I have found it very interesting this year to study the reaction that the Minister’s Budget Speech has had in the Press. I think that the most interesting comment came from the “Cape Times”, which described the Minister’s Budget Speech as “tame and featureless”. The “Argus” through the medium of a prominent businessman criticised the Budget as follows—

The “Rand Daily Mail” expressed itself as follows—

But I think that the most interesting comment emanates from the “Star” of Johannesburg. The faults to which that newspaper points are not so much negative faults.

Is this a case of the devil quoting scripture?

After the Johannesburg “Star” referred to the defects in the Budget it said, inter alia, the following—

South Africa starts off as far as concerns this big work of reconstruction that we shall have to proceed with, with the wrong foot in front. There we have the strongest condemnation that could be voiced about a Budget during this period. This does not come from an enemy but from a friend. South Africa is commencing the great work of reconstruction with the wrong foot in front. I only want to say this, that with those words the “Star” gave expression to the prevailing thought that lies at the bottom of the heart of everyone who has a love for South Africa. I must admit that on Budget day itself there was a feeling of relief. That was clearly visible, especially on the faces of members opposite. The taxation axe had fallen and our heads had not rolled. There were many people who were thankful for that small mercy, but that was just for the moment. Almost the following day we said to ourselves: No, there was no necessity really to impose additional taxation, additional taxes were not unavoidable. If England with its big war burden found even last year that there was no necessity to increase its war taxation, what justification could there be for our Minister to have increased taxes this year? And when we realise this we at once see the Budget in its true perspective; then we see the Budget as the “Star” saw it, and as it expressed its convictions with “South Africa starts the very difficult work of peace-time reconstruction on the wrong foot”. We did not receive the death sentence on Budget day, but what we did receive was sentence of life imprisonment. Or, we were given an indeterminate sentence. There is in the Minister’s Budget no single ray of relief; we must continue with the taxation system that we have had in the country, a taxation system that we know and that our friends opposite know, deadens all spirit of enterprise and initiative in our country. That is the crux of our charge against the Budget of the Minister of Finance. We have in South Africa today a tremendous amount of capital that represents savings. The Minister told us there is £271,000,000 in the banks. We know there is £100,000,000 in Union Loan Certificates and in the post office. Short-term loans amount altogether to £150,000,000. There is lying available in South Africa £400,000,000, and the big question is how that money is going to be used. If we had a Budget from the Minister of Finance in which care was taken that the investment of that money was encouraged in a direction that would make for the development of South Africa and for the expansion of our industries and enterprises, what an excellent opportunity would that money not have offered South Africa. Here we have £400,000,000 that can be invested. Later I shall come to the point about the people being afraid of investing that money; they are afraid of what the Minister of Finance may do. If that money was employed in the right direction it could have effected a revival in South Africa such as we have never previously experienced. But if it is only used for the accumulation of consumers’ goods we shall be creating a condition of inflation in the post-war period of which we ought to be afraid. In this connection we should have derived guidance and inspiration from the Minister in his Budget Speech. There should have been encouragement for the proper investment of that money. But what have we from the Minister? A Budget which, as his own newspapers have told him, was not an inspiration. At the moment that the country awaited it, there was no inspiration and no encouragement forthcoming from the Minister. We expected inspiration and guidance. All that we received amounted literally to nothing. That will be the main charge made by this side of the House against the Minister of Finance. Allow me to pause for a moment to dwell on certain aspects of the estimates. In accordance with custom the Minister has stood up here and presented a picture to the House. He has told us how a deficit was expected on his main estimates, how he was subsequently obliged to incur further expenditure, and that he had to introduce a supplementary estimate running into millions of pounds, as well as to additional estimates. A deficit was expected, but this child prodigy of South Africa controlled the finances of the country to such purpose that instead of closing the Budget with a deficit of £8,000,000, there was, to and behold, a favourable balance of over £3,000,000. This is the picture that the Minister of Finance has displayed to this House. The “Cape Times” did not boggle at it. This newspaper trumpted forth to the world: “Hofmeyr produces a big surplus” We know that this was merely political propaganda. The Minister was careful not to talk about a surplus, but about a favourable balance. His press was not as prudent as he was. What is the true position? If we ignore capital expenditure and leave out capital revenue, what is the position? We have been accustomed to transfer it to loan account. The Minister stated in his Budget speech that capital expenditure amounted to £15,800,000, while the loan receipts on loan account were something over £8,000,000. The Minister was in high feather over all the figures that he presented to the House, and he tried to explain we had only received £8,000,000 from loans while last year £13,000,000 was obtained, and the preceding year almost £12,000,000. But if we omit capital and loan receipts and we take the service expenditure in the Budget, we find that the expenditure in the Budget is £165,000,000, and the revenue £118,000,000. This signifies that there is not a surplus but a deficit of £47½ millions. If the Minister wanted to present a true balance to the country, and if his press wanted to give the right information to the country, that is the position that should have been divulged to the nation, namely, that the servicing expenditure amounted to £47½ millions more than the revenue, and that last year it was £45,000,000 more. In other words, there has this year been a deficit of £47½ millions and last year a deficit of £45,000,000. So it has gone over the past five years, with the result that our national debt has grown since the beginning of the war by an amount of £248,000,000. The burden of interest on that was £4½ millions at the beginning of the war and now it is about £10½ millions. The excuse made by some people is that this debt is not heavier in proportion to our national income. I have examined the figures, and I find this is the position. In the year 1938-’39 our national debt was equivalent to 68 per cent. of our national income. The national debt was £271,000,000, while the national income, according to the estimate of Prof. Frankel was £394,000,000, which means that the national debt was 68 per cent. of the national income. It is a little difficult to examine the figures for 1944-’45, because Prof. Frankel has not given the national income for later than 1943-’44. But if we assume that the national income has grown at the same pace during the past few years, then we may assume that the national income this year will be round about £600,000,000. In the previous case I deducted the money in the sinking fund, and I am doing that again. Our national debt is now £520,000,000, and this is equal to 86 per cent. of the national income. In connection with the national debt I want to say this. We are accustomed when the present Prime Minister is at the helm, to his bequeathing to his successors a great national debt. He did this after the last world war. He is again doing it. I should like to add that his Government is very fond of contracting debts, but at the same time it reveals no disposition to pay its debts. Although the Government of the present Prime Minister remained in power for a considerable number of years after the last war, it exerted no effort to pay off the unproductive debt of that war. They simply left it over to their successors. One of the first things that the Nationalist Government did was to discharge its obligations and responsibilities towards the country, and in the Act of 1926 it immediately made provision for the wiping out of the unproductive debt of the country over a period of 40 years. The bequest which we have again received in the political testament of the Prime Minister, is a war debt of £248,000,000. There is no desire to pay that debt. I put the question to the Minister of Finance whether they were satisfied with the sinking fund provisions. It is exactly the same as it was when the Nationalist Party established it in 1926, namely, £1,000,000 a year. If that is and must remain the provision for the sinking fund it will take us 248 years to pay off that unproductive debt, because that is the unproductive debt that the present Government has now saddled us with. I asked the Minister whether he did not think the time had arrived to make provision for a larger sinking fund, and the Minister’s answer was that it did not help to do this because the money would still have to be borrowed. The answer to that is that the Minister’s balance sheets ought to be correct, and that he must put it clearly to the people so that the people may realise that this is the financial position of the country. We must see to it that our balance sheets are in every respect precise and accurate so that the general public may realise that under the present Government we have to borrow money in order to place it in the sinking fund. There is an idea amongst the general public that the money that we have to spend falls like manna from the heavens; we simply have to turn the tap, and it is there. We are not paying for what we are spending, and the result is that South Africa is up to the ears in debt. Now I should like to turn to the estimates of expenditure. I want to ask the Minister whether he thinks that this is the way to present the main estimates to Parliament, the way he has done it this year. I think that a protest should emanate from this House against the crude and half-baked manner in which the Minister has laid his estimates before us. I had thought that a budget signified and represented the policy of the Government, that it was an expression of the fixed and well-considered policy of the Government in respect of the following twelve months, and was being presented to the House in that manner. But what has happened in this case? We have had the budget, and after that the Minister came along with a number of loose sheets containing figures, with transfers from one vote to the other and all sorts of alterations, so that it is impossible to obtain a clear picture of the whole. I want to give this advice to the Minister if he will take good advice, that if he is not yet finished with the budget and if the Government has not yet concluded its policy finally—and we know it still has plenty of time to make a decision—why not first wait and go into things thoroughly so that a properly rounded-off budget can be presented to us. Why do they come along with bits and pieces and offer them to Parliment and the nation in this way?

There are no bits and pieces.

Hon. members opposite do not even know that there are twelve loose leaves.

They are marked.

The manner in which the Minister has presented his budget to the House confirms what we have often stated here, namely, that the budget, like the Government itself is void of counsel, void of plan and void of policy.

Void of future.

Yes, and void of future. The hon. Minister has himself described the budget as a transition budget. He knows that we are on the eve of the crisis of the peace. He knows that in the following twelve months we must switch over from a war economy to a peace economy. He knows that the country that switches over the most quickly to a sound peace-time economy is the country that will best be able to weather the storms of the post-war period. He knows that there are not only a large number of returned soldiers who must be reinstated in civilian life, but he knows that the expansion of industries during the war was an expansion in the main of heavy industries. The people and the country would like to have from the Minister an assurance that provision is being made that the heavy industries that are today giving employment to tens of thousands of people in our country, should continue if possible without a setback. The country would like to have the assurance. From the beginning of this Session one speaker after the other on the Government side has stood up and pointed out things that have been neglected during the war. The hon. member for Drakensberg (Mr. Abrahamson) has drawn attention to the fact that in the past 5½ years our soil has been neglected, and he has urged that an amount of at least £100,000,000 should be spent on soil conservation. The hon. member for Krugersdorp (Mr. Van den Berg) has alluded to the tremendous shortage of housing in the country and the necessity for going ahead in that connection. The hon. member for Yeoville (Dr. Gluckman) has pleaded for national health services. We expected that in this Budget we would find that a commencement had been made in connection with the great plans the Government has in this respect. We know that the foundation will have to be laid for a sound peace. The hon. member for Vasco (Mr. Mushet), who will rise to speak presently, is sitting there. I ask him to mention a single basis for a sound peace economy that has been established in this Budget. Mr. Speaker, this brings me to the second big charge against the Government. They are doing nothing. All that we get from them is that “the committee that had to furnish a report has done so, and we are considering it.” They are still brooding. They are continuing to brood because they are powerless to do their duty in regard to the problems of peace, having been caught in their own nets. During the war years we have sounded a warning, we have sounded a warning against the spendthrift spirit that has been turned loose in the country. If the Government, wants to spend money on the war—that is their policy—good, but money should not be wasted as it is being wasted. We have warned them. Does the Prime Minister remember how a few years ago when there were these complaints from this side of the House, he stood up here and he said in so many words: “Who worries abouts accounts during a war?” And that refrain was echoed by hon. members opposite: “Who worries about accounts during a war?” That was the spirit of extravagance that was given free rein and that has got out of hand; and the Government is powerless to do its duty in respect of the problems of peace, because it cannot find the money and because it has not economised where it ought to have done. It is powerless. I say this to the Minister, that one of the main foundations of a sound peace economy is that there should again be cultivated in the Minister of Finance, in the Prime Minister and in the general public a financial conscience. We shall never arrive at a sound peace economy as long as this spirit of extravagance is rampant in the country, and that spirit is being encouraged every day. I shall mention only one instance of how it is being encouraged. The Department of Defence has a big section that in the course of the war has spent £20,000,000 on military works and buildings. I shall mention the name. It is the Directorate of Fortifications. There is not a single irregularity that can be perperated by an official that has not been perpetrated by the Department of Fortifications. They have entered into contracts and we have shown that the contracts were so generous that people who took no commercial risks, who were provided by the State with material—the State did everything—made a profit in nine months of £35,000. And now we find that they are not satisfied with a profit of £35,000. We disovered that in a period of nine or ten months, the Chief of Fortifications altered the contract in every possible manner to the detriment of the State and to the benefit of the contractors. Only now are we finding out how contracts that were generous to an extent they never should have been, were changed on every possible point by the head of this organisation to the detriment of the State. He did not keep the books properly, with the result that the Auditor-General comes and says: “It is no good my trying to make an investigation.” They really recommended that a veil should be drawn over it and the loss written off. The Select Committee declined to go as far as that. But what happened further? The man who was at the head was selected by the King and by Government for special distinction, for a special honour. No doubt because he holds a record for irregularities. We on this side of the House feel compelled to demand three things from the Government, and the first is that this year specified expenses in connection with defence should be presented. I shall return to that later, but if the Government is not in a position to do this during the present Session, let them convene a special Session of Parliament in September. This House cannot allow the Budget speech and the Budget plans of the Government to remain so unsatisfactory and so incomplete. In the first place, we ask that the expenditure on defence should be specified. Last year we asked for a committee in regard to national expenditure, just as they actually have in all the countries with which we are friendly, and those committees in these other countries have performed tremendous services and saved huge sums of money. The Government is afraid to have such a committee. It has refused. Now we ask the second best thing, namely that the expenditure on defence should be specified. I hope that the Prime Minister will not reply that we cannot do this, that it is a case of war secrets. I think that at this stage of the war this would be a puerile argument on the part of the Prime Minister. I have before me the “Journal of the Parliaments of the Empire”.

A very good publication.

More devils quoting. I have here the report of the Canadian Lower House when the Minister of Finance introduced the war appropriation for 1944. He came before the House and the one Minister after the other that had to do with the war effort gave particulars. First the Minister for National Defence. He communicated to the House full details of the war strength of the Canadian army, and where every one of the Canadian divisions was. When he had finished the Minister for Air stood up and furnished full details of the strength of the air force.

They have no Broederbond in Canada.

The same was done by the Minister for Naval Defence. If it is no war secret in Canada, if it cannot embarrass the war effort there, if it is of no value to the enemy, why should it be so in South Africa? I should just like to say to the Minister that we created a war expenditure account, I believe, in 1940-’41. Then the Minister in reply to a question from this side of the House gave the assurance that at the end of each year he would communicate to the House the state of the war expenditure account, what the state of the account was at the end of each financial year. Has the Minister ever honoured that promise? The last figures available to the House are contained in the report of the Auditor-General for 1942-’43. We know that every year there figures on the account an amount that is carried over from one financial year to the other. This year it is £8,000,000, and in the preceding year there was £6,000,000 in the fund. How much is there this year in the fund? A promise from the Minister really should have some value. We are entitled to know. Nothing whatever has been communicated to us, and we on this side feel, bearing in mind the stage that the war has reached, that we have the right to expect full particulars in connection with defence expenditure. We ask this with emphasis, and we feel that as soon as the Prime Minister attempts to detail his defence account, he will discover how much dead wood there is that can be cut out. The mere fact that he will attempt to specify will have a wholesome effect, and will also contribute towards the removal of this spirit of extravagance. If we desire to build a sound peace economy, we must apply the brake to this spirit of extravagance. Otherwise we shall perish. We are convinced that tens of thousands and hundreds of thousands of pounds are unnecessarily being flung into a bottomless pit.

Do you wish to curtail the circulation of money?

The hon. member asks whether I want to curtail the circulation of money. No, we feel that the time has arrived when South Africa can effect a great saving on defence. Last year Canada economised to the extent of £60,000,000, or 240,000,000 dollars on its war account. New Zealand that stands in the centre of the war zone, and whose boundaries are still in danger, with the enemy close to it, last year saved a sum of £19,900,000. We feel that the same thing should be done immediately in our country, because we must have money for housing, for the health of the people, for soil conservation, and no longer may we tolerate the waste of money in the Department of Defence. The country cannot afford it. The money is vitally necessary for those things that we are all hankering for today in our hearts. This is all that we ask. We are not getting it. The Minister of Finance has not imposed any special new taxes this year. I do not want to go into the taxation system today. The attitude of our party will be clearly stated when the taxation proposals are dealt with. I only want to say that every feeling we have of what is right and fair and just rises in revolt at the fact that the only people whom the Minister has this year picked out for heavier taxation, is a married man with an income of £250. Our feelings of what is right and proper are outraged by this. I have succeeded in obtaining the report of the Commissioner of Revenue. I ask why the Minister has picked out that class of the community. He may say that he has abolished the savings levy. The Minister knows that the taxpayer could demand the return of the levy after six months. The person who demands its return loses something, but not as much as what the Minister takes from him now. The tax on the lowest income group has been increased from £2 10s. to £3. I have before me a statement of the taxable income of the nation. I run through the list and I find that the group that the Minister has selected for further taxation is that group in respect of which according to the Commissioner of Inland Revenue the taxable income is £175,000. It is the group from £250 to £300. The group which have not a taxable income of more than £300. And when I examine the list further, what do I find? At the top of the list stand the people with an income of more than £20,000 a year, and their taxable income runs to £28,000,000.

All Nationalist farmers.

And the Minister picks out those people who have a total taxable income of £175,000 to impose a little more taxation on them.

That is wrong.

But here it is. The taxable income of the people with incomes of £20,000 a year or more amounts to £28,000,000. They are classified here according to the estimates of revenue for the year ended June, 1942, that have been published.

That is only a handful.

Yes, and why cannot they contribute a little more? They have a combined taxable income of £28,000,000, but the Minister is too tender-hearted to tax them. For my own satisfaction I have attempted to work out what the position is. Their taxable income is £28,000,000, and the tax payable by them is £3,400,000. They surrender £3,400,000 of the £28,000,000. If the Minister of Finance will only tax them 1s. a £ more he will receive £1,200,000. But he picks out the small man. Does it not occur to him that this is petty and mean? [Time limit extended.] I have stated that we advanced two demands from this side, and we are advancing them in the interests of South Africa. The first is that the riot of extravagance should be checked, and if we fail to do this it will be too late. The second is this, and it is an important point, that we must be on our guard against inflation. I said a moment ago that there is a great deal of money lying about in the country. How is it going to be spent when peace comes? Is it merely going to be used to satisfy the need for consumers’ goods? Then we are going to create a dangerous state of inflation that can only have one effect, and that is that we shall again have a disastrous depression such as we had after the previous war. That is the second charge. There is no effective control. The control is rotten. And what is the position in regard to our living costs? Our cost of living is steadily rising. Take a country like Canada. All the figures that we have available, the official figures furnished by the Minister of Finance there, are comparative figures between the 1st November, 1941, and 1st November, 1943, and the cost of living has risen only by 1.5 per cent. In England where there is real want, she Chancellor of the Exchequer stated in April, 1944: “The cost and commodity index for 1941 was 28 per cent. above the pre-war index, and today in April, 1944, it is 29 per cent.” But with us the cost of living is continuously mounting. The President of the Reserve Bank sought to reassure us, and he stated that we have not yet got inflation, as it is usually understood. If it is not yet here we at any rate stand tottering on the edge of the abyss of inflation. One thing is very certain, and that is if the Government is not careful after the war we shall have serious inflation. We on this side of the House are in favour of control being continued. We want to protect South Africa from the effects of a depression. The further the pendulum swings to one side the further will it swing to the other side after the war, and we do not again want to have a depression such as we had after the last war. We demand control, but it must be effective and honest and not unnecessarily "expensive. Other speakers will go into that. In the third place, there should be no set-back to our industries. On this the Minister tried to reassure us, but here I have the figures worked out by Prof. Frankel, who says that the net investments in South Africa are declining. In South Africa a lot of money has accumulated, capital representing savings, and yet the investments in South Africa are declining. People are afraid.

Of your being returned to power.

