I move—

At this first reading of the Natives (Urban) Areas Consolidation Bill I should like to make a few remarks. The Bill was referred to a Select Committee of which I was a member and I want to make it clear at once that we gave our approval to the consolidating measure, which, in fact, we asked for year after year, but in the Select Committee our difficulty was that we could not under the rules of the House, propose any amendments. So it should not be understood that because we have given our approval to the consolidating measure we agree with all the provisions of that measure. In the Select Committee we gave our approval only because under the rules of this House we were unable to effect any alteration. Now, on the occasion of the third reading, I want to express my regret that the Government should have come with a consolidating measure before it had made one or two necessary amendments. The Government could even during this Session have produced a short Bill in order to make these necessary amendments and they could also have brought in a consolidating Bill. We welcome the consolidation of the law because there have been so many amendments in the past. With your permission, Mr. Speaker, I want to make a few general observations. One necessary alteration, one thing that calls for alteration in connection with this legislation, is in relation to the pass system. I should like to say a few words about that. The whole arrangement in connection with the pass system in the Union remains unsatisfactory, in the first place because it is not applied uniformly in all the provinces, and in the second place as far as regards control of natives we are to some extent in the hands of the municipalities, many of whom take up an unsympathetic attitude, while a municipality like Cape Town is openly hostile; and thirdly, we have a Minister of Native Affairs who is reluctant to take action. His reluctance borders on lack of sympathy. Otherwise his action cannot be understood. We are faced with these three difficulties; the difficulty that the pass system is not applied uniformly in all the provinces the difficulty in respect of unsympathetic and hostile municipalities, and the third difficulty, that we have a Minister who today will not function, his failure to function bordering on lack of sympathy. What is the position? The old Natives Urban Areas Act, as well as the present consolidating Bill, contains the provision that every two years a census of natives should be taken; every two years the municipalities have to make a census of the natives within their municipal area. This was Section 6 in the old Act and it is Clause 26 in the Bill now before the House. But what is the result? We had a census of natives in Cape Town in 1938, and none since then, and it is now 1945. Now I want to ask the Minister this morning what excuse he can offer for allowing the municipalities not to give effect to the provisions of the Natives Urban Areas Act. The first thing we must do if we want to control the movement of the native population in urban areas is that we should determine how many natives there are and where they live. This morning I want to issue a challenge to the Minister and to ask him to tell the House and the country how many natives there are in any town in the Union. He can pick any town. He cannot tell us with certainty. The Minister has neglected his duty of complying with this provision of the law, to ensure that effect is given to this provision, as it was in the Natives Urban Areas Act, and as it is in the consolidating Bill before us this morning. What reason can he find to excuse the Cape Town City Council for having failed to take a census since 1938? And the position of Cape Town is, I understand, the position of other municipalities. If you want to control the movement of natives in towns the first thing you must know is how many natives there are. Will you believe it that the Minister does not know, that the provincial councils do not know, that the divisional councils do not know, and that the municipalities also do not know. I make bold to say that if a census is held next year, as it must according to the Government’s plans, including a census of natives, the people will be surprised and shocked to learn how many natives have come into the urban areas during the period in which the present Minister of Native Affairs has been in charge during the period of office of his predecessor. The Minister does not know. The figures hitherto given in connection with the municipality of Cape Town are more or less guess work. There has been no census. The first step to secure control is to have a proper census, to ensure that the law as it stands is enforced, and that the law as confirmed in the consolidating measure is carried out, particularly where it is stated that every two years there should be a census in the municipalities. I want to know from the Minister why he has neglected his duties so long and what his plans are for the future. Will he compel them to take a census? Otherwise you cannot gain control over the movements of natives. Segregation under the present Government—urban segregation of natives—is a farce, they pay lip service to segregation but their actions lie in a different direction. Let me tell the Minister that the impression in the country is that the Government does not want to stop the infiltration of natives into urban areas. The Minister has had the power under the law, and he has the power in the Bill that is before the House. He made no use of his powers under the old Act. In order to have proper control of the natives a pass system is necessary. We have grown up with the pass system in South Africa, but something entirely new is showing its head under the present Minister. What is it? We are steadily departing from the pass system. It appears from the report of the Native Representative Council in 1942 that it recommended the abolition of the pass system, and ever since that moment there has been a relaxation in the application of the pass system. When you apply the pass system you can exercise proper control over the movements of natives, but not otherwise. I trust that at this late stage we shall not take up the attitude that we want to apply segregation in urban areas without enforcing the pass system. Or is that the policy? Some time ago when the Native Representative Council recommended that the pass laws should be repealed, it gave inter alia these three reasons—

1. (1) Because it restricted the freedom and movement of natives;
2. (2) because the natives in general are exposed to humiliation and indignation; and S
3. (3) because it makes him a stranger in the land of his birth.

These are the reasons that they give. It appears to me that the Minister has fallen under the influence of these considerations, and the resolution of the Native Representative Council was followed by a relaxation in the application of the pass system. But still worse, the Minister in 1942 appointed an inter-departmental committee in reference to the social, economic and health conditions of the natives in urban areas, and the recommendations of this inter-departmental committee in regard to passes are so sensational that I want to read out the names of the committee: Mr. Douglas L. Smit, former Secretary for Native Affairs, chairman; Mr. A. L. Barratt, ex-Chief Native Commissioner; Dr. Peter Allan, Secretary for Public Health; Dr. G. W. Gale, Assistant Health Officer; Mr. G. A. C. Kuschke, Secretary for Social Welfare; Dr. F. Brummer, Social Research Officer; Mr. F. McGregor, chairman of the Wage Board, and Prof. I. S. Fourie, Economist. What was their recommendation? The report is dated 1942 and after a long argument and explanation this committee came to the conclusion—

That is their report. The Minister has not carried out the report in this respect, that he has not proposed in this Bill to abolish the pass laws, but he has carried out to the letter this part of the report—

He has carried out literally this passage of the departmental committee’s report, and that is why we today have the position that the control of natives in the urban areas has got totally out of hand. The pass laws are not being enforced. Some members of that departmental committee are still in the Department of Native Affairs, others have left, but the pass laws are not being carried out. We have seen what occurred in Johannesburg. I want to congratulate the Transvaal and the Free State because the natives there still have to carry travelling passes. The poor Cape Province! The native does not need a travelling pass to come here.

Has there ever been a time when the natives carried travelling passes in the Cape Province?

No.

During the nine years your Leader was in office why did he not introduce the pass system?

He was not Minister of Native Affairs.

But he was an important member of the Cabinet.

If you examine the period from 1924 to 1932 you will find a record of the Nationalist Party in connection with native affairs, and they have nothing to reproach themselves with.

Why did the Minister fight our native legislation tooth and nail?

The Nationalist Party has nothing to reproach itself with. It applied the Urban Areas Act, but under the control of the present Minister those laws are not being enforced. Frequently, after the Nationalist Party left office in 1932, there was an opportunity to extend the pass system to the Cape Province, because repeated amendments were introduced to the Native Urban Areas Act. Why was that not done? My complaint is that the pass system is not being applied uniformly in all the provinces. Poor Cape Province ! Here the native—just like the Minister-can alight from a train at any station he wishes to. We have seen from press reports what occurred in Johannesburg, how gangs of Natives go round at night making trouble. We see what the position is in Cape Town. The Minister can ask the police what the position is here. In Johannesburg they still have a system of night passes.

They do not worry about it there.

The hon. member is right, but still they have the night pass system. In Cape Town, however, there is no night pass system even for male or female natives. They can run around as they wish. The Minister may have seen the sensational report in the newspaper of a native who, in broad daylight, assaulted a white woman yesterday on the Cape Town railway station. I want to tell the Minister that if he does not take steps in connection with the control of natives in urban areas clashes will occur between Europeans and non-Europeans. He will not be able to prevent them. When a native comes to the Western Province he does not need a travelling pass. Except for the fact that when he comes to the urban area of Cape Town he is asked to report at Langa to obtain a pass to move about, there is no restriction, and those who do not call at Langa can simply walk around. But outside the municipal area of Cape Town, in Bellville, Goodwood and Parow, they can move about without any pass. No one asks the native for a travelling pass or a night pass or a big pass—as the natives call the contract of service. So we find in the last few years there has been an influx to Cape Town of tens of thousands of natives, to the number of about 60,000; they alight from the train at Parow or Goodwood or Bellville, and thereabouts, and they are at liberty to alight, being just as free in this respect as the Minister himself. No one puts a question to the native and he has freedom of movement. He is swallowed up in the unknown thousands, and as the police say, he speedily becomes the prey of the communists who stand and wait for him. In other words, we have a pass system on paper. A pass system on paper does not assist. Night and day the native can run about where he wants to. Here in the Western Province, sad to relate, it is still worse. The municipalities of Stellenbosch and Worcester have a registration system and they have locations outside for the accommodation of the natives with the result that the natives do not stream into Worcester and Stellenbosch. But they stream into Paarl to the tune of thousands every month. Why? Because the municipality of Paarl for some incomprehensible reason have not yet got a registration system, nor have they a location. That is the position, and these things are occurring while the Minister sits with folded arms; he has the power to act but he remains quite inert. His registration system exists on paper only with the result that the situation has got entirely out of hand. We put the point in a previous debate: In heaven’s name prevent this influx of natives; make it necessary for them to have a permit to enable them to board the train coming south, then we shall not be involved in the expense of sending them back when they come here and are unable to find work, and if they are sent back! That is not done. If a person wishes to consign meat by train or if he wishes to send other products he must have a permit. But the native can board a train and he can alight where he wants to without any document, without having to produce a permit indicating whither he is going and whence he came. The Minister has the authority to take action, he can adopt the necessary measures, but he does nothing at all. It is merely necessary for him to administer the law properly. I am sorry that municipalities in the Western Province, and I mention Paarl particularly, have not introduced a night pass system. We charge the Minister with having failed to compel the municipalities to do this. There is another difficulty in the Cape Province to which I should like to refer. We have a large number of natives here who are on the Voters’ Roll. They have the franchise and they vote for the three hon. members in this House who represent the natives. But for some inexplicable reason, because they happen to be voters they are treated differently from the other natives and they are exempt from any pass system with the result that the police are experiencing difficulty in this regard. Repeatedly you find that a native in an urban area simply says he is a voter and that it is not necessary for him to have a service contract. Then the police must find out the following day whether he is a voter or not, a procedure that involves considerable trouble. This morning I beg the Government to take action. Let us have a system of uniform legislation for all the provinces. Let us compel hostile municipalities to act. We are asked, while the Minister is neglecting his duty, what the position is going to be under present legislation when hundreds and thousands of coloured soldiers return from the army and look for work. Whether it is the dairy industry, the building trade, the motor business or any other concern to which the coloured soldiers wish to return, in many instances they will find that natives have taken their places. I am mentioning only a few occupations. I do not know what the Government intends to do in this connection; whether it intends to send back the 40,000 natives who have flowed in here during the last few years. The Minister will be able to tell us. I maintain that he will experience difficulty when the war is over. The further question that I want to put to him is this: Under the native laws of 1936 it is provided that the child of a native by a coloured person is a “native”. My question to the Minister is whether it is his policy and the policy of his department that under the Natives Urban Areas Act the child of a native by a coloured person should be a “native.” I should like to have an explanation from the Minister in connection with this matter. Is he going to apply the definition in the Act of 1936 to urban areas? Why are we asking this? For the simple reason that we know what the position is. Thousands of male natives come here and are absent from their homes and we are creating a new coloured population and a new coloured corps of voters.

