I move—

This is a motion which the House usually passes before we deal with the motion to go into Committee of Ways and Means. The object is to save a little time. The passing of this motion will mean that the taxation Bills can be introduced and made available at least one day earlier.

I second.

Motion put and agreed to.

I move—

Why is an abatement allowed?

This abatement was allowed at the time the Act was passed. In other countries it does not exist but I am not prepared to depart from that and to let the abatement go as it is now in the Act. We propose increasing the percentages from two, four, six and ten per cent. to three, five, eight and twelve per cent. Then we also propose an additional levy of one per cent. on all inheritances exceeding £10,000, and this levy will be made on amounts in excess of £10,000. This proposal will bring in an amount of £250,000 per year when it is fully in operation and it is expected that during the current financial year it will bring in £150,000. Now I come to the fourth proposal—which deals with stamp duty. This mainly concerns stamp duty on brokers’ notes in respect of negotiable scrip. At the moment the stamp duty is 1d. when the consideration exceeds £5 and is less than £25; 6d. if it is between £25 and £50; 1s. between £50 and £100 and 1s. on every £100 or part thereof after that. We propose to increase this scale to 6d. 1s., 2s. 6d. and 2s. 6d. respectively. This is an increase in most cases of practically 100 per cent. It should not be forgotten that where such a deal in scrip takes place through a broker, brokers’ notes are usually issued, both to the buyer and the seller. It means that the State receives stamp duties on both notes. The tax on those transactions therefore is 5s. in the £100 where the transaction exceeds £100. It is also proposed in this clause of the motion before us—in the second part of this clause—that these stamp duties will also be payable on certificates known as unit certificates, or certificates issued by unit trust companies. Such certificates give the owner the right to an interest in a group of shares which form a unit. It is right therefore that the transaction in regard to those certificates should also be subject to stamp duty. I expect that the amount which will be collected as a result of this amendment will bring in £200,000 per year. Now I come to the fifth proposal which deals with the war-time extra levy on transfer duties. This is a provincial source of revenue but the transfer duties are not imposed under a provincial ordinance. They are imposed in terms of legislation which can only be amended by the Union Parliament, and the amounts collected from transfer duties in accordance with amendments which can only be made by Parliament have under the law of 1913 been allocated to the provinces with the proviso that the Union Parliament reserves unto itself the power to reduce the rate of the transfer duties. We are not proposing a reduction but we are proposing that although the transfer duties as in the past will be paid over to the provinces there will be an extra levy for the benefit of the Union Exchequer. In cases where the purchase price is less than £1,000 no surcharge will be demanded. Where the purchase price is between £1,000 and £2,000 the extra levy will be one per cent. on the purchase price. Where it is more than £2,000 the extra levy will be two per cent. The resolution provides that the extra levy, subject to the exemption, will apply to transfer duties payable oh or after the 25th day of February, 1944. The bill will provide that the levy will not be applicable to cases where the purchase was concluded before the 25th February, and where the transfer duties had been paid before the 15th March. As hon. members know, I intimated that there would be such exemptions, and provision to that effect will be made in the bill.

Is there any change in the total?

No; that does not arise here. Then I come to the sixth part of the motion, which deals with excise and customs duties. Here the motion consists of practically three parts: the first part deals with the increased excise duties on items in respect of which excise duties are already being charged. There in the first place we have the duty on matches. In my budget speech I pointed out that the excise duty on matches was lower than it should be if we take into account the price at which matches are bought in the retail trade. I propose then that we should double the excise duty and I said that we could do so without increasing the retail price of matches. It was found subsequently that there had been an increase in the cost in connection with the manufacture of matches which if we had raised the duty throughout would have meant that the Price Controller would have been obliged to raise the retail price, especially so far as the small boxes are concerned. And as I had given the undertaking that there would be no increase in prices I have amended my proposal somewhat. The excise duty on the small boxes, the boxes with not more than 60 matches, remains unchanged, but beyond that the rate is increased by 100 per cent. It will not bring in as much as we originally expected—it will bring in £50,000 instead of £100,000. Then we have the increased excise duty on cigarettes and in that respect provision is also made for an increased customs duty on cigarettes. The adoption of this proposal will involve the increase of the excise duty on cigarettes by ½d. on every ten cigarettes, which will bring in £1,250,000 per year. An increase is also proposed in the excise duty on pipe tobacco from 1s. to 2s. per lb. but in dealing with this account will have to be taken of the abatement for which provision will be made in the Bill. At the moment the tax on pipe tobacco is 1s. but there is an abatement of 4d. in respect of the cheaper kinds of tobacco. In other words on the cheaper types of tobacco, 8d. is paid and not 1s. We are proposing a tax of 2s. per lb. but provision will be made in the Bill for an abatement of 1s. 4d. on the cheap types so that the tax will remain at 8d. per lb. And also an abatement of 1s. on other types of tobacco which on the 25th February were sold at not more than 4s. per lb. In other words, on those types the excise duty is unchanged.

That refers to the retail price.

Yes, the 4s. per lb. refers to the retail price. Consequently, this increased tax will only apply to the more expensive types of tobacco, and we expect to get £175,000 per year out of this tax. The second part of the proposal relates to new excise duties and there we have two specific proposals. The one relates to fortified wine where we propose a tax of 1s. 11d. per gallon, and the second relates to sparkling wines in respect of which we are proposing an excise duty of 7s. 6d. per gallon. From this we expect to get £600,000 per year. Now, in the third place we come to a long series of proposals in which changes to the existing customs duties are proposed. These can be divided into three groups. The first group comprises the first three items where the changes only have this object, that where we have increased the excise duties there must also be an increase in the customs duties on those items. These are merely counterparts of the increased excise duties. The second group in this annexure deals with all the items from 86 (c) to 154. There we have a series of proposals which aim at substituting the existing specific customs duties by ad valorem customs duties. There are certain classes of articles in respect of which there is a high degree of standardisation, and where specific duties are as suitable form of taxation. There are other articles, however, where there is a great diversity, sometimes an increasing diversity in the form of the article or in the quality of the article, and there it becomes more and more difficult to apply specific duties. Take for instance typewriters and radio sets. There we have a great variety and it is difficult to apply specific duties. Those cases are becoming more and more difficult and more and more inconvenient so far as specific duties are concerned, and as a result of the experience we have had we propose in cases of this kind to substitute the specific duties by ad valorem duties. We are doing so in such a manner that the degree of taxation is not changed, and it will make practically no difference so far as the revenue from that source is concerned. Finally, I come to the third group of the proposals in the schedules. These are items 254 to 256. Those items all deal with the customs duty on various types of leather. We are dealing here with a recommendation of the Board of Trades and Industry. The existing classification in regard to leather has turned out to be ineffective. The question was raised by the Tanning Industry and a conference was eventually held between two sections of the industry, that is the tanners and the boot manufacturers, and they arrived at an agreement in regard to this division. The boot makers of course, would not be pleased to have an increase in the price of leather. The object of the conference was simply to obtain a better classification. An agreement was arrived at and the Board of Trades and Industries is satisfied with the proposals which have been adopted as a result of that agreement. Those proposals are now contained in the proposal introduced in the House. The impression may perhaps have been created that these proposals will involve an increase of taxation but if we take the matter as a whole, and not only the amendments as they lie before us, we shall find we are not dealing with an increase in taxation here but with a re-allocation, and so far as the Exchequer is concerned we are not expecting any additional revenue from these proposals but only a simplification of administration. This will be coupled with concessions to the industry concerned. That is all I need say at this stage in regard to these proposals. I have tried to place a summary of our taxation proposals before the House and I now move the adoption of the motion.

I am glad the Minister has decided in the third group to change the date of the coming into operation of the Estate Duty from the 1st March to the 1st April.

We made a mistake.

Yes, but the Minister did not make it clear to the House how such a mistake could have slipped in. The date of the coming into operation of a Bill is so important that it receives the special attention of the person who drafts it. This again is evidence of the hurry and carelessness with which our taxation proposals are drawn up and placed before the House. In any case we are glad that the Minister is making this change. We can only express the hope that similar mistakes will not be made in future. The Minister has explained the taxation proposals which are contained in the proposals now before the House, but he said nothing about two important matters. One in particular is a matter in which the farming population especially are interested. He has proposed to amend the farmers’ income tax.

That is dealt with in the Bill.

The whole of the farming population is very anxious and very concerned and wants to know what the position is. We know that the Minister’s object is to catch the cheque book farmer, but according to the information which we have it seems that the Minister may also vitally affect the practising farmer. We want to ask the Minister, before he puts this tax into its final form, to express his willingness to meet representatives of the farming population on both sides of the House to discuss the matter in order to prevent a mistake being made which in future may do serious harm to the farming industry in South Africa. The Minister in his introduction today did not really tell us very much about the reasons why he particularly discriminates from year to year against two sections of the population. The first section is the man who produces and smokes tobacco, and the other section is the man who produces wine and the man who likes his glass of wine. He did not explain to us why these two classes of the population are year after year picked out for special taxation. Does the Minister regard the production and smoking of tobacco and the production and drinking of wine as such social evils that he wants to kill those two industries in South Africa? Let the Minister tell us outright whether he intends killing those two industries in this country, yes or no, because it seems that that is the Minister’s intention. If the Minister looks upon them as social evils which have to be knee haltered, I can quite easily mention other social evils in South Africa which he could tax with very much more justification. I am particularly thinking of the dog races in Johannesburg. If there is one thing which is a curse to this country it is those dog races. It is a social evil which the Minister could tax out of existence, and no objection would be raised by either side of the House.

That also is a voluntary tax.

Yes, the dog races would also be a voluntary tax. If the Minister wants to tax a social evil, there is one which he can tax, and that also applies to horse racing.

I agree.

I could mention a whole series of other social evils which the Minister could tax. This side of the House fails to see why the Minister goes out of his way, year after year, to select these two sections of the population for discrimination. The Minister will have to tell the country a great deal more before we on this side of the House will be prepared to approve of those proposals. The Minister told us about the new taxes which are contained in these proposals. Let me say this to him : That his greatest sin this year contained in his proposals is not in the things he is doing, but in his neglect to remedy the wrongs of the past. I think that the greatest grievance which the taxpayers of South Africa have today is not the Minister’s sins of commission, but his sins of omission, in regard to our taxation system as a whole. And because I particularly want to deal with that aspect of the matter I now wish to move the following amendment—

1. (1) to review the agreement with the Bank of England in order to secure to the Treasury the full benefit of the rise in the price of gold and to abandon its intention of utilising loan funds for subsidising a particular industry in respect of the wages of its native workers:
2. (2) immediately to appoint a commission to review the whole system of taxation of the country and to make recommendations for a more equitable and just distribution of the incidence of taxation;
3. (3) so to modify the excess profits duty that national production and the development of sound and new undertakings in commerce and industry will not be handicapped;
4. (4) to abolish direct taxation on small incomes; and
5. (5) so to amend the Income Tax Act that taxpayers will be allowed to deduct medical and hospital charges from their taxable incomes.”

I just want to say in explanation that when we speak of a small income we mean an income of £400 and less. Then I want to say a few words about point 5 of the amendment. I am surprised, Mr. Speaker, that the Minister did not say a word in that connection. Last year we raised this question in the House and the Minister promised to go into the whole subject. We expected to hear something from him today about it and we are disappointed that he said nothing. Now I should like to deal with this amendment clause by clause. The first point is that the agreement with the Bank of England should be reviewed so that the South African Exchequer will have the full benefit of the increase in the price of gold. I think the whole House will agree that we are dealing here with a matter of urgent and actual importance to South Africa. We know that part of the gold mining industry is struggling with the problem of increasing costs of production. The gold mining industry has a very special interest in this matter, but the State, of course, also has a special interest in it. We know that a demand is being made from all sides for a social security policy for days to come. The Minister needs money for the reconstruction period. The livelihood of the low income groups has to be raised; the Exchequer also needs money for other purposes and it should get all the money it is entitled to, and it is in order to ensure that the Exchequer gets all that money that we have raised this question in the House this morning. In the second place I want to express my disappointment at the fact that an important matter like this is, so to say, being hidden away. The whole question has during the last four or five years been covered by a veil of secrecy. The hon. member for Waterberg (Mr. J. G. Strydom) raised this question in the House for the first time in March, 1940. He raised this question repeatedly, and it was in 1940 that the Minister of Finance replied to him. But we find that all he said was this—

That is all the Minister of Finance at that time considered it advisable to tell this House. Nothing further was said in regard to this agreement. Nothing was said about the duration of the agreement, nothing was said as to what extent South Africa, and how long South Africa, would be bound by it. It is only a week or so ago since the veil has been slightly lifted, and since the House has been told a little bit more about the inner workings of this whole matter. And yet this is a question in which millions of pounds are involved. In spite of that the Minister did not think it worth while to give Parliament and the people a full explanation of the whole matter. Everything comes in bits and pieces. We have to struggle to drag information out of the Minister of Finance or the Prime Minister, and on behalf of this side I want to protest against the practice of keeping secret to this House such important matters. What do we know today about this whole matter? We know there is an agreement. That agreement has been made with the Bank of England to buy our gold production. The Bank of England pays us 168s. per fine ounce. The agreement is to the effect that the Bank of England will take delivery of our gold here in South Africa so that the cost of shipping and insurance to England has to be borne by the Bank of England. The third point is that the agreement apparently is for the duration of the war. That is all we know so far in regard to the matter, and I want to ask the Minister on this occasion to try and treat the House openly and frankly on this question. I think the least we can expect is that the documents which are connected with our whole financial policy in South Africa, which affect our mining industry, which affect the interests of the Exchequer, in respect of which millions of pounds are at stake—the least we can expect is that those important documents at least shall be laid on the Table of the House. That is all we know about the agreement. We further know that England buys our gold and takes delivery of it here at 168s. Added to that are the realisation charges, such as shipping costs, etc.; we know that these are borne by England, and I believe that they amount to 3s. or 3s. 2d. per ounce of fine gold. I believe that those are the realisation charges. The result therefore is that England gets our gold landed in England for 171s. We know that now. We further know that England sells that same gold in America for 174s.

There are further costs.

England sells that gold for 174s., or at a profit of 3s. per fine ounce. On our gold production that means round about £2,000,000. We have at last been informed also now that the Bank of England is selling gold in India on the open exchange. It is not the black market, as the Prime Minister tried to explain in the first instance, but it is the legitimate open exchange in India, and the gold is sold there at 320s. per fine ounce. In other words, England sells our gold to India at a price which is nearly twice as high as that which England pays South Africa. We know that something similar is going on in South America. We know that bar gold in small bars of 3 ounces, 4 ounces, 6 ounces and 10 ounces, are sold in South America and the price they get there is 210s. per ounce. Consequently England does not only sell our gold to America, it does not only sell our gold to India, but it also sells large quantities to South America at a profit of 40s.; or let met put it this way, at 40s. more than what we get for our gold. If our gold mining industry had been so prosperous that we could afford to present the Bank of England with that money we might perhaps have raised no objections. If the Minister had so much money that the fact of £8,000,000 or £10,000,000 or £20,000,000 profit on our gold going into England’s pocket made no difference to us, one could understand it, but can the Minister, can the gold mines, can the Exchequer, manage without that money? Can the Minister say that that is the position? That profit is made by the Bank of England on our gold, and the question arises: Who is entitled to get that profit? Should it go to the Bank of England or to South Africa? That is the question. As I said, gold is sold to India. I am told that the demand is so great that India is prepared to buy practically the whole of our gold production. I have figures here which show the tremendous demand there is for gold, not merely in the East but also in South America and in neutral Europe.

I suppose they want to sell it for German marks.

They buy from the Bank of England.

Who?

Neutral countries—Portugal, Spain, Turkey, Switzerland, Sweden. I have figures here in regard to the gold sales to all those countries. I knew that the hon. member for Kimberley (District) (Mr. Steytler) would tell us that gold would not be allowed to go to neutral countries because it would eventually land in Germany, but England is supplying the neutral countries today. I have the figures here for the past two years. The information I have is that South America over the past two years has bought gold to an amount of 1,000,000,000 dollars, or £200,000,000. According to the official figures supplied by the National City Bank of New York neutral Europe in the past two years has also bought gold to a value of 1,000,000,000 dollars. South America and neutral countries in Europe alone have bought gold to a value of £400,000,000 in two years.

At what price?

The Minister tells us nothing. All we know today is that gold bars are being sold to India on the open Exchange at £16 per fine ounce, and we know that in South America an amount of 210s. per fine ounce is being paid.

Is the gold sold there by the Bank of England?

Where does the bar gold come from?

Is it being sold by the Bank of England?

I only know one thing, and that is that there is a gold hunger in the world today because people are looking for safe investments. They all have the same problem as South Africa has, namely too much money and too few goods to buy. Portugal, Turkey and other neutral countries in Europe are selling their products at unheard of prices. They are now looking for investments for their money and are prepared to pay anything for gold. That is the beginning. There is a tremendous demand for gold in the world, and the question is whether South Africa is to benefit by that or not. That is the question. I think we are entitled to a very open and frank statement from the Minister in regard to this matter. The Prime Minister has told us that negotiations are proceeding to try and secure the profits made on the sale of gold to India, for South Africa, but that is not all. It is most peculiar to me that India supplies practically all the requirements for our army along the Mediterranean. Most of the supplies are bought by England. According to the purchase price of gold, England, for goods to the value of £1,000,000, only pays £500,000.

We do not pay for these goods.

The position is that England gets twice as much for her gold as she pays us for the value of that gold. We have to pay £1,000,000 but England buys with our gold at half the price. I do not think the House has ever had a more important question than this to deal with and I want to ask the Minister whether he does not think the time has arrived when we should again put gold into circulation in South Africa? In South Africa, too, people are looking for a safe investment for their money, and because they can only get such an investment today in the form of land we find this pressure to buy land today, and that is why the prices of land are going up in such an unsound way in South Africa. If the Minister were to put gold into circulation it would serve as a deflector to assist in reducing the pressure in South Africa to a certain extent, and it would also help to stop inflation in South Africa. The actual proposal made by this side of the House in regard to inflation naturally has the object of setting the production machinery in South Africa in motion, not merely to manufacture war equipment but to manufacture consumers’ goods. That is the most effective way if there is too much money and too few goods—increase the quantity of consumers’ goods. That is our proposal. But we would like the Minister to tell us what objections there can be today to putting gold into circulation again?

At what price?

We are looking for information from the Minister.

But you are now making a proposal.