No, they are afraid because they know what value can be attached to the promises of the Prime Minister in connection with the protection of our industries. He made the same promises in connection with the last war, and what was their experience in reference to the promises? The history of South Africa knows of only one party that has had a sound policy, and has raised a clear voice in connection with industries, and that is the Nationalist Party. We saved South Africa in 1922, and the people will again call on the Nationalist Party in the future to save the country. I want to propose the following amendment—

1. (a) full details are furnished in the Estimates regarding the expenditure under the Defence Vote;
2. (b) liberal provision is made for social and other essential services of national importance, such provision, in view of the present war situation, to be obtained by saving on Defence expenditure;
3. (c) the Government renounces its intention of increasing the burden of taxation borne by the lower income groups;
4. (d) the Government submits definite plans to the House during the courrent Session for ensuring conditions of full employment in the post-war period and for building up the national income;
5. (e) the applicpation of the control system is radically altered with a view to securing proper efficiency, and all unnecessary or redundant controllers and staff are discharged.”

As far as concerns the basis of social security after the war, someone has expressed it very nicely in this way, that the public do not want “unemployment benefits” but the “benefit of employment”.

I second the amendment.

This House has listened to the principal speaker in the Opposition on financial matters, and I think the consensus of opinion will be that it is the worst speech on the Budget which has been made by the hon. member for George (Mr. Werth). I am sorry for it. I think he has rather spoilt his reputation. The Whole trouble is that the hon. member for George (Mr. Werth) psychologically is the victim of the background of his party. To criticise this budget was an ertremely difficult thing for him to do. As a matter of fact, it was an impossible thing for him to do.

I am glad I have achieved the impossible.

In the first place, his party came to this House and they wanted to propose a vote of no confidence in the Government. For tactical reasons they altered the nomenclature and called it a vote of censure but the burden of the vote of censure or no confidence was that this is a lax and incompetent Government.

Hear, hear.

They tried to pin that down in the criticism of control on certain specific matters, but as the debate developed everything the Government did was wrong. When it came to the Prime Minister we on this side shouted “Hosanna”, and on that side “Crucify him”. The Minister of Finance —well, we never had a worse Minister of Finance! Nor had the country ever had such a Cabinet. In business circles when we hear this sort of remark about a firm one of the first things that occurs to us is: “We had better see the balance sheet”. In this case when the balance sheet is produced to the Opposition they find it the most wonderful and healthy and buoyant balance sheet that this country has ever been presented with. That is the whole trouble. The Prime Minister they want to cruicfy, the Finance Minister— he is just, no good; a Cabinet that is absolutely worthless produces the strongest budget this country has ever set eyes on. On the strength of that budget the Minister of Finance is able to go to the country and raise £15,000,000 at 2 per cent. That is what the country thinks of the Minister of Finance. That is what the country thinks of this Government. And of course in these circumstances for my hon. friend the member for George to get up and make a case against this balance sheet—well he could not do it. Even in regard to extra taxation, my hon. friend has made reference to the alteration that has been made, to the adjustment that has been introduced in regard to the lower income groups; the change provided by that adjustment has not been by way of getting extra taxation. We do not need to tax to provide the extra money, because of the buoyancy of our finances. Can you wonder then that this morning the hon. member simply floundered around; he did not know what to say and he said it. [Interruptions.] The position is this, that is our hon. friends opposite can make any party political capital they always try to do it.

That is a back bench argument.

It is an argument unfortunately used by the Opposition from front to back and back to front every day in this House. Cannot we for one morning look at things from a South African point of view; cannot we for one morning be proud of our land?

Yes but not of our Government.

The position of our country today in the eyes of the world is largely to the credit of this Government, and if its stock is not as high as it should be in certain quarters it is because of the Opposition in this House. In 1939 this Minister of Finance that is “No good” found that the revenue account of this country was something like £40,000,000 and this Minister of Finance that is “no good” was warned that he must find vast sums of money. The Budget introduced this year is the sixth Budget in five years of war, and that same Minister has raised the revenue account of this country from £40,000,000 to £120,000,000.

What about the public debt?

It shows you—

The Port Elizabeth election is today.

Cannot we be proud of that record? What has that meant to this country?

Taxation.

Every penny of our bills has been paid—

From loan funds.

We will come to loan funds. Every penny of our bills has been paid, and paid on due date.

Posterity will pay.

I am not going to be sidetracked. My hon. friend has referred +o Canada. He is always talking about Canada. Incidentally he talked about New Zealand, and about New Zealand reducing its expenses. I think that is only by comparison, because the trouble in South Africa right through this war period has been this, that we do not know how well off we are. Nor do we know how well we have been governed. New Zealand financially is in this position, that she has a bill for £18,000,000 to pay on armaments. She has had to contract overseas, and she cannot pay her bills, and the British Government in these circumstances have said: “All right, we will not press you for the money, pay it when it is convenient.” There has been no occasion of that kind in South Africa. If it was £18,000,000 or whatever the sum of money was, when it fell due, or sometimes before it was due we said: “There is the money.” Some kind of Finance Minister we must have had! Another thing there has been a great deal of talk about is the cost of living. My hon. friend says the cost of living has gone up. Who has contributed more to the cost of living going up than the Opposition? I ask this question. When the food question was brought up in this House, what was the solution of our food problem according to the Opposition? It was, give the farmers more money for their stock. [Interruptions.] Their reply was, keep down the cost of living by increasing the price of stock to the farmers.

But not to the consumer.

How can you do it? [Interruptions.] Places like Canada and New Zealand have had difficulties that we know nothing at all about in South Africa. Is that in spite of the Government, or is it because of the Government? I say it is because of the Government. The other day eyebrows were raised in Britain at the statement of the Chancellor of the Exchequer implying that the British Government is donating no less than £46,000,000 to the New Zealand Government over and above the contractual price under the British Food Ministry’s bulk purchases of New Zealand’s exportable surplus of butter, cheese, beef, veal, mutton and lamb, in recognition of the benefit Britain has received from New Zealand’s price stabilisation policy. Last year we talked about the New Zealand price of food. In New Zealand the Government, by its policy, brought down the price of food and kept it down until the farmers in New Zealand were nearly ruined, and then New Zealand had to go and ask the British Government to please pay them the difference between the price charged by them and the market price, and they were given this gift of £46,000,000. Do not speak to me about the cost of living in New Zealand, do not speak to me about the cost of living in Canada unless you have all the relevant facts. This payment I have referred to is tantamount to a very big subsidy having been paid to keep the cost of living down. To some extent we have resorted to expedients of that kind in this country, but nothing approaching that in magnitude. It is idle to compare the cost of living in this country with the cost of living in other countries where that kind of thing is going on. As I have said, we in South Africa are in a very fortunate position. When one listens to the Opposition and hears about the bad government South Africa has got, when one hears about our bad Prime Minister, when one hears about our bad Finance Minister, we turn to the facts and find that the conditions here are better than in any other country in the world. Is that in spite or because of them? You cannot get away from it, and that was the trouble with the hon. member for George this morning. He was slanging the fellows opposite, but in his heart of hearts he knows they are good fellows. He knows that he and his party at the beginning of the struggle took a wrong step, they took the wrong turning. We have come out with a war record second to none in the world, and we have come out with a financial record second to that of no other country in the world. The extraordinary thing about the position is this, that the financial strength of this country is greater than it has ever been before in its history. [Interruptions.] Meanwhile the Minister of Finance has had to tax and he has had to spend money to an extent that none of us would have dreamed it was possible. My hon. friend speaks about the loan account. It is true we have also spent a lot of loan money. He puts it at £248,000,000; I think that is a little high, but I will give him the figure. Every penny of that £248,000,000 has come from the pockets of the people of South Africa; not a penny piece has been borrowed from overseas. [Interruptions]. That money is our money, that money represents the savings of our people.

It used to be our money.

My hon. friend, now and then gives himself away, because a remark like that can only mean one thing. He is sorry we did not borrow the money overseas; that is, if it means anything at all. I ask from the Opposition that they should be a little appreciative of this position we are in in South Africa today.

We are in a mess.

Just think of it objectively—that any Minister should be able to raise the taxation imposed on the people of this country from £40,000,000 to the sum of £120,000,000 inside a short period of five years, and at the same time be called upon to raise in loans a matter of £248,000,000 (to use the hon. member for George’s figure). To have done all that is a marvellous achievement. During that period of time, too, he has also been able to pay off some of our overseas debts, as much as he possibly could. Our overseas debt, apart from sinking fund will be reduced to something like £11,000,000. It was in the neighbourhood of eight times that not so long ago. Instead of being in the position that when the bills fell due in London we could not pay, we paid all our bills on due date and at the same time paid back all this loan money. Cannot we give a little credit to our Government for a financial achievement of that kind?

Is it so wonderful so borrow and to spend; is that an achievement?

My hon. friend will get the opportunity of speaking later on. I ask in all seriousness, whether it is the English Press or the Afrikaans Press, or the Opposition members of this House, that they should reflect quietly about this position of ours in South Africa, that they should think sensibly and reasonably and with appreciation of the work that our Minister of Finance has done for us over these four or five years. He now finds himself in this position. That long long slope he had to climb is behind him; and he must have had his difficult and dark days. I have known a time three years ago when demands were being made here and when demands were being made there for vast sums of money, and it seemed impossible that any Minister of Finance could listen to them. He did listen and he found the money. He has never been afraid to tax when necessary, he has never flinched from his duty, and he has raised the taxes when it has been necessary for this country. Now he stands at the top of the great divide and looks back on five or six years of war, a devastating and costly five years where he has always had to tax more and more. This is only the first year since the outbreak of the war that the Minister has not had to tax an extra pennypiece. In these circumstances our Minister of Finance says: “I am going to pause, I am going to mark time, I realise that behind us we have a great history of achievement. I realise that before us we have an opportunity for achievement, but this year I am going to mark time.” I am going to deal critically later on with one aspect of the Minister’s attitude. If the Minister of Finance gets up in this House and makes a speech that refers at all to spiritual values, the Opposition sneer at him. I think it is a pity that in recent speeches he has omitted, perhaps with Opposition criticism in mind, to say anything about that side. But it is a poor nation indeed that cannot prize its spiritual values. I think one of the finest speeches the Minister made in his life was one he made at the City Hall the other day. The papers gave it very little space, but I am glad to know that speech has been printed and circulated. There he enunciated the importance of spiritual values after this war. There he said that spiritually even we in South Africa could not be happy and contented and prosperous if, so to say, all the rest of the world was unhappy, discontented and unprosperous. That is a side that I say we should dwell upon. But there is also the material side. We in South Africa are bound up in peace as we have been bound up in war with the rest of the world. We may talk about development in this direction, and developing industrially in that direction, developing commercially, and so on, but a wise Minister of Finance realises that our progress is contingent on what happens abroad. I shall never forget when I was in London in 1929 at the time of the great Wall Street slump. For the first couple of days one did not realise that that slump in America would have enormous reperecussions in South Africa. It was not very long, however, before we knew the seriousness of those repercussions. As a result of that slump this country experienced one of the greatest economic depressions in its history. Today we read a great deal about the opinions that are held in a great country like America. It is true you have one school there that is full of optimism about the future, like the hon. member for George. There is another school there that looks to the post-war period as one of the most difficult in the history of America. In England we have the same two groups, one optimistic the oher cautious. The one may be right or the other may be right. But our Minister here, in these circumstances, has said to himself: “Having fought the good fight for these five years we can mark time and see what is going to happen abroad before we try to launch out on economic and industrial development on big lines.” That is his excuse, and it is a very sound excuse. [Interruptions.] I can tell you this as a businessman, it is extremely difficult for one to know what to do today in one’s own business. Take the question of plant and the construction of new buildings; are you going to pay for this plant and these new buildings at today’s prices? There are troubles facing us from morning till night, even if you have a heart as progressive as that of the hon. member for George. He can talk irresponsibly, but the Minister of Finance cannot act irresponsibly. He has to act with a full sense of responsibility. You may call this a Budget that does not budge, you may call this a “mark time Budget”. But the wise man in South Africa will say it is a good thing we have a Minister at the present time who is willing to wait a bit and see what is going to happen overseas. We could launch all kinds of undertakings at this time and perhaps in two, three, four or five years’ time they would come tumbling about our heads, through no fault of ours but very largely because of overseas conditions in that regard I give our Minister of Finance full marks. My one criticism is this, that I do think he should have taken this opportunity of overhauling his taxation machine. The Minister is very largely in the position of a man who has had say a factory going for years with machinery that he thinks is very good. He shows profits; he produces results; and somebody comes along and says: Your machinery is obsolete, you ought to have completely new machinery. He replies: I am going to lose money if I do that. But when he does put in that new machinery he knows what a fool he was to have even hesitated about putting it in. The taxation machine we have today is one handed down to the Minister; it has grown in bits and pieces; and it needs overhauling. There is no doubt at all about that. Two years ago the Minister was good enough to promise me in this connection that he would allow a committee to help and guide him in this matter. It appeared that the committee did not function as it ought to have done. At any rate the Minister rather complained of the limited extent of its helpfulness, but last year he gave us a definite promise that he would agree to the appointment of another committee and that this time he seriously meant business. That commitee was duly appointed, and it has done a lot of research work over the last nine months. Various reports have been presented to the Minister’s Department. He has personally been in consultation with that committee. But so far as this year is concerned, it is the same tale and he is not going to do anything about it. That, I think, is the most fatal thing in the Minister’s Budget. The Minister may plead that he cannot afford to lose income at the present time. I agree with him, but if you have a proper taxation machine such money as you may lose on the swings you will gain on the roundabouts. What is more, if you have that efficient taxing machine that imposes the tax where it should fall and if it falls with its full weight on monopolies or vested interests, taking every penny that is necessary for the Government and for the State, the country will benefit; but a real taxing machine should also be one that encourages the people of the country to put forward their very best efforts. The taxing machine we have today does not encourage the people of the country to put forward their very best efforts. Businessmen, I contend, are today making huge losses in South Africa as a result of our taxing machine, because many of these people will not put forward their best effort. I cannot go into details at this present moment, but I can assure the Minister that this is a serious matter. Some of the best brains in this country today are practically idle. They say, what is the good of us trying to do this or that or the other because this taxation machine we have comes along and “busts” the works. Sir, that is a very serious state of affairs. Now during the war period there was a great deal more excuse for the Minister doing nothing about this matter than there is today. I can tell him that if he had been able to announce in his Budget Speech that this taxing machine was going to be modernised to encourage development and the country given a taxing machine that will, as far as possible, brush out of the way obstacles to progress; if he had been able to announce that, then I would have said this Budget, in all respects, was a complete Budget. I shall ask the Minister, before I sit down, to give this matter his most serious attention. There is nothing in the matter of taxation that is going to have so much importance as the introducing of a modern machine. Let me come back to the old simile of the manufacturer with the obsolete machine which has served its purpose, but with which he apparently is still quite satisfied. There is a modern machine and it is only when he uses it that he realises that it serves much better. I may assure the Minister that he will find in a new taxing machine a great difference and improvement. The country will experience that improvement and it is so especially necessary now, because I am one of those, Sir who believes that this ordeal of battle we have gone through, this terrible war we have gone through, can only be compensated for in some measure by the fact that by the measure of our suffering we will have a happier South Africa in the future. The position of our people economically must be improved. But, Sir, we cannot irresponsibly indulge in all kinds of fancy legislation, social and otherwise, but we can afford a reasonable measure of social legislation provided we make it possible for the people to increase their incomes and so increase the national income. In other words, a demand for national social services can only be met by an adequate national income and an adequate national income can only be achieved if the Minister of Finance modernises his taxing machine.

I am sure that this House, having listened to the hon. member for George (Mr. Werth) and the hon. member for Vasco (Mr. Mushet), will be convinced that the only conclusion we can come to is that, if we are going to put this country right and are going to secure a proper taxing machine, and if we are going to see that our people get material values, we must have a Labour Government. I have listened to the hon. member for George and he has put forward an amendment which, on the face of it, would appear to be an excellent one, but with the Nationalist Party, as with the other party, it is a question of which is the more reactionary, and I submit in putting forward the amendment, I would feel this way about it. It would be a useless document even if it were carried by this House, because the system on which we base our taxation today shows that it is clear that it is impossible for the Nationalist Party or the United Party to give effect to the things they promise the people unless they tackle this thing at its source.

We want Labour!

And on the question of labour we must see to the pay rates. We must not merely have a wage determination. The people are there to work, and therefore they must secure proper living wages for their work. Now, having said that, Mr. Speaker, I want to try, as apart from the two hon. members who have spoken, to get down to what this Budget really means. I could not gather much from the hon. member for Vasco because in the beginning he was praising the whole thing and at the end he was damning it with faint praise.

There was no praise at all.

With regard to the hon. member for George, his has been an attempt to tell the country how much better they can run the country than the present Government. Now I want to ask the Minister of Finance why he has departed from the old basis of 50-50 of raising money on actual war expenditure. The estimated war expenditure is 82½ million pounds, and in his speech the outstanding points in this regard were—

Then he deals with taxation and says—

I would like to find out what he means when he refers to this: He says—

I cannot understand the explanation so I hope the Minister, when he replies, will develop that further because it is very important. It is important for this reason, that the difference, if he stuck to the old basis, would be that he could have made a saving of 44 million pounds. That could have been used by way of easing taxation or could have been applied in other directions. But the facts are that on his own figures the Loan Account will provide £37,125,000 and the Revenue Account £45,375,000. That is a tremendous difference of 10 per cent., the change from the 50-50 basis to the 55-45 basis. The hon. member for Vasco has drawn attention to the fact that the Minister had borrowed £15 million at 2 per cent., that if he could raise £15,000,000 in the past year at 2 per cent., there is no reason why he cannot borrow £50 million next year, also at 2 per cent., and I think it will be better if they save this £44 million of the taxpayers’ money and finance war expenditure on the 50-50 basis. Interest charges can be reduced by reducing the interest to 2 per cent. The hon. member is a businessman and mixes with businessmen. He is evidently satisfied that the industrial and commercial community is quite satisfied with the Government therefore I think we should get all the money we want at 2 per cent. Now I feel with regard to this whole question of taxation, and there I agree with the hon. member for Vasco, that the entire taxing machine requires an overhaul, but I do not agree with the methods he suggests. I further say that any system that allows such a position as the hon. member for George has stated cannot be supported. I have not checked his figures, but he said that a small group of people have an income of £28,000,000, and their taxation is only £3,000,000. I think that requires explanation from the Minister. A system like that certainly is very bad for a country which is taxing the man with only £400 a year income so heavily.

His figures are wrong.

It is said that the figures are wrong, but we do know that the higher income group has a very substantial balance after they have paid their normal and super taxes, and it is essential that the Minister should give more attention to that section of the community. Now, Mr. Speaker, the Minister of Finance in his Budget right through developed rosy promises of what we can expect in the future with regard to postwar work, employment, rehabilitation and so on, and at the same time he said at the finish of his speech, almost the last paragraph—

Does the Minister pin his faith for post-war rehabilitation on the £271,000,000 lying idle in the commercial banks, plus the £180,000,000 worth of gold in the Reserve Bank? I feel that for the purposes of this rehabilitation the attitude of full employment for all has to be given effect to. He leans on a very weak reed if he thinks that the commercial banks will assist in any development of industry to solve the problem of 6Q,000 soldiers returning to peace vocation, and the munition workers will also have to find peace-time vocations. It seems to me that he is pinning his faith to a very weak reed indeed. Then he has quite rightly shown in his speech his desire to see that these things are done, but again I must remind the Minister that in actuality we have had, over a period of years, and particularly during the last two or three years, this tremendous demand on the one side for social security, and the promise of social security by the Government on the other side. But this promise has to be implemented, and I say advisedly I want to warn the Minister and the Government that if once, by bitter experience, suspicion of the people is aroused that this Government lacks the determination and ability to give us these things, then this Government and the United Party must certainly fall. I think that if they fail in this charge, if they fail in the charges committed to them, they will deserve to fall as a Government. I could point out to him that the workers after all can only live on wages paid to them; they cannot live on promises of security to come or on wage determinations, if the work is not there. We have excellent legislation in the Labour Department such as unemployment insurance and the Workmen’s Compensation, but the real hub of the whole thing is full employment.

