance. I came across this in one of the Trade Journals. On a consignment of towels from Brazil which cost £191 there, the importer in South Africa had to pay £65 per cubic ton plus £119 for insurance. That consignment was landed here at a cost of £468 9s. 3d. and it will probably be sold to the consumer in South Africa for something between £600 and £700. Goods which cost £191 there will be sold to the consumer in South Africa for something between £600 and £700. Now, hon. members opposite ask what the Government has to do with that. If a government in time of war, when it controls everything, does not take action and does not use its influence over other countries, so far as freight and insurance are concerned, then I say the sooner such a Government gives way the better it is for the taxpayers of the country. As a result of its failing to act the Government is to a large extent responsible for the tremendous increase in the cost of living in this country. So far as war expenditure is concerned I want to associate myself fully with what the hon. member for George has said, namely that the war expenditure, so far as the army alone is concerned, could be very much smaller that it is now if the Government had exercised proper control. I understand that the Government today has an army of 150,000 men. I want to ask the Minister this: How many of those 150,000 are fighting? Have we ever had more than one of our divisions fighting at the front? They have an army of 150,000. Why nave we got this tremendous force of women, natives and coloured men who never do any fighting? Why have we got all those clerks and others in uniform, and why have we spent hundreds of thousands of pounds on uniforms? Many of those people do not do any work at all. If one goes to Pretoria station one notices numbers of troop carriers and lorries every day picking up soldiers. Those lorries or troop carriers are sometimes driven by young ladies or by natives. Why should those motor cars be driven by natives? There are sufficient white soldiers to do that work. If the Minister complies with the request from this side of the House to appoint a committee that committee will be able to determine that millions of pounds are spent every year unnecessarily on the war effort. Now I want to refer to a new item of expenditure which the Government has placed on the estimates—old age pensions for natives. I understand the Minister estimates that this year he will grant an old age pension to 67,000 natives, which will cost the country £323,000. Quite apart from the principle of doing so, I want to ask the Minister whether his calculation is correct? Why does the Minister fix the number at 67,000. The Minister should know that within the next two or three years that figure of 67,000 will rise to a few hundred thousand. Why does he create the impression in the country that only a small number of natives are going to get that pension, when he knows the number will very soon increase to hundreds of thousands? Now I want to go into the figures to see whether his calculations are correct. We have 800,000 coloured people in this country—of those 800,000 coloured people 27,000 draw old age pensions. If the same percentage of the 7,000,000 natives is to draw pensions, then it will not be 67,000 natives who will draw pensions, but 230,000. If, of the 800,000 coloured people, 27,000 draw pensions, then it means that 230,000 natives out of the 7,000,000 natives will draw pensions. I want to refer to the 1936 census figures. The 1936 census figures showed that there were 234,500 natives over the age of 60, and 80,000 native women over the age of 60—that is to say 314,000 natives who will have to be considered for old age pension. One can take it that that number has by now gone up to at least 330,000. The Minister knows that as soon as it gets known among the natives that they can get an old age pension, they will all come and ask for pensions, and if the Minister applies the means test I predict that the number of natives who within a few years will be receiving old age pensions will be nearer 300,000 than 67,000. According to the Minister’s calculations he will pay about £8 5s. per native. If one applies that to 300,000 natives we can take it that our normal expenditure within a few years will go up to £2,041,000 per year only for native pensions. I am not going to talk about Oudstryder pensions. Other speakers on this side of the House will discuss that question. I only want to ask the Minister whether the white population of this country can afford to spend millions of pounds every year on old age pensions for natives? Are we prepared to do so—can we afford it, because that tax will be imposed on the white man and not on the native? The taxes imposed on the native all go to the Native Trust Accounts.

And more than that.

I ask again whether we can afford, in view of the poverty prevailing among the white population in South Africa, to put a tax on the white man which is going to cost millions of pounds, in order to help old natives to get old age pensions?

What about the pass fees?

Those native pass fees don’t come to the Treasury. The hon. member should know that. Now I come to the unfair taxes. The hon. member for George has mentioned instances here which should stir the Minister’s conscience. The hon. member referred to the unequal burden of taxation. I don’t want to quote the remarks of industrialists about the setback which our industries are going to suffer as a result of this unfair tax. I want to draw attention to another act of unfairness committed in this Budget. The hon. member for George has already done so in part. I am referring to the tax the Minister is imposing on transfer duties on the sale of fixed property and the sale of shares. The Minister expects to collect £1,100,000 from a 2 per cent. increase in transfer duties. That means that he estimates fixed property to a value of £55,000,000 will be bought next year. The total duty will amount to £2,000,000, because there already is a duty on such sales. Now we come to the share market. The Minister has increased the stamp duty on brokers’ notes very slightly. He expects to get £200,000 per year from that source. The increases he proposes amount to 6d. on amounts of £25, 1s. on amounts between £25 and £50, and 2s. 6d. on amounts between £50 and £100; on the average this will work out at 2s. per £100. On shares therefore it works out at 2s. per £100 and on land it works out at £4 per £100. On a plot of land for £2,000 one has to pay £80 in taxation, and on £2,000 worth of shares one has to pay £2. In the one case it is £2 and in the other case it is £80. Most of the people who buy land do not buy it for speculative purposes. There are, of course, some people who only buy for speculative purposes, but the Minister should be aware of the fact that the great majority of the people who buy land buy it for the purpose of living on it.

Sometimes.

I admit that speculation does take place, but not to the same extent as speculation takes place in the purchase of shares. If one takes it on an average of 2s. per £100 it means the Minister expects that in the current year shares to an amount of £200,000,000 will be sold on the share market. That money is subject to a tax of only £200,000 while the tax on land has to produce £1,100,000. I do not think I am exceeding the limits of reasonableness when I say it is a disgrace. Why is the Minister so afraid of taxing those people? It is nothing but gambling. This speculation which takes place on the share market is not a case of investment.

Not always.

I say that for the greater part it is nothing but gambling. Let me put it to the Minister in this light. The profits which those people make are not taxed. The hon. member for George said that he knew of people who in the past year had made £15,000 on which they did not pay a penny by way of taxation. If Abe Bailey or Oppenheimer make £1,000,000 per year out of shares they do not pay a penny tax on that £1,000,000.

What about the money they lose from time to time.

It is only people like the hon. member who lose on the share market. The Oppenheimers and the Abe Baileys do not lose.

You are the lambs who are fleeced.

The Abe Baileys and the Oppenheimers and the John Martins do not make their millions out of investments. They make their millions out of speculation on the share market, and so far as taxes are concerned I say again that on the major portion of their income from those sources they do not pay a penny by way of taxation, and I know the country is fully aware of that.

Anyhow, Abe Bailey is dead.

I again want to emphasise that on the profits which those people make on shares which they sell they do not pay a penny taxation of any kind, and that is the state of affairs which we have in South Africa. It is not that one does not pay tax if one speculates occasionally on the share market, but those people who buy and sell shares every day of their lives do not pay a single penny by way of taxation.

The Nationalist Government inherited money from Mr. Willie Beyers.

If that hon. member ever said a thing he should be ashamed of he has said it now.

He has no sense of shame.

He has a skin like a rhinoceros.

I want to put this question to the Minister: If he taxes the profits that are made on the sale of fixed property why does he not tax the profits that are made on the sale of shares? The excuse put forward is that these people sometimes lose money in their negotiations on the share market.

The farmer loses every time, but he is taxed none the less.

If I were to sell my farm and lost money on the transaction, would the Minister allow me to deduct it from my tax? But we have people who make their living out of the sale and buying of shares, yet they don’t pay a penny tax on their profits. I don’t want to go into detail on the necessity of industrial development. I only want to say this, that unless South Africa develops industrially it is useless talking about social security. Nothing will come of it. There is only one way of securing a decent livelihood for the people of this country in days to come, and that is by developing South Africa’s resources and by creating sources of wealth in the future. Our policy is clear, not merely through the amendment which we have proposed, but our whole history, our whole past as a party, is well known. We stand for the development of South Africa’s industries. The question is what is the Government’s policy? Does the Government also stand for industrial development? Their past testifies against them. When in days gone by we proposed the establishment of the Iron and Steel Industry that side of the House opposed us. When we proposed the protection of our industries after the last war, because our industries could not compete with foreign countries, they opposed us. Their past testifies against them. Why did they oppose these things? Because they as good British Imperialists in the first place look after the interests of England.

Old stories.

They may be old but they are true. Will that hon. member get up and tell us that his side of the House did not oppose the establishment of the Iron and Steel Factory? Will he get up and tell us that his party did not oppose the protection policy of the Nationalist. Party?

Who designed the first plans for Iscor?

So much for the past. Now I come to the present. The Government has already announced its acceptance of the Atlantic Charter. That means that it is in favour of the breaking down of tariff walls. It has already committed itself to that, but we also know what England’s position is. We must take into account the attitude of this Government towards England’s position. We know what England’s position is at the moment. Declarations were recently made by English authorities. Lord Leverhulme speaking to a meeting of commercial experts said: “We must either export or starve.” England must obtain markets, failing which she will starve. Lord Harcourt-Johnson—Parliamentary Minister for Trade—said at the same time that England’s invisible export had been largely lost and that she would therefore after the war have to increase her export by at least £150,000,000. Who is going to make up that loss of £150,000,000 in England’s invisible export. [Time limit.]

The hon. member who has just sat down has indulged in a tirade in the course of which he stated that the Opposition is today as much as ever opposed to the Government’s war policy, and therefore, their attitude towards the expenditure on the country’s war effort, and consequently their amendment must be judged in the light of that fact. The hon. member in his tirade painted a gloomy picture of the future of South Africa based presumably on the effect of our expenditure on the war. Let me say to the hon. member that the suffering and the anguish of people in connection with the war is something which does not affect the Opposition. This war has not touched this country from many angles—from the point of view of physical and mental suffering certainly not in the way it has touched other countries! In this country in pursuing its war policy industries have been established such as we had never dreamed of before, and these industries it will be impossible for us after the war to convert into peace industries. What is more the two hundred thousand men who will be returning to this country after having done their duty—those men who have been prepared to sacrifice their lives for the welfare of the country, will be looking on the future not on the basis of racial prejudice but on the basis of what they have learned at the front, of racial co-operation which is essential for the future welfare of the country. The hon. member for George (Mr. Werth) and the hon. member for Waterberg (Mr. J. G. Strydom) have dealt with one or two points of industrial policy. They claim credit for their party for having established Iscor. The Pact Government, of which the Labour Party was part and parcel, established Iscor, and I had something to do with that as I was a member of the Select Committee which reported in favour of the establishment of an Iron and Steel Industry. But in fairness to the Rt. Hon. the Prime Minister I think it is right to point out that the initiative for the establishment of Iscor did not rest with the Pact Government but with the Prime Minister who had the vision, when he was Prime Minister, to appoint a commission to enquire into the possibilities of establishing that industry in the Union.

Why did he fight the Bill?

But for that the Pact would probably have done nothing.

Why did he fight the Bill?