They still remain natives.

I should like the Minister to make such a statement.

You should know.

What the hon. member knows, and what I know, is that the segregation laws of 1936 in respect of rural segregation contain a definition that a child of a native and a non-native is a “native”.

That is correct.

But I ask the Minister now whether he is going to apply this definition or another definition in connection with the Urban Areas Act. I am somewhat apprehensive that he will not be able to apply that definition that a child of a native by a non-native is a “native”. The hon. member for Vryheid (Dr. Steenkamp) will no doubt also welcome a reply by the Minister. That will suffice for me. The coloured people on the Voters’ Roll numbered 21,000 in 1910. A few years ago the number was 27,000. Now there are 55,000, and when this definition to which I am referring is not applied to the children of natives by non-natives the figure will increase still further to 75,000 or 100,000. Does the Minister not see what the result is of such a lax policy—the creation of a new coloured population—because no matter how you interpret the definition for franchise purposes that the child of a native by a non-native is a “native” yet in everyday life there will in the next 15 or 20 years be in the Western districts large numbers of coloured people whose presence will be due to the herding of tens of thousands of natives and coloured people in the towns. This is the practical sequel and consequently the sooner we put a stop to the business the better; and my request to the Minister this morning is: Do not pay lip service to segregation and then carry out steps that make the urban segregation of natives a farce.

The hon. member for Moorreesburg (Mr. F. C. Erasmus) was the member who asked me to introduce the Consolidation Act. At the second reading he contested the Bill, and he is again hitting out at me a little at the third reading. Well, I will reply as far as possible to the questions which were put to me. But I must honestly say that I do not think this is the right time to raise these points, when we know that no change can be brought about in the Act. With regard to the pass laws, let me just say this. Never before in the history of the Cape Province has a travelling pass been applied to natives, and if the members of the National Convention did not find it necessary, then I do not think it would be right at this stage to introduce a general pass law in the Cape Province. I think my hon. friend knows himself that it would Cause an enormous amount of difficulty and bitterness. As far as this matter is concerned, you can go forward but there is no going back. He knows it to be impossible, and I must frankly say that we do not intend introducing a general pass law here in the Cape Province. With regard to the registration of service contracts, that system is in operation in Cape Town, at Stellenbosch and also at Worcester.

Only within the Cape Town Municipality.

I am coming to that. The native must obtain permission to enter these areas and then he can make application for a pass to look for work. He must first get permission to come in, then he receives a pass to go and look for work. If he does not find work, he must leave the area.

The Cape Town municipal area?

Yes, but that measure is also applicable elsewhere under the legislation which I put through last year. They have the power to make it applicable to divisional council areas.

But they do not do so.

In certain cases it will be made applicable in divisional council areas close to the Cape. It is the whole purpose of the Act.

Can the native enter if he has not yet obtained employment?

He must obtain a permit to look for work.

He must go to Langa to ask for a permit.

Until such time as there is a receiving depot here and a labour bureau where these people can be brought in order to be registered and issued with a pass to look for employment, it is impossible to exercise control. This is the reason why I piloted the Bill through the House last year in order to establish a receiving depot together with a labour bureau which can serve not only for Cape Town but also for the small municipalities which border on the Cape, and where the depôts can fall under the control of the Cape Town Municipality, and where the small municipalities can bear their share of the costs. As I said on a previous occasion, we have found that it will take five years to build that depot. It is going to cost £160,000, and I felt that we could not wait for five or six years to bring the matter under control. What has my Department done? I acted immediately and tried to obtain cottages from the Defence Department. Then it was a question of money because the municipalities said that they were going to spend £160,000 in establishing a permanent depot and labour bureau, but it could not be expected of them to spend £8,000 on a temporary measure which within a year or two would be valueless. The Department then got the money to enable the municipality to establish the temporary hut-depôt, and the plan is to receive the natives in the depot; there they can obtain permits to look for employment, and there they must live until such time as they have obtained employment, and then it is the intention of the labour bureau to send them out to the various places where they can obtain employment. Until such time as that organisation is functioning, it is impossible to exercise effective control.

What about the rural towns? They are also streaming in there.

As I said, under the Act which the House passed last year, I am also empowered to apply the Act to divisional council areas.

And in the meantime may they just stream in?

It was for that precise reason that we obtained the cottages from the Defence Department so that the municipality would be in a position to make a start.

Would it not be better to exercise control at the places where they board the trains?

My hon. friend knows that where we have no general pass law, we cannot do so. You have no right to prevent a man from buying a train ticket. Any coloured or native has the right to purchase a ticket. He enjoys that right. I discussed the matter with my colleague, the Minister of Transport, and we can do nothing about it.

Did the Minister of Transport refuse to help you?

No, he did not refuse assistance. I put the position to him and he explained to me that today it is the law. If the native has obtained his employment under his pass, then that contract must be registered, and if he does not obtain employment within a reasonable period, then he must leave the area.

Are you not willing to take legislative power to control the position? You tell us that we cannot prevent their boarding the trains. Are you unwilling to take that power? We will assist you.

To prevent a man from buying a train ticket?

Yes.

Then you mean that the native cannot purchase a ticket unless he obtains a permit?

Yes: It was always the position in the Transvaal.

Yes, but my hon. friend knows that the position in the Cape has always been different to that in the Transvaal.

In other words, you do not want to change it.

It has never been deemed necessary to do so in the Cape, and in my opinion it would not be the right thing to bring about a change. I am afraid that it would make the natives feel that they are being suppressed.

Are you worried about the native’s feelings?

I fear that if we were to take this step, the native would feel that further Measures will be applied to him which are calculated to suppress him and that can only serve to cause more bitterness between the white and black.

But it is surely justified in the light of the migration which is taking place today.

Before this they were also streaming in.

But not on the same scale.

Í agree that it was not on the same scale as today, but there has always been a migration towards the urban areas, and especially in war-time it is difficult to deal with the matter on account of lack of personnel.

But you simply let these things develop.

If the native commits an offence he can be punished if he fails to comply with the provisions of the law, that is to say if he does not leave the place immediately after failing to obtain employment. There are no curfew regulations functioning in any of these places. My Department leaves it to the municipalities to ask for the application of these regulations. We do not go to the municipalities to ask them if they want the regulations applied. They have the right to ask me to apply the regulations. The initiative must come from them.

But the Cape Town Municipality is crammed full of negrophilists; they will never do it.

My hon. friend must remember that the voters in the Cape elect the council members. It is their affair, and if things are going as badly as my hon. friend asserts, the voters would oust those people. Up till now the policy has always been that we have waited until the municipality concerned has asked us to apply the regulations.

If that is the case you will wait in Cape Town until the cows come home.

The small divisional councils and the small municipalities in the vicinity are now co-operating to make provision for the housing of natives. As soon as there is proper provision the registration system, to which I have referred will be applied in these areas, and the Cape Town Municipality will then administer the whole system. I think my hon. friend also spoke of the position at Paarl. I do not think the registration system is functioning in Paarl.

Will you force them to do it in Paarl?

Before this the municipalities were urged to take proper steps in that direction and the matter is receiving their attention.

What steps are they taking?

They have been asked to carry on with the matter, and they are now busy with it. In any case I will make investigations.

It looks to me as though you are sheltering behind the municipalities.

I understand very well the reason why the hon. member for Moorreesburg made this speech. They want the world to know that although they agree with the consolidation of the Act they do not agree with the principles of the Act.

No, we support the principle of segregation in the Act; only it is not carried out.

I thought my hon. friend wanted to make it clear that he welcomed the consolidation but that he did not agree with the act as consolidated.

Yes. There are certain points with which we do not agree, as for example the application of the curfew regulations.

That I can understand.

Then you agree with us; you must come over and sit on this side.

No; I am man enough to say what I feel and what in my opinion is the right policy in everybody’s interest. My hon. friend raised objection to the fact that the laws are not made equally applicable in all the provinces. This has always been the position; at the coming of Union it was laid down ….

We did not have the Urban Areas Act at the coming of Union; we only got it in 1925.