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

When we adjourned for lunch I was dealing with the question of full employment and expressing the view that the methods suggested by the Minister were very haphazard. I should like to point out to the Minister that if he wishes to see the post-war period working as smoothly as possible he must now go in for an expansionist scheme. It is not sufficient to leave it to the enterprise of people who will be dependent, shall, we say on the banks and on similar methods of finance. Actually, I think the Minister when he considers (as he says he will consider) a changed system of taxation, should take note of what Lord Keynes, who is today a director of the Bank of England said in 1941 when speaking of rebuilding—

I think if the Minister will keep that in view when he is endeavouring to secure a system of social security, a system of national health service, and similar things by the simple expedient of seeing that full employment is assured for everyone these other things will become of very secondary importance indeed. When one speaks of that I think we should remind the Government that they have already been put to the test. The Minister in a recent speech promised to us the things we are looking forward to, and I told him how embittered people would be if these things are not delivered. In that connection I should like to mention this. We read in this morning’s paper that 1,300 employees at the Mint in Pretoria have received their notice because of the unfortunate accident that occurred there some days ago. If that is the test of the intentions of the Government, when a catastrophe like that happens and when an appeal is issued by the Prime Minister and the Mayor of Pretoria for assistance to help some of the unfortunate sufferers, how is it that side by side with that appeal a Government department is giving notice to 1,300 of these people? This shows that there is some laxity, and if that is the metod in which our efficiency is shown today it makes us very nervous of what the position will be when the war is over. It makes us nervous regarding whether the efficiency will be there even if the intention is there to do the things that have been promised for his country. I want the Minister to take due notice of that. The whole question of finance is one the Minister can easily take into his hands, and without again reminding him of his orthdox methods, I may say that orthodoxy may be very suitable and sound in certain cases but it may be a remskoen to progress. Some time ago I asked the Minister if he would go into the question of ensuring that holding companies should be compelled anuually to disclose the names of the companies in which they hold shares, the number of the shares and the value of those shares at that particular date. I told him at the time that the Rand Mines, Limited, was the only holding company that published these figures. Since then I have had a number of letters from people all over the country who tell me that it is not only vital that this knowledge should be made available regarding the companies that are represented and what interests these holding companies are concerned with, and they point out in their letters that some of these holding companies are guilty of manipulating and manoeuvring the shares of which they have substantial holdings. They manipulate those shares first of all to enable them to sell at a high price. Then having flooded the market, the shares drop, not in respect of the true value of the shares but because of this manipulation and manoeuvring on the market, and when these shares have dropped to a low figure the holding company buys them back and within a period of weeks they have recouped themselves and made a substantial profit. That is a matter that I think the Minister of Finance should take up. It is a serious matter and many people suffer as a result of that. There is one other point I want to bring to the Minister’s notice, and that is one that I discussed with him on a previous occasion, the question of a balanced Budget. One aspect that of course was considered was the tremendous amount of loan funds that are used, but I pointed this out to him that under no circumstances has any government any right to worry about a balanced Budget so long as a large number of people are out of work, and that the first essential should be to secure expansion by the reorganisation of agriculture, to secure a full supply of foodstuffs, to see that the material is there, thus enabling the Government to go in for a system of expansion that would absorb every able-bodied man in this country. [Interruptions.] Instead of that we are paying people off. I have already dealt with this subject as far as Pretoria is concerned, though I believe that is a blunder on someone’s part. I do say, however, that if this is an example of efficiency in a governmental department it is a very serious position indeed. It seems almost callous; it certainly does not reveal any human feeling towards the people concerned. The Government must take the blame; the Government is to blame for allowing such inefficiency to continue. There is one other point the Minister might consider, and that is the question of coastal shipping. I don’t know whether coastal shipping is a matter entirely for the Minister of Transport, though I rather think it would be through the Minister of Finance, because he would have to provide the funds. I want to draw attention to the fact that if we are to develop our coastal shipping we ought to secure markets near the Union right up the coast as far as Nigeria, a country that has in recent years developed to a tremendous extent. It was reported only the other day that Nigeria is preparing to spend a further £40.000,000 on development. It is a country rich in raw materials of every kind, and the Union is naturally the part of Africa to supply them with manufactured goods. That would be a very easy arrangement. As a result of our coastal shipping we could develop that trade, and I am sure it would be something well worth gaining and keeping. Some years ago we had a desire to develop this West Coast trade, and we subsidised a shipping line but nothing came of it and they did nothing to develop the trade, although I am sure that with a number of small ships we could develop our trade up the West Coast as far as Nigeria, and I put that in a serious form, and I hope that the Board of Trade will enquire into this possibility. Well, Mr. Speaker, whether it is expansion in the way of our agriculture, our secondary industries or any other means of giving employment to our 60,000 soldiers when they are released, and to the munition workers, let us see to it because now is the time to have that expansive scheme ready and we should not wait. Although the Minister says that he has every confidence in the future, it is no good waiting, because wishful thinking has done a great deal of harm in this and every other country in the past. It requires the Minister to make the necessary provision for expansion, and he must do it now and ensure that when the war is over we will have a contented people, and that we do not suffer from the restrictions and the aftermath of the war. In the light of the materials we have and the manpower we have we should see to it that the post-war period will mean everything in this country for the peace, happiness and prosperity of every section, every man, woman and child in this country of ours.

I think that the hon. member for Vasco (Mr. Mushet) has excelled himself this morning. I think that it is a long time since this House has listened to a more peculiar contribution to the debate on the Estimates, than came from the hon. member for Vasco this morning. One can divide his speech into two parts. The first was an apology for the Minister of Finance, and the second was an attack on the Minister of Finance. The two parts are mutually selfdestructive. The one cancels out the other. Therefore there is actually not much in what the hon. member said, which we need to delay on, because what he said in the first portion of his speech he replied to himself in the second portion of his speech. However, there are a few points I want to mention here; and I may say that in so far as the second portion of his speech is concerned, that is the only portion which we can say was a positive contribution to the debate. That was the healthy portion of his speech in which he criticised the Minister of Finance. I do not want to delay long in regard to the first portion, but I just want to refer to a few propositions which the hon. member announced here, to test out how the hon. member set out certain facts and handled them. In the first place he said that not a penny-piece of additional tax has been laid on the nation in these Estimates. He has forgotten about the £180,000 which the Minister said he is going to find, especially out of the pockets of the low income group, the people who earn between £250, £300 and £400 per year. That must be a matter which he has forgotten for the sake of convenience. When a person takes part in a debate of Estimates he should not ignore anything even though it may be such a negligible amount as £180,000. Has the hon. member forgotten the £250,000 which the Minister is going to get from the share speculators? I can understand that the hon. member forgot to mention the other amount for beer. Perhaps he is not sufficiently interested in it. But that is an example to us of how the hon. member deals with these figures. He went on to say that this Budget is a Budget which is just marking time. At this important time the Minister of Finance has handed in a Budget which is marking time. That is the first portion of the hon. member’s speech. But in the second portion he attacked the Minister, especially in relation to his tax proposals, because the Minister’s taxing machine is busy marking time. How can one possibly take the hon. member seriously when he is so contradictory. One of his important points is that South Africa today finds itself in a better position than any other country in the world, and that, notwithstanding the present Government and the present Minister of Finance. Has the hon. member forgotten what the Minister of Finance himself said about that not so long ago? Has he forgotten that the Minister of Finance has said that we are getting poorer and poorer and not richer and richer; has he forgotten that the Minister of Finance has said that South Africa is now living on its capital?

You should not propound the matter wrongly.

That is what the Minister of Finance said. The hon. member went further and said that we are in a better position in South Africa today than we ever were. How can he say that, when his Minister of Finance himself said that we are getting poorer and poorer, and that we are living on our capital?

Don’t twist things.

No, that is exactly what the hon. member said, and it is what the Minister of Finance said. The hon. member also said that we find ourselves in the best position of any country in the world. But if we have to pay attention to the Minister of Finance, who made a speech at Swellendam less than a month ago, then we hear from him that South Africa is a poor country in comparison to other countries. However, the hon. member for Vasco says that we are a wonderfully prosperous country. No, the first portion of the hon. member’s speech is based on a miscalculation of the clear economic facts regarding the position in which we are, facts which were appropriately and clearly propounded by the Minister of Finance. I want to give another example of the hon. member’s reasoning. He said: “Where could we have better proof of South Africa’s flourshing position, than that the Minister could find £15,000,000 at 2 per cent. within a few minutes?” That is our complaint, that the Minister can get that money at 2 per cent. That money should have been better utilised. It should have been made available for productive investment in order to improve employment. That is the main point in our observations, that these tremendous amounts are lying deposited in the banks in such a manner that the Government can easily get hold of them, and that circumstances are such today in this country, that those amounts are not profitably utilised for the improvement of the national income. That money is lying idle there because there is no encouragement, and the result is that the Government can easily get that money at 2 per cent. It ought to be able to earn more than 2 per cent. in South Africa. That money is not being invested in the industry. Why not? Recently I spoke to a big businessman who wanted to sell his business: I asked him why he was doing that now, because in any case he would have to invest his money again in another business. His reply was, no, he will leave his money lying, even without interest, because there is no encouragement to invest money now. That is our complaint against the whole policy of the Government. Large amounts of money are lying on deposit in the commercial banks and in the Reserve Bank, instead of being fruitfully utilised in production and employment in the country. That is exactly our complaint, and yet that fact is mentioned in order to give us an example of the wonderful prosperity of the nation. Every requirement for inflation and every condition which more and more aids inflation is created in this manner. Nevertheless the hon. member for Vasco actually boasts of those signs as proof that the nation is prosperous. Such an argument destroys itself. I would like to refer to one point which the hon. member mentioned. He referred to the increasing cost-of-living, and he said that the members on this side are responsible for the rise in cost-of-living, because we come here to ask that reasonable prices should be paid for agricultural products. I would like to know whether that is the considered opinion of the other side of the House. Do they want to contend that the cost-of-living should be diminished today at the expense of the farmer?

That is not what I said.

That was the whole contention of the hon. member.

You must not twist it.

Why then does the hon. member blame us on this side because we asked that reasonable prices should be paid for farm produce? We all recognise that the price of food should be as low as possible, but that the decrease in the cost-of-living should not come out of the pockets of the farmer. The farmers produce only 12 per cent. of the national income, and the contribution towards the decrease in cost-of-living must come from the whole nation— it must be equally divided amongst the whole nation—and we must not expect it from one section only. We should not pick on just one section for that. We cannot want to place the burden on only one section of the population. I do not think that I need delay any longer in connection with the speech of the hon. member. I come to the Estimates themselves. I am afraid that we again today have here the old story of a topsy-turvy Budget. We have already become accustomed to them. In previous years perhaps there was an excuse for it, but in latter years there is not. I call it a topsy-turvy Budget because the point of view of the Minsiter of Finance is this: What is a reasonable expenditure which I must allow? That amount he fixes upon arbitrarily, then he says: Now I must get taxes to Cover that expenditure together with the ordinary income. Then he searches round and applies pressure in regard to taxes in order to obtain that amount. But the most important element is the whole history, namely what the national income of the nation is, is left entirely out of account. When he imposes his taxes, he does not enquire as to what the result of that is going to be on the building up or otherwise of the national income. No, we do not even know what our national income is at this time, and therefore we have no knowledge whatsoever as to what the position of the country is in regard to the financial proposals of the Minister. That indicates to the public that the Government is floundering in the dark in regard to its financial proposals and that we do not know what the financial position of the country is. I submit that the only scientific manner in which we should tackle the problem is that we must first investigate what the national income is, because no nation, just as little as an individual, can in the long run, live beyond his income. The national income is the aggregate income of the nation, and that should be the starting point of any Budget or any taxation which is proposed to us. If we know what the national income is, then we must accept that the largest portion of the national income must be used for consumption purposes. The consumption of the nation regulates the standard of living of the nation, and thus the major portion of the national income must be set aside to elevate or maintain the standard of living of the nation. Then we come to the second portion which should be set aside in the form of savings, because the saving is that portion which is available for investment and for production, which in its turn increases the national income. That will increase and improve the national income in the future. Then we come to a secondary portion of the national income which can be utilised for taxing. Only a certain proportion can be made available for taxes. I do not here want to propose definitely what proportion of the national income should be made available for taxes, but certainly that will not be more than 10 per cent. of the national income, if we desire to continue along a sound basis. Now what is the position in regard to the Estimates? If a person determines that your taxes are going to be 10 per cent. of the national income, or whatever other percentage, then you must proceed to decide what taxes you can impose, and you must choose the taxes in such a manner that they will have the least detrimental effect on the normal flow of matters and the building up of the national income. You must choose the taxes which will have the least detrimental effect on the consumption of goods, and the increase of production, so that the national income can be built up. We must also keep account of our external trade, that a certain proportion of goods has to be imported, and if we want to pay therefor then we must make provision for export. We must create the necessary channels, to encourage export, in order to be able to provide for the payment of any necessary imports. That is not only the scientific approach to the matter, but also the commonsense method. Just as in the case of the individual, the nation must also cut its suit according to its cloth. In this case the cloth is the national income, and you must keep account of the national income before you can sensibly determine what taxes you can impose on the country. But what have we before us here today? There is no attempt whatsoever on the part of the Government to determine the estimates on the background of the national income as a whole. The Minister has no excuse for that. During the last four years in England the system has been adopted, namely, that in conjunction with the Budget speech there is a White Paper which contains all the details in regard to the national income, so that the people can appreciate the ambit of the Minister of Finance’s and the Government’s estimates against the background of the country’s economic position. What is the position now? The latest available figures of our national income are for the year 1942-’43. That is already three years ago. Those are not figures which have been caculated by the Treasury; they are calculated by a private professor, who has been requested to do so. He calculates the figures but we only get the figures two years after we can make any use of them in relation to the Estimates for the year. I ask: How can a person make a national diagnosis of the economic position of the country in such circumstances, if you have not got that data on which it should be based? I want to draw the Minister’s attention to what was recently said by Sir John Anderson in England’s budget.

Is he a Scot?

Yes, and that is the reason why he holds such a responsible position in England. It is not a case of “Satan quoting scripture” but of “it is no use quoting scripture to Satan”. The only thing you can do when you attack the devil is to quote from his own bible. Amongst other things Sir John Anderson said in the British House of Commons—

That is what we have here—

He says further—

In this case I do not think that it is a “rest cure” which the Minister should prescribe, but which should be prescribed for him. One really cannot pass a sound judgment on such an estimate unless one has the background and facts at your disposal. One would very badly want to know what percentage of our national income the taxes now is. We would very much like to know what percentage of the national income the increase in the national debt is. We also want to know what percentage of the national income comprises the Government expenditure income and also the Provincial incomes and expenditures. We would also like to know what net investment we have in the country, as a percentage of the national income. We want to know what portion of the national income is available for consumption, because that determines the standard of living of the population. We cannot arrive at these percentages because we do not know what the national income is. We want to know what the amount of the national income is which is available for consumption today in terms of the 1938 index, and that will determine whether there is an actual increase in the actual national income or not. We cannot get those facts. In view of the fact that we have the neglect on the part of the Government to make that data available, there are just a few facts in connection with the broad background which we can mention at this stage. Thus we must delay for a while in connection with the background of the Minister’s estimates, which should be brought to the notice of the people. The first is that the national income of Great Britain was £4,560,000,000 in 1938. In 1943 it had risen to £8,075.000,000. That is to say that there was an increase of 77.7 per cent. We come now to the increase in the national income of South Africa in the corresponding period of five years, namely from 1937-’38 to 1942-’43. It increased from £374,000,000 to £547,000,000, namely 46 per cent.

In terms of what prices?

I am pleased that the hon. member drew my attention to that point, because if we relate it back to the index of 1938 then the position is very much worse. It is in terms of ruling prices. If we convert it to the basis of the index prices of 1938, then we do not get that figure. I am now only comparing the increase in national income in England with the increase in South Africa, and I say that it is 77.7 per cent. as against 46 per cent., and then the hon. member for Vasco comes along and says that South Africa is such a wonderfully prosperous country.

What do you want to determine by that?

I am busy drawing comparisons. Apparently the hon. member does not follow my Afrikaans sufficiently well to be able to quite appreciate the point.

I understand well enough what you are saying, but there is nothing in it.

I have given the most kindly explanation of the hon. member’s inability to grasp what I am saying here. Possibly he will appreciate the economic meaning of it in due course.

That is no economic argument.

I would rather leave the hon. member alone. The light will dawn later. I am now taking only the facts. The second is, the total net investment as a percentage of the national income in South Africa. In 1938-’39 it was 14.4 per cent., and it has decreased to 6.7 per cent. in 1940-’41. The net private investment, including municipal investment, has decreased from 9.11 per cent. in 1938-’39 to only 3.6 per cent. in 1940-’41. I can only deal with the figures which are available to us, because Professor Frankel has not yet published the figures for the last two years, or rather, not for the last two years for which he gives the national income. However, we have this decrease in the net investment percentage. There is a further matter, namely the amount of the national income which is available for use. If we take the index figures for 1938, and we take the national income for 1941-’42, then it shows a tendency to decrease. Then the actual national income is also lower in 1941-’42 than it was in the previous year, and as Professor Burrows says “it may still be falling”. These are facts which the nation should know, when they have to decide on the estimates presented by the Minister of Finance, and judge the financial position of the country. I want to quote a few other figures which relate to the question of inflation. We have the very sorry position that, the dangerous inflation spiral has not yet been checked. The cost of living is still rising. The latest figures are that compared to the 1939 figures, the cost of living has risen by 31.1 per cent., including house rent, and by 36.3 per cent. excluding house rent. I want to deal with the three factors which relate to inflation. The first is the cost of living, and the second is the money in circulation. It has increased from £51,000,000 in the previous year to £59.8 million in the last year. In 1939 the money in circulation was £19 million and now it is approximately £60 million. The bank deposits are the next factor. In the Reserve Bank the deposits in 1939 were £22.6 million. That has now risen to £165.7 million. That is not something which should be used as proof of the favourable financial position of the country. It is a danger signal to us of inflation. Possibly there is not yet any serious inflation in the country, but here we have two forerunners which may result in large inflation, which will hit us hard in the period of deflation, which we can expect after this war period. In 1939 the deposits in the commercial banks amounted to £158 million. According to the Minister of Finance that has risen to £271 million. This sombre picture is not in any way brightened when we take into consideration that we are now experiencing the transition period from a war economy to a peace economy. That is not something which will take place tomorrow or the day after. That transition period has already dawned. We are in the middle of it, and in the light of the data I have given here, we cannot do otherwise than to say that it is a sombre background, a background which becomes even more sombre when we look at this Budget, and the direction which the Government is taking. A further factor which we must take into consideration is that, in addition to all the other consequences of the war, we must expect very strong competition for our industrialists from overseas; and when one thinks of it, one becomes almost despondent when one sees that South Africa in these circumstances has to put up with a Government which, along these lines, is busy pawning the future of the country. From overseas countries we hear the cry “Export or perish”. Their Governments are making plans and they are giving information so that when the time arrives after the war then their plans are in operation and they are already in a position to compete. Then they will have progressed half-way towards he carrying out of the plans which have been made. In this manner they will have gained an advantage over other nations, with whom they have to compete. It is such a pity for South Africa that at this particular time we have a Minister of Finance who produces a Budget which would be no credit to a third-rate politician. The Budget has not even got this merit, that it is original. The best parts of it are only a feeble imitation of Sir John Anderson’s Budget last year. The most important factors in that Budget were that there were no new taxes imposed. The second was that the writing off of depreciation on machinery and equipment in industries was allowed. The third was that there was a possibility that assistance should come from the Government in connection with industrial research. Those are also the three main features in this Budget. The only difference is that whereas Sir John Anderson last year already imposed no new taxes, our Minister of Finance has imposed a little new taxation. He said that no new taxation was necessary. That is what Sir John Anderson said in England a year ago. The Minister has said that he now anticipates that, as soon as hostilities cease, depreciation in regard to machinery and equipment in industries will be allowed for. But the difference is that Sir John Anderson made available for that purpose 20 per cent., • whereas our Minister of Finance speaks of 15 per cent. These are all ideas which have come from overseas, and are not original ideas. The third important point is that Sir John Anderson made provision by way of taxation relief for industrial research. That is very vaguely put here by our Minister of Finance. He does not yet know what it is going to be. Several years ago Sir John Anderson had already put it plainly what it is going to be, namely, that a portion of the capital expenditure can be deducted from the whole amount which must be paid in taxation, for research, that yearly an amount may be expended on research and that the amount may be written off against income tax on the industries. On this third point our Minister, in a tardy manner, and after a delay of a year, has imitated what England has done, but what did Sir John Anderson actually do, which our Minister did not do? He also propounded the proposition that in regard to the erection of new buildings for industries, 10 per cent. can be written off in the first year and thereafter 2 per cent. yearly; that is to say in relation to the amount which is devoted to buildings.