That is the first part of my motion. I now come to the second part where we ask the Minister to give up his intention of raiding the loan funds in order to subsidise native wages in the mining industry. In this connection we lay down three doctrines. The first is that it is unprecedented in the history of South Africa for loans in a particular industry to be directly subsidised. I think it is unprecedented in our history for the Government directly to subsidise wages in a particular industry. In the second place we lay down that it is indefensible to subsidise the wages on all the mines irrespective of whether they are rich or poor, or whether they need assistance or not. If a case could possibly be made out for assistance being given to certain mines which are in trouble one can certainly not justify by any possible manner of means a similar subsidy being given to mines like the Sub-Nigel and others which do not need it. In the third place we say that it is unforgivable to raid the loan funds for that purpose. This is not the first time an industry in South Africa has been in difficulties. The farming industry has often been in trouble. Has the Government ever gone to the extent of directly subsidising the wages in the farming industry? Our secondary industries at one time were in trouble. Has the Government ever gone so far as to subsidise wages in our factories to keep those factories going? The diamond mines were in trouble in days gone by and they were compelled to shut down. Did the Government ever subsidise wages to keep that industry going? And now I want to ask the Minister this, and I hope he will give us a clear and definite reply : Does this wage subsidy mean the initiation of a brand new policy in South Africa, namely that of assisting all industries, which henceforth get into trouble, out of the Exchequer by a direct subsidy to wages? Are we to take this as a precedent? Are we to assume that if the farming industry gets into trouble the Minister will do the same for it as he is now doing for the gold industry? And if our factories in the post-war period get into trouble, will the Minister be prepared to extend this precedent to our secondary industries? If not, why make this distinction? I just want to say this to the Minister; it appears to me that this is the most expensive form of subsidy. We have been told that there has been an investigation and that a report has been made, and we hear that four of the mines are in danger of closing down. Those four mines employ 20,000 natives and 2,000 whites. A subsidy now has to be paid to keep these four mines going.

Only so far as the natives are concerned.

Let us for a moment leave the natives out of it. In the first place the cost of living does not affect the natives very largely, because the gold mines provide the natives with all their essentials. In the second place, many of them are imported natives. But if there are no imported natives let me tell the Minister that there is a tremendous scarcity of native labour in South Africa and the farming population will be only too pleased to use any native labour which is available. So that means that only 2,000 whites are left if we cut out the natives for a moment. Imagine a proposal to spend £1,800,000 to keep 2,000 whites in employment !

But this money is not being given to the whites.

No, but the mines have to be kept going. It is the most expensive form of subsidy. It sounds so strange to me that I have arrived at the conclusion that we are dealing here with a game which is being played between the Government and the Chamber of Mines. We know that the white workers in this country have demanded higher wages. We know that the mineworkers have taken a vote, and we also know what the result of that vote has been. It seems to me that a game is going on now to try not only to alienate public opinion against the mineworkers, but also to try and convince the mineworkers that the mines cannot stand an increase of wages. I don’t like the game which is going on. I don’t like the tactics which are being pursued. If there are certain mines which cannot be kept going then we have the machinery which was created by the Nationalist Party. The National Party Government created machinery to this effect, that if a mine gives notice of its intention to close down the Government has the right to step in and work the mine itself. We demand that the conspiracy between the Chamber of Mines and the Government shall stop. A few mines have given notice of their intention to close. I notice in this morning’s paper that one mine has actually given notice that it is going to close down. That mine made a profit last year of £112,000.

That is not much use if it is running at a loss this year.

Eyewash.

The production costs have not gone up since then. Last year they made a profit of £112,000.

Where do you get that—that the production costs have not gone up?

Wages have not been increased.

But wages are not the only thing.

What about the drop in the grade of the ore?

The wages of the mine natives are only now going to be increased and they constitute the principal item. The Government should lay its cards on the table. If a mine can no longer produce we have the machinery under which the Government can work the mine itself, and it can then decide whether or not the mine is really worked out. Those are the two most important points in my motion. In regard to my third proposal, namely that a commission should immediately be appointed to consider the whole of our taxation structure, and to make recommendations for a fairer and more just taxation Act. I hope that even the Minister will be prepared to accept this. When the Minister, at the beginning of this war, started imposing his taxes he said he was going to tax war incomes. I think he must admit today that he has not succeeded in taxing all war incomes, and all these inequalities and anomalies in our taxation system emanate from his failure to do so. Imagine! You have a big business and as a result of the war your business expands—it expands to such an extent that the salary of the manager of the business is increased considerably. That is due to the war, this is a war income, and he is taxed to a maximum of 7s. 6d. under the Super Tax Act; but the owner of the factory, if he expands his business as a result of the war, has to pay 15s. in the £.

What about the levy on trade profits.

The special levy of 7s. 6d.?

No, the other taxes.

What you say only applies to over £3,000.

No, the Minister has not succeeded, and he knows it just as well as I do. There are war incomes which are not taxed today. There is a good deal of differentiation too, and that has created a lot of dissatisfaction throughout the country. I think the whole country would welcome it if the Minister were to appoint a commission. Then there is the excess profits duty. We have so often pleaded for a change in regard to this matter that I do not think it is necessary to go into it again. I made a proposal on the Budget and I said that where new industries were concerned the abatement should in any case be increased from 8 per cent. to 12 per cent. Our criticism: on the Excess Profits Tax is that it is not elastic. Our information is that in England, for instance, the exemption is in certain cases increased to 25 per cent. Here there is no play, no elasticity. I ask the Minister to increase it from 8 per cent. to 12 per cent. Now I wonder whether the Minister does not see his way to work out a graded scale of abatement. [Time extension granted.] I shall not detain the House much longer. Let there be a graded scale under which the tax will still be 7s. 6d. or 10s. on certain excess profits, and then the Minister can let it go up to 15s. But let me say this to the Minister: That it is no use his saying that he is not doing any harm to new industries in this country. Dr. Van der Bijl, whom we look upon as the creative spirit in the industrial world today, holds a different view. It cannot be said that his knowledge is only academic. There is no man in South Africa, on account of the position which he occupies, who has his finger on the pulse of our industrial life in the way Dr. Van der Bijl has. As head of Iscor, as the head of Escom, as the head of the Industrial Corporation, as Director of Supplies, he has day after day to deal with every industry and with every factory in South Africa, and if he says that the Minister’s taxation system makes the establishment of new industries impossible …

He never said that.

Yes, and he says that it has a restraining effect on our whole industrial life, and that if we carry on in this way our national income will be reduced and not increased. If Dr. Van der Bijl says that, in the position which he occupies, then we accept it and the country accepts it, and the Minister must accept it as a fact that he is doing harm, to our industries, and if it is so then it is his duty to reduce that harm to a minimum. The next point I have already explained, viz. : the abolition of direct taxation on small incomes of £400 and less. We are particularly asking for the abolition of the personal and savings levy on small incomes. The Minister will tell us that these people are getting a cost of living allowance out of which they can pay their Personal Tax and their Savings Fund Levy. I just want to remind the Minister that not everybody gets this cost of living allowance. Certain pensioners do not get it. The purchasing power of their small incomes has dropped very considerably, and in addition they now have to pay these taxes; and not only that, we also know that the interest on capital has been reduced. Where people used to invest their money with trust companies we know that the interest on their money today has dropped from 6 per cent. to 5 per cent. and 4 per cent. Their incomes have come down and they are not able to pay the £7 10s. or £5. I fully agree with what the Prime Minister of Australia said once in connection with this matter. He said that to take something away from the cost of living allowance by way of taxation meant that you took everything away, except life itself.

Don’t only listen to his words, look at his deeds.

Now, may I be allowed to say a few words about the increase of our Estate Duty? We shall deal with the details in Committee. In regard to the estate duty the Minister says that the main object is to make it wider, in order to get a redistribution of incomes. Assuming that that is a good purpose to aim at, the estate duty still does not achieve that object. I therefore say that I am not enamoured of an estate duty. I am much more in favour of succession duties. In an estate duty we tax the family just after the breadwinner has fallen away and when the family is at its weakest. An estate duty does not take into account the division of an estate. Assuming an individual leaves an estate of £20,000. If there is one heir he is taxed, and the Minister of Finance can say that it is necessary to re-distribute the income somewhat and re-distribute the wealth over the country, but assuming there are ten heirs; then each gets £2,000 out of the estate, and we already have the distribution. I must say that I am not enamoured of an estate duty. I would rather see the Minister get the revenue out of succession duties. We merely want to say that we feel that this tax is going to hit the farming population in particular and we intend to oppose the reduction of the abatement proposed by the Minister to the utmost. In regard to the tax on brokers’ notes, I have already, during the Budget debate, said that I regard this tax as a joke. It would have been better if the Minister had not imposed it at all. 2s. 6d. on a £100! There are two types of speculators in South Africa, land speculators and speculators on the Stock Exchange. Let the Minister tell us how he discriminates between those two types of speculators, the land speculator and the share speculator? Let him tell the House about the burdens he has already imposed on the man who buys land and sells it again, and let him compare that tax with what he has done in regard to the share speculators. I want to say here that we regard the share speculators as the greater evil in this country. It is in this way that the millionaire is made, and it is there that we should tax if we want to get revenue, and if we want to get a re-distribution of wealth. This side of the House says that the Minister could have got the amount which he gets through the curtailment of the abatement on the estate duty if he had increased the stamp duties on brokers’ notes to 10s. on £100. The Minister would have got £750,000 or £1,000,000 out of that tax, and he could then have left the abatement at £15,000 and it would not have been necessary for him to increase the transfer duties. Transactions in land are already taxed heavily enough. The other points which I should like to deal with can be dealt with during the Committee stage and I now move my amendment.

I want to second the amendment of the hon. member for George (Mr. Werth) and I just want to deal with a few of the points mentioned in his amendment. I shall start with the second point, viz., the appointment of a commission to consider the whole of the taxation structure in this country and to make proposals for an improvement and a more even distribution of the taxation burden. I think the one thing on which we are generally agreed is that we have no real conception of our taxation structure in this country. The hon. member for Troyeville (Mr. Kentridge) the other day pointed out that the situation in South Africa was such that 2 per cent. of the population were in receipt of 50 per cent. of the national income, and that the other 98 per cent. of the white population, together with the coloured and natives, were in receipt of the other 50 per cent. of the national income. Here we have a fact which shows that we have practically no knowledge of the actual taxation structure of this country. I don’t know whether, even the hon. the Minister of Finance, has a clear picture in his mind of our taxation structure and whether he can give us figures showing the taxation burden on the various income groups. Can he tell us what the burden of the taxation is on the first group, the group with the lowest income, that is to say the group with incomes up to £300? Can he tell us what the burden of taxation is on the second group, consisting of those earning from £300 to £1,000? What is it on those earning over £1,000. I don’t know whether the Minister of Finance can give us that information. If he can give us those figures, it will help us a lot to understand his taxation proposals and perhaps if we get these details we may be able to accept his proposals. I wonder whether the Minister of Finance can tell us what the percentage of the national income today is which has to be paid out in taxation. It is very important that we should know what percentage of our national income is paid out in taxation, and whether we have already reached the danger point in our taxation, whether we have reached the plimsoll-line of safety, and whether we can continue levying taxes, as the Minister of Finance apparently intends doing. Can the Minister of Finance tell us what influence our taxation system has had on our industrial development, and what effect it has had on the development of primary and secondary industries, or on the building up of our national income. The time has passed for taxation to be regarded merely as a means of securing revenue for the State. It is admitted that taxation can have a tremendous influence on the whole fiscal policy, and that by means of taxation the whole of the country’s economic development may be diverted. When dealing with the taxation system we must be in a position to understand the extent to which the taxation proposals are going to have a detrimental effect on our economic development, on the country’s financial development or otherwise. I make bold to say that we have not got that knowledge today, and that we have been most casual in the way we have carried on. We have used existing taxes, we have added 15 per cent. here, and 20 per cent. there, and so we have gone on with the result that we now have a taxation structure which we do not understand, and which, for all we know, may have an extremely detrimental effect on the country’s economic position. I think the time has arrived for the whole position to be reviewed by a commission with expert knowledge of the subject. I notice that in England a similar enquiry has been entrusted to a research commission under the chairmanship of Prof. Shirras. This commission is going into the whole question and it has already collected very important data in regard to the taxation structure and the taxation burden on the various income groups. If something of the kind can be done here it will give a very interesting indication to the Minister of Finance— whether it will be the present Minister of Finance or the hon. member for George—but in any case it will be the background against which we shall be able to determine what will be the best way of levying taxes in this country. I think I have said sufficient on that point to explain how important it is for us to have such an investigation. I don’t want to go into details now. I don’t want to discuss the particular taxes in this connection now. The hon. member for George has already mentioned a few. For instance, we have the effect of the excess profits tax on the development of new industries. When I speak of new industries I have in mind healthy new industries with vitality which will be able to continue after the war, and which will in days to come constitute the taxation sources for the Minister of Finance. We know that every section in the House has complained of the effects of the excess profits tax on these new industries which are deprived of the opportunity of developing as they should. The hon. member for George referred to what Dr. Van der Bijl had said, and I believe I heard the Minister of Finance säy that he had not said it. I therefore want to refer to what Dr. Van der Bijl did say. In the annual report of the Industrial Development Corporation he said this, inter alia—

In the same report there is a further onslaught on the taxation proposals, viz : that they make the rationalisation of industry impossible because when two industries have to be rationalised they cannot claim the prewar standard of the two old industries, but they are regarded as a brand new industry with a standard of only 8 per cent. as allowed by law. I think that is enough on that point and now I want to come to another point. I want to deal with point No. 4 of our motion, viz: that the direct tax on small incomes should be abolished; and as the hon. member for George has already said, here we have in mind incomes of £400 and less. We know that three years ago those incomes were not subject to direct taxation by the Central Government. Two years ago, however, a start was made by imposing direct taxation on incomes below £400. On the income group of £250 to £400 the tax last year was increased by 50 per cent. in the one case, and 662/2 per cent. in the other case. This means a tremendous tax on the very people who find it most difficult to keep body and soul together in these days, On the one hand they are hit by the increase in cost of living, and we know that on the other hand they are also hit by a drop in their incomes. Those who are dependent on interest payments are faced with a drop in the interest rates. The widow who before the war was in receipt of £300 per year from an investment at 5 per cent., or who received an annuity of £300 on that basis, finds that she can no longer get 5 per cent. on her investment. The utmost she can get is 4 per cent. That means that she gets £240 per year insead of £300.

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

When business was suspended I was dealing with the position of the low income group—the group with an income of between £240 and £400. I want to make a special appeal to the Minister and to the House on behalf of that group. They are the people who suffer great hardships, who have to stand the heat of the day. If we are to tax them still further, it means burdening our conscience in a most serious way. They have to pay the State between £500,000 and £600,000 per year in direct taxation. That group of people earning between £240 and £400 have to pay the personal tax and the compulsory savings fund levy. In addition there is a direct tax which they have to pay to the Provincial Administration; and that is not the only direct tax they have to pay. I want to draw the Minister’s attention to the fact that they pay large amounts in indirect taxation. There has been a tremendous increase in the cost of living—more than 27 per cent. We know that the increase in the price of food is even more—it is nearly 35 per cent. If you take the income of that group, you find that the proportion of income spent on food is bigger than the proportion of the income of higher groups spent on food. In the report of the English Committee, to which I have already referred, it is estimated that a working class family spends 41.8 per cent of its income on food, while the average spent on food by all classes is 30.8 per cent. Hon. members will see therefore that any rise in the price of food hits the groups with a lower income in particular because the cost of food constitutes a very large proportion of their income. I say that it affects them more than the other classes. The Minister of Finance will perhaps say that there is a cost of living allowance today, but I want to point out that the cost of living allowance does not apply to everyone. It only applies to the group of people who rank as employees. There is a large proportion of people who earn less than £400 who are not wage earners at all, and who therefore do not benefit from the compulsory cost of living allowance. The Social Security Committee has recorded that 550,000 people in this country are wage earners, and about 260,000, while earning money, are not wage earners. Nearly one third of the total money earning population—apart from the housewives—therefore do not get cost of living allowances as wage earners. They do not benefit from these allowances, but in spite of that they have to bear the full increase of the cost of living. That applies not only to those people who are in receipt of money but are not wage earners, but it also applies to pensioners and widows who have to live on their interest. It does not apply to the self employing class, nor does it apply to the casual workers. This class receives no help through the cost of living allowance, and it therefore has to bear the full weight of the increased cost of living which falls heavily on the man with a small income of from £250 to £400. The figures which the Social Security Committee mentions in its report are 566,000 employees and 241,000 people earning money but not employees. Apart from the increase in the cost of living there is the increase in indirect taxation levied, especially in excise duty. In 1939-’40 the total revenue from excise was a little over £3,000,000. This year an amount of £12,750,000 is estimated as the revenue from excise, an increase of over 300 per cent. The income tax has also been increased. The basic tax has been increased by about 50 per cent. In 1939-’40 it was 1s. plus 20 per cent. Now, it is 1s. 6d. The total revenue from income tax has actually increased from £2,696,000 to £7,600,000, but that is because the incomes themselves have increased. The tax itself has been increased by about 50 per cent. The excise duty on cigarettes and liquor has been increased by about 300 per cent. Now let me point to the importance of this to the poor man in terms of his income. What does this indirect taxation mean to the poor man? That is one of the questions which this Committee in England has investigated. It found that a man with an income of £300 paid £14 10s. per year in taxation in respect of tobacco and cigarettes.

Their scale is very much higher.