The rights which the native then enjoyed in the Cape Province and which he did not have in other parts, were accepted by everyone. It was accepted that those rights should not be taken away from them. As regards the census—and there I think my hon. friend has the right to criticise me— it is true that that Act has not been carried out during the war. Let me say this; the last census was taken in 1938. Before the two years were up the war broke out. When I became Minister it was very evident that my predecessor was convinced that the municipalities did not have the staff and the organisation to carry on with the census during the war years. That position was accepted by my predecessor. When I became Minister I immediately investigated the position. I saw what the difficulty was, and I say that my hon. friend has every right to criticise me, but under the circumstances I could not force the municipalities because they did not have the staff and the organisation. When the general 5-yearly Union census took place, it was found impossible to compile the native census, and only the non-European census was completed. There also the provisions of the Act were not complied with, due to war circumstances. The municipalities explained to me that they were not in a position to complete the bi-ennial census, but I will go into the matter again immediately because I agree with the hon. member that it is absolutely essential to have the figures. You cannot deal with the matter unless you have the figures available. As regards the nass laws, which according to my hon. friend have not been carried out, let me just say this. We saw how in the Transvaal 345,000 natives landed in gaol within three years in some cases for trifling offences. The gaols became packed with young natives who were condemned on account of offences which were not of a serious nature. There they became corrupted because of their being in close contact with hardened criminals. There is the further argument that they then lose their fear of imprisonment, and for that reason the pass laws were not abolished, but for a time my predecessor said that he would endeavour to see if matters could be improved on. It was the policy of my predecessor, and up till now I have not changed that position. I think that I have now replied more or less to all the points.

Motion put and agreed to.

Bill read a third time.

The Committee has to consider the taxation proposals on income tax, excess profits duty, fixed property profits tax, personal and savings fund levy, stamp duties, excise duty on beer and stout and customs duties; the Committee has leave to bring up a report forthwith instead of on a future day.

Income Tax (Normal Tax and Super Tax).

The Committee proceeded to consider the proposed income tax (normal tax and super tax).

I move—

1. (1) That, subject to the provisions of Act No. 31 of 1941 (as amended) and of an Act to be passed during the present Session of Parliament amending that Act and subject to such definitions, conditions, exceptions and exemptions as may be provided in the said Acts, there shall be paid as from the first day of July, 1945, on all incomes received by or accrued to or in favour of or deemed to have been received by or accrued to or in favour of all persons from any source within, or deemed to be within the Union—
   1. (a) a tax (to be called the Normal Tax), the rates of which for the year of assessment ending the thirtieth day of June, 1945, shall be—
      1. (i) in the case of companies the sole or principal business of which in the Union is mining for gold, for each pound of taxable income, three shillings;
      2. (ii) in the case of companies the sole or principal business of which in the Union is mining for diamonds, for each pound of taxable income, four shillings and sixpence;
      3. (iii) in the case of all other public companies, for each pound of taxable income, four shillings;
      4. (iv) in the case of persons other than those referred to in sub-paragraphs (i), (ii) and (iii), for each pound of taxable income eighteen pence increased by one one-thousandth of a penny for each pound of the taxable income in excess of one pound, subject to a maximum rate of three shillings and threepence in every pound: Provided that for a married person the rate for each pound of taxable income shall be fifteen pence increased by one one-thousandth of a penny for each pound of the taxable income in excess of one pound, subject to a maximum rate of three shillings in every pound: Provided, further, that there shall be added to the amount of tax calculated in accordance with the preceding provisions of this sub-paragraph (including the first proviso thereto) a sum equal to fifteen per cent. of the het amount arrived at after deducting the rebates provided for in Section 13 of Act No. 31 of 1941 from the amount of the tax so calculated;
      5. (v) in the case of any company or person other than a company who derives any portion of his income from mining in the Union for gold, in respect of each pound of the taxable amount so derived (exclusive of amounts chargeable under sub-paragraph (vi)), a percentage determined in accordance with the following formula: in which y represents such percentage and x the ratio, expressed as a percentage, which the taxable income derived from mining for gold bears to the income derived therefrom;
      6. (vi) in the case of any company which derives or has derived any portion of its taxable income from mining in the Union for gold, in respect of each pound of any amount included in its taxable income in respect of excess recoupment of capital expenditure, a sum equivalent to the amount by which the average rate of normal tax paid by the company for the period from the first day of July, 1916 to the thirtieth day of June, 1945, exceeds the rate prescribed in sub-paragraph (i):
      Provided that the tax determined in accordance with sub-paragraph (v) or (vi) shall be payable in addition to any tax determined in accordance with sub-paragraphs (i), (ii), (iii) and (iv); and
   2. (b) a tax (to be called the Super Tax), the rates of which for the year of assessment ending the thirtieth day of June, 1945, shall be—
      For each pound of the income subject to Super Tax two shillings increased by one four-hundredth of a penny for each pound of such income in excess of one pound, subject to a maximum rate of seven shillings and sixpence in every pound: Provided that there shall be added to the amount of tax calculated in accordance with the preceding provisions of this sub-paragraph a sum equal to fifteen per cent. of the net amount arrived at after deducting from the amount of the tax so calculated, a rebate of two hundred and ten pounds.

A number of amendments will be proposed from this side of the House on Resolution No. I, especially in regard to paragraph (iv) but before these amendments are moved there is one matter on which I am rather worried that I should like to bring to the notice of the Minister. I have before me the latest report of the Commissioner of Inland Revenue. It gives us details in connection with the various taxes mentioned in Resolution No. I. The gold mining tax the companies tax, diamond mines, the ordinary normal income tax, the super tax, etc. Parliament and the public of South Africa are dependent on this annual report for information regarding taxation, and I find a serious error in this report, an error that stultifies all the details covered by this report. I should like to ask the Minister what steps he intends to take to rectify this error. If we turn to page 26 we find that No. XXXII sets out the amount of taxable incomes under each of various heads, and the taxable income from the gold mines is given as £13,400,000. In the previous year the amount was £33,000,000, and we felt concern at the thought that the taxable income of the gold mines could have dropped in one year from £33,000,000 to £13,400,000. Then I turned over to page 17. where the particulars are given in connection with the tax that the gold mines paid in that same year on taxable income, and there we find that for the year 1943 they paid in income tax alone more than their taxable income. They paid £13,900,000 and, in addition, the special gold mines tax of £8,000,000. The taxable income is given as £13,400,000 but here they are paying a total taxation of over £21,000,000. I then consulted the Commissioner of Inland Revenue in connection with it and he told me that a mistake had been made. He said that the figure of the taxable income of the mines should not be shown as £13,000,000 but at least £10,000,000 more, that is to say £23,000,000. One can well understand that a mistake of that description in this annual report renders valueless all the figures contained in it. We can absolutely make no use of the book neither this year nor in the future, and the Minister will readily appreciate what the result will be when after a year or two reference is made to this annual report and it is continually found that the figures given here are wrong. I should now like to ask the Minister what he intends to do in order to correct the error. The printing of this report cost £147. I want to ask the Minister whether he does not consider it desirable to issue a fresh annual report. We cannot afford to allow the present annual report to remain as authoritative for the future. An extra expenditure of £147 will be involved, but with an eye on the future I believe it is necessary that this mistake should be corrected, and the only way to do this is to publish a new réport. I regret that this should have happened, but it appears to me the course I have recommended is absolutely necessary. Now there are a few other points that I should like to bring to the notice of the Minister. He has presented certain figures to us in connection with super tax, in connection with taxation paid by people with an income exceeding £5,000. I hope I understood the Minister aright when he told us that the total taxable income of people with an income of over £5,000 is £11,500,000.

No, I said that of the total amount we receive from individuals, namely something over £11,000,000, the amount of £5,000,000 is derived from individuals with an income of £5,000.

Is it right of the Minister to put it in that form? It makes only one impression on the public, that of the total income of £11,000,000, an amount of £5,000,000 comes back to the Treasury.

That is not what I said.

That is the impression that was created. I think it is desirable that we should direct the attention of the Minister to page 29.

That is not what I stated.

The fact remains that the taxable income for individuals with an income of over £5,000 is £15,000,000 in the case of super tax only. In respect of that they pay only £3,600,000. The average super tax that individuals with an income of over £5,000 pay is 4s. 8½d. In regard to normal tax—we find that on page 24—the revenue from normal tax over £5,000 is only 26d. or 2s. 2d. That is to say the total normal tax and super tax that individuals pay who have an income of over £5,000 is only 6s. 10d. in the £. I think it is desirable that the general public should know that people with an income of over £5,000 pay in normal tax, according to the figures provided in this report, an amount of 2s. 2d. Super tax averages 56d., so it is altogether 6s. 10d. The whole attitude of this side of the House is that persons with an income of £5,000 can contribute more to the State than 6s. 10d. in the £ in normal and super tax. The hon. member for Houghton (Mr. Bell) gave certain figures, and I want to refer him to page 59, where we get the super tax paid by persons in receipt of an income exceeding £20,000. They number 96. They pay 98d. in super tax, or 8s. 2d. in the £. The figure for normal tax is not given, but the average figure for persons over £5,000 is 2s. 2d. Add that and you get 10s. 4d. The Minister now wants to make us believe that this tax is higher than in any other part of the world. We simply do not accept that.

No, I did not say that.

He gave the impression that we imposed a terribly heavy tax on persons with an income in excess of £5,000 a year. With these figures from the Commissioner of Inland Revenue before us we simply cannot accept that.

Then we have, in addition to that, the personal and savings fund levy and the provincial taxes.

Unfortunately they are not given here. I am only referring to the two big taxes, super tax and normal tax. Since that time a surcharge has been added. Persons with an income of more than £20,000 pay according to these figures, not much more than 10s. in the £, but I should like again to ask the Minister what he intends to do in respect of these errors that appear in the annual report and that render it valueless to Parliament and the public. I think the only way to rectify it is to have a new report printed immediately.