Perhaps our Minister will come along with that next year.

Yes, perhaps he will come along next year with the “brainwave”. We hope for the best. Another important matter in regard to building is that the Minister in England has said that what he does for the industries, he will also do for the farmers. That is what our Minister has not done. And what further? It appears to me that our Minister of Finance can as little get away from beer as he can get away from the lower income groups. Now he comes along and again taxes the lower income groups, and in addition to that he imposes a little more on the share speculators. That is not original. This Budget does not take into account the fact, except in name, that we have entered upon the transition period between a war economy and a peace economy. This Budget is one of the most important which has been produced for years, but in this Budget we find, according to the opinion of the Minister’s own friends, no vision, no inspiration, no guidance and no plans. It is “the mixture as before”. This Budget of the Minister’s is a Budget in regard to which Browning could have said 60 or 70 years ago—

In regard to this Budget the Minister is nothing but a powerless ghost. It is our accusation against the Minister and the Government that during this particular period they have lit no lamp to light the way for the industrialists, commercial people and farmers of the country, that no lamp has been lit for the dark period we are going out to meet. Our accusation against them is that they do not gird their loins for the tremendous fight and test of strength which lies ahead. That is the crux of our complaint against them, that we have nothing but “the unlit lamp and the ungirt loin”. Unfortunately South Africa has to find itself unprotected on the slippery ice. If South Africa remains on its feet in the post-war storms then it will not be because, but in spite of the fact that, South Africa has a Minister of Finance and a Government like this at the head of affairs. I just want to put a few questions on the Budget, and the first question is whether the Budget encourages production. I wish to challenge any hon. member on the other side to give one example of how the Budget encourages production in so far as the industries are concerned. No, the retarding policy of the past remains. The Excess Profits Tax is still there in the same form. Now was the time to bring about alterations in the Excess Profits Tax, in the first place because it would encourage production, which is exactly what we want at this period, and secondly because Excess Profits Tax is not traffic in one direction, but may possibly be a burden on the Government. The Minister has said that the tax must be maintained for a short period after the war, and that the loss in one year can be made up for out of the profits of the previous year. Thus the contribution of £15,000,000 is not a clear contribution to Treasury. The possibility exists that a repayment will have to be made out of the amount which the people have now paid in. Therefore I say that at this time it is necessary to reduce the possible burdens for the future and make provision for some relief of the position. That has already been done in England, but in that respect our Minister of Finance has not followed their example. Last year Sir John Anderson granted relief which assisted 30,000 small businesses. £12½ million of Government money was sacrificed to bring about this relief. In Ireland it was the same. The profit margin was increased from 9 per cent. to 10½ per cent., but here it remains 8 per cent., an arbitrarily fixed, inelastic, illogical presentation, which does not take into account scientific principles or facts, and which makes it impossible for any industry to build up reserves for the post-war period, now while things are going well, in order to be able to weather the storm which threatens after the war. There is one small poor consolation which we get, the 15 per cent. writing off on machinery and equipment, but that applies only for 1945-46 and 1946-’47. Who can say that industries will be able to get the necessary machinery and equipment during that time, in the next two years. It will not be so easy. Also, the amount is 15 per cent. as compared to 20 per cent. in England. That is the only small consolation. But let us turn to agriculture. Here again I want to ask the hon. members to give me one example of how the Budget encourages production in relation to agriculture. The limitation which was imposed last year that only 30 per cent. of the capital invested in improvements can be written off against income, remains unchanged. If we desire to encourage production in the agricultural sphere, we must make it worth the farmers’ while to produce. I just want to refer to an article which appeared recently in “Round Table”, and that is also a reply to the hon. member for Vasco—

That is the policy which we support, and now I just want to read the last paragraph of the article—

This Budget and the whole of the Government policy falls far short when it comes to a question of the encouragement of production in industry and agriculture. I put the further question: Does the Budget encourage investment? We cannot expect to wait until after the war and then only seek encouragement for investment in industries which will create new employment circles. It is estimated that £400 capital, in an industry is needed to keep one person in employment. The Planning Council has estimated that employment will have to be found for 230,000 people after the war Further there is the natural growth of the people which has to be cared for. We must have £400 capital for each one. Where is that going to come from if there is no encouragement? There are large amounts lying in the Reserve Bank today, instead of their being used to bring about more employment. The Minister’s test is the amount of capital in, and the number of new companies which have been registered. That is not a scientific test, and I am surprised that the Minister relies on it. Does he know the actual amount of capital which has been subscribed? He does not even know that. It is very much more reliable to take the figure of nett investment, and according to Professor Frankel there has been a tremendous decrease in the nett investment, from £56,000,000 in 1938-’39 to £31,000,000 in 1940-’41, and there should be at least £80,000,000 yearly for investment, additional investment, according to my calcuculations, but instead of that, it is decreasing. That is the result of the Government’s policy because it is not designed to encourage investment in industries and agriculture. The national income from employment is more or less parallel over the years to the national income from primary and secondary industries, and consequently if you increase the income from primary and secondary sources, you also increase the income from employment. Every increase of £1 in the national income from production, means approximately an increase of £2 in the national income as a whole. [Time limit].

Mr. Speaker, I think the House has listened with great attention and interest to the speeches made today by the hon. member for George (Mr. Werth) and the hon. member for Fauresmith (Dr. Dönges. [Interruption], That interest I also felt, not for what they have said, but for what they left unsaid. The hon. member for George enjoyed himself by telling us what the English Press said about the present Budget. Unfortunately the English Press is not the Government Press in South Africa [Interruption] in the sense that “Die Burger”, “Die Transvaler’.’ and “Die Volksblad” are party newspapers and write to Party dictation. In the minds of hon. members opposite the English Press only speaks for the Government when it expresses views that suit them, but I am wondering what would be the reaction of “Die Burger”, “Die Transvaler”, “Die Volks-blad”, and even the “New Era”—if they were an independent Press in the sense the English Press is—if they had to deal with the speeches to which we have just listened. What do these speeches consist of? The hon. member for George placed great reliance on disconnected fragments from the English Press, and the hon. member for Fauresmith who has just sat down, pinned his faith to quotations from speeches by Sir John Anderson, Prof. Frankel and other professors who have made academic statements. When he quotes Sir John Anderson, when he quotes from a debate in the House of Commons as to what should be done in regard to our national finances, I should like to ask him—and I should like to ask the hon. member for George and the Party opposite—if they approve to such an extent of the theories laid down by Prof. Frankel, by Prof. Burrows and particularly of the policy laid down by Sir John Anderson, Chancellor of the Exchequer in Great Britain, and quoted with approval by the hon. member for Fauresmith (Dr. Dönges), whether they would equally favour the control that is imposed on the people of Great Britain by the Government of Great Britain and whether they would equally favour South Africa enduring the unheard of sacrifices that the British people have been compelled to make. They even go to the lengths of dwelling on the circumstance that £180,000 have been added to our taxes. What is that in comparison to the issues with which we have been faced? Will they agree so glibly on those points as on other points they have picked out today? What is the attitude they have taken up in connection with the matter? They based their criticism on theoretical analyses made by these professors, and analysed the national income in this light. But we must deal with facts. Let us take the hon. member for George. We need not dwell on the hon. member for Fauresmith because beyond a few quotations from English professors and some lines from an English poet, there was not an original thought in his contribution to the debate. One of the main criticisms of the member for George was in reference to the amount of money that is lying idle in the banks. I entirely agree that a great deal of the money lying idle in the banks is there primarily owing to the fact that there has been too much profiteering in South Africa. Instead of imposing an excess profits tax and making other demands on war profit-making up to 100 per cent. we have imposed an excess profits tax of only 15s. in the £. I remember some two or three years ago when the excess profits tax was being dealt with there was collusion between hon. members opposite, and the then hon. member for Kensington (Mr. Blackwell), their view being that the taxation was too heavy and that it would discourage people as they would not be satisfied with their proportion of the profits. I should like to know whether hon. members have revised their attitude. The remedy I would have imposed in respect of idle capital that is locked up in the banks —and I wonder whether hon. members opposite would support this—is through a levy or idle capital; that is the way in which I would enforce the use of this idle capital. We have been told that no less than £15,000,000 has been subscribed for a Union Government loan that was issued at 2 per cent. By whom has it been subscribed? Largely by these very people who are keeping their money lying idle in the banks. They could invest that money in industry, but they are not satisfied with 8 per cent. and they are putting their money into a 2 per cent. loan with a view to keeping it there until such time as pressure on the Minister will make him improve that figure. That is the position as far as they are concerned. Reference has been made to the national debt. Again the hon. member for George compares the position as disclosed by the Minister of Finance with the position when the Nationalist Government was in power, when special provision was made for reducing the national debt. In the first place, I would remind the hon. member that there always was a sinking fund, before Mr. Havenga introduced his provisions in this connection. In the second place, they should remember they are not the Nationalist Party of 1924. The Nationalist Government of 1924 was composed of an alliance between that party and the Labour Party, and I was one of the ardent supporters of it at the time. Hon. members opposite should remember when they claim credit for the Nationalist Government of that time that the Nationalist Party of today are not the inheritors of the policy of the Nationalist Government. [Interruptions.] That is not my statement at all, it is the statement of Gen. Hertzog, and when he was driven out by members of the party opposite he said the country would not follow the policy of the present Nationalist Party. The real inheritors of the ideals and traditions of the Nationalist Party of 1924 are the Fusion Party and now the United Party. They are the people who stand for development and for co-operation. They are the people who play the game not only by the urban population but also by the rural population. Again hon. members opposite made a point of the cost of living, and we were told that the cost of living in England and New Zealand compared favourably with the cost of living in South Africa. I ask hon. members, would they have agreed to the control that has been imposed in Great Britain? Would they have agreed to the 100 per cent. rationing imposed in Great Britain in order to keep down the cost of living? No, hon. members want free development, they do not want such control as is imposed in Great Britain. Then hon. members spoke with enthusiasm about the conditions that the farmers in Great Britain are experiencing. The hon. member for Fauresmith dwelt upon what is being done to encourage the farmer in Great Britain. But he has not told the House that the subsidy paid to the farmer in Great Britain is based on marginal land. It is only the farmer who produces on unpayable land who is granted a subsidy, but the farmer who farms rich and fertile land does not get that subsidy at all. Would they be prepared to accept the principle that in future, in dealing with a subsidy to agriculture, it should only be paid in respect of the marginal and sub-marginal land and not to the wealthy farmer who is making huge profits, leaving the State to secure its share through the income tax which he usually contrives to avoid. I do not think for a single moment that hon. members opposite would be prepared to accept a policy of that kind in South Africa. But in spite of that they speak glibly of the situation in England and quote from articles published by English professors in South Africa. The hon. Minister is perfectly justified in saying that at present, and until such time as the war is over, and we know that to an extent war expenditure is reduced, he is not prepared to alter the position, but he will go into the question. My hon. friend the member for George (Mr. Werth) quoted an article in the “Cape Times” with great approval. I think it is probably the very same article in the “Cape Times” that contains the passage I wish to read to the House—

The hon. member cannot quote a newspaper article about a debate that is in progress.

What about the article read by the hon. member for George?

I ask the hon. member for George whether he agrees with that quotation, and after all that is what is laid down by the Minister. The country is still in this position that we still have a huge expenditure in connection with the war, and let me remind the House—I know my hon. friends opposite do not want to be reminded of it—that though we are looking forward to the war in Europe being over in a matter of weeks, even then there will be some expenditure before the troops are brought back and demobilised. Furthermore, I think we are committed, and committed very justly, to the war against Japan. My hon. friends opposite forget the yellow meance they used to speak about in the old Nationalist days. They forget the fact that to a very great extent expenditure on the war is related to the aggression of Japan. In the early days of the war the Vichy Government generously came along to Japan and said: Take Indo-China and protect it against Great Britain and her allies. The Vichy Government was prepared to do the same thing in regard to Madagascar. They were prepared to hand Madagascar to the Japanese for protection against Britain and her allies. In view of the fact that Madagascar is so near to South Africa, I should like to know what the attitude of the Opposition would have been if Japan had got possession of Madagascar. It was due to Great Britain and her allies and the South African forces, and especially to our Prime Minister that we saved Madagascar before the Vichy Government was ready to act, and that that tragedy was averted from South Africa. It is due to that we are today in the safe and secure position in which we stand. That being the case, surely no one, no reasonable person at any rate, and I do not include our hon. friends opposite in that category would for a moment suggest that the war is over until Japan is out of the war. It is difficult to tell until Japan is out of the war what our war expenditure will be, and in the absence of that knowledge it would have been a gross blunder to have removed or reduced our war taxation and to have placed ourselves in the position of perhaps having to budget for war expenditure on a subsequent occasion, after we had already abandoned the policy. I think that the Minister has been courageous—I know that is not a word that is often applied to the Minister— he has been courageous in withstanding the criticism and in resisting the agitation that has been carried on by various vested interests, and to have adhered to the policy that he had adumbrated in the present budget. This will give him time, and I think it is as well that he should have time to go into the whole question of what method of taxation should be imposed. For my part I believe that when the Minister examines these problems in the interval before the next budget, he should consider the idea of taxing idle capital, because I believe the moneyed people who are so disloyal and who are so unconcerned over the needs of the country as to withhold their money from investment because they are not satisfied with a profit of 8 per cent., will not be prepared when we pass over to the reconstructional period in peace, to invest their funds for the development of the country unless they can get a higher profit. Consequently, I think the Minister should embark on a policy that would afford some measure of protection for the people of South Africa, and he should be prepared to consider taxing idle capital to such an extent that it will force it to be applied in the interests of the country as a whole. I go further. I think the Minister should definitely consider between now and his next budget, the principle of so grading up income tax that you will have a level below which no citizen will pay and you will have a ceiling, shall we say, of £5,000 above which the tax could be 20s. in the £. I say without any hesitation that any individual, be he on this side of the House or on that side of the House or in whatever part of the country who, whilst the majority are in a state of need, desires to have more than £5,000 per year for himself, can only be described as a hog. That is a point which, I think, the Minister should consider. I go further. The late Sir Patrick Duncan supported that suggestion of mine many years ago in this House. That is a suggestion which the hon. Minister should consider when he comes to lay down a new system of taxation, the principle of differentiating between earned and unearned income. Finally—and I am sure hon. members on the other side will cheer me to the echo when I put it forward —I think the Minister should consider the imposition of a land tax in South Africa, in order to see that land shall not be held idle in this country, and to compel the best use of land in South Africa, because the farmer who is developing his land will not be hit by such a tax. But the man who holds up the development of the land, the big corporation which has a tremendous amount of idle land, the rich man in the town, who is trying to evade taxation by investing his money in farms in the country, will have to pay the tax. It will not pay him to hold the land idle for speculation purposes, and he will be forced to develop the land to a greater extent than has been the case in the past. And then I want to say this, I disagree with the hon. member for Vasco (Mr. Mushet) who said that no indication of a revision of taxation has been given. I think there are three highlights in the Budget which are worthy of notice and to which insufficient attention has been paid and that is firstly the proposal that the Minister has made that he is going to appoint a special departmental committe to revise the whole system of mining taxation. I say without any hesitation — I know there are some friends who are opposed to the mining industry—I used to be opposed to the mining industry, but I have realised that but for the tremendous amount of money that has been spent by the mines in the form of wages, salaries and in the consumption of local products in South Africa, the country would not have been developed to the extent it has been developed. And so long as the world is prepared, as it is now clearly prepared, to utilise gold, so long is it desirable for us to pursue a policy by which we will encourage the extraction of the last possible ounce of ore and thereby increase the spending power of the people to the advantage of secondary and agricultural industries in South Africa. And in that connection I would strongly suggest to the Minister—and it is not a case of mining at a loss—that when that departmental committee is considering the problem, he should, as one of the terms of reference, submit to them the suggestion that there should be considered a rebate in respect of low grade ore, so that so long as the State does not lose, as long as the State does not have to contribute, we should pursue the same policy in respect of the mines as is pursued in Great Britain in the case of agriculture, namely, to help the mines by granting a rebate in respect of low grade ore. We will not lose revenue by doing so. Instead of taking the direct revenue and possibly forcing the closing down of the mines—and our business is to delay the closing of the mines—it will mean that the money that they expend will be available for other industries, will be spent on agriculture, will be spent on production generally, and the Minister will by way of indirect taxation get bäck the revenue which he would normally have given to the mining industry by giving them a rebate.

Every mine is full of low grade ore.

Give them a rebate to that extent, but do not give a rebate in respect of rich ore. Another point that the Minister has made, and not a single word has been uttered about it so far, is his proposal, a very far-reaching proposal, in so far as the Provincial Councils are concerned. The change in the method of subsidy will place a greater responsibility on the Provincal Councils than has been the case in the past. And especially the provision by which if they exceed their expenditure by more than 5 per cent., the subsidy which they will get from the Union Government will be one-third instead of 50 per cent. on such excess expenditure. I think the value of that new policy is going to be this, that the Provincial Councils will be encouraged and forced to carry out its real functions, and their existence will be entrenched instead of the Provincial councils being in jeopardy all the time of being done away with. The Provincial Councils are now strengthened. The Minister’s new subsidisation policy will have the effect of encouraging those Provincial Councils to pursue a policy towards free hospitalisation, and I feel that is an important aspect we have to consider. When we have been speaking in this House about the incorporation of South-West Africa, when we have been speaking in this House about a possible economic union between the Union and the Rhodesias with possible political co-operation, when we have been speaking about economic arrangements with the territories further north, the British African territories. I believe that the menace which hung over the Provincial Councils was one of the means of retarding any such development, and that the knowledge that South Africa, by the policy laid down by the Minister in this Budget, whereby the Provincial Councils will continue to exist, will be entrenched—thus having the fullest encouragement to carry out health schemes and educational schemes which are necessary for the betterment of South Africa —that knowledge will foster co-operation between South Africa and the Rhodesias and the British African territories, so that we may build up what I think all far-seeing people have been looking forward to, namely, a greater South Africa for the benefit of all South Africa.