He probably was not prepared to trust the Opposition to establish the industry. I am not prepared to deal with that question now, but I might just as well put a “tu quoque” to the Opposition. They talk about the cost of freight for the conveyance of goods to and from the Union. Why did they do nothing when they were in power to do away with the shipping combine which controlled our sea traffic? What have they ever done except to subsidise an Italian shipping company? That is a question which they cannot answer. Now, what is the sum total of their criticism as far as the Budget is concerned? The whole of their criticism is based on one or two aspects. The hon. member for George has criticised the Excess Profits Tax and the Trades Profit Tax. His only complaint was in regard to those two taxes. Not a word was heard about the other taxes, except, of course, from the wine farmers. But no other criticism has been forthcoming of the taxes imposed by the Minister. The hon. member’s criticism of the Excess Profits Tax is based on the policy which they evidently are pledged to of developing industries in South Africa on the basis of private enterprise, based on the profit motive.

What’s wrong with that?

I am not discussing that, I am discussing what the hon. member said. They are definitely pledged to the policy of pursuing the old pre-war ideals of capitalism and capitalistic exploitation. I think the country should know that. Another criticism made by the hon. member for Waterberg (Mr. J. G. Strydom) is surely something they should be ashamed of. He criticised the Minister for having made provision for old age pensions for natives. Why? He said the white people would have to pay for these pensions. But the white people are themselves getting the money from the natives to pay for them. When you read of a case such as was reported recently, where a magistrate refused to convict a native for desertion, because he was receiving a wage of only 5s. a month, can hon. members tell us that it is the native who must contribute to the old age pension that is now to be paid to him? Is it not a fact that the exploitation of the native is contributing to revenue which enables the Government to give them, at long last, something in the nature of a pension? But I congratulate the Minister. I think that the Minister has proved that he is able to withstand the criticism and the attacks of the well-to-do and moneyed classes of this country, who have been clamouring for relief for the hard-pressed people who are paying the excess profits tax, and who in addition to paying £13,000,000 per annum to the Government are left with the sum of £5,000,000 a year apart from what they are making in some cases, by tax evasion. I congratulate the Minister that he has not allowed himself to be bluffed into making alterations which would have meant that he would have had to meet the shortfall in revenue by taxing the poor people of this country. There is one item in the Minister’s budget which is worthy of note. It has not been mentioned by my hon. friends on the Opposition benches or on the Labour benches. I refer to the Minister’s consideration for the gold mining industry. I differentiate between gold mining and share speculation. I think that in the future the Minister should seriously consider, when we have to finance social security, whether a source of revenue for social security could not be provided by a heavy tax on share speculation. But as far as the gold mining taxation is concerned, we have not heard a single word in criticism of the Minister for his consideration in not increasing the tax on gold mines. I agree with the Minister’s attitude. Although the gold mining industry last year paid dividends to the amount of £19,000,000, I agree with the Minister’s attitude in not having increased taxation on the mines. I do so because I hope that the consideration which he has shown the gold mining industry will have as a result, due consideration on the part of the gold mining industry for the reasonable requests that have been put forward by the Mineworkers’ Union for an increase in wages, and that the gold mining industry will see to it that some reasonable increase in wages is made to the European workers. I also express the hope that the gold mining industry will see to it that, being relieved of additional taxation that they might have anticipated, an increase is made in the wage that is paid to the native worker. My hon. friend for South Rand (Mr. Christie) I think did himself less than justice. Having made one point in connection with the tax on cigarettes, and after all, that is a tax in respect of which we can decide for ourselves how much we are going to pay, he finished up his remarks with a demand for this, that and the other, all of which form part and parcel of the social security proposals that have been laid down by the Social Security Committee.

I hope the hon. member is not going to discuss social security, except to mention it incidentally. I cannot allow another full discussion on social security.

I do not propose to go into that. I am referring to the fact that these are items which are included in the Social Security Committee’s proposals approved by the Planning Council of which the hon. member who sits behind him is a very distinguished member. That being the case, I think it ill becomes my friend and those who sit with him on the Labour benches, and who are in this House as a party in coalition with the Government, it ill becomes them to keep on telling the country that they do not trust the Government, and that the Government is going to bluff them. That is not creditable to them, nor is it desirable from a national point of view. We are all in the same boat, and it is our business to see that the policy on which we fought a general election together and in which social security was an important feature, is given effect to. Both the Prime Minister and the Minister of Finance in his Budget statement, have shown a definite determination and desire to see that this problem is effectively dealt with at the earliest possible moment. I think the Minister is to be congratulated. My hon. friend says he has not done this, that and the other by way of social security, but the Minister, realising that the matter is before the Select Committee of the House, has only touched upon some essentials which cannot wait for the report, and he has given an earnest of his sincerity, and the sincerity of the Government in a manner creditable to the country. He has dealt with social pensions, and in dealing with social pensions he has taken a step which will be historic in South Africa, because he has accepted the position in dealing with these matters that we cannot treat ourselves as if this is a nation of a handful of white people, and that the non-European population does not exist. He has shown that we have to treat the non-European population, including the natives, as part of the population of South Africa, and that the time has come to improve the lot of the non-European population not only in their interests but in the interests of South Africa as a whole. The hon. the Minister has indicated some financial difficulty that may arise in giving effect to the policy of social security. In that regard I think it is worth while drawing the attention of this House to the fact that the gap which exists today in South Africa between the well-to-do and the poor is so great and so extreme, that it will be necessary even if we have to soak the rich, to find the money to carry out the social security policy. In the last report of the Income Tax Department—and it is regrettable that that report has not been printed and made available for the use of members—we find on an analysis of income tax figures that for the year 1941-’42 there were 136,000 income tax payers in this country. I think the hon. member for Sunnyside (Mr. Pocock) gave those figures the other day. Those 136,000 income tax payers received a taxable income of £174,000,000. Limited liability companies—and the shareholders after all consist of the same set of individuals, because I do not think that any of the non-European population are great shareholders in those companies—received a taxable income of £64,000,000. So taking the two items together which affect these 136,000 income tax payers in the Union it would appear that they are in receipt of a total taxable income of £239,000,000, while for that same year the national income was something like £480,000,000. We have, thus, the position in this country that, less than 2 per cent. of the population of this country is in receipt of about 50 per cent. of the national income of this country, and the balance of 98 per cent. of the population is in receipt of the other 50 per cent. of that national income. When you take that into consideration, I think no one can hesitate for a single moment in saying if there is one method—it may not be adequate, it may not be complete—but if there is one preliminary method that can and should be applied by the Minister of Finance, it is to start upon a policy for the redistribution of the wealth of this country, raising the standard of living of the lower paid strata of our population by means of social security measures. I agree—as you have stated, Mr. Speaker, one should not go into details about social security in this debate—I agree that one of the most essentials things, as the Minister has said, is to create employment for all sections of the people, but not merely employment as desired by those who want to pay for a job on the basis of the colour of a worker rather than on the job that is done, but on the basis of paying a wage that will enable all the workers to live in decency and comfort. In doing that you will pursue a policy of redistribution. You will then find that instead of the overwhelming mass of the people of this country not being in a position to buy the products of the farmer or the manufacturer, as is the case at present, the country will be developed to such an extent that neither the farmer nor the manufacturer in this country will be able to provide the requirements of the people of this country; and as far as labour is concerned it will be possible to absorb every soldier in the country into useful industry, and in addition to that, to go in for a policy of mass production which will enable us to provide the needs not only of our own people at reduced costs, but to capture and hold the the markets on the Eastern and Western Coasts of Africa. In that connection let me touch on a criticism that has been continually levelled. We are told that Great Britain will come along and take away our markets immediately the war is over. We are told about the blueprints created in Great Britain in that connection. In addition to that, we are always being told about the Atlantic Charter. It is true that Great Britain is preparing for post-war development. We must remember that we have not suffered in the war in this country as have the people in Great Britain. In comparison our sacrifice has been a joke. In Great Britain they have suffered. There has not only been great loss of life, but there has been widespread destruction, and it will take some years before they can rebuild the country, which has been destroyed by the evil forces of Nazism. Moreover, the United States and Great Britain are pledged to the policy of rebuilding Europe, and that is going to take a considerable number of years—the rebuilding of a destroyed Europe. They are both pledged to help to save Europe by sending machinery and material in order to rebuild the cities which have been laid waste by the armies of Hitler, and they are pledged to help to rebuild the destroyed parts of Russia. Those things are going to take so much time that if we embark on a policy of national development today, if we raise the standard of life of the vast majority of the people, including the non-Europeans in South Africa, then we can build up a home market for our industries without any fear of competition from overseas. I say, therefore, that the policy which has been adumbrated by the hon. the Minister, though it may not go as far as my hon. friend the member for South Rand would like, is at any rate an indication of the direction in which we are travelling. I do not believe that we will go back to the pre-war ideals and standards. I believe that private enterprise will play its part in the development that lies ahead, but it will have to be supplemented and in many directions replaced by public effort in the form of State enterprise, public utility corporations and similar organisations. Once we do that we will be faced with the position that we shall be able to build up in South Africa a big and ever-growing nation, and we will not only have employment for everyone, but we will be in a position to embark upon a policy of immigration which will not be a half-hearted policy, but something which is urgently necessary; and immigration will not be circumscribed by prejudice nor even by the “blessed” word “desirable,” but based on the needs and the real interests of a great South Africa. On that basis; on the basis of raising the standards of life by providing the people of this country with the social and economic security which will create an economic floor below which no one will fall, we propose to go ahead with the building of a brighter and happier South Africa.