I wish to express my regret for the mistakes to which my hon. friend referred. We were anxious to make the report available and consequently those few mistakes crept in I propose having separate sheets printed indicating the mistakes, and they can then be sent to everyone who has already received the report. In the meantime there has been no distribution of the report to the public. Before we do that we will insert the sheets containing the necessary amendments. I do not think it is necessary to have the whole report reprinted. We can indicate the mistakes by means of errata, and that will cover the position. I regret that the mistakes were made, but my hon. friend knows under what difficulties we work and that we wanted to make the report available as soon as possible. As regards the position in connection with people with an income of over £5,000, the general position is this, that I often explain that if you come to the top our tax is approximately three-quarters or more of what it is in other like countries—not the highest in the world. That is when one comes to £30,000 and £40, 000. When we come to incomes of £5,000, our tax is approximately 40 per cent. of the tax levied in other parts of the world. I give that percentage approximately, because I have not the exact figures before me. People with incomes of £5,000 are not so badly treated in South Africa in comparison with other parts of the world as people with £30,000 or £40,000. When we come to people with £700 and £800, our tax is much lower than in other parts of the world. Take the people with an income of £5,000. Such a person’s normal tax is 20d. in the £ and his super tax 36d., thus altogether 56d. If we take the average of persons having between £5,000 and £40,000, the weight is at the bottom. The largest number are round about £5,000 and the average amount payable is thus nearer the amount payable by people with £5,000. As my hon. friend said, that average amount is 2s. 1d. for normal tax, and 4s. 8½d. for super tax. But that does not take away from the fact that the tax rises very sharply above £5,000.

On £20,000 it is 8s.

Plus normal tax, plus all the other taxes in addition.

It is 13s. 3d. in the £.

My hon. friend is perhaps ohe of the persons who have to pay that amount. It is probably correct that it is 13s. 3d. in the £. I cannot quote the figures now. It is possible, if we take into account normal tax, super tax and all the other taxes, that the figure will be 13s. 3d. It is a fairly high figure. I therefore again wish to make the point that at the top the tax rises steeply. I do not say that our tax there is the highest in the world or higher than in other countries, but it rises steeply there and approximates nearer to taxes in other countries. If we get to £5,000, our tax compares favourably with that of other countries, and if we come to £700 and £800 the comparison is much more favourable as regards other parts of the world. I have already given the figures in this connection very often but I have not got them before me now. I think that is really all that my hon. friend wanted. I again wish to say that I regret that mistakes crept into the annual report and that we will do our best to correct them.

I wish to move the following amendment—

The Act of 1935 gives us a very clear definition of a farmer. A farmer, according to that Act, is a European who in the opinion of the board in ordinary circumstances derives his sole or chief income from farming operations carried on by him in the Union of South Africa. On previous occasions we heard that the Minister of Finance expressed the sentiment that in imposing this tax he did not want to touch the farmers as such, but that he felt that there was a certain section of the community who misused the privileges which he correctly applied to farmers, taking into consideration the circumstances in which they have to operate. There are people who misused those privileges, and for that reason the Minister wanted to exclude them. But he had a difficulty, namely that he did not know where to draw the line between bona fide farmers and those who just used that calling to find a means of investing their superfluous money. On 24th February of last year the Minister of Finance in a speech very clearly told us that his aim was not to touch the bona fide farmer. Inter alia he said the following—

I agree 100 per cent. with the Minister of Finance that that class of person certainly ought not to share the privileges granted to farmers which were created through the force of circumstances under which they have to make a living. The Minister will notice that at this stage we do not go further in the amendment we propose than only to plead with the Minister of Finance for the acceptance of this principle. We are not now concerned with the machinery required for the motion, how to let this tax come into operation, as the Minister himself said on a previous occasion. At a later stage we shall also deal with the machinery. At this stage we only want a statement from the Minister to the effect that he agrees that this principle should be adopted. We are at one on that. It is not often that we in this House agree with each other, but in this case, if words mean anything, the Minister of Finance agrees with our opinion that the farmers should have these privileges which are extended to them and that he only wanted to exclude those people who misuse it. If we agree on that basis, we want to press the Minister of Finance to accept this amendment, so that at a later stage we can consult each other when we make suggestions from this side as to how to institute the necessary machinery; and then the Minister will have no opposition from this side, but will have our support. The grounds on which we direct this plea to the Minister as to why he should accept this amendment is that as regards the development of agriculture, that has stood still in recent years. There were two reasons for that. The first is that the necessary implements, machinery, material, etc., required for the development of the farming industry were simply unobtainable. Where we perhaps could still have obtained it the prices were so tremendously high that the farmer simply felt that he was not justified to incur that expenditure, because he would be loading himself with too big a capital burden. He did not see his way clear to acquiring those necessary things at these tremendously high prices. For that reason he did not do so, but in the majority of cases the stuff was not there for him to buy.

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

When proceedings were adjourned I was busy pointing out the grounds on which we are pleading with the Minister to restore the position as it was before he imposed this new tax of his. I pointed to the fact that development had stood still in recent years. I now wish to come to a second reason, namely that the agricultural industry as such provides employment and a living for approximately 35 per cent. of the European population of South Africa, but this 35 per cent. only contribute 11.8 per cent. to the national income. As against that, 7.4 per cent. of the European population are concerned with trade, and trade contributes no less than 16.6 per cent. to the national income, while for industry the figures are 8.1 per cent. and 17.5 per cent., and 1.3 per cent. are concerned in the mining industry and contribute no less than 23.6 per cent. to the national income. Therefore you will see that the agricultural industry which provides occupation for the largest part of the European population in South Africa proportionally contributes a very small amount to the national income of the country. And in the days which are past we learnt, and we realise it still more today, that agriculture is the axis on which the life of the whole nation turns, and therefore we must assist this industry with special measures not only to remain in existence but to show progress, because if the one cog of the community is defective, the whole structure of the nation must suffer under him. This portion of our population, the 35 per cent. of the European population concerned with agriculture, have a gross income of £51,065,000. From that a tremendous sum has to be deducted, namely £17,600,000 for cash wages, £15,608,000 for production costs. That leaves an income for that portion of the European population of South Africa of £17,857,000. From that still has to be deducted interest on mortgages and interest on borrowed money, to a further amount of £3,340,000. That leaves an income for this large section of the community, 35 per cent. of the population, of £14,517,000. That was not the position before. We see how agriculture has gradually contributed less and less to the national income. According to the statistics for 1924-’25 our agriculture contributed 19.4 per cent. as against the 11.8 per cent. today, while trade then represented 18.1 per cent., manufacturing 12.3 per cent. and mining only 17.6 per cent. It is therefore an incontrovertible fact that agriculture in the short period between 1924-’25 and 1939-’40, which is the last year for which figures are available, has retrogressed considerably; from 19.4 per cent. of the national income it decreased to a mere 11.8 per cent. Many will perhaps say that that is because agriculture as such did not develop. No, it did in fact develop. If we take the period from 1924-’29, and we compare it with 1935-40, we find that the production in agriculture increased by not less than 41 per cent. In spite of that, the value only increased by 21 per cent. Just take one branch which is significant, the dairy industry. In the same period the production in dairy products increased by no less than 296 per cent, but the value only increased by 58 per cent. We thus have here the incontrovertible proof that agriculture is steadily going backwards, that its income does not keep step with rising production costs, and therefore we ask the Minister, in view of the prevailing condition, the steady retrogression of the agricultural industry, in view of the absolute necessity for development in the sphere of agriculture, that he should restore the position which existed before he levied this tax. Agriculture, which proportionally contributes such a small portion to the national income, while such a large section of the population are concerned with it, must be assisted. The Minister now only allows 30 per cent. of income to be used for improvements. We ask him to restore the old position. Such a step will be welcomed by all the interests in agriculture. That step will not only be welcomed but it is absolutely essential if we want a sound agricultural industry here. We talk a lot these days about social security. By means of this concession the Minister will be doing something in that direction, and not only will it be appreciated by the people receiving the concession, but it will contribute to the social security of that large section of the population. I move my amendment.

I want to point out to the hon. member that in my opinion it would be better for the hon. member to move this amendment in Committee of the Whole House on the Bill which will give effect to all the resolutions now being considered by the Committee of Ways and Means. May I refer the hon. member to the wording of the paragraph now under discussion. It begins—

I think it would be better if the hon. member were to move the amendment when we are in Committee of the Whole House on the Bill. The hon. member can move it here if he likes to but I suggest that it would be better to do it in Committee of the Whole House. He can then discuss the matter more widely.

As I have already stated, we intend to move further amendments when we deal with the Bill. If however you read the further portion of the same paragraph you Will see that in principle provision is made for exceptions. For that reason we should now like to plead for this exception.

I also wish to move an amendment which reads as follows—

This motion is so clear that practically nothing remains to be said about it, except that I well remember that the Minister of Finance last year intimated that in principle he has no objection to it.

No, I did not say I have no objection to the principle. I said I would investigate the matter.

Does the Minister in fact object to the principle?

I said I would consider the matter.

If one is willing to consider a matter he gives the impression that he has no objection in principle to it, because if one objects in principle, why should one consider anything to which one objects in principle? And why can the Minister have an objection to it in principle, because it is something which is already being done; it is something which he already permits in the Railway Department. The railway official every month contributes a certain amount to what is called the Sick Fund. The Minister permits that, and he can have no objection in principle to these proposals because he permits it in those cases. I quite agree with that. In principle I am opposed to the health of the nation being taxed. I do not think that the Minister, if he is a right-thinking person will differ from me. I wish to approach this matter in the first place from the point of view of the person who has illness in his family and who is consequently seriously damaged financially. I wish to confine myself to people who have a small income, people who receive salaries of approximately £400 per annum. A person like that may probably be able to put aside £10 or £20 every year, but to the head of any such family it is a nightmare when he thinks that he may perhaps have illness in the family. It may perhaps happen that his wife or one of the children have to undergo a serious operation which may cost them £100 to £200. Very often that person has not the money. He must borrow money to pay the costs. That affects the man’s whole psychological condition; it is a matter of conscience with him. If one of the members of the family becomes ill every father wishes to do the best for his wife or for his child, so that his conscience can be clean. We now find that this man must pay tax on that money which he had to pay for the operation, or which he borrowed to pay for the operation. That is my first reason. The second reason affects the health of the nation in general. In principle I am opposed to the national health being taxed. I think for example of the infantile paralysis we had last year. Mostly children were affected. Every parent of such a child fears that the child will be crippled for ever, and he does not mind what he spends, whether his income is £200 or £2,000, in order to do the best he can for that child. But it is also in the interests of the State that such a man will make the best provision possible so that others will not be infected. Just look at the typhus cases, the figures of which I happen to have before me. In 1943 there were 521 deaths In 1944 there were no less than 2,600. Take in addition a disease like smallpox. It is in the first place in the person’s own interest that he should do everything in his power to protect his health; in the second place we must have regard to the health of the nation as a whole; and if an individual spends money to promote health, we should not make him pay taxes on it. My third point is the following. It is already accepted in principle in the Department of Railways. Those officials contribute a monthly amount to the Sick Fund. They are allowed to deduct that as a rebate, just as insurance policies can be deducted. I cannot see what objection the Minister can have to this. If the Minister wants to argue that he cannot change his taxation machine at this moment, due to the war, I wish to remind him that the health of the nation is one of the first things we should keep in view in the new world we wish to have after the war, and in view of the social security we wish to ensure to our people. Sickness does not wait until the war is over. It comes unexpectedly. For example, I think of the excellent investigation instituted by the Health Commission. It is worth-while studying that report carefully, and although the Prime Minister had objections to that report, even before it appeared, the Minister of Finance, when he reads that report carefully, will arrive at a deep realisation of what health means to the nation. For that reason I proposed my amendment and I hope that he will accept it.

