I move—

The object of this clause is to remedy a defect in the existing Act which makes no provision for the disposal of nets and implements which may have been seized by Government officers in the execution of their duties while patrolling prohibited fishing grounds. As the amendment now stands where nets or implements are seized, and where a prosecution takes place as a result, and where an offence is committed or is found to have been committed, the nets and the implements will automatically be confiscated. That is in conflict with the provisions of Clause 8 of the existing Act, and my first amendment is to bring it into line with the existing Act. That is to say, where the prosecution takes place, it shall be for the court to decide whether or not the implements shall be confiscated. The second amendment deals with the subsection which deals with the case where nets or implements are found in a prohibited area, such as a crawfish sanctuary and the owner is not there, a case that occurs not infrequently. Where these things are seized, though they may not be in law a presumption of an offence if a number of nets are found in such a crawfish sanctuary there is a strong presumption they are there for the purpose of catching crawfish, and so the nets are seized. In many cases the owner does not come along and claim them because he knows if he does he may be prosecuted for having been poaching. In that case after a period the Crown has power to dispose of these nets. In this paragraph we deal with a man who comes along and says: These are my nets, but they were taken without my consent and used by somebody else; I committed no offence and it is not right I should have the tools of my trade confiscated. As the amendment reads ho has to prove no offence was committed. So I am putting in an amendment that if the owner comes along he will not be required to prove an offence has not been committed, because if the nets were found in the crawfish sanctuary ipso facto an offence was committed, but he has to prove that it was not committed with his knowledge or consent.

The fish are perishable stuff, so is it possible to hold them until the sitting of the court?

In the case of fish they are disposed of, and he may later recover the value. This more affects the question of nets and implements than fish.

May the fish be sold before the case comes into court?

Yes.

Amendment put and agreed to.

Clause, as amended, put and agreed to.

On Clause 2,

I move—

In the previous stage of the Bill the hon. member for Ceres (Dr. Stals) pointed out that simply providing that nobody should use a boat without the consent of the owner might be embarrassing and difficult, and he suggested we should insert “written consent”, and I am prepared to accept that.

Amendment put and agreed to.

Clause, as amended, put and agreed to.

The remaining clauses and the Title having been agreed to.

House Resumed:

The CHAIRMAN reported the Bill with amendments.

Amendments considered.

Amendments in Clauses 1 and 2 put and agreed to, and the Bill, as amended, adopted.

I move as an unopposed motion—

I second.

Agreed to.

May I speak on the third reading of the Bill.

I am sorry, but the third reading has already been passed and I have already asked the Clerk to read the Bill a third time.

We have no objection to the Bill now coming up for third reading, but I intended to say something at this stage.

The motion for the third reading has been passed and I have already asked the Clerk to read the Bill a third time.

Bill read a third time.

It is a generally accepted principle that capital is not subject to taxation, a principle I believe the present Minister of Finance also subscribes to. When we come to transfer duties I regard it today as a levy on capital. Originally, there was a levy of 2 per cent., but that 2 per cent. in respect of transfer dues was intended to cover costs incurred by the Government in connection with the various transfers. But when we come to the additional 2 per cent., now being imposed for war purposes, I feel that such a tax is in conflict with that principle because it is a tax on capital. I really hope the Minister of Finance will see his way clear to repeal that tax. The idea of it was to restrict transactions in connection with immovable property. It has definitely not answered that purpose because we see that in the past year it has yielded an income of £1,050,000. In these circumstances we might indeed argue that it has yielded revenue but it has not really put a brake on that sort of transaction. On the contrary, all I can see in it is that it is pushing up the costs of production. We have had the experience that dairy farmers during the past week came here to plead for an improvement in prices. The mealie farmers are dissatisfied with the controlled price. The farmers are all asking for higher prices. I am convinced that this sort of taxation is only calculated to send up the cost of production higher and higher; and, consequently, I hope that the Minister will find an opportunity to lighten this restrictive taxation. Then I also want to put a question to the Minister of Finance, namely whether the 10 per cent. rebate given in respect of all transfer duties paid before the 31st March, 1945, applies to all the provinces or only to the Free State.

No, it was only their affair.

I see in that an indication that the Free State admits that the tax has a restrictive effect, and I hope the Minister of Finance will take a leaf out of the Free State’s book and not only allow the 10 per cent. rebate, but restore the transfer duties to their previous level so that they will not retard development.

The case put forward in this debate by the hon. member for George (Mr. Werth), in moving his amendment, cannot I think be regarded as real politics. In the first place, it was negatively aggressive and did not, or would not, assist the Minister in any way. In the second place, it asks for a hold-up of the finance machinery pending some sort of investigation. It is obvious that major fiscal changes in the country should only be brought about gradually; as the revenue of the State must not be subject to heavy fluctuations at the present time. The proposals contained in the motion we are now considering are integral to the tax system of the Union. They will have to go through. We must therefore look ahead. I am concerned mainly, not with any particular tax system, but with the ability of the country, in view of the price position in the Union, to make any tax system work unless we can arrive at some method of stabilising our economy. I want to discuss therefore, briefly, the general taxation system of the Union in its relationship to the real incomes of the people. Several members during the debate have referred to what they have called the national income. That is a very vague term. If we are to take it to mean the value of the goods and the services produced in the Union, then, according to Prof. Frankel and to Dr. Van Eck, that figure would be round about £550 millions today. But that figure, which represents the nominal national income, is not really important. What is important, is the real national income; which would be that figure corrected by a retail price index. For example the increase during the war of the nominal national income is round about 26 per cent. But the increase in the real national income, due to increase in prices and to inflation in the country, is round about 11½ per cent. I want to keep that fact in the background of our thinking for a few moments. Now there is a well-known distinction between public expenditure and private expenditure. We say that the State gets what it spends; but the individual spends what he gets. The State estimates its expenditure first, and then by taxation and loans and earnings, tries to cover that expenditure. The prudent individual spends what he gets; and, preferably, a little less. If the State expenditure increases or is inflated, as is the case today, then taxation adjustments become necessary. It is when the expenditure is increased because of inflation that a difficulty arises. The Government is a spender and an investor. It cannot escape the impact of inflationary prices in the country, for example, inflated land values, and increases in the prices of raw materials and services. In that connection I take a few examples to prove the extent of inflation in South Africa. From the report which I have in my hand, the 1943-’44 report of the Commissioner of Inland Revenue, in 1939 the value of the immovable property transferred in the Union was £38 millions; in 1943-’44 it had risen to £101 millions—an increase of 170 per cent. Mr. Postmus, recently Governor of the Reserve Bank, explains these high prices for fixed property as being due to fear of inflation. Then the payments of wages in all industries, amounted in 1938-’39 to £46 millions, while for 1943-’44 the figure was £63.8 millions—an increase of 37 per cent. The average individual wage for the Union of all workers in all industries rose 24 per cent. over that period. For non-European workers it rose 29 per cent. The Government and private employers are today spending several millions on cost of living allowances, mainly to offset inflation—but not very successfully. On the Government’s own showing, the general cost of living has increased to just over 30 per cent. on pre-war levels. That, I think, is an under-estimate. It is heavy inflation which is one of the reasons for heavy taxation. When we consider the pent-up demand for consumers’ goods not available in the Union today, a demand which is lying sterile, it does not take a great deal of imagination to realise that we are likely to go into extended inflation after the war making necessary heavier taxation, and the continuance of many of the economic controls we have in the country today. I think these things can be avoided. It is often said that the State itself is responsible for the inflation, and therefore the unnecessarily high level of taxation. I agree that the Government has not during the war exercised sufficiently strict control over costs and prices in the Union; but I do not think it can be argued that the Government has deliberately financed the war by inflationary methods. For example, the redeeming of over £60,000,000 of repatriated debt, the system of compulsory savings, and the system of financing the war to a large extent out of taxation, are creditable efforts. The essence of inflation is this: It is the competition as between an increase in the supply of money in the country for a limited supply of goods. Dr. de Kock gave us, in an article, “Concepts of Money, Capital and Credit” published by him, I think, last year, his method of calculating the quantity of money in South Africa. Let us for the sake of argument accept his system. He gave us a table like this: In 1938 the notes in circulation amounted to £15.8 millions. The current deposits in commercial banks were £74.9 millions; and the Government and other deposits £4.8 millions. That gives a total of £95.5 millions as being the amount of effective money in the Union. In 1943 the total figure was £246.5 millions. Notes in circulation had trebled during that period, current deposits of the banks were twice the amount; and Government and other deposits trebled themselves. There was therefore this increase to £246.5 millions in 1943 from £95.6 millions in 1938. This represents an increase in money volume of 158 per cent. That alone, subject of course to correction, because of the velocity of notes and of bank deposits, has increased the demand side of our economy: The other side, the supply side, as measured by the national income, has increased to only 26 per cent. in the case of the nominal national income; and only 11.3 per cent. for the real national income. In the light of these figures there seems to be no doubt of the existence of serious inflation in the country. Another important point is this. Inflation to this degree definitely increases Government spending; and has a very powerful upward urge on the taxation required. But it has another equally important and indeed a debilitating effect on the economy. It seriously lowers the real incomes in the country. If prices go up 100 per cent., incomes are halved. I made a calculation of family budgets in Durban last year. I did so very carefully; and I came to the conclusion that the general cost of living for the average family in Durban had gone up 80 per cent. On the basis of that increase in the cost of living, the value of our South African pound has fallen today to 11s. Now it is the people in possession of these depreciated pounds who have the real income of the country, and who must pay a big share of the taxation of the country.

This then is the dilemma of public finance in times of war and will be in the post-war period. The total expenditure of Government is inflated; and Government consequently has to strive to obtain increased taxation. But the very influences which forces that position on the Government, i.e. inflationary conditions in the country, are constantly lowering the real income of the people, i.e. the Government tries to get more from the people who have relatively less than previously. Now, there is social danger in that position. We experienced the results of that danger towards the end of the last war. There can come a public demand from the people for increased wages and salaries and allowances; and that can lead to uncontrolled inflation. Alternatively, there might come from employers and the State a demand for decreased expenditure; and then, by an increased bank rate, and by other orthodox methods, we might have engineered in the country a serious deflation. Now, I believe that both these unpleasant alternatives may be avoided; and that our tax system can be made to do its proper work, namely, the equitable distribution of the national income over all sections of the population. I wish, therefore, in conclusion, to outline what I believe would be a plan by which we could stabilise the South African economy now, by pegging all our costs and prices, as a first step, to our December, 1944, levels. There is nothing original about this suggestion. The Minister will know that the Canadian Government has some such plan. The New Zealand Government for some years now, have been successfully operating a stabilisation plan of that kind. We may, for example, in order to make stabilisation effective, have to peg some 200 commodities. We could treat them as a group and endeavour to keep the group price stable, so that a fall in the price of some commodities would be offset by a rise in the price of other commodities. I would suggest that we make the range of commodities fairly wide, to include groceries, dairy products, meat, fresh fruit and vegetables, drapery, footwear, furniture, rents, and perhaps also property values. It would be impossible to control prices in that way, and to keep them stable, unless we fix within narrow limits all costs. That would mean that all rates of remuneration, i.e. wages and salaries, directors’ fees, profits, dividends and commissions, would all have to be controlled. Farm prices would have to be stabilised. There again, we may take an example from one of the other Commonwealth Governments. It has adopted the procedure of fixing agricultural products for the first three years of the peace. Farm costs would also have to be fixed. If that were difficult, then by a form of indirect taxation, we would have to subsidise them. Similarly, imported goods may have to be subsidised, as we are subsidising condensed milk in the country today, to prevent imported inflation. In other words, steps of this kind become a sort of collective bargain by the community with itself, ensuring stability in accordance with a State managed price index. But there would have to be machinery for them. We would need a stabilising council under the Treasury, using the emergency regulations. I take it that the war is not going to end the need for emergency regulations. As I see it, I believe that the greatest emergency is going to be the peace; when we shall be faced with the demobilisation of large numbers of men requiring housing furniture, and all sorts of family needs. They will not be happy to buy these things even at the present inflated prices. I have suggested the establishment of a stabilisation council in order to give stability to the whole economy and make the taxation system work smoothly. We should have done that in 1939. But there is no reason for inaction now. We can put our economy in order now. We can revise the stabilisation structure every six months to bring prices gradually to a more natural level and into purchasing power parity with the other parts of the Commonwealth. That I believe, is an economic necessity. I believe it is an economic possibility. I believe it is a sine qua non for the efficient working of any system of taxation; for it is a fundamental and inescapable duty of government to take such steps as will ensure the relative stability of the value of the people’s money.

When the Minister of Finance introduced this vote to the House to go into the Committee of Ways and Means in the usual way, I made a note of it that when he referred to mining taxation he said that mining taxation in future would depend on the life of the mines. That has given me encouragement today to put forward a plea for those seven mines which have given the usual statutory notice to close down on the Reef. My reason for doing that is this, that I am going to put forward what is considered to be a practical suggestion to the Minister, namely the following: In order to extend the life of those mines the Government should forego the usual mining taxation. I would like to point out that if a mine closes down there is no taxation to be derived from it, and no money is coming into circulation and no-one is employed. The point I wish to make is this, that if he would accede to the request I have made, he would most likely extend the life of those mines perhaps others for two or three years, and when I addressed the House on a similar occasion I gave the mount of money which one of the mines in my constituency was putting into circulation by way of stores, an amount of something like £100,000 per annum, and a similar amount was paid in wages. When that mine closes down, there will be no taxation coming from it, and no £100,000 circulated for stores, nor £100,000 for wages. It is in the interest of not only one but seven mines at present, and it may be more in the near future. If that suggestion is adopted, in order to put that money into circulation and to create that employment which we shall need, the Government will be doing the right thing by foregoing that taxation in order to allow these mines to go on producing for another two or three years, which would no doubt be of great benefit to the country in putting all this money into circulation. When the Minister replies, I hope he will give an indication of what he wants to do about this important matter, because it is an important matter. I hate to see a mine closing down. There was one mine which closed down in Johannesburg some years ago, and I saw the result of that. People were sent away from the homes which they had occupied for many years and where their families had been brought up. It is a very deplorable thing to see and I want the Minister and the Government to give the greatest consideration to avoid these things for the next two or three years. We may be in a bettter position then to deal with the matter. I again ask the Minister, when he replies, to tell us what the Government intends to do.

On this occasion I want to mention a matter that I have personally brought up in the House on many occasions, and which I regard as of very great importance, and which I hope to continue to mention until one day the Minister of Finance hears something that will bring about a change. It relates to income tax and the amount that is deducted in respect of children. It has been our misfortune that since 1924, that is to say for 21 years, our Ministers of Finance have had no responsibility for children. The previous Minister of Finance had no children and the present Minister of Finance is an unmarried man. They have not had the responsibility of bringing up children, and they do not know the expense attached to bringing up children in South Africa. We ought to encourage large families in our country. I maintain that the effect of our whole taxation system is to discourage large families.

To discourage large families?

Because we are doing nothing to encourage them; the result is that parents are uneasy about having children, and the tendency is not to have large families. In regard to income tax, the parent is allowed to deduct a maximum of £5 for a child, but it can only be done until a child is 18 years old. When the child is 18 years old it involves the parent in very heavy expense, because it is then the child has to go to the university, but the parent is not allowed this deduction. When your child costs you perhaps £10 a year to maintain then you may deduct £5. When the baby is only a month old you may deduct £5 but when a child is 18 years old, and when it may cost £200 or £300 to send it to the university, you are not allowed to deduct this amount. That is a big anomaly. We have on many occasions pointed out that this is unfair and anomalous, but no government has hitherto gone so far as to regard this matter seriously. When the child has found his own sphere of work and can look after himself, the parent does not desire a single penny to be deducted in respect of that child; but the parent has the right to say that as long as he maintains the child and the child represents expenditure by him the State should assist such a parent, and not penalise him. This is penalising the parent because now if he wants to improve the child’s education he is not allowed to deduct anything. When a child is 18 years old and the parent tells the child that he must go and earn something for himself, and he is rid of the child, the child does not involve the parent in any more expense and then the parent cannot expect any reduction in the tax; but when the parent accepts the responsibility of paying £200 or £300 to allow the child to enjoy higher education it is not right that he should not be allowed even to deduct a small amount of £5 from the tax. The amount that he may deduct for a child is insignificant enough. I main tain that there ought to be a progressive scale, and the more children the parents have the higher ought to be the amount allowed in respect of each child. This would in a measure be an encouragement for larger families. I hope the Minister will be in a position to consider this matter seriously. As has been stated it is regrettable that for 21 years we have had Ministers of Finance who cannot treat the matter as seriously as parents who are involved in great expense in connection with their children. I do not know what the reason is, but a satisfactory reason has never been given to me, nor indeed any reason, why this has to be the case. The present Minister of Finance whenever I have mentioned the point has said: This is a good point, this is a reasonable point, but no government has ever arrived at the stage of rectifying it. May I again appeal to the Minister to take this matter into serious consideration and to make an alteration so that there will be encouragement to this extent for larger families, and so that the parents at the stage when they have big expenses in connection with their children will obtain relief. Then there is a second matter that I want to touch on in connection with income tax, and I shall give the Minister the particulars in connection with one case. The figures that I am giving I cannot vouch for personally, because it is information that has been handed to me and I am giving it as I received it. It is an interesting case of a young Afrikaner who is still a student at one of our universities, and apparently only 24 years of age. He discovered a certain patent, a very important patent in connection with the manufacture of rubber, to reduce the cost of the manufacture of rubber by 50 per cent., as I understand it. The student tried to sell his patent in this country, but not much interest was taken in it. He obtained, however from a foreign government—according to my information from the Belgian Congo—an amount of £240,000 for his patent. But our Government, so I understand, took about £200,000 off this £240,000 in taxation, because it is regarded as income and the tax had to be paid on that for this year. We know that the tax in the higher levels rises to 17s. 6d. in the £. My information is that this young Afrikaner had to pay £200,000 in taxation on his invention.

How much did he get?

According to my information he received £240,000 of which the Government under the laws of the country took £200,000. Now one involuntarily puts the question whether anything of that sort should be regarded as income. Is it not capital? That is all he has to sell, the invention of his brain. When a person sells property it is not regarded as income, when one sells shares it is not regarded as income; it is capital, and one feels that in such a case it should not be regarded purely as income but as something that you possess. It is the capital of his brain this man sold, and it seems very unjust that the State should seize the greater portion of it by way of tax. Such a person is not encouraged to go further. I understand that he has two or three other brilliant patents, but if he sells them today the Government will receive the largest part of the money. That is not quite right, and that ought not to be the case. One feels that the Government if it wants to take the revenue should encourage that young man to go ahead, and the Government ought to use that money to etstablish a research institute for him, for him alone to go further. A young man like that who makes such an invention while he is still a student may be a second Edison or a second Marconi, but what encouragement is there? I understand that he gave all his attention to this and as a result he failed in his engineers’ examination last year. The professor said he devoted too much time to other things. One can well understand that this is the position. I believe he has other patents in connection with electricity and wireless which are of great significance, and we feel there is something wrong when a young man of that type is not assisted. The State ought not to take such a large amount away from him, almost the lot. We should rather encourage him. Otherwise he will probably be snaffled by another country instead of remaining and being a big asset to our country. Other countries will be only too anxious to get him and use him, and then he will be lost to us. I should like the Minister to take measures so that such a person will not be discouraged when he has an achievement of such distinction. If the Government took £40,000 and left him £200,000 it would be a better proportion. Then he could perhaps use the money himself to establish a laboratory and to continue with his inventions. I understand that the work in connection with his inventions was carried out in a workshop behind a chemist. That was his laboratory, and it was there he made the important discovery. I hope the Minister will take sufficient interest in this matter to go into it in order to see whether anything can be done.