I want this afternoon to look at this Budget from an objective point of view without any political bias. It seems to me a pity that in this indiscriminate way we mix our politics so much with our finance. This is primarily a War Budget, and as such it is a valuable experiment in financial management. For five years now the hon. Minister of Finance has departed very considerably from the traditional canons of finance. I mean those canons in so far as they were based on the policy of laissez faire. By that policy the position is held that at all times in society there are economic forces which, if left to themselves, will call forth the full productive capacities of people. Therefore the State should not use private wealth or property except at a minimum, and that the State should refrain also as much as possible from engaging in economic activities. Now the Minister has done just the opposite, and he has done it with success. The war has compelled him to put public need first; and the major economic factors in the country vested as they are in private enterprise and public bodies, have had to subserve the national imperative—often at great profit. He has Shown us that there can be no total war effort on the basis of laissez faire; nor can there be any total peace effort on the basis of laissez faire. Sir William Beveridge puts the matter rather well in these words—

That is it. A compelling common purpose. In the peace that compelling purpose would be the supplying of the simple needs of John Citizen, to supply him with his full measure of consumer’s goods: houses, hospitals, schools, food, clothing and so on. I want to urge’ the Minister of Finance, in preparing for the peace and in the peace, to adhere to the pattern of this War Budget in providing plenty for the common man. That is the road to the achievement of full employment in South Africa. The war has proved that the State in the exercise of its sovereign power, by its financial initiative, by its example, can call forth effective demand in the community to engage our manpower at full capacity, giving enterprise investment opportunities, eliminating unemployment, and raising living standards. Total war means full employment. There can be no idle resources in war. We plan our economy to prevent that. In war we create all the plenty we need; to create scarcity in war would be sabotage, would be a serious crime. For the peace, we require the same type of planning—planning for plenty—to provide all the essential needs for a decent family life for all races in this country. To create scarcity in view of these necessary needs, should be regarded as great a crime in peace as the creation of scarcity is in war. I want to appeal to the Minister in the same terms as he was appealed to by the hon. member for South Rand (Mr. Christie) in carrying through his Budget to work to a human datum, not a money datum; to make himself the master, not the servant of the money power. The Minister can to that; for what is financially successful in war, can also be financially successful in peace. This is a Budget, in my estimation, which has virtues. In the first place, it is a good War Budget. I do not want to touch on that aspect of it. In the second place, however, it holds tremendous potentialities for a policy of expansionism in the peace. In order to indicate what I am driving at, I want to analyse it this afternoon in a somewhat unorthodox way. There are three essential components in any Budget. The first is the output capacity of the man power in this country when it is at a condition of full employment, say, for example, when it is at a position that 96 per cent. of our employable capacity is being used. The output capacity, if you like “the national turnover,” is the result of this full employment. I want to use figures; they are entirely my own figures, and I take the responsibility for them. I use them merely for illustrative purposes. The output capacity today is roughly about £550,000,000. If we maintain it at that level in the peace — and this is the main point of my argument — we should be able, I believe, to ensure full employment in the peace. We dare not reduce our national turnover during the peace. How can we keep it at £550,000,000? Obviously we must have a demand sufficient for that. Where will we get that demand? There are two sources; from the State consumption outlay and from the non-State consumption outlay. According to this Budget the State consumption outlay is £124,000,000 from revenue and £56,000,000 from loans; the State’s total contribution to the national market demand is therefore approximately £180,000,000. The third component is the non-State consumption outlay. It is difficult to calculate that today. It comes from individuals, from private enterprise, from public bodies. My estimate is about £350,000,000; adding to that capital that would be used in the country for productive services, say a further £60,000,000, we get a total non-State consumption outlay in this country of approximately £410,000,000. The conclusion from these figures would be roughly this: that if we have £410,000,000 from non-State activities, £180,000,000 from State activities, then the total demand in the country, on those figures is £590,000,000. That is in excess of the output capacity of our manpower at present; it is in excess of our national turnover; that means that today we have full employment. It also means that we have a serious inflation gap in our economy; it is the Minister’s first duty, in preparing for the peace, to close that inflation gap. I believe he can do it. I believe he can stabilise our economy even at today’s prices. If not, then the inflation will assuredly wreck the peace. How can we close that gap? Not by reducing purchasing power, not by increasing taxation on the lower income strata; but by increasing consumers’ goods; in other words, giving John Citizen the plenty in the form of consumers’ goods on which to spend his money. The country in these days is looking to the Minister of Finance with hope and confidence, that when the war demand and militray allowances cease, he will, by means of his Budget, this Budget, by means of the departments of State, by means of our own State bank, the Reserve Bank, by means of the taxation system, by means of investment spending through the State, encourage the maximum output from our farms, our factories, our businesses in the country. His is a great responsibility; and if I may say so, he has a magnificent opportunity. No man in the history of this country has had a greater opportunity—and I use his own words now when he introduced his Budget last year— to create “a better life for the people of South Africa.” This year we are prepared to spend £82,000,000 on the war. The Minister quite rightly reminded us in his Budget speech that there can be no great reduction of this expenditure after the war. It is conceivable that we shall require more than that if we take into consideration the necessity of putting something like 60,000 men now in service back to work. The State dare not reduce its contribution to the total national turnover. Hon. members will recollect that we tried that dangerous experiment in 1920. We tried it again in 1933. The psychological and the subsequent economic effects were disastrous to this country. I think we shall all have to accustom our minds, and reconcile ourselves, to a high level of expenditure after the war. That means today, without delay, switching from war services and war goods, to peace goods and peace services. It is in regard to that aspect that this Budget is disappointing to me. I had hoped that the Minister would come forward with some alternative expenditure to the war expenditure to bridge the transition smoothly and easily without rocking our economy—bridge the transition from war to peace. What, in order to make my case practical, would be a reasonable expenditure, a work-creating expenditure, in substitution for the war expenditure as we are budgeting for it this year? Again I want to give some illustrative figures. For national housing, we should prepare to spend £120,000,000 a year; another £10,000,000 for capital construction for health and health services; £15,000,000 for the conservation of our soil on a national plan; another £8,000,000 for the expansion of public education, mainly capital construction; £10,000,000 for public works, excluding the railways; £20,000,000 for social insurance; a further £5,000,000 for land settlement and training for our veterans. That would give us a total expenditure of £8,000,000 as a basis, a beginning, of our peace economy. That, Sir, is the programme for the common man. That is the social security that this country is waiting for from the Government. That is what the country is wanting. There is great disappointment in South Africa with the Government’s peace policy. We have not yet tackled 30 per cent. of our housing requirements. We have not yet begun our programme of national housing. No capital construction on a big scale is under way for health services. We have no national scheme for soil conservation Our Board of Trade and Industries has not yet presented this House with a report in connection with our industrial planning. Social insurance has been turned down, although four responsible Government committees have recommended it; and instead of that, we have had proposed to us a means tested poor relief system, costing between four million pounds and six million pounds in addition to the present expenditure. The recent White Paper, misnamed social security, offers us no real hope, Sir, for constructive courageous social planning for our people. I say again that South Africa is disappointed with the peace planning of the Government; and the Government must be warned that it cannot rely indefinitely on its war effort for the support of the people. They are asking: What is the Government’s peace plan? It is past the eleventh hour, when a master plan of social construction should be given to the country. If that were given today, if the Government were to undertake in addition to appoint a Minister of Reconstruction as England and New Zealand have done, I believe confidence could be restored in the Government’s ability to win the peace. I have little time left to touch in detail on the taxation proposals of the Government. I would like, however, to see a very much heavier tax burden imposed on the higher ranges of income, with less weight on the lower and middle ranges. I remember, too, as hon. members do, that the inflation today means that, our South African £ is worth about 10s.; and that every family from the poorest native to the richest is thereby paying an income tax of 10s. in the £. I would like to see the death duties increased. I favour the Rignano system of imposing not too heavy a duty on the estate at the beginning, but increasing the weight of that duty as the heritage is passed on to grandchildren. I would like to see a capital levy imposed on all those who have made excessive profits out of the war; and I am in agreement with the hon. member for Troyeville (Mr. Kentridge); though I would like to see something more specific than he suggested. I recommend a capital levy on those who are holding land out of production today, namely cheque-book farmers and speculators. If that were done it would be possible for the excess profits tax to be removed, with its restrictive effect on industrial development. In those conditions the fixed property profits tax could also go. Might I suggest further that the Minister of Finance should consider adopting the practice of the British Treasury of issuing Treasury deposit receipts to the commercial bank, in order to make immediate use of their balances, at, say, a half to one per cent. I believe also the Minister would be justified in these days of war, and during the great emergency of the peace just ahead of us, in using our own State Bank for the issue of at least 60 per cent. of our loans, loans which he could get almost interest free. In that way he would avoid a heavy interest tax burden on capital development and on posterity. The Minister of Finance in this country is our pilot in these difficult days. A great opportunity is knocking at his door. I would like him to take over a Ministry of Reconstruction himself, on the basis of a policy of expansionism with a social security objective. This is the time, while we are in the midst of total war, to plan for that. Keeping in mind the responsibility of men similar to that of the Minister (a man with a position determining the welfare of the generations to come), a great popular leader in England, Harold Laski, says—

That is the Minister of Finance.

In judging the Budget we would naturally like the Minister to understand that we on this side too will judge it on its merits. After the Budget Speech of the Minister a certain measure of relief was undoubtedly felt not only on his own side but also in the country as a result of the announcement that there would be no additional taxation. But in that connection the Minister has a responsibility. He gave the country to understand by implication that there would be additional taxation. At the beginning of February it was announced that Parliament would be asked to approve of certain taxes in connection with services, and at the end of that same month the Budget Speech was delivered and it then appeared that there would be no additional taxes.

It was not said that it would be done this year.

Nor was it said, however, that it would be later. As I read this paragraph, I understood it would be immediately. From an impartial reading of this paragraph one comes to the conclusion that it is proposed to introduce additional taxation. I do not want to accuse the Minister of having done this deliberately. But he will understand that it does seem a little suspicious that the country was first brought under the impression that taxes would be increased, and then this announcement One is naturally gratified to know that the war expenditure will be reduced, at any rate. On this side of the House we need not say that we are opposed to it; the Minister knows it. But since, generally speaking, that is a dead expenditure, we welcome the reduction of war expenditure out of revenue. There is also a certain amount of gratitude in respect of the small increase which the Minister has brought about in the tax on stock exchange transactions, and in respect of the decrease in connection with the purchase of machinery. We welcome that as a step in the right direction, but the Minister will understand that since that reduction is so small, it hardly affords any relief at all. I dare say the Minister would not be surprised if we told him that, generally speaking, this Budget has been a great disappointment. For months the country clamoured for certain services, and it was stated in the announcement of the Prime Minister some time ago that legislation would subsequently be introduced in this connection, but the people in the country expected provision to be made in these estimates for certain services in the direction of social services, in the direction of meeting social needs. In that respect it is disappointing. It is also disappointing especially to those who expected that a considerable change would take place in the system of income taxation. The Minister of Finance has explained why no change has been brought about, but I do not think we can accept the explanation that there was no time available. He felt, as he did the previous year, that if he brought about a change, it might possibly mean a reduction in the revenue, and in order to be on the safe side as far as that aspect is concerned, he preferred not to attempt to introduce any change. We have fought for years in regard to this matter, but it remains one of the causes of disappointment that the system of taxation and the taxation machine remain as they are, and that there is consequently an unequal tax burden on the various sections of the population. I need not again speak of the heavy burden on the lower income groups. But the main cause of disappointment as far as this Budget is concerned is that no provision has been made for savings out of income, to put aside money for industrial development. All this talk about new conditions in the future, about the new life which will be created in this country, and the improvement of living conditions, will mean nothing, and all those plans will be unsuccessful unless provision is made for increased production, and unless we concentrate on creating new sources of wealth for the country. It is fruitless to talk about new conditions, unless we do that. We can, it is true, manpulate our currency, and in that way we can try to create the impression that our wealth is worth millions and millions more than it actually is, but we know that manipulation of our currency cannot actually increase our riches. I want to emphasise in connection with this Budget, that no provision is being made for the encouragement of thrift to make more capital available to increase the actual assets of the country. If, in addition to that, we take into consideration the estimates which have been made with reference to the increase in the national income, and if we take into consideration the increased taxes which have been imposed from year to year, we can only come to the conclusion that those increased taxes, which are designed to find revenue for Government purposes, are out of all proportion to the increased riches of the country. For these reasons I heartily support the amendment of the hon. member for George (Mr. Werth) that it is an urgent necessity, that the matter is so urgent that we have the right to expect the Government during this Session to make provision for proper means of employment. It can only be provided profitably in two directions. The country’s sources of income from which the national revenue is derived—well, a number of factors are mentioned in estimating it— but in actual fact there are only three which form the source of the real wealth which is created in the country. These are agriculture, mining and industry. We must remember that we have no external investments from which we derive revenue to augment the riches of this country, nor are we rendering services to countries overseas. We only have those three sources, which I mentioned as sources of income, yielding the real wealth of the country, and out of those sources a considerable amount is devoted to services, but those services do not increase the actual revenue of the country. Those services also represent earnings, but they are only services which can be extended on the strength of the actual wealth which is produced. As one increases the actual substantial wealth, one can also increase those service riches, otherwise one finds oneself in a maelstrom. In this connection it is surprising that South Africa has obtained only half its actual national income out of these three sources which I have mentioned. In the year 1940-’41, the revenue derived from farming, mining and factories represented 50.4 per cent. of the national income; the following year it was 49.6 per cent. and in the year 1942-’43—the last year in respect of which we have the figures—it was 49.5 per cent. May I here associate myself with what the hon. member for Fauresmith (Dr. Dönges) said and lodge my protest against the delay in the publication of these data. Why should we wait for years before these particulars are published? I see no justification for this secrecy, and it can only create distrust in those who are responsible for the servicing of the country. The remaining 50 per cent. of the national income consists of services which are rendered in connection with the original wealth. These are sources of income about which we should undoubtedly be concerned. Another factor which is a matter of concern to us is that no less than 10.6 per cent. of our national income is derived from war services. In my opinion, the fact that we obtain such a great proportion of our revenue from a source which is a passing phase, is particularly dangerous. To me that is a danger sign, and it is a danger sign to everyone who would like to see our national income more and more assume the form of real wealth. The actual national income from the three sources which I have mentioned was £238,000,000 in 1941; in 1941-’42 it was £256,000,000. In 1942-’43 it was £270,000,000. But before the war the same national income was £201,000,000. During these four years the actual national wealth only increased by £28,000,000 on the price basis of 1938-’39, while the actual national income on paper was £426,000,000. I want to emphasise therefore that the actual national income practically became stabilised, while the services in that connection or arising therefrom formed an ever-increasing proportion of the national income, and that it is something which ought to receive the serious attention of the Minister of Finance. To this extent the nation is faced with a serious problem. A new standard of living has been promised to the less privileged classes. Not only was it quite correctly promised to them, but they had the right to demand it. The conditions of a large section of the population are unsatisfactory. These promises have been made to them and the State should be responsible for carrying out those promises. The first person to whom they will look to give effect to it, is the Minister of Finance. In the second place, as has been mentioned, there are hundreds and thousands of workers who will have to be re-absorbed in the near future. As far as they are concerned, the Minister and the Government have two alternatives. The first and the correct thing would be to provide opportunities of employment immediately. The second would be to keep the returned soldiers in the camps until such time as they are demobilised. Thai policy can only give rise to serious consequences. If the Government does not take steps to create employment opportunities, it will have to keep thousands of men and women in the camps. It will have to face two consequences. The first is that there will be continuing expenses which will have to be covered primarily from loan funds. The burdens of the nation will be increased without there being any productive investment. The second is that it is going to create a state of mind on the part of those people which it will be very difficult to control eventually. My advice to the Minister of Finance is to go out of his way to create circles of employment which will encourage the production of wealth. In other words, he should give greater encouragement to industrial undertakings and industrial development, by means of which so much has already been done to increase the independence of the nation and to create opportunities of employment. This morning I got data from another source which gives me an indication of the value of the sound policy which was started in 1925. Up to 1942 £100,000,000 capital had been invested. There were 364,000 people in the employment of those private industries; and during the same year £53,000,000 was paid to the employees in the form of wages. Here we have a field where opportunities of employment can be created, where labour can be used productively, and where goods can be produced to meet the needs of the people. In this connection I want to emphasise one aspect particularly. There are other members of this Party who will also do so and who have already done so. One of the phenomena of the times is that the non-Europeans are striving to make headway, and unless openings and opportunities of employment are created to meet the growing feeling for something better, we must expect trouble to arise. We and our industries are faced with new problems, and the question then arises why practically nothing has been done in the estimates to give the industrialist an opportunity to make a start with the development of new industries? I have already referred to two things which have been done. I am grateful for those small concessions which have been made, but surely the Minister cannot expect those trifling concessions to enable industries to comply with what is expected of them. It is the task of the Minister of Finance and of the Government to see to it that the financial policy of the country is such that the resources of the country are properly used. He controls the economy of the nation; he can exercise influence on the thrift of the nation. If the people see that their savings cannot be properly used, why then should they save? The promotion of thrift and the development of the capital power of the nation are factors which are determined to a large extent by the financial policy of the Government. The people want to know what sources of investment there are for their savings and what protection they will receive. We are disappointed with the reaction of the Minister to these considerations, as revealed in his budget speech. The question is what light the budget throws on the problems of the country. I have already said that we have three important sources of wealth, namely agriculture, mining and industry. There are numbers of additional factors for the promotion of industry in South Africa, but there are particularly three outstanding factors which I should like to analyse a little further. The first is the availability of cheap capital. The second is a stable economy and the stability of your currency. The third is the stabilisation of the marketing of products. I should like to go more fully into these aspects. The first is the availability of cheap capital. It is no longer necessary to urge the necessity of industrial development. It is only necessary to point out the shortage of opportunities of employment which exists, to realise that capital is necessary for the development of industries in order to meet those needs. What is the position in connection with the provision of cheap capital? The Minister was delighted with the available private capital and he referred to the £171,000,000 which is deposited in the commercial banks. Other members have mentioned bigger amounts. I am afraid I cannot associate myself with the arguments which have been submitted to us in regard to the availability of that capital which lies in the commercial banks. I should like us to analyse the position a little more closely before we can come to the conclusion that this capital is available for use in industry. The Minister touched on this aspect in his budget and he stated that £271,000,000 was available for industry from these sources. It is still a question how much of that money is available in the form of long-term capital for our industries. In that connection I want to mention six factors, of which three can be assessed accurately and three cannot be assessed very accurately. The first which can be assessed accurately is the amount which is necessary for the statutory reserves of the banks. No bank or individual can touch that. The Banking Act requires that there shall be available at all times for the investors in the commercial bank a statutory reserve which is in proportion to the deposits at any bank. On the basis which is given in the Banking Act, that would mean not less than £24,000. I should also say that £12,000,000 has been deposited with the Reserve Bank in addition to the £271,000,000. Then we have this further consideration that in present circumstances the commercial banks will retain at least 20 per cent. cash to meet their obligations. In normal times the British banks keep from 10 per cent. to 12 per cent. But in the present circumstances it would be rash for any bank to keep less than 20 per cent. of its obligations in the bank. That means that something like £52,000,000 must be kept available. That is cash which the commercial banks have to keep in order to be able to meet the demands on the part of the public. We must also remember that a great proportion of these investments was deposited in the banks on demand. A cash sum must be kept to meet those demands, and it cannot therefore be used for investment purposes. Then there is a third figure which the Minister can assess but in regard to which the particulars are not available to me. He has made a concession of a 10 per cent. rebate on investments in machinery. These rebates are deposited in cash in the banks until such time as there is an opportunity to replace machinery. It is a reserve for the replacement of worn-out machinery, and it cannot therefore be regarded as a capital investment in the sense which the Minister had in mind. If we assess this 10 per cent. over a period of 5 years, it means that provision will have to be made for £50,000,000. Then I come to a particularly important aspect which cannot perhaps be assessed very accurately, but which should nevertheless be borne in mind. The Minister must not forget that since the beginning of the war, as a result of great shortages of supplies, the commercial practice in South Africa has changed completely. Before the war it was the practice to adopt a credit policy in commerce. The period was thirty days, sixty days and ninety days, the bills and overdrawn accounts were used. During the past few years that credit policy has disappeared to a large extent, and the trade is now conducted on the basis of cash or thirty day’s credit. In other words, two-thirds of the credit which formerly circulated amongst the clients of the banks, has now been converted into cash, and it represents part of the available funds which are in the commercial banks. If a radical change takes place in business methods and if bills are again used, a great proportion of this £271,000,000 will have to be written off against that credit which will again come into operation. If we deduct all these amounts from the £271,000,000, I think we can only come to the conclusion that it will be an altogether inadequate amount for industrial development. I just want to conclude my remarks on this aspect of the matter by emphasising that the conclusion on the part of the Minister that there is adequate capital to be devoted to industrial development, is a statement on which no reliance can be placed. We cannot rely on this source which the Minister mentioned; and other provision will have to be made. If the Minister does not make provision in his estimates for the saving of money from revenue for the development of industry, there are only two other sources from which the money can come. One course is for the State to take the responsibility. We already have the Industrial Development Corporation, but the amount which is made available along those lines is a bagatelle. The other course which will be a very serious reflection on our policy and that of the Government, is that there will be facilities for the investment of overseas capital in South Africa. If that happens, it will be a serious charge against the Minister that he did not give industry in our country an opportunity of saving for investment in industry, an opportunity of putting aside something for future development. We know that there is tremendous competition overseas to market products in South Africa. It stands to reason that some of those companies will want to establish branches of their industries in South Africa. I do not want to express an opinion on that point at the moment, but at this stage I definitely want to express the opinion that it will be much better for South Africa’s own benefit if the capital for the development of our industry can be found from the savings of our own citizens. The next factor in connection with our industrial development is the stabilisation of our currency. The hon. member for Fauresmith (Dr. bönges) has already mentioned it in certain respects, and he has indicated how the purchasing power of our currency has decreased from year to year. Since that is the case, we can only come to the conclusion that there is a serious danger that there will be a further, serious depreciation of our currency. In his Budget speech the Minister expressed concern about the stability of the international currency. He referred to representation at national conferences and an arrangement which will probably be carried into effect in May. It is very much more important for us in South Africa to stabilise our own currency internally. I do not suggest that we are indifferent in regard to external Currency; but we are in this favourable position that we are able to pay with gold where there is a shortage of means of exchange, and we can therefore stabilise our currency if the Government will take the necessary steps in that direction. It is essential for welfare and peace in our industrial life to stabilise our currency. A number of difficulties are beginning to "make themselves evident in the industrial sphere. That is also happening in South Africa. There are labour difficulties and the Government is trying to suppress those difficulties here and there by means of negotiations and not by force. Unless the currency is stabilised we must expect other serious difficulties to arise. As it is, our currency was responsible for the fact that the Government has had to take steps and impose heavy burdens on the shoulders of the taxpayer in order to make payments to officials as a result of the decline in the value of our currency. The Government had to pay an amount of £3,380,000 of the taxpayers’ money to the civil servants, not to restore the purchasing power of their salaries to the pre-war level, but in order to give them some relief in the difficult position in which they were placed. That £3,380,000 represents nearly 20 per cent. of the whole amount which is being paid in the form of salaries and allowances. The Minister of Transport has had to make provision for an amount of £4,435,000 in the form of allowances which have been paid as a result of the decline in the value of the currency. He is making provision for something like £5,500,000 in respect of next year in order to compensate for the declining value of the currency. It is difficult to estimate how many millions private employers have to pay in this respect. I think it is clear that if the Minister ever seriously intended to stabilise the currency— and I take it he had serious intentions of doing it—as far as purchasing power is concerned, then he has Tailed utterly. I do not want to draw comparisons with other countries. That has already been done, but with these details before us, it reflects a serious position. Inflation is no longer a matter of the future; it is there already. What still remains to be done is to take steps in that connection. I also want to emphasise this point. Unless the stability of our currency can be assured, we deprive the investor of his courage and confidence in the industrial development of the country because he will always have to contend with labour difficulties and disputes, and if the value of the currency fluctuates internally, he cannot make sure of his market. Of the millions of wage earners in South Africa—that is perhaps slightly exaggerated; let me say of the million wage earners— there are very few who are compelled today to consume less than they did formerly. To that extent the market of the producers will be reduced. It is urgently necessary to stabilise the currency, to make capital cheap and to ensure markets for our producers. What is the Minister going to do to stabilise the purchasing power of our currency, to stabilise prices? If he continues to borrow on a large scale, and if the war industries cease to produce as they are doing today, what is he going to do? How is he going to change over from a war economy to a peace economy, without exposing industry, labour and trade to this danger? These vital questions are not dealt with in the Budget. The Budget is silent on those points. I hope the Minister will give us reason for a little more courage and confidence in his reply and that he will give us some relief as far as these problems are concerned.