I should also like to move an amendment but I wish to give my reasons for moving it beforehand. I should like to ask the support of the Minister of Finance to extend the rebate of £5 for each child up to the age of 18 years, to children who are older than 18 years and who go to an educational institution. When a child reaches the age of 18 he generally goes out to work for himself, but under present conditions we like to give our children the best possible education by sending them to a university, and I should like the Minister of Finance to consider what it costs the parent to give the child that higher education after it reaches the age of 18. I am convinced that if the Minister leaves a matter like this to the free vote of members of Parliament, not more than half a dozen will vote against the motion. I think that most members who have any experience at all of what it costs to send children to a university will agree that it is necessary to have the rebate we have today for children, but that it is still more necessary to have it in regard to those children who go to the universities or to other educational institutions after the age of 18 years, in order that we may encourage the parents and enable them to make use of those opportunities. If the parents are very rich the rebate will not be applied to them. But I think that the Minister will agree with me that it is essential in the interests of the country that our children should be educated as far as possible, and seeing that we wish European civilisation to be maintained here at the best level possible, we must do something like that. As civilisataion develops we find that people have fewer children in our country. The birth figure is sinking and the reason why people do not have more children is because it costs them so much to give those children a decent education so that they can have a proper opportunity in life. This is an opportunity for the Minister of Finance to make things a little easier for the parent. Take a parent with an income of £600 or £700 per annum who has a few children at university. The Minister of Finance himself knows what that costs, and he knows how essential it is to meet such parents. If we make it possible for such parents to send their children to the university we help them to enable their children to become independent citizens who will become payers of income tax. The birth rate will rise again. I am one of those who think that the State should maintain all children more than two in a family. It will be an asset to the State, because at this stage of the history of the world we need it. I am speaking here only about a small concession. It will not amount to a large figure affecting the Treasury, because many of the parents who send their children to the university are so rich that it will not affect them.

Why not?

They receive the rebate, but it disappears again. It will also not affect the parents whose children have borrowed the money. It will be deducted from the taxpayer who provides for the child. I do not think it is necessary for me to say more about this. It really seems as if the Minister of Finance will accept this motion. The amount which he will lose is not so large, and if the Minister accepts this amendment he will perform a good service to the country. He will promote family life in the country. He will also help the parents to give the children a decent education and to make them useful citizens of the country. I therefore move the following amendment—

I think it is fairly clear. I do not think it is an unreasonable amendment and I submit it to the Minister of Finance for his favourable consideration.

The general attitude adopted by the Government is, as I understand it, that as far as possible the ex-volunteer shall not be prejudiced financially on his return to civilian life as a direct consequence of his having proceeded on active service. That is a principle which I think every member of this House will uphold. I have a case here which I think may be typical of many similar cases, in which I feel that the hon. Minister may be able to help to a considerable degree. Before enlisting this particular soldier had a business with a capital of approximately £2,000. He worked in it himself and when he joined the forces he left a manager in charge, but owing to war circumstances it proved impossible for the business to continue and it was temporarily closed down. His pre-war standard, on a profit basis, was £333, to which was added an abatement of £250, as a limited company, making £583 in all. That is, no excess profits tax would be charged unless his income exceeded £580.

May I point out that we are not discussing excess profits tax, but only normal income tax and super tax.

I thought that was precisely what I was doing too.

I understood the hon. member to discuss the excess profits tax.

It is the matter of the income and the tax which this particular business will have to pay by reason of being treated as a new firm.

The hon. member will find that in No. II of the proposais before the Committee there is an item for excess profits tax and it might be better to discuss it under that paragraph.

Very well, Sir, I will do that.

I want to make an appeal to the Minister of Finance to accept the proposal of the hon. member for Swellendam (Mr. S. E. Warren). Last year I broached the same matter, and at that time the Minister told me that it is a capital investment. If a child is kept at the university after the age of 18 years by the parent in order that he may enjoy a university enducation, it is a capital investment. I am convinced of that and I now want to address the Minister of Finance as man to man.

As one father to another father.

I am convinced that the Minister has had the same experience as I and many others have had, that children who have not the means to enjoy education approach us with the request for assistance. I am convinced that he has already assisted Afrikaans boys and girls to receive an education. He has naturally found that it costs him a great deal to help them. That is the experience we all undergo. Last year he told us that every one of us assumes obligations, although we are not compelled to do so. So although hon. members may say that neither the Minister of Finance nor myself have experience of children, I know that he is contributing his share to assist the children of less privileged parents to receive education. He knows what it costs to do this, and I want to ask him whether it is not a good investment to put a child in a position to be eventually independent. If such a child is not assisted he will very probably retrogress and never become an independent citizen and a taxpayer to the country. But by being allowed to follow that course the child eventually becomes an independent citizen, and he will ultimately be able to make his contribution to the development of the country. Now I want to ask the Minister this. Amongst our taxpayers are those who are unable to buy land and who are unable to hand on businesses to their children, and can only give them their education. A person may draw a salary of £1,600 to £2,000; but if he has two or three children at the university and they reach the age of 18 years they constitute a considerable burden to him, and yet he receives no deduction as far as income tax is concerned. The Minister of Finance is in agreement with us that it is in the interests of the country that the standard of our social life should be stabilised. We dare not neglect that section of the community that gives permanence to society. A former Minister of Finance, Mr. Pirow ….

He was never Minister of Finance.

As Acting Minister of Finance he stated one day that the State should be accommodating to those with an income of from £400 to £700 or £800 a year. These are the people who provide stability to society. They are people who cannot buy farms, but who can only send their children to the university to be educated. They may not be able to give their children higher education. These are the people we want to meet, and the Minister of Finance should help us to meet them. We have those people who perhaps own a farm and who have three or four children. Such a person is not in a position to purchase further farms for his sons or daughters. He can, however, send those children to the university over a period of years so that they may eventually find a niche in life. We should encourage such a parent. If we as South Africa’s population value the standard of education of our people so that they will not need to fill an inferior position, then we should assist the middle class man to care for his family so that the children may one day be independent. Accordingly, I ask the Minister of Finance to accept this amendment. It is a very reasonable proposal and I am convinced it will not cost millions. I wonder whether it will even cost hundreds of thousands; I wonder whether it will cost more than £100,000 for the State to make this sacrifice in order to place the taxpayers in the position to receive this rebate in respect of children over 18 years of age who are sent to a university or some other educational institution, so that they may become honourable citizens and eventually taxpayers. For example, we find that last year application was made by the Help-mekaar to the extent of £100.000. The Helpmekaar could advance only £6,000 in the form of bursaries to such students. This shows the necessity that exists and how difficult it is for these people to send their children to the university. The State ought at least to contribute this share. I am convinced that if the Minister is not such a stickler for his taxes he will agree to place these potential citizens of ours in a position to become persons who will be a great asset to the State. When I proposed something of this sort in the House last year it was stated in a railing way that the Minister of Finance would have no sympathy, because he himself has no family. On that occasion he said we all have assumed obligations, and I know he has done that. I am convinced that he has assumed many obligations and that many young boys and girls have been assisted by him. He knows how much it costs and how much greater is the burden on the parent who is keeping two or three children at the university so that they may eventually make a decent living. Accordingly, I ask the Minister of Finance to treat this motion of the hon. member for Swellendam (Mr. S. E. Warren) as urgent, and to adopt it.

Three amendments have now been moved from the side of the Opposition, and it may be as well if I say a few words on these amendments. In the first place, I should like to point out that it would perhaps have been better to propose these amendments when the Bills themselves are under discussion. At present we are only engaged in providing the scales of taxation. In the Bills provision will be made for deductions and exemptions. Thus the Bill really provides the occasion for a discussion of proposals of this nature. These matters have, however, been broached, and I shall therefore deal with them. Of course, in all three cases we have to deal with proposals that have already been discussed in the House more than once, and in connection with all three cases I have not modified my opinion since the last occasion on which they were discussed. In the first place we have the motion of the hon. member for Kuruman (Mr. Olivier) in reference to the rebate given to farmers in respect of capital expenditure. This matter arises out of the Budget proposal I made last year. I then pointed out that it was necessary to eliminate one of the methods of evasion, that this concession in connection with the income tax of farmers had been used on a fairly large scale in recent years for tax evasion especially by persons who are not farmers, and I stated further that it also operated against the interests of the bona fide farmers themselves, because without doubt it is a fact this method of tax evasion has encouraged people to buy farms sb that they might be able to lessen their tax obligations, and consequently the price of land has risen in an unhealthy manner. Undoubtedly, therefore, the existence of this means of evasion was not in the interests of the farmers. I therefore made this proposal last year, and I pointed out that in regard to a reduction for capital expenditure it is not possible to differentiate between the bona fide farmer and the non-bona fide farmer, but in order to meet the bona fide farmer I said I was prepared to modify my original proposal and to increase the deduction from 20 per cent. to 30 per cent. This was done, and I then considered, and I still consider today that this is adequate consideration for the farmers. It is an ample concession and I do not believe that persons who ask for more are really fostering the interests of the farmers. I think it is something that can be regarded as reasonable, and with which we must be satisfied. The second motion is in connection with medical and hospital expenditure. I think the hon. member for Gordonia (Mr. J. H. Conradie) first mentioned the matter two years ago.