I want first to congratulate the Minister on having balanced his budget or on having nearly done so. I realise that he had difficulties occasioned by the war to contend with. His task, however, must have been made easier by the fact that we now have a condition of full employment in the country and that our national income is higher than it has ever been in our history. I should like, for the short time that is allowed to me, to look at the budget in terms of its incidence on the general economy of the country. I want to use three criteria of judgment. First, will the budget stimulate increased productivity? Second, will it give stability to the monetary unit; that is, will it hold down inflation now and prevent deflation after the war? Third, is it the basis for a sound peace economy? I am happy to be in a position to look at the budget on that basis without any party prejudices. In regard to productivity, our South African economy is an expanding one, not a mature one; that means that a great part of our national income cannot be used consumptively, but must, as it were, be ploughed back into reserves against the provision of equipment and replacement. It is obvious that any tax policy which prevents the investment of some portion of profits for new capital assets must be detrimental to the country’s productivity. In South Africa at the present moment, there are many existing companies which, on account of discriminatory taxes, for example the excess profits tax and the trade profits levy, are finding it difficult to build up capital reserves for expansion. In that connection I would like to quote the words of one of the most progressive industrialists of the Union, Mr. R. D. Faulks, president of the Natal Chamber of Industry, who said: “For some years now legislation has tended to restrict the development of industry, and it was hoped that some provision would have been made to enable industrialists to build up resources with which to face the post-war years.” Mr. Faulks in that statement, indicates the danger signal regarding mass unemployment after the war. Mr. Speaker, we in South Africa are on the threshold of probably the greatest period in our history, an era of industrial expansion, and it is bad policy to attempt to put a brake in any way on that expansion. Now productivity depends a great deal on costs. The Minister himself had some doubt in his mind regarding the high cost structure in South Africa. I believe that this budget will tend to stabilise, if not increase, the high cost structure complained of. And why? In the first place, it sanctions cost of living allowances. It is a fair estimate, I think, to say that we shall spend throughout the country during the course of this year on cost of living allowances, a sum of probably £25,000,000. In 1939 when that policy was begun, we started the spiral of increasing prices and increasing costs. Now these cost of living allowances always tend to crystallise into wages. Therefore we shall have to face carrying over into all undertakings after the war very considerably increased wage levels. Secondly, the question of interest enters into costs. This has already been referred to this afternoon. This budget bases our interest rate on what I believe is too high a level. The average interest rate on the national debt is 31 per cent. That must obviously be the minimum rate for the country; and that is going to mean dear money, a shortage of loan funds for industry, and generally a similar position to what we had in 1920, when a period of deflation was followed by high interest rates. Then the overdraft rate reached anything between 10 per cent. and 20 per cent., and we drifted into disastrous depression. Then again this budget is primarily a consumption budget. It is therefore an inflation budget. It will force up the costs of production, of rent, of interest, of wages and of goods. The Government has already breached the wage line in South Africa, and that fact together with this budget, may raise food costs, all costs, even the costs of army supplies and equipment. The Minister has already referred to the loss of £2,000,000 in connection with gold-mining revenue. That, in an economic sense, is due to high production costs. We must remember that private investment in this country must provide £85,000,000 a year continuously for investment purposes, if we are going to achieve full employment. Before the war our maximum was about £50,000,000; and when we realise that capital expenditure of £85,000,000 will mean a net increase to the national income of not less than £75,000,000, that fact surely calls for a dynamic budget with a productivity drive. I am sorry to say that I think this budget will restrict productivity and the national income—the very conditions that, as the Minister himself has constantly reminded the country, are necessary to social security. By failing to stimulate productivity the budget will miss a great opportunity. My second basis for evaluating the budget is this: Will the budget control inflationary tendencies? Will it give us monetary stability? All our planning for the future is going to fail if we go into the peace period with our present inflation tendency and the present shortages. Rural land has increased, for instance, 40%; urban land double that; building costs 70%; and cost of living 30%; and in these matters I am using very conservative figures. This inflation tendency has got out of control. It was begun by the cost of living allowances in 1939. It has been unchecked owing to the inefficient hit-and-miss methods of price control; and it has been promoted by the policy of the Government in borrowing from the public for mass spending by the State, the Government leaving in the hands of the lenders scrip for further borrowing. If the inflation gathers momentum it is going to endanger the savings of our people in the post office, in insurance companies, in building societies and in Government stock. It has already imposed severe hardships on disabled and pensioned soldiers, and on the widows of men who have died for their country. In this budget there are no cost of living allowances for them; but there are for big salaried officials. It is forcing thousands of our people today below the poverty line. It is reducing the value of investments of public-spirited people who handed over their money for war loans while others were putting their money into speculative deals and may get away with it. In fact, on the Government’s figures, the value of the South African pound is 15s.; I think it is much less. That depreciation is tantamount to an income tax of 5s. in the £ on everybody. The Minister spoke of toil and sweat. What else have the masses of our people had for generations but toil and sweat; and insecurity, and the scrapheap probably, at the end of it? By permitting this financial folly of allowing inflation to develop, we are allowing and causing depression and suffering. I believe when we members of this House come into this Chamber and shut that door, we become oblivious to the sufferings and the troubles and difficulties of the millions of men and women and little children outside. Hon. members here will remember that a previous Minister of Finance almost ruined South Africa by his stubborn adherence to an outmoded gold standard. That meant gross overvaluation of the pound. And I believe that by inflation or gross undervaluation of the £, economic disaster, if we do not watch out, can also come to South Africa; and will cancel out the hopes of our families and of our fighting men that South Africa will be socially secure after the war. True democracy demands a democratic budget. This is not a democratic budget, it is not a people’s budget. It does not go anywhere near far enough towards an adequate distribution of the national income. Our tax burden in South Africa, direct and indirect taxes, presses heaviest on those least able to bear it; the physical needs of the workers, of the humblest workers in this country, are taxed today at about 30% of their value. I would like to offer this suggestion, that the Treasury make a study of the Australian income tax law passed in 1943. That tax imposes a uniform progressive income tax on all citizens in Australia, from a level of £125 a year and upwards. It differentiates as between income from labour and income from property. The man in receipt of an income of £125 pays £6 in tax, and the man with £40,000 pays in taxes £35,000. But it should be remembered that a great deal of the money extracted from these incomes goes into a post-war credit in the name of the taxpayer, to be released after the war, as and when the Australian Government thinks there are sufficient consumers’ goods to meet the increasing demand caused by the released purchasing power. For example, a man earning £200 a year pays £22 a year tax; £12 of that is a post-war credit in his name. Now I believe some such system would work admirably in South Africa. In the first place, it would effectively check the inflation tendency; secondly, it would make for a more equitable distribution of the national income; thirdly, it would be a valuable backlog against depression after the war; fourthly, it would create, compulsorily create, assets for all sections of the community; and, fifthly, it would give the Government access to large volumes of funds on which no interest at all would be paid. That is to say, the Government would be using these credits in the people’s cause. I have referred to the national debt of nearly £500,000,000 in this country as a cause of inflation. There is no doubt at all about that. We shall pay something like £14,000,000 a year in interest. That money, the £14,000,000, will not go to the masses of our people. It will go to the bondholders. It will become surplus money to bolster up bank credits. Do members of this House realise that at this moment we must have something like £200,000,000 of idle, non-interest-bearing sterile money in this country ? I believe that in a realistic budget some means would have been found to turn some part of that idle money into productivity. If we could raise loans so that the interest could go to the people, then the term “national debt” would be a misnomer, and we could call it “national credit.” If this Budget provided for the extra £45,000,000 the Minister wants by using our central bank on business principles so that the credit would be self-liquidating, then the £45,000,000 would be an addition, not to the national debt, but to the people’s credit. The country would get the money, and the people the interest and the fruitage. There is no need for us to finance reconstruction or the war any longer by putting gilt-edged shackles on posterity. My proposition is not novel. The Minister has had access during the war through the agency of the central bank to several millions monthly. During one month the loan reached the sum of £46,000,000 and he paid an average interest on that floating debt of only 1.07 per cent. He is using such money now. I believe that is a good system. We have therefore already adopted a new way of financing our requirements. Such self-extinguishing debt from month to month, means controlled credit, stability of the money unit and will insulate our economy against inflation. My next criterion is this. Does this Budget form an adequate basis for a peace economy? In view of its lack of encouragement to productivity, and in view of the fact that it leaves open the door to inflation, it will fail to bridge the transition period from war to peace. I desire to be as constructive and helpful as possible. I suggest that in addition, as a corollary if you like, to this Budget a stabilisation council be set up without delay to restore the cost of living in this country to a reasonable level. They are doing that with some success in the United States. We can do it here. This council would stabilise wages, salaries, directors’ fees, profits, prices of goods and dividends. Then all cost of living allowances would have to cease; and if the courts fearlessly did their duty I believe it would be possible, even now, to put the inflation process into reverse. Such a policy has been a great success in New Zealand. In 1939 a council of that kind was set up there, and I am advised that the cost of living index has not risen in New Zealand beyond 8½ per cent. on 1938 levels. Then again an essential preparation for a peace economy is the creation of consumers’ goods. Now, while the war is on, goods must be created for sale after the war. This Budget makes adequate provision for war supplies. It does not make adequate provision for peace supplies. I mean houses, clothing, furniture, implements, tools and so on. If we are going to return to a reasonable price level after the war, then we must see to it that there will be a flow of consumer goods to meet the enormous volume of purchasing power that will be put into circulation after the war. And then a most important measure which should have been provided for in the Budget to meet the peace needs, is a definite social security programme. We had hopes that the Government would introduce a social security Bill early this Session. Such a Bill was drafted by the Social Security Committee, a Government Committee, but this House has not seen that Bill. We thought that we might get something like £10,000,000 for the purpose. The hon. member for Sunnyside (Mr. Pocock) last week suggested £5,000,000 to the Minister. What did the Budget give us? A tragically inadequate amount of £1,000,000. The country is ready for a social security programme. It is the biggest job that this Government can undertake—that is a full programme against poverty and want, as the basis of reconstruction. Our faith is now in the Select Committee, and the report of that Committee is going to be the acid test of the Government and the parties that compose it.

Order; the hon. member is referring to a Select Committee which is sitting

This Budget is a laissez faire Budget, in the Havenga tradition with a slight social security complex. Viewing it in terms of the peace needs, even as a bridge from war to peace, one comes to the startling realisation, to the proof, that the Government has no social charter for our people.

Did you have any doubt about that?

It is not in a position now to lay before the country and before this House a master plan for a peace economy. We know how unpreparedness for war nearly brought upon us and the Commonwealth a major disaster; unpreparedness for peace can be fraught with disasters almost as bad as those of war. It was Lord Keynes, I think, who warned us that if we are going to drift into an unplanned peace with depression and mass-unemployment then let us pray that the war will go on, for depression can be more destructive than war. This Budget tells us where the Government stands in regard to the brave new world which for three years the Leaders of the Government have constantly promised our people and army. If the Budget were designed to promote maximum investment without restrictive taxation; if it were designed to hold down inflation by a re-organisation of the tax system, by compulsory savings, by controlled costs, by financing without dear long-period credit, and by removing surplus funds from today’s money stream to meet the needs of the peace; if it were designed to regulate consumption among the unprivileged, the low income groups, and all on wages and salaries by means of social insurance; if it were designed to give our people, in terms of economic realities, a rich measure of social security; then such a Budget would meet the war needs fully, and also carry our nation into the peace, with an increasing national income, with full employment, and guaranteed family welfare for all South Africans.