I have quite a few things to say in connection with taxation. In the first place I just want to point out that our taxation system remains the same in spite of the complaints which are lodged year after year, for instance that it is so complicated and that we cannot understand it. The Minister goes on in the same way. As various speakers have indicated, the system is so complicated that one needs experts of the first water to explain matters. On a previous occasion I asked the Minister whether it would not be possible to have a simple form of taxation so that the ordinary man who is liable for taxation is able to understand it. At present it is necessary to obtain the services of a professional man to have it explained. There are today many people who pay income tax but who do not know where they are. They have to engage experts to explain it to them. Once again I want to urge for a simple form of taxation, and when we press for a simple form of taxation, I wish to add that there is only one just system in the world, and that is the simple income tax system, for then you catch the man who is able to pay, and the man who cannot pay receives a reasonable concession. Then I just want to reply to the attack made by the hon. member for Waterberg (Mr. J. G. Strydom) on the hon. member for South Rand (Mr. Christie). It is true that it may perhaps sound a little strange that we on this side should plead for a decrease in mining taxation. But for some years now whenever we have urged for an increase of the Mine workers’ wages, we have received the answer from the mine owners: “The Government has taxed us beyond existence”. They then tell us to approach the Government and that the Government should decrease the taxation. Then, I say, the onus rests on the Governmen to reply and say that the mine owners are not taxed to such an extent that they are unable to pay. If this is the constant argument of the mining industry that the Government taxes the industry to such an extent that they are unable to pay increased wages to their employees, then the Minister must illustrate that he does not tax them so heavily, and that they are in a position to increase the wages of the mine workers. The onus rests on the Government.

You said last year that the mines could close down if they liked.

I am glad that the hon. member has reminded me of that. I repeat that if the mines say that the taxation makes it impossible for them to increase the wages, then the onus rests on the Government to investigate the matter, but I say that where taxation is reasonable and where the mines are definitely in a position to pay higher wages and they are unwilling to do so, and then threaten to close down if the Government refuses to meet them half way, let them close down and then we can take the mines over. Did I not say last year that if the Government let the mines understand that it would take over the mines, not one of them would close down? We have heard threats that a few of them will be obliged to close down unless a change is brought about in taxation. But what is the position of those mines today who last year threatened to close down? We know that it is just a scare story. We know that in 1929 the low grade ore commission was appointed to see what should be done in order to lengthen the life of those mines. These mines then said: “We are going to close down tomorrow; we are finished’’. But if you, Mr. Speaker, were fortunate and had bought up shares of those self-same mines, today you would be a very wealthy man if you had invested a few hundred or a few thousand pounds in them. Those are mines who said in 1929 that the standard of their ore was so low that they simply could not carry on if the Government did not come to their assistance. That is why I say that the Government should say to the mines: “If you want to close down, then do so, but then tomorrow we will open up again”. Then we would see how much truth there is in that story. But now I want to put a question to the hon. member for Waterberg (Mr. J. G. Strydom); he branded members on these benches as the spokesmen of the mines. The hon. member for South Rand (Mr. Christie) said that mining taxation should be decreased for a specific reason, namely to enable the mines to pay higher wages. Now I want to put this question to the hon. member for Waterberg. Supposing the hon. member for South Rand had proposed that mining taxation should be increased and that that money should be used to the benefit of the farmers, would he then have raised objection? No, then the hon. member would have said that we were the champions of the farmers. The hon. member for South Rand did not ask the Government to make a present to the mines of a sum of money, but he said that if the Minister and the Government are satisfied that the mines are unable to pay higher wages, let them then make a concession to the mines. If the hon. member for Waterberg wants to style us the champions of the gold mines, then he must remain consistent and also style us the champions of secondary industries, because for years now we have pleaded for assistance to secondary industries.

Would you raise objection were I to say so?

No.

For you object to my calling you the champions of the mines.

No, I have no objection to that, but I want the hon. member to tell the whole truth, then we will understand one another better. Where we have been constant in our plea for a decrease in the taxation of the working man, the hon. member must remain consistent and say that we are the champions of the working man, but he must not pick out one small point and try to create the impression that our only endeovour is to promote the interests of the gold mines. The hon. member for South Rand gave his reasons for asking for those concessions. If the Minister is satisfied that the reason advanced by the mines as to why they are unable to increase the mine workers’ wages, is correct, then the Government ought to make a concession. The Minister will perhaps say that although we tax the mines very heavily, the mining industry receives concessions over and above other industries. The Minister can rightly say that the mining industry has received all help, encouragement, protection, guarantees, work concessions and transport concessions from the Government. After all, it is owing to the fact that the mines are the goose that lays the golden egg that they receive all these favours, from the Government. They are regarded as the goose that lays the golden egg, but I would like to draw the Minister’s attention to the fact that that goose that lays the golden egg pecks many of the chickens to death. The Minister knows that years ago the mines declared themselves positively opposed to the development of other industries, and now that they see that the will of the nation has triumphed, now they say that they themselves want to develop industries. We are not opposed to that, but then they must not only encourage secondary industries when it suits their purpose. We want to see them encouraging the development of secondary industries when they are to the benefit of the development of South Africa. One thing which would encourage secondary industries would be if South Africa were able to obtain agricultural implements at the prices which the European farmers pay for them. Up till now we have not been so privileged. We have always had to pay practically three times the prices paid by the farmers in the Argentine, in the United States of America and in Australia and any other country for any vehicles or any implements which one needs in this country in order to produce, and one of the reasons why those prices are so high is the detrimental form of taxation which is levied on the import of machinery and implements to this country. That is why I say that a just taxation system is one which is based on revenue, but when we import implements, be they from America, or Britain, which enable our secondary industries, our wine industry and our agricultural industry to produce on a larger scale—to produce more effectively—then we must enable the farmers in South Africa to obtain those implements at a reasonable sum, and not at such a high price that the small man is put completely out of production, and for that reason I appeal to the Minister to review his taxation system in that respect to such an extent that it will not act as a brake on the import of certain implements to South Africa. There are many things which must be developed but the most elementary development today is in the first place dependent on certain machinery which you have to import from overseas to South Africa and the prices have soared to such a height as a result of the import duties which are payable on the import of machinery that the South African producer is suffering as a result thereof, and after all it is one of the reasons why production in South Africa has always been retarded. And now I just want to ask the Minister to reply to me on one small point when he replies to the debate, namely: Can the Minister give us an explanation as to why the cost of living in South Africa has risen out of all proportion when one compares it with the rise in the cost of living in New Zealand. I understand that the rise in the cost of living in New Zealand is less than 4 per cent.

I do not know how much it is, but it is very much more than 4 per cent.

My information comes from a very reliable source. I understood it to be less than 4 per cent. I maintain that this is one matter which the House cannot disregard. I hope the Minister will make more allowances with regard to the terrific rise in the cost of living. The Minister will certainly concede that the figures, as from time to time furnished by his Department, are not a true reflection of the actual state of affairs with regard to the increased cost of living in this country. I want to point out to the Minister that the figure furnished by his Department probably does not take into account the enormous increase in the cost of men’s clothing. I want to point out to him that the cost of men’s clothing has risen to something in excess of 300 per cent. The Trades and Labour Council fixed the increase at 300 per cent. and the Department did not dispute it. It is a figure which is out of all proportion to the New Zealand figure. The country is very anxious to know what the position is. Clothing has risen by approximately 300 per cent. and the price of almost every article has risen enormously. The Minister of Mines mentioned a few facts the other day in connection with the prices which are asked by hairdressers. I want to quote another example. This morning I bought a razor. That type of razor we used to buy for 3s. or 4s. Today you cannot buy one under 18s. That article as well is also up by more than 300 per cent. I would like the Minister to illustrate to the House what positive measures have been taken by the Government to pen down the enormous rise in the cost of living. I concede that there are many prosecutions in our courts, where for example a small shopkeeper has perhaps sold a tin of milk for ½d. too much, but I think that if in the big towns you go to big commercial concerns you will find that they charge enormously high prices for vital necessities, articles which are essential to one, and there is no form of control in that respect. I will mention an article. Today one has to pay £5 5s. for the same quality blanket which one could buy before for £1 4s. and at the most £1 8s. I can take the Minister to one of these places. I can take the Minister’s inspectors to these places. We understood that the Government had taken steps to ensure that increased cost of living and speculation and exploitation would be put a stop to during the war. Now I ask: Where are the control measures to put an end to the enormous speculation on the part of big business men? Then I want to ask the Minister—if it falls within the scope of his Department and not within that of the Department of Agriculture— he can perhaps put me right—whether as regards the import of meat from Australia and the Argentine to South Africa, this falls under the fixed prices, as determined under the meat scheme or has it absolutely nothing to do with it?

I am sorry but that has nothing to do with the matter.

Then I will leave the question. I simply wanted to put a question to the Minister. I wish to endorse a point which was made by the hon. member for Witbank (Mr. H J. Bekker), and that is that the exemption allowed to the family man is so little that it is almost negligible. I think that it only causes clerical difficulty, for the rebate which is allowed for every child is so little that it is hardly worth while. It amounts to a few pounds, and I hope the Minister will revert to the old system and grant an exemption of at least £75 per child. There are certain salaried people who have perhaps four or five or six children but they are at the stage where they are liable for income tax so that it is to a man’s detriment if he is for example just above the notch where he has to pay income tax. After he has paid his income tax he is actually worse off than the man who draws a smaller salary than he does. If the Minister can asssit those families and grant a rebate of £75 for each child, then the man who earns a higher salary will at least be able to show something for it. Now he does in reality receive a higher salary but after deducting income tax he has less than a man who draws a lower salary and who has fewer children. I wanted to put a few other questions to the Minister in connection with controlled prices, but as it does not fall within the scope of the Minister, I naturally cannot do so. But I want to make an appeal to the Minister to come to the assistance of the family man, and as he is about to switch over to a peace taxation system—I do not say that the war taxation should be entirely abolished—I would like the Minister in his reply to the debate to tell us that every penny of war taxation which is now being collected and which is not used in the course of the year for war purposes, will be used in connection with reconstruction, so that South Africa can develop on a sounder footing in the industrial sphere, and so that we shall not revert to the position of chaos and unemployment which confronted us after the last war. I will go further and say that a specific sum should be mentioned which the Government will put aside every year for at least 10 years for the purposes of reconstruction, for the purposes of industrial development, for the purposes of subsidising all the industries which have sprung up during the war and which have seen South Africa through these dark years. Even if their survival has been dependent on a form of subsidy or other consessions, it will pay us to make those concessions, for it is only on the strength of those industries that we in South Africa will be able to realise the high expectations we cherish of this Government in its early years.

I feel the country would not support the amendment put forward by the Opposition. The whole object of that amendment is to hold up supplies in order that a complete overhaul of the taxation machinery may take place. Obviously this would not be possible in the limited time in which these financial proposals have to be put through. The country is, I feel, overwhelmingly behind the Government in their attempts to provide the necessary finance, and when we have a little more time to go into this complicated system of taxation we can try, with the assistance of the various bodies concerned, to evolve a more satisfactory basis. We know that during abnormal times, such as we have been passing through, the principal business of the country was to see the war brought to a successful conclusion, and we had at the same time to provide the fluids necessary for that purpose. We could not possibly examine all these proposals in every detail, but the Government has undoubtedly placed South Africa in a very sound financial position. They have enabled us to make a most effective contribution to the cost of winning the war, and I am sure they have inflicted the minimum of hardship on the people of South Africa. One effect of the Opposition’s proposals would be to make more difficult the provision of land for housing. One of the Government’s main proposals, on the other hand, is to try to encourage the people who are holding up land that is urgently required for housing, to bring that land into the market, and to give the necessary tax relief which it is hoped will bring this about. The Opposition’s policy makes this more difficult, and I think this should be clearly shown so that the returned soldiers will realise that the attitude of the official Opposition would make the provision of more land for housing difficult. Another point that I feel has not been emphasised sufficiently is that we are today living under very abnormal conditions. We are inclined to think many of the conditions we have been accustomed to for the last three or four years are part of our normal economy. We are inclined to view present prices as something likely to continue and present conditions as something likely to continue. I think that under these abnormal conditions we would be very foolish to try to bring about a permanent solution of our taxation policy. I think it would be very much wiser to leave this matter over until we are more or less settled down to what we may consider to be a normal period. We all realise that taxation is necessary, and it is possible that with the war situation looking very much more promising than it was even a few months ago, the Minister may have imposed more taxation than is really necessary for the business of the country during the ensuing year. But if that happens to be so, I think it will be a very happy state of affairs. If we have a little surplus I think it should be used for the permanent development of the country and I think the country would support wholeheartedly the view that that development should first of all be on the lines of assisting our returned soldiers. Any surplus we have from taxation should be used for development, and particularly for development by returned soldiers. There is one particular point I would like to refer to. Stress has been laid by the Opposition on the fact that the exemption for permanent improvements in agriculture is not sufficient. The Opposition would like to see any farmers who have made a considerable amount of money during the war allowed to use that money to put up permanent improvements at a time when building materials are very scarce and when labour for building is very scarce, and when the country generally wants every scrap of material and all the labour available to be used to provide houses. Speaking as a farmer I say that 30 per cent. is ample; I think it is more than ample, and I would prefer that a lot of this material and labour should be used to provide houses rather than to encourage the wealthy people who have made large profits during the war to put that money into permanent assets for their own benefit. I think the country rather than individuals is entitled to this money, and I am prepared to defend that attitude on any public platform. Many people have made money, not necessarily on farming, but they have acquired farms, and if they are to be encouraged to hide their war profits by putting up improvements on these farms I do not think that is a principle South Africa would subscribe to. The whole country agrees an overhaul of our taxation system is desirable, but I submit this is not the time to do it and, particularly, it is wrong to try to hold up the money essential to carrying on the business of the country in order that this overhaul might take place. Then I should like to touch on one particular aspect of this proposal, and that is in regard to personal savings levy. I notice the Government does not propose to continue to collect that money in the form it did originally, and that the amount that will have been collected as at 31st March is £3,600,000. Those certificates, I understand, are redeemable in three years; but I think the Minister could consider the possibility of trying to make these certificates redeemable at an earlier date, and in that connection I would like to suggest that he should introduce a new loan and accept these certificates as an instalment oh that loan in order to carry out the object he had in mind, hamely, to encourage saving. I think these certificates would be a very fine contribution, and I make this suggestion of a special loan to be started for that purpose. Then on the question of excess profits several speakers have stressed that these excess profits are being taxed too heavily, and in that way capital that would be available for future investment, capital that would be available to encourage industry, is being taken away from the people who are running those industries. I submit a large amount of these excess profits should be available for starting industries, but rather than have them left in the pockets of the people who made them I would like to see a great proportion of them taken by the Government and utilised as capital to start industries by returned soldiers. They are more entitled to consideration than the people who have had five years’ experience of making profits and who have had five years to build up new businesses while these other men have been fighting for South Africa. Then I would like to touch briefly on the development of agriculture. It is absolutely essential that we should encourage sound development in agriculture. Mr. Churchill in a recent speech used these words ….

Order, order. Will the hon. member tell me how he wishes to associate general questions of agriculture with the question before the House?

I do not want to go into general matters and I would only like to say I was touching on the question of using excess profits for future development, and I was trying to suggest that some of this excess profit should be used for the development of agriculture. There is another point—I do not know whether I would be allowed to use it—and that is a suggestion made by the organised woolgrowers of South Africa asking the Government to allow them to impose a levy on themselves.

No, that is not in order.

Then, I should like again to emphasise the fact that I entirely support the Government’s proposals. The amendment of the official Opposition, wanting to deny supplies for the country until the whole taxation system has been overhauled is not a sound proposition, and I feel, Sir that the policy of the Government is in the best interests of South Africa. I do not think they will inflict any hardship on the country. Particularly I should like, as a farmer, to support the idea that the gold mines should not be taxed out of existence. It was, I think, the hon. member for Swellendam (Mr. S. E. Warren) whose attitude was: Let them close down and we will open them. I do not think that is a sound attitude or one that would commend itself to the House. We do not want the mines to close down; we want the mines to continue to provide a tremendous amount of employment we want the mines to continue to provide a large amount of taxation, and we want them to continue to provide a market for the vast bulk of South African produce.

The speech of the hon. member for East Griqualand (Mr. Fawcett) really surprises one especially when you remember that he is a farmer. He owes such loyalty towards these taxes that are being imposed that he even combats the idea broached by this side of the House that the taxation system should be simplified. If I asked him to explain the taxation system as it refers to the farmer, I am convinced that though he is a member of Parliament he would not be able to give the explanation. It is very involved. What also appears so strange to me is that he is satisfied with the taxes that are borne by the farmer. He forgets that the taxes press very heavily on the farmer. He forgets how recently dairy farmers came from his district to Cape Town and told the Government that they could not come out with their products at the present prices. Nevertheless he is satisfied with the existing taxes. He talks about improvements and he apparently refers only to building improvements. I want to remind him that these do not represent all the improvements on a farm. There are such things as camps, dams, the planting of trees and so forth. I only want to tell the hon. member that if he continues to talk in that way in this House it is very unlikely that he will retain his seat. Another matter that I should like to bring to the notice of the Minister of Finance is the grievance that exists in connection with the rebate that applies in respect of co-operative associations that are now regarded as open associations. Last year legislation was adopted by this House in connection with the taxation that has to be paid by co-operative societies and we then had a greater distinction between closed co-operative societies and open co-operative societies. That legislation hit the trading co-operatives on the platteland with special severity, and it amounted to this, that co-operatives that were esablished after 1939 were knee-haltered as a result of the new taxation system. I want the Minister to take into consideration giving a better rebate to the newly esablished co-operative societies, and this applies also to other new businesses. They now get £250. The position is being made impossible for these new enterprises in respect of competition with established businesses. A co-operative that is not a closed co-operative can only obtain the rebate of £250 together with 8 per cent. on the unpaid shares. That is only a small amount when we take into account that the capital is perhaps £6,000 or £8,000. The result is that such a co-operative society cannot build up a reserve fund, and in consequence those co-operative societies are placed in a difficult position in normal times or should a depression come. Can the Minister not take into consideration entitling the co-operatives to deduct the portion that was in the past paid out in the form of a bonus to members and then the rebate can be set aside as a nest egg for a reserve fund. Tax only on the amount received in payment of goods sold to non-members. At the moment it is weighing heavily on the co-operatives and on new businesses and industries established since 1939. They simply cannot compete with the old businesses. I should like to have a reply from the Minister on this point.

I did not intend to intervene in this debate, but in view of the fact that several members on the other side as well as members of the Labour Party have pleaded for an easing of the taxation on the gold mines, I should like to say a few words on the matter. The hon. member for Houghton (Mr. Bell) has appeared here as the protagonist for the Chamber of Mines. He has argued for a lightening of the taxation on the gold mines. He has argued that the gold mines cannot bear higher taxation, and that it will be disastrous if some relief is not given in respect of taxation on the mines. He lauded the Chamber of Mines to the skies, and maintained that it represented a great deal to the country. I am not going to argue about that. I grant him that the mines mean much to the country, but we have to be specific in our arguments when we plead for the mines and we must be able to prove that it is really necessary that there should be a reduction in taxation. The argument he offered was that unless the mines are not given some relief in regard to taxation they will necessarily be compelled to close. I would just say that this argument is presented to the House every year when the taxation proposals are under discussion. I fear that, with the experience we have had in the past, that argument has lost its value. Last year I pointed out that every time the mines want a reduction of taxation they come along with the story that the gold mines will have to close unless this is granted. We had the case of the New Kleinfontein. They applied for a reduction of taxation, and they stated that the mine would have to close down if this was not granted. Nevertheless that mine did not close down, and on the contrary we found that within 12 months its shares rose. Now I ask, if a mine can still send up the value of its shares how is it possible that it should be in such a lamentable position that an argument of that sort can be introduced? The hon. member for Houghton introduced another argument which to me is rather unintelligible in the present circumstances. He referred to the great expenditure involved in deep level mining. But before I come to that I want to point out that he attacked the hon. member for Swellendam (Mr. S. E. Warren) and said that that member suggested that the State should take over the gold mines. The hon. member for Swellendam stated here that if the mines came along and threatened that they would close, well let those mines close and the State could then take them over and work them. The hon. member for Swellendam agrees there with the hon. member for Krugersdorp (Mr. Van den Berg). We are tired of that threat of closing down the mines, and we say that if they want to close down let them close down and the State will then work them. If a mine is worked out it is worked out, and it will not help matters for either me or the hon. member for Houghton to go and sit on the white sand and cry as if there is no further hope in life for us. Then I come to the fact that the hon. member mentioned the cost of deep level mining. I do not know what his object was. We recently received a report of the relevant commission, and that report remains to be considered. We cannot now drag in this matter as a reason why we should give some taxation relief. We on this side of the House are reasonable, and if mines working at depths of from 8,000 ft. to 12,000 ft. require assistance, we shall not be unwilling to take this into consideration and we shall not be unwilling to think about the writing off of capital and suchlike things. We will welcome it, but we must first have the proofs. But that report has not yet been dealt with, and this is not a ground on which to plead for a reduction in taxation. I want to go into the present position. I want to refer to the report of the Commissioner of Inland Revenue. I take in the first place the revenue to the State from the leased mines. In that connection we can take mines such as Government Mining Areas, the Brakpan Mine and the Springs Mine.