I, like many other hon. members of this House, wish to add my quota of praise to the Minister for the Budget, but he will know as well as we all know that where there is plenty of light there must of necessity be some shade. I do not want to speak on the Budget in general; I wish to concentrate on one or two particular items. It is never popular to say something in favour of the upper financial strata. It is never popular to say something on their behalf because generally speaking amongst the middle and lower financial classes they command not too much respect. The hon. member for Durban (Berea) (Mr. Sullivan) has said that he looks to the Minister with confidence and hope. I also look to him with much confidence but with little hope. At the same time, Mr. Speaker, I should like to point out some inequalities. We know full well that in this country about 10 per cent. of the population is carrying the financial burden and we know there is a limit to that load. It is true, as has been said in Parliament before, that we expect most from those who are most able. I would like to say we cannot expect all from those who are most able. There are certain inequalities which are very glaring; and I humbly suggest that I am surprised those inequalities have been allowed to remain so long. I am referring now to the professional class, and on this occasion I will refer to the medical man, because that happens to be the professional class regarding whom I know most. Take the professional class of man; take the returned soldier who has been working for years and who goes back to his practice after some years. He is promptly told he is a beginner. Let us take two cases in point. When this beginner appeals to the income tax authorities he is referred to Clause 7 (d) and he is told to appeal. Well, it is not moral for a man of that class who has given his all to his country, to have to appeal for his rights. We look on that as immoral, though it may be legal. I will state a specific case. Take two medical men, A and B, whose income was £2,500 each gross before the war. Dr. A for reasons of his own prefers to remain at home, and Dr. B decides to give up his practice, to leave his wife and children and go. He may have been practising for years. Assume that his expenditure including his life policies, apparatus, rents, etc. is roughly £1,800 a year. Assume this man goes to the war with the rank of captain. He will now be drawing £750 a year, while the man who remains at home and continues his practice will be drawing £2,500 a year or more. During that period Dr. B has no opportunity for private practice; that is to say, he has made a sacrifice in order to go to the war. When he returns after an absence of four years, he is treated as a beginner and his salary for tax purposes is set down at £1,500 a year. So in view of his expenses he must draw from capital. Though the Prime Minister said that people would be restored to their original positions as far as possible, he is told by the income tax people that he is a beginner and he must start afresh, and that his allowance will be on a salary of £1,500. So this man had to spend some of his capital— he is told by the income tax authorities, and let me say that he is sometimes told in a not very pleasant way: You are a beginner, and you will start at £1,500, and above that you will have to pay E.P.D., whereas the other man, Dr. A will pay E.P.D. on his prewar standard of £2,500 plus £500 viz. £3,000. Those inequalities go even further. This unfortunate man, Dr. B, submitted himself to all the dangers of warfare. He has given up four years of practice and he is treated in this way by those who promised to treat him better. It is unfair, to put it mildly. But of course the Minister of Finance will tell me: You should know very well that this man has redress under Clause 7 (d). I treat that with contempt—with the contempt it deserves. I suggest that not only should this returned soldier not be told he will now be dealt with as a beginner, but that he should be automatically returned to his pre-war standard. That is his due, and he has every right to expect it. Further, I would like to ask the Minister of Finance in his reply to me to explain how it comes about that professional men, dentists, doctors, advocates, attorneys are subject to E.P.D., but professional company directors are not. I leave it to the House to know to whom the public owes more for its welfare and happiness, the professional man or the professional company director. I should like to say, in conclusion, that we are not deriving so great a benefit from the E.P.D. as was made out. It is only a matter of about £15,000,000 to the Treasury—I am informed on high authority— and that is not very big money today.

Not if you say it quickly.

I should like to know whether it is possible for any single individual to have framed a law by which he could alienate the sympathy of a class of the community from the Government in a more effective way than has been done by the treatment of professional people, like this man who has been at the front for four years and who is treated as a beginner and is told that he must start with an index of £1,500 a year.

I should like to congratulate the Minister of Finance on the Budget which he submitted to the country. When he made his Budget speech and subsequently broadcast it, I was in the fortunate position of being in the bushveld and I could clearly hear the speech over the wireless. And I was gratified to see the excellent and sound budget which the Minister put before the country. It was a pleasure to listen to his broadcast, and to listen to it again that evening we can be proud of the fact that we have a Government which has so controlled the finances of the country during these difficult war years that the public has retained full confidence in it. A great song was made by the Opposition this morning of the fact that there was no proper control in regard to various items of expenditdure, especially with regard to defence, but I want to ask members of the Opposition and especially the hon. member for George whether he first wanted approval to be obtained in 1939, when the war broke out, before the Government could spend a penny to defend our country? The allied countries were caught in a condition of unpreparedness and the mere fact that we still have the right today to air our opinion as free men and to criticise this Government as free men, shows that our choice at that time was right. A great fuss has been made of the immense national debt which has risen from £200,000,000 to £400,000,000. For my part I ask whether my house and my lands have suffered any damage during the war years? A few days ago an unfortunate catastrophe took place in Pretoria, and that gave us an idea of what might have happened in South Africa if the enemy had been victorious in this country. There we got an idea in one morning what it would have meant. The people, terrified, walked up the street in their night apparel, but fortunately there was not a fleet of enemy aircraft to destroy the whole city, and we owe that to the wise leadership of the Prime Minister in 1939. That alone is sufficient to make us feel grateful for the leadership of the Prime Minister, the fact that our country has been spared such disasters. Have we suffered at all? South Africa has never flourished as it has done in the war years. That is my experience as a farmer and it is proved by the investments in the savings banks and in Union Loan Certificates. Where does the money come from? Was that state of affairs brought about by poverty and misery? We are in this fortunate position that no damage has been done to any building or land, and the people have reaped the benefit of it.

Are you talking about farmers’ finances?

The hon. member knows full well that the sheep farmer for whom he has always pleaded, has not been in such a good position for years.

That is trash.

And the tomato farmers whom I represent have never been in such fortunate position.

And the boxes?

We can pay for it. We can pay for the artificial manure and for the land. There are certain difficulties. We have to make sacrifices. We have not had free supplies; there has not been sufficient shipping space to meet all our needs; and one hears on all sides that we cannot get sufficient petrol to travel about, but therein lies our salvation, because we are now paying off our debts. We cannot buy motor cars and new wireless sets; but that money is being invested in the savings bank to pay off debts. The lack of shipping space came as a blessing, because the farmers on the platteland are today paying off their debts, and that is proved by the amounts which are being repaid to the Land Bank and the Farmer’s Assistance Board. The farmers have had an opportunity of paying their debt. In this House the opportunity has been used to make capital out of the drought which we have had in South Africa, and to see whether it could not be used against the Government, whether the Government could not be accused in connection with the drought position. Is that fair and just? The Government has no control over it and it is the duty of everyone to co-operate in that respect.

Are you becoming “Empire Jim”?

I know that old story well enough by now. I am trying to make a stand for the truth and for South Africa. I now come back to the Defence Expenditure. When one listens to the pleas of the Opposition, one would say that all this money is being thrown away, that the State has not been getting any of it back. Valuable buildings, which will be of service to the country for many years after the war, have been erected in the Union for Defence. Aerodromes have been erected which we shall be able to use. Industries have been developed with the aid of the brains of South Africans, not imported men. They have made intricate technical machinery in this country to manufacture war material and the same brains are going to develop the textile industry which will develop into a great industry after the war.

Where is the machinery?

Where was it when the war broke out? Surely the hon. member is not so ill-informed that he does not know that this machinery was built by Afrikaners. He is always ready to belittle and to trample upon his own nation. The hon. member also knows that in Johannesburg and Cape Town and in the railway workshops, machinery has been built which we did not dream of building before the war. But the hon. member likes to belittle his own people. The confidence which this country places in the Government is proved by the investments and oy the development which has taken place, and the public will always be grateful to the United Party for saving South Africa in these years from the disasters which would have followed if the policy of the Opposition had been carried out. There are a few points in the estimates, however, with which I as a farmer do not entirely agree. As far as machinery is concerned, for example, I find that the ten per cent. which is granted for redemption is not sufficient. We as farmers have worked out our machinery. We cannot get ploughs or tractors or motor lorries, for example. Year after year, we have not been able to buy anything, and the Minister should consider the question of increasing the percentage. We now find that we have to pay taxes on assets which we do not possess. We have had to spend a very great deal as farmers to keep our tractors and machinery in order, and if we have to carry on like this for another two years, the farmers will have to incur great expenditure for the purchase of machinery, and this ten per cent. will be insufficient. There are quite a few other matters which can perhaps better be raised in Committee, but there is one further national aspect which I want to mention here, and that is the tendency to do nothing but talk in connection with the protection of our water supplies. I have been a member of this House for three years, and in these three years I have heard nothing but talk in regard to the tremendous danger of exhausting our water supply, the destruction of our Water supplies by burning down our mountain ranges. We find that the slopes of the mountains are mostly in the hands of natives This is a national matter which ought to be tackled. Those grounds should definitely be brought under control; the burning down must be controlled, otherwise we shall witness the drying up of our country. As far as the conservation of water is concerned, I should have liked to see the Minister make available a bigger amount to tackle these evils and to put a stop to them as soon as possible. I want to emphasise once again that South Africa owes a debt of gratitude to the Government for the privilege that after years of war we are still in the position in which we find ourselves today. We have borrowed money, but the interest which has to be paid on those loans is being paid to our own people, and it is probably the most sound position in which any country can find itself if it owes money internally and not externally.

It seems to me the Opposition is fleeing this afternoon, and I hope they will succeed in putting up the white flag somewhere. We know they are continually resorting to flight. The amendment which they have moved is nothing but a ruse. There is one aspect of the amendment which stands out, and I hope the country will take notice of it, namely that while we are very concerned about various matters requiring money, there is not a single word in the amendment in regard to the returned soldiers or their families. Of course, we know what political somersaults they have turned in the past. They are continually doing it. Take their attitude towards the English-speaking people and Jewry, for example. No circus exhibition on their part will surprise us. No, we cannot waste any more time on them. I should like to draw attention to a few matters in connection with the estimates. It has been said of the Budget that it is a Budget without imagination, that the Minister is meeting the post-war period on the wrong basis. I think the best comment which can be made in that respect, was made by one of the leading newspapers in our country, the “Sunday Times”, which described the Budget as a cautious Budget having due regard to possible developments. What the Opposition is trying to forget and would like the country to forget is that we are still involved in war. There is one aspect in the Budget to which I feel the Minister might have given more attention, and that is the fixed property profits tax. I should like the Minister to reply to the question as to whether he has changed his policy in connection with the property tax. This tax was originally introduced with the object of checking inflation, and for that purpose only.

No, not with that object only.

If it was not levied for that purpose only, the Minister also regarded it as a source of income. This tax had two aspects, namely, in the first place, to prevent inflation and, as the Minister has just said, to produce revenue. If the latter was the primary object, then I should like to advance the argument that there were other methods which could have been employed to attain that object. The Minister is not being consistent in contending that this tax did check inflation. I cannot pit my financial knowledge against that of the Minister of Finance by entering into arguments with him. He knows more about the matter than I could ever hope to know about it. But I have a little practical experience of this matter. Apart from that, I have had the privilege of reading a memorandum which was sent to the Minister by one of the biggest bodies in Johannesburg in that sphere, namely the Association of Estate Agents, and I think in that memorandum fairly good reasons are advanced to show that this tax has not checked inflation but encouraged it to a great extent, or at any rate that it has brought about an increase in the price of land. In this case, too, I can speak of personal experience. I know of quite a number of cases in Johannesburg where land is being kept out of the market as a result of this tax. Land which can be used for housing purposes and for the building of factories, etc., is being withheld as a result of this tax. I can mention cases where it is retarding industrial development, because land which is necessary for industrial purposes is being withheld from the market. I know of a case at Doornfontein where a person who produces war material, had to extend his undertaking. He could have bought an adjoining building, but the owner stated that it was simply impossible for him to sell it while this tax was in operation. Fortunately, the Minister of Finance has made a concession, namely, where land is sold to a utility company or a public body for the purpose of erecting houses, it will be exempted from this tax; but I want the Minister to remember that there are many people who will not derive any benefit from this concession. The very poor man may still derive some benefit, but the middle classes, the so-called white-collar brigade, will derive no benefit from it. I want to draw the Minister’s attention to the fact that they are the people who mostly pay this tax. I want to suggest in all seriousness, therefore, for the Minister’s consideration that he should extend that concession to all cases where land is sold for the building of a house or houses. In other words, if X goes to a company and he wants to buy Stand No. 9 for the building of a house, the Minister should grant him exemption, because he sells the land for housing purposes. I know that the main thought in the Minister’s mind was to help the returned soldiers, but we should also remember that there are returned soldiers who will not fall in the category of people who will be assisted by utility companies and city councils. In those circumstances I feel that the private man who cannot be "helped by these bodies, should also be met. Then there is another important factor. Whether we like it or not it remains a fact that municipalities and utility companies are sometimes very slow with their schemes. In the meantime there are hundreds of people who are waiting to build. Are we going to allow this tax to stand in their way? I know the Minister of Finance and I know that he is the last man who would want to stand in the way of those people. This tax will again come before us in the form of a Bill, and I want to make a serious appeal to the Minister and express the hope that he will go a step further. If he does, he will render South Africa a service, and especially those people who are clamouring for houses. There is another problem in connection with houses to which I want to draw the attention of the Minister. We know what the problem is at the moment and we know that sometimes there are shortages of the goods which are necessary for the completion of houses. It is a pity the Minister concerned is not here, because I should like to make the suggestion that we should allow municipalities and private persons to carry on with the building of houses with the material which they have at their disposal. Let them carry on as far as they can go. If they cannot go further, the houses can remain uncompleted until such time as material becomes available. That will mean that by the time when electrical equipment, baths and such items are available, those houses can immediately be completed because they would have been completed half-way. I do not want to detain the House long because I know there are many other speakers, but I want to say a final word on behalf of that section of the people which is often forgotten. There are many people who think that South Africa is a nice country to live in. It is also said that that is the case in respect of two classes, the very rich people and the paupers. When a man is very poor, the State takes some notice of him, and the same applies when he is very rich. But the medium section, the white-collar brigade, as I call them, are the people who experience hardship. They cannot go to a hospital or to a doctor for free treatment. They are just above the line and they have to pay for everything they receive. These people represent the greater majority in the country and there is no doubt that it is that class which carries the State, in all countries of the world, not only in South Africa. Those are the people on whom the State depends. I feel that those people as a class should be given a little more consideration from the point of view of the taxes they are required to pay and also with regard to social services. If they have to continue to pay taxes, they should be included in the social services. If they are not included, they should be granted some relief from taxation. There can be no doubt that those people are experiencing hardship today, and I want to express the hope that they will be looked after, that we should not overload the camel. In conclusion I want to say that there are many speakers of the Witwatersrand who will discuss the mining question, and I do not, therefore, want to devote more time to that subject, except to say that there is anxiety on the Witwatersrand in regard to the mines which will possibly be closed owing to the depth to which they have to go and the costs involved in doing so. We want to express the hope that the Government will take steps timeously to keep those mines going. Someone had an article here the other day under the title: “What can be done to keep the mines going?” I think the heading should have been: “What can be done for the mines so that they can keep us going?” I do not want to enlarge on this, except to bring it to the notice of the Government.