It was really a pleasure to listen to the speech of the hon. member for Durban (Berea) (Mr. Sullivan) who has just sat down. It was a pleasure to listen to his sober reasoning, especially after the superficial, wishful-thinking speech of the hon. member for Vasco (Mr. Mushet). Here we heard the refreshing voice of sound criticism instead of what we so often hear from members on the other side, the parrot-like shouting of the Government’s “yes” men, who eliminate one another in seeking favour with the heads of the party on the other side, and who come to this House with all sorts of flattery and who hold up to the world their lord and master, the Minister of Finance, as a financial colossus. If we had more of this sound criticism and less party feeling, it would be a good thing for our country. But I am afraid that with the party which we have on the other side, with their passion to hold on to those benches—often empty benches—there is not much hope for the future. I do not want to say that I agree with everything which the hon. member for Durban (Berea) said, but there are certain points on common ground, as will appear from what I have to say in connection with the estimates. First of all, I want to explain that other opportunities will be available to discuss the new taxation, and therefore I shall not discuss the question of new taxes at this stage, except to say this. I want to point out that an inexplicable position is being created in connection with the estate duties. I should like to know from the Minister why he stops at 33⅓ per cent. Why should an estate of £100,000 have to pay the same duty, pro rata, as an estate of £500,000? Why cannot the Minister let the sliding scale go above 33⅓ per cent.? But I do not at this stage want to discuss the new taxation proposals. There will be other opportunities to do that. I shall endeavour rather to look at these Estimates of the Minister’s in the light of the national Budget. That, is the proper background. The Minister of Finance spoke here of the national balance sheet. I wish we had one, but we heard nothing of that. We have had the Government’s balance sheet, but the background to the national economy of the country as a whole was conspicuous by its absence in the speech of the Minister last week. It is necessary, for the proper framing of a budget and in order to be able to judge it properly, to have the background—not of Government finances, but of the national economic structure of the country as a whole. For that purpose, in the first place, one requires as much information as possible in regard to the national income. This is the third time I have risen to ask why we cannot get any figures in regard to the national income, in regard to its division as between the various production groups. Two years ago the Minister said that this task had been entrusted to a professor of the Witwatersrand University. Two years ago these figures arrived in time for the budget debate, but last year that was not the case, nor this year, and we have to be satisfied with the figures for 1941. Those are the last figures we have in regard to the assessment of our national income. In other countries, in England for example, it has been the regular practice for the past three years, in introducing the budget, to lay before Parliament, by means of a White Paper, an assessment of the national income, and in introducing the 1943 budget, the Chancellor of the Exchequer in England submitted figures in respect of the national income for 1942. Why cannot that be done in South Africa? In England these figures were not compiled by a private individual but by the Treasury. I again want to make an appeal to the Minister to let us have this assessment which is so necessary in considering the national economic position, and not to let us have the information three or four years after the period with which they deal. In 1944 in England the figures were given up to the end of 1943. Let it be a function of our Treasury to compile these figures, so that we shall have them available. Let them bear the official stamp, and let there be this essential continuity of assessment. I just want to point out in this connection that in Canada the figures in regard to the national income appear annually in the Year Book, and they are compiled by the Department of Finance. The figures at our disposal which deal with the first two years of the war, indicate a disturbing position. When we take the figures in regard to the national income, we notice, in the first place, that according to the assessment there was an increase of 26 per cent. in the war years of 1939 to 1941. The increase in these two years was 26 per cent. In spite of the stimulus which was caused by war production, the increase over these two years was only 26 per cent. while it was 44 per cent. in Britain during the corresponding period. There is a second disturbing sign, and it is this, that the national income available for consumption on the 1938 index, has gradually been declining since 1940. The net national income is still rising, but when one brings it down to the 1938 figures, there is a gradual decline. I can give the House the figures for 1939-’40. It was then £375.8 millions, but the nett national income for consumption in 1940-’41 was £357.6 millions, and £356.2 millions in respect of 1941-’42. In spite of the increased production caused by the war, we find that the actual income per head of the population declined during the first two years of the war. Furthermore, I want to point out that that is the case in spite of the fact that during the past year there was an increase of more than £20,000,000 in income due to soldiers’ pay, clothes, rations, etc. In other words, in respect of 1941-’42, £43.7 millions of the national income must be ascribed to the rations of soldiers. That will fall away when the war is over. We shall then lose £43.7 millions. I just want to point out what the importance of this £43,000,000 is, which will disappear from our national income when the war is over. I want to point out that the total contribution of agriculture to the national income is only £61,100,000. I further want to point out that the total contribution of the mining industry to our national income is only £100,000,000. In other words, after the war £43,000,000 will be taken away from our national income, and that will mean a tremendous gap in the national income, because it is nearly as big as the total contribution of agriculture and nearly half as big as the contribution of the mines to our national income. The hon. member for Vasco spoke of our wonderfully sound economic fabric. Has he ever taken these things into consideration? Did he bask in the sunshine of the false prosperity which we have experienced? Did he not attempt to see what lies beyond the horizon? He has forgotten that the Minister of Finance said a few years ago that the prosperity which we are experiencing, the prosperity in which the hon. member for Vasco places his confidence, is sham prosperity, false prosperity, and that the Minister of Finance warned us that the country was living on its capital. Then the hon. member for Vasco comes along and talks of our sound economic fabric. We must face the facts and the implications of the danger signs which I mentioned a moment ago in connection with the national income. I want to deal with those signs for a moment, because they are of the utmost importance in connection with our post-war reconstruction schemes. In paragraph 7 of the summary, the Planning Council stated that within the next seventeen years the national income would have to be increased by at least 50 per cent. for the minimum programme of social security which they recommended. I take it that the Planning Council meant the actual income, that is to say, the income on the 1938 index. I take it, therefore, that they took into account the reduction in the purchasing power of the £. Having regard to these facts which I have mentioned, I want to ask whether it is possible for the actual income of the population of South Africa to increase by 50 per cent. within the next seventeen years? It must be remembered that between 1940 and 1942 the actual national income did not increase but diminish—diminish by nearly £20,000,000. It must also be remembered that included in the amount for 1941-’42 was the £43,000,000 in respect of soldiers’ pay which will fall away after the war, and which would not have been there if it were not for the war. In other words £43,000,000 must be deducted. It must further be remembered that a decline is expected in our mining income. According to the third interim report, the Chief Mining Engineer estimates that the total tonnage milled in 1945 will be 63.2 million tons, but that in 1955 it will only be 26.3 millions tons. In other words, the yield of the gold mines, according to the report of the Government Mining Engineer, will by 1955, the date on which the seventeen years elapse, have decreased by more than half. As far as the national income is concerned it therefore falls away by another £60,000,000. Even to retain the national income at its present level, you will have to make allowance for the £43,000,000 in soldiers’ pay and the £60,000,000 in respect of reduced mining revenue. So there you have £100,000,000, which has to be made up in the following seventeen years merely to keep the national income at its present level. Where are you going to get this 50 per cent. increase? Where are you going to look for it on the basis on which we have carried on in the past five years? This year the Minister comes again and wants to borrow another £45,000,000. That means, in his own words, that every year there will be £1,350,000 less available for social security after the war. Calculating the interest on this £45,000,000 at 3 per cent. means a deduction of almost £1,500,000 a year from the funds that will be available for social measures, and if the total increase of our national debt since the beginning of the war amounts to almost £200,000,000 then this implies that for social welfare almost £6,000,000 less will be available annually after the war. That sum will have to be devoted to interest that we shall have to pay on the debt which the Minister has burdened us with in the last five years. These are things that you must take into consideration if you wish to pay regard to the background of the estimates, and we have heard nothing about the background from the Minister. We have not received anything in the nature of a national balance sheet. We have only received a Government balance sheet without the background of the national economic position. The Minister’s conception of his so-called national balance sheet is unrealistic; takes no account of the actualities of the position, and it pays no regard to post-war problems, and his self-satisfaction is just as misplaced as it is misleading. I want to criticise another point in the estimates, and that is in connection with the inflation policy. I deliberately use that word “policy” because as the Government is now proceeding you cannot view it in any other light. In the first place, the Minister has preserved silence over this important aspect of inflation. Even last year I drew attention to this, and I invited the Minister to express some views on this point, and to take the country into his confidence, so that the country would know what the Government’s intention is in regard to this important matter. I should like to quote a few figures in order to indicate the dimensions that inflation has already reached in South Africa. The three features that one usually turns one’s attention to are, the notes in circulation, bank deposits and the cost of living figures. The notes in circulation had increased from £18,000,000 in February, 1939, to £49,000,000 in February, 1944; thus in five years there was an increase of 272 per cent. The volume of money, that is to say Government and private deposits in the Reserve Bank and commercial banks, and the notes in circulation increased from £123,000,000 in 1938 to £255,000,000 in the first quarter of 1943. Bank deposits at the Reserve Bank increased from £25,000,000 in February, 1939, to £129,000,000 in January, 1944. During the first year of the war the cost of living, calculated on a pre-war basis, increased by 3 per cent., in the second year by 9 per cent., in the third year by 18.4 per cent., and in September, 1943, the increase was 25 per cent., while in December, 1943, it had mounted to 26.2 per cent. Now we are faced with the fact that the Minister apparently anticipates a further increase in the cost of living, because in his estimates he makes provision for a sum of £2,595,000 for the ensuing year in respect of cost of living allowances, instead of £1,133,000 that was expended during the year that has just closed. As the hon. member for George (Mr. Werth) has already indicated, when one analyses these figures, it almost seems as if the Minister has come to the conclusion that the position in regard to inflation has got out of control to such an extent that he expects the cost of living to rise by 50 per cent. during the ensuing year. When we compare that with the rise in the cost of living in other countries, we find that South Africa is not in a favourable position. In New Zealand, according to the statement of the Minister of Industries in that country, the cost of living rose by 13 per cent. up to September 1942, in Canada by 16 per cent., in South Africa by 19 per cent., and in Britain by 30 per cent. That was in 1942, but in the meantime the figure has been reduced in Britain from 30 per cent. to 28 per cent., and in South Africa it has risen from 19 per cent. to 26.2 per cent. We notice therefore that in comparison with the other countries, apart from England, South Africa is in a most unfavourable position. It is clear that the measures which have so far been taken by the Government to check the inflationary tendency, have not succeeded, and that the Minister’s prognostication for the future is very sombre. Inflation has got out of control or is in the process of getting out of control. And I want to say that this Government, and especially the Minister of Finance, are really making the inflation position worse by the things which they neglect to do as well as the steps which they are taking. In the first place there is the uncontrolled speculation on the share market, which is definitely one of the causes of inflation in our country. If there were more control over share speculation, there would be less danger of inflation. Now the Minister has introduced his ridiculous stamp duties which will yield £200,000 during this year. And his objection to a higher tax, to a higher tax on share speculation, is that it is juridically impossible to draft legislation to pin these people down. I want to give the Minister the assurance that colleagues of mine at the Bar guarantee that they can do it effectively, that it is possible, and I also want to give him the assurance that I am prepared to give him my undertaking that I will frame something which in any event will be more effective than his effort to check speculation in land. There is no juridical reason why the share speculation cannot be checked and why it cannot become a source of income to the State. A second reason for the increase of the inflationary danger is the Government’s unsuccessful control in regard to land speculation. We know that the tax does not cover all land transactions. I do not know what the percentage is, but only a small portion of farms or houses which are sold, say 10 per cent., fall under the Act. The other properties were sold before the time which was fixed. In respect of this 10 per cent. the prices are increased, because the people want to make a profit, and the prices which are paid in respect of 10 per cent. of these cases, also determine the price level for the remaining 90 per cent. The result of the profit tax on fixed property is that the Minister encourages land speculation, increases the price of land and promotes inflation. When the Minister of Lands goes about with his irrigation dreams, which will apparently remain dreams, and when he tells the people of the enormous irrigation schemes he has in mind, he encourages them to buy farms in those areas where these wonderful irrigation schemes will ostensibly be built in the future. That again is a means of forcing up land prices and of promoting inflation. The average value of platteland property has risen from £1.9 per morgen in 1941 to £3.32 per morgen in October, 1943, that is to say, the value of land in the platteland has increased by 74 per cent. Higher prices are paid; the money is spent, giving free rein to increased inflation. In New Zealand a different system is in force to check land speculation, and it is a much sounder system. When land is bought in New Zealand, the transaction has to be submitted to a commission. They have to fix the price which in the circumstances is a sound one, and the seller may not sell at a higher price than the fixed price. That is a more effective way of checking speculation. A third reason for inflation, as encouraged by the Government’s action; is the high pay which is paid to natives and coloured soldiers and their dependants. It is not necessary for me to go into details. I know of one case where the income of a coloured family, the whole family, was £7 per month, and today the same family is drawing £78 per month. What do they do with the extra money? They do not possess a sense of thrift, they do not know how to spend their money. They spend this money on gramophones and radios and many unnecessary articles, thereby promoting inflation. If this scale of pay has to be given, the Government should stipulate that not all of it shall be given in cash, but that a portion of the pay shall be given in the form of services, and that a portion shall be kept for the coloured people, in the form of compulsory savings, until after the war when they will need the money very badly. That would help to keep the inflationary tendency in check to a certain extent. But the Government’s policy means that free rein is given to inflation. And the position is going from bad to worse. If these measures are taken, together with the usual methods of price fixation, taxation and a measure of rationing, the inflationary tendency will be combated. I am speaking in a constructive spirit. The causes of inflation are clear enough. There is too much money and too few consumers’ commodities. That is the cause, and if one wants to prevent it, one must proceed in both directions; one must make available less spending money and more consumers’ commodities. The first can be achieved in two ways. The direct manner is to curtail war expenditure. We are now in the fifth year of the war. The greatest expenditure has already been incurred. The fortifications, the hospitals, etc., have already been built. Why should there still be a rising war expenditure? Has the time not arrived for that expenditure to be reduced? If the war expenditure is reduced, we would withdraw a certain portion of the money which is today being spent by the public. It can also.be achieved indirectly by means of thrift measures against waste of money in connection with the war, as suggested in the first paragraph of our amendment. If we accept the principle of fifty-fifty which was announced by the Minister of Finance, it means that in respect of every pound which is spent on the war, a burden of 10s. is placed on the people, and it also means that for every pound which is saved on the war, the burden which rests on the people of South Africa will be reduced by 10s. A great deal can be saved on the war expenditure, and we therefore suggest the appointment of this committee, a committee which has been functioning in England as from December, 1939, and which has brought about an enormous saving. This committee was responsible for the fact that the cost of the war was very much lower than it would have been if there had not been such a controlling committee. Then I come to the second requisite to check inflation. The first is to curtail to some extent the spending power, and the second is to encourage the manufacture of consumers’ commodities so that the gap between excessive money and a shortage of commodities can be narrowed down. That is what we are asking here. We ask that the manufacture of consumers’ goods be encouraged. This would be one of the best ways of preventing the inflationary tendency from rising still further and getting out of control completely.