What page is that?

Page 13. We find there that in 1936 the State’s share was about 58 per cent. It gradually decreased every year until it is now 40.4 per cent. We are thus faced with the position that the State’s shares decline each year. Take the case of the Brakpan Mine. There it fell from 10.78 per cent. in 1936 to 7.5 per cent. last year. That is a tremendous decline. In the case of the Springs Mine it was reduced from 34 per cent. to 31 per cent. in that period. The State’s revenue has progressively declined. We have all these others too but it is not necessary to go into them. On page 15 we find this, that the State’s share in connection with that class of profits from the mines amounted to about 24.54 per cent.

But that does not represent all the taxation.

I am referring now only to that section. In the time at my disposal I cannot go into all of them. Then it is further pointed out here that under Act No. 25 of 1940 as amended by Act No. 41 of 1943, a special levy of 22½ per cent. was imposed on the gold mines, but it was provided that a deduction could be made from the taxable amount of £20,000 which is reducible by £1 for every £10 of expenditure on capital development ….

That was intended to help the small mines.

I know what it was for. That deduction was granted, and I mention it to show that the position of the mines is not so unfavourable as hon. members on the other side would suggest. The other side of the matter is the dividends that are paid out by the mines. If we take the dividends for the six years from 1936 to 1942 we find that an amount of £58,781,000 was paid out to local shareholders while £72,471,000 was paid out to foreign shareholders. The external amount was considerably more than the local. Altogether, it represents an amount of £131,000,000 that was paid out in respect of shares. The profits on the shares has always increased or shown a tendency to increase. During this period it has in some years gone up to £22,000,000. Under the Nationalist Party Government the dividends were never more than £9,000,000 a year. I speak subject to correction, but I believe that to be the position. When we look at the dividends that were paid out in those six years, or at the capital that was invested in the gold mines, the position is not so unfavourable as has been represented here. In the circumstances I believe the Minister will not find it necessary today to grant some relief in taxation to the mines. I do not believe there is any reason for it. Now I come to the attitude of the hon. member for South Rand (Mr. Christie) and the hon. member for Krugersdorp as well in the name of the Labour Party. They take up the attitude of the Chamber of Mines and they ask for taxation relief. They say that this relief should be forthcoming for the benefit of the employees. I should like to know what evidence they have that the Government or the Chamber of Mines will really carry this out should relief be granted.

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

I was referring to the attitude of members of the Labour Party in reference to this matter. The Labour Party proceed from the assumption that mining taxation must be reduced and that the reduction should go to the mineworkers. I should like to ask the Labour Party what assurance they have that should mining taxation be reduced the reduction would go towards the increasing of the remuneration of European mineworkers, and I should like in the first place to refer them to the report that was made by a commission in reference to the wages of native mineworkers on the Witwatersrand a little while ago. The finding of that commission was on the whole that the Chamber of Mines is endeavouring, as far as possible, to work with cheap labour. If this is the policy we must ask ourselves before we ask for a reduction of taxation whether the reduction will really go into the pockets of the European mineworkers. I say no. Then I refer further to the report of the Gold Producers’ Committee, 1945. It is clearly indicated there what the attitude of the Government is towards the European mineworkers on the Witwatersrand. For instance, the cases dealt with here of the difference that arose when the mineworkers asked for a wage increase of 30 per cent. That was not in the interests of the Chamber of Mines, and we also saw in a report of one of the commissions published recently that that commission found in connection with silicotics that, as far as the Chamber of Mines was concerned, the position was that, as regards salaries, they would make no recommendation for the increase of the pensions of silicotics. They wanted the position to remain as it was, but when the difference arose in connection with the wage increase of 30 per cent. the Government intervened. Many of us were not aware until the report was published that the Government had such a strong feeling against the mineworkers that the Government practically squashed the demand for an increase of 30 per cent. Here I want to refer to the report of the Commission wherein it is stated—

In this connection the commission is dealing principally with natives, and in that connection the Government were more accommodating and we know that as far as native wages were concerned a change was brought about. But the report goes on to make it clear what the attitude of the Government was in reference to European mine employees. There was actually an arbitration court to go into the difference regarding wages and the whole thing ended in failure. But we never knew how the land lay. I shall read again out of the report of the Gold Producers’ Committee that discloses the attitude of the Government—

Here the Government went as soon as a small difficulty arose, because an objection was made to one of the members, and the Government advised the chairman to take steps and to compose the difference, and then they say—

I ask what assurance the Labour Party has, bearing this policy in mind, that if relief is granted to the mines, the relief will be diverted to the benefit of the mineworker. I refer them to the attitude of the Government in respect of the mineworkers. That argument does not wash. The mines have never been pressed to such a degree that they can come today with the argument that they are going to close down, or that they should obtain relief, which relief would then be passed on to the European mineworkers. This attitude of the Labour Party is inexplicable to me. The hon. member for Krugersdorp rose in his place and stated that they certainly would not play into the hands of the mineowners. In reference to the speech made by the hon. member for Waterberg (Mr. J. G. Strydom) he said that the Labour Party have always fought against taxation of the poor man. May I ask him whether he has forgotten that only last year when we on the Nationalist side of the House introduced a proposal that all workers, or all persons with an income of less than £400 a year should be exempted from income tax, whether he did not fight that tooth and nail? Did he not fight against this concession to the workers? Then I come to the speech of the hon. member for North Rand (Mr. Van Onselen). He took up the same attitude, but then he comes and reproaches this side of the House. He says that there are a number of European workers who find a good home on the mines. Can this be regarded as a concession on the part of the mines? But leave it at that. He comes and says that as a result of the policy of this side of the House thousands of mineworkers Walked about on the Witwatersrand without work. He reproaches us with that. I want to ask him whether his memory is so short and whether he does not know that it was the Sap Government of that time which followed that policy immediately after the last war, but that they were not able to follow this policy. When the mineworkers rose in revolt against this policy they were shot down in Johannesburg. This was not the policy of the Nationalist Government but the policy of the South African Party at that time. Then he goes further and he refers to the position of the mines, and he says that this side of the House is opposed to the mines. I think that every member of this House, no matter what Party he belongs to, takes an interest in the policy of the various Parties in our country. Now I want to ask the hon. member why he did not help us when last year we fought for an increase of 30 per cent. for the mineworkers. He did not. I want to ask him further whether he is prepared to support the policy of this side of the House, that every mineworker over and above a good economic wage should have a share in the profits. This is plainly stated as the policy of this side. Will he be prepared to support us in this respect? I do not want to go further into the policy, because it would not be appropriate at this stage—we shall do it under the vote “Mines”. I think that there are no members in this House who really believe that the mines are in such a bad position that they should receive concessions such as hon. members have pleaded for here. There is another matter. Suppose the mines are so badly off let me point out how the Chamber of Mines has in the last 12 months given huge donations to all sorts of bodies. I quote again from the report of the Gold Producers’ Committee. They have contributed to these other organisations. I do not say those contributions were not justified; I do not say they were bad. But according to this report of the Chamber of Mines we find that they donated no less a sum than £167,000 during the 12 months to other bodies. There are items such as £5,000 a month to the Governor-General’s Fund; £12,000 a year to the Navy War Fund, etfc.—a total of £167,000 for the 12 months. I am not condemning those donations, but I am pointing out that an amount like this can be contributed, if such enormous donations can be made to other bodies I do not believe we can come to the conclusion without going into details that the Minister of Finance would be justified in giving relief of taxation to these mines. Then I want to identify myself with the plea of the hon. member for Winburg (Mr. Swart) in connection with the reduction of taxation granted in respect of children. Although the Minister has not any children himself he has common sense, and he will realise that it is just when the child is 17 or 18 years old that the biggest expenditure commences with the parent for that child, because it is the age at which the child usually goes to university. The hon. member has rightly pointed out that it is just during those years that the parents need some consideration. The parent goes out of his way to send the child to the university. Every parent wants to do the best for the future of his child by giving him a good university education. But that is accompanied by tremendous expenditure, and I want to ask the Minister to be indulgent to the parent in regard to that period when the children reach that age. At that time there is considerably more expense involved in connection with the child. I want to draw the attention of the Minister to this, and I want to ask him to direct his earnest attention to the granting of consideration to parents in respect of their children, during the years they go to the university as well.

There have, throughout this debate, been heard advocates of the reduction of taxation, and I do not demur in any way to their request that reduced taxation should be considered. But I believe that before one can reduce taxation there must be a programme evolved to reduce expenditure which will bring the reduction of taxation into the region of practical politics. For many years, if we look back upon the financial history of the Colonies before Union, it will be found that it was necessary from time to time to introduce a programme of retrenchment and economy in the public service. I can recall the effect of the retrenchment associated with the name of Mr. J. X. Merriman in the Cape, and the retrenchment in the Transvaal which followed on the reports of Sir William Mariss (subsequently a Governor of the Central Provinces of India) upon the state of affairs in the Transvaal Civil Service, just before the end of Crown Colony government, and similar retrenchments which took place at the instance of the Retrenchment Commission presided over by Sir William Solomon in the Transvaal. Similar investigations were made in Natal and the resultant economies took place. It is inevitable that that should take place in this Union of ours and the sooner the Minister begins to consider ways and means of retrenchment the better it will be for the smooth working and the success of it when it comes into operation. In the Transvaal we were faced with the problem which will seriously confront us, and which already confronts us here, of having too many officials. There are already in the Union, in every department, too many officials, and too many incompetent officials.

No, that is not right.

I hope that hon. member is speaking from a careful examination of their competence or otherwise. My own view is that a very large number of the junior officials should never have been appointed. They will never make good public officials, and it is not good for the future of the Public Service in South Africa for its ranks to be so constituted. I had occasion recently to write to a civil servant in Cape Town ….

Order, order. I do not wish to interrupt, but I think that is hardly relevant to the subject under discussion.

I bow to your ruling, Sir. I really made reference to this in reply to the interjection by the hon. member. Sir, I wish to maintain, however, the desirability—and possibly I am within the scope of this debate there—of bringing the Public Service down to its proper limits in regard to the number of officials, and the kind of work performed.

I am afraid that is not relevant to this debate. The House is dealing solely with taxation matters, and the incidence of taxation, and the notice of motion can only be discussed from that point of view.

I am sorry. It is very difficult to hear your ruling in this portion of the House, but I accept that you are ruling me out of order. I shall confine myself merely to saying that I look forward to the time when the Minister of Finance will realise that his first task in regard to the reduction of taxation is to reduce the expenditure and have economy in connection with the Public Service. In dealing with the difficulties of taxation, I should like to invite the Minister’s notice to some remarks which were made by a former Minister, Mr. Stuttaford, with regard to the inroads that were being made upon possible incomes by certain rulings of the Price Controller. In that connection he indicated that the dividends that would be ordinarily available for taxation would no longer be available. He refers to the Price Controller’s action in regard to the possible profits of a business, which inevitably meant that revenue from income tax was bound to shrink considerably. His remarks appear in a publication known as “The Buyer” of January, 1945 in which Mr. Stuttaford said—

I suggest that the hon. member should discuss that matter under the vote “Commerce and Industry.”

As you please, Sir. There is another kind of taxation which is the subject of a good deal of complaint, namely the taxation imposed on proprietary companies. I hope I may refer to this matter here without incurring your displeasure.

Yes, the hon. member is in order.

The taxation of companies is held by minority shareholders to be out of proportion to the taxation which even public companies, the shareholders in public companies are called upon to bear. I have a case which I have mentioned to the Minister, but it seems appropriate to mention it again on this particular occasion, of a man, a minority shareholder in a proprietary company, who says—

He then goes on to show in further figures that he paid a total of £19,018 10s. 11d. in the 1943 tax year and that that represented an amount considerably in excess of his income during that year. These are figures which mark the doom of companies of this kind, or of the shareholder, in any case. It means that in a short course of this kind of treatment firms that have a good reputation in this country and have had a long career will disappear, and will cease to exist. Many of us, from two or three different Provinces, regret the disappearance of firms like Parker Wood and Company and Steel Murray and Company, which traded in three different Provinces, and other firms of like standing, who ended up their careers with a very good reputation. I hope the Minister will consider the desirability of relieving shareholders in proprietary companies of the excessive burdens imposed. I feel confident that the Minister intends relief as soon as it can be applied. Realising that no immediate reductions of general taxation can be granted, I commend to him the policy of retrench, retrench, retrench!

I should like to deal briefly with the onerous taxation on the tobacco industry and to ask the Minister to give his attention to one or two aspects of it. If I am not mistaken the Minister of Finance stated last year that the Treasury is such a great shareholder in the tobacco industry that he would not permit the industry as a whole to be menaced by the taxes. But this afternoon I wish to remind the Minister that the farmers have good reason for complaint about this heavy tax that the Minister has imposed on the tobacco industry. I want to point out to him that since 1939 this tax has risen regularly and swiftly. In 1939 the tax, if I am not mistaken, was £1½millions; in 1940 it increased to about £2 millions; in 1941 to £3½ millions; in 1942 to about £4½ millions; in 1943 to roughly £6 millions; in 1944 to about £7½ millions; and this year approximately £7½ millions is expected. I have taken the figures for the calendar years. This gives the Minister some indication how in the five years of the war this tobacco tax has increased five-fold. The Treasury is now receiving in the neighbourhood of £7½ millions from the industry. The Minister will, of course, say, as members on the opposite benches have said so frequently, that it is not the farmers who pay that tax. It is nevertheless a tax that rests on the tobacco industry. I shall not this year go into the question again of how it affects the farmer. I have done this already in past years. I only wish to make a few general observations. In the first place I want to point out that this tax on tobacco has a detrimental effect on the price of tobacco. Just because of that high tax the farmers do not get the augmented price for tobacco they would otherwise receive. Seeing the Minister is now obtaining £7½ millions from the tobacco industry, seeing he is such a big shareholder in the tobacco industry, I want to refer him briefly to a comparison between the increase in tobacco prices and the increase in prices in force in respect of other crops. In the case of tobacco we find that between the years 1939 and 1944 there was an increase of only 40 per cent. in the prices of tobacco as a result of war circumstances, while there has been an increase of 82 per cent. in the case of summer cereals and 83 per cent. in the case of winter cereals; while in the case of other agriculture products we find there has been a rise of not less than 291 per cent. In other words, notwithstanding the Treasury being a big shareholder in the tobacco industry the farmer is not receiving his rightful share from the industry. If we turn to other farm products the rise in price to the tobacco farmers appears on the whole very poor in comparison. In addition we must remember that the purchasing power of the £ has dropped to a terrible extent. It has dropped about 50 per cent. compared with its pre-war value, and though the tobacco farmers have gained a nominal rise of only 40 per cent. it really signifies that today they are worse off than they were before the war. In Rhodesia the prices of tobacco have risen during the period 1939-44 no less than 115.4 per cent. while the price in the Union has only risen 40 per cent., and this though the costs of production in our neighbouring state are lower than here. Their land is cheaper; their wages are lower and they produce on dry land. Nevertheless the rise in the price of their tobacco is 115.4 per cent. as against 40 per cent. in the case of the farmers in the Union. When we come to countries which have an open market, for example America, we find that the rise in price of dry land tobacco is 167 per cent. Accordingly, the farmers in the Union feel that as the Treasury is such a big shareholder in the tobacco industry and as control is being exercised over the industry and over prices the farmers are not getting their legitimate share.

Do you want to do away with the Control Board?

No, I do not. But we know the Control Board recommended an increase of 10 per cent. and the Minister of Agriculture has only given a miserable 5 per cent.

I am only asking because you spoke about an open market.

The hon. member knows very well that this party is not opposed to control, but I know from that hon. member who represents the greatest tobacco district in the Union, Rustenburg, that he will rise in his place and help the tobacco farmers when we find that the Board of Control recommends an increase of 10 per cent., when that Board that the hon. member wants to cap recommends 10 per cent., the Minister of Agriculture gives only 5 per cent.

The hon. member cannot go into that now. I think he should leave that over until the Minister’s vote is under discussion.

I only want to say to the Minister of Finance that seeing the State is such a big shareholder in the tobacco industry he ought to urge that when the Control Board recommends a 10 per cent. increase provision should be made for that so that the farmer can obtain his legitimate share from the industry. I should now like to put the following argument to the Minister of Finance. Last year I referred to the fact that the tobacco industry is in the hands of the small farmer and that the Minister of Finance should take that into account. It has been repeatedly stated in this House that the tobacco farmers are big farmers and wealthy farmers. I have stated that this is not the case and I have now obtained the following data in order to be able to show the House that the thousands and tens of thousands of tobacco farmers in South Africa are not wealthy, but that they are only small farmers. According to the crop valuation of 100 per cent. that was made by one of the biggest tobacco co-operatives in the country, the M.K.T.V., we find that in the year 1940-’41 .26 per cent. of the farmers receive more than £1,500 for their crop; .71 per cent. between £1,000 and £5,000; 4.18 per cent. between £500 and £1,000; 10.73 per cent. between £250 and £500; 12.98 per cent. between £150 and £250; 13.14 per cent. between £100 and £150. What is more, 58.04 per cent. of the farmers receive less than £100 for their tobacco crop. These figures are based on the 100 per cent. valuations of tobacco deliveries. I take these figures in order to bring to the notice of the Minister that tobacco farmers on the whole are small farmers. The figures for 1940-’41 show that about 84 per cent. of the tobacco farmers in South Africa are small farmers with an income of less than £250 from the industry. In the year 1941-’42 we find that .17 per cent. derived more than £1,500 from the industry, and no less than 85 per cent. of the tobacco farmers gained less than £250 for their crop during that financial year. Similarly, we take the financial years 1942-’43 and 1943-’44 and we will find that in these years about 84 per cent. of the tobacco farmers enjoyed an income of less than £250. Those are eloquent figures, especially to the Minister of Finance who receives such a tremendous revenue from the tobacco industry, and he should take full consideration of that fact, that 84 per cent. of the tobacco farmers receive a return of less than £250. When we investigate these figures we find that no less than 96 per cent. of the tobacco farmers have a return of less than £500 from the tobacco industry. I have mentioned this figure just to bring home to this House that the members and the Minister must realise that as the Minister of Finance is actually taxing the tobacco industry to death it is having a tremendous influence to the detriment of these thousands and tens of thousands of small tobacco farmers. The Treasury receives no less than about £7½ millions from this taxation, and what do these thousands and tens of thousands of tobacco farmers receive? In the financial 1940-’41 they harvested 36 million lbs. and the gross income from that was £1,411,000, roughly £1½ millions. In 1941-’42 they harvested 21½ million lbs. and from that the gross income was £1,079,000. In the year 1942-’43 the crop amounted to about 23¾ million lbs. and for that they obtained roughly £1,300,000. Where the Minister of Finance as a shareholder in the tobacco industry received some £7½ millions by way of taxation the tobacco farmers received about £1½ millions as a return for their crop. This is the gross revenue that has to be apportioned between the thousands and tens of thousands of small tobacco farmers. Now on the other hand I should like to refer to the profits of the biggest tobacco factory in the country, namely the United Tobacco Company. In the year 1936 the profit of this company was no less than £1,089,000. It paid out a dividend of 8s. per share. In 1937 it was £1,120,000; in 1938, £1,157,000; and in 1939 £1,170,000. So we can go into the figures. In 1941 it was £1,037,000. In other words, the State is receiving £7½ millions from the tobacco industry; the farmers receive a gross income of £1½ millions and the biggest tobacco company in the country is making £1,000,000 a year in profit. This is after everything has been deducted including taxation. That is clear from this return. The taxes have already been deducted and this is the net profit it has made. The one big tobacco factory in the country thus makes nearly as much nett profit a year as the gross income of all the tobacco farmers in the Union, while the Treasury receives £7i millions. Now I want to tell the Minister of Finance that I last year directed his attention to the fact that the tobacco industry is menaced, and he gave the assurance that he would do everything in his power to ward off the threat. I think the hon. Minister knows what I mean. I am referring to the policy of the Minister of Labour to get a stranglehold on the tobacco industry, namely his policy of gradually applying the Wage Act to the tobacco industry. Now I want to tell the Minister why the farmers are so disappointed. In the year 1942-’43 the farmers in the co-operatives paid native wages to the amount of £25,500 and there was cost of living allowances in addition. Notwithstanding these taxes imposed by the Minister and the higher wages they were prepared to produce tobacco, but they are threatened. They feel that they are not being allowed to develop the industry on a sound co-operative basis. They feel that the Minister of Labour wants to make that quite impossible.