I am coming to that. At the moment I am comparing the smoking and drinking capacity of the man earning £300 with that of the man earning £1,000. That is all I want to do. I want the Minister to exercise a little patience. It is £14 10s. for the man with an income of £300, but for the man with £1,000 it is only £20. In other words, your capacity to buy cigarettes does not depend on your income but on your needs—your capacity to smoke and also to drink. Now, let us compare the two. I assume the ratio will be more or less the same in England and elsewhere. The ratio as far as smoking and drinking are concerned will be more or less the same. That means that the man who earns £300 pays out 4.8 per cent of his income for tobacco and cigarettes while the man who earns £1,000 only spends 2 per cent. of his income on tobacco and cigarettes. That is the ratio between the two, which has to be taken into consideration. When we come to drink we find that the indirect taxation on drink has gone up from £1,219,000 in the year before the war to £5,500,000 for 1944-’45. How has this extra £4,200,000 been obtained? I again want to refer to the comparative figures of the English Commission. They say that a man with an income of £300 there pays £16 in tax or 5⅓ per cent of his income, while the man with an income of £1,000 only pays £18, of 1-4/5 per cent. of his income. If we take these two things together we find that there is an increase of £9,000,000 in our indirect taxation from those two sources since the beginning of the war, viz: £4,750,000 from tobacco and cigarettes and £4,250,000 from drink, making a total of £9,000,000. My point is that the major share of that comes from the poor man in particular, and from the man with an income of less than £400. According to the English figures the man with an income of £300 pays in respect of these two items, tobacco, cigarettes and liquor, 10.1 per cent. of his income, whereas the man with an income of £1,000 only pays 3.8 per cent. These two indirect taxes press nearly three times as heavily on the man with an income of £300 as on the man with an income of £1,000. That is what we should take into account when we deal with the lower income group. When a comparison is made with other countries—and the Minister this morning compared the direct tax in this country with that in Australia, one also has to take into account the indirect taxation, and when we do so we find that in terms of a man’s income the indirect taxation falls much more heavily on the man with a lower income than on the man with a high income. If we find then that generally the direct tax in the form of income tax for people getting more than £400 has only gone up by 50 per cent., the only conclusion we can come to is that we have during the past few years, relatively speaking, been taxing the man with a smaller income more and more heavily as compared with the richer man. I most earnestly want to make an appeal to the Minister on behalf of the poor man living below the £400 mark—on behalf of the man who with his low income is expected to stand up against the falling purchasing power of his money and the increasing cost of living. How can he keep his head above water in those conditions and how can he, under those conditions, make it possible for his family to live on a civilised level—how can he educate his children under those circumstances? And now I come to the additional direct taxation of £500,000 which again falls most heavily on those people who are least able to bear it. Remember that in connection with this personal tax there is no graded scale, but that it operates almost equally throughout. No matter which income group the individual belongs to, it operates almost equally. We ask for the tax on those people to be abolished. The £500,000 can quite easily be surrendered. The Minister can easily do it. Let him, in its stead, convert this ridiculous tax on brokers’ notes into a sales tax of 1 per cent. On his own basis that tax would give him £2,000,000. The Minister made his calculations on a basis of a turnover of about £250,000,000 on the share market. Now, let us assume for a moment that we cannot catch all the sales of shares, but that we only manage to catch those which take place through the stock exchange, and let us also assume that for administrative reasons it may perhaps be easier to collect the money by means of a stamp duty; let the Minister then use his administrative machinery which he needs in connection with the £200,000 for the collection of the £2,000,000. Then, with the £1,800,000 extra, which he will get, he can in the first place give relief to the poor man in regard to the £500,000, and he can use the balance to give relief in regard to the additional transfer duty. Here in the Cape we have always paid a 2 per cent. transfer duty, and it is now to be increased to 3 per cent. and 4 per cent., and the Minister expects to get £1,000,000 out of it. Why cannot he, as he does with the man who sells land, tax the man who sells shares? Why must the transfer duty be further increased, and why must we have such a ridiculous levy as is now proposed? The Minister may perhaps say that there are services rendered for it, that the registration of transfers of land is in the interest of the owners of the land. Let me assure the Minister that the costs of the registration machinery are more than compensated for by the stamp duties and fees on the sale of land—irrespective entirely of the transfer duties. The transfer duties are a tax on the sale of land. They used to be 2 per cent. and the Minister now wants to raise them to 3 per cent. and 4 per cent. Instead of doing so let him rather put 1 per cent. on the sale of shares. He will then be able to abandon the extra 1 per cent. and 2 per cent. on transfer duties. Because I want to point out to the Minister that this increase in transfer duties will be another way to promote over capitalisation of land. These are additional costs in regard to the purchase of land, and they will have the effect of prices going up still higher. The danger of the over capitalisation of land, which already is considerable, will be even further increased. But there is another important consideration and that is that a sales tax or a stamp duty, if you want to call it that, on shares, sold on the Stock Exchange—a tax of 1 per cent. will have the effect to a certain extent of curtailing the speculation in shares, apart from ordinary investments. Today you have what I believe is called the tickey snatcher— the man who buys shares and sells them again as soon as there is a rise. If a tax of 1 per cent. is levied it will restrain the speculator in shares. If he feels that he has to pay 1 per cent. every time he sells shares it will have a restraining effect and the real investor, who buys shares once in five years perhaps, will not be seriously affected. In any case if you compare the position of the seller of land and the seller of shares— which is a good comparison—you can make out a strong case for an increased tax on the sale of shares, and the deletion of the proposed extra tax on the sale of land. In that way you will be able to give relief to the poor man earning between. £250 and £400 and on the other hand to the man who sells land. There is another point in connection with these taxation proposals, and that is the estate duty. We feel that the Minister went in the right direction when he raised the 25 per cent. limit to 33⅓ per cent., but we feel that the Minister should have raised the ceiling still higher—he should have put it up to 50 per cent. The position at the moment under the Minister’s proposal is that an estate of £110,000 pays 6s. 8d. in the £ but an estate of £250,000 also pays 6s. 8d. There is no increase in the scale for an estate in excess of £110,000 pays 6s. 8d. in the £, but an estate of £250,000 also pays 6s. 8d. There is no increase in the scale for an estate in excess of £110,000. We say that the scale should go up further to 10s. in the £. It will then be unnecessary to bring down the starting point of the tax as the Minister now proposes doing. At the moment it is £15,000 and the Minister now wants to reduce it to £10,000. We say retain the £15,000 starting point, but raise the ceiling a bit. Then this so-called “squeeze” ratio is just as great as it is under the Minister’s proposals, but it is more reasonable. As the hon. member for George (Mr. Werth) has said, the Minister with this tax hits the farming population. How many farms and estates have not to be mortgaged today to enable people to pay the estate duty? The heirs have not got the ready cash. If there is only one heir it does not make so much difference. He gets £10,000, but if there are ten heirs and each only gets £1,000, it comes very hard especially on the farming population where farms pass from generation to generation. Now I want to say a few words on the first point of our amendment, viz. : the sale of gold. I understand that since the 17th August of last year gold has been sold on the Bombay Share Market, an open market, with the consent of England and the United States. I have tried to get the figures of the quantity sold there since the 17th August and I notice from the “Economist” that on an average 40,000 tolas were sold at 75 rupees—equivalent to a value of £225,000 per day. If we take twenty days in a month it works out at £4,500,000 per month. From the 17th August to date is only eight months, and taking the basis of the “Economist” we must take it that on the Bombay Market alone gold has been sold to a value of £36,000,000. The “South African Mining and Engineering Journal” gives different figures. That paper says that the average sale has been 20,000 ounces per day, at £14. That is not the highest figure, but a conservative average, and it means £280,000 per day, or for eight months on the basis of twenty days per month, £44,800,000. I am prepared to take a figure in between the two, and I am assuming that in the past eight months gold has been sold in Bombay to a value of about £40,000,000 at this high price. For that £40,000,000 value sold there, this country under the agreement with the Bank of England, only received £22,500,000. Consequently, in eight months there was a profit of round about £17,500,000. Who got the money? Our mines did not get it, the people who got the money out of the ground did not get it, and our Exchequer did not get it. The Bank of England got it.

Not all of that gold came from South Africa.

It is a fact that according to the figures of the Indian Reserve Bank their gold reserve during that time did not drop at all in spite of these sales so that it is clear that this gold which was sold did not come out of the gold reserve of the Indian Reserve Bank, in other words it is gold which was sent there for that special purpose. There are only two countries which can sell gold there. There is South Africa, through England, and secondly the United States. But the United States, where there has been a great drop in the gold reserve of about £340,000,000 value, in 1943, have sold their gold particularly to South America. If the United States did send gold to India and Egypt, it can only have been very little. But apart from the £17,500,000 profit made on the gold sold in Bombay there is Egypt as well. I cannot get any figures at all about Egypt. The Minister can perhaps tell us how much gold has been sold there at the increased price. We are now told that we ourselves cannot sell gold in India; at any rate we cannot sell all our gold there. That may be so, but our imports from India must amount to at least £3,000,000 worth, and that being so we can surely export gold now to India to a value of £1,600,000 to pay for those imports. We could make £1,400,000 on an average on those imports. Another point is that we are paying the British Government £1,000,000 per month today for maintenance costs of our troops up North. We know that the arsenal of those troops today is India. The English Government therefore gets these goods at the increased gold price from India but we get no rebate on the £1,000,000. The Minister of Mines in another place a few days ago said this, and here we can agree with him—

I am not going into the question of an open market now. It is a matter for the Government to decide whether it wants to have a fixed price throughout now and after the war as well, or whether it wants to avail itself of this incidental rise. But I want to say this : We are not going to get a stable gold price if we sell our gold here to Great Britain at a fixed price and Great Britain has the right to sell that gold at any price. That will not bring about a stable world price for gold; that is not the way to achieve our object. If the seller alone is bound you do not get a stable price. If we want a stable price the Government will have to see to it that gold is sold only on condition that it is sold for neither more nor less than a fixed price. Only then will you get a stable gold price. Today we have not got that. If America pays 35 dollars for an ounce of gold, and India pays 68 dollars, we do not get a stable price. Just as there are certain proprietary articles in the ordinary commercial world today which cannot be sold for either more or less than a certain price, we shall also have to put a provision in the gold agreement laying it down that gold shall not be sold for either more or less than a certain price. In that way we will get a stable gold price, but as things are today we are not getting it. In America there was a great drop in the quantity of gold last year, a drop of about £340,000,000, but that gold was bought by the South American States, and they did not buy it at 35 dollars but according to the “Mining and Industrial Magazine”—

That is the situation. We want our country to have the full benefit of any increase in the price of gold, and if the Government’s policy is to secure a stable world price, it will have to see to it that no agreements, such as that with the Bank of England, are entered into. A clause will have to be inserted to bind the purchaser not to sell above a certain price. Profits like £17,500,000 in connection with the sale of gold to one country over a period of eight months should not be possible. An important point in regard to gold is the fact that the position which at first was very dangerous and very uncertain has latterly, as a result of circumstances, been crystallised to such an extent that one can say today that there are reasonable prospects for gold after the war Russia and the British Empire are the biggest producers of gold, and the United States have the biggest supplies, and we had Prof. Varga’s speech recently in which he said that Russia was in favour of the maintenance of gold as a means of international adjustment.

Mr. Speaker, the Opposition benches both this morning and this afternoon have initiated an interesting debate. I think they might have left, however, this reference to gold out of their amendment. They have asked this House to approach the Bank of England and say with regard to the price that has been fixed at 168s. per fine ounce that we want to break the contract. For a responsible Opposition to argue upon a contract which I submit they have not seen and which they do not know anything about, is to make this House ridiculous. Over and over again the hon. member for George (Mr. Werth) and the hon. member for Fauresmith (Dr. Dönges) have said: “We want further facts, we want the Minister here in this House to play open cards with us over this arrangement that has been entered into with the Bank of England.” It seems to me they are asking this House to pass a resolution knowing nothing about the facts of the contract, nothing about its implications and nothing of our obligations I repeat, Mr. Speaker, that to ask a responsible Parliament to pass a resolution of this kind is ridiculous.

We are asking for a revision of the contract.

The hon. member is a lawyer, and he does not know the terms of the contract; yet he wants it altered. I do not know myself the terms of this contract, which presumably was entered into for a period of time.

Did you read the contract?

I have personally not read it. I will ask the Opposition why they are asking us to vote blindly for an amendment to an arrangement which has been entered into which will have the effect of changing its terms, when they do not know what the terms are. I say it is ridiculous to ask us to do that. We have heard a lot of glib talk from the Opposition with regard to gold. More people go wrong in talking about gold than perhaps about any other subject in the world. The hon. member for George, for example, says that in the year before last, the member for Waterberg (Mr. J. G. Strydom) brought up the point that we should sell our gold direct to America and thereby make an extra shilling or two per ounce profit. Now, sir, I want to ask the hon. member for George if we had entered into an agreement with America and not with the Bank of England, let us assume on the same terms as we have entered into with the Bank of England, would he get up in this House and ask us to pass an amendment willy-nilly disturbing that arrangement?

Why not?

Because when its price was determined the price of gold was and is completely in the hands of the American Government. When the price of gold was fixed at 168s. by the Bank of England that was in terms of the price of gold fixed by the American Government.

One hundred and seventyfour shillings.

There are realisation and other charges which, you know, have to be added. We here in South Africa think because we have gold mines we can dominate the gold market.

They all want gold, the world wants gold.

Look at this, Mr. Speaker. Arrangements being negotiated between Russia and the American Government over a period of ten years provides for the supply of £2,500,000,000 worth of goods, and one of the stipulations by Russia was it should be partly paid for with £500,000,000 worth of gold, but the American Government said to the Russian Government: “We don’t want your gold; we won’t have it.” America is in that very strong position. Supposing this arrangement with the Bank of England had been made with America, and we passed a resolution such as my hon. friend wishes us to pass, does he think America would have listened to us? America might have turned round and said to us: “Look here, for goods that you get from us in the future we don’t want gold. Nor do we want any more of your gold in future at all.” The gold position in the world today is extremely difficult, and for us to go the length of asking for an amendment like this only makes us look foolish in the eyes of the world.

We must not revise this, we must simply accept the position?

We might ask the Government first of all, if the Government can do so, to tell us what are the terms of that agreement.

You can ask that, we have no objection.

My friend is a lawyer, and it surprises me when he commits himself as he has done this morning and this afternoon. This debate may have been extremely interesting, that is one thing, but for us to get up in this House and from a few loose facts and stray circumstances say here we want an amendment to a solemn agreement is something that surprises me. Hon. members want to get the highest price for gold.

That is what the Minister of Mines said.

I do not for a moment suggest that the highest price however is the price for which gold will sell in the bazaars in Bombay. The price at which gold is sold to the Indian Reserve Bank and the price in the bazaars of Bombay is quite different, and the same applies to Cairo. No, I say the House must be grateful to the Opposition for bringing up this matter and for debating it in the sense of desiring to know the terms. And I say that if the Government could take us into their confidence they should do so and they should let us know what this agreement is with the Bank of England. There I agree with the remarks made by the other side. I, like every South African, am out for the highest price we can get for our gold, but I am not like the dog in the fable snatching at a shadow and losing the bone.

The Prime Minister said they were busy trying to revise it.

My recollection of the Prime Minister’s statement is this: in the matter of India and the price paid for gold there, he said that negotiations were taking place, and as I understood him he would try to see if we could not pay in gold for the goods which we were getting from India.

No, he said he would try to meet us so far as the increase of the price was concerned. That is in Hansard.

Well, that may be so.

Why object to this then?

You want to break an agreement which you have never read …

The Prime Minister has read it and he is prepared to do so.

No, I don’t read it that way at all, and I am sure hon. members opposite do not do so either.

You should read the Prime Minister’s speech.

I read it. Now we come to the question of the subsidy which has been paid by the Government to the mines to meet this increased wage to natives. I am sure this is a matter which has given a great deal of concern to the country at large because it really means a departure in principle from anything which we have had before. I weigh my words very carefully when I say that I do hope that in this case the Government has agreed to this plan simply as an emergency, simply as an expedient. One can understand what the implications of industrial troubles would be on the mines, to begin with, and perhaps throughout the country at the present moment. One can understand the Government wishing to do everything it can to avoid industrial troubles. One can also understand that the mines by and large, faced with the increased working costs today, cannot afford a greater burden being placed on them, and in those circumstances one can understand the Government saying: “Well, as an expediency, as a way out of the difficulty for the moment, we are prepared to pay this money out of the realisation fund,” but I do hope the Minister will give this House and the country an assurance that this is only an expediency and that he— the Minister of Finance—himself views this matter as the ordinary taxpayers of the country view the matter. On grounds of emergency I would say the intervention of the Government was something that we would have expected of them to tide us over a difficulty, but if this principle is to become an integral part of our fiscal policy, then I am afraid there will be a great deal of trouble and criticism throughout the country. And I hope in that regard the Minister will make a statement to the House. Then, there is this question of having a commission to go into the question of taxation—I think the Opposition will agree with me that it will be impossible for the Government to agree to a commission on the lines of their amendment. I have not consulted the Minister of Finance about it, but I do feel this, that outside of politics altogether, the time has arrived when we should have this matter investigated and seen to. But purely from a scientific angle. I do not know if our universities might take on a job of work like this, because what we want is a really objective report, something detached, and it must be completely scientific and absolutely non-political. If something like that could be devised I cannot see the Government taking any exception to such a committee or commission set up. It would be enormously helpful. I raised this question on earlier occasions with regard to having from the taxation incidence side the whole position of our industrial development examined. That is specific and different from this amendment. You get one school which says our taxation is not hindering industrial development, and if it does then it is doing good because it will stop mushroom industries springing up, and it is better that we should watch that and not have concerns like that coming into being. We get another school which says if we are going to provide a national implement, an implement which meets the requirements of social security, then the only way to do it is to have industrial development, and those people say that our taxation today is retarding that industrial development. So you have two opppsite schools of thought, but I submit that the position is such that we should get at the facts. It is to me a very interesting phenomenon to notice that countries, say, like America—and their great industries there—are all at present feverishly preparing blueprints for their future expansion. I read the other day of an English company that had paid something like £5,000,000 in E.P.D. and as soon as possible it intended to rebuild and get new plant and machinery for its whole undertaking. Its plant and machinery through excessive work in the war was worn out, and in many ways the plant had been found obsolete, and they blueprinted for an expense of £1,000,000 on this new machinery they required. And all that money was coming back to them, it was anticipated, from the rebate from Excess Profits Tax they had paid into the Exchequer during the war period. In other words, the capital for their expansion, the capital necessary for that expansion, was all there already, kept safely for them by the British Government. In America you find the same kind of thing going on, and I cannot for the life of me understand how in view of these facts we simply sit here and say: “We are going to wait and wait.” I would very seriously ask the Minister to reconsider this position. If I spoke for myself I would say nothing, but I speak for a very large volume of public opinion, and that public opinion becomes more and more outspoken and more insistent every day. I think it was a very significant thing that while the Minister in his Budget reply was demolishing my arguments and similarly demolishing the arguments of other members, at the same time that he was making that speech the Chamber of Commerce at its annual congress, was listening to the President of the Chamber, making a speech which proved up to the hilt that speeches such as mine were giving expression to views widely held by the industrial community. In other words, the Minister’s reply, brilliant as it was, left the case for amendment standing. As one of my friends said to me a day or two afterwards: “Well, I was in the House, and I heard the brilliant speech of the Minister but when it was finished I walked around and I did not see a pane of glass broken, I did not see a building in any way disturbed”. In other words nothing was done in that speech to change the opinion of men who are seriously interested in our country’s development and in the national economy of this country generally. And I would plead with the Minister to consider whether or not he can get a commission of this kind set up, non-political, scientific in its approach, and quite objective, and then stand by the facts.

That is all we ask.

If that commission proves that I am wrong, then I will take my hat off to the Minister of Finance and say: “You were right”, but I also hope that if he appoints a commission and it agrees with the other school of thought if it agrees that that school of thought is right, the Minister will take his hat off to the school of thought I represent. I am sure all of us in this House are interested in the plea made by the Opposition this morning for exemption from taxation for the group of lower wage earners. We all agree with that. But when we listen in this House to debate after debate there comes to one a sense of unreality—a sense of unreality which is not only manifest in this House but in the country as a whole. My Opposition friends will laugh as usual when I say: “Do you remember there is a war on?” I knew they would laugh. We are the most fortunate country in the world today, and because of that somehow or other we have lost our sense of realism. You take the boys who come here from the front— they marvel at the complacency they find here. They come to the galleries of this House sometimes and I often talk to them. How many of them have not said to me: “Sir, one does not realise in this House that there is a war on”, and that is the position we want to get out of our minds. The plea for the smaller wage group when there is no war on has been the policy of our Government for years, and I hope that when the war is over it will be the policy again— I hope that we shall not impose direct taxation on the group of small wage earners. My hon. friend for Fauresmith (Dr. Dönges) has compared direct and indirect taxation as it affects these people in our country, with the direct and indirect taxation as it affects people in other countries. And on the figures he makes out a prima facie case. But I would ask him this : The standard of living in South Africa today is higher than it was before the war. The standard of living in South Africa today is perhaps higher than in any other country at war today, and certainly higher than in many neutral countries. What is his answer to that?