How do you propose to do it?

I shall tell you in a moment. It is very easy to do it. If one withdraws a little more manpower from work which they do not do at all, making them available for those industries which are prepared to manufacture consumers’ commodities, one would have an increased production of consumers’ commodities, and attain this object which I have mentioned. But then one must not retard and check those industries which are going to manufacture these goods, but give them an opportunity of developing properly. There is yet another measure which can be taken. If there is a reduction of expenditure, with a resultant decrease of taxation, and there is still too much money for spending purposes in the country, I want to suggest that more effective use should be made of compulsory methods of saving. Let us reduce taxation, but make effective use of compulsory saving methods. Let us reduce the taxes, but let us employ compulsory saving methods in an effective manner. At the moment we have got something of that sort, but what does it signify? I have not got the exact figures, but it means only about £400,000 or £500,000 a year. I do not know what the precise amount is, but whatever the amount is, it is only for a year. After eleven months the person can withdraw the money, with the result that that money is released to the country, and the inflation spiral mounts steadily. Let us accept that money is obtained in that manner by compulsory saving. What should be done with that money? Let us have a positive objective in this connection. It is said that we shall have great industrial development after the war. It is the boast of the opposite side of the House that the Minister of Finance has repatriated so much national debt that was held overseas, and that the whole of our national debt, with the exception of 2 per cent., is now held internally. It is stated that this means that the interest is not sent overseas, but is used in our own country. And that is good. South Africa is going to require capital for industrial development. We have become a creditor country, and we are longer a debtor country. It is no longer necessary for us to obtain capital from overseas. We want to have the capital from our own people for our own industries. Now I want to suggest that the money that is obtained by means of compulsory savings should be accumulated in a fund that can be employed for industrial development. The money that has flowed into that fund can then be given to the public in the form of shares or scrip, with the result that they will get an interest in industrial development. On the other side, industry will obtain in the country the necessary capital in order to develop properly and to make provision for employment after the war. This has already been done in the land of “our ancient ally," Portugal. Last year, at the time the suggestion was also made in this House, legislation was accepted in that country that every new company that is registered and every new industry that is established, must issue 60 per cent. of its shares to citizens of Portugal of at least ten years’ status. Existing companies are allowed to continue without any modification, but in respect of any transfer of shares from foreigners, the privilege to purchase is given to Portuguese citizens until a ratio of 60 per cent. as against 40 per cent. is reached. We want, as far as possible, to see the development of our industries with our own capital. We have seen to it that interest on our national debt should stop being sent overseas, and we also want to stop dividends on shares in our industries being sent overseas. We ask, therefore, that this should be done, and in doing so two objectives will be reached. On the one hand money will be withdrawn that is being spent at the moment, and the inflation spiral will be checked, and on the other hand a fund will be created in South Africa in which everyone who has contributed on a compulsory saving basis will have a share and these people will thereby be accorded the opportunity to make some provision for their old age. At the same time we shall be developing our industries by providing them with the necessary capital. A third point in my criticism is in connection with the effect of the Minister’s estimate on the productivity of the land, on the economic development of the land. The Minister has referred with a measure of self-satisfaction to the number of companies that have been formed. He has informed us that the number formed in 1943 is larger than the number registered in 1942; and that the number registered in 1942 is larger than the number registered in 1941. That is no test of the encouragement of industry. The test will come in the years following the war and it will be this—how many of the new companies that have now been formed will be able to survive the postwar depression? It is not a question of the aggregate number of companies. That is why we say that what we want now in the first instance is that more control should be exercised in connection with the formation of new industries, with a view to their potentialities for existence after the war. In other words, there should not be an indiscriminate establishment of industries, but a sort of licensing or selection of industries, with an eye to their post-war prospects of survival. But in the second place we maintain that every opportunity must be given approved industries to encourage their development and to build up reserves, so that if as may happen, a depression should overtake us after the war, they can continue their existence and not necessarily fall into the depths and drag others with them. What then is the Government’s policy? Is it to give this encouragement to selected industries? I have before me the annual report of the Industrial Development Corporation of South Africa, and I find there that Dr. van der Bijl says, inter alia—

And then he gives his reasons for that—

He says that certain proposals for rationalisation have been submitted, namely, to incorporate two or three companies with a view to reducing costs of production and in order to ensure unity of production, but the Minister’s policy in connection with excess profits tax is such that they had to abandon that, because the new company which has had recourse to rationalisation will not be in a position to avail itself of the pre-war income limit of the existing companies. Is this encouragement for rationalisation and for the lowering of the costs of production and for increasing production? That is the policy of the Government. I should like to mention another example, and that is in connection with the building up of reserves. What encouragement is there for industries, particularly for new industries, to build up reserves in order to protect themselves after the war. Dr. van der Bijl also discusses this matter in his annual report, and he tells us that it is not possible to build up reserves, because the excess profits tax begins at 8 per cent. and in some cases at 10 per cent., and then it becomes drastic; as soon as this point is reached it is 15s. in the £. It is not something that mounts gradually. It is 15s. or nothing. I should like again to refer to the proposals that have been made from this side of the House in the past, in order to improve that position. All those proposals fell on deaf ears. We said, give the people encouragement to build up reserves. But the Minister would not lend an ear to that. We made all sorts of propositions, and I shall just mention one of them now. Is it not possible to introduce a tax that will be more gradual and on a sliding scale? Supposing we say that under 8 per cent. there is no excess profits tax, but that from 8 per cent. to 10 per cent. it will begin with 10s. in the £, and then the tax can rise until we get 25 per cent. and take 20s. in the £. What is the result of the present policy of the Minister? The result is that production is retarded. Companies that have reached the excess profits limit have adopted the practice of giving bonuses to their employees. They say that they would rather give the money to their own people than to “Jan Taks”. They refuse to pay 15s. in the £ to the Government and would rather pay bonuses. There are individuals as well as companies that simply refrain from working, or that curtail their activities when they have reached their limit. Encourage production? Who is going to work for 5s. in the £, and it is not even 5s. in the £, because that 5s. is subject to a number of other taxes. [Time limit.]

If five years ago we had been told that we had to find the amount money that has been found by the Minister of Finance now, we would have been told that we were mad. Yet the Minister of Finance has succeeded in finding this necessary money, very necessary money. We are told here by the last speaker that owing to the extra national debt due to the war, that there is £6,000,000 per annum less for social security. Mr. Speaker, I feel that if we had lost this war we would have had no social security. It is for that reason that I feel that the majority of the people in South Africa are prepared to pay the price, the price that was necessary in order to ensure that social security we are looking for. We have been discussing today the industrial development of the country, and in that connection I feel that the greatest industry that we have is our farming industry, and that that farming industry is the one which should be developed on really scientific economic lines. I therefore suggest once more, Mr. Speaker, that we should have a complete agricultural survey as soon as we have the staff that is necessary available, and when we have had that agricultural survey, we will then be able to put that great industry of ours on a sound footing and a proper basis. I should like to quote a few words from a report by Mr. D. F. Kokot. These are taken from an address which Mr. Kokot gave at an informal meeting of the Transvaal Branch of the South African Association of Civil Engineers. Mr. Kokot starts off there by stating—