The matter that the hon. member is now dealing with may be discussed on the Vote of the Minister of Labour in Committe of Supply.

I bow to your ruling, but the Minister of Finance is thoroughly conversant with the matter because if I am not mistaken, on the 22nd June of last year a deputation of the tobacco co-operatives met him and in an interview they drew attention to the oppressive taxes and he gave a promise that he would discuss the whole matter with his two colleagues the Minister of Labour and the Minister of Agriculture and Forestry. I do not think that this is the psychological moment to ask the Minister whether seeing he is extracting £71 millions from the tobacco industry he will extend such protection to the tobacco industry as is necessary. Has he spoken to his colleagues with a view to affording protection to the tobacco industry against this pernicious policy? I am only putting it to the Minister. I feel that an entirely wrong impression exists in regard to the tobacco position. Only this week when I spoke to hon. members on the other side of the House in order to put the position of the tobacco farmers, they said that the tobacco farmers were flourishing during the war years. I want to ask the hon. member for Rustenburg (Mr. J. M. Conradie) straight out whether he thinks the tobacco farmers are flourishing.

We only talked about the open market.

We are out for control as far as the tobacco industry is concerned, but the tragedy is that the industry that has the best control is being exploited to extract this taxation. Figures appeared in the newspapers showing the figures for final crop payments (agterskot) in reference to the M.K.T.V. and possibly people came under the impression that the M.K.T.V., one of the largest tobacco co-operatives, is making tremendous profits. Let me tell the Minister of Finance and other hon. members that they should not allow themselves to be misled by such figures which appear to be quite rose-coloured. The M.K.T.V. as such is not making any profit. It is a tobacco co-operative that cannot make any profits. It takes the tobacco from the farmers at a 100 per cent. valuation; it treats it and the standardised product is then sold. In other words, the farmer utilises the tobacco co-operative in order to market his tobacco in an economic manner. That is all. Accordingly, I hope that no misapprehension will exist in regard to the position of the tobacco farmers. Hon. members should not be so ready to quote the deferred payment (agterskot) figures. We do get 100 per cent. valuation, but the 25 per cent. that is held over as a balance is the farmers’ own money, and one cannot only talk about an “agterskot” in a year when things are going well. Take, for instance, 1928 when the full “agterskot” was not paid out even once. We did not then receive the 25 per cent. of our money that was kept in reserve. The hon. member laughs. It appears to me that he remains indifferent to the sufferings of the poor tobacco farmers. In that year we only received 8s. in the £. Why did the correspondent of the Rand Daily Mail not publish the figures at that time? Hon. members must no allow themselves to be misled by such figures. They were sent by an unscrupulous correspondent of the Rand Daily Mail, and in this topsy-turvy manner it was sought to give the impression that the tobacco farmers are flourishing. I hope the hon. member will realise that the time has come to reduce the taxation and to save the tobacco industry from the threat hanging over it.

I should like to draw the attention of the Minister to page 608 “Customs Dues” Clause (2). It appears to me this particular clause will affect our soldiers when they come back. Here I want the members of the Opposition to assist me in what I am going to say. When the soldier comes back from Italy and brings in goods to the value of £10 he would have to pay £11 on them.

Not on £10 1s., on £10 11s.

Yes. Is that fair to the returned soldiers and sailors? We know how they fought. My friends on the other side may say they are not going to assist them because they do not favour the war. They have a colleague of theirs who does not favour the war, that is Mr. Himmler. So they can be with us on this. Because these goods that the soldiers are bringing back are the goods that the South Africans learned to like. It was impressed on our people we should buy these goods. That was the time when the late Mr. Mussolini was in charge of Italy. It is surprising to me that my friends did not propose a vote of condolence to the late Mr. Mussolini. I came into the House to see that — I thought they were going to act “according to precedent,” and that the hon. member for Waterberg (Mr. J. G. Strydom) would have got up and said: Our old friend has gone and the House must now adjourn. The hon. member did not do so.

Last year in replying to this debate I made the remark that it seemed to me to be appropriate that in connection with the debate on the taxation measures we should act in the same way as in connection with the debate on the budget; in other words that the reply should be in one language only. I feel that in view of the importance of this particular debate I should in this case, as in the case of the budget debate, reply not in both languages but in one language. Last year, having introduced a similar motion in Afrikaans I replied to the debate in English. This year having introduced the motion in English, I propose to reply to it in Afrikaans only. I hope, therefore, that no hon. member who has addressed the House in English will take it amiss if I do not reply to him in that language. He will understand that I am simply following the system introduced last year.

†*In this debate a great many hon. members of this House have again been trying to prove that two and two do not make four but five. Throughout this sitting we have had repeated requests for increased expenditure. The Government is expected to be prepared to spend more money on this, that or the other service. But now we come to the time for payment, the occasion when taxes are levied, and now we have representations that the taxes must be reduced. Hon. members can only tally these two arguments if two and two do not make four but five. It is very clear that a great many members do not realise that one of the most important means of avoiding increased taxation is to combat increased expenditure. The hon. member for Pinetown (Mr. Marwick) appreciates this point very clearly. He spoke of the desirability of reducing expenditure as a means of reducing taxation. I think he fully realises the position as far as this is concerned, but comparatively few members on the other side seemed to realise the true position. The Minister and the Treasury are called upon throughout the year to exert their efforts to check increased expenditure. In this connection they get very little assistance from Parliament and from members of Parliament. It is true that hon. members of the Opposition regularly opposed our war expenditure. As far as that is concerned, they are quite prepared to see that there is a reduction of expenditure. But there it is a matter of politics and not a matter of financial policy. Apart from that the Minister gets very little assistance in checking the increased expenditure, and sometimes it seems to me that the best friends of the taxpayers are to be found not in Parliament but in the Treasury, because it is in the Treasury that the best efforts are made to protect the taxpayers. When I hear members of this House pleading for a reduction of expenditure, I shall be prepared to believe that they are inclined to assist me as far as decreased taxation is concerned. I first want to deal with the amendment of the hon. member for George (Mr. Werth). He will forgive me if I say that to a large extent his speech was a repetition of points which have frequently been dealt with.

It is the same tax.

Yes, but also the same speech.

The same taxes by the same Minister.

And probably we shall get the same reply.

Apparently the hon. member cherishes the hope that constant dripping wears away a stone. He wants the taxation system particularly to be amended.

Can not we save time by reading last year’s reply?

We could have saved a great deal of time if we had not made the same speeches again. The hon. member for George wants a simplification of the taxation system. He will get that.

When?

When the time is ripe for it. He will not get it this year. He knows very well that he will not get it. These things will come, and then the hon. member for George and the Opposition will probably claim the credit for themselves that these things came about. I put our position in connection with this matter very clearly in the budget speech last year, and I put it very clearly again in this year’s budget speech. There are certain taxes which must be regarded purely as war measures. It stands to reason that those measures will have to be revised, but the war is not over yet, and since that is the position, since it is still necessary to incur war expenditure, since there is demobilisation expenditure for which we have to make provision, there cannot be any question at this stage of any large-scale alteration in our system of war taxation. There cannot be any question of a change in the excess profits duty or of any appreciable relief in that respect. There can be no question of the abolition of the special levy on trades profits, as the hon. member for Houghton (Mr. Bell) apparently desires. At this moment there can be no question of doing that. I stated the position clearly. There are certain war taxes which will have to be revised. There are also certain aspects of our normal taxation system which require revision. I have often explained that in the past. With regard to the normal taxation system, it cannot be altered until such time as the other aspects of the matter have been dealt with. In other words, the war taxation aspect of the matter must first be dealt with, and then the question of a possible change in the normal taxation system, especially in the light of the information which will then be available with regard to the scale of our post-war expenditure It is very clear that we cannot bring about an appreciable change in our taxation system until such time as we come to the end of our war expenditure and until such time as we know on what scale our post-war expenditure is going to be. For that reason I put the matter in my budget speech as follows—

There we have the attitude of the Government. The hon. member for Vasco (Mr. Mushet) wants a statement. I do not know what statement he wants other than that, but if he wants to know on what lines we are thinking in connection with the improvement of our normal taxation system, I want to point out to him that I have also dealt with that point in the past. I referred more particularly to two aspects of the system which in my opinion call for consideration. The first is the system of taxation in respect of companies. The second is the twofold system of normal and super tax and in that regard the possibility of replacing it by one continuous scale of taxation must be considered. I have already made all these statements in the past, and I find it somewhat difficult therefore to appreciate what further statement is expected of me. Of course, I can well understand the attitude of the Opposition. They were opposed to the war. They have always opposed our war expenditure. But we have accepted the war policy once and for all, and we must see through the financial consequences of the war. Our troops, even if the war in Europe comes to an end tomorrow, will not be able to come home immediately. It will not be possible to demobilise them immediately. It will take some time and it will be coupled with a good deal of expenditure. Then too, there will be the expenditure in connection with our demobilisation plans, to which reference has so frequently been made. We shall also contribute our share in connection with the further military operations in the East. The Government is committed to all these things. I think every member on this side realises that. At the moment there can be no question of a reduction of our obligations in connection with this matter. A radical revision of our taxation system is altogether impossible at this stage, and for that reason I cannot accept the amendment. I just want to say a word however, in regard to one further aspect of the amendment, as it stands. The hon. member referred in his amendment to the factors in the present system of taxation which produce inequalities and which retard production, and he quoted me as a witness for his statement that there are inequalities and production retarding factors in the system of taxation. He is quite correct. I said that and I say it again. There is no taxation system in the world in connection with which there are no inequalities. There were inequalities in our pre-war system, there will be in our post-war system, whoever may be Minister of Finance. One cannot get away from that. There were inequalities in our pre-war system which many of us did not realise at the time, but which were brought to our notice for the first time when the scales of taxation were increased. Then the shoe started to pinch. We will he ver succeed altogether in eliminating inequalities in our system of taxation. We can only do our best in this direction.

We can make improvements at any rate.

One can only do one’s best in this direction. In war time there is necessarily an increase in the number of inequalities or apparent inequalities. The hon. member for George gave an example. He referred to the case of the two people, one with an income of £5,000 and the other with an income of £2,500, who pay the same amount of taxes. That is quite correct. I understood from the hon. member that he was not opposed in principle to the imposition of excess profits duty in time of war. He may not fully agree with the excess profits duty in its present form, but in principle he approves of the imposition of such a tax. If that is so, if an excess profits duty is imposed, is it unavoidable that one may find two people, one with an income of £2,500 and the other with an income of £5,000 who pay the same amount of taxation, because the person with an income of £5,000 may have the same income at present as he had before the war and he does not therefore pay excess profits duty, while the other person may have excess profits amounting to £1,500 on which he has to pay taxes. He is called upon to pay excess profits duty therefore, and he may be paying the same amount as the man with an income of £5,000. That is unavoidable.

It may still happen where both sets of income represent war income.

I am coming to that. I merely want to show that it is quite possible that one may have the apparent inequality of two persons paying the same amount in taxation, while the one has an income of £5,000 and the other an income of £2,500. Take another type of case that the hon. member mentioned. Take the case of a person who pays excess profits duty and who has his own business. And then take a company with the same taxable income. The company pays more than the individual. That is quite correct. But there is a reason for that, and it has been mentioned in the debate. The reason is that a company has the right, as part of its expenditure, to make an award to the person who is actually the owner of the company, and because the company is in a position to make that payment to its managing director, or whoever it may be, there is a smaller rebate in the case of companies than in the case of individuals. There again one cannot avoid it. When one examines these things more closely therefore, one sees that the inequalities are really apparent inequalities. There are reasons for it and good reasons. And if the cases had been reevrsed and exactly the same rebate had been given to the company as to the individual, we would have had complaints from the other side. I merely mention these facts to show that one cannot get away from the element of inequalities and apparent inequalities, especially where it is clear that such a thing as excess profits duty is justified in time of war. But now I come to another aspect of the matter The hon. member spoke of elements in our system of taxation which retard production, and there again he quoted me as saying that high taxation is a factor which tends to retard production. Of course I said that. I would never deny it. High taxation does constitute a retarding factor. But is there any taxation system in the world of which that cannot be said? How often in peace time does not one hear the plea in every country that reduced taxation will mean increased production and increased national income? I still remember Lord Cromer said on one occasion that low taxation should be the keystone of a financial arch. He had in mind the development of a country like Egypt where a low system of taxation would promote production. But when one is involved in war and is called upon to incur more expenditure and when one has to find money for that expenditure, one cannot always be content with a system of low taxation. It then becomes necessary to increase taxes. It is quite true that the war circumstances which we have experienced in the past five years, have offered opportunities for an expansion of our industries and for an increase in production, and it is equally true that if our taxation had not been as high, it might have been—I use the word “might” because I shall come back to this point in a moment—possible to have a more rapid expansion. But you cannot have your cake and eat it. When people come along and criticise us on the strength of the fact, according to them, that war taxation has not made it possible to make the fullest use of the opportunities which the war offered for expansion, our reply is that they are dissatisfied because they cannot reap the advantages of the war without reaping the disadvantages at the same time. These two things must go together.

Not even normal expansion.

One cannot speak of normal expansion when it is necessary to use such a large portion of the national income for war expenditure. But in addition to that I say that the statement which has been made that our taxation policy has acted as a serious brake, altogether preventing industrial expansion, is altogether exaggerated.

That is not what Dr. Van der Bijl says.

Perhaps Dr. Van der Bijl too, just like hon. members on the other side, will be able to learn something from the report which appeared in the “Argus” on the same day that we had the discussion in this House, in which it is stated that there are 19 new factories awaiting erection on the new industrial sites in Cape Town. Is that a sign that our taxation policy retards development? Perhaps the hon. member can tell us why, if the taxation exercises such a retarding influence, there is so much demand for avenues of investment for the available money.

They expect a change of Government.

In that case they will have to wait a long time. I have here the index figures of the number of employees. What does that show? Not that we are standing still. It also reflects an increase. The index figure for January, 1944, was 1,796; the figure for January, 1945, is 1,846.

Which figure is this?

It is the index figure for industrial employees. I do not want to repeat other figures which I have quoted on previous occasions. In any event it is very clear, especially if one takes into account the amount of money which is available today for industrial expansion, that taxation has not been a retarding factor. In so far as there have been retarding factors—the hon. member for Vasco (Mr. Mushet) is quite correct— those factors were the shortage of manpower and the shortage of material. Those were the retarding factors, but taxation has not resulted in a lack of capital for industrial expansion.

If that is so, why do the industries complain?

How can anyone sit in this House for more than a few days without knowing that it is only to be expected that every person will complain if he thinks that by doing so he has a chance of obtaining some relief of taxation. The industrial people are human, just as we are, and it is only human to complain if you think that by doing so you can get taxation relief. The hon. member for George (Mr. Werth) also quoted figures in respect of persons with an income of more than £5,000 a year. He apparently wanted to prove that these people pay very little. If that were so, it would also prove that the moneyed people are still left with a good deal of money for investment, of which they are not deprived by the taxation machine. The actual figures are these. It appears that persons with an income of more than £5,000 pay almost £5,300,000 out of our total collection of normal and super tax amounting to £11,600,000. In other words, those persons with an income in excess of £5,000 do contribute a substantial portion; and since the hon. member for South Rand (Mr. Christie) more particularly, has again sponken of the relationship between the rich man and the comparatively poor man as far as taxes are concerned, I just want to repeat the statement, without repeating the figures, because I have done so on various occasions, that if our system of income taxation is compared with that of other similar countries, our rich people are taxed comparatively heavily and our middle classes and poor people are taxed on a comparatively low basis. In comparison with other countries the weight of our taxation system is not at the bottom nor in the middle but at the top. The hon. member for George said that £5,000 a year should be sufficient for the personal needs of any person. I have always found that everyone is prepared to lay down such a ceiling in relation to his own personal circumstances, and as soon as his own personal circumstances improve, that ceiling goes a little higher. As far as I am concerned, I should say that £5,000 is more than sufficient considerably more than enough for the personal needs of any person. But what I should like my hon. friend to remember is that it is from that very class of person that one expects to get a large proportion of investment capital, and that under our present economic system it is not really in the interests of the State to leave those people with just enough for their personal needs. I think the hon. member for Fauresmith (Dr. Dönges) will agree with that. I think it would be wrong therefore to adopt a policy which will mean that no one will retain more than £3,000 or £4,000 or £5,000 of his income. I think under our present economic system that would not pay.

But in England that is the position.

Yes, under the war system which is in operation in England, but I think it is clear that the system will not remain as onerous as it is today. Then just one more point with regard to the amendment. The hon. member asks for a simplified system. If he means a system under which there are fewer taxation measures than there are today, I think his wish will probably materialise in the courst of time. But there is another aspect of the matter; and sometimes we use that word in a different sense; we sometimes think of the terms of the individual taxation measures. Take the Income Tax Act; it is an involved Act; it is difficult to understand, and when hon. members ask for a simplified system they sometimes have in mind the simplification of the individual Acts. Well, if all our taxpayers were anxious to pay what is due to the State, we would be able to make our laws very simple. The hon. member for George is one of those members who quite correctly told us that we should close up the gaps. We must close up the loopholes which make evasions possible. Quite correct. But as soon as one starts doing that, the legislation necessarily becomes more involved. I say again if all taxpayers were anxious without further ado to pay their legitimate share, it would be possible to frame the laws very simply, but as long—and that will always be the case— as long as there are taxpayers who are intent on employing every means to pay as little as possible, to avail themselves of this, that or the other legal point in our legislation, our legislation will have to remain involved, and that means that our legislation will have to remain involved for ever and always because in that respect human nature will not change.

It is, in fact, because the legislation is so involved, that evasions take place.

No, the position is that every time we try to close a loophole the law becomes more involved. The hon. member for Fauresmith went a little further. He made specific proposals for the abolition of taxes and he told us how he would balance his budget if those taxes were abolished. He wants to reduce the excess profits duty considerably. He wants the trades profits special levy to disappear. He wants to increase the rebates which are granted on the income of farmers. He wants to abolish the railway passengers’ tax and he wants to eliminate the savings fund portion of the personal and savings fund levy altogether. And then he goes on to say that according to his calculations—of course, it all depends on what the changes in the excess profits duty will cost—according to his calculations it will mean a reduction of £5,000,000 in our income. May I just say this in the first place: The hon. member for Fauresmith is concerned, and correctly so, in regard to the possible dangers of inflation. But I have often emphasised that taxation is one of the best means of cheking inflation. His proposal to reduce our taxes by £5,000,000, without putting anything in its place, is therefore an inflationary proposal.

The proposal related to compulsory savings.

No, I am taking the hon. member’s proposal as a whole. He wants to reduce our taxation yield by £5,000,000. Compulsory savings represent a very small portion of it.

Our proposal of last year ….

I am referring to the hon. member’s present proposal. He wants to reduce the taxation yield by £5,000,000. I say again that taxation is one of the best counter-measures against inflation, and I do not think the hon. member took into account the fact that a reduction of taxation by £5,000,000 would not be an anti-inflationary measure but an inflationary measure.

That is not the only means.