Except in the case of these small wage groups.

Even in regard to these small wage groups. And you must also realise that in these small wage groups we have a very large number of people, and the moral effect on these people of knowing that there is a war on and having to pay something for it is excellent, and what is more, in any war you can do more to avoid inflation by making everyone feel that they have to spend as little as they can and save all they can—and that is what you have to do at present—and imposing a tax on them makes them realise that there is a war on. I wish my hon. friends would bear that in mind when they plead so eloquently for these groups. They also talk about inflation, but they will admit—and every expert on inflation will agree—that to tax these lower groups is one of the best preventives of inflation. That is so, although naturally one does not like to tax these low wage groups more than one can help.

If you fell under that group you would say something else.

Yse; but my friend knows that what I say is absolutely correct. My hon. friends may have studied, as the hon. member for George (Mr. Werth) has done, what the position is in Australia and Canada. In Canada they have deliberately lowered their standard of living in the interest of a non-inflationary policy, and where they tax £1 on the lower income groups they even go so far as to make these people save £1 all in the interest of their non-inflationary policy, and if my hon. friends over there will look at it from that point of view they will realise that the Minister has done something strengthening the whole fabric of the financial position of the country and effectively has done something towards a non-inflationary policy for South Africa.

The saving here is only for 11 months.

Do you mean in Canada?

No, here. After 11 months you can exchange you saving certificate.

After six months.

Yes, but they don’t do it.

On the other hand, the idea is that the money belongs to the Government for five years, and if something can be done about tightening up the position I am sure the Minister will be doing a very good service. Before I sit down I want to say this to the two speakers opposite, that so far they have made what I consider contributions to this debate of an exceptionally useful order. I congratulate them on it. And the more earnest we are in matters of this kind the better the service we shall do to our country. One is tremendously struck when you ask yourself, however, when the last word is being said by the Opposition speakers, whether they have put forward any real serious criticism of the taxation proposals before the House. These hon. members criticise the proposals before the House and they should do so with a sense of responsibility, and if they wish to change the taxes downwards, the question is, are they prepared to devise means by which we can get the money to make good the surrender which they suggest the Minister should make? Have they proposed any other taxes? I think it is a very remarkable thing that the Opposition themselves have had so little to say about improved taxes.

What about the subsidy to the mines?

I have dealt with that. Yes, they have spoken about the tax on wine and the tax on tobacco, too. Let me tell them that those commodities are taxed here less than they are in any other country in the world. And their arguments there can be answered at once. The position has become rather disconcerting within the last two or three months. We have had people visiting this country, soldiers from the North, and people from other parts of the world, and they all comment on the complacency in this country—on the fact that one would not realise that South Africa is at war. And as a matter of fact that position is actually commented upon overseas today. It is not doing us any good. We had an official who was sent to Washington for supplies the other day. He had rather a cool reception there, because, so it was argued, South Africa wanted to get goods which America herself was doing without. And he had the same reception in England. He was told: “Do you expect us to do this or that while we ourselves have to do without these things?” They want equal sacrifices from South Africa, and we are not sacrificing equally with other countries. And from that point of view, to criticise the tax on tobacco and wine is making à bad position even worse. I don’t think there has been any serious criticism, criticism which we should take much notice of. I think the Minister of Finance must feel rather pleased to think that this is all the Opposition can put up against him, up against his taxation proposals, and the fact that the Opposition cannot put up better taxation proposals shows that the taxes are reasonable. By and large the finances of this country are being administered by a very competent Minister of Finance, and when it comes to the real criticism we find there is not very much in that criticism. In other words, the Opposition realise as members on this side of the House also do, that the resources of South Africa have proved themselves so buoyant, so adequate throughout this period of war—and I sometimes wonder when I look at the buoyancy, and see that even with all the demands made there is no real strain, no real sign of strain—this country, I say, has stood up to the war situation, to the finances required by the war situation, second to none in the world, and in our heart of hearts, whether we are members of the Opposition or members on the Government benches, we must feel grateful and proud that South Africa has weathered the storm in the way she has done.

I disagree with the hon. member for Vasco (Mr. Mushet) when he suggests that we should not reconsider this agreement between South Africa and the Bank of England. After all, the whole question of the future of our gold mines must be dependent on any agreement which we make in regard to the sale of our products. There fore, when the time arrives, owing to the increased costs of production, it becomes essential for us to examine and to consider whether the market in which we sell is paying us sufficient for the winning of that gold.

It all depends on the agreement.

Yes, and there, again, it is most unfortunate that this whole gold question has not been brought into the House before, and that the Government has not taken us into its confidence. There is an agreement but I have a shrewd suspicion that that agreement is elastic enough to provide for the continuation of the industry, and the industry will have to continue. And just as they have to find. £1,000,000 to subsidise native wages so the Government will have to find some other means, not only to pay increased costs, but also to prevent mines from closing down. And I just want to deal for one moment with the question of gold mines closing down. I have lived in Johannesburg for forty-two years, and from the very first year I lived there we were threatened with mines closing down. I can give names of mines which are working today which threatened forty years ago to close down. Is it because the Mineworkers Union are trying to negotiate some new agreement and because there are other threats, that we are now told that the Van Ryn Deep, and the Wit Deep and the Langlaagte Mines are ready to close their doors? It seems so significant that these things are discovered at a time when people are asking for better conditions. If there is one way of solving these difficulties it is to examine the position when we sell the product of the mines. Let us examine the markets. We were told this morning about the difference between a free gold market and a market in Great Britain and America—and other conditions. I want to deal with the question of a free gold market. Now, you sell your gold for paper as far as India is concerned. And you do that ás far as other countries are concerned as well. But if you sell to India you have to negotiate your paper in other parts of the world. The reason why we get £16 paid for our gold in India is that we have a fixed agreement for the sale of the product in South Africa—it is because the product in South Africa is not available to the small buyer—and it is for that reason that the small buyer is prepared to buy at a higher price. If we throw the whole of our production into the open market, the price would drop probably to about £10 per ounce, based on the usual currency manipulations. And when you talk about a higher price for gold let me say this, it is not gold that affects the price, it is the manipulation of the currencies which affect the price. That is where we are misled, and that is why we get away so often from the main issue. The real price of gold is fixed, its value does not change. Currencies have changed—today it requires more paper in India for instance to buy gold than it did before. But as far as we are concerned in the selling of our product we must get the best bargain we can, and secondly that bargain must be in the direction of a stabilisation of price and thirdly we want gold to be the foundation of all currency. I suggest that at the present moment that is not being done to the fullest advantage of South Africa, because in my opinion, for what it is worth, the price of gold today, based on increased cost, based on the fact that gold must be had, based on the fact that if we are going to win a sufficiency of gold to give us that freedom of transaction that we hope to see when the war is over— then the gold has still to be won and a higher price has to be paid for it. Australia subsidised that product; we know that Soviet Russia made an output of gold to a tremendous extent, and experts tell us that it cost more to win that gold than it was worth. But that was done at a time that Russia was not as popular as she is today, and she had to get that gold in order to get material imported. She paid through the nose for that gold, but she served her purpose. Therefore it must be obvious that in dealing with the price of gold if is essential that that product must be fixed at a price that is fair to the countries in the world which wish to use it as a basis of currency. At the same time it must not be manipulated and it should not be too closely reserved in the sense that only a small group of people decide what the price shall be. Some time ago when the price was less than 168s., the leading banking people in England from day to day changed the price of gold, which meant that every day there was gambling in the various stock markets. Today we have a firm price. We have an agreement, but that agreement must not be used to our detriment. The hon. member for Vasco (Mr. Mushet) spoke about the sanctity of contracts. I am prepared to observe the sanctity of contracts, provided it is not an unfair contract, once a contract is in favour of one side only, then it ceases to be a contract. It is only a contract when both sides can be satisfied with the contract.

When does that contract expire?

We don’t know. It is time that we are taken into the confidence of the Government. The whole country today is speaking about the gold position. Many of us may have the wrong outlook in regard to gold, but we do see that something is not working as it should be and we are entitled in this House to try and put this thing in a workable way. The Prime Minister has indicated — not very clearly I will admit— but he has indicated that he is making some negotiations with the Bank of England. I do not quite understand to what extent but there is some indication that the Prime Minister would negotiate with the Bank of England. I hope he will secure a bargain that will make it possible for the mines to contiue production in such a way that the workers will be able to live on the high standard suggested by the hon. member for Vasco. The hon. member told us that the standard of living of the individual in this country is higher today than it was before the war. I think the hon. member is confusing the issue. There are more people employed today and an extra £70,000,000 is being spent every year. That is the position. But to say that the individual worker is today living on a higher standard than he did before the war, is a travesty of the truth. The costs of living figures show that he is living today on a lower standard. He is in a worse position today than he was before the war. So it is not a matter chat requires investigation whether the people in this country are living on a higher standard than the people in other belligerent countries. The main point is this; other countries may be living on a lower standard than we are, and the reason for it may be that they are placed in such a situation that they are forced to adopt a lower standard of living. The true test should be this. Is it necessary? If it is necessary for us to live on a lower standard as a result of the war circumstances, then it is a different matter. But merely to say that we must adopt a lower standard of living because other countries do so, is wrong. If it is necessary for us to live on a lower scale for certain reasons, let us do so.

Let us be frugal.

Let us be frugal by all means, but there is a limit to frugality. Extreme frugality is just another word for malnutrition. As I say these are points that have to be considered. Another thing that we have to remember is this, that the gold that has been shipped to Great Britain is today being used for war purposes, and we are all very glad to know that today that gold is being sold for munitions and for other commodities from other countries, all for the benefit of winning the war, and to that extent we are very glad indeed that it is being done. But I submit that in approaching this position, we must see to it at all costs that we obtain a fair and reasonable price for our gold, and once we get to a freer movement of gold we will probably arrive at a price much lower than £14. That is by the way. I wish to put it to the Minister that if he will take the House into his confidence and let us know exactly where we stand with regard to this agreement, it will be all to the good of this country and to the good of this House.

I shall do that.

That will help tremendously, of course, I would like to raise this question also. A plea has been put up with regard to the exemption of the lower paid groups from taxation. It should be unnecessary for us to put up such a plea. The groups under £400 a year, the groups round £300 a year are having a very hard time indeed today, and we should rather step up the taxation at the other end. There is still a good deal of scope of increasing taxation in other directions, leaving those people who actually are not in a position to pay and who are really in a very bad position, free from taxation. Because of the present taxation they have to do with less on their dinner table; they have to do with less on their back. We can take a little more from the groups at the other end without their feeling it at all, and in this way leave the lower groups free of taxation, The hon. member for Vasco spoke very feelingly on the question of the excess profits tax. I want to suggest this, that no one can object to an excess profits tax dealing with profits made as a result of the war, but one can object to the method in which that tax is applied. It is undoubtedly stultifying in some cases while it is serving its purpose well in other cases. It seems to me that there are means whereby certain people are apparently able to evade that tax. I agree with the principle, but I disagree with the manner in which the tax is applied, and there is undoubtedly a great deal of room for a more effective system in order to secure the just payment of taxes on profits made out of the war. The tax should not be applied in such a way that it will kill industries which will have to carry on after the war. There must therefore be a good deal of elasticity in the application of any excess profits tax. One does not want to go too far into the other items that have been raised. In connection with the question of setting up a committee to examine the methods of taxation, I suppose there is so much confusion today in regard to committees and commissions that an extra committee will probably not add much to that confusion. Such a committee may be able to find some equitable way of taxing profits made out of the war. We are told that all taxation is bad, but we also know that it is necessary, and that is the price we have to pay for this Democracy of ours. But we should make those pay who can afford to pay and leave those who cannot afford to pay free of taxation, and if the committee can take into consideration the question of indirect as well as direct taxation, then perhaps we might at last see that millenium, that those who have shall pay and that those who have not shall get more relief and more assistance in their suffering.

I should like to support the amendment of the hon. member for George (Mr. Werth) and I want to confine myself mainly to the taxes which are being imposed on the gold mines. The Rt. Hon. the Prime Minister said some time ago that the farmers were sitting on the steps of the Union Buildings in Pretoria, and by that he meant that the farming community is poor and frequently applies to the Government for assistance. I think we can also say today that the gold mining magnates are sitting on cushions in the Union Buildings. The gold mining magnates have never had a Government which is so sympathetic towards their interests as the present Government. They need only express a wish and that wish is fulfilled. Our mineral riches in South Africa have become proverbial throughout the world. The whole world speaks of South Africa’s riches in gold, of its fabulous mineral wealth, but so too, the poor white problem in South Africa has become proverbial in South Africa. We have this contrast that on the one hand we have this colossal wealth in the country and on the other hand we have the greatest poverty in South Africa. One of the reasons which are continually advanced why we should take part in England’s wars is because of our rich gold mines. Whenever England is involved in a war, the argument is advanced that the world looks enviously at the riches of South Africa, and that we must take part in the war, otherwise other countries will come and deprive us of those riches. One of the reasons which is advanced why we must take part in England’s wars is that other countries may perhaps deprive us of our mineral wealth. While we participate in such a war and while the sons of South Africa are called upon to sacrifice their lives for this country, the Government allows the gold mines to plunder the riches of South Africa on a colossal scale. The Government allows the gold mining magnates to plunder the riches of South Africa on an enormous scale; I want to say that emphatically. I am not going to leave it at vague statements; I am going to prove the facts. We are spending an amount of £102,500,000 annually on this war and we are told that this war is being fought primarily for the protection of our rich mines. What is the contribution of the gold mines to this war? What taxes are paid by the gold mines? The Minister of Finance imposed a special levy of 22½ per cent. on the mines. That is the only extra war tax which was imposed on the mines, but we must remember that 9 per cent. of that was imposed on the mines before the war broke cut; in other words, Mr. Havenga, the previous Minister of Finance, when the price of gold rose from 150s. to 168s. proposed that the Government would take all the gold and sell it at 168s., and whatever it gained would go into the coffers of South Africa. The present Minister of Finance said very eloquently that that increase in the price of gold had been obtained by a stroke of the pen of the Minister of Finance, that no extra effort was called for on the part of the mines. The present Minister of Finance stated that he would impose a special tax on the mines and that they could then get a price of 168s., and he then imposed a tax of 9 per cent. That 9 per cent. must therefore be deducted from the 22½ per cent. The contribution of the mines is approximately £7,500,000 at the present time. From that must be deducted approximately £3,000,000, in other words 9 per cent., and the fact is that the mines are paying in the neighbourhood of £4,750,000. That is their contribution to the war expenditure of £102,500,000 per annum. A portion of the war expenditure naturally comes under loan account. We have so frequently been told that gold mining constitutes a wasting asset. Posterity will therefore have to pay once that asset has disappeared. The present contribution of the mines is in the neighbourhood of £5,000,000; that is all the mines contribute to the war expenditure of £102,500,000. The gold mining industry is the richest industry in South Africa, an industry which is held out to us as the big source of income of the people, and that is its contribution. But the Minister of Finance goes further. He now proposes to give the mines an amount of £1,850,000 by way of a subsidy in respect of labourers’ wages. If he puts that through, the contribution of the mines to the war will be in the vicinty of £3,000,000. The ordinary man, as the hon. member for Fauresmith (Dr. Dönges) said, the man who earns £26 per month, must pay £7 10s. per annum. He has to pay £3 15s. by way of taxation, and £3 15s. towards the so-called savings account. That is his contribution to the war. But the contribution of this rich industry, the gold mining industry, is approximately £3,000,000. We on this side have urged since 1933 when this gold premium was introduced, that the Government should take its legitimate share of this profit of the mines for the people, and we say that the Government is allowing the mines to exhaust this country’s riches on a colossal scale. When the gold mining industry disappears we will be saddled after the war with a war debt of millions of pounds; and not only that, but we shall also be saddled with poverty and misery and thousands of phthisis sufferers. The people will have to pay the piper. We can take Kimberley as an example. In Kimberley we had the richest diamond mine in the world. That diamond mine was developed, and it produced scores of millionaires, and when the mine was no longer a paying proposition, the Government had to pay £20,000 per annum in order to alleviate the poverty in Kimberley. What will be the position in South Africa if the Government persists with this policy of not taking its legitimate share of the income of the gold mines? What will be the position when the mines close down in the future? Do you know why the mining magnates so readily gain the Government’s ear? It has one of the best propaganda services in this country. The mining magnates have their powerful capitalist press in this country which is continually making propaganda in the interests of the mines.

They deny that.

They deny it, but it is nevertheless a fact. They are continually making propaganda on behalf of the gold mines. There is not an industry or a body in this country which has as powerful a propaganda machine as the mine magnates. Their organisation is perfect; it is effective. In a subtle manner propaganda is made in the interests of the gold mines. They represent Hoggenheimer as an impoverished struggler who ekes out a meagre existence. We are told that they cannot make a living, that they are now compelled to close down two of the mines. They can no longer exist. Let us see whether that is really the position. In 1930 one of these mines paid out £30,000 in dividends. I am not speaking of profits now, but of dividends. I want to point out to the hon. Minister how cleverly these people make propaganda. I have here the report of the Witwatersrand Mine Natives’ Wages Commission. This report was brought out in 1943. In Paragraph 31 the report reads—

One always finds the same people in the directorate of these companies. Here we have Sir Ernest Oppenheimer as chairman, and there we have Sir Ernest Kotze as chairman, and these people do as they please. They manipulate the stock exchange. The Prime Minister admitted on the platteland a few years ago that Black Friday was the result of the manipulation of share speculators. They drive the market up and down as they please, and they make thousands of pounds profit without a single penny coming to the State. I want to put this question to the Minister of Finance. Here I have the report of the commission to which I have referred, a Government commission, and I read this in Paragraph 331—

In the first place, I should like to know whether this is correct: Does the State receive £27,500,000 by way of direct taxation from the mines? Is that correct?

Quite possibly.

Did the State receive £27,500,000 in 1942; is that correct?

I think those figures must be more or less correct.

Does that include profit?

The hon. Minister cannot deny ….

My hon. friend forgets the contribution which appears on Loan Vote. There are two or more items which form part of that sum of £27,500,000.

This amount is arrived at by adding the rentals on mines.

But in the case of lease mines the rentals represent the method of taxation; that is the system of taxation.