I would recommend all people who are interested in agriculture to read this address. I have just tried to whet your appetite at the moment. The economic structure of South Africa has very largely been built up on the gold mining industry, but as gold is a wasting asset, we now will have to get down to farming and secondary industries and base metal mining. I have asked for an agricultural survey for our farmers, and then I have asked for a sound farming policy, out just at the moment, Mr. Speaker, one of the great difficulties that we are suffering from is shortage of farm labour. We are told that this is due to the fact that the labour has not been getting the return on the farms that it can get elsewhere. It is perfectly true that the rates of pay, the monetary rates of pay on the farms have been less than the rates of pay that have been made at industries and at the mines. But, Mr. Speaker, the rates of pay which a farmer can afford to give depend very much upon the price that the farmer can get for his produce, and upon the productivity of those that are working for him. It is the amount of work that the labourer accomplishes, and the price we get for the produce that determine the wages that can be paid to the labourer. The gold mining industry, where large numbers of the Bantu people have been working under the supervision of Europeans, has served very largely as the basis for the conditions under which our Bantu workers are working on the other mines, and in industry, at industrial works. On the mines the Bantu has done a large amount of manual labour. The European has had the responsibility of directing that labour, and he has also had the responsibility of providing the necessary finance. He has been the head that has guided the Bantu in the work the Bantu has been doing there. The mines have seen to it that the Bantu labourer has been properly housed and fed, but have the mines taken into consideration at all the position and the living conditions of the wives and the children of the Bantu labourer? The Bantu male worker has been separated from his family for periods varying from three, six, nine months and longer. Family life, as far as the Bantu worker is concerned, has to a very large extent lost the influence of the father. This has unfortunately resulted in many cases in the father forgetting his responsibilities, those responsibilities which every father should have, does have, towards his own family. Family life, after all, Mr. Speaker, is the foundation upon which a community is built. Any successful community must have a successful family life. We have used our farms and the reserves in the past as nurseries for the unskilled workers that have come out and worked on the mines. These workers have been separated from their families for long periods, and the employers have not worried too seriously, provided they had an adequate supply of labourers, about the conditions obtaining where their labourers came from. Can we not adopt a long-term policy as regards our economic and industrial development? The low purchasing power of the labour force and the low productivity of this labour force, restricts the local market, and this definitely impedes the rise of modern industry in our midst. We should aim, Mr. Speaker, at getting an effective labour force so well trained and so prepared to do the work, that the employers can afford to pay them a reasonable and just wage. In this way we will develop a consuming market, and it is this consuming market that it is our duty to provide for our greatest industry, namely, the farming industry. The urbanisation of the native is taking place at a great rate. It is absolutely necessary, I feel, that in this transition period the essentials of life should be fearlessly and honestly attended to. I believe that we should classify our native labour force into such groups as farm labourers, domestic servants, industrial workers, mine workers, etc. We Europeans choose the work that we want to do, but unless we stick to the job we choose we usually make a mess of things. The rolling stone does not gather moss. On the other hand, our native labourer is migratory labour, and if their work could be more stabilised so that they could become more proficient in the particular work that they choose, we should get greater effectiveness from their labour. Our farmers today have their natives for a short while. Then they go off and they work for a period on a mine. Then they go and work somewhere else, and then if the farmer is lucky after a long time, he gets that native back on his farm. In the meantime the native labourer has lost his knowledge or a fair proportion of his knowledge of farming. In any case he is very much less efficient than he would have been had he remained at farming all the time, and the same applies to those who work in other industries. If they continued and became really, experienced at the work that they have to do their productivity would be increased. We would not be able to do this sudden change over of grouping labour by a, sudden revolution. Such a division of labour will gradually have to be evolved, but I feel that we should definitely aim at a stabilised labour force. In order to attain that, those who have decided to join a particular group in which they wish to work, should be able to live a normal natural family life. In order to be able to do this, we shall gradually have to put an end to our present migratory labour. I would like to see a state of affairs where the normal life can be enjoyed by one and all, irrespective of creed, colour and race,. We have different standards of life, but according to those standards each and all of us should be able to live a normal life, and we should be able to get the returns commensurate with the services that we are rendering. I feel that we can now start to arrange that in any new ventures conditions of labour should be such, for example, that a married worker should be able to spend at least 12 hours per week with his own family. That is asking for little enough. This would mean that we would have to arrange the homes nearer the place of work for the labourers. For example, our farmers—to start with them—today have their labourers staying with their families. Their difficulty, of course, is in connection with the seasonal labourer. I would suggest that we might have hamlets where the seasonal worker could live but that it would be a condition of being able to live in such hamlets, that that seasonal worker should be prepared to go out and do seasonal work as and when required. These hamlets could have the necessary schools, the necessary social services that are required. As regards new mining ventures, I would suggest that we should try to do away with this taking away of the male from his family, and that the male who is working on the mines should be able more frequently to see his family. We have today on the coal mines in Natal and at the Carbide works in Natal, started with having some of the houses for the families on the spot, and I can assure you, Sir, that those labourers who live there and who are able every night to go back to their families are satisfied workers. They produce more; they are contented and their families are being looked after. The mine scores in that it has a bigger permanent labour force, and as these children grow up there they start off by carrying a billy can of food to the mines; later on you find them working on the screens, and later on again you find those boys become the mineworkers, and it is that sort of policy that I visualise as something that we should aim at. I feel that the family life is most important, and therefore I recommend that we should consider giving everybody an opportunity of enjoying the ordinary human family life. In regard to the question of labour, after all the economic fundamental of a country is labour. Labour is the human element which makes the products of the earth useful to man and available to us. When a man has earned his bread, he is entitled to that bread. A man should be able to get repayment not necessarily in cash money, but repayment commensurate with the services that he renders. A man is not just an individual. A man is usually a citizen, a father of children who have to be reared to usefulness on what he can earn, and I feel it is the duty of the hon. Minister of Labour to see that every man that is prepared to work, if possible gets work and does sufficient work to enable him to be entitled to the necessities for a decent living. It is not much use if the hon. Minister escapes his responsibility of finding labour just by fixing a wage which he considers to be necessary to enable the man to make a decent living unless he also makes sure that sufficient work is available. If he will only make it his duty to find labour for all of us and see that we are given adequate recompense, he will have accomplished much. Wealth gotten by vanity shall be diminished, but he that gathereth by labour shall have increase.

Where is the opposition to this Budget? I would have expected that at this stage at least half a dozen members on the other side of the House would have jumped up and attempted to tear this Budget to pieces, but instead of that not a single member gets up, and we on this side of the House are obliged to keep the debate going. The speeches which have been made on that side have certainly been astonishing, the most astonishing that I have heard on any Budget since I have been in this House. The hon. member for George (Mr. Werth) made a speech which might be described as this year’s attack on last year’s Budget; the same old points were made one after the other, and the only serious criticism that he had to offer was regarding the increase in the old age pensions. I suppose his idea was that they should have been doubled, but as a matter of fact he does not realise that from the time when this Government came into power they have been very nearly doubled. He then proposed an amendment which was seconded by the hon. member for Swellendam (Mr. S. E. Warren) who raised tears to his own eyes by condemning the additional taxation on fortified wines. But if there is one commodity in respect of which this country has been crying out for additional taxation, it is fortified wines, and I congratulate the Minister that he has at last faced the position and imposed this taxation. There is no industry that has benefited more in consequence of the war than the wine industry, and it is only fair that it should bear a fair proportion of the taxation. I listened particularly to the speech of the hon. member for Fauresmith (Dr. Dönges) and after confining himself to a condemnation of the rise in the cost of living—he forgets that there has also been an increase in the earning capacity of the people—but after condemning that he goes on to deplore the fact that a family which formerly earned £7 a month is now earning £78 per month, and he says that these people are enjoying luxuries which they never enjoyed formerly, and he wants to know whether something cannot be done to convert their savings into a fund to meet post-war conditions. We know that most people who are earning large amounts today are putting a portion of their earnings away for the post-war period, and that is the explanation for the enormous deposits in the Post Office and in the Savings Banks in this country. A great deal has been said about the system of taxation and the fact that had it been framed somewhat differently, it might have had the effect of encouraging the development of new industries. Well, I think that there is a great deal of loose reasoning as far as that is concerned, because the South African people today is employed practically 100 per cent., and I doubt very much whether many more new industries could be established. We have to recognise that our labour capacity is limited, and the number of the more skilled type of labour is also limited, and so far as we know all those people are today able to get employment at satisfactory wages, and although there is a great deal to be said for some system under which a portion of the Excess Profits Duty can be set aside for postwar conditions, I do not think that it can necessarily be said that any alteration to the existing system would have the effect of creating new industries or of establishing new industries of a character which is likely to prove permanently beneficial to the country. And I want to say at once that while I have been a critic of the details of the taxation policy of the Minister of Finance, one must recognise that he has been able to extract from this country for war purposes a vast sum of money which has in no way affected the development of the country, but on the contrary, he has been able to see that notwithstanding this enormous amount of money paid in taxation, the development of the country has gone ahead and the country is more prosperous today than it has ever been in its history. The conditions which have developed since the war are such a revolution in the history of South Africa that one can compare them with the discovery of diamonds or with the discovery of the gold fields, and if the present conditions are suitably entrenched for post-war conditions, I am sure we would be able to look to this period as a turning point in the economic development of South Africa. I feel, however, that there is a great deal to be said in favour of a portion of the excess profits duty being earmarked for industries for post-war difficulties. The matter was dealt with by Dr. van der Bijl in his address to the Industrial Development Corporation of South Africa in these terms—

The position in South Africa must be faced. We are an undeveloped country, and if countries like Great Britain feel that they must allocate a portion of excess profits for postwar difficulties surely the argument is all the stronger that in a country like South Africa some similar provision must be made. During the last few years there has actually been a surplus at the termination of the financial year. For the financial year ending on the 31st March, 1942, there was a credit balance of £6,814,170 which was brought forward to the next year and which was used for the reduction of debt; and for the financial year ending 31st March, 1943, there was a credit balance of £6,693,000. I do not know what the figure will be this year, but I have no doubt that there will be a considerable balance over this year, and I do hope that the Minister will, instead of paying it in reduction of debt, hold it in a Suspense Account so that he can allocate it after the war to assist industries which are affected by slump conditions. That is a matter which will be supported by all sides of the House, and I can assure the Minister that there is a great deal of anxiety on this side of the House that nothing is being done in that direction. I would support therefore the suggestions which have been made so far as that is concerned. But there are other matters to which I would like to draw the attention of the hon. Minister. In Pretoria we have the Mint. The Mint has been taken over, as hon. members know, by the Union Government, and it has been enormously developed. There are thousands of people who work at the Mint all round the clock and it has become one of the foremost industries connected with the war. It is entirely Government-controlled and Government-owned, but it makes a very great difference to the industrial stability of Pretoria and to the income which Pretoria enjoys, and I hope that the Government will not overlook the necessity for considering what might be done after the war with an industry of this character. We hope that South Africa will become an industrial country after the war, but it is necessary that something in the nature of Public Utility Companies should be formed which will produce, among other things, machine tools for industries at cost. Instead of our having to import that kind of commodity from overseas at great expense, it should be produced under Government auspices at the lowest possible cost, and I suggest to the Government that they should consider the advisability of converting the Mint in Pretoria into a Public Utility Company which should concentrate entirely on the production of machine tools which should be sold to other industries concerned at the lowest possible cost. That would be one step towards the development of South Africa which could be based on the development which has been achieved during the war. There are many other things which might be done. It has been suggested by Dr. Price in an address which he gave the other day to the Rotarians in Johannesburg that industries should be established on a licence system in particular zones, and he referred as an example to the case of the Victoria Falls Power Co. which had been allocated a licence in respect of the supply of power over a particular area. It was able to produce electricity at a competitive rate with the Electric Supply Commission. In addition to that it was able to pay its shareholders a considerable dividend and it was able to allocate to its consumers a very, considerable portion of the profits made. Something like 70 per cent. of the profits went to the consumers and 30 per cent. to the shareholders; and he said that after the war in a country like this instead of allowing destructive competition between various factories in the same area some system of licensing might be adopted in which a factory approved by the Government should be given a licence to operate exclusively in a particular area and produce a particular type of commodity. He went on to say that it seemed to him that that was a picture of future conditions which might enable this country to develop without the bad effect of competition, and which would at the same time give to shareholders and to enterprising people an opportunity of exercising their talents with an adequate reward for their work and their investments. I think that is a matter that the Government should take into consideration. There was a time when the idea of monopoly was regarded as being beyond the bounds of any decent government, but today where everything is being reconsidered, it is a question whether, in order to secure our industries, we should as far as possible restrict competition. I know it will at once be said by hon. members that the effect of restricted competition will be to increase profits. But, of course, it follows from what I have said that you must also restrict profits. That would be a condition, attached to the allocation of the licence. I think the days of uncontrolled profits are past for ever, and the day has now come for some system of control of profits subject to an assurance that within a particular sphere the industry in question will be protected and its investors assured a reasonable return for their work and on their capital. I do not wish to take up much more of the time of the House. I regard this Budget as a triumph for this country in this war. I doubt if there is any other country in the world which is able to present to its people at this stage of the war a budget that contains so little new taxation and which shows that we are fairly entitled to expect that the existing prosperity will be continued. I think we must recognise that if the step which was taken on the 4th September, 1939, had not been taken, this country within its borders would have seen a great deal of bloodshed, and a great deal of destruction. Instead of that, while our men have fought outside its borders, and given their lives outside its borders, they have been able to protect South Africa against the destruction which nearly every other belligerent country has suffered in this hemisphere. That is a blessing which we owe to the Rt. Hon. the Prime Minister and it is a blessing which this country will never forget.