It is not the only means, but it is a very important means, and it is a weapon which the hon. member now wants to give up. I say again that I am not prepared, since to a certain extent I am responsible for the struggle against inflation, to have that means weakened. It is a very important aspect of the matter which we must not overlook. May I just say a word or two in parenthesis to the hon. member for Durban (Berea) (Mr. Sullivan). He also spoke of inflation generally, and he made a speech which, it is true, is interesting, but which is not strictly relevant to the debate, and for that reason I shall not reply to it in detail. But he referred to the measures which were adopted in Canada and New Zealand in connection with stabilisation, including the stabilisation of wages. May I just point out that in view of the very low wages of certain sections of our community, it has not been as easy to stabilise wages in South Africa as in other countries. There has not been the same margin as in other countries, and that point must not be lost sight of. Now I come back to the hon. member for Fauresmith. He wants to abandon £5,000,000 by way of taxation, and then he suggests how we should make up this £5,000,000. In the first place he says that we under-estimate our excess profits duty. We did so in the past and we have done so again. We certainly did not do it deliberately. I made an estimate according to the best of my ability, for the current year as well, and it is true that during the past few years we have obtained more than we estimated, but that in itself is no reason for expecting the same thing to happen this year, in view of the changing circumstances and especially in view of the fact that the amount we are refunding under the Excess Profits Duty Act in respect of losses is constantly increasing, and if the general world economic position develops rapidly, this amount may increase even more rapidly during the current financial year. Nor must we forget that if we do get a little more from that tax than we anticipate, there will be no lack of holes to be plugged with that money. We have already undertaken—and I think hon. members on the other side welcome it—to pay a considerable subsidy in respect of mealies. That money must still be found. There are other similar services as well for which money must be found. Of course, we might have said that the consumer should pay higher prices but in that event hon. members on the other side would have described it as a step in the direction of inflation. Here again therefore, they are trying to have it both ways. The second proposal which the hon. member makes is this: He says we can save £2,500,000 on war expenditure. I can only say that I regard that as extremely improbable. We have already made provision for a reduction of something like 20 per cent. in our war expenditure, and I do not think the decrease in the British budget exceeds that. We have already made provision for that reduction. If we make more rapid progress than we anticipated, it will simply mean that we shall have to find more money for demobilisation than we would have had to find otherwise. I do not expect a saving on that Vote therefore. But even if it were so, even if it did happen that instead of spending £82,500,000 on Defence we only spend £80,000,000 this year, under what account would hon. members prefer to see that money saved, on Revenue Account or on Loan Account? My hon. friends on the other side always attack us because we put the Loan Account too high. We are told that our State debt is soaring too high. In order to meet them, therefore, it would have been my duty, if there had been a saving on our War Expenditure Account, to place it to the credit of Loan Account, and not to use it for a reduction of taxes. I want to accept the advice of my hon. friend, the member for George. The hon. member for George always tells me that I should not let the debt rise so sharply. If therefore I can save anything on Defence, that is the account to which it should go. In connection with the excess profits duty, I want to repeat what I have already said. Any worth while alteration in that tax would cost a considerable amount of money, and as yet we cannot spare the money, and when, as often happens, comparisons are made between what we do and what is done in other countries, I want to point out, as I have done before, that our war taxation is very much less onerous than it is in the case of other countries. The scale of 15s. in the £ is lower than the scale in England although, as the hon. member for Houghton correctly said, there are other taxes as well which are payable on the remaining 5s. Our pre-war standard, with its four alternatives, is more favourable to the taxpayer than in other countries, and when hon. members speak of an amendment to the pre-war standard in other countries and in England especially, that fact must be taken into account. Our pre-war standard is already more favourable to the taxpayer than theirs. Then there is the fact that we have a special Advisory Committee which is able to deal with individual cases, and there is the further fact that we have undertaken to leave this tax in force for some time after the war so that we can deal with losses which are suffered as a result of war circumstances.

For how long?

My hon. friend asks for how long. I cannot reply to that now. That is happening today, and it is not being done in other countries. There is that reserve under our system, and at the moment there are various taxpayers and businesses which benefit from that reserve.

It depends on the period whether it is worth anything.

The hon. member for Fauresmith also discussed the question of the sale of our gold in India. I have already dealt with that point, but I shall do so again. This matter was taken in hand by the Government not as the result of discussions in this House, as it is frequently said, but it was taken up long before the matter was raised in the House. The British Government notified us of their intention to sell gold in India. The object in selling gold in India was to combat inflation. That was the object not to make a profit, but to combat inflation in India. We made representations that in view of our purchases from India we should also have the right to sell some of our gold there. The reply was that the Indian Government was strongly opposed to such a proposal. They were subject to criticism in connection with the sale of gold in the open market in India. It was described as an exploitation measure to the detriment of the Indian population, and they felt that it could only be defended as a means in connection with the purchase of military requirements by the British Government and also America. The Indian Government could not therefore approve of our proposal to sell gold direct in India in the open market in connection with the purchase of ordinary civilian requirements, but in order to meet us the British Government agreed to give us the benefit of their sales up to the amount of the purchases we made in India, and that arrangement was then made. In the course of time the British Government abandoned their policy to sell more gold in India as a means of combating inflation. That arrangement therefore came to an end, and we could no longer benefit by it. There was no question of the English Government selling gold elsewhere where they could make more profit. It was not a question of profit; it was a question of combating inflation.

Was there no longer inflation in India?

They apparently decided not to adopt that course any longer, and because that arrangement came to an end, our participation also had to come to an end.

Who is selling gold in India at the moment?

I know of no government which is selling gold there at the moment. Of course, the gold which is sold in India, is sold in the open market, and gold is always being sold in the open market. But the English Government as well as the American Government sold gold in India, and that also came to an end and I do not know of any government which is selling gold there at the moment. Now I come to the particular questions which have been raised in the course of the debate. In connection with that portion of the resolution which deals with the excess profits duty, the hon. member for Waterberg (Mr. J. G. Strydom) raised a point in connection with small shareholders in a business who also draw salaries from the business concerned, and who, he thinks, will be subject to taxation in terms of this resolution. I just want to point out that a resolution of this kind is always framed in fairly broad terms, but it is subject to the exemptions and the rebates and other conditions which are laid down in the Act. It is certainly not own intention to hit those people, and provision will be made to that end in the Bill which is being drafted. The hon. member for Cape Town (Gardens) (Dr. L. P. Bosman) touched upon a similar point in connection with the salaries payable by the universities to part-time professors and lecturers in the medical and legal faculties. I just want to tell him that educational work is not regarded as part of the calling of professional people, and I do not think that that type of pay will be subject to excess profits duty.

It will result in the resignation of numbers of people who do fall under it.

That may be so; I am referring to university professors. The question has also been raised of farmers who sell stock, who may sell their whole herd in one year and who are then called upon to pay a large amount by way of excess profits duty. I just want to point out that in that case it must be remembered that not only will those farmers benefit the next year when they buy cattle, as a result of this loss, but that they also benefit in respect of the years preceding the year of sale, if in those years their income was less than the minimum pre-war standard of £1,500. In the majority of cases, therefore, those farmers have something to carry forward as well as the expectation of getting something back in the future. Just a few other points in connection with farmers. The 30 per cent. rebate with regard to capital improvement has been described as retarding production. I have not yet heard that from the Department of Agriculture which would certainly have brought it to my notice. That measure was adopted last year, particularly to retard cheque book farmers, to close up a means of evading taxation. I think generally speaking that measure has been in the interests of the farmers themselves, because it has checked the tendency for the prices of land to increase, and it has been in the interests of bona fide farmers and it is not proposed to bring about any alteration in that respect. With regard to the alterations which were introduced last year in connection with co-operative societies, to which the hon. member for Ladybrand (Mr. J. N. le Roux) referred, the arrangement which was made last year was regarded as a useful arrangement, and there too we do not propose to bring about any alteration. With regard to the excise duty on tobacco and wine and spirits, I can only repeat that these are taxes not on the producers but on the consumers, and these taxes are quite reasonable in the prevailing circumstances. The hon. member for Calvinia (Mr. Luttig) and the hon. member for Hoopstad (Mr. H. S. Erasmus) mentioned the question of income tax payable by members of Parliament, more particularly the question of a concession with regard to the expenditure incurred in travelling through their constituencies. I have given a good deal of attention to this matter, but I find in the first instance that under the present legislation, as interpreted by the courts, no exemption can be given and then I still find it very difficult to discover how one can make provision under the law which would make it possible to grant such relief. In any event this matter is receiving my further consideration. The hon. member for Winburg (Mr. Swart) and the hon. member for Westdene (Mr. Mentz), I think, raised the question of a rebate of income tax in respect of children. The hon. member for Krugersdorp (Mr. Van den Berg) stated that we used to allow £75 and that we now allow only £5 per child. I think he is under a misapprehension. Formerly we allowed £100 on the taxable income. At present we are allowing £5 on the tax, and it practically amounts to the same. One cannot therefore make that comparison.

It used to be only £75.

Yes, I think it was £75 at first and it was then increased to £100, but in any event those amounts were on the taxable income. The £5 is a rebate on the tax. I think if we compare our income tax law in this regard with that of other countries, the provision which we make for exemption as far as children are concerned is not unreasonable. I think we go at least as far as other countries in relation to the system as a whole. It is true that the rebate is discontinued at the age of 18 years, but at the age of 18 years the majority of children earn money.

But what about those who do not earn anything?

It is true that there are those who go to the university but the State is already subsidising those who go to university, and those persons who attend university on a State subsidy receive a considerable capital investment from which they will derive an advantage in the future.

In that case one might say that it should not be allowed in the case of the ordinary school child because that education is free; that is no argument.

The hon. member also raised the question of patents. I am not fully conversant with the circumstances, and I shall go into that. The hon. member for Port Elizabeth (Central) (Mr. Oosthuizen) made a very interesting and well-informed speech in connection with our customs duty. In the first place he referred to our policy in reference to secondary industry, generally speaking.

The points he mentioned fall more within the scope of my colleague, the Minister of Economic Development, than in my own. In giving effect to our customs policy with regard to the question of protection, I must be guided largely by the Minister of Economic Development and his Board of Trade and Industry. The Minister of Economic Development has already referred to the investigation which is being made by that board at present, and on the basis of which the whole question of policy will receive further consideration. In the meantime I just want to give the House the assurance that the statement which was made by my colleague, to which the hon. member referred, was made with the full authority of the Government behind it. In so far as the importation of redundant war supplies is concerned, I want to say that that matter is receiving the attention of the Government and that my hon. friend need have no fear in regard to the possible effect of it on our industries. Then the question has been raised of the fixed property profits tax, more particularly by the hon. member for Gezina (Dr. Swanepoel) as well as by the hon. member for Swellendam (Mr. S. E. Warren) to a certain extent. As far as that is concerned, I can only refer to what I have already said. When I introduced the Budget, I think I pointed out that the rise in the price of land has been considerably less during this war than it was during the previous war. A good deal more money has been brought into circulation during this war than during the previous war, but notwithstanding that the increase in the price of land is less than in the case of the previous war. That definitely proves that the means we adopted were not without success. I say again that if that tax is abolished today, it will be in the interests not of the purchaser, but only of the seller. With regard to the question of stamp duty, which was raised by the hon. member for Swellendam, I just want to point out at this stage that the amount of 10s. per £100 is payable both by the purchaser and the seller, so that it practically means £1 for every £100 for the transaction. With regard to the mining taxation, various members have discussed it, for example the hon. member for Langlaagte (Mr. Bawden), the hon. member for Houghton (Mr. Bell), the hon. member for North Rand (Mr. Van Onselen) the hon. member for Westdene, and other hon. members. Certain hon. members advocate a reduction of the gold mining taxation for some reason or other, and others advocate the continuance of the present basis of taxation, or that it be increased. I stated clearly in the Budget speechc that in my opinion the time has arrived when we should again take into review our mining taxation system, and that with that object in mind, an inter-departmental committee will be appointed. That will be done. I went on to say that the question of the encouragement of ultra deep mining required special attention, and that not only would that matter be referred to the committee in question but that we would co-operate in establishing an institution for research work in connection with the problems which face that section of the mining industry. I cannot go further than that at the moment. The hon. member for Houghton raised the question of refunds under the excess profits duty, and he stated that it should be placed to the credit of the taxpayer, not in the year of receipt but in the year during which the loss is suffered. That was the system up to a few years ago. That system gave rise to considerable administrative difficulties and certain anomalies. There were cases, for example, where a change took place in the shareholders, and there were cases where that arrangement gave rise to complaints and grievances. For those reasons we brought about a change, and now there is dissatisfaction on the other side apparently. That shows how difficult it often is to find a middle course which will satisfy all parties concerned. I shall give further attention to this matter. I think I have now disposed of the various points, and I want to conclude. I want to make one general observation. As I have already said, there have been complaints—understandable, especially in regard to taxes in war time—in connection with the burden of the taxes, and we are holding out the prospect of a revision of our taxation system. The question may now be asked whether that revision, generally speaking, will bring about a reduced taxation burden. There are two points, more particularly, which should be stressed in that connection. The first is that very often when members in this House plead for increased expenditure, they plead at the same time for increased taxation. We cannot get away from that, and hon. members must be prepared to accept the responsibility. If they want more expenditure, they must not complain when more taxes are imposed. The second point which must be borne in mind in that connection—and here I want to associate myself with what has been said by the hon. member for Zululand (Mr. Morris) and the hon. member for Orange Grove (Mr. Waring)—is that if our expenditure is going to remain high, if it is going to remain high even after the war—and perhaps it would be desirable to keep it on a high level—there is only one means of lessening the taxation burden, and that is by means of increasing the national income. If the national income is more we can collect the same amount at a lower rate of taxation. And I want to emphasise that point particularly at this stage. Our best method of promoting a system of lower taxation is to do everything in our power to increase and to expand the national income of the country.

Question put: That all the words after “That”, proposed to be omitted, stand part of the motion.

Upon which the House divided:

Ayes—82:

Abbott, C. B. M.

Abrahamson, H.

Alexander, M.

Allen, F. B.

Ballinger, V. M. L.

Bawden, W.

Bekker, H. J.

Bell, R. E.

Bodenstein, H. A. S.

Bosman, J. C.

Bosman, L. P.

Bowen, R. W.

Bowker, T. B.

Burnside, D. C.

Butters, W. R.

Christie, J.

Christopher R. M.

Cilliers, H. J.

Cilliers, S. A.

Connan, J. M.

Conradie, J M.

De Kock, P. H.

Derbyshire J. G.

De Wet, H. C.

Dolley, G.

Du Toit, A. C.

Du Toit, R. J.

Eksteen, H. O.

Faure, J. C.

Fourie, J. P.

Friedman, B.

Gluckman H.

Hare, W. D.

Hemming, G. K.

Henny, G. E. J.

Heyns, G. C. S.

Higgerty, J. W.

Hofmeyr, J. H.

Jackson, D.

Johnson H. A.

McLean, J.

Madeley, W. B.

Marwick, J. S.

Miles-Cadman C. F.

Moll, A. M.

Molteno, D. B.

Morris, J. W. H.

Mushet, J. W.

Neate, C.

Oosthuizen, O. J.

Payn, A. O. B.

Payne, A. C.

Pieterse, E. P.

Pocock, P. V.

Prinsloo, W. B. J.

Robertson, R. B.

Rood, K.

Russell, J. H.

Shearer, O. L.

Shearer, V. L.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Steenkamp, L. S.

Sullivan, J. R.

Sutter G. J.

Tighy, S. J.

Tothill, H. A.

Trollip, A. E.

Ueckermann, K.

Van den Berg, M. J.

Van der Byl, P.

Van der Merwe, H.

Van Niekerk, H. J. L.

Van Onselen, W. S.

Visser, H. J.

Waring, F. W.

Warren, C. M.

Waterson, S. F.

Williams, H. J.

Tellers: G. A. Friend and W. B. Humphreys.

Noes—30:

Bekker, G. F. H.

Boltman, F, H.

Bremer. K.

Conradie, J. H.

Dohne, J. L. B.

Dönges T. E.

Erasmus, F. C.

Erasmus, H. S.

Fouché, J. J.

Grobler, D. C. S.

Le Roux, J. N.

Louw, E. H.

Luttig, P. J. H.

Mentz, F. E.

Olivier, P. J.

Potgieter, J. E.

Serfontein, J. J.

Stals, A. J.

Steyn, A.

Steyn, G. P.

Strauss, E. R.

Strydom, J. G.

Swanepoel, S. J.

Swart, C. R.

Van Nierop, P. J.

Warren, S. E.

Werth, A. J.

Wilkens. J.

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

Question accordingly affirmed and the amendment dropped.

Original motion put and agreed to.

I move—

I object.

House to go into Committee on 1st May.

I want to ask the hon. Minister whether he does not think the time has arrived for him to have a Select Committee every year to deal with all the cases of promotion that are submitted and have been granted by the Civil Service Commission. I ask this for the following reasons. We know that the position in the public service was so bad that the Minister and the Government found it necessary to appoint a commission in order to enquire into a large number of alleged grievances. I think this House and the country are just about tired of this closed shop, this secret business of the Civil Service Commission. We are willing to delegate certain powers of this House, provided this House will have an opportunity every year to scrutinise the work of the Civil Service Commission. There are certain aspects which force us to challenge the Civil Service Commission to lay open to this House and to the public a list of promotions which have taken place for, say, five years. The position is this that on various occasions I was trying to draw the Minister’s attention and that of other Ministers, to this fact, that in certain departments one is astonished to find that a good many people in the service are waiting for promotion. They are due for promotion and are told by their superiors that there are only one or two people above them waiting for promotion, but after five years they discover—and are told so by the same head of the department—that there are now twenty, and even twenty-two men, superior to them, in spite of the fact that time and again these men have been told that they are due for promotion and that there is nothing in their way. I think if there is one thing which this House should scrutinise carefully it is the work and policy of the Public Service Commission. I maintain that if Parliament had an opportunity to scrutinise their work it would never have been necessary for the Minister to appoint a commission of enquiry into the actions of that body. We want to have a satisfied public service. We want them, the civil servants, to feel that if they are worthy of promotion they will get it. We want everyone to be satisfied that there is no favouritism. I do not think the hon. Minister or any of his colleagues can stand up today and say that the work of the Public Service Commission is an open book. I do not think they can say that. We have had too many complaints, one after the other in this House, and it is no good raising these points unless someone is in a position to tell this House exactly what happens. Then, the main reason why I stand up is that I want this alteration in the public service. I want the man who is worthy of promotion not to wait for dead men’s shoes the point being that today you might have in your junior ranks competent individuals who could render great services to the country and be of great use to the Government and to the State, but they are simply kept in the refrigerator by their superiors because they are a potential danger to their superiors themselves. If they are allowed to show their capabilities they might prove more competent than their superiors. What is the position today? That public servant simply has to stay there, and especially if his superior finds that he is a very competent man he will deliberately hold him down. That is what I find today. What chances of promotion, what hope is there for the promising man in the public service today?

The reason you give is wrong.

He only gets promotion if the other man plays the game and dies.

That is what they call efficiency.

But if they see a young man will rise to the top of the ladder they keep him down or they make things most impossible for him so that he resigns. There are many such cases. That is why today there is an army of men in the public service who will put in their resignations tomorrow if they can, but they are not allowed to resign because the Controller of Manpower simply says no they must stay there.

Why are the Commissioners afraid that these young men will take their places?

I did not say the Public Service Commissioners fear that. They are at the top of the ladder. I am referring to the immediate chiefs of certain departments. If the hon. member disagrees with me I say: In what way can the public servant prove himself more competent than his chief? He cannot. If he were to write a book or an article explaining a subject which puzzled his own chief, he cannot do it. I ask anyone to prove to me how he can prove himself more competent than his immediate superior, the chief of his department. If he does, the position is sometimes made so impossible for him that he wishes to resign. I think the hon. Minister will agree with me that we cannot tolerate such grievances any more. We find that in various Government departments today there are problems affecting the State being dealt with and there are young men capable and qualified to tackle these problems, but they are not allowed to do so; and if he does it his superior will make dead certain that he is not allowed to stay there. I think the hon. member for Vereeniging (Lt.-Col. Rood) will agree with me now.

No.

Let them quote one example where a young man had an opportunity of proving himself more competent than his chief.

The present Postmaster-General is only 45 years of age.

He should not have been appointed.

But how many are there? I am not launching an attack against individuals, against a certain chief of a department, but I say that the system simply kills the initiative and brains of young men.

I agree with you, but not for the reasons you have given.

Let the hon. member then give his reasons. But if you agree that the system today kills initiative in young men, it must be agreed that there is an army of competent young men today who are faced with these obstacles. First of all there is the immediate superior who says he must not do things, because if he allows him to do so he will prove himself more competent that the chief. It is the same in the military army. Anyone who has been in the army as a soldier and proved himself more competent than his superiors is kept down. [Time limit.]