We have this interesting statement from the Minister of Finance. I want to remind him of the fact that the late Mr. Duncan criticised an hon. member in this House because he said that the rentals represented taxation. How can these rentals be regarded as taxation? The gold is the property of the State, and the mines lease the right to extract the gold. Does the Minister of Finance really want to suggest that those rentals which they pay can be regarded as taxation? I want to put this question to the hon. Minister. Why did he insert a clause in the leases of the mines to the effect that if the tax increases, they can deduct it from the rental of the mines? If the two things are the same, if taxation and rent is one and the same thing, why insert this clause in the contract that if the tax is increased they can deduct it from the rental of the mines? No, this only goes to show how cleverly propaganda is made on behalf of the mines in this country. Here we have the report of a commission which was appointed by the Government. The enormous contribution of the gold mines to South Africa’s finances is emphasised, but do they also emphasise the enormous profits which are made by the gold mines? We need not even talk about profits. Let us take dividends. During the last twenty years the gold mines have paid an amount of £280,000,000 in dividends, and that on a capital of £100,000,000. They paid out £280,000,000 in dividends. The Crown Mines, Limited, of which John Martin is the chairman, one of the mines which must now be subsidised, has a capital of less than £1,000,000, but it paid out £34,000,000 in dividends. It paid up to 190 per cent. in dividends. But the people have to be taxed so that a subsidy can be given to the native workers of the Crown Mines. I say that the Minister has succumbed to the pressure of the mining magnates, and that he is thereby prejudicing the people. He is engaged in robbing the people and giving the assets of the nation to the mines. Let us now take the taxes. The Minister of Finance stated in reply to a question as to the amount of taxation which was paid by the mines during the past 33 years, that the mines had paid £132,500,000 in taxation, and he stated that the highest tax in one year was £22,159,000, and next year the Minister expects £17,500,000 from the mines. But what are the concessions which are made to the mines. There is the formula tax. Every mine is allowed, according to this formula, to make a profit of £20,000 before the formula comes into operation. This is the formula tax which was introduced instead of taking the premium on gold, as we advocated. Then there is the rental which is paid by the mines. The mining magnate enters into a contract with the Government to mine a certain piece of ground. The Government agrees to it, but stipulates that 10 per cent. or some other percentage of the profit which is made on the gold extracted from the leased ground, shall go to the State. The Minister has now inserted a clause to the effect that if the taxation on the mines is increased, they can deduct it from the rental of the mines. I want to give a few examples. There is East Geduld. I obtained the figure for 1940. In 1940 that mine made a profit of £3,000,000, but it did not pay a single farthing to the State in respect of rent to extract the gold. Why? Why must a rich mine be treated in this way? It is allowed to deduct the rent from the tax which it has to pay to the State. When the Government taxes the farmer, it does not allow the farmer to take into account his rent. The farmer has to pay rent, irrespective of taxation. But the mine is allowed to extract gold without paying a penny; it does not pay rent, only taxes. Take Grootvlei Proprietary Limited. That mine made a profit of £1,365,000, and did not pay a penny to the State for the right to extract the gold. Sub Nigel made a profit of £2,593,000 and did not pay a single penny to the State for the right to extract gold. So I can mention the names of numbers of mines which extract gold from the ground without paying a penny to the State for that right. Nevertheless, the first clause of the Transvaal Ground Act states that the gold is the property of the people, and not of a number of gold mining magnates who exploit it. What did the Minister of Finance say? He said that the gold premium meant an increase of profits to the mines which they did not obtain by any effort on their part, but that it was obtained by a stroke of the pen, the pen of the Minister of Finance. The Minister went on to say that there was a possibility that as the result of that there would be a serious dislocation in the economic life of this country. As a result of the depreciation of sterling there is the possibility of a serious dislocation in the economic life of the Union. What benefit did the mines get from that stroke of the pen of the Minister of Finance? From 1933 to 1942 the gold mines paid £177,800,000 in dividends, but from 1923 to 1932, the ten years prior to our abandoning the gold standard they paid only £83,000,000 in dividends. They paid out twice as much in the ten years after we abandoned the gold standard; they paid an extra £94,000,000 in dividends. Before we abandoned the gold standard the mines never paid more than £9,250,000 in dividends in any year, but they are now paying approximately £17,750,000, and nevertheless the Minister wants to give them a subsidy. They are paying twice as much in dividends, and our Minister now comes along and subsidies the natives who are in the employ of the mines. In 1935 we had a commission in connection with farm labour, and representations were made to the commission pointing out that one of the reasons why the farmers could not obtain non-European labour was because they could not pay the cash wages which the mines paid and which commerce and industry paid. The position in the farming industry as far as labour is concerned, is critical, and now this Government, which has never lifted a finger to assist the farmers to obtain labour, comes along and gives the mines a subsidy in connection with the wages of natives. As a result of that an even greater number of labourers will be attracted from the farms to the mines, and the farmers have to contribute their share of the taxation to cover the subsidy to the mine natives. I shall not be surprised if the farmers consider this fact and hold it against the Minister. The other day I read in the newspaper that the position in regard to farm labour was so critical that a farmer and his wife were compelled to shear 3,000 sheep themselves. That is the position in the plätteland. The farmers are struggling to obtain non-European labour, and the Minister is paying a subsidy to the mines, which will result in a greater number of natives being drawn from the farms. But I also want to say this. When Mr. Havenga stated that he wanted to take from the gold mines the profit which they would make as a result of the abandonment of gold, when he wanted to take whatever they received in excess of 150s. for gold, the Minister stated that he promised to obtain the same amount by means of his taxes as Mr. Havenga would have obtained it. I want to ask the Minister whether he is still getting it. Today he is getting £5,000,000 less than he would have obtained—quite apart from the higher prices overseas—if he had taken yield of gold in excess of 150s. The Minister made a solemn promise that he would not take less. We often hear of the wealth of the mines. What does it mean? There is a propaganda campaign which is designed to point out what the mines mean to our country. An amount of £100,000,000 capital has been invested in the mines, and that has been paid back over and over again. Nearly £500,000,000 has been invested in agriculture, and 64 per cent. of our people make a living out of agriculture. There have been depressions when the farmers had to sell mealies at 7s. 6d., wool at 2d. per lb., cattle at £5 and £6 per head. They could not pay their interest. But in connection with gold which is not subject to the same fluctuations as farmers’ products, the Minister keeps a protective hand over the gold mines, and the farmers have to struggle along on their own with the labour problem. At this time when the farmers can obtain good prices for their sheep and cattle and mealies, the Government comes along and fixes a maximum price for the farmers’ products, but there is no limitation as far as the gold mines are concerned. Their profits have risen enormously, and instead, as the Minister promised, of taking as much as the premium on gold after the abandonment of the gold standard, the Minister allows the mining magnates to pocket £17,500,000 in one year in the form of dividends.

Mr. Speaker, I am inclined to agree with the hon. member for Fauresmith (Dr. Dönges) that the tax on the broker’s note does not yield the amount that we ought to be getting, and a tax of 1 per cent. or any percentage at all on the turnover on speculative stock on the stock exchange would definitely bring in a good deal of revenue to the Treasury. We have a precedent. You have today a provincial turnover tax on betting and surely if anything will stop gambling either on the race course or on the stock exchange such a tax will definitely be a deterrent. I do not suggest that even 1 per cent. would be sufficient. I say a tax of 1 per cent. on Government stock and a higher tax on all other stock that goes through the stock exchange might be advisable. Then I am inclined to agree with the hon. member that we ought to get a higher price for our gold, particularly a higher price from some of those foreign countries that we trade with today. Those countries supply us with merchandise and their price is based on the price that they have to pay for the gold, and not alone have we to pay that higher price which they place on the value of their goods on account of the premium, that they have to pay for gold, but we also lose that very gold premium and our costs are very much greater. I do not think that an arrangement like that would disturb the contract we have with the British Government. There is no reason at all why we should not have a direct exchange of our gold with those countries from which we import today. Last year we imported into this country £15,000,000 worth of merchandise from South America, on which they had to pay a premium on the gold, and definitely some of that gold came from our own country. Now I wish to bring to the notice of the Minister a matter in connection with our industrial concerns, and that is the acquisition by big financial houses of industrial concerns in this country and the subsequent mergers which take place in some of our established industries themselves. Now one naturally looks for the reason why these financial houses should all of a sudden go in for industrial investment. To my mind there can be only two reasons. One is an attempt to escape taxation such as the excess profits tax, and the other is the increased cost of living that is brought about through these mergers. I do not know the particulars of these mergers.

What kind of mergers are you referring to?

Well, Sir, there is the recent merger of Edworks; there is the acquisition by the Union Goldfields of the Alpha Harris Engineering Works, and one or two others. We find these big financial houses investing in industrial concerns, and for what reason? Recently I have seen in the papers a report of a big industrial corporation being formed by De Beers with a capital of £6,000,000. Presumably that is a merger of the industrial concerns that they have already established, and probably aonther purpose is to acquire other similar industrial concerns. It is a reasonable assumption to say that such transactions must have taken place at values which compared with pre-war values must inevitably be inflated, either based on a valuation of capital or on share valuation. These mergers take place, and if assets are taken over at inflated values immediately there is a reaction on the cost of production, which from the price control point of view must be regarded as detrimental, especially if such businesses are employed on war supplies on the cost-plus basis. The new owners can claim for these items based on their new enhanced value. These industrial concerns are bought up at fictitious or any sort of prices, and when buildings and machinery are bought at these enhanced values the goods they produce go up in price, and consequently an increase to the consumer. I very much fear that if this sort of thing goes on we shall have a hopeless inflation coming to this country through these transactions, I suggest that this is a matter which the Government ought to look into and control. There will be an increase in the cost of production, and our price control will permit the increased prices that are occasioned through this inflation. There is another aspect of this matter. Where these transactions are conducted on a basis of an issue of shares on a holding company, or by the purchase of shares, there is no doubt that increased capital follows and earnings, from an accounting point of view, may justify the price. But there can be no guarantee that either capital values or returns will be maintained. In fact, the converse may probably be the position. It cannot be denied, for instance, that electric motors produced by the Alpha Harris Company, which has recently been acquired by a mining company, and articles that the country needs will be utterly eclipsed by importations in due course; and so it may be found that products of many of the businesses involved have only come into their own by reason of the absence of overseas competition. I think it is the bounden duty of the Government to control such transactions. There is no doubt that those people who have bought these concerns will foist them on to the public, they will increase their capital and foist these shares at present-day value on to the public, and I think it is the bounden duty of our Government to protect the public against this happening. I cannot see any other outlook than that the public will have to pay, and the public will be very much poorer and the country have no benefit at all. This will definitely retard our industrial progress. We are talking about the expansion of our industries with a view to the re-employment of the people who we hope will be engaged, but immediately these mergers come along the heads of the firms absorbed will lose their positions and it will mean unemployment for a number of people engaged in any particular industry. I want the Minister to think this over, and see whether something cannot be done. I am sure that some kind of control could be brought about. If every issue of shares were referred to the Treasury, it could establish a body similar to the Income Tax Appeal Court whose decision should be final. In that way some effective control could be exercised. I do not want the Minister to regard too much the returns which he gets at the moment from flotations. They mean a certain revenue, but that is merely a flash in the pan. I am very much afraid that the reactions to what is happening here in this country will be very detrimental to us later on.

Mr. Speaker, after listening to the hon. member for George (Mr. Werth) and the hon. member for Fauresmith (Dr. Dönges) and one or two hon. members, who have spoken on the subject of the gold price, which is of course an all-important matter to us, one would almost gain the impression that the hon. Minister and his advisers, to say nothing of the heads of the goldmining industry, know nothing about the gold price. I quite agree that it is due to this country to receive for its gold the maximum price it can receive. We know that the Drice was fixed by an agreement entered into with the Bank of England shortly after the outbreak of the war at 168s. per fine ounce. At the outset that price was subject to a reduction to the extent of the realisation charge, which was to be paid by the producer. It had always been the custom for the producer to pay realisation charges. Shortly after the outbreak of war, the Bank of England agreed to pay the Reserve Bank 168s. net. The realisation charge should then have been passed on to the producer, who should have got 168s. net. But it was not, and the retention of that realisation charge was nothing more nor less than a direct tax on the product. It was not a tax on the profit, but on the product, and as such it was a violation of the principle, which the Minister adopted when he very wisely indeed abolished the practice which had been initiated by his predecessor who taxed the product by fixing the price of gold at 150s. It would have been far better, I submit, to have passed on the realisation charge to the mines, and given them the net price of 168s. a fine ounce and then to have taxed the amount as profit. In any case, when one appreciates that the gold mines are paying direct taxation in the neighbourhood of 15s. in the pound on their profits, one realises that three-quarters of that realisation charge would have come back by way of taxation, and that it would have come back in a sound manner. Today the position is that a mine, whose working costs are equal to 168s. an ounce—an ounce not a ton—is getting 168s. for its product, less the realisation charge of 3.2 shillings. That mine is therefore working at a dead loss. The hon. member for George has taken exception to the mines being subsidised to the extent of the increase in wages to natives. But who is paying for that subsidy? The mines themselves have been paying for years past by means of this direct tax on their product. It is true this is an expedient to meet a special situation, and is not to be a permanent matter. But I think it would have been better had this realisation charge been allowed to the different gold mines and they had paid their own expenses. There is a great difference between this subsidy and the subsidies, which this House has become so familiar with, I mean the subsidy of millions upon millions each year to the farmers. In this case the mines are providing the amount of the subsidy and no one else is being asked to pay. That is the net effect of it, whereas in every other subsidy there has been resort to some industry or to the general body of taxpayers to find the revenue to meet the subsidy. The two cases are very different. While I am on this point I want to deal with what the hon. member for South Rand (Mr. Christie) said earlier on. He conveyed the impression that it is extraordinary that at the moment certain mines are closing down; we know two mines have given notice and several others are facing a similar fate. He suggests that it is more than coincidence that they should have given notice at this stage when a demand is pending by labour for higher wages. I see nothing coincidental in it. The plain facts are these, that for some years the grade of these mines has been falling, and it is incapable, it is unavoidable that as a mine draws to the end of its life so it must mine out the remnants of its ore body and will take what it can get. If the hon. member for South Rand had taken the trouble to study the statistics he would have observed that in the case of each of these mines, which are threatened with closing, that grade has been dropping rapidly for the last few years.

What grade?

The grade of the ore milled.

You don’t know what you are talking about.

I know what I am talking about, but my hon. friend does not. It was nature, which put the gold into the ore, and not the hand of man. The hand of man can take out no more than nature put there. The grade has been falling, and concurrently the working costs of the mines have been rising, just as the working costs in every industry have risen. The net effect is this, that the revenue from the product has been declining and the costs of producing that product have been increasing. The returns have been going down until now we find that more recently the balance has been falling on the debit side. The Van Ryn Deep is one of the mines which have given notice of intention to close down.

What about the Wit Deep?

I shall deal with the Van Ryn Deep first. Last month the Van Ryn Deep working operations resulted in a loss of 7s. per ounce.

What about the Wit Deep?

I shall come to that in a moment. The Van Ryn ore reserve values over the past few years have declined steadily from 3.1 dwts. in 1939 to 2.9 in 1940, to 2.7 in 1941, and to 2.5 in 1942. And concurrently there has been a fall in the available tonnage in the ore reserve from 3,750,000 tons in 1939, to just over 2,000,000 tons in 1942.

These are not the figures.

What about Langlaagte?

Oh, yes, these are the correct figures. I am only quoting figures which are absolutely reliable. The name of the Langlaagte Estate has also been mentioned. Now let us deal with the Wit Deep first. The loss on the Wit Deep last month was 17s. 6d. per ounce, and if you study the figures you will find a similar state of affairs ….

Is not that due to a little skilful dilution?

No, there is no skilful dilution at all. The hon. member for Bloemfontein (District) (Mr. Haywood) has quoted the case of the Crown Mines, of Sub Nigel, of Grootvlei, of East Geduld and so on. Well, he has selected a few of the richer and the very newest mines, which we have; he has picked out the shining luminaries in an otherwise dull sky. Let me refer him to many other mines—not these few mines— and let him observe the state of affairs, which has been developing, and has not just developed recently, but a state of affairs which has been developing over the last few years. When he examines these records he will begin to get a correct picture of the position. Hon. members opposite have criticised the Minister for his failure to tax the gold mines more heavily. The hon. member for Bloemfontein (District) took great pains to give us a wealth of figures, which in the final analysis amounted to very little indeed. In fact, the answer to his figures is the proverbial lemon.

You show us where they are wrong.

They did not mean anything, and the answer was precisely a lemon. The excess profits duty as applicable to trade and industry is applied to an increased profit, it is not applied to the increased price which you obtain for a product, it is not applied to the increased price which the farmers get for their products.

You can leave the farmers out of it.

And yet in one mine after another the profits have fallen considerably during the war, but these mines are still liable to pay the special contribution. They are paying 22½ per cent. And that is not all.

But all these taxes are on profit only.

The 22½ per cent. is on working profits. I am sorry the hon. member was not in his seat earlier on when I explained that the realisation charge was a tax on the product and not on the profit. These mines, which are making far less profit than they were in pre-war days, are paying that extra tax on a far lesser profit, and the 22½ per cent. is not levied on the taxable profit, but on a gross profit, which is a fictitious profit, and the mines are therefore taxed on a profit which does not exist. If a mine makes no profit, it still may have to pay this contribution. I think the fundamental mistake in 1940 was that the tax went past the recommendation of the 1935 Taxation Committee, which was to the effect that all mining taxation should be based on the same taxable profit. That was deviated from in 1940. Therefore the rate of tax, if appropriately applied to the taxable profit, would be very much higher than 22½ per cent; it might be a rate up to 30 per cent. I am concerned with the implications of the special contribution in its effect on the gold mines. We find now that several mines are in difficulty, and it will not avail us to say that this is just manipulation. It is for this House to decide the future policy. We can close down all these mines if we wish to—we have to decide whether or not we are going to do so. We have to decide whether we are going to close down the mines by taxing them up to the hilt—direct and indirect—by raising working costs in all manner of ways, or whether we are going to preserve them for the benefit of the country—yes, for the benefit of the Opposition as well—whether we are going to preserve them as a great national asset. In doing so we must avoid the confusion which is obvious from the criticisms of hon. members opposite. We must be perfectly clear on some points. You cannot take more gold out of a ton of ore than nature has put there.

No, but you can take less.

Of course you can.

Yes, and that’s the trouble.

But that is not done. The price of gold is fixed in relation to conditions largely beyond our control. Let me put it this way: The price of gold is fixed in relation to the dollar gold price and the sterling rate of exchange.

No.