I must admit that I am one of those unfortunate optimists who had hoped that in this Budget the Minister would make a reduction in taxation, but I am not a financier and I am afraid I cannot give him any advice as regards measures for taxation, as the hon. member for Fauresmith (Dr. Dönges) did, but on the other hand I do know that there is still a war on and the members of the Opposition seem to lose sight of the fact that a great deal of expenditure is still on War Account, and secondly they have urged the Government to increase the expenditure on health and social services. The Minister made it quite clear last year and again this year that increased services demand increased expenditure. We cannot have social security coded in South Africa unless expenditure is increased. In other words, taxation must be kept at a high level. I want to support the hon. member for Gardens (Dr. L. P. Bosman) when he brought to the notice of the Minister that when professional men return from war service they are not judged on their pre-war salary for taxation purposes ….

It is not their salaries, it is their income.

Yes, their income. I was confusing the two. They are judged on their income as members or officers of the Defence Force. This has entailed a great deal of hardship and I would appeal to the Minister to see that something should be done for these men who sacrificed a great deal to do service for their country. There is a feeling in the country, as the member for Vasco (Mr. Mushet) pointed out clearly this morning, of a great deal of dissatisfaction amongst the people over the multiplicity of taxes. If the Minister could possibly bring in some simple form of taxation it would cause a great deal of satisfaction to the people. It is not the amount of money involved, but the form of the taxation, and we feel that that multiplicity is growing in sead of decreasing today. I must, however, praise, where praise is due, the Minister owing to the fact that he has increased certain votes, especially a vote which I have always watched with great interest, and that is the Public Health Vote. It is true that the increase has not come up to my expectations, but I am easily pleased by the gesture of the Minister showing that he realises that it needs an increase. I am also pleased to see that he increased the vote for native education. That is a move in the right direction, because it is of great importance for the education of our natives.

Hear, hear!

Their health affects our health and this increasing of the education vote is a step towards the better health of the native. Ánd what is more I was pleased to see that for the first time a good deal was set aside for bursaries for natives to study medicine. I would like to draw the attention of the Minister again to one of the recommendations of the Health Services Commission, and that is that assistance should be given by the State to people who have the capacity of becoming, medical practitioners, but who have not the means, and I think it will be a great step forward if the bursaries for medical study can be also introduced for Europeans because the Commission has pointed out that this is totally inadequate. But a more important point still is that no allowance is made in the Budget under the Health Vote for making vital statistics a compulsory project for natives. We are today in the very unfortunate position that we have no vital statistics available for the native people, except to a certain extent in the urban areas, and very much of our work as regards the incidence of mortality or birth-rates is merely guesswork. Well, the whole future basis for any health scheme is to know the vital statistics, and that is the only way in which we can know what is going on. But today we have to do pure guesswork in the native territories in regard to tuberculosis and venereal disease, two of the most important diseases amongst the natives, and not only amongst the natives because it is also on the increase amongst the Europeans. Then I notice that there is a very large increase in the subsidy to all the Provinces. A larger subsidy and additional subsidies are being given. I am very anxious to know from the Minister whether this increase is part and parcel of a new arrangement the Government has made with the Provincial Councils for improved health services, and, if that is sc, I am also very anxious to know, if by making this subsidy the Government will assure us that the consultative body will lay down a central policy for this free hospitalisation the Provinces are going to introduce. We have varied circumstances in the four different Provinces. It is all right for the Transvaal to promise free hospitalisation, but I think the Transvaal is the only Province that can afford it, and I think, if the other Provinces are going to give it, it is only right that whoever pays the piper should call the tune. In other words, a central body should keep an eye on the spending of the money. I noticed at the opening of the Cape Provincial Council yesterday, the Administrator mentioned that he was afraid that in the Cape Province there would have to be considerable increase in taxation, if these hospital measures are put forward. If that is so, I would like to know whether additional taxation powers have been given to the Provinces, or whether the increased subsidy is the sum total of what is going to be spent on this service. I feel that in the past the Provinces have only spent 12 per cent. of their total resources on hospital services, and I am sorry that that bogey has been laid before the public that the removing of the hospital services from the Provincial Councils would practically mean their abolition. Surely if only 12 per cent. of their total resources is taken away I hardly think that that can be put down as a step towards their total abolition, although I must say that their abolition leaves me cold. Now I want to bring something to the notice of the Minister. I see that in England the first £100 of the allowance received by members of Parliament is free from normal income taxation. I would like to see the Minister apply that to members of this House. They have to incur large expenditure in coming down here and staying in Cape Town, and in their constituencies they have to spend quite a lot of money for the benefit of their constituency, and I think it would be a fine gesture if the Minister would allow the first £100 to be free of income tax, as is the position in England.

That would be very inequitable. The concession would be worth very much more to a man with an income of £2,000 than to a man with an income of £1,000.

The Minister has already several other taxes which are inequitable in operation. I have mentioned good reasons why it should be done, but perhaps the Minister means that some members don’t do any good in their constituency. Now I just want to also point out to the members on the opposite side who are such keen critics of the Budget, that there has been a considerable increase in the Budget of grants to universities and technical colleges, and I, as a member of the Cape Town University Council, was gratified to see the special grant made to Pretoria University, more than they would have got in ordinary circumstances, in order to equip their medical school. There is no doubt that the Pretoria Medical School is going to play a large part in the training of our medical students, and I think that members of the Opposition who bear the interests of Pretoria at heart, should modify their criticisms with an occasional word of praise, where praise is due. Finally, I just want to utter a further word of warning about the National Health Services Commission’s recommendations. I have now to be prepared to accept the fact that the Government has handed over hospitalisation to the Provincial Councils, but what worries me is whether this consultative committee will be a statutory body or purely an advisory body, or whether their attitude is to be the attitude of a watchdog only. The Provincial Councils are taking the bit in their mouths and going full steam to get new rights under these regulations, and I feel that the amount of money voted for health services is going to be an integral part of the business of this body and I advise the Government to make this consultative body statutory, and not purely advisory.

I should like to take this opportunity of heartily congratulating the hon. Minister of Finance on his clear explanation and his splendid review of our national position in his budget speech. His exposition of our economic and general position after five years of war was masterly, and the budget which was a sequel to this is in my honest opinion a brilliant masterpiece. I have now listened to many budgets in this House. I have listened to excellent budgets in this House, but seldom if ever have I listened to a budget that gave such a clear explanation of our economic and our general position as the Minister of Finance’s present review. His survey of the wider and broader aspects of the world position which arise from the policy of the Government was in my opinion unsurpassable. It was a pleasure to listen to the Minister of Finance, because his speech was so inspiring that I thought even the members of the Opposition themselves after hearing his budget speech should have felt pride in being Afrikaners. There has been disappointment with the budget in some circles because it was not sensational enough. There had been all sorts of speculations as to what the budget would contain. Some cherished great expectations from it. Others again harboured serious fears with the budget, and now they are disappointed that not one of these things have been given reality in the budget. Of course, those who are the most disappointed about the Minister’s budget are my Opposition friends, because there is nothing left for them out of which they can make political propaganda. The hon. member for George (Mr. Werth), who was the chief Opposition critic of the Government endeavoured, with the assistance of all the newspapers he could lay hands on, to criticise the Minister and to find faults in the budget, and it had to be left to the hon. member for Vasco (Mr. Mushet) to advance sound criticism of the Minister’s budget, and to ask the Minister to introduce a new form of taxation as soon as possible if at all practicable. I agree thoroughly with that. This is not the first time that it has been mentioned in this House. We feel the need of that, but at the same time we feel that we must leave it to the Minister to choose the right time for changing the taxation system. I cannot refrain from saying that I felt sorry for the hon. member for George while he was wrestling with this budget of the Minister’s. He really was a pathetic figure, and I thought if the hon. member could have seen himself and judged himself he would not have been flattered. But it is easy to understand what a mighty struggle the hon. member for George must have had in attempting to criticise the irrefutable facts of the budget to which he was opposed. He made a great fuss over the unproductive national debt which has been increased by £247,000,000. He is fully aware how much of this money has been expended in the country, but he did not tell the country; nor did he say how much of the prosperity of the country is to be ascribed to this amount which has been borrowed as we have gone along, and which has been spent in the country. But apart from those benefits that we derive from the money, I say that it was a cheap price for the prestige that we gained and retained with that money. It is an insignificant amount that was paid for our freedom. Who calculates a people’s prestige and freedom in terms of money and material advantages? I want to ask my hon. friends whether this is the new form of nationalism for the new South Africa, to reckon these things in terms of money, and in terms of material benefits. It would be lamentable to reveal such pettiness when thousands of families in South Africa, as well as in the rest of the world, have been plunged into sorrow, and when the world is struggling against subjection and for our freedom and continued existence. I feel a thousand times more concerned about the valuable lives that have had to be sacrificed in this struggle than I feel worried about these expenses about which such a big outcry is being made in this House by the hon. member for George. But I am glad to know that our Opposition friends have arrived at two discoveries in this House in the last few years. The first discovery is that the policy of the United Party with Field-Marshal Smuts, the Prime Minister, at the head, is the only policy and the right policy for South Africa; that for South Africa there is no beneficial policy other than the one, that has been followed by the United Party under the leadership of the Prime Minister; that the far-seeing statesmanship of the Premier has triumphed gloriously during these anxious years that we have struggled through; and that he has saved South Africa by his statesmanlike policy from humiliation, chaos and misery. Where does our prestige as a nation stand today in the eyes of the world as a result of his wise statesmanship? Where would it have stood if the Opposition’s policy, the policy of the Leader of the Opposition, had triumphed in this country? If it had been followed we should have been stigmatised in the eyes of the world as a nation of traitors without any status. My national pride has never stood higher than it is today, after the triumph of that statesmanship that was exercised by the Prime Minister supported by the United Party. The country and the nation cannot compensate the Prime Minister for the services that he has shown not only during his lifetime, but particularly in the recent war years. We thank him and we are proud of him. I should like the country to know that. We admire him, and he has by his statesmanship compelled the admiration of the world towards us as a nation. The Opposition’s second discovery they made was that our soldiers are also Afrikaners, and that those Afrikaners also have votes in this country, that they are also returning to South Africa to assist in building up the future of this country. Suddenly, as a result of that, the Opposition has developed a great interest in our soldiers, an interest which is entirely inconsistent with the policy and conduct they formerly revealed in respect of our soldiers. Where was that interest when we in this House were called upon to pass legislation to protect those soldiers from attacks which were being made upon them in their own fatherland in an illegal and venomous manner? Where was that interest when they suffered reverses in the field, when they had their backs to the wall and carried on the fight in the interests of South Africa? Where was their interest and sympathy with the families of the thousands that we plunged into sorrow? Can we merely wipe out these things and forget them? We do not want to be bitter, but many families have been grief stricken by the loss of valuable lives, while throughout the country there has been stabbing in the back and a subversive campaign. I want to ask my friends of the Opposition this, is this interest in our soldiers sincere, is it genuine? Do you show your genuineness by contributing to our war funds? Do you show your sympathy in a material way by assisting us constructively with the problems and difficulties of those soldiers? If you do this then I shall believe that your sympathy and your interest is honest and honourable. Mr. Speaker, in the short time that is at my disposal I should like to deal with a few other matters. In the first place I want to invite the Minister’s attention to the fact that the price of fertiliser has increased by about 16s. or 17s. a ton, and that has come at a very unwelcome and unfortunate time, when farmers have already received half of their fertiliser and paid for it, whilst others still have to receive their fertiliser and to pay for it; I should like to say to the Minister that provision should be made to equalise the burden between the two sections, seeing that one is paying almost £1 more than the other for his fertiliser. Otherwise great and bitter dissatisfaction will be occasioned by these inequitable prices that have to be paid. One small point I should like to bring to the notice of the Minister, and I hope the Minister will take some notice of it. I want to tell the Minister that recently I have attended many auctions where prices have been paid for cattle and for implements, especially for pure bred stock, that are absolutely out of all proportion to the value of these animals and these implements, Prices are being paid for these secondhand implements which are higher than would be charged for new implements in the market if they were available. I asked the people what the reason was for these tremendous prices being paid for the stuff, and the answer was that they were simply doing it to evade war taxation. I do not know whether anything can be done about that. I know it is easy to mention these matters and to expect they should be rectified, but to find a solution is an entirely different matter. But I am advising the Minister about this sort of inflation, and what is being done merely to evade taxation.

The excess profits duty?

If you dodge the excess profits duty then you are going very far, but as the Minister says, it is mainly the excess profits duty. I say that the Minister will be doing well to give this matter his attention and to endeavour to combat the inflation which is undoubtedly rapidly developing in this connection.

I propose raising the question of the high cost of living which exists in South Africa and to show that this high cost is very largely influenced by the activities and the policy of the various control boards which have been established in this country under the Marketing Act. They appear to the uninitiated to fix prices without any consideration as to the cost of production and the public has got to pay accordingly in order to secure the food which they require. Take, for example, the price of mealies. I think I am correct in stating that at the outbreak of war a bag of mealies could be purchased for approximately 7s. 6d. a bag, and that the price today is in the neighbourhood of 17s. 6d. Why it has been necessary to increase the price of this article to such an enormous extent, has not yet been explained to the public and I doubt if it ever will be. I have heard it suggested that there is a proposal afoot o increase the price still further to a figure of 22s. 6d. per bag.

Only 20s.

Well, it is obvious to anyone who gives any thought to this important matter that the cost of mealies has a very big effect upon the cost of various important articles of diet which are needed and consumed by the poorer people of the country.

Do you know that an imported bag of mealies costs 31s. 6d.?

It may interest the hon. member for Swellendam (Mr. S. E. Warren) to know that the price of mealies is 12s. 6d. per 200 lbs. f.o.b. Buenos Aires. As I have said, the cost of mealies has a very big effect upon the cost of milk, eggs, butter and other commodities, and it is not surprising that the high’ cost of living has resulted in a demand from the public for a Ministry of Food which would control the activities of these boards and make it necessary for them first to establish the need for an increased price before the increase is granted. I have no doubt that before these boards advance the price, they submit a request for an increase to the Minister of Agriculture, and I have no doubt that permission to increase the price is readily granted. No one would suggest that anyone living in the towns wishes to deny the farmer a reasonable return for the money invested in his property or the labour involved in producing what he obtains from the soil.

What do you regard as a reasonable price?

I regard a reasonable price as a price which gives the farmer a fair margin of profit and a sufficient amount to enable him to put something aside for emergencies. I believe that the price of mealies at 17s. 6d. a bag is far too high, and I have heard it stated on good authority that there are many farmers in this country who are producing mealies in substantial quanties at less than 10s. a bag. Why it has been necessary to increase the price from 7s. 6d. to the present level is beyond my understanding, and my only regret is that I am not a mealie farmer and able to enjoy the enormous profits that some of them must be making today. Then we have seen an equally substantial increase in the price of wheat. We know the tremendous increase which has taken place in the cost of meat when it is obtainable, and other essential foodstuffs have similarly advanced in price. One hears statements that the farming community must be making tremendous profits out of the produce which they are putting on the market. That must be so or else they are not doing justice to the job which they are tackling. The poorer people of this country, those for example who have to come out on small incomes varying from £15 to £35 or £40 per month, have been granted increases in salary by way of cost of living allowances. These cost of living allowances are based upon figures which are produced by a Government department. Those of us who are in touch with that section of the community appreciate that they cannot understand how the Government statistics can show an increase in the cost of living of between 25 per cent. and 30 per cent., when most of them know from bitter experience that the increase is nearer 100 per cent.

Their figures are all wrong.

These smaller income groups are having an extremely difficult time and finding it difficult to obtain the necessities of life. The children of that group are not being fed as they should be fed, and the food which is necessary for their maintenance and welfare is certainly not available to them. The Dairy Control Board in its wisdom, has seen fit to fix the price of condensery milk and creamery milk at a level which makes it unattractive to the dairy farmer, and dairy farmers, who are within reasonable access of a large town or city send their milk to the market which gives them the best return. For example, milk sent to Durban is sold to the wholesale dairies at approximately 1s. 9d. per gallon, whereas the Dairy Control Board has fixed the price for condensery milk at 10½d. and 11½d. per gallon. This means that instead of that fresh milk going to the condenseries to be manufactured into condensed milk to feed the poor people who depend upon it for their milk requirements, it is going into the towns and cities and is being used largely in the luxury trade. The position in the large centres, in my opinion, is scandalous. The person who has plenty of money with which to buy high-class food and whatever food he needs, can obtain supplies of icecream with a very high butterfat content, and he can also obtain in unlimited quantities chocolate, caramels and other luxuries which are largely made from fresh milk. At the same time the poorer section of the community who in pre-war days and still must use condensed milk for their children and their household requirements, are unable to obtain what they need. Actually the monthly consumption per head of the poorer population in pre-war days was 3½ tins of condensed milk. Today the sales of condensed milk show their consumption as two tins per head, which proves that these people have to go without this very necessary article of diet. It will be appreciated that they are not able to use fresh milk whereas those of us who are fortunate enough to have a cooling apparatus in which we can store the milk, are able to do so. They are compelled by the circumstances under which they live, to use condensed milk. That is the only milk food which they are able to use. The condensed milk industry has been established in this country for many years, and we have here plants with sufficient capacity to satisfy the whole of South Africa’s requirements, and indeed, since the war broke out, two additional condenseries have been installed. The actual quantity of milk produced by them had shown a considerable reduction, whereas the fresh milk consumption in the towns and cities has increased by 50 per cent., which indicates that in addition to the large quantities of fresh milk which are being consumed as such by the more fortunate section of the community, a lot of this increased consumption is going into the luxury trade which under war conditions, in my opinion, should be utterly and completely barred. America,, for example, was a large icecream consuming country. I would not like to suggest how many thousands of tons of icecream were consumed in the United States in the course of a normal year, but I understand that the consumption of icecream in the United States was banned two years ago, and icecream has not been available in Great Britain since the war began, whereas we in this country are able to obtain in the dining room of this House and in any other place which we care to go to, icecream and other luxuries while the poor’ people are short of this very necessary item of diet. I suggest that action should be taken in connection with this matter, that the sale and production of these luxury milk foods should be banned and that the price of condensery milk should be increased to a figure which will make it unnecessary or unattractive for the dairy farmers to send milk to the towns or cities when a condensery is available at his back door. An increase in the condensery milk price of 4d. per gallon would mean an increase in the price of the manufactured article of 1d. per tin. The price of a tin of condensed milk in South Africa is 8½d., which shows a very small advance on the price which obtained in pre-war days. We have recently seen published that a shipment of eighty thousand cases of condensed milk, occupying very valuable and very much needed shipping space, is arriving shortly from the United States. This milk cannot be retailed at less than 1s. per tin. This in spite of the fact that no duty will be levied on it and no profit made on its distribution, so that by their policy the Dairy Control Board has made it necessary for this large importation and has been responsible for the fact that this imported milk will cost the consumer 34d. per tin more than the price of the local article. In addition to condensed milk the South African factories make milk baby food, which everyone who is a parent knows, is absolutely essential to a child, even after it ceases to receive milk from its mother. This South African milk food is as good as any milk food produced anywhere in the world. Because of the policy of the control board, the quantity of milk baby food in this country has been utterly inadequate for the country’s requirements, with the result that it has been necessary to import large quantities at a price of 4s. 9d. per lb. against 3s. for the South African product. Here again valuable shipping space is being occupied by making it necessary for this milk to be brought into the country. I submit that the policy of the Dairy Control Board, together with the policy of the other boards requires very careful and thorough investigation, and I would submit that it is high time a board was established to control the activities of the control boards which have been established under the Marketing Act.