There is a point or two I am very anxious to make on this Public Service Commission Vote. Let me make it clear at once that I am not out to attack the members of the Public Service Commission. They have done well, as far as I know. If anything, they have done almost too well, because they have so guarded the purse-strings of the country that one of the results has been that we have had a mass of wastage in the public service in recent years, more serious than any country has ever been faced with. As an example, this year the Minister of Welfare and Demobilisation was was asked how many public servants had resigned since 1st January, 1944, and what were the reasons advanced for their resignation. The reply was that on the assumption that by public servants is meant only those as defined by Act No. 27 of 1923, the particulars are as follows: Total resignations 2,176. The reasons given were: for other and better employment, 1,107; to be married 507; by study 24; for no reason given 374; farming 10; military service 22; domestic reasons 17; refused transfer and to avoid dismissal and disciplinary action 16, and 30 for some other reason. The point is that for other and better employment 1,174 public servants have resigned. That means over 2.5 per day, public servants who have been trained to carry on the work of the country. If in addition to the permanent staff we take the number that have resigned from the kind of temporary service that is in all but name permanent service, resignations amount to something like seven a day. The question arises: What is the cause of these resignations? And the major cause is quite obviously the fact that our civil service does not pay adequate wages for the work the staff are called upon to do. In addition there is this other cause, that the State follows an absurd and indeed iniquitous and anomalous system today that a woman on marriage should retire from the work she has spent years of training to do. Between them those two causes account for the loss to the State of about three public servants a day. Now Sir, I say if we are to build up an efficient public service some radical alteration must be made. Now another point, I have had a look at the Public Service Act, and I see that amongst the duties of the Public Service Commission they have to make various recommendations, e.g. they have to make recommendations affecting economies in or promoting efficiency in the managing and working of departments. Yet I know, for instance, that one public service department which issues something like 2,000 to 3,000 cheques per month still issues them by the elaborate system of writing these 2,000 to 3,000 cheques by hand, thereby involving the employment of a staff of about 30 ….

To write cheques?

To write cheques, amongst other things. Another department receives 2,000 to 3,000 letters a day, and all of these letters are still opened by hand. I want to know from the Minister if the Public Service Commission has made recommendations for the mechanisation of automatic tasks of that sort, and, if these recommendations have been made, why they have not been carried out? Because if you are to have an efficient and economic public service you must, as a means to making them efficient, have mechanisation of various sorts. Then the Minister ought also to inform the House whether the recommendations made by the Public Service Commission have been carried out, and if not why not. Because I am one of those who believe that the future development of this country depends on the efficiency of the public service. This Parliament, like every other Parliament before it, imposes increasing burdens on the public service and to cope with these increasing burdens there must be increased efficiency in the staff and also an increase in the staff. Yet though this Public Service Commission was appointed in 1923 and the routine of getting more staff was laid down at that time over 20 years ago, there has been no changes with the result that to my own knowledge one department in January, 1944, indented for nine or ten new staff—a department on which Parliament had laid a new burden—and though it is now the end of April, 1945, that department has not yet got that increase in staff. Not only have they not got that staff, but the advertisements for that saff have not yet been published. Naturally the public that doesn’t know blames the service. How are you to get the efficient work that the public demands from the civil service if that kind of thing continues? I am not blaming the Public Service Commission as such, but I am saying that they should be alive to the developments that are taking place in this country. They should be alive to the fact that Parliament is day after day imposing increasing burdens on departments, and they should be alive to the need for administrative reorganisation and make recommendations to the Minister accordingly. For all I know they may have made them though there is nothing in their Amended Report. But Parliament is not aware of that fact, and if they have made them the Government has not acted on those recommendations. I contend that it should be impossible for a department to wait nearly 18 months before there are even advertisements for nine or ten new posts. This is a point I am very clear about. Then because of the fact that the departments of state very often lack staff and very often lack the mechanical means of producing greater efficiency, because of that there has grown up on the periphery of the public service, shall we say, some semiGovernment organisation. I have in mind, for instance, an organisation like the Citrus Control Board, which is a semiGovernment Board. A board like that has it within its power—and did in fact exercise the power last year—to override a departement of State. As an example, the Social Welfare Department was notified by the Citrus Control Board that oranges would be available for distribution to the Social Welfare Department up to the end of November last year. Some time in October the Citrus Board got a cable that shipping would be available for a million oranges. What was, the result? The Citrus Board promptly notified the Social Welfare Department that oranges would no longer be available till the end of November, regardless of the fact that the Social Welfare Department had at the express behest of Parliament, made arrangements to distribute oranges to the low income groups …. [Time limit.]

The fact that today there are no less than 200 resignations per month from the public service is disturbing. The Minister has admitted that the public service is deteriorating. The experience gained by us in the past proves that the public service is being drained of its best powers. The public service must execute the policy of the Minister and the Government, and if it deteriorates, the Minister cannot expect to get decent results. We must now search for the difficulties leading to the deterioration of the public service, and in the first instance I wish to mention that the initial salary of young public servants is scandalously low. That is the first point. Although public servants are in the service of the State in the service of the public, they have the usual civic rights and the right to demand social security in our country, just like any other part of the community, and the Minister will have to lay it down as his policy that a young official will draw sufficient salary when he enters the public service to make it unnecessary for him to live in the slums. We do not deem it advisable that a young official should have to segregate himself from the best circles in the community, as is the case today. We expect him to be well fed and clad, and unless the Minister makes provision for that, he will not attract suitable officials to the public service. If this policy of low remuneration is to continue, the Minister will admit that young officials are in danger of losing their balance in life. The young official starts his career, and he will immediately lose his self-respect, with the result that. Tais whole future career is ruined. That is one of the great reasons; the initial salary is hopeless. Then I come to those who are in the public service, those who are inside the wall, and I want to tell the Minister that he is busy driving out of the service men who are working themselves up in the service. When I say that I should also like to refer to the policy adopted by the Minister of re-appointing in the public service at higher salaries large numbers of officials who have reached the retiring age and who are drawing pensions. Can the Minister tell me that he has not enough young men in the service who are efficient enough to be promoted in certain divisions? Is it necessary to appoint old men who have been pensioned? The hon. Minister will agree that when a man has reached the retiring age he is no longer the man he used to be; his powers are on the wane and he is no longer what he was. A question was put to the Minister how many pensionaries who received a salary of more than £1,199 per annum at present have temporary positions in the public service. The Minister replied that there were 27. If the amount stated had been £800 instead of £1,199, we would have had a colossal number. For instance, in the Minister’s reply mention is made of one case of a person who originally had a salary of £1.350. Today the Minister has again appointed him in the public service at £600 per annum. He is already drawing a pension of £648. After he has retired he now has an income which is almost higher than his original salary. There are 27 of those cases. What encouragement is there for a person in the public service to do his best if the Minister fills the higher posts with people who have retired from the service? That is the reason why the Minister gets men who were in the service 10 or 12 years and who today are highly efficient officials of whom the State may be proud, but who left the public service because there are no prospects. I wish to quote another case, and I will mention the name, although I do not like doing so, but it is already mentioned in Hansard, namely the case of Mr. Van Zyl Ham. According to the Minister’s statement he filled two posts, namely one under Defence and one under Social Welfare. He drew £1,800 per annum from Defence and £1,800 from Social Welfare, totalling £3,600. I should like to have some information. He has been pensioned and he receives £750 pension from each of the two posts, a total of £1,500. Now he has received new appointments from the Minister, one of £1,200 and one of £360. That is a scandalous thing and I consider that the Minister should alter his policy entirely in this connection. If he is going to continue giving important posts in the service to people with large pensions, he will lose still more of his best officials, because he is then blocking the public service. The Minister by his policy is busy encouraging deterioration in the service increasingly. Then there is another matter in connection with which the Minister in my opinion is following a bad policy, namely that personal and friendly promotions, if I may call them that, take place in the public service. I do not wish to mention the official’s name. The Minister will know to whom I am referring. But one finds for example, X in the Food Department. The Minister knows that he was taken from the lower ranks. I do not know whether he is “the blue-eyed boy”, but he was taken from the lower ranks, people who were just as efficient as he, and more, and who were his seniors in the service, being ignored. I cannot see why the Minister does that. Then there are other inequalities in connection with the treatment of officials. One finds for example a person who served on an important committee and could influence favourably the whole economic structure of South Africa. The Minister knows to whom I am referring. He knows what work is being performed, but this man is just a senior clerk. There is another case of an important official who was even sent to Bretton Woods but on his return was put in the position of a senior clerk and receives the salary of a senior clerk. That is anomalous, and the Minister cannot expect to improve the public service if he makes such appointments. We turn then to the Minister’s own attitude towards civil servants, and there we come to the crux of the matter. In recent times the Minister and the Government adopted a policy of persecution. I told the Minister the other day that it was the first time in history, as far as I can remember, that public servants are so dissatisfied about their treatment by the Government itself, about the insults hurled at them that they challenge the Government to come forward and to prove against them what had been alleged. [Time limit.]

Last year from these benches we raised with the Minister the question of the position of the lower paid workers in the Government service. Our arguments in regard to the position of those workers were reinforced very strongly at that time by the Social and Economic Planning Council, which was most emphatic in its representations in regard to the level of the pay made to these workers and the necessity for their immediate revision. The hon. Minister replied that various adjustments had just been made in the remuneration of these lower paid workers, and that in any case the whole matter of the conditions in the civil service was being referred to the Public Service Enquiry Commission, which would be asked to bring in an interim report dealing specifically with the question of remuneration in its more urgent aspects as occasioned by the war. That commission has now presented us with an interim report, and what I am anxious to know is what are the plans of the Minister in regard to that report. For myself I find the majority report of the commission extremely disappointing. In fact, I go so far as to say it is both unimaginative and ungenerous. I say so particularly in regard to its proposals in connection with the lower wage groups in the public service, people earning less than £300 a year, and particularly those who are earning less than £100 a year. The recommendations made in respect of the remuneration of the service by the majority of the commission are, in brief, what amounts to a 5 per cent. increase all round on their basic remuneration, to be a temporary increase not carrying an increased cost of living allowance. Apart from that, there is an improvement in the cost of living allowance only for those members of the civil service earning £300 a year or over. Apart from that there are minor adjustments in respect of the group between £100 and £200 which do involve increases in the emoluments of those earning £150 and in the £150 to £200 group. On the basis of these recommendations, the great bulk of the lower paid workers, those in the unskilled group, are getting no more than a 5 per cent. all-round increase in their present emoluments. It is quite true that before the commission began its work, there had been a very considerable revision of the cost of living allowances being paid to the lower wage groups of the Government service. These workers had been conceded a cost of living allowance fairly considerably above the level which was supposedly due on the figures of the retail price index which has been used by the Government as a cost of living allowance, quite wrongly I contend. But that fact has got to be considered in the light of certain circumstances. In the first place, that concession was made largely because of the effect of the report of the Social and Economic Planning Council, which revealed, with all the facts and figures they were in a position to get, the truth of the argument we had continually put up in this House that the levels of the pay to the unskilled workers offered by the Government were not only starvation rates but were very considerably below those rates imposed by the Government by wage determination on private employers. The adjustment of this cost of living was made in order to meet the situation so clearly revealed by the Social and Economic Planning Council. Further, the adjustment was justified by the acceptance of the argument—I contend also legitimate—that the retail price index was not a fair basis on which to measure the increase in the cost of living of these lower income groups, an argument, which I am glad to see from the commission’s report, was accepted in 1943 by the Public Service Commission itself, resulting in an improvement at that time in the cost of living allowances paid to this group. And then there is this fact to be taken into consideration, as the minority report points out, that even after this adjustment of the cost of living allowance had been made, this commission was appointed and there was referred to it the whole question of remuneration of all groups in the service, including this lowest wage group. I think perfectly rightly; I think that the responsibility of the Government to refer this issue to a commission of this kind was fully justified. It was justified on the scales of remuneration which still prevailed in the service after the cost of living allowance had been adjusted on the higher level. These scales are published in the report of the commission where every member of the House can see them for himself. It is clear, from the record of page 26 of the report, the extent to which the bulk of the unskilled workers in the Government service were still earning completely starvation wages, wages well below any established poverty datum line, even after the adjustment of the cost of living allowances last year by the Government. The majority of the workers in the Government service at the beginning of the war, and still today, are earning a basic wage of less than £50 a year. A great any of them, according to the Social and Economic Planning Council, over 6,000 are earning from 6s. to 12s. a week. Over 15,000 are earning from 12s. to 15s. a week; and nearly 39,000 altogether are earning £1 a week or less, from £1 a week downwards to 6s. in the Government service; and these people, even with the increase in the cost of living allowance and the 5 per cent. special war allowance which is now to fall away—if the recommendations of the commission are accepted in favour of an all round 10 per cent. rise—still leaves those on the basic rate of £50, the highest wage in this group, earning £73 5s. a year. That, to my mind, is a full justification for referring this matter to the commission. But to those people on that level, earning that starvation income, the commission has offered nothing more at all but a 5 per cent. increase which will still leave the most fortunate of them earning just over £6 a month, and the lowest of them less than £4 a month. This is with the cost of living allowance included, and is a family wage. A family wage at the present time! I think it is an absolute scandal. The minority report, if the Minister proposes to adopt it, as I hope he will, with further extension, does propose some small alleviation of the position, which the majority have so callously left. They suggest that the 5 per cent. special war allowance shall not be deducted from the 10 per cent. all round increase which the majority commission has recommended. This, if adopted, would mean an all round 15 per cent. increase from the time the special war allowance was first established. They have also proposed a dependents’ allowance for those who are earning £300 or under. The majority of the commission thought a dependants’ allowance was going to break such revolutionary new ground that they could not take the chance. I must say I agree very strongly with the recommendation made by the minority report—that the situation is so urgent the necessity for relief is so pressing among those who are earning £300 a year and less, that there is every justification for a little imagination and generosity, and courage to surmount any administrative difficulties that might here be involved. [Time limit.]

One has every sympathy with the Public Service Commission. One has every sympathy with the manner of their last approach to the lower income groups in the service. One has no sympathy whatever for a Parliament that tolerates the payment of its civil service in so meagre and so scandalous a fashion. I do not propose to utilise the time at my disposal for criticising the emoluments which are paid to the people in the service compared with the payment given in similar positions outside the service. I would merely mention the heads of insurance companies who can earn from £5,000 to £7,000 per annum, and are worth it, and others who are the heads of petrol companies, and of various other companies, who earn up to £12,000 per annum—I am talking about this country, not America. When we find that similar positions in the public service are paid at the surprising rate of £1,800 per annum one wonders why. The answer is so obvious that I am very surprised that our Public Service Commission has not reported on it. Quite apart from the lower paid sections in dur public service, from a grade IV clerk in the post office, who is expected to maintain a standard of living that involves clean shirts and collars, etc. and a respectable hat to come to work in, there are no less than 15 or 16 divisional grade groups before you come to the head of a department. The head of a department, who should not be paid anything less than £3,000 per annum, is forced to receive a payment of £1,800. Why? Why is the head of a department paid only £1,800? The answer is so obvious that one has merely to point to the fact that the Minister, as the Chief Executive Officer of a Department of State, receives no more than £1,800 per annum. The Minister gets £1,800 per annum for a full-time job, and therefore the head of his department shall get no more, and because the head of the department gets no more, 15 or 16 graded positions down to fourth grade clerks, when it is all evened out cannot get more but work at a scandalous salary. The whole of the public service expected some revolutionary recommendations from this Public Service Commission of Enquiry. It has got nothing because the Public Service Commission’s hands were tied by the fact that they were precluded from recommending that the heads of their departments should get the salary commensurate with their responsibilities. As long as we pay the heads of our departments no more than £1,800 things will never be better. After all, the Minister can pay himself what he likes. I do not mind a Minister getting £1,800 per annum, like the Minister of Railways.

It is £2,500.

He only gets £1,800 as Minister of Railways, and £700 he gets as a member of Parliament. Speaking of that, I think that £700 paid to members of Parliament is hopelessly uneconomic to anyone who has to come from a centre outside Cape Town. But the Minister of Railways gets £1,800 for his responsibilities as a Minister. I do not suppose railway servants are really the same as public servants, but the principle is the same. We have to raise it all up. If you are going to raise the income of the lower sections in the income groups you also have to raise the higher income groups.

Why do you aim at the Minister of Railways?

I did not travel at him especially; I refer to really any head of a department or any Minister. But you cannot give a clerk £450 not because his services or his intelligence do not warrant it, but simply because the head of his department cannot get proportionally more. The sooner this House and the country take into account and consider the hopeless and inadequate payment meted out to the professional staff, the magistrates and prosecutors and those in other departments, and until we move up the whole standard, so long will these benches be complaining that people are only getting £1 a week. You cannot give the labourer £1 a week as the cleaner in your office, if the clerk gets only very little more. My whole point is that the standard should be raised, and until that is done the public service will be dissatisfied. This country can afford it. It ought to afford it. This country only has to take a comparison of wages paid by the civil services outside the country to see how hopeless and inadequate and disgraceful is the salaries of its public servants.

I have been very interested in the comments and criticisms that hon. members have made with regard to the remuneration of our public servants, and I sympathise to a very considerable extent with the hon. member for Cape Eastern (Mrs. Ballinger), but I do not think any hon. member really wants me to make a declaration in connection with these matters, particularly the matter raised by the hon. member for Green Point (Mr. Bowen) when we have in existence the Public Service Commission of Enquiry going into these very questions. I will say that I am rather glad at the expressions of opinion which have been given here. The hon. member for Westdene (Mr. Mentz) was correct when he said— and the hon. member for Jeppes (Mrs. Bertha Solomon)—that we are losing six or seven civil servants a day, and this is due primarily to the prosperity that the country is going through today that they are leaving the publie service, as they think, to benefit themselves, although it may be the other way around. Many of our professional men have left the Public Works Department, the Mines Department and other departments to take up private positions, and the Public Service Commission is sitting at the present moment and with the responsibilities they have cannot possibly stop these people leaving. I want to assure you that the Public Service Commission is fully alive to the trouble and in many cases in which I have made representations they have been most considerate and have made substantial allowances in order to let us keep in the service men who would otherwise have left, but then decided to stay. But the position is critical. The other point made by the hon. member for Westdene is with regard to the pensioners. I do not know what would have happened to the public service of this country, particularly after war broke out, and especially in the post office, if we had not been able to obtain the services of many of these pensioners, and none of them is responsible for interfering with the normal procedure for promotion the permanent men are entitled to. Men who have been postmasters of Cape Town were put into temporary positions and drew the same money as anyone else. A Divisional Controller of Cape Town is another case. He was also drawing 20s. to 25s. a day. The other case the hon. member referred to, Mr. van Zyl Ham has a pension of £900 per year. He gets £360 a year as a member of the Exemptions Tribunal, and he was appointed, not by the Public Service Commission, but by the Minister of Labour, as chairman of the Rent Board, at £1,200 per annum. The hon. member for Jeppes referred to the question of mechanisation. We do everything possible to mechanise the public service. That is the information I have. I know what happens in the post office, and we encourage our people to suggest means of expediting the work. We have a special method of reward to them in that connection, but it is not yet mechanised to the extent it should be simply because the machinery is not available at present.

Many other departments are not mechanised.

I cannot speak for all the departments, but I do know what has happened in the post office. I now come to the remarks of the hon. member for Krugersdorp (Mr. van den Berg) with regard to promotion. I want to inform hon. members that anyone in the public service is only promoted with the approval of the Minister of his department. The Public Service Commission, with their inspectors have a good knowledge of the qualifications of people in the various departments. First of all, recommendations come from the head of that particular department. In the post office the Postmaster-General makes his suggestions. Before he makes his suggestion he has had a promotion board sitting in Pretoria for six weeks dealing with every person who is entitled to have promotion all over the country. They have the reports of the clerks immediately superior, the postmaster in a place like, for example, Oudtshoorn, of the postal inspector and of the Divisional Controller. Some of the Divisional Controllers have been inspectors in other provinces and have a very wide knowledge of the various people. Promotion in the post office is on merit. The fact that the Postmaster-General is only 45 years of age shows that he has got his various promotions absolutely on merit, and that occurs in the other departments. I do know that there are people even in the post office who complain that promotion is not what it should be. If the hon. member for Swellendam (Mr. S. E. Warren) would bring me the case to which he has referred, we will go into it, and I make the same offer to the hon. member for Krugersdorp. It is very difficult indeed to reply to criticisms about unfairness of promotions without having specific cases.

You know what the trouble is if a man’s name is mentioned.

I give you the assurance on behalf of the Minister and the Public Service Commission that there will be no victimisation.

There are still the chiefs of the departments.

Their chiefs will still victimise them in spite of what you promise.

We must have these cases, otherwise we cannot criticise the Public Service Commission. Errors will and do take place, but I have no hesitation in saying that we have a Public Service Commission whose only desire is to see that the right people get promotion, and everyone gets justice. You will get no forrader if there is a Select Committee to go into these matters. I cannot agree to that. I do not want to agree to anything while the Public Service Commission of Enquiry is sitting. Amongst other things they have to deal with in this enquiry is the Public Service Commission. They have full powers to investigate anything, salaries, grades, promotion. We made the terms as wide as we possibly could. I would ask hon. members not to press me unduly on the matter in view of this position. I can see the hon. member for Cape Eastern smiling, but I think hon. members all realise that I do not wish to express any opinion when the matter is really sub judice.