It is dependent, too, on certain expenses. The crux of the whole issue lies largely in one thing, that the gold deposits, the conglomerates of the Rand, contain untold quantities of very low grade ore. Even the higest grade mines such as Sub Nigel, East Geduld; Grootvlei and the Crown Mines are all in the same boat. They all possess enormous tonnages of low grade ore, but are able to sweeten these tonnages with a certain amount of high grade ore, and the policy of the mining engineer in this respect has been a very sound one. He knows as a result of development operations how he can average his grade and has done so to the best advantage. The mining operations are designed to extract the maximum payable tonnage available. In the process the grade has been consistently lowered, it has fallen substantially since 1932, when we went off the gold standard and the price rose. In the measure that the grade has been reduced, so the tonnage available has increased severalfold, and it is this which is of such value to South Africa. The real true value of the gold mining industry to South Africa does not lie so much in the number of ounces of gold produced, as it lies in the tons of ore milled. When we went off the gold standard in 1932 and this country flourished, it was significant that the actual number of ounces produced fell, but the number of tons milled rose. And that is where the problem lies. Our prosperity does not only lie in the high grade ore but also in the low grade ore, and we can decide whether we are going to make it possible for the mines to mill that low grade ore or not. Some of these mines have to bear relatively very heavy burdens, which are in our power to reduce. The hon. member for Bloemfontein (District) has given us a number of figures. Now, the total capital involved in mining runs into figures which the hon. member for Bloemfontein (District) has never dreamt of. And when one takes the profits derived from gold mining and compares those profits with the aggregate capital invested the return will not be much more than the yield on a number of other investments, such as Government loans in pre-war times.

Farming for instance.

Yes, farming too. It is no use picking out a few bright spots and saying, as the hon. member for Bloemfontein (District) has done: “They show how prosperous the industry is.” It is no use saying that every star in the firmament is a planet. Now, with regard to the contract for the sale of gold, it is conceivable that South Africa can benefit by selling a certain amount of its gold in India, but I want hon. members to remember that we are not the only pebble on the beach.

But we are the biggest pebble.

Other countries also possess gold. But it may yet transpire, and I think it will, that it is far more to the interest of South Africa to have a fixed stable price for the whole of its gold output than to have a higher price for part of it and not to be sure what to do with the rest of it. When unstable conditions arose at the beginning of the war, it was beneficial to South Africa to have a fixed price for the whole output. We in South Africa can only get 174s. an ounce at the most in America—converted into South African currency and less expenses it is a different figure.

But what can you get in India?

The question is how much can you sell in India?

More than we can produce.

And how are we going to get it settled up? No, this is a very deep issue. There are implications, which are very profound, and I think we have to step very carefully in the direction of supporting any amendment such as that moved by the hon. member for George. Now I want to deal with a point or two on the question of taxation. When this House had before it the Part Appropriation Bill, the Minister, in response to a point I made, said he would welcome the establishment of some committee to help him in overcoming difficulties and in eliminating some of the criticisms. He extended an invitation to interested bodies, and he said he had in mind industry, commerce and accountants. I think South Africa welcomed his invitation. But I would suggest to him that rather than follow it up along those lines it would be preferable to do so by the appointment of some committee or commission. I do not know whether a commission is the best, but it is better to have one central body to take evidence and go into the issue and weigh up the implications than to have evidence and views coming in from all different parts of the country to such a body, and sometimes expressed by persons who are not fully conversant with the position, or with this very complicated taxation subject. Whether a commission or some committee is advisable, I don’t know, but I do have in mind the great benefit, which South Africa derived when in 1935 an inter-departmental committee was appointed to advise the Government on gold mining taxation, and I have in mind the very valuable report which that committee brought out. There is much to be said for a careful investigation along some such lines. Such a committee has big scope. It could investigate a number of aspects which I could mention. It could investigate for example the taxation of companies. The taxation of companies today is not in a very satisfactory state. There was a time, before 1941, when a private company was defined and all other companies fell into the category of public companies. But in 1941 it was thought that the position could be stabilised by defining a public company and letting all other companies fall into the category of private companies, and the profits of private companies were then distributed among the shareholders. That system is not satisfactory. I myself would like to see the suggestion carried out, which I made in 1940, that there should be no distinction between private and public companies, that all companies should be companies, that the taxation should be levied in this manner, the tax on the dividends should be levied in the hands of the recipient shareholder, who has received the money, with which to pay his tax. The tax should be assessed on the dividends in the hands of the recipient. That would help to improve the present state of affairs, and it would be a means of eliminating taxation at source. In regard to the balance of the profit, which is not distributed, that should be taxed in the hands of the company, which would have the funds to pay the tax. I think a system along these lines would prove better and more simple than the present one. It would only remain to tax the company at an appropriate rate having regard to the proportion of profit undistributed, and I do not think that that would present any difficulties, Then there is a matter, which permeates all our income tax legislation, and that is the mathematical basis often employed by the department. The Minister told us in his introduction of the motion that for example it was very unsatisfactory under the death duties, that the abatement of £15,000 was diminished by £1 for every additional £1 over £15,000. It meant that on every pound over £15,000 you paid tax on £2. That characteristic was part of the normal and super tax before 1941. The Minister has now eradicated it from the death duties by setting up a fixed abatement. Instead of it being based on the amount of the estate—it is now a flat amount off the tax. It is £300. Now in the succession duties there is an abatement of £100 diminished again pound for pound. Why leave it diminishing? Why not eliminate that and leave the £100 as a fixed abatement, because for every pound over £100 and up to £200 you pay duty on £2. We find the same principle in the formula tax on the gold mines and again in the special contribution by the gold mines, where the abatement is diminished. I think it would be very sound if the diminishing effect upon abatements was eliminated and the fixed method put in its place. Then in fixing the rates of tax in the grading of rates, instead of grading in some smooth manner, which is easy to do, steps are resorted to. We find that in the new methods of calculating the estate duty, the rate is fixed in steps of £100 at a time. Why should that be? Why not in £1? The net effect is that if an estate is £100,000 you pay a certain amount of duty and if £100,001—£1 more— you pay an extra £30 duty. You find it in the trade profits special levy, where the rate proceeds by steps of 8d. I had a case which illustrates the point. When the Receiver of Revenue started to assess a certain account he decided to make the profit £30 more than the books seemed to show. By reason of that extra £30 the rate was brought onto the notch higher and the assessment was increased by £325. I don’t see the necessity for stepping rates in this way.

How do you wish to do it?

Just even it out. Work it out on every pound. It is just as easy to do that.

That was the way it was before.

No, not quite. These points just want investigating and with a little ingenuity many of these rough and unsatisfactory aspects in the method of computing rates would be eliminated. With regard to the computation of normal and super tax we have normal tax at a certain rate, super tax at a different rate, there is superimposed a 15 per cent. surcharge on both, and also the personal and savings levy and the provincial tax. The effect of all this is to produce an extraordinary state of affairs over certain ranges of income. I want to quote figures applicable to two bachelors in the Cape. The taxes paid by these two people are normal tax, super tax, personal and savings levy and provincial tax. The one bachelor earns £14,000 and the other one £26,000. The bachelor, who earns £14,000 after paying his taxes is left with £6,500 net.

A starvation income.

The other bachelor, who earns £26,000 …

Are there many?

I am not concerned with that. That man is left with £5,765 net.

I am sorry for him.

The man who earns £12,000 more pays £12,800 more in taxes. Now it is obvious from the interruptions that some people think it is not possible to earn that much money. I am concerned only with the principle at issue, because if you carry the point further and take the man, who earns £38,000—£12,000 more still—you find that he is infinitely better off than the man who earns £26,000. I cite these figures to illustrate the peculiar effect which our method of calculation produces. I submit that tax should never equal or exceed 100 per cent. on any increase on income, and if tax is 100 per cent. that should be only at the very top scale. I think it is wrong that on the scale from £14,000 to £26,000 the tax should be more than £1 on every additional pound of income.

He can give some of it away.

And make a profit. It would be comparatively simply to change the method of computation, and by doing so we could arrive at a sounder basis to tax high incomes, and it would give positive results. I cite these as some of the points which the Committee could investigate to good advantage, and to drive home the advantage of having such a committee. Time does not permit mention of others of importance. I hope the Minister will give careful consideration to the advisability of establishing such a committee instead of the invitation which he gave to various bodies. The bodies are spread all over the country and are numerous. People are very busy in these times and it is difficult for them to come together and to try and reach decisions by means of correspondence is virtually impossible. Interests do conflict up to a point, and it is for the Minister to deal with the divergent views. It is hardly for the private individual to do so. Let the Minister set up a committee and see how these many difficulties can be overcome. I agree with what the hon. member for Vasco (Mr. Mushet) has said. There is a growing tide of opposition to our taxation system on account of its tremendous complexity and inequity. It is not against the amount of taxation, but if one man pays several times the amount of tax which another man with a similar income pays, one cannot wonder at the one objecting. And that is happening today. It is men like that—it is cases like that which cause the trouble, and such a state of affairs should be remedied, and the sooner the whole problem is tackled in an objective way the better.

†*Mr. J. H. CONRADIE : I notice that the amendment proposed by this side of the House is having a fair amount of support from hon. members opposite. I notice that hon. members opposite are inclined at the beginning of their speeches to adopt an attitude as though they do not agree with our amendment, but eventually it turns out that the contents of our amendment are in accordance with the general feelings expressed in this House. I therefore hope that the hon. the Minister of Finance will be influenced by these feelings, and will realise that the day has arrived when he should listen to this side of the House because we are making converts on his side of the House. We have been educating the people in regard to economic and industrial matters, and the great industrialists in this country today all agree with us when we say that protection should be the country’s policy. The hon. member who has just spoken, and the hon. member for Vasco (Mr. Mushet) too, said that certain things could not happen. Possibly these things cannot happen if we judge the matter by what has occurred in the past, but time causes people to change their opinions and circumstances have taught us to put our heads together and to try and achieve the very best in the interest of the country. There is the hon. member for Vasco. He apparently thought that we had said that the gold agreement should be entirely rejected. All we ask is for a revision of the agreement, and from a legal point of view there is nothing wrong in wanting a new contract if one finds that the existing contract is detrimental. There can be no objection to arrangements being made in that direction. The hon. member does it every day in his own business. If he makes an agreement to deliver certain quantities of goods from his factory and he finds afterwards that it will suit him better to make a different agreement, and that having a different agreement will lead to better development of his industry, the hon. member would be the very first to try and get his agreement revised. The hon. member for Vasco is one of those who has come over to our side in regard to industrial development. Let him follow us in this respect as well. It is simply business—it is a business transaction. If we find that a tremendous profit is being made on the sale of gold, why then should that profit go to the Bank of England which is nothing but an agent? That bank re-sells the gold to other countries. We say the big profits should come to South Africa.

Which other countries?

India, Egypt, South America. These are facts which the hon. member cannot get away from, and if the contract is reviewed it will be unnecessary to take this £1,850,000 out of loan funds on behalf of the native workers in the mines. The mines will then be able to do the thing themselves. The Minister of Finance in his Budget speech said that the mines were a languishing asset. Well, if the Minister sees to it that these big profits are not made overseas he will probably have no cause to make a statement like that. We have an article here which is required all over the world, in neutral countries, and in certain parts of the British Empire, and we should derive the greatest benefit from its sale. The hon. member for George (Mr. Werth) rightly said that in the interest of South Africa we should try to obtain a revision of the agreement. The Prime Minister, when his attention was drawn to it, said he would try to do so. When the hon. member for Waterberg (Mr. J. G. Strydom) brought the matter up in this House a few years ago the Minister of Finance started thinking in that direction, and he eventually succeeded in saving £1,850,000 for the State out of the transaction, but a great deal more can be rescued today than was rescued in those days. Now, in regard to the commission of enquiry which we have proposed the hon. member for Vasco started off performing a sort of egg dance. He first of all said that we should leave it to the universities to investigate the whole matter. Then at the end of his speech he pleaded very strongly for the appointment of a commission such as was proposed by us. Surely, if there is one thing which we all want in this country, it is that the taxation burden should be divided equally, so that the man with a small income will not be taxed out of all proportion, and thus find it impossible to meet his obligations. It is for that reason that we on this side of the House are pleading the cause of the lower income group. The hon. member for Vasco says that the standard of living in this country has gone up. Let me tell him that it has not gone up so far as the lower income group is concerned. If you take a man who today earns £20, £30, or £35 per month, especially among the working men, you will find that they are suffering great hardships. One often wonders how they can manage to make ends meet. Let us take a few items. Take a family of three or four here in Cape Town. I have enquired into a few of these cases. Where the meat account of a family like that before the war averaged about £1 15s. per month it is more than £3 10s. today. Where the milk account—and then they only use milk for coffee and tea practically speaking—used to be 12s., it is 17s. today. Groceries which used to amount to about £2 come to about £4 5s. per month today. But the hon. member for Vasco says that they are living at a higher standard. Will the hon. member explain how they can possibly do so? I have mentioned only three items, and yet the Minister comes along and makes it compulsory for them to save. They find it difficult to save anything at all; they are not able to do it. The hon. member says : “There is a sense of unreality abroad.” That is the position in regard to the lower groups. How many of the Railway officials and public servants can come out on an income of £300 or £400? It is beyond me to see how a man with a family of four or five children can manage to feed, clothe and enable his family to live a decent life. And those are the people who constitute the stable section of our population. These are the people who are not subject to all kinds of influences, and that is the section we have to look after, but the Minister does not pay any attention to those people. This is the class of man to whom it is a calamity if he has illness in his home, and he has to pay £30, £40 or £50 to the doctor—if that happens it means that he has to go under. He has to borrow and it means that his income is mortgaged for years. That is why we are making an earnest appeal to the Minister to improve the position of these people, and it is not just the cost of living, there are many other things as well. Insurance has to be paid. These commitments have to be met if they want to provide for the future, and this class of man finds it very difficult to meet his obligations. People with big families are suffering great hardships, and consequently, in spite of everything the hon. member for Vasco has said, we come along with this definite proposal. We are not pleading the cause of the big taxpayers like the hon. member for Houghton (Mr. Bell). He is always pleading on behalf of the stone rich people—he is pleading on behalf of the bachelors earning £14,000 and £26,000. Practically speaking there are hardly any people like that. There are only three with incomes over £20,000. Let the hon. member for Houghton go to the homes of people earning £300 and £400 per year. There he will see how hard these people find it to pay their taxes. But he talks about the very rich who suffer hardships. If a man has an income of more than £2,000 we need not worry our heads about him. Let the hon. member worry about the people with lower incomes. I think it was the former hon. member for Malmesbury (Mr. Loubser) who moved last year that medical and hospital expenses should be deducted from the taxable income. The Minister at that time said that the suggestion was a good one and he would go into it, but he has come to this House and said nothing about it. That is why we feel compelled to plead with the Minister for this concession under which the expenses which people have to pay for medicines, doctors and hospitals, will be deducted from their taxable income. The Minister should realise that this is a very important point. It is not only the man who earns £300 or £400 who suffers as a result of these taxes, but also the man earning £500, £600 and £700. If there is any illness in their homes it is calamatous to them, and the Minister should come to their assistance. The Minister said last year that the House should realise that the time had come when we should build up the health of our nation, and especially the health of the children. To achieve that object we must make it possible for the taxpayer to bear such medical expenses. But if the State makes no concession so far as the expenses are concerned many people are going to suffer serious hardships. I consider that if the Government proposes to carry out the policy which was proclaimed last year to improve the health of the people then this is a point which the Government should carefully consider. Now I come to a specific tax—the tax on wine. If there is one part of the country where people work hard and where you get a stable population, where you get people who so far have never had any help from the State, who have never been a burden on the nation, it is the population of the Western Province, and especially the wine farmers.

They don’t pay tax.

That’s an old story. It is perfectly clear that if their product is taxed the consumption goes down.

That is not so.

Eventually it is the producer who suffers.

The Government has put the wine industry on its feet.

The hon. member probably does not know that if the wine farmer distils his product and makes brandy, and the brandy is kept by him or by the Co-operative Society for three years he gets 10d. per bottle, but the Government puts a tax of 4s. 2d. on that bottle of brandy.

Yes, but it is not the farmers who pay that.

Would the hon. member be satisfied if a tax like that were put on gold? They are always the very first to cry out when a small tax is imposed on them. Here we have a case where the producer gets 10d.—and that is not profit—that is the price he gets, including all his expenses. But the Government taxes the bottle by 4s. 2d. and the consumer probably pays 8s. 6d. and 9s. 6d.

What does a bottle of whisky cost?

I am dealing now with South African brandy. It seems to me that hon. members over there have no sympathy whatsoever with the wine industry. These taxes are too heavy. This is the time for the wine farmer to build up a reserve. Hon. members over there are continually advocating for relief to the companies and to the industries, so far as taxation is concerned, so that they can build up their reserves for the future, but so far as the wine industry is concerned the taxation which the Minister imposes is becoming quite unbearable. Last year they were faced with a surplus of 47¼ per cent., and the Minister does not show any goodwill towards the industry, nor does he enjoy the goodwill of the industry. During the last financial year, according to the final figures, the Minister collected £3,500,000, and the wine farmers, for the product on which the Minister collected £3,500,000 in taxes, did not even get £400,000. This year the Minister deems it necessary to tax the wine farmers by a further £600,000. Hon. members over there have no sympathy with the wine farmers. Let them proclaim in the Western Province that they support the taxation policy. In 1939 we got £4 4s. 3½d. per leaguer, and last year we got £5 0s. 6½d., an increase during the course of the war of a little less than 20 per cent. Is there any other industry, is there any other branch of the farming industry, in which the increase in these years of crisis has been only 20 per cent. while the increase in the cost of living according to the Government itself has already gone up to 27 per cent.? There is only one other group of farmers who come in practically the same category and that is the wool farmers. The wool farmers, with prices as they are today, have only got on increase of 24 per cent. in their price. The wine industry in the Western Province is entitled to be supported. In the past the farmers of the Western Province have never approached the Government for help; they have always arranged their own affairs. It is for that reason that the Western Province farmers contend that this action of the Government’s in imposing such an increase in taxation so far as their product is concerned—should meet with the strong disapproval of the House, and I hope the Minister will consider this whole question and will next year not come with another increase. If the Minister wants to tax the liquor industry in the Western Province to such an extent that it cannot carry on, let him be honest and tell the public that he does not want any wine farmers in this country. Then we shall know where we stand, but we consider we are entitled to exist. We are the most settled section of the population. We have had a great share in the development of the country’s culture, certainly more so than any other section—although I do not want to belittle the contributions made by other sections. We consider that the Government is imposing an unfair burden on the wine farmers, a burden which they cannot stand.

I want to give the Minister a hand if possible. As a result of his taxation proposals this year, there has been an outcry in certain circles of the mining industry that some of them will have to close down because they can no longer bear the burden. I want to assist the Minister by telling him that the younger generation in South Africa may perhaps believe this story, but I hope that the Minister, as one of the experienced statesmen of our country, will not allow himself to be bluffed and persuaded and influenced by the propaganda which is again being made today, namely, that some mines will be compelled to close down owing to the Minister’s taxes. It is a bluff of the first magnitude. I want to draw the Minister’s attention to the fact that this story of closing down mines is as old as the mining industry itself, and I want to strengthen the Minister’s hand by reminding him of the fact that not one of the mines which was going to close down in the past as a result of taxation, or for some other reason, did in fact close down. They are again coming forward with this old story. I think it is fitting that attention should be drawn to the fact that the same propaganda was made in 1932. At that time the then Government thought it necessary to appoint a commission to investigate the matter, and we are now getting the same story from the same mines, namely, that they will close down. We are again getting this propaganda today which we heard in those days. At that time they wanted to undermine and to bring about the fall of the Government of the day. They tried to do it in a very clever way and attempted to make the Government unpopular. They tried to influence public opinion against the Government.