I doubt if any Minister of Finance has ever introduced a Budget into this House that has pleased all parties of the House or that has pleased all members of the House. But at least the hon. Minister has introduced a Budget which, notwithstanding the doleful prognostications of my hon. friend opposite last year, shows a surplus and a true surplus and shows that the prosperity of this country is still buoyant. I have no doubt that this buoyancy will continue through the coming year, and I have no doubt that the Minister’s expectations in regard to the yield of new taxation, will be well up. Last year when I answered the hon. member for Swellendam (Mr. S. E. Warren) when he criticised the tax which the Minister had put on brandy, I challenged him to repeat at the end of the year what he said, that the Minister was putting a millstone round the necks of the farmers. I do not think he has taken up that challenge. The sales of brandy have gone up enormously, and not only the wine farmers but the Government have benefited considerably thereby. I issue my challenge again this year in connection with the tax on fortified wines. I told the hon. member last year and I maintain this year that this tax comes solely out of the pockets of the consumers, and this mild tax of 4d. per bottle, at a time when wages are high, will not curtail sales. I will therefore challenge him to show next year that the sales have considerably diminished on account of this taxation, and I have no doubt that once again I shall be able to say to him: “Look, listen and see,” because I have no doubt in my mind that this tax is going to yield not only what the Minister has prognosticated but even more, without in any way harming the wine farmer. I feel that for one particular section of the community to hold protest meetings against a legitimate tax, a tax in war time, when they like other sections of the community are enjoying a period when prices are high, when consumption is high, is the wrong attitude to adopt; they should also bear their fair share of taxation, and I think it is something to be frowned upon that certain sections of the farming community are holding protest meetings because the Minister has seen fit to tax their products. In regard to the other tax that the Minister has imposed on cigarettes and the various other forms of new taxation, I do not believe that the Labour speaker here this afternoon was serious when he said that the extra price of 2½d. on 50 cigarettes was going to hit the poor worker very hard. Surely that is not the case. Look at the general prosperity in the country. Look at the Factories Act which is in operation today. Wages are higher than they have ever been. In the garages alone in the Cape Western Province wages have nearly doubled and on the mines you get a paid holiday every year.

One holiday.

Fortunately not at the expense of the Government but at the expense of the Hoggenheimers. I want to congratulate the Minister, but it is only a half and half congratulation, on the fact that he increased the Public Health Vote by a fairly considerable figure this year. But on the other hand I must congratulate him on the fact that he is putting aside a certain sum as a gesture to what he expects from the National Health Services Commission. The condition in this country today is evident to any observer, that as regards one disease alone, and that is tuberculosis, notwithstanding the good spadework that has been done, our morbidity and our mortality figures are still irrationally high, and as I said once before, for a country with the natural climate that South Africa possesses, with the natural resources in production, of valuable foodstuffs, I think it is a reflection that our morbidity and mortality figures have reached such a high level. Not only does it cause one death in every seven in Cape Town, but amongst our coloured and native communities—and for the natives we have no vital statistics, so what happens in the native territories no one knows—the incidence of tuberculosis is enormously high. But not not only among the coloured community in the Cape Province especially, but even among our Europeans there is a death rate and a morbidity rate which compares only with that of the working class cities of Great Britain. Surely that is a reflection on South Africa and I maintain that this is a problem which should be thought out and worked out and planned for on national lines. I hope that when the report of the National Health Services Commission comes forward a comprehensive health scheme will be placed before this country. We can talk till we are black and blue in the face about social security and although it has been said in this House what the foundations of social security are, I still maintain that national health is the corner stone of any social security scheme that can ever be brought about in this country. With the health problems many other things are bound up. I do not want to weary the House with details, but even the personal health services in this country are far below, the modern standards laid down by other countries. We have in our rural areas today no considered or organised system to look after the health of all sections of the community. We have in the urban areas such conditions of living that no healthy children can be brought up under those conditions. I am not asking for a Utopia, I am not asking for great things to be performed in a day, but I am asking that the Government should keep in mind that now, during this time of war, when the mind of every thinking person is closely concentrated on the better world we are looking forward to—I would ask the Government to plan at a time like this for the future, and I am grateful that the Minister has at least planned for some slight increase in the immediate future in regard to the conditions of the older people of our community. I refer to the fact that there will be a rise in the old-age pensions, not only for Europeans but also for coloureds, and in certain cases, where possible, also for the natives. But I think even with the increase that is going to be given we still have to apologise to the world for the low scale of our old ago pensions. When we take into consideration the present cost of living, the present rental basis, it is asking a lot to expect an aged member of our community to live in this year of grace, 1944, on something like £4 or £5 per month. I am also glad that the Minister warned the House and the country that there must be no loose thinking on social security. It is easy to vie with each other on what we want to give the country, it is easy to talk about issuing bank notes on the value of this House—and then we do not know the value—that will have to be judged in the future—it is easy enough to talk as the Minister of Labour did, about free credit. Personally I would welcome it, but I do not know if it is sound business. I just want to mention this, that I heard the evidence of Professor Gray, of Johannesburg, who was an economist and who is himself very keen on social security.

I hope the hon. member is not going to discuss social security now. I allowed him to mention it incidentally.

If I am out of order I crave your pardon, but I had an idea that as old age pensions, disability allowances, and even health matters, came within the purview of social security, I might be allowed just to say one or two words more on the subject, but if you rule that I must leave it because there is a debate on the question, well, I shall pass on. I just want to express my regret at the delay which has occurred in the provision of free school meals for children. It is a sad thing that we have such a system of government in this country that the Central Government can put an amount of £1,000,000 on the estimates for free school meals, and the Provincial Councils in their wisdom can decide that they are not in a position to carry it out because of the small loss they will suffer or because of some small inconvenience. The sooner the Provincial Councils learn that where there is a will there is a way, the better—and the sooner they realise that something can be achieved the better for this country. I do not propose trespassing by dealing with the question whether Provincial Councils should exist or not. There is no doubt that we have for years past in this House from all sections appealed to the Government to tackle this question of malnutrition. Now, here also, there is a lot of loose talk going on, because when we want really to judge the amount or the state of malnutrition among certain sections of the population, we have to do so on a scientific basis, we have to judge by having nutritional surveys, and these surveys have been undertaken among certain sections of the community and we have to judge from the observations made by the men and women qualified to do so. How much of this state of ill-health among certain sections is due to malnutrition is not always easy to determine, but there are scientific methods of determining it. I want to say that recently I had the opportunity of travelling through a very large part of the Union. From my own observation I have no doubt that there is a certain definite degree of malnutrition among all sections of the community in this country. Sometimes in our enthusiasm to keep the public warm we may be inclined to magnify and exaggerate things, but without any exaggeration one can definitely say that there exists in South Africa malnutrition among all sections of the population.

Is not there starvation by any chance?

There may be starvation, too, but I shall leave it to the hon. member who interjected to go into that. I just want to say this, that in judging the amount of malnutrition there is we must not lose sight of the fact that free school meals are just a pleasant anodyne for any such conditions which prevail. At the root of malnutrition we find poverty and ignorance, and probably more ignorance than poverty, but medically unstable and unsuitable as an anodyne may be, because it treats the symptoms and not the origin, nevertheless it is necessary until the root cause of the evil is eradicated, it is necessary that we should have these free school meals, and I am very glad to hear that within a short time free school meals will be available if not all over the Union at least in certain parts of the Union, namely, in the Cape Province, where up to now they have not been in existence. In Natal, of course, it is working fully, but then Natal is very favourably situated. I am also glad to see that the Springbok Hospital for tuber-culotics has at last been opened and that the Minister has been successful in getting the necessary nursing staff. I was very glad when the Minister of Public Health—I still call him that—because Minister of Public Health sounds better than Minister of Social Welfare—accepted a suggestion on my part to do away with the charging of fees from patients who are housed in mental institutions. I notice in the Estimates on page 176, Vote 31, that the average cost per day per patient varies in these institutions from a minimum of 1s. 9d. per day to a maximum of 3s. 10d. per day. And although the total sum is £110,000 I think it is a very fine gesture on the part of this Government to do away with the collection of fees from these unfortunate people who through no fault of their own, and very often through no wish of their own, are patients in an institution. Just one more point if I may be allowed to deal with this question of the Central Housing Board. We have had evidence all over the country showing that there is an enormous lack of houses today. We do not need evidence, we can see it for ourselves. We have had complaints from local authorities, from municipalities who want to do their duty by their people, who are anxious to erect sub-economic houses for their people, for that class of person who cannot afford his own house. There have been inexcusable delays from the time the plans have gone forward from the Housing Board. Not only that, the lack of knowledge shown of local conditions has been in my estimation appalling, and I would suggest to the Minister, much as I dislike the provincial systems, whether it might not be suitable in the case of a Central Housing Board, to have a Housing Board for each province which would have allocated each year a subsidy for the proposed housing schemes for each province, and with the Provincial Housing Board being au fait with local conditions and being responsible for local schemes, one might in that way have a better system of attending to housing within local authorities than the one that now prevails.

That is the wisest thing you ever said.

I always like making converts. And now may I congratulate the Minister on the Budget. Personally it has hit me to some extent, because unfortunately never having been in the fortunate position of being a super-taxpayer, now that he has lowered the margin of the super-tax, I can imagine that I am a rich man. I just want to say in conclusion that now is the time to act. This is the time to save and invest in Government bonds—and I think when the Minister told us that he spoke very wise words at the right time.