The hon. the Minister has just enlightened us about the present methods of the Public Service Commission. He gave us the assurance that the aim and object of the present Public Service Commission is to promote people as far as possible on merit. I should like to return to that later, but may I now draw the Minister’s attention to the fact that the whole system and the methods of the Public Service Commission in South Africa are completely antiquated and obsolete; it was copied from the British system of hundreds of years ago. When I say it was copied from the old British system, I do not wish to cast a reflection through the use of the word “British”. But it is so often our habit in South Africa, and in this House, simply to adopt old obsolete methods of the British system and then to regard it as a system which may not be criticised. The Public Service Commission and its system in our country is to a certain extent even weaker than the British system in England. For centuries this conception of the Public Service Commission remained in existence and continued to function according to methods which had been adopted round about the 17th Century; and what has happened since that time? Commissions of Enquiry were appointed, just as the Minister has now informed us that a commission has been appointed in South Africa, and because that has been done now we should not criticise too much the work of the existing Public Service Commission. But does the Public Service Commission of Enquiry realise, or did the Minister draw the attention of that commission to the fact that it is essential that the whole system of the public service in this country should be reorganised? In order to attain that object only one method can be used and that is that the machinery at the top of the public service must also be reorganised.

The terms of reference of the commission are as wide as they can possibly be.

The Minister says that the terms of reference of the commission are as wide as possible. But is it realised that the most important members of this commission—I cast no reflection on them here as individuals—did not make a study of public administration in other countries of the world? How many of them made a comparative study of the administration of great business undertakings in comparison with the public service in South Africa? That commission continues to receive data from the various departments and practically to compile files of the good or bad behaviour of the officials concerned, which must eventually help them to decide as to how promotions should take place in the service. If we take into consideration what is done in other countries, we will realise that our whole system is antiquated. Take for example a country like America. In the “American Year Book of 1940” I read that the American public service, and also the services of the various states of America concentrate increasingly in promoting officials according to what they call “the merit system”. The Minister also told us that efficiency and good service are taken into consideration. But who decides that? That is the most important part of the whole question; and here I should like to support what the hon. member for Westdene (Mr. Mentz) and the hon. member for Krugersdorp (Mr. Van den Berg) said. We were also at one time or another employed by and working hard for the State. I can give you the assurance that the merit mentioned here by the Minister in the majority of cases only amounts to this, that the official concerned has the approval of his superior as a person. There is an official who some years ago received special promotion because he, when his chief came to Cape Town for the Session, went to sleep in the room in the back yard and looked after the chief’s house so that nobody would break in. If a person is prepared to sleep in a native room if the chief is away in Cape Town, he receives promotion “on merit”. We feel that the time is more than ripe that the Public Service Commission, like the chief executive body of any organisation, should be able to act on another basis, and we say that the whole system should be reorganised with that aim in view. We can argue just as we like, but we cannot get away from the fact that we have more red tape in the public service than is necessary. There is 100 times more than is necessary for efficient administration, and unless we now realise in the country that the time is more than ripe for a change and for thorough investigation at the top end of the public service, namely into the Public Service Commission itself, we shall not be able to bring our administrative machinery in South Africa in order. I read in a work of Charles Beard, “American Government and Politics”, inter alia the following—

I think that in South Africa we can underline that. Taxes are fast accumulating—

The time is more than ripe to do what I should like to do today, namely to protest at our having in South Africa an antiquated system which no longer functions properly, and that we should set to work systematically. Action has to be taken to reorganise our administration in the country thoroughly. The time is more than ripe for that in this country. This author goes further and says—

In our public service we have inspectors who go round. But what is the position of the inspectors? It is usually an official who originally was taken into the service in a small office in Johannesburg or somewhere in the country to write down figures. They have experience, but that is all they have. That experience is based on no technical training or administrative work. They have no further background than that experience. Those are the inspectors we have. Ten years ago one of these inspectors of the public service for example came to me and he had to investigate whether. I was bilingual or not, although he himself could not speak a word of Afrikaans. I discussed with him the unsatisfactory position of graduates in the public service, and his reply to me was that they did not require educated people in the public service. If our administration and the public service must continue on that basis, that a chief inspector in the public service can say that we do not require educated people in the public service, no hon. member can do anything else but agree with me that the time is more than ripe to bring about a reorganisation of the public service machinery, of the machinery of the administration.

I am sure the hon. Minister will agree with a great deal that has been said by the hon. member for Gezina (Dr. Swanepoel). In particular I am sure he will agree with the statement that the public service stands in need of complete overhaul and complete reorganisation. As I understand him, the hon. Minister’s reply is that the matter is under consideration by this Commission of Enquiry and that we can scarcely ask him, at the present juncture, to make any sort of declaration of policy. Well, I raised this matter last year when it was under discussion and when the appointment of this Cocmmission of Enquiry was mentioned, and at that time I urged upon the Minister that he should not wait for the recommendations of the commission before introducing certain reforms into the public service. Mr. Chairman, as a see it, there are reforms which can be introduced without waiting for any report from the Commission of Enquiry. The House will remember that the appointment of this commission arose out of a recommendation of the Planning Council in its third report. In that report the Planning Council made certain criticisms of existing conditions in the public service which, as I understand, were the result of its own investigations, its own knowledge, and its own enquiries. These criticisms were quite dogmatically stated; they were not tentatively stated. It was not suggested that these criticisms might possibly be proved wrong after a full investigation. The criticisms were perfectly boldly stated. I am not concerned to repeat all of them here, but I would like to mention two. One criticism was to the effect that under present conditions there is a complete lack of co-ordination between various State departments. That was a very definite criticism arrived at through the Planning Council’s own experience. The other criticism, equally definite and positive, was that the general standard of remuneration in the public service was quite clearly too low and was resulting in the State losing first-class men from the public service and driving them into private enterprise. These two criticisms were not of a kind which, in my opinion at all events or in the Council’s view, stood in need of further investigation. One other aspect of the report of the Planning Council to which I wish to refer is this. The Planning Council drew attention to the fact that our present public service was founded upon the Graham Report of 1918, thè recommendations of which were, broadly speaking, incorporated in the Public Service Act of 1923. The Council emphasised that to all intents and purposes no enquiry had taken place since that date and that no reorganisation or reform had been introduced during that time. The Council also emphasised that in the coming years the functions of the State would increase in importance and increase in difficulty, and that a first-class public service was therefore an imperative requirement. The Council therefore recommended that this should be given immediate and urgent attention. I am quite unable to see, with great respect to the hon. Minister, why, in view of these definite recommendations of the Planning Council, he should find it necessary to delay any declaration of policy, any indication of reforms which he intends to introduce, till this Commission of Enquiry reports. We are moving rapidly into a time of peace; we are moving rapidly into a time when the public service will have to carry very heavy burdens and I feel the House would welcome some indication from the Minister that he is alive to the necessity of reforms and that he intends to introduce certain reforms, where further investigation is not called for, immediately.

I was referring to the Minister’s unsympathetic attitude towards public servants. I do not want to stand still there; I just want to ask the Minister whether he accepted the ultimatimi of the public servants to meet them. I must tell you that I sympathise with the Minister, because some of his colleagues did more harm than he did in this matter, but the final responsibility lies with him. The Minister asked here in connection with the re-appointment of officials who had been pensioned, what would have happened to the service if we did not have those people to appoint. My reply to the Minister is this: It would not have been necessary to appoint those people again if he had seen to it that the salary scale of his officials more or less agreed with the salaries being paid for similar work outside the public service, and then I want to suggest that the Minister should consider the advisability of bringing the basic scales of salary into relation with the remuneration for similar work outside the public service. The Minister will perhaps say that high salaries outside the public service are due to a temporary factor namely the pseudo-prosperity during the war, but the Minister will remember that the public servants have felt aggrieved about the matter for a long time already. They felt aggrieved even before the war. The Treasury will perhaps say now that it is too expensive to bring about appreciable improvement, but it still remains a fact that it is better to have a group of efficient men in the service than to have a service with a large number of inefficient men. I also wish to suggest that the basic salaries should be determined in accordance with the duties and the responsibilities of the post. I would not like to see a difference made between married and unmarried people who do the same work and are equally efficient. Personally I also would not like to see the Minister differentiating between men and women if they have the same ability and if they do the same work. And then, in fixing the basic salaries, the Minister must take into consideration the number of hours of service, pensions, leave, etc. As regards leave, I wish to say that public servants are very dissatisfied with their leave. According to the law leave today is not compulsory; it is purely a privilege, and I say the leave of public servants should be made obligatory and should not be regarded as a privilege. Every man is entitled to a reasonable holiday every year to recover from the work he has done during the past year. I now come to the Public Service Commission itself. Here we have today a Public Service Commission, a body inaugurated by Statute with the function of giving effect to certain recommendations by the Governor-General. It is therefore clear that the Public Service Commission today is largely an advisory body. It has no executive powers, and that is clearly apparent from Clause 2 (1) of Act No. 36 of 1936. There we see that—

It is therefore largely an advisory body. And so one has an advisory body with practically no executive powers. Any outsider today will realise that the Public Service Commission as it is composed today no longer fulfils its objects. It has always been alleged that unless this body receives greater executive powers, it will not be able to fulfil its purpose, and judging by circumstances we are of opinion that that is actually the case. The public Service Commission has today become a burden on the State. It knows nothing about the capabilities or otherwise of the individual members of the various departments. It only has knowledge of the persons it comes into contact with. Here one finds the cause of the widespread disappointment amongst the officials when it comes to questions of promotion. The officials feel aggrieved because the Public Service Commission is not in a position to consider the capabilities or inefficiency of the various members of the service, and to compare and to test it.

What about the Broederbond?

We are now dealing with serious matters, but that hon. member mentions the Broederbond. He has the Broederbond on his brain. There ought to be a central controlling body which will become acquainted with the personnel in the various departments in order that when it comes to the question of promotion in the various departments, it will be capable to weigh the efficiency or otherwise of the officials as opposed to each other. Under present circumstances the Treasury suffers, because appointments are made which cannot be justified, and in the second place, as the Public Service Commission is constituted today, they cannot be held responsible for the personnel in the service and as a result Treasury finds itself with too many officials, whether it is aware of that fact or not. There is continual unrest and dissatisfaction about the unequal treatment of the officials, especially those who do the same work. On this point the Graham Commission was very clear in its report. In paragraph 127 the commission said this—

Then paragraph 129 says—

We can therefore clearly see here that the Public Service Commission, as it exists now, does not answer its purpose. There are many people in the public service itself, and they have no say in that commission. Will it not be desirable to allow the executive committee of the public servants to nominate one member on the Public Service Commission? Then there will be one person who is acquainted with the personnel. Allow the executive committee of the Public Servants’ Association to appoint one member of the commission and there will be greater satisfaction, and in the second place that will give the Public Service Commission greater executive powers. Now there is the advisory board of the commission, and that advisory board is also purely an advisory body. Here one now lias an advisory body giving advice to another advisory body. That seems to be the case. Clause 98 (1), (h) of Act No. 27 of 1923 reads as follows—

Here one also has a purely advisory body. This advisory body itself stated in 1943—I do not wish to read the whole extract—but it passed a resolution to the effect that it itself admitted that its continued existence was not justified. That was in December, 1943, and here even the advisory council insists on general reform. That body itself stated that its continued existence was not justified. It has no executive powers. It can only give advice to the commission.

Do you refer to the advisory council?

Yes. [Time limit.]

I am sorry not to be able to respond to the hon. Minister’s appeal that we should not press him for a declaration of policy in the matter of the public service since the whole question is under review by the Public Service Enquiry Commission. At the moment it is largely because the matter is under review by the Public Service Enquiry Commission that I feel a little more anxious than usual. This report that has been issued is not one to inspire confidence in anyone whose business it is to represent the group whom we on these benches represent in this House. I think it has become abundantly plain already that the recommendation which had been made by the commission is hopelessly inadequate to the situation which we are called upon to face. And it is not even as if this interim enquiry was supposed to deal only with cost of living allowances; it had referred to it, and it took specific consideration of the need to revise basic salaries, and it said itself, as a result of its investigations, that it was satisfied that there was an urgent need for immediate relief, “and as the general enquiry is likely to take a considerable time such relief should be given without delay”. It is particularly on that finding of the commission that we are naturally extremely disappointed at its recommendations which provide no appreciable improvement in the position of that large army of workers who earn less than £100 per year in the Government service. I may say that large army of workers in the Government service who earn less than £50 per year. I believe that if the minority report of the commission is adopted, that will relieve the position to some small extent. It will add 5 per cent. to the basic salaries, and it will provide a small fixed allowance for dependants, and to that extent it will be an advantage to those people who are now trying to live on the starvation wages which are being paid today. But even that is not going to be adequate, even to meet the rise in the cost of living in these war years for this particular group of people, let alone the fully established need for improvement in their basic earnings. The Bus Commission which enquired into the dispute in regard to the bus route to Alexandra Township and on other routes—and their figures have not been challenged—found that the rise in the cost of basic foods used by the native population has been 91 per cent., and the House will have seen from the public announcement that unfortunately the retail price of maize is going to be increased again. The Bus Commission found also that the cost of second-hand clothing for these people had gone up from 80 per cent. to 100 per cent. in these years. Those are the facts on which cost of living allowances in respect of this group of workers really ought to be based, and even on the scale of last year’s revision, those costs are not really met, and this commission has offered no improvement in that position. In the circumstances I want to support what has been said by the hon. member for Parktown (Mr. Stratford). I cannot in fact see any necessity—and I can see a good deal of danger—in waiting for further investigations by this commission, before the Public Service Commission does what it obviously should have done years ago, which is to revise the basic conditions of service, particularly of these people in the low income groups. The Social and Economic Planning Council in this regard, as in the cases quoted by the hon. member for Parktown, made a clear and definite recommendation to the Government. It said in the first instance that the Government should not pay less than the best wage determinations laid down for private employers and that beyond that it should set an example to private employers, a good example and not the bad one that it now offers. That is a perfectly clear and straightforward recommendation, and I cannot see why the Government does not plan to implement it at once without waiting for any further enquiry. I might have suggested that what we should have was another interim enquiry that would deal specifically with this question of the low income groups, but I see no advantage even in that. I think that the main difficulty of any enquiry by this particular commission is that the Government has so far given no indication to the commission or to anybody else as to what it feels about having a large proportion of the population and a large proportion of its own employees living well below the basic cost of living standard, being remunerated well below the basic cost of living standard. The Government has given no direction in this regard to the country, or to this commission, which quite clearly needs some indication if it is going to find its way in this matter. I do not know the members of the commission, so there is nothing personal in my remarks. There is no indication of any policy on the part of the Government in regard to this basic matter. I think it is time we had a declaration of policy in this matter, and I think that what the Government should do is specifically to commit itself to the principle of a living standard for everybody in its employ, a remuneration on a living standard to everybody in its employ, a standard which will naturally be related both to the work and to the racial group which is employed, since the Government actually does employ people on a racial basis which is not allowed to private employers and regulates wages on a racial basis, which again is not allowed to private employers; that the Government should adopt the principle of a living standard for all its employees, and that it should proceed to elaborate a policy whereby it will achieve that standard within a fixed and limited time. That seems to be the straight issue before the Government; and I think the time is long past when it should have been faced. I beg the hon. Minister to accept this principle now, and simply to hand over to the Public Service Commission the resulting job which is (a) to revise the present existing basic rates of pay and (b) elaborate a plan whereby a living standard shall be achieved, say, within the next five years for the whole staff of the Government service.

It does my heart good to hear members of the opposite side and from this side pleading mitigating circumstances in so far as the Public Service Commission is concerned and condemning the Minister. I want to say that the Public Service Commission governs the whole of the public service, and if a member of the Public Service Commission is entitled to more than £1,800—because there is a difference between £2,500 and £1,800—then I say that they have neglected their duty for many years in the past. I am not going to blame the Minister by agreeing to a commission being appointed, because I think he has done the honourable thing, and I am surprised to hear members on this side of the House saying that the Minister should have taken the initiative and done something different. How many members of Parliament on either side of the House realise that the Public Service Commission governs all Government departments other than the railways? What have they done whether they were under the Nationalist Party Government, or whether they were under the United Party Government? Let us take the case of the humble nurse in the leper institution, or in the mental hospital, getting a miserable allowance of £7 or £8 per month, and then the hon. member for Green Point (Mr. Bowen) talks about £1,800 per year! Is it a question that the people who are supposed to have brains, who are born with a golden spoon, should be the only people that have the right to live? The Public Service Commission is responsible for letting down the Minister, whoever he may be, in not recommending a decent rate of pay. I say this, that in the time of the late President Kruger people working on the mines in 1900 were getting a minimum rate of pay of £1 per day. If the people are prepared to sacrifice their lives for their country, it is up to this House, whatever Party is in power, to see that they get a living wage, and I am not prepared to support the hon. member for Green Point who says that £1,800 per year does not represent a living wage. I say that the hon. member for Green Point and the representatives of the natives and the coloureds realise only too well that when this country or any country is in trouble it is the rank and file that pulls it through, and I ask this House to remember, when dealing with this vote, that it is the rank and file in the public service that is entitled to a living wage, and I say that all members on the public service, other than the members of the Public Service Commission, are being totally underpaid.

I think the hon. member for Pretoria (West) (Mr. Hopf) has just been a little bit too rough on the hon. member for Green Point (Mr. Bowen). The question as to whether the members of the Public Service Commission are being paid enough I do not think should be mixed up with the general pay which is given to civil servants. Personally I agree with the hon. member for Green Point that £1,800 is not enough for the men who are carrying out such an important job. But let me hasten to add my support to the plea made by the hon. member for Cape Eastern (Mrs. Ballinger) on behalf of a new basic rate of pay to be laid down for the whole of the civil service, and let me disagree with the hon. member for Pretoria (West) when he alleges that the trouble has been purely and simply that of the Public Service Commission. We know quite differently in this House. The Public Service Commission, as happens with so many other bodies in the administration of the Government of this country, exists in many instances as a good institution whereby Cabinet Ministers can pass the buck, and the responsibility for the deplorably low rates of pay, particularly for the lower paid groups in the public service of this country rests entirely with the various governments of this country. We know what the position of the Minister of the Interior is. We know that the Minister of the Interior has to go to the Minister of Finance whenever he wants extra money. Sometimes I have a feeling that instead of having 12 Cabinet Ministers we should only have two, we should have a Prime Minister and the Minister of Finance and 10 office boys and the secretaries, because that is more or less how our country is being run. Everything comes back to the financial consideration, and the Treasury, working under the Minister of Finance either agrees or does not agree to any scheme. But the fault for the low rate of wages which is paid to our civil servants, lies with the Union Government. The Minister of the Interior cannot avoid his responsibility by saying that the Public Service Commission should have done so, nor can he get away with the story that he appointed a commission to go into this matter. You do not need a commission in this country to tell you that the Government in many instances is the worst employer in the country, that the Government brings measures into this House laying down scales of wages and imposing conditions upon private employers, and then they straightaway reduce those rates of wages by as much as, in some instances, 33⅓ per cent. The Government knows it is the sinner and the civil service is suffering from it. We know that for years now the number of resignations which continually occur in the civil service has been actually alarming and we are losing—not in the very lowly paid groups —but we are losing in some of the groups which eventually can rise to higher pay, some of the best brains in the Union of South Africa to private enterprise. Just take the case during the war period itself. What self-respecting person would work for the Government department at £11 per month, when she is offered £25 and £30 outside. And in many instances Government departments are being used by these young girls to learn typing and shorthand and as soon as they have learnt it and become efficient and experienced, and they see no opportunity of advancement in the service, they accept outside employment. I am glad to see the hon. member for Westdene (Mr. Mentz) back in his place, because he seems to think that the Government members have the Broederbond on their brains. I want to appeal to the Minister to see that the Public Service Commission does everything in its power to eradicate this danger. I do not believe I have spoken very much in my time on the Broederbond, but I am persuaded to make a remark or two by rather a remarkable article which has appeared in the American weekly news magazine, “Time”. “Time” is considered to be one of the best magazines of its time. It is considered to be well informed, and whatever one reads there one can take it that there is a very substantial amount of truth in it, and it seems to me that America either knows a little more about the Broederbond than we do, or else they have been allowed to publish more, and this is what they say after making a preliminary statement about the Rt. Hon. the Prime Minister—

I do not want to read the whole thing. That was published in a responsible American journal. I do not intend to read on, but it is relevant. I want to touch on another thing. This was published in a responsible American journal that no doubt verified all the facts and was apparently in a position to gain information not at the disposal of the general public in this country. It is the job of the Public Service Commission to see that the activities of this organisation are eliminated within the ranks of the public service. It is their job to hound out, wherever possible, the members of this particular organisation, or individuals who are prepared to follow the instructions of this particular organisation, and to see they are summarily dealt with. We have far too much of this in the public service in the Union of South Africa. I take it that as the Prime Minister eventually made a statement in which he said, and it appears to be true to a very large extent, that they knew the names of all the members of the public service who were in this secret and bloodcurdling organisation, if that is so why was not some action taken a little time ago? Why was the position allowed to develop to the state where it has become a positive danger? I trust the mere getting rid of a few members who were in the Government service is not going to be the end of the question. I hope the matter will be followed up very carefully and that a specific effort will be made to eliminate every individual who has any connection whatever with the Broederbond. I cannot understand this. It brings me to my final point. We are continually denying the public servants the democratic rights to belong to a political party in this country. We say to our public servants that they cannot attend a political meeting in a prominent manner, that they cannot take part in the machinery of running any political party, and yet apparently for years, knowingly and willingly, we are tolerating in our public service an admittedly secret society, because in the statement in answer to the Prime Minister we find Christoffel Johannes van Rooyen and Ivan Makepeace Lombard who made the statement saying the Broederbond was born of a deep conviction—

Yet the ordinary member of the civil service is not allowed to appear on a platform of the Dominion Party or the Labour Party or the Nationalist Party. I feel that as we are year by year building up a bigger and more extensive organisation, and as a larger proportion of the population are becoming civil servants, the time has come to give consideration to allowing public servants to enter into their democratic right to take part in politics. [Time limit.]