On which side are the mines today?

If the hon. member thinks that they are on the Government’s side, he is making a great mistake. Today they are adopting the same methods which they adopted in 1932. They are again coming forward with the old story that the mines will have to close down, äs they did in 1932. Their first argument then was that there were mines of such a low grade ore that they could no longer continue. They then adopted three methods in order to make the Government unpopular. Their first aim was to reduce the wages of the mine workers and in order to gain the sympathy of the public they said that the mines would all have to close down. Today they say that costs of living have risen, and that thev must therefore have more money. I now want to reply to the Chamber of Mines by reminding them of the case which they made out in those days. What did they say in those days in order to gain the sympathy of the country and of the Government? The mouthpieces of the mining magnates, Messrs. Farrer and Gemmill stated that as—

1. (i) Wages are by far the most important factor in the working costs of the mines, which pay out, directly and indirectly at least 13s. per ton milled in salaries and wages within the Union;
2. (ii) the level of wages on the gold mines largely sets the standard of wages throughout the Union;
3. (iii) there has been a reduction of 10 per cent. in the Witwatersrand cost of living since mine wages were fixed at the beginning of 1927,
4. (iv) a 10 per cent. reduction in mine salaries and wages from top to bottom, followed by a similar reduction throughout the Union, would reduce the existing mine working costs by at least 1s. 4d. per ton milled;

Those were their methods. Another method was to cause unemployment among the mine workers. They said that there were European mine workers who were supposed to be redundant. “There is a large number of redundant European mine workers on the mines.” The Gold Producers’ Committee on page 60 of the same report stated that they were convinced—

This was another method which they adopted. One method was to reduce wages; the other was to throw people out of employment. That is what they want to do today too. The other method was to intimidate the Government by saying that the ore was of such a low grade that they could no longer exist. That was in 1932, but they are still mining today. What were the working costs at that time?

They were able to continue because they obtained more money for gold.

They said that their working costs had risen. They remained more or less the same. In some years it was reduced by 1d. per ton; in other years it increased by 1d. per ton. But throughout that time they did not close down. When we go back to 1920, we find the same state of affairs. There we find the same names of mines, such as City Deep, Witwatersrand Deep, Robinson Deep and others which, it was stated, would have to close down. Not one of them closed down. And those which were closed down in name were worked by other mines. At that time a similar threat was made, but not a single mine closed down. They only want to frighten the Government. Their method is to intimidate the Government. They want to gain public sympathy with their mighty press machine. They make propaganda so that Uncle Tom and Uncle Dick and Uncle Harry in the platteland will later begin to sympathise with the mining industry. That is the whole object of this propaganda. They want these people to come to the Govern and beg the Government not to have the mines closed down. The whole object is to intimidate the Government with their mighty propaganda machine. The Chamber of Mines is afraid that the Government will say: “You have not treated your mine workers fairly; you must give these people an increase in wages.” In the past it was the Chamber of Mines itself which advanced the increased cost of living as a reason why an increase in wages should be granted. The time has now arrived when the Government ought to advance the same argument to the mines and compel them to grant increased wages in view of the increased costs of living. We must use the same weapon. It is not we who said that the wage scales should be based on the cost of living. It is the most important employers of South Africa who stated that, and we ought to advance the same argument today. We on this side ask the Government not to allow itself to be influenced by that propaganda on the part of the Chamber of Mines. Let the Government have the courage to say to the Chamber of Mines: “Close down if you like, but I you close those mines we are going to take them over.” I make an appeal to hon. members to support the Government if it tells the Chamber of Mines that if it closes down those mines the Government will reopen them tomorrow. Let the House speak with one Voice and say that to the Chamber of Mines. If that is done I am convinced that not one of those mines will be closed down.

Who is going to pay for the losses?

I suppose the mealie farmers.

Let me now deal with another aspect of the matter. I believe it is the intention of the Government to give a subsidy to the Chamber of Mines in respect of native wages, but I as well as other members in this House would be neglecting our duty if we did not protest strongly against the payment of that subsidy. Those mines are making enormous profits, and we now propose to give them a subsidy. They are making enormous profits, but the country is expected to give the mines monetary assistance. We are now expected to say that in spite of the fact that the mines are paying record dividends we are going to subsidise them. That is a dangerous principle. Up to the present, as far as I know, not a single stipulation has been made that that money will only be used to assist mines which develop a low grade ore. No, the rich mines can also get this money. I hope the Minister will not persist with this policy.

It is an old policy; it is the policy of the previous Government.

Since that industry is making record profits and paying record dividends, this House cannot agree to that money being given to the mines, in order that they may ostensibly pay it out in the form of wages. If there are mines which deserve it, it is a different matter, but we certainly cannot agree to the payment of a subsidy to all mines, rich as well as poor. What sympathy has the mining industry got with the Government of this country today? The mines are not being developed in the interests of the country. They are being developed only in the interests of the mining magnates. Whenever the Chamber of Mines can intimidate the Government and exploit the people and frighten them by means of their powerful Press, they do so on every occasion, and I want to protest most strongly against the payment of this money to rich mines.

Give us the names of the mines.

And then I want to say that I am also in favour of the lower-paid native, the native who earns 1s. 8d. and 2s. per day, receiving more than the proposed increase of 3d. or 4d. per day, and that gentleman who earns 5s. or 6s. per day should not receive any increase at all. I shall tell you why I say that—because the man who does the donkey work of the mines is the Xosa and the Basuto. The gentleman in the mines is the Mashangaan; he gets the best appointments in the mines; he receives the highest wages, and if any increase has to be granted at the expense of the State, it must not be granted to natives who live in the Union for a short while and then return to their own territories. These natives who are imported from across the borders receive the highest wages. They ought not to receive any increase. If an increase is granted let it at least go into the pockets of the Union natives, and not into the pockets of the natives who are imported from outside the Union. I now want to come back to a remark which the hon. member for Vasco (Mr. Mushet) made here this afternoon. He said that the standard of living today is undoubtedly higher in this country than it has ever been. I do not believe that that statement is correct. It is only correct in the case of the man who was out of employment before the war, but the man who earned £30 a month before the war and who did not receive an increase of 27 per cent. in his wages, must today be on a lower standard, because he cannot afford to buy as much meat and as much clothing as he could buy before the war. The cost of living has risen by 27 per cent., but his wages have not increased by 27 per cent. That is surely logical. That argument on the part of the hon. member does not therefore hold water. It is only the man who was out of employment before the war who is in a better position today. But the people who were in employment before the war and who have not received an increase of 27 per cent. must obviously be in a worse position today. Then I just want to say this too. The Government is trying today to adjust its system of taxation in such a way that it will lead to the development of industries. Industrial development is definitely dependent on a protective policy. The Gold Producers’ Committee is, however, unanimously and 100 per cent. opposed to a protective policy. Whenever the Government proposes to protect other industries in this country, they rise as one man and say that they will have to pay for it, because they tell you that they can import the articles more cheaply, but when it affects them, they do not hestitate for a moment to throw 2,000 Europeans out of employment, and even to recommend a reduction of wages. I want to say this to hon. members who want to base the whole politics, the whole economic policy of the country on the mining industry: They will have to modify that view; they will have to alter it. We must not forget that the mining industry, to a great extent, has the power to smother other industrial development in South Africa. The mining industry is responsible for the fact that our secondary industries in this country are today on a low level, because the mining industry has opposed a protective policy tooth and nail in the past. The secondary industries must be sacrificed in order to comply with the wishes of the mining industry.

The mines are also establishing secondary industries today.

That is true; the mines are also going in for the development of secondary industries today. But those are the very industries which they opposed in the past; why have they suddenly changed their policy? It is because they want those industries under their wing; they do so because they realise that an attempt is being made in this country to develop those industries, and the Chamber of Mines wants to have a monopoly when it comes to influencing the Government. They want to have the sole say. The Chamber of Mines is afraid that if those industries develop on their own, apart from the Chamber of Mines, the influence which they have on the Government today will disappear to a certain extent. They are afraid that those industries, once they develop, will also be able to exercise an influence on the Government. But these other industries which the mines now want to develop are under the protection and under the thumb of the mines. Perhaps hon. members do not realise that the Chamber of Mines has the most perfect economic and political organisation which the country has ever seen. Their organisation is more effective than the organisation of any other industry in this country ….

In other countries too.

I am confining myself to South Africa. In 1922 the same propaganda was made. The Chamber of Mines then imposed its will on the Government. It discharged 5,000 European mine workers for the sake of cheap labour. In 1932 the Chamber of Mines again had its way, and the Chamber of Mines is again playing this role for the fourth time, namely, to show the Government how strong its influence is. They want to have the whole economic structure and the whole economic life of South Africa under their control, and it is for that reason that it is the duty of the House to strengthen the hands of the Government and to give the Government our word of honour that we will support it, that it must not submit to the present propaganda of the Chamber of Mines. This is nothing but talk on the part of the Chamber of Mines which is calculated to frighten the Government. I realise that, but in the past they succeeded with their scaremongering, and we must prevent them from again succeeding in intimidating the Government. We have a voice only in the House. Our voices go no further than these walls, but the Chamber of Mines controls the Press and whatever they want to propagate is read throughout the whole Union the same night. They again want to intimidate the Government, and it is for that reason that I rise to raise my voice in this case. I rise to break a lance for those workers who earn these large profits for the mines, those workers to whom the mines owe their big dividends. They are now asking for a small portion of those profits which they earn, but again the Chamber of Mines comes along with its scaremongering, and they are making propaganda throughout the Union. I am afraid—and I have every reason to be afraid—that the Government may at some future date pay attention to the propaganda of the Chamber of Mines. Since the Chamber of Mines, for the third time within a comparatively short space of time, wants to exercise its influence on the Government, I make an appeal to the Government to stand firm, and I make an appeal to all hon. members in this House to stand by the Government in this struggle. Hon. members will not hold it against me if I say that there is a great difference of opinion even in the ranks of the United Party in connection with this question, and I believe that there is also a great difference of opinion in the ranks of the Nationalist Party in connection with this matter. We must choose whether we are going to submit or whether we are going to compel the Chamber of Mines to do justice to its workers.

The Government has already submitted; you are still talking about submitting.

This question is under discussion at the present time. If I am not mistaken, that decision must have been taken during the past few minutes. If the Government has yielded. I feel sorry for South Africa. I make a final appeal to the Government not to yield, but to say to the Chamber of Mines: “Whether you close down or not, you are going to give that 30 per cent. to the mine workers.” The Government must take a firm stand. Let me remind the House of the fact that on the 21st March of this year this claim on the part of the mine workers was ten years old, and ten years ago when they asked for an increase the Government said: “You make me laugh.”

And they are still laughing.

It was because of that statement: “You make me laugh” that I became a member of this House. Hon. members must not say that the mine workers are coming forward with a new claim. I was sent to this House for no other reason than that the Government of that time said to the mine workers: “You make me laugh.”

If you persist you have a chance of a Cabinet appointment.

You “laughed with” the Government during the last election.

Since the hon. Minister is now partially refunding the taxes levied on the mines, I want to make an appeal to him not to give the subsidy to those mines who make huge profits. In the second place, the Union natives should receive the benefit of that increase in wages, and not the imported natives. In the third place, I ask the Government to tell the Chamber of Mines that it is firmly resolved that the workers must receive a reasonable share of the profits which the mining industry yields, namely, that increase for which the mine workers are asking today.

It is with great pleasure that I associate myself with the motion which was introduced this morning by the hon. member for George (Mr. Werth). When we come to the first point contained in that motion, we cannot but protest most strongly against this £1,800,000 which is being taken out of loan funds in order to assist the native labourers on the mines. As the hon. member for Krugersdorp (Mr. Van den Berg) has just explained, it is not only a question of those moneys going to the mines which need assistance: it will go to all the mines, to the rich mines as well as the poor mines. It seems to me that this case is again taking us back to the old days of 1917 to 1924 when the Government of the day, as soon as its funds ran low, simply went to the Treasury and drew loan moneys in order to cover current expenses. Today we are reverting to the unsound policy of those days, and we on this side cannot but protest, and we feel that we must pertinently bring it to the notice of the people of South Africa that we are repeating the same big mistakes which were made at that time, and we have no doubt that those mistakes will again bring about the same upheaval in this House and produce the same result on the minds of the people as they did in 1924. The value of our gold production last year was in the neighbourhood of £107,500,000.

What was it four years ago?

Look it up, my friend.

That is the whole point.

If our gold had been sold to India, for example, or if we come to an arrangement with the Bank of England to sell this gold for us where the best prices can be obtained, at a price which is approximately £16 per fine ounce in India today, the gold production could yield nearly another £100,000,000 for South Africa. That is a figure which is equivalent to our total annual expenditure, both on the war and in respect of normal expenditure. There is an unusually great demand for gold not only in India; that demand exists in Egypt and in all the neutral countries of Europe, in all the States of America, and in all those countries the price is infinitely higher than the price which South Africa gets under this arrangement. Even if we take the price which was given this morning by the hon. member for George, a profit of a few million pounds is still being made on our gold—even if it is taken at the price which even America pays for it. Why should we forego such huge sums simply because we entered into a bad contract or a bad “gentleman’s agreement?” When we think of the taxation burden which rests on South Africa today, not only on the rich man but also on the poor man and the middle class man, and especially on the middle class man, we feel that the time is overripe for the Government to institute a thorough investigation, and to obtain the maximum for that gold which is our gold. We have no objection to the Bank of England making profits, only because it happens to be the Bank of England; our objection is based on the fact that the money does not come into our own coffers. We have the same objection to the speculators in America or the Federal Reserve Bank of America making that profit. Another question which seems strange to me is that the native labourers in the mines now suddenly require so much additional remuneration in the existing circumstances. I served on numerous commissions and for lengthy periods, where the Chamber of Mines and the Gold Producers’ Committee specially emphasised the fact that the protection of secondary industries merely amounted to this, that State money and public money was being paid in order to pay a small group of skilled labourers excessive wages. Today those same mines are receiving a subsidy from the State, moneys which they know are derived from loan funds. The cost of living of the natives who work on the mines has not increased to such an extent; on the contrary, I cannot see in what way it has increased. The mine native receives free housing; he receives free food from the mines; he gets his working clothes and all his equipment from the mines. All that happens is that when the native returns to the native territories outside South Africa, he takes more money with him from the Union.

How much money does he take home?

If the hon. member for Hospital (Mr. Barlow) does not know that yet, I think he is a little late.

You are still young.

When we come to the question of estate duty, we on this side do not object to the taxation limit being lowered from estates valued at £15,000 to estates worth £10,000, but we feel that succession duties represent a more reasonable form of taxation. It is surely not reasonable when a man leaves a big estate to one son, that that estate should pay the same tax in the form of estate duty as an estate where the inheritance is left to ten children. The object is an even division of wealth, and if that wealth has to be divided amongst ten persons, it is not reasonable that the taxation burden should be the same as in the case where the money is left to one person. In order to effect a more even division of the riches of the country, it is necessary that the estate duty in the case of one heir should be much higher than in the case of ten heirs. The other point which I want to raise is this. We feel that the duty on the huge sums of money which are frequently left in this country, for example in estates exceeding £100,000, coulld be even higher than it is today. Then we come to the question of stamp duties. These stamp duties which are levied on brokers’ notes are laughable; it is really a joke, but it is a serious joke. It is a joke which will find its echo in this country, and which will invoke a serious protest throughout the country. If both the broker’s note and the purchaser’s note have to bear a half-crown stamp it amounts to 5s. per £100; in other words i per cent. It surprised me that the hon. Minister did not blush when he proposed this to the House. When we compare this with the form and the amount of taxation imposed on other forms of speculation, it is really incomprehensible. Some years ago the hon. Minister moved a tax of 6s. 8d. and 13s. 4d. in the £ on the sale of land. The Minister then stated that we must prevent speculation in land in order to avoid inflation. If speculation in land and rising land prices promote inflation, I would like to know from the Minister what the effect of speculation in shares is, and what the effect of rising prices in shares is, if it does not promote inflation? On that occasion the Minister of Finance proposed that the tax on the transfer of property—and the majority of properties which are transferred are sold at more than £2,000—would be 4 per cent. If that property belongs to a railway official or a civil servant as is frequently the case in my constituency, and they acquired that property because they were transferred to Pretoria from Cape Town three years ago, and they are subsequently re-transferred to Cape Town and they happen to make a profit on the sale of that property because they planted flowers, because they improved the property, they have to hand over 13s. 4d. in the £ out of the profit they make. In addition to that, 4 per cent. must be paid on the transfer. The Minister will say that the purchaser pays it. But it still comes off the price, because if it had not been necessary to pay that percentage on the transfer, the purchaser would have been prepared to pay a higher price. Then there are still stamp duties, and I make bold to say that those stamp duties are as high as the stamp duties on brokers’ notes. It is a rule of the Inland Revenue office that if a person puts through more than three property transactions per year, he is classified as a dealer in property, and he has to pay an additional 4 per cent. on the transfer. And in addition to the profit tax on fixed property, he still has to pay income tax and supertax on his income. I know of cases where persons paid as much as 18s, 4d. in the £ by way of taxation on property transactions; and how the Minister reconciles that with the stamp duty of 2s. 6d. per £100 on brokers’ notes, is a puzzle to me. It may be true that people have made fortunes out of property but I make bold to say that the biggest capitalists have made their fortunes on the share market. It is the big capitalists who remain at home, and who give telephonic instructions for shares to be sold; the people who, at the expense of the ordinary worker and the middle class man, are able to push the share market in any direction in which they want it to go, who make these fortunes. They make colossal fortunes on the stock exchange, and if they make £10,000 or £100,000 out of share speculations, they do not pay a farthing tax on it, except the 2s. 6d. per £100 in stamp duty. They do not pay an income tax on the profits derived from speculation. It passes my comprehension. Can one be surprised that we on this side ask for a commission of investigation to investigate the burden of taxation in our country? I should like to repeat once again that it is not only a question of big speculators, but every civil servant, every railway official and the ordinary man whom we try to encourage in every possible way to become the owner of his own property, so as to save something concrete during his lifetime, is hit by these taxes. If that type of person has the fortune to make a few hundred pounds on the sale of property, he has to pay the taxes which I have already indicated. When we come to the question of the Excess Profits Tax, I feel that we are also dealing with a very important matter, a tax which operates unfairly. The man who made his fortune before the war, who had a big income—the medical man who made £15,000 before the war—is dealt with much more favourably than the man who started during the war, because as soon as he earns £1,500 he has to pay Excess Profits Tax. Why should the person who started after the war, who was forced by fate to start during the war, be specially penalised? That is surely not the intention of the Government and of the Minister of Finance. I cannot believe that they want to penalise the young man who starts in a profession and the young industrialist and business man, in this manner. In my own constituency I know of cases where young men started without a penny, but they worked themselves up and today they are successful business men. In the present circumstances they simply cannot pay the debt on their buildings. In these days when everything is expensive, they have to pay the highest prices, and they have to buy or erect buildings at the highest prices. The building may have cost £50,000, and they may still owe £40,000 on it. The tax makes it impossible for them to pay off this debt, and if there is a setback after the war with the result that the value of those buildings falls to, say, £25,000, everyone of those companies or persons will be bankrupt. This is no political question. It is not a racial question, it is only a question of the best interests of these young people and these new businesses in South Africa. It is a question of the interests of our young professional people, our young technical people and our young business people. We must give the business man an opportunity to get on his feet, because if we come up against bad times after the war, it will be a blot on our name in South Africa if we are responsible for the insolvency of these young industries and businesses which have come into existence within the past four or five years. I cannot believe that it is not possible to introduce a steadily rising scale of Excess Profits Tax. The hon. member for Vasco (Mr. Mushet) discussed the same question the other day and he suggested that a committee be appointed to go into each case specially. The Minister then stated that something of that kind already existed but the existing body has not got the power to investigate cases where a man contracted big debts and where the danger exists that if the value of his buildings and property falls during a depression after the war—and falls very considerably—he will inevitaby become bankrupt if we now prevent him by means of the Excess Profits Tax from redeeming those debts. I feel that we are here dealing with a matter which should receive our most serious attention. We must not only look at the enormous expansion which we expect to come about. We all look automatically to the beautiful dawn, but frequently the dawn breaks to the accompaniment of a thunderstorm and a hailstorm. When we come to the question of the specific customs duties which the Minister of Finance now proposes to change to ad valorem duties, I cannot but congratulate the Minister. A specific duty must be avoided wherever possible. The Minister of Finance will realise that ultimately it is an inequitable form of taxation. Assuming we take a piston which costs a shilling. The specific duty on that is one penny. If the price rises to 3s. or 4s., the specific duty still remains one penny. I hope the Minister will adopt the attitude that as far as possible all specific duties will be removed in the future. I know that the Minister will say there are cases where he has no alternative. But these specific duties were brought into our tariff since the depression period from 1929 to 1939 and they were brought in mainly because it is a hidden tax and afforded protection in a hidden manner. Of course, in times of falling prices specific duties afford a high measure of protection, and that is why everyone favours specific duties. But in times of rising prices it yields not only less income but affords less protection. From the very nature of things it is therefore an unsatisfactory type of duty, and if it can be avoided, it should be avoided. I am glad that circumstances have practically compelled the Minister and the Administration to alter this tax. Then there is another question which I should like to bring to the notice of the Minister and that is in connection with 147 F, namely tractors. The price of tractors has risen enormously. They are almost unobtainable. I was given to understand on making enquiries that the Minister is now restoring the tariff to the pre-war ad valorem duty of 10 per cent. What I feel is this, that in these difficult times our farming community has to pay so much for tractors that the Minister must take steps to provide them with tractors as cheaply as possible. Since the price f.o.b. of the tractor has risen from £200 to £400, a duty of 10 per cent. means that the farmer does not now pay £20 only in import duty but £40, which means that the ad valorem duty has practically doubled in comparison with the previous basis.