It was the late member for Malmesbury (Mr. Loubser) who mentioned it three or four years ago.

I recollect particularly that the hon. member for Gordonia mentioned it, and I then stated that I would investigate the whole matter in the light of a similar provision that was made at that time in Canada. It was brought to my notice that something similar was being done in Canada. The matter was again mentioned last year, and I then stated what the results of my enquiry were. I said then it was very clear that considerable administrative difficulty was attached to the matter. The system in Canada became very involved and it was to a certain degree unsatisfactory, with the result they had to introduce amendments. To mention only one difficulty—I do not say it is insurmountable but it throws light on many of the proposals that are sometimes made for taxation relief—we must not forget that we do not all pay income tax on the same rate. A person with an income of £5,000 pays a higher rate than one with an income of £1,000. If both individuals had hospital expenses to an amount of £100 and they both had to receive a deduction of £100 on their taxable income, the concession would represent more to the wealthy man than to the less wealthy man. This is the difficulty you experience in connection with many of the proposals in trying to be accommodating in respect of a reduction of the taxable income. It may perhaps be possible to devise a formula to overcome this difficulty, but it is not easy. I mention this as only one of the administrative difficulties in connection with this matter. Last year I stated further that when I made a comparison with Canada it was especially clear to me that we have scales of taxation relating to individuals with comparatively small incomes—whom one specially wishes to assist in connection with such expenses— and that the scales are much lower than they are in Canada. That is what necessitated Canada—the considerable increase in income tax—to take this step, but in our position the same case cannot be made out. For this reason I have felt that the time has not arrived to make such a concession. I have already frequently stated that we shall probably reconsider the whole question of income tax in the forthcoming year. I do not know what the result of that will be, but I am quite prepared to reconsider this aspect on that occasion. But I cannot go into it further at this juncture. Accordingly, I am not prepared to accept the amendment of the hon. member for Kuruman nor the amendment of the hon. member for Albert-Colesberg (Mr. Boltman). Now I come to the amendment of the hon. member for Swellendam (Mr. S. E. Warren), and in this connection the hon. member for Gordonia addressed me as one unmarried man to another unmarried man. Just to show that I am not influenced in this matter by my personal circumstances I want to say at once that I do not share the feelings of my fellow bachelor, the hon. member for Gordonia.

Then you feel like a married man.

I have frequently pointed out that generally speaking the age of 18 is a reasonable age to stop the rebate to children, that by granting an extension of the period you will be assisting a relatively small number, you are helping only a minority of persons who are sending their children to the university, and you assist them in creating a capital investment for their sons or daughters and I cannot see any adequate reason why this special favour should be accorded to them. The hon. member spoke here of the desirability of encouraging university education. I shall, of course, be the last person in the world to oppose this. It is quite correct that I frequently had cases under my notice of individuals who required assistance in connection with university education, but I have not yet encountered a single case in which a student would have gone to a university if his father could have obtained the deduction of £5 in his income tax. I have never yet seen a case where the £5 a year made such a difference. The hon. member will admit that this cannot be the real difficulty in the way. If it is a matter of £5 it can always be bridged. I cannot for a moment see how a proposal of this character will have any relation to combating the fall in the birth rate. A means to that end may to a certain degree be family allowances, and we are moving in that direction. In a previous debate the hon. member for Gordonia argued for the institution of a fund for bursary loans and I stated I would be prepared to go into that. I must say that if there were funds and if it was a matter of £100,000, as I stated, the £100,000 would be much better expended on such a fund than by granting this rebate of £5, in the majority of cases to persons who do not need it. With the best will in the world to foster university education, I really cannot see that this proposal will contribute much in that direction, and consequently I am not prepared to accept the amendment.

It is perfectly clear the hon. Minister has wilfully thrust aside as impracticable the amendments from this side of the House. I associate myself with the three amendments that have been proposed. But what surprises me is that though the amendments moved by us are not based on any political foundation hon. members on the opposite benches do not support us. Those amendments are in the interests of hon. members on the other side just as much as they are in the interests of those on this side. They are in the interests of the population as a whole, because on both sides of the House we have children and on both sides of the House there are farmers, and the amendments are in the interests of the community as a whole. I am sorry that we have not gained any support from the other side of the House. That indicates that the true and genuine interests of the people are only cherished by this side of the House. Circumstances have changed. The cost of the war—which has almost come to an end— will decline. Circumstances are changing from day to day and in the course of this year circumstances will change on a very big scale. War expenditure will be less. Now we come here and we ask not for large sums but for three things in the interests of the people. In the first place we wish to plead for a concession in respect of the bona fide farmer. The Minister has his excuse. Well, we did not approve it when he brought it up and today we approve it still less. He wants to catch the man who is exploiting a concession made to the farmers in order to evade taxation. He wants to catch the man who is not really a bona fide farmer and who has seen an opportunity to deduct certain expenditure when he has a farm. In order to catch the rogue the bona fide farmer has to suffer. This is very unreasonable. Let the Minister rub it into the businessman who attempts, by resorting to farming, to evade taxation, and tax him double. It is not fair to allow this man to compete with the bona fide farmer who already is finding it difficult enough to dispose of his products. It is not fair in respect of this matter to treat the bona fide farmer and the other man in the same way. The Minister however, will not listen. I think he has a good understanding of the point but he is hitting the farmers who are already the slaves of the land; but let us leave that there. I then come to the rebate for children. Before a child has turned 18 the parents have not had any special expenditure in connection with it. The child is still in the parental home and expensive clothes are not yet required. But when the son or daughter has turned 18 the parents are by no means relieved of their responsibilities. The Minister knows this although he has no child. He knows that heavy obligations begin after a child is 18 years old. Only a small percentage of children leave their parents’ home at the age of 18. The great majority of children over 18 remain under the care of their parents. Then the heavy expenditure begins in connection with feeding and clothing and other things. A parent was telling me just the other day that the outfit for a girl going to the university for the first year was not less than £50, just for clothes and things. It is not only rich people who send their children to university, but the middle-class men. It cannot be denied that the majority of children who today attend the university are the children of middle-class men who slave day and night to give these children an opportunity to go to the university. If it costs £50 for clothes and if you reckon all the costs attached to the university by way of travelling expenses, the cost in respect of a child amounts to not less than £200. There are hundreds of middle-class children at the university, and these people find it difficult to pay. Does the Minister not wish that comparatively poor parents should send their children to the university? It will be a great loss to the State should the middle-class man say: “Away with learning.” Then the universities would be idle. The Minister definitely refuses to grant that big assistance to the children. The Minister is learned and highly cultured and one would expect him to be helpful in giving the children an opportunity to attend the university. A number of children of the more well-to-do people receive assistance. They receive loans and in this way they are assisted by other people. It will be of great assistance to poor children if the Minister grants this rebate. As far as concerns the third amendment of the hon. member for Albert-Colesberg (Mr. Boltman) with reference to hospital expenditure, that is a very delicate matter, and the Minister ought definitely to give special attention to that. People work hard year after year to have a home, but when a child falls ill in the family, or if another member of the family falls ill, no parent will hesitate to undertake the liability for hospital treatment even if it amounts to £200 or £300, up to everything he possesses. No parent would hesitate about that for a moment. But what is the result if they cannot pay? Must the child just die instead of being sent to hospital, or must the child remain an invalid for life? The Minister says that the rebate would not amount to a great total. Well then the Minister’s loss would also not be great. Let the Minister then give the concession. It makes for the health of the people. If the Minister fails to do this he must not be offended if it is felt that although he always is very cordial to us it does not pay to give any attention to that, because all the time the Minister does not deviate an inch from the course that he has struck, and he will not show any consideration. I feel disappointed about him not accepting these amendments.

I have listened to the Minister’s reply to the amendments. It appears to me that the Minister has made a proper enquiry in connection with the amendment of the hon. member for Albert-Colesberg (Mr. Boltman) and is not ill-disposed towards it; but he says that he has learned, especially by enquiring into the position in Canada, that when you give such a concession you are going to benefit the rich man more than the poor man. If, the Minister argues, people are allowed to deduct doctors’ bills and hospital fees from the taxable income, the rich man would benefit the more. It may be that is the case. We are, however, not concerned with the rich man but with the great majority of our péople who have incomes on which they can barely make ends meet. As the Minister has investigated the matter we want to plead again that he should draw a line and give that relief to persons who have hospital and medical expenses. If he wants to eliminate the wealthy man let him draw a line and say when a person has an income of less than £400 or £500 a year it may be deducted.

Those people actually pay no income tax.

They pay very little, but if the small amount is added to the other expenses when they are ill it becomes almost intolerable. The Minister can draw a line so that the wealthy man can be left out of account. Put it then a little higher than £500. We beg the Minister to take it seriously into consideration. I can speak from personal experience and I know how these things go. The expense attached to bringing up a family decently is very high and if there is a set-back owing to illness things become very hard, especially in the case of the farmer who is subject to other reverses, and who on account of all these setbacks is not in a position to keep his head above water and become a useful citizen. I shall be glad if the Minister can grant this rebate.