Anyone who believes the nonsense quoted by the hon. member for Fordsburg (Mr. Burnside) from an American journal must be either drunk or mad.

On a point of order, is an hon. member justified to say about another hon. member that he is drunk?

Did the hon. member for Winburg (Mr. Swart) refer to the hon. member for Fordsburg.

I said that any person who believed those stories must be either drunk or mad. I shall take no further notice of it, because it is all lies and not a single word of that nonsense is true. A plea was put up here today for the public service, and all kinds of nice things were said about the public service. But we also know how the public service was attacked from the political platform of the United Party, how, at conferences of the United Party heavy attacks were made on the public service, and how the public service was accused of unfaithfulness and sabotage and under-mining. It was so bad that the public service, or the executive committee of the Public Servants’ Association had to have an interview with the Minister of the Interior in order to lay the matter before him. In October of last year they asked for an interview with the Prime Minister to protest against the mean and untrue attacks coming from the platform of the United Party and directed towards them. The Prime Minister refused to meet them. They again wrote to the Prime Minister and asked him permission just to come and explain to him that these things were untrue, and they asked for an enquiry. The executive of the public service personnel, consisting of English-speaking and Afrikaans-speaking persons, members of the Broederbond and of the Sons of England, asked the Prime Minister: You attack us at your Party congresses; come and investigate and prove one of those allegations. The Prime Minister would not investigate. The public service published a challenge in the Press and said—

This is what the responsible body of the public service, which represents them, did after an interview with the Minister. The Minister could give them no satisfaction. He could not quote a single case of unfaithfulness or sabotage. They approached the Prime Minister. He could say nothing except that in a democratic country one has the right to criticise the public service. He could not prove a single accusation. After all this, the executive of the Public Service Association in the public Press challenged the Prime Minister and the United Party to prove what they had said. They requested that an investigation should be instituted to prove one of these things. Neither the Prime Minister nor any member of the United Party nor the Minister of the Interior could mention one example of unfaithfulness. I want to ask the Minister of the Interior, who is responsible to this Parliament, whether the accusations were true. Can he deliver one proof? To the Minister’s honour I must say that he sent a Christmas message to the public service in which he said—

That was his message. No accusation, no indictment. No, he accuses his own Party of being sadly lacking in knowledge. I am speaking to the Minister. Let him rise and say in this House whether the accusations of unfaithfulness and of sabotage and of undermining were justified. How many cases can he mention where persons made themselves guilty of these things? Can he bring proof, if not, then the Government and the Party opposite owe an apology to the public service. They were continually challenged by the public service to bring proof. But as late as December it was stated at a political conference of the Party—

Again the public service approached the Prime Minister and the executive committee of the Association, consisting of all sections of the public service, English-speaking and Afrikaans-speaking, after making all possible attempts to find proofs, unanimously decided—

That was the executive committee. The office-bearers received a vote of full confidence in spite of the allegations of sabotage and suchlike matters, and that they were supposed to be members of the Broederbond. It was English-speaking and Afrikaans-speaking people who adopted this unanimous resolution. What right has the Minister or any member still to make accusations? Here they talk nicely about the public service, but if attacks are made from their platforms, mean allegations, we do not hear their voices. Then the public service is allowed to be villified. If there are members who are guilty—I do not know; the Minister cannot prove it—why were they not taken by their necks? Why must the whole public service be sullied by such mean allegations? It is a group of honourable people who are being accused and sullied, without one single proof being brought. That is mean. I want to protest against that action against the public service, without any proof being brought. Where is the proof? They can bring no proof against any person, but the stain is put on the public service as a whole. The members of the public service have reasons to be bitterly dissatisfied over the fact that members of the Cabinet and members of the opposite side of the House make such allegations against them without having the courage to bring proofs to the light of day or to let an enquiry be instituted. Let one of the Ministers rise and say: “In my Department this or that happened.” You may not sully the public service like that without being held responsible. I hope that the Minister in his reply will say whether it is true that there was unfaithfulness and sabotage, and if there is any truth in the allegations of members of his own Party. Let him say whether there is any truth in it, or whether their knowledge is deficient about circumstances.

One is surprised, in listening to the hon. member for Winburg (Mr. Swart), to find him posing as such a great champion of the civil service. He and his Party are first of all the champions of the civil servants, and secondly, they are the champions of the Broederbond. I give the Broederbond far more intelligence and foresight than to entrust their future into the hands of these people. Every member in this House must recollect how they flung it across the floor of the House that if anyone dared to touch the members of the O.B. they would give a lead. If we touch the Broederbond will they give a lead? I do not know the Broederbond, but I say this to them: can we trust a political party that left the O.B. in the lurch when they needed them? They cannot deny the fact they are fighting these poor fellows, and I lay the blame at their door for many being in the internment camp today. Let us hope they will not be turned into Broederbond members. In regard to their championship of the civil servants, may we ask respectfully whether any member of the Nationalist Party has given evidence before the commission appointed last year to enquire into the civil service? A member of the United Party has done so. We must not use our civil servants or our working classes to advance our political ends. When we discuss their interests we must always try to place them above the level of party politics. There is a fair question to the members of the Opposition: Have they or have they not taken that interest in the civil servant to have gone over to the commission and spent a few hours there to be cross-examined while putting up a fight on behalf of the civil servants? A member of the United Party has done so. They are fond of using the words that they challenge the Minister; they are always pointing the finger and saying, prove sabotage, prove this and prove that. There is so much to be proved on that side of the House that I do not think it is worth while the Minister taking much notice of it. I was unfortunately one of those who launched a severe attack on the commission lagt year, not on the members—I do not want to say anything about them personally—but I feel the commission, as such, cannot defend themselves in this House, and it is always difficult to attack officials when they have not got the power to defend themselves in this House. I think, however, one is safe in saying this, that the public service does deserve a compliment and the thanks of this House for managing a difficult job in very bad times. I am referring to the war period. We know many civil servants joined up; we know the staffs of the majority of departments were depleted, but in spite of that the civil service generally has done a very good job of work and has carried out a very difficult task in abnormal times. In my humble way I should like to pay them that compliment. I have no complaints personally either; they have always treated me with respect and civility. The Minister has been pressed for a declaration of policy. You will remember, Sir, some days back I asked for a ruling whether we could discuss civil servants’ salaries, etc. in connection with the matter now being investigated by a judicial commission, or whether it was considered sub judice. I still feel the House did its duty last year when it impressed on the Government the need to appoint a commission; the Minister agreed to that, and we should now await that commission’s report. I think it would be wrong for the Minister to make a statement of policy before the commission presents its report. There is one thing I do want to impress upon the Minister, and I think he is very sympathetic, and that is that the recommendations when made will be retrospective. There is no shadow of doubt that the civil servants have been waiting a very long time for the improvements. What the hon. member for Cape Eastern (Mrs. Ballinger) has said is perfectly correct, that many civil servants are living under the bread line. There is no denying that fact. I am referring particularly to low paid employees, labourers, messengers and typists. Yes, these nice young ladies have been living under the bread line. They have been waiting long for the commission to be appointed. If we ask the commission to expedite its work it might not do its job thoroughly, and therefore it might be better to wait and let them make a good job of it, going their own way. It will take them to the end of next year; I hope that will be the latest. That being the case, I hope sincerely that any recommendation made in that report will be retrospective. There was an interim report. No doubt the House realises that brings very little benefit. The final report should be published in a way that will make it readily understandable by the man in the street. May I point out that we, as a movement, impose certain wages and wage conditions on private enterprise but we do not ourselves comply with those standards of wages and those wage conditions. It leaves a bad taste. When we prescribe wages and wage conditions the State itself should uphold them in practice. I have given evidence before that commission, and it is my opinion if you want to do justice to the civil servants right through all the categories— labourer, messenger, typist, clerk and all the various grades—you should increase the remuneration at least 45 per cent. But do not let us repeat the mistake that is made interminably, not only by State departments and local authorities but even sometimes by private firms, that if an increase comes along it starts from the top and goes downwards. When an increase comes it should start from the bottom and go right up to the head of the department, and I hope that principle will be adopted.

Why should it not start in the middle and go both ways?

No, it should start from the bottom. I think the departments of our civil service require more assistance from members of Parliament in the administration of the country’s affairs, my point being this, that heads of departments and public servants generally are required to carry out the policy of the Government …. [Time limit.]

I should like to mention a matter in connection with the public service, and that is that due to the small salaries’ these people receive, many of them cannot live on their salaries. If it is a young man with a wife and child, or two children, he is always in fear that one of them will get sick, and if he has to pay for a long illness he does not know whether he will be able to do it. For the railwaymen there is a medical fund to which they contribute and which gives them all the assistance they require. Their contributions are small and the services they receive are many when there is illness. For a small contribution they receive the best medical help obtainable. As regards the usual public servant, their salaries are so small that I do not know how some of them can live. If they marry, they fear illness. Can a scheme not be evolved for these officials? Even if it is the Commission now sitting, let there be a Commission which evolves a scheme to which everyone can contribute. I know that there are officials who belong to one or other society, or who have their own benefit society, but we can understand that a small group of people contributing a small amount cannot provide the medical services which can be provided if there is a strong fund. Just as it is compulsory in the railway service, there ought to be a scheme for the public service so that these people can be assisted. The low paid officials have difficulty if sickness comes, and a plan should be made to protect them. I know the Minister may perhaps think it presumptuous of me to plead in this manner for the public service, but in my profession I come into contact with these people and they have often discussed the matter with me. Only recently when I was in my home town there was a case of a man with two children. He had illness and the costs were so heavy that he could not pay, but had to pay it off gradually. People who work with thousands of pounds of State money should be paid sufficient for them not to be led into temptation. I have met many cases of people with low salaries. Especially people who start are paid very little. If a boy from a good family is appointed in the public service and is sent to some other place and commences with £12 a month, he cannot live in a decent hotel, he cannot get decent boarding, and if his parents or people do not give him an allowance he finds it very difficult. They are not all appointed in the place where their parents live. If they can stay at home they may perhaps still manage, but generally they are sent away all over the country and we can imagine what the position is. The other day a teacher visited us. She earns £16 or £17 a month. She wanted to buy a winter coat. The shop charged £16 for the coat. She could not afford to buy it but she must be decently clad and live decently and must be an example to the community. If something is not done you will not attract the best brains and the best people to the public service. I am sorry that the matter of the Broederbond was raised again. The position is simply this. The Prime Minister referred to the matter here and spoke about it. All he said was that it is a political party. That is all. One would not expect any decent newspaper to publish something like that quoted here by the hon. member. It will first investigate the matter. It is simply ridiculous and laughable to publish such matters. The Prime Minister had all the documents. His spies were there. He knows who the members of the association are and everything in connection with it. The Prime Minister’s verdict was that it is a political party. The Prime Minister did not say anything more here because there was no proof of anything else. The Prime Minister has more brains than all the other members opposite. He has 50 years experience of politics. He had all his spies there and investigated everything, and that is his judgment about the matter, as he told us here. Now that hon. member rises here and quotes all sorts of things from a newspaper, about dead bodies and such things. It reminds one of the stories one hears of the Freemasons, that they initiate people by means of coffins and such things—that people are placed in a coffin. I cannot understand how a responsible person can rise here and refer to such matters, after the decision of the Government that it is purely a political party. I regard the Minister of the Interior as a reasonable man. He knows that if there are persecutions in the public service and if there is victimisation—well, the wheel turns. He will not always be Minister and that Government will not always be in power. If he sets such an example to the public and to any other Government which succeeds him he must realise that there will be trouble. As regards the Broederbond, we accepted the case as put here by the Government, that it is regarded as a political party, and the Government knows that it suffered a moral defeat in connection with that matter, and the public outside also knows it. I do not refer only to the Nationalists. The people had been roused to expect all sorts of things, and then they had the decision of the Government that the only trouble was that it is a political organisation. Now that member comes here and quotes things from an American newspaper which cannot be believed by anyone with brains. The racialism which exists in this country does not emanate from this side of the House. That racialism emanates from the opposite side of the House. I know that there are decent persons opposite who are not racialists, who know that they can derive no benefit from racialism. But there are English-speaking persons opposite, and also Afrikaans-speaking persons, who cause the racialism in the country. We have the member who just rose and read these things to the House. He did it for only one reason, and that is because he is animated by racialism. If he can kill any Afrikaans-organisation or association, he will do so. He only raised these things in order to get them published in the Press again and in order again to cause an agitation by means of all kinds of stories and to try to make the Afrikaner appear ridiculous. But on the other hand the public believes what the Prime Minister said, that he took action because this organisation is a political party. [Time limits.]

Let me deal first of all with the criticisms and remarks made by the hon. member for Winburg (Mr. Swart). It is quite true that the executive of the public Servants’ Association saw me, and as the result of that interview I thought they were satisfied with the stand I took in connection with the matter. I told them precisely as I am telling hon. members here, that if any member of the public service had done anything contrary to the terms of conditions of the Public Service Act there was the appropriate procedure and I said they could bring their accusations at the congress that has been referred to.

And nobody came?

No, no one came. That is the correct position. I wrote the letter which I wrote, and I neither add to it nor detract from it.

So in fact no charges were ever brought to your notice?

Not to my notice.

Nor to the Public Service Commission?

I cannot go to that extent because I do believe that some of those people may have, but to make a general accusation was absolutely wrong. And now I hope we will have no further discussion about the Broederbond. The hon. member for Swellendam (Mr. S. E. Warren) stated exactly and correctly what the Prime Minister had said, namely that it was a political party. The head of the Department gave instructions that these people must resign if they are members, and there is no question about that. The Public Service Commission is really a court of appeal. It is not their job to snoop around and find out whether people are breaking regulations, or are to be dealt with. They are a body which appoints a commissioner in the event of someone reporting an official breaking regulations, and the man is dealt with accordingly. The hon. member raised the very important question of a medical association for public servants. Well, the Public Advisory Committee have also made a recommendation in that direction, and that matter is being investigated. I do not know to what extent it has gone, but all the points urged by the hon. member are sound. We know, and I have had personal experience of it, and in some cases I have had to help where it was reported that an unfortunate public servant whom I knew intimately had had heavy medical expenses. In that case I intervened with the province to have him relieved of the medical expenses at the Addington Hospital and they agreed to help. But this matter is of vital importance and I hope that something satisfactory can be evolved similar to what is in vogue in the railways. The only other point I wish to deal with is the challenge made by the hon. member for Parktown (Mr. Stratford), and the hon. member for Cape Eastern (Mrs. Ballinger). If I made a statement as to what Government policy would be in connection with this matter, I should expect the resignation of the seven commissioners on that Public Service Enquiry. That is one of the specific things they are on the point of enquiring into, the question of salaries grades, promotions, etc. I sympathise with all that hon. members have said, but I am not prepared to go any further in connection with the matter. They delivered that interim report and we varied it by paying an extra 2½ per cent. to people getting between £200 and £300 per annum. I had better not say more, but that was the report as made and I will discuss it with my Cabinet colleagues and I shall be very disappointed if the position as regards civil servants of all grades, including those the hon. member for Cape Eastern is talking about, is not improved.

Will you tell us what you are doing about the interim report?

The Government accepted the report practically as announced, with this addition, that people getting from £100 to £300 get an extra 2½ per cent. They get 12½ per cent. and all the rest get 10 per cent. That includes the 5 per cent. war allowance, which disappears. In regard to the hon. member for Westdene (Mr. Mentz) I said, and I repeat, that we employed pensioners to replace and to fill the places of men who had gone to the front but these pensioners did not take their position and did not prevent their promotion, the promotion of people who were entitled to promotion. But a man who was a senior clerk and who left the post office, who was probably a postmaster or a senior man, filled the position in the meantime. The position was there and we could not promote anyone into it, but an official of lower rank might have acted in that position. To that extent the criticism may be fair, but I do not know what we would have done if we did not have these experienced pensioners to take charge and to help to guide the nearly 2,000 people who knew nothing at all about postal work whom we had to take on in a temporary capacity, as indeed the pensioners also were taken on, in a temporary capacity. The hon. member raised a question with regard to the commissioners. The chairman, Mr. Cilliers, was one of six nominated by the Public Service Association. In regard to the Advisory Council I hope that the hon. member is not fully informed about the matter, because both the commission and the Government and I as Minister of the Interior take a great deal of notice of the recommendations which come from the Public Advisory Council, constituted as it is. They have done very important work in the past and I hope will do even better work in future. Saying that it should not exist is a mistake. The Public Service Commission of Enquiry is constituted of members who are all ex-civil servants. There are Messrs. Pienaar and Pring, who became Public Service Commissioners. There is Mr. Lewis who was with Ackerman’s, but formerly was in the Treasury Department. The other two are the nominees of the Public Service Association. Then there is the chairman, who is a very distinguished Judge, and a lady, who was not previously a member of the Public Service Commission. I say again that they have a very important job and I hope that as the result of their investigations we shall have the public service which the country needs. I am not satisfied with the position as it is and I am expecting great things from this commission, which is making a thorough, systematic and scientific investigation in connection with the matter. Because if this country is going to carry out the responsibilities thrown upon it as the result of various measures being brought into existence we shall need a scientific public service and we cannot afford to allow members, experienced members of that service to leave in order to go to more attractive positions outside.

I should not like there to be a misunderstanding between me and the Minister in connection with the Advisory Public Service Board. The Minister stated that he thought I did not have the correct information. I repeat that he and the Advisory Board itself decided that under the circumstances in which it has to function it has no right to a continued existence. The resolution was adopted in December, 1943, and reads as follows—

I will speak to them about this matter.

We therefore know that the Advisory Board itself thinks that there should be a general reorganisation. They themselves agree with that. I wish to bring that to the Minister’s notice, and then I want to put this question to the Minister. There is no body in existence which officials can really regard as a body which protects them. I wish to suggest that a board should be instituted, namely an appeal board which should preferably consist of only three members, where officials can note appeal. This body should be above the Public Service Commission, and its work should be to protect officials as regards promotion, the withholding of promotion, transfers, disciplinary measures, etc. I wish to bring it to the Minister’s notice that the officials today have no body in which they can take refuge if they feel that an injustice has been done to them, and I wish to recommend that such an appeal board should be formed.

I should like to know whether the Minister is prepared to agree to the adjournment now.

Are there any more members who wish to speak?

Yes. I move—

Agreed to.

House Resumed:

The TEMPORARY CHAIRMAN (Mr. V. G. F. Solomon) reported progress and asked leave to sit again, House to resume in Committee on 1st May.