I think the hon. member should rather deal with that matter in the Committee stage.

Then there is a further point which I would like to raise, and that is the question of the alteration of the customs tariffs in the whole section which includes leather. This also applies to the responsibility of the Board of Trade and Industries in that connection. I have gone into the report. These alterations relate to a whole series of items from 254 to 256 E. It is not a matter which can be disposed of overnight. We are dealing here with an extremely important matter, because our whole footwear industry is based on this question of protection. The report of the Board of Trade and Industries simply states that they had an interview with the Commissioner of Customs and Excise and they recommend therefore that those alterations be brought about. No reason whatsoever is given. It is not stated that they investigated the matter and that they make this recommendaion for this, that or the other reason. The reports of the Board of Trade and Industries are laid on the Table and the object of that is to enlighten the House as to the reasons why such radical alterations are brought about. I make a serious appeal to the Minister to see to it that in future the Board of Trade and Industries gives the House intelligent reasons for such alterations. What does it convey to this House when such a series of alterations are recommended and it is simply stated that those recommendations are being made after discussions with the Commissioner of Customs and Excise. We do not even know whether those discussions led to a proper agreement. Very often the Board of Trade and Industres have differed from the Commissioner of Customs and Excise, and he in turn has differed from them. That is only human, and it is also desirable. But we must know the reasons why these recommendations are made. If these additional duties are imposed on leather, if these duties are made ad valorem duties, what will be the effect on the footwear industry?

The footwear industry is satisfied with it.

At the moment they are satisfied because the prices they obtain for shoes are so high that they can bear the duty. The price of leather is so high that the duty does not affect it. But I feel that after the war, when there is a depression and when the footwear industry is again faced with ruin, as was the case after the previous war, the Minister of Finance will again have to receive a deputation from shoe manufacturers who will again tell him that they will use their influence to get the Government thrown out if it does not come to their assistance. It is for these reasons and also other reasons which hon. members on this side have given, that we feel that it is necessary to have a committee or commission to investigate the whole question of taxation burden in our country. It is not only necessary for such a commisison to go into the direct taxation burden, the effect of the taxes which the Minister has put before us, but it must also go into the indirect taxation burden on the people. It is extremely necessary to make a thorough investigation into the indirect taxation burden on the people as a whole. The indirect taxation burden affects the total amount of taxation which the people can bear. The indirect taxes always remind me of the man who sent in a claim for shoes, and the head office refused it. The next time he again submitted a claim and this time it was approved. The shoes were included, but he omitted to mention it. Indirect taxation is a hidden matter. It is necessary to institute a thorough investigation. We started with our taxation in 1910. We took the taxation systems of the four provinces, mixed them a little, and eventually we accepted it as the taxation system for the Union. Our taxation has received attention from time to time in special directions, as for example, the customs tariff. But as far as I am aware no thorough investigation has yet been made since the establishment of Union into the taxation burden as a whole. If such an investigation is undertaken, I want to make a special plea for the working class man, the middle class worker. It is the middle class man who is really the backbone of this country. When I look at the thousands of Railway officers, officials and workers in my constituency, and together with them, I calculate what the actual taxation burden is which falls on these people, we see that there are many inconsistencies and that those people experience great difficulty. If the Minister takes a few families and works out their necessities, if he considers the direct and indirect taxation burden which rests on them, he himself will be surprised. It is for that reason that we feel that a commission of investigation should be appointed in order to investigate the whole taxation system thoroughly. We notice in the first instance that the costs of living have risen enormously. The Department of Census and Statistics gives us the figure of 27 per cent. I have every respect for that department. It has done excellent work and has always received credit where it deserved credit. But I doubt whether that figure reflects the true position. If we buy shoes or any article of clothing which we require from day to day, we find that the price of those articles did not rise by 27 per cent. but much more. At the same time the purchasing power of our money has fallen immensely. If we take the position since 1914, we find that generally speaking prices have increased by 110 per cent. That means that the purchasing power of the pound is considerably less than half its purchasing power in 1914. In 1910 the purchasing power was even greater. When we take all this into consideration we realise why the middle class man finds it so hard to make ends meet. It is actually the salaried person on the Railways, in the Civil Service, and the ordinary man who has not made colossal profits on the share market or elsewhere, but at whose expense those profits are made, who can no longer bear that burden of taxation, and it is in their interests and in the interests of the people as a whole that we on this side move this amendment, and it is for that reason that I support it heartily. I should like to make an appeal to the hon. Minister of Finance and explain that this is no political matter; it is a national matter. It is not a matter of this, that or the other party; it is a matter for all parties and for the whole country and the whole nation. I shall be very glad therefore if the Minister of Finance will regard this matter in that light and if he will agree to accept our request for a full investigation.

The hon. member for George (Mr. Werth) asked this morning, inter alia, whether the Minister of Finance intended taxing the tobacco industry out of existence, and if I am not mistaken there are two members on the Government side who since the Minister’s Budget speech told the House that they were opposed to the increased excise duty on tobacco and cigarettes. Now let me tell the Minister of Finance that the tobacco farmers are very upset at this tremendous tax which he is forcing on to the tobacco industry—viz : the tax on tobacco and the tax on cigarettes. Year after year, since the outbreak of war, the Minister of Finance has come along with an increased tax on tobacco and cigarettes. Let us take a few figures in that connection. I am not taking the financial years but the calendar years. We find that in the year 1939 about £1,500,000 was obtained from the tobacco tax. In the year 1940 it was about £2,000,000; in 1941 it went up to £3,500,000; in 1942 it was £4,500,000—last year it was about £6,000,000 and this year, with the increased tax on tobacco and cigarettes—provided the consumption does not drop—the Minister will get round about £7,500,000 out of this source of taxation. Now let me say this to the Minister of Finance, that since 1939 he has this year demanded five times more from the tobacco farmers than he got from them in 1939.

Not from the farmers.

Yes, from the tobacco industry. The farmers also smoke. As a result of these taxes the consumption may drop, and the effect will then be that this tax will have a handicapping effect on the tobacco industry as a whole. I want to point out that time after time a larger tax is being put on the tobacco farmers. It is nothing but a mad taxation rush, and I want to assure the Minister of Finance that so far as the tobacco farmers are concerned they look upon him as a man with an insatiable swallowing capacity so far as the tobacco tax is concerned—but not so far as tobacco is concerned. It is only a Minister of Finance who does not smoke who would adopt such a hard-handed and merciless attitude towards the tobacco farmers of this country.

The poor farmers have to bear everything.

I am talking about tobacco now, but the hon. member over there is talking rubbish. Let me assure the hon. the Minister of Finance that the tobacco farmers are fully aware of the fact, and fully realise the great danger this tobacco tax means to the tobocca industry. The tax which is being imposed is to my mind a very great danger to the tobacco indutry. As hon. members will recollect, one of the biggest tobacco co-operative societies, the M.K.T.V. lodged a strong protest last year with the Minister of Finance against his increased excise duty on tobacco. If I am not mistaken the Central Co-operative Growers Association, which represents 11 tobacco co-operative societies, lodged a violent protest. Against the increased tax on tobacco, and I want to assure the Minister that he will have the very same thing again this year. The Minister has time and again put up the argument that this increased tax is not going to affect the industry because the consumption remains consistent, and he himself said that in spite of the increased tax there was going to be an increased consumption. The Minister will admit that that argument does not hold water. The hon. member for Potchefstroom (Mr. Van der Merwe) admitted the other day that the consumption of certain types of tobacco already dropped by about 24 per cent. The Minister therefore made a mistake when he used that argument, and it is therefore not to be wondered at that tobacco farmers are lodging emphatic protests against this increase in the tax, and I am convinced that the M.K.T.V. and the other organisations will again make themselves heard in protest. The hon. member for Rustenburg (Mr. J. M. Conradie) said that he could not protest because the growers had not yet protested. Well, they have done so in the past and I am convinced they will do so again, and that being so we are fully entitled to make ourselves heard here in opposition to this increase, and in opposition to the tremendous taxation burden which the Minister is putting on this industry in South Africa. But I think the farmers have still another reason for complaining that the Minister of Finance is acting in a high-handed way against the tobacco farmers. I have already said that the Minister is expecting about £7,500,000 this year from the tax on tobacco and cigarettes. Do hon. members realise that the gross income of the tobacco farmers is estimated at £1,600,000? That is the gross income of thousands and ten thousands of tobacco farmers. If production costs are deducted only about £800,000 is left for the farmers. That is what they get; the State gets about £7,500,000 out of the tax, while the farmers get a net income of about £750,000. The ratio between what the Government gets in the form of taxation and what the farmers get is lopsided. The Minister of Finance is continually coming along with an increase in the taxation on tobacco and cigarettes. His attitude towards these people is hard and I just want to ask him this question : Does he intend this tax on tobacco and cigarettes to continue, or will the Minister assure us that this tax is only going to be a temporary one? The hon. member for Vasco (Mr. Mushet) said today that we must not forget that there is a war on and that we must put up with a lot of these things for the sake of the war. He is of opinion that we must be satisfied to justify this tax on cigarettes and tobacco because of the Imperial cry “for the sake of the war”. We want to know what the Minister is going to do after the war? Is the Minister after the war perhaps going to justify the tax on tobacco and cigarettes with the cry “for the sake of social security”. If that is what the Minister is going to do then the days of the tobacco industry are numbered. It will not mean social security for the tobacco farmers in South Africa, but it will unquestionably mean that the tobacco farmers will be doomed in this country. The Minister of Finance has a peculiar way of always trying to justify the tax on cigarettes and tobacco by the increased consumption. We admit that as a result of war conditions and as a result of the convoys which passed through here, and also because we are supplying smoking materials to our troops up North, there has been an increased consumption.

But at the same time we always have this unfortunate position, that as soon as the Minister of Finance talks of an increased consumption of cigarettes and tobacco he is looking at this industry with the rapacious eyes of the man who wants taxes, instead of regarding it as an opportunity for the tobacco farmers to get on a sound footing after all these years of difficulty which they have had to pass through. That is the point of view which the tobacco farmers want the position to be looked at. This is the psychological moment to put the tobacco industry on a sound basis instead of ruining it by increased taxes because there is an increased consumption. We should avail ourselves of this opportunity to strengthen the tobacco industry instead of breaking it down. I want to say this to the Minister of Finance, that if there is one industry which should be protected in South Africa it is the tobacco industry. The tobacco industry has for many years been in a most deplorable position. If the Minister were conversant with all the difficulties with which the tobacco farmers have had to contend he would not have increased his taxation burden to such an extent that these people now have to pay about £7,500,000 in taxation. I therefore want to appeal to the Minister to protect the tobacco farmers and not to keep on taxing them more and more. There certainly is no other industry in South Africa which has experienced so many setbacks as a result of climatic conditions. Tobacco is drowned, there is hail, there are droughts, there are untimely frosts. The tobacco farmers have to cope with all those conditions, and in this connection I want to refer to the report of the M.K.T.V. to show the setbacks which the tobacco industry has already had to contend with. And now that the tobacco farmer has an opportunity, during the war, to make a better living, it is wrong for the Minister of Finance to deprive him of this opportuinty. In 1940 the M.K.T.V. had a crop of 20,000,000 lbs. but on account of climatic conditions that crop in 1941 was only 14,500,000 lbs. In 1942 at the beginning of the planting season an earnest appeal was made to the farmers to produce about 30,000,000 lbs. but as a result of drought and floods the crop was about 7,000,000 lbs. less than the farmers had expected it to be. The Hon. the Minister can therefore see that even during war time they have had tremendous setbacks. This year, too, they have suffered serious damage on account of excessive rain. Hon. members will recollect that the Minister of Lands made a tour of investigation some time ago and in his report to this House he said that practically speaking the farmers in those parts of the country had been hit by a calamity. And if one sees now that the Minister of Finance gets £7,500,000 in taxation out of tobacco, hon. members may easily get the mistaken impression that the tobacco farmers are rich men but let me tell them—and I want them to believe me—that there is no industry in South Africa which gives a livelihood to so many poor people. Out of the 10,000 members of the M.K.T.V. more than 9,000 have to struggle hard to make a living. The great majority are ordinary tenants and bywoners and small land owners, and the Minister should not regard the tobacco farmers as stone rich people. I myself am a tobacco farmer, and the Minister knows that so far as earthly possessions are concerned I am very badly off. Don’t think that the tobacco industry is in a flourishing position. As a result of climatic conditions it has suffered tremendous setbacks, and the Minister should rather have selected this year to strengthen the tobacco industry than to doom it by his heavy taxes. In my constituency there are more than. 600 settlers making a living out of tobacco, people on smallholdings, and then there are tenants of land and small land owners. The tobacco industry is unlike other industries where you have a large number of big land owners or rich farmers. Perhaps you have two or three big tobacco farmers, but the majority consists of poor people, and I want to ask the Minister not to be so hard on the tobacco industry, but to review this increased tax and rather put the industry on a sound basis.

I want to associate myself with the amendment of the hon. member for George (Mr. Werth) because I feel that, as the war has been going on for more than four years, many farmers, who have been compelled to buy their own land, find the tax so heavy that it is impossible for them to make a decent living today. The land has gone up more than 100 per cent. on account of the inflation, and the Minister’s increase in transfer duties also means an increase of 100 per cent.—it is an increase from 2 per cent. to 4 per cent. Farming requires a big capital to start with. If a young beginner starts off with £3,000, he is only a small farmer; he comes under the law and he has to pay 4 per cent. transfer duty if he buys a farm; but I particularly want to draw attention to a reply which I received from the Minister on a question I asked. I asked whether the excess profits duty on fixed property, Act 40 of 1942, also applied to mineral rights, and the Minister’s reply was: “Yes.” He added that he had no intention of amending the Act. Now, may I, for general information, put it this way: A farmer has three rights on his farm; viz: surface rights, trading rights and mineral rights. Those three right are separable from each other. A man can sell his surface rights and retain the other two rights, or he can sell his trading rights and keep the other two rights, or he can sell his mineral rights and retain the others. Now, it so happens that in the Free State a large area is under gold options today, and Act No. 40 of 1942 provides that all land purchased after the 1st October, 1939, and until the 26th Febraury, 1942, is subject to this provision, that if it is sold again the seller has to pay the State a tax of 6s. 8d. in the £ This does not only affect the surface but also the mineral rights on such a farm. And if the land is bought after the 26th February, 1942, and is sold again after that, the owner has to surrender 13s. 4d. in the £. That also affects mineral rights. Where the injustice comes in is that the farmer—I am speaking particularly of those who have bought land after that date—was aware of the fact that if he sold surface rights he had to pay 13s. 4d. in tax, but they did not realise that this also applied to mineral rights. In the meanwhile the gold companies came along and took the gold areas under options, and the gold rights were sold on options at from £12 to £15 per morgen. The companies have the right to exercise their options during the war, and in some instances until five years after the war. During that time they can buy the farmer’s mineral rights. The injustice comes in here, that the man perhaps only once in his lifetime gets the opportunity of selling mineral rights on his farm and it is most unjust for the State to come in and demand 13s. 4d. from the seller. The farmers were not aware when they gave those options that their mineral rights would be taxed in that way. Today they cannot get out of it because they have entered into those agreements with the gold mining companies which have bought those rights for the purposes of speculation. No gold mining companies, however, buy mineral rights for speculative purposes. On the contrary, no gold mining company is going to buy any rights before it is convinced that there is gold in the ground. They don’t mind paying big sums of money if there is gold, but if not they won’t do so. And only by prospecting can one determine whether there is any gold in the ground or not. That argument therefore does not hold water.

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 18th April.