I think we may justly say that the Budget has been favourably received by the country as a whole. To its credit we may place the increase in the old age pensions and the fact that now that the Budget has been issued it has had no ill effects on the national economy of the country, but rather has it had the effect of instilling a feeling of confidence—a feeling of reassurance. The Minister budgets for an expenditure of about £180,000,000, and it is rather interesting to see how he can budget for such a huge amount at a time when the country is engaged in such a terrible war. First of all it seems to me that the Minister is able to get the money he requires because of the fact that we are engaged in this war; he is able to get the money because of his bringing into circulation the extra money derived from taxation—it is that which has made that expenditure possible. May I be allowed to illustrate that point briefly. The Government buys from me a bomb. Buys a few bombs from me. Those bombs go into the army, they are shot away, but I still have the money for those bombs. I put that money into circulation and that is why the Minister is able to extract from the public such large sums of money, and is able to use that money, simply because those large amounts of money do not lie idle but are put into circulation. Our greatest trouble before the war was our lack of purchasing power. Today the Government is placing into circulation large amounts of money which it is taxing the people for, but there is, of course, also the borrowed money, which the Government is spending on defence, etc., and that creates a demand. It increases our purchasing powers. All this enables us to raise these vast sums of money necessary for the prosecution of the war. That may take a little further explanation, and it may require a little bit of going into detail. Before the war industry in this country rapidly found itself in the position that when it attempted to expand it was up against a brick will. The fact of the matter was that there was no market for the products of industry. Well, now, the Minister, through taking that money by taxation from the people and by putting it into circulation has created that market. I should like to come back to that point a little later on. Now, I would like to lay before the House the possibilities of industry in the post-war period. We know that in every previous war all ordinary lines of industry have more or less had to come to a standstill—take your road building, your road construction, your general building, your railway expansion—all these have more or less come to a standstill while the main efforts of the country we concentrated on the first priority—winning the war. Now, is it not a fact that all that work must remain and form a vast reservoir? It has happened in previous wars, and it will happen again. That is to say, there must be a vast reservoir of work. In previous wars we have not taken advantage of that, or perhaps I should put it this way: In previous wars our industrialists have smashed the wall of that reservoir, and they have created a flood of prosperity—a temporary flood. Now, we should be able to canalise that and lead it through proper channels. In other words speculators should not be allowed to put up hundreds and thousands of jerrybuilt houses; labourers should not be allowed to work hundreds of hours’ overtime. We must limit overtime—not with the object of reducing the wages of the workers. By all means keep the wages high, by all means fully occupy your workers. It is in the interest of the country to do so but do not fully occupy them today and throw them on the streets tomorrow. We must not attempt to cut down the wages of the workers. If necessary we may reduce their working hours, but we must not interfere with the wages they receive. What we have to do is to create the necessary work—as a matter of fact that work will he there—to spread us over a number of years and enable the Minister to extract from the country almost as large an amount of money as he is doing now. Now, may I come back to this question of industrialisation. Although the country as a whole has congratulated the Minister on his budget, there are certain sections, notably the industrialists, who have their little grouses, and I think the Minister is fully conscious of those grouses, I think he knows them as well as we do. Now, it is just a question as to how he is going to formulate a plan to assist these industries. At the moment I am referring to the question of the Excess Profits Tax. We know that that tax is at the rate of 15s. in the £. But there are so many other aspects which enter into our calculations that it is difficult to say just how a company or an industry will come out. The Minister may use the argument—and I believe he did actually use it—that whoever pays an excess profits duty must be better off than he was before the war. That sounds reasonable, but if we go into it it is not quite so reasonable, and let me try and explain why not. Take a company which had £4,000 worth of machinery and plant before the war. That plant cost him £4,000 at some period before the war. But it is not worth only £4,000 today, although it stands in the company’s books at that figure—it is probably worth £10,000 or £12,000. That is to say that to replace that machinery and plant would cost £10,000 or £12,000 and possibly even more today, but when we come to write down depreciations we can only write it down on the valuation of the residue shown in our books. If the figure allowed is 7½ per cent., we should be allowed to write it down by at least three times that amount. Taking that factor into account hon. members will realise that the 5s. in the £ left to us after paying the excess profits duty is practically absorbed by these book figures allowing us so low a depreciation in respect of machinery and plant. That is a point which the Minister should seriously consider with a view to allowing industries to form some sort of renewal fund based on present-day value of plant and machinery. Now, I want to say a few words about the position of the gold mines. No matter how we look at it we must come back to the feeling—we must come back to the fact that for some time at any rate the gold mines will continue to be the backbone of the country, and I think the Minister is to be congratulated on having realised that, and on not having attempted to extract any more from the gold mines. But I think we could have gone a little further, and we could have eased the position of the gold mines by the remission of the gold realisation charges. I think that is a point which the Minister might well go into. Now, I want to come back to the question of labour in our industry, which I was dealing with earlier on. I wanted to make the point that before the war most industries had not reached the stage where they could produce to the full limit of their capacity, but immediately or shortly after the war broke out, and a vast supplies organisation was formed, industry was called upon not to supply in small quantities, but in huge quantities—in huge units—they were called upon to supply thousands and tens of thousands of articles. They were called upon to supply in quantities such as they had never done before. That meant that we could produce under mass production conditions. I doubt whether that state of affairs can be expected to continue after the war. And coincidental with that point we come to the question as to what is to happen to the labour which has been introduced into industry to an ever-increasing extent. Many thousands of workers have been introduced—they are mostly raw men—not men who have been trained—raw men from the platteland, who have never touched machinery before, men who by being given an intensive course of training, have been able to perform certain circumscribed classes of work, and thereby they have been able to produce those tremendous quantities of goods required for the war effort. Today these men are classified as emergency labourers. The Trade Unions do not admit them. What is going to be their position after the war? Are we going to be allowed to transfer these men into peace occupations and possibly run up against the Trade Unions? Remember there will be no patriotic incentive then—there will be no “win the war” cry. Are we going to be allowed to turn these men to ordinary peacetime occupations, and then, where are we going to get the demand for the products of these men’s labour? These products run into hundreds of thousands of units for which there has been a demand during the war, as a result of which the Government has been able to circulate that large sum of money, which I referred to earlier on. These are problems facing the country and these problems will have to be faced squarely. We have heard a lot of speeches in this House, but we have to get down to basic facts, and one of these basic facts is where in our secondary industries are we going to find an outlet for the mass production which we have achieved during the war? Now, there is, of course, the possibility of developing our export markets. When we go into the question of our export markets we may be faced with the implications of that rather vague instrument, the Atlantic Charter. We do not quite know what the implications of the Atlantic Charter will be. If we are going to market our products in the Belgium Congo and America also wants to do so—who is going to be given preference? These are things which our industrialists are very much in the dark about. And there are other directions, too, wherein we don’t know where the implications of the Atlantic Charter will lead us. And I think it may be a wise gesture on the part of the Government to give us a little more information on that subject so that industry can start setting its house in order for the post-war period. It is useless disguising the fact, it is useless blinding ourselves to the fact that we shall have to compete with highly industrialised countries. We have by no means reached the stage of industrialisation which other countries have reached—simply because we have not got the markets here. It is no use blinding ourselves to that fact. And it may well have its effect of our internal markets. We have to export and in order to export we must import, and that raises the question what are we going to import. Previous to the war we used to import motor cars, agricultural implements, sewing machines and many hundreds of other articles. But now the proposition is so to build up your industries that you can manufacture all these things here. What then are we going to import? That is another question which may well face the people who are dealing with this question of industrial development in this country. Anyone can get up and say: “Develop your national economy”. Anybody can say these things. But we have to get down to it and learn the facts and tell the people just what we are up against. That is what we want. We have heard a lot about the establishment of State enterprises and that may be all to the good. I for one would not be against State enterprises if they were properly controlled, and if they had a beneficial effect on the country’s economy. But I must say that up to the present my experience of State enterprise has not been very encouraging.

What about the steel industry?

I do not like to indulge in politics, the hon. member will understand that, but I should like to deal shortly with the steel industry. That industry, Iscor, is not a State industry in the full sense of the term. Possibly if it were the tale might be different. During the war it has been a very great asset and it has been of very great service to the country. There can be no shadow of doubt about that, but there is no denying the fact that the cost of the material it produces is high, and unless something can be done about that immediately after the war it may produce repercussions throughout the secondary branch of the steel industry, for instance, farmers may be asked to pay more for their agricultural implements because the manufacturers will have to pay more for their steel and they will be running along to the Government and saying: “We cannot come out on this price,” and we must have a protective duty, as American products can beat us. To that extent, although Iscor has been of great use to our country, we cannot escape the fact that the cost of primary products is too high, and if something can be done in this connection is will be to the benefit of the country as a whole. Then I would like to refer to the question of workmen’s compensation. I have here a report of the South African Federation of Engineering and Electrical Industries, and there is a note here in regard to insurance. It is estimated that the State Workmen’s Compensation Act has resulted in an increase to employers of 40 per cent. to 50 per cent. on their premiums, without any commensurate increase in benefits to employees. This is contrary to statements made in the House concerning the effectiveness of the Act. I hope the Minister will consider the points I put before him.

The hon. member for Vasco (Mr. Mushet) told us: “We have broken with the past; we never knew what we could do.” The hon. member painted a wonderful picture about our country’s finances. Well, I checked up to see whether the picture is so wonderful, and I came to the conclusion that the hon. member is entirely wrong if he considers that our financial conditions are as rosy as he tells us they are. Our public debt has increased by £184,000,000 since the outbreak of the war. We are now paying more than £100,000,000 by way of taxation. We have to borrow about £44,000,000 in one year. In addition to that there is an accumulation of commitments placed on every citizen of the country. I consider that if the hon. member for Vasco had made a careful study of the country’s financial position he would have said: “I do not know how in days to come we will be able to bear those burdens, unless we take steps now to increase the National revenue.” We can do so in one respect. If we go to a country like Canada we find that the Minister of Finance for Canada this year reduced his Budget by about 25,000,000 dollars. It is not a tremendous amount, but still there is a reduction of expenditure on the Estimates. And what is the position in the United States of America? It has already been emphasised here that the President has been forced, or is being forced by the Senate and the House of Representatives, to reduce his Estimates by one fifth.

No, not his expenditure, his taxes.

Yes, I beg your pardon, that is so. Well, we should also do so in this country. But if we don’t reduce our taxes what are we to do then? Keep the taxes where they are, but bring down the war expenditure by £11,000,000 or more, and use that money for the general development of the country. We should avail ourselves of a time like the present to keep money in circulation; that £12,000,000 or £15,000,000 per year should be kept in circulation, but we should use it for the establishment of industries in this country, for sound development works, such as the building of irrigation canals which the Minister of Lands always has so much to say abut. We should use it for the development of key industries by the State. We have the Industrial Development Corporation. We can increase that Corporation’s capital, and it can then use that capital for the establishment of new industries. The day will come when we shall have to compete with the rest of the world, especially so far as the African markets are concerned, and if we do not proceed now to develop our industries in an energetic way we are going to find that when the time comes the other countries, especially the United States of America, will immediately turn over to ordinary production, and we will be a long way behind them.

At 6.40 p.m. the business under consideration was interrupted by Mr. Speaker in accordance with the Sessional Order adopted on the 25th January, 1944, and Standing Order No. 26 (1), and the debate was adjourned; to be resumed on 6th March.