I should like to support the amendment of the hon. member for Albert-Colesberg (Mr. Boltman). Although the Minister has rejected it, I am glad to learn that though he sees no opportunity at present to deduct the costs of hospital and medical treatment from taxable income, he will nevertheless consider this matter in the future and I hope he will give it his serious consideration. I want to plead for the low wage group in our community, especially in the cities the great majority of these people are poorly paid; they are people who live from hand to mouth, and medical expenses and hospital expenses press very heavily on that class, especially in the times through which we are now passing. You visit a house where there is sickness, and when you ask why the person has not been sent to hospital the very first thing you are told is, we cannot by any means afford it. We must take into account the health of the nation and if that person is not encouraged—especially now that the taxation system hits the lowest paid groups—to make use of hospital and medical services his health is going to suffer. If he knows he is entitled to deduct those expenses from his taxable income it will encourage him to utilise these services to a greater extent. Then I come to a case I want to mention to show to the Minister how detrimentally such a thing can affect a person. Recently in my constituency I had the case of a railway official who has worked hard his whole life. A few months before he would have been entitled to benefit under the sick fund he fell seriously ill. He had to give up work and undergo a serious operation. That illness broke the man entirely. The Minister should not think that he will ever in future get another penny out of that man in the way of taxation. This man has struggled his whole life to save a little for his old age. He bought two properties. When I last saw him he had to sell one of these properties and the other property is now heavily encumbered. This just shows how severely people may be hit by hospital expenses. Then I have also Government officials in mind, the greater part of them receive a miserable wage, as we have heard here. Under the present system these people also do not feel very disposed to visit the hospital for medical attention when sickness overtakes them. I want therefore to make an appeal to the Minister to say now that he will allow these people to deduct from their taxable income the amount expended by them on hospital and medical services. If the Minister does this I can assure him he will be meeting a very great need.

Many appeals have been made to the Minister of Finance in respect of a rebate for children over 18 years of age who are in educational institutions. But I do not propose to appeal to the Minister of Finance. I wish to appeal to the Minister of Education. It is a matter with which he has been entrusted as Minister of Education. The institutions for higher education in this country are under his care, and I should have thought it was in his interest to give higher education in this country every possible encouragement, and here the opportunity is presented to him. I am confident he will not experience too great difficulty if he discusses the matter with his colleague the Minister of Finance. I think he is the only person who will be able to convince the Minister of Finance. He is the only authority the Minister of Finance recognises.

The Minister of Education gets very little from the Minister of Finance.

Then the experience of the Minister of Education is exactly the experience we have had on this side of the House, and that is the Minister of Finance often reveals an unnecessary stubbornness, and I think it is high time the Minister of Education exercised his authority on the Minister of Finance. The day before yesterday I pointed out that State allowances for higher education for children at the universities have been reduced in the past 20 years by £18 per head per year. Where in 1925 it was £56 per year per head it has dropped to £38 per head per year. But that has been accompanied by a rise in the fees per head per year of £16. In other words, the parents of those children who are at the universities have to pay in fees alone an average of £16 a year more than they had to pay 20 years ago. Today we have 12,000 students at the universities. Suppose that half of them, that is to say 6,000, are over 18. It means then that the Minister is saving, by not extending this rebate to them, an amount of £30,000 a year. We say that he should now do one of two things. He should either increase the grants to the universities, so that the universities will be placed in a position to reduce the fees and to meet the parents in other ways, or else he should, in respect of the children …. I am sorry to interrupt the conversation of members opposite but perhaps they will allow me to finish. He must either meet the parents by increasing these grants to the universities, or he should meet them by accepting this amendment. It is not an unfair amendment. I think myself the Minister of Finance in this case ought to know it is just at the age when children enter the university they involve their parents in the greatest expense. There are many university students—and I speak now from experience of them—whose parents find it terribly difficult to keep them there and any relief, even if it is only an amount of £5 a year, will mean much to them. You should not think it is an easy matter for many of these parents to make this sacrifice, but they feel it is something due from them to their children; they feel it is an obligation to their country and their people to give the children this opportunity to develop their latent talents. But if the sacrifice is too great you cannot expect them to make it. This small concession will not cost much. It seems to me that at the utmost it will cost £30,000 a year. That is all the Minister has to surrender, and I think he can do that. And if the argument is that rich and poor will receive it alike I would point out to the Minister this is also the case in respect of children under 18 years of age. There is no provision as to whether the parent is rich or poor, but if the child is under 18 the parent obtains that rebate, and accordingly I ask that the Minister of Education should use his best endeavours with the Minister of Finance to bring about this highly necessary alteration. Then just a few words in connection with the other amendment that has been proposed in reference to medical and hospital expenses. The Minister has pointed out that the same tax is not paid by a person with a large income as by a person with a low income, that the proportion of his income paid in taxes is much higher in the case of a man with a high salary than in the case of a man with a low salary. That is perfectly true in respect of direct taxes. If the Minister refers to income tax that is quite correct, but I think he will also concede that the opposite is the case in reference to indirect taxation, that the proportion paid in indirect taxation by the man with an income of £400 is much higher than is paid by a man with an income of £4,000. Indirect taxation is inverse ratio to your income. Last year I quoted figures, disclosed as a result of an enquiry in England, to the effect that the indirect taxes paid by the poor man are very much higher than those paid by the wealthy man. If one only considers how large a proportion of the poor man’s income must be spent on food, and if one considers the tremendous increase that has occurred under this head, then one sees that the taxes imposed on the poor man are much higher than the burdens laid on the wealthy man; that it absolutely cancels out the proportion in respect of direct taxes, and truth to tell sets up a debit balance. In these circumstances I think there should be some concession to these people in the lower income groups; they should be exempted from this tax, and they should have an allowance for the expenses they incur in connection with hospitals and medical services. I want cordially to support the amendment that has been introduced, and I hope the Minister, bearing in mind that tremendously high indirect taxation is paid by the poor man, will accept this amendment. Our indirect taxation in the form of excise duty and import duties has increased by between 300 per cent. and 400 per cent. since the commencement of the war. When one takes into consideration that this increase is borne to a greater extent proportionately by the poor man than by the wealthy man, it is fair that this consideration should be extended. I have no objection if the Minister does not extend it to the higher income groups, if he restricts it to the lower income groups. But I think it is a relief that can rightly be claimed by the middle income groups and the lower income groups.

I desire to associate myself with the amendment proposed by the hon. member for Kuruman (Mr. Olivier). How the Minister can say that these improvements are for the benefit of the bona fide farmer I cannot understand. It might look very well on paper, but in reality it is not the case. The agricultural unions have, during the course of the past year, expressed themselves strongly at their congresses on this matter. The hon. member for Hottentots Holland (Mr. Carinus) can confirm tins. He knows himself that his agricultural union expressed itself strongly at its last congress on this matter.

They are absolutely satisfied with it.

I may be wrong, but I think it was the hon. member for Hottentots Holland who last year proposed that there should be an allowance of 50 per cent. and not 30 per cent.

That was last year.

What has happened in the meanwhile?

This congress proposed that there should be a 50 per cent. allowance in respect of improvements.

I also pleaded with the Minister for that.

There is then apparently no difference between the hon. member for Hottentots Holland and myself on this point. The agricultural unions feel that agricultural development is being retarded by the taxing of improvements. There are parts of our country where the developments are practically completed, where the improvements have virtually been carried out. But we are a pioneering country; the further you go the more meagre are the improvements. Take the north-western parts. I should like the Minister to go back 15 years and recall what was the income of the farmers in Victoria West, Priestka and Carnarvon. What is the position today? Three or four years before the war the income of the farmers in those parts was much more. Why? Because the people improved their farms much more. There were large parts of the country where improvements were virtually at a standstill during the war. Take fencing, or dams, or windmills, and boreholes. As soon as this war is over the people will want to effect improvements on a great scale, to adjust farming to modern science, and in that way to endeavour to obtain a larger income from farming; and consequently it is necessary that the Minister should be accommodating for the benefit of the development of the country, for the sake of the improvements, for the sake of those parts where development is so vitally required; and I can give the Minister the assurance that the agricultural unions throughout the country are in favour of farmers being exempted from taxation in respect of improvements. The object of this measure was to catch a small percentage of people who are not bona fide farmers. But what has happened now? The Minister, it is true, catches these people, but he is also bringing in this large percentage, the people who are bona fide farmers, and he is penalising them. Accordingly I make an earnest appeal to the Minister entirely to exempt improvements that are made by bona fide farmers.

The Minister said in his reply that the farmers are in fact allowed 30 per cent., and on the surface it appears as if the farmer is allowed to deduct 30 per cent. of his expenditure on improvements from his taxable income. Then it is a great concession. But we must remember that in practical life a farmer connot set aside 30 per cent. of his taxable income for improvements. There is no farmer who has the labour to effect a certain amount of improvements every year. It never happens in practical life that a farmer sets aside 30 per cent. of his income every year for improvements. What happens in this; when a farmer gets the labour he spends a certain amount in one year on improvements, and if he exceeds 30 per cent. of his income he is not allowed to take that into account. Accordingly we argue that 30 per cent. is too little. If, as practical men we could manage to effect certain improvements every year, if we could deduct 30 per cent. of our expenditure every year in connection with improvements it would work well, but you simply cannot do that. We all know what the labour position is today. We all know how improvements are carried out on the farms. When you want to fence certain paddocks, or when you want to make certain irrigation works, you finish off that work in a year, and for the following three, four or five years you cannot deduct anything for improvements. You spend a great amount of money in one year and for that reason a deduction of 30 per cent. is not as attractive as it sounds. Accordingly we on this side of the House propose that bona fide farmers should be allowed to deduct the whole amount. The Minister last year by means of this measure made an effort to put a stop to malpractices in the way of tax evasion. This amendment of ours will not re-establish those malpractices. We ask that where a bona fide farmer has effected improvements he should be permitted to deduct the whole of the amount expended. In these days in which we are living everyone is bubbling over with talk about agricultural reconstruction. We are going to create for the farmer and for agriculture a heaven on earth by all the improvement schemes that are held in prospect, and even our people in the towns are excited over that wonderful thing that is coming, agricultural reconstruction. But I want to tell the Minister that if money is ever well spent in this country it is the money the farmers have been spending all these years on improvements on the land. We know if you come on to a farm and you see the works that are in progress you cannot realise how much money has been put into them. We know what it costs a farmer today to fence a camp, but we forget what it means in the case of the conservation of his soil. We know that farmers have become erosion-conscious in recent times, and today thousands of pounds are being spent in the country by individual farmers and by the majority in connection with erosion works; that work is done by these people at their own cost, and we now appeal to the Minister of Finance to allow the farmers to deduct a full 100 per cent. in respect of bona fide improvements. If a farmer is prepared to expend £500 or £600 on improvements, he takes that money out of his own pocket. What does the State lose if it allows him to deduct that £500 or £600 for taxation purposes? Perhaps £25 or £30. But if the farmer does not do it then the State will eventually be called upon, in the interests of the country to effect these improvements, and then the State will have to pay not 5 per cent. but 50 per cent. and more. Accordingly we appeal again to the Minister to allow bona fide farmers to deduct the full amount in respect of improvements. It occurs only once in five, six or seven years that the farmers effect improvements on a large scale. What appears to me so peculiar in this debate is this. Since this morning we have been arguing that certain relief should be afforded to people who go to hospital or who require medical attention and for parents who send their children to the university; we are also pleading that the farmers should be allowed to deduct the money they expend on improvements. But on the other side not a single voice has been raised. Only one man on the other side holds an opinion on this matter, the Minister of Finance. Not one member on the other side has enough thought for these people as to stand up and support us. Not one member on the other side has so much sympathy for these people as to stand up and say that he feels with that parent who has to send his child to the university, that he feels for the parent who with an income of perhaps only £500 has to find the funds to send his child to the university.