Another board?

Yes another board, and I would suggest that that board should not consist of a majority of farmers. Because of the policy of the Dairy Control Board, I am reliably informed, a large number of dairy farmers, particularly in Natal and East Griqualand, are finding it impossible to make a profit out of that industry with the result that they are disposing of their cows, and the volume of milk which will flow during the winter months, will be so small that the existing shortage will be seriously accentuated. I shudder to think what the position will be unless something is done to increase the milk flow and make it possible for the condenseries to obtain a sufficient volume of milk to keep them going and thus supply the requirements of South Africa. As an indication of the position, in 1940, the South African condenseries produced 31 million lbs. of milk whereas in 1944 their production had fallen to 23 million lbs. so that their output was reduced by approximately one-third. On the other hand, the flow to the towns has doubled, and unless something is done to modify this I see no answer except a further decrease in the supply of condensed milk to the poorer consumers. I have said before an increase of 4d. a gallon would only represent a 1d. per tin to the consumer in the case of the manufactured article. I submit the policy of the Dairy Control Board, which probably originated with the idea of keeping down the cost of living, has had the opposite effect; and it is futile controlling if you control to the extent that the commodity is no longer available. What is the use of controlling a foodstuff if the nett effect is that, it disappears? Therefore I propose a drastic reduction in the luxury foods, and an increase in the price of condensing milk, so that the flow to the condenseries will be sufficient for the country’s needs, and as a result the poorer people who use condensed milk will be able to obtain their requirements which they have not been able to do during the last two years. Two tins of condensed milk equal 3½ pints of fresh milk. The average fresh milk consumption of Europeans or of people in a better financial position is 15 pints monthly, so that the poorer people who to a much larger extent need milk in their diet, are only able to obtain 34 pints as against 15 pints, the quantity that the more fortunate section of the community including members of this House can obtain without difficulty. So far as people living in urban areas are concerned, I can assure the Minister that no complaints will be heard in the event of these luxury foods being banned and the volume of fresh milk to the towns being reduced, provided he tells the public that the reason for doing so is that this milk is now being made available to the poor, to whom it is a vital necessity for the maintenance of health both for adults and children.

It is not very often I am privileged to be able to congratulate the Minister of Finance. I have a rare opportunity, therefore, which I want to make use of, and I congratulate him on the very fine support he has received from his side on the Budget. When I refer to this very fine support, I have specially to allude to the hon. member for Barberton (Mr. Raubenheimer). As a student of economics and finance, I appreciate his remarks very much, and more particularly his knowledge of the financing of tomatoes. I presume the hon. member will see that his tomatoes are available for she next General Election. We have often on this side of the House pressed the Minister of Economic Development for a statement on the policy of the Government with regard to the industrial development of the country in the future. This call has not only come from this side of the House; it has come from the industries of the country as a whole, and particularly from organised industry. I presume it was as a result of that that the hon. Minister made a speech before the convention of the Federated Chambers of Industry in November last. I have the report of that speech in “Industry and Trade”, and it is from that paper I am reading now. The Minister said, amongst other things, that South Africa’s aim is and must be “the maximum utilisation of its national resources”. We agree, but has the hon. Minister even in this whole speech given us any concrete idea of what policy the Government is going to adopt and how it is going to work out in detail how the resources of the country will be uitilised. The Minister went on to say that—

We agree, but he goes on to say that the re-establishment of returned soldiers and the reinstatement of labour now engaged in war work—

I am afraid if we want to develop our national resources to the utmost (I agree the Minister said later a long-view policy will have to be kept in view at the same time), if the industrial policy to be adopted by the Government is going to be regarded as one of emergency by which returned soldiers not fitted for the jobs will be forced into industries, what hope will these industries have of establishing themselves on a sound basis, what hope will they have of producing economically? I should like to stress that from the economic point of view and the point of view of the country as a whole it will be more profitable for the Government rather to keep the returned soldiers in camps, to keep them in uniform, and to continue to give them their pay out of the military vote, rather than to place them in position for which they are not fitted. Because once there they will have to stay a year, and if a man is a year in a position for which he is not fitted he will probably remain there many more years, perhaps permanently; and that is one of the things the country can least afford, that we should put people into industrial positions for which they are not fitted. The Minister has referred to protection, and he has given three points in his speech. He referred to the establishment and development of infant industries “which it is desired to foster in the national interest”. That sounds very nice, but I am afraid all the industries that have sprung up during the war period, and the other industries which have expanded beyond the absorptive capabilities of this country, will require the protection, all the protection the Minister can give them in order to keep going. I do not think the Minister will, in the period immediately after the war, have much time to pursue this subject. The Minister’s next point was that we would have to shield our industries against competitive factories in countries where there is no control, against dumping and against competitive prices oy countries with “a lower standard of living and lower wages”. We have been told that the Atlantic Charter ( I agree it has to a large extent been torn up) is intended to give equal opportunities to everybody for development and equal access to the raw materials of the world. The position is this, we have an eastern nation and, a very big nation like China, a nation which is amongst the Great Four, and which has produced industrially on a large scale during the years of war. Does he intend to discriminate against China? If he does discriminate against China what will China think? If he does not, how will we be able to compete against China? The Minister went on further to say that the Board of Trade and Industries is making an investigation into the general industrial position, and that it is expected this will be completed “in 1944 or soon after”. He then proceeds to say what this investigation was about. We have been waiting for this report for a long time, and we have been asking the Minister in view of the urgency of the subject to let us have the report at the earliest possible date and to give members of this House and also the general public, an opportunity of studying that report. We have heard nothing more of this report, except in speeches. I wish to stress that if the Board of Trade and Industries has made a thorough investigation into the industrial position of this country, then its report must be laid on the Table of the House in the shortest possible time, and be made available to members of the public who are interested. The Minister said the board was making an investigation into the principles of protection, and that the Government would aim at keeping protection as low as possible, maintaining it on a selective basis subject to regular cost and technical investigations, and that safeguards would be given to the consuming public. But in all this the Minister does not say that the Board of Trade and Industries is making an investigation, or whether the Minister intends making an investigation into the position of other countries of the world. We are told every day, and especially from the other side of the House, that we are living in this big world. To our party the world is one big community, and I am afraid to the Government the world is only the British Empire. We will experience competition from the markets of the world and especially from the East. What hope have we of making an investigation into the principles of protection unless there is a thorough investigation of conditions overseas, and until we have a full view of those enormous industries in overseas countries which will compete with us after the war; until we have learned what they are doing, what new methods are being employed and what is involved in mass production and by way of labour-saving devices, etc., etc. The Minister further said in regard to exports that—

The thing the Government does not seem to realise, and that the Minister does not seem to realise is that the most important point which will have to be kept in view in order that we shall be able to export after this war is that we must be able to produce, and produce at a low cost; and when I say “producing at low cost” that does not mean producing at a low rate of wages. The idea that low cost means low wages is something that is relegated to the distant past. We have the experience available where countries paying the highest wages are producing at low cost purely and simply because of industrial efficiency. I might instance in this respect the American automobile industry, in which very high wages are paid, but they make the cheapest and most effective automobiles in the world. These are points we have to investigate instead of merely stating that we shall try to get markets overseas. In addressing the Chambers of Commerce the Minister was reported in the “Rand Daily Mail” in November last to have said that the Government was not taking any steps to increase or extend their protection, and the question of subsidies was receiving very serious consideration by the Board of Trade. He added that the Union’s problem would not be the retention of import control but how best “to relax and finally abolish it”. Here again, as far as the export trade is concerned, the Minister says we are waiting on the report of the Board of Trade and Industries. I must stress again it is essential this report should come before the House at the earliest possible date. In regard to the speech made by the Minister, there are a few further remarks I should like to make. In the first instance, I should like to know what is the Government’s attitude towards private firms which will have to bear capital losses incurred through the ownership of specialised plant and equipment constructed for war purposes? Will these firms have to carry these losses themselves, or what is the attitude of the Government? Another very important point which the Government does not seem to realise; no mention of it has been made by the Minister or in any of these speeches that we have seen; the point is what protection is going to be based on after the war. The Minister says that there will be the lowest possible protection, or that the tariffs will be as low as possible. But a low tariff may be high protection. Does the Minister realise the necessity for protection after the war being based on the marginal cost of production, or in other words, that it must be based on the efficient end of industry, and not on the haphazard methods of cost examination we have had very often in the past. The Government is always talking of increased costs of production, but does the Government realise that protection cannot always merely aim at increased production in a particular field? The report of the Agricultural Reconstruction Committee recommends a scaling down duty on wheat and the reduction of output in order to build up local sales. It appears to me that the whole policy of the Government is merely to increase production at any price, at any cost, provided we become accustomed to the duty and do not squeal too much. Those are all facts that have to be carefully considered. It may be necessary even for production to be reduced in certain spheres, as in the instance quoted by this committee. It is also nécessary to remember when we talk about protection we are not referring to the protection of secondary industries only, because it is fully realised that secondary production and production in mining and agriculure must go hand in hand, and if we want prosperity in this country after the war that production will have to go hand in hand to a greater extent in the future than it has in the past. The old idea of reviewing the protection of agriculture and of the agricultural industry is just as essential for the future success of the secondary industries of this country as mere investigation into the secondary industries themselves. Is the Government making such an investigation into the agricultural protection position, as such. If we want to build up secondary industries successfully in future, we will have to draw on locally produced materials to a larger extent. Before the war our secondary industries consumed about £100,000,000 worth of raw materials, of which £50,000,000 of material was still imported for local industries. In many cases, too, secondary industries had to be given specific high protection in order to counterbalance the portection of higher costs in those raw materials, usually drawn from agriculture, which itself was highly protected. It appears necessary that in order to put our secondary industries on a sound basis, particularly in order to put our agricultural industry on a sound basis first—only then can secondary industries draw their raw material from local sources at reasonable and competitive prices. It is wrong to consider, as so many people have considered, that the total return to the producer is necessarily highest when the price per uit is highest. It is possible that the price itself (as we have just heard in the case of maize) does not affect the farmer at all. It is the cost of the production of the maize that affects him, and the cost of production has gone up considerably because farmers cannot get what they need during this war period, and because farmers cannot get what they need at reasonable prices. If they were capable of producing at a reasonable price and had opportunities for producing maize at a level that other countries in the world are producing, South African farmers would not need protection. It is necessary that we should reconsider our whole economic position in order to reduce the cost structure which is so high at present, and only then may We talk as the Minister has done, of the marvellous export trade we hope to have in the future. As long as we maintain a high cost structure we have no hope of building up an export trade. There is one favourable condition in our South African industrial position at present, fortunately, and that is that the wohlesale price index of locally produced goods has not gone up any way so far as that for imported goods. According to the figures given by the Department of Census and Statistics, the wholesale prices of local goods have increased only 60 per cent. over the base of 1910, while imported goods have increased 110 per cent. over 1910. But we must remember that was also the position during the last war, and at the end of the last war the price of imported goods fell, and not only did they fall as fast but they fell considerably faster than the prices of locally produced goods, and that was the problem our secondary industries had to face. I put it to the Minister that our industries will again be faced with that position, that the prices of overseas goods will fall and fall more steeply than the prices of locally produced aricles. That is a serious problem that our industries will have to face, and that is the problem that the Minister of Economic Development will have to keep in view. We were told the other day by the hon. member for Zoutpans-berg (Mr. S. A. Cilliers) of the marvellous industrial development that has taken place in this country during the war period. I do not know what the hon. member’s knowledge of secondary industry is, but he has, amongst other things, referred to boots, and he told us what a marvellous expansion has taken place in our boot industry. May I say that is a very real danger point, if that is true; because before this war, in 1938, the South African Boot and Shoe industry had already reached saturation point, and the Government had to order an investigation into that industry because the country could not consume all the boots and shoes produced by this industry; and because of the high cost structure our boots and shoes could not find markets overseas. In other words, if during the war we have expanded our output so considerably but based on the high costs ruling during the war, what hope will these industries have of competing in overseas markets after this war, and what hope will we have of competing in the local market itself? I do not believe that this is so, really. Unfortunately that is the position that has been created, because we have no statistics as yet—we have complained about it before— and our industrial statistics are not available since 1938. But the Statistics Department have published some figures of decreases and increases in various industries since 1935 and according to these statistics it does not appear that these industries have increased very considerably. For instance, the industry connected with processes in stone, clay, etc., has in the period from 1935 to 1944 only increased 8 per cent. Working in wood has decreased 5 per cent. There has been an increase in the engineering and metal industry of 103 per cent. There has been enormous expansion there. I have had an opportunity of seeing practically every one of these factories, and they are producing war material on the Rand, at Vereeniging, at Pretoria and elsewhere. One is bound to take note of that. We agree that very fine work from a technical point of view has been done in those factories. But what bearing has the Government’s policy on those factories when the war is over? What is the policy of the Government? How is it going to adjust these factories to civil life? What is the Government’s intention in regard to the thousands of people employed in these industries? From these people we are receiving letters daily, and letters were read in this House the other day showing that these people’ are worried to death that they may lose their employment because the Government has no policy, and it does not take the House into its confidence to tell us what it intends to do. With all due respect, I say that these factories may be producing excellent rifles and rifle barrels, but we cannot buy these things in this country after the war; there will be no market for them. If it is the policy of the Government to adapt those industries to production of other articles in the engineering trade after the war, and we may presume this is probably their intention —I ask them how they intend to do that while steel, the raw material of the industry, South African steel, is the dearest in the world? Before the war no industry of ours was protected so much by c.i.f. prices as the South African Iron and Steel Industry; and if we cannot manufacture on an economic basis in this country because of the high prices of raw material, what hope have we of developing our engineering industries when the raw material of engineering, steel, is one of the most expensive in the world? To return to the list showing the state of our industries in 1944 as compared with 1935. “Food and drink” decreased 3 per cent.: “clothing and textiles” is employing only 71 per cent. of the labour it employed in 1935; “printing and book-binding” has decreased 90 per cent., and practically every industry shows a decrease except “heat, light and power” which has registered an increase, mainly on account of war concerns. If we take into consideration the enormous amount of capital which has been invested in South African industries, £113,000,000 before the war, and if we remember that the European employees in 1939 numbered 1450,000 out of a total of 353,000, and that there was a total annual output of over £200,000,000, then only do we realise how important it is this country should have a soundly based and definite policy on which to develop our industrial structure of the war. Various conditions exist in this country which the Government will have to alter. It will have to prohibit the withholding of productive resources by wasteful monopolies and labour restrictions, that is by forcing unsuitable workers into specialised employment. Another great obstacle in the way of economic progress has been the metality of restrictionism in the defence of private interests which has existed in this country, and which has restrained and often destroyed productive capacity. It has not been confined to private industry, but it has developed of late in the very dangerous direction of state capitalism protected by the laws of the country and shielded by authoritarian control. If we want to eliminate wasteful private capital we cannot eliminate it by replacing it with wasteful state captalism, as exemplified in very many of these bodies that have been started by the Government. We have many of these bodies, but time is too short to mention them all. The Government should not merely accept existing systems, and merely calculate costs. These cost investigations are often useless and more often dangerous. We were told about a hundred years ago by a very prominent economist, Marshall, that this procedure is most wasteful. The costs of distribution are illustrated in every big block of flats, where a little milk is distributed at every flat every day. If the Minister wants to find the cost of distributing milk he will send out cost accountants, and they will draw up a very careful statement, so much for the cost of vehicles and tyres, etc. But the whole system is wrong. It is high time the Government, once and for all, made a thorough investigation into the costs of distribution not by merely accepting the statements of persons, but by going into the whole scheme, by going into the whole framework of distribution, and with the knowledge we gain it can be altered in order to provide the South African consuming public with commodities at a reasonable price. Sir, the Prime Minister said the other day that he was not afraid at all about the industrial position of this country after this war, and that he will have unemployment because he expects a shortage of labour. I am afraid there is a tendency for the Government to share just those views of general optimism which other people hold but which is not founded on a satisfactory basis. What is the position in America? We have the report from S.A.P.A. Reuter in “Die Burger” last month—

If that is the position with such a highly industralised country like America, and it expects such a large decrease in employment, what reason have we for assuming that we will have no unemployment and will actually have a shortage of workers after the war. A further point of importance is the whole policy of export, and the Government will have to keep in view that in order to export, we will have to import, and we will have to import to keep our gold mines going. We will have to take imports from other countries and only if the tariff policies have been based on a thorough system, only then do we feel that the Minister can go and tell a body of industrialists what will happen after the war.

Mr. Speaker, in considering the Budget statement, it is usual to consider its impact on the country’s economy and to judge it by the reactions which it produces. Last year I was able to tell the hon. Minister of Finance that his Budget had been received by the country without any apparent disadvantage to the country as a whole. This year it would seem that the reaction is entirely neutral. In fact, the Budget, from outside this House, has been described variously as “timid”, “tame” and “unimaginative”. The Minister, himself has described it as a transition Budget, and its lukewarm acceptance by the country may be due to the thinly disguised disappointment which has been felt by a large section of the business and commercial community, because they have been led by expectations and rumours to believe that the Minister was going to provide some taxation relief. It was freely whispered and rumoured that it was his intention, if not entirely to do away with the Excess Profits Duty, to provide at least some relief. And the same was rumoured in connection with the Fixed Property Profits Tax. As it happens, the Minister has done neither of these and some of our speculators have been inclined to burn their fingers, because, just prior to this Budget it was noteworthy that some of our industrial stocks, which are quoted on the Stock Exchange, would have been favourably affected by the abolition of the Excess Profits Duty, and their shares showed a rise. That has’ been checked. Whether that is to the advantage of the country as a whole, or not, I am not prepared at this stage to pass an opinion on, but I think, as a whole it may be said that industry accepts the position and is grateful to the Minister for the assurance he has given that the whole taxation system is under investigation and will probably be revised before the next Budget. Now I would like to come to a few remarks about our industrial prospects. That is a favourite subject of mine and I will be pleased if the House will bear with me if I go over some ground I have gone over before and which other speakers have touched on. Firstly I would like to refer to the great expansion which has occured in our secondary industry. I refer to that because I find that although I have asked the Government, through the Minister of Economic Development, to declare a policy showing which is going to be the branch of industry on which the Government is going to concentrate, I find that no such statement has been forthcoming, and in considering this matter it seems to have become the fashion to regard the secondary industry as the industry which is going to be the favoured one. I would, therefore, like to examine the position from the standpoint purely of the secondary industry branch. There has, admittedly, been a great expansion during the war and this is due in no small measure to the purchasing power that has been created by the Government coming into the field as a major purchaser. Now it is important to consider for a few moments how that was achieved. That was not done haphazardly. The Government did not go about placing orders here and there and everywhere. It was done under a co-ordinated body, namely, the Directorate of War Supplies. Now, Sir, under the direction of that co-ordinated body, we have been so able to extend our industries that we have been able to take care, not only of our war needs, but to a large extent, of our civil needs, which this country was to a large extent deprived of by the war. Considering that, might it not be possible to apply some of the lessons we have learnt during the war, when we were faced with an emergency which we were able to overcome by co-ordinated methods under the direction of the Directorate of War Supplies, to our civil needs, and would it not be possible to create a directorate of civil supplies so that we might make use of these lessons in the peace or in the transition period, for which this Budget is designed. Now, Sir, that expansion of our industry brought with it several tendencies. Foremost amongst these I think I may clearly say …

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, 1945, and Standing Order No. 26 (1), and the debate was adjourned; to be resumed on 8th March.