Now you are talking just like Oom Kaspaas.

As Oom Kaspaas says: You can say that that member was born without brains. When we plead for these things hon. members opposite sit and chat so that one can hardly hear one’s own voice, but not one of them stands up to help us. On that side of the House there is, as a matter of fact, not one member who holds an opinion on the matter.

I wish to associate myself with the previous speakers on this side of the House in connection with the pleas directed to the Minister, namely that the farmer should be allowed to deduct the costs of all improvements on the farm before he pays income tax, and also medical costs and an amount for his children who are at the university. The requests directed to the Minister from this side are very reasonable. We find that the farming community contribute only 13 per cent. towards the national income and it is a further proof that the farming community needs this help, and this fact alone is enough to support what was said here. I do not wish to go over those facts again. I just want to emphasise this: If a farmer were to go in for wheat farming and were to sow 400 morgen and he has a total crop failure, he has not even the right to get back the capital expenditure connected with it. A farmer who for example made £2,000 out of that 400 morgen has practically profiteered as against this farmer who had a total crop failure. In other words, he is £2,000 better off than the farmer who had a total crop failure. But notwithstanding that the Receiver of Revenue refuses to allow a farmer who had a crop failure to deduct his costs. The purchase price of the ground is also not taken into consideration; the implements purchased are not taken into consideration. Neither is one allowed to deduct interest from capital expenditure. That is very unreasonable. Take the case of a farmer who possessed nothing and who had to borrow all the money when he bought his farm. He at least has the right to deduct the interest he has to pay. But the person who took the risk of putting all his money into farming has not the right to do that. Last year various farmers in my vicinity tried to deduct the interest they have to pay, but the Receiver of Revenue would not permit it. This injustice in done to the farmer, and now the Minister limits the amount which he may deduct from his taxable income for improvements to 30 per cent. The farmer is unjustly treated and I wish to ask the Minister thoroughly to consider the matters raised here today. The facts mentioned here are incontrovertible. As a result of this measure the farmers are handicapped. The result is that farmers will leave the country and go to the towns. Reasons are searched for. The reason lies in that one secret, that farming does not pay, and those farmers who still do their best to keep their sons on the land are handicapped, and we must not forget that the farmer is the cultivator of the soil, and if he is driven from the land the city dweller will not be able to exist either. We must do everything in our power to keep the farmer’s son on the land. I almost want to go so far as to say that the Government should pay a proper subsidy to every young farmer to encourage him to love the soil.

Hear, hear.

Members opposite perhaps regard it as funny, but I assure them that if they crack those jokes on the platteland they will stay at home with a stocking over their heads; they will not again come back as members of Parliament.

I hope it will not be a wool stocking.

Amendment proposed by Mr. Olivier put and the Committee divided:

Ayes—32:

Boltman, F. H.

Booysen, W. A.

Bremer, K.

Conradie, J. H.

Döhne, 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.

Malan, D. F.

Mentz, F. E.

Olivier, P. J.

Potgieter, J. E.

Serfontein, J. J.

Stals, A. J.

Steyn, A.

Steyn, G. P.

Strauss, E. R.

Swanepoel, S. J.

Swart, C. R.

Van Niekerk, J. G. W.

Van Nierop, P. J.

Vosloo, L. J.

Warren, S. E.

Werth, A. J.

Wilkens, J.

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

Noes—73:

Abbott, C. B. M.

Acutt, F. H.

Alexander, M.

Ballinger. V. M. L.

Barlow, A. G.

Bawden, W.

Bekker, H. J.

Bodenstein, H. A. S.

Bosman, J. C.

Bosman, L. P.

Bowen, R. W.

Bowker, T. B.

Burnside, D. C.

Christie, J.

Christopher R. M.

Cilliers, H. J.

Clark, C. W.

Conradie, J. M.

De Kock. P. H.

Derbyshire, J. G.

De Wet, H. C.

De Wet, P. J.

Dolley. G.

Du Toit, R. J.

Eksteen, H. O.

Faure, J. C.

Fourie, J. P.

Friedman, B.

Gluckman. H.

Goldberg, A.

Gray, T. P.

Hemming, G. K.

Henny, G. E. J.

Heyns, G. C. S.

Hofmeyr, J. H.

Jackson, D.

McLean, J.

Miles-Cadman C. F.

Moll, A. M.

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.

Road, K.

Shearer, O. L.

Shearer. V. L.

Solomon, B.

Solomon, G. F.

Sonnenberg, M.

Steenkamp. L. S.

Stratford, J. R. F.

Sturrock, F. C.

Sullivan, J. R.

Sutter G. J.

TothiU, H. A.

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.

Waterson, S. F.

Williams, H. J.

Tellers: R. E. Bell and G. A. Friend.

Amendment accordingly negatived.

Amendment proposed by Mr. Boltman put and the Committee divided:

Ayes—33:

Bekker, G. F. H.

Boltman, F. H.

Booysen, W. A.

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.

Malan’, D. F.

Mentz, F. E.

Olivier, P. J.

Potgieter, J. E.

Serfontein, J. J.

Stals, A. J.

Steyn A.

Steyn G. P.

Strauss, E. R.

Swanepoel, S. J.

Swart, C. R.

Van Niekerk, J. G. W.

Van Nierop, P. J.

Vosloo, L. J.

Warren, S. E.

Werth, A. J.

Wilkens, J.

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

Noes—71:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Alexander, M.

Ballinger, V. M. L.

Barlow, A. G.

Bawden, W.

Bekker, H. J.

Bell, R. E.

Bodenstein, H. A. S.

Bosman. L. P.

Bowen, R. W.

Bowker, T. B.

Bumside, D. C.

Christie, J.

Christopher R. M.

Clark, C. W.

Conradie, J. M.

De Kock P. H.

Derbyshire J. G.

De Wet, H. C.

De Wet,. P. J.

Dolley, G.

Du Toit, R. J.

Eksteen, H. O.

Faure J, C.

Fourie, J. P.

Friedman, B.

Gluckman, H.

Goldberg, A.

Gray, T. P.

Hemming, G. K.

Henny, G. E. J.

Heyns, G. C. S.

Hofmeyr, J. H.

Jackson, D.

McLean, J.

Moll, A. M.

Morris, J. W. H.

Mushet, J. W.

Neate, C.

Oosthuizen, O. J.

Payn, A. O. B.

Payne, A. C.

Pocock, P. V.

Prinsloo, W. B. J.

Robertson, R. B.

Rood, K.

Shearer, O. L.

Shearer, V. L.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Steenkamp, L. S.

Stratford, J. R. F.

Sturrock, F. C.

Sullivan, J. R.

Sutter G. J.

Tothill, H. A.

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.

Waterson, S. F.

Williams, H. J.

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

Amendment accordingly negatived.

Amendment proposed by Mr. S. E. Warren put and the Committee divided:

Ayes—33:

Bekker, G. F. H.

Boltman, F. H.

Booysen, W. A.

Bremer, K.

Conradie, J. H.

Döhne, 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.

Malan, D. F.

Mentz, F. E.

Olivier, P. J.

Potgieter, J. E.

Serfontein, J. J.

Stals, A. J.

Steyn, A.

Steyn, G. P.

Strauss, E. R.

Swanepoel, S. J.

Swart, C. R.

Van Niekerk, J. G. W.

Van Nierop, P. J.

Vosloo, L. J.

Warren, S. E.

Werth, A. J.

Wilkens, J.

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

Noes—72:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Alexander, M.

Ballinger, V. M. L.

Barlow, A. G.

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.

Christie, J.

Christopher, R. M.

Cilliers, H. J.

Clark, C. W.

Conradie, J. M.

De Kock, P. H.

Derbyshire, J. G.

De Wet, H. C.

De Wet, P. J.

Dolley, G.

Du Toit, R. J.

Eksteen, H. O.

Faure, J. C.

Fourie, J. P.

Friedman, B.

Gluckman, H.

Goldberg, À.

Gray, T. P.

Hemming, G. K.

Henny, G. E. J.

Heyns, G. C. S.

Hofmeyr, J. H.

Jackson, D.

McLean, J.

Morris, J. W. H.

Mushet, J. W.

Neate, C.

Oosthuizen, O. J.

Payn, A. O. B.

Payne, A. C.

Pocock, P. V.

Prinsloo, W. B. J.

Robertson, R. B.

Rood, K.

Shearer, O. L.

Shearer, V. L.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Steenkamp, L. S.

Stratford, J. R. F.

Sturrock, F. C.

Sullivan, J. R.

Sutter, G. J.

Tothill, H. A.

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.

Amendment accordingly negatived.

Original motion put and agreed to.

I move—

1. (2) That the rates fixed by sub-paragraphs (a) and (b) of paragraph (1) shall be the rates fixed in accordance with the provisions of sub-section (2) of Section 5 and sub-section (2) of Section 23 of Act No. 31 of 1941, respectively.

Agreed to.

Excess Profits Duty.

The Committee proceeded to consider the proposed excess profits duty.

I move—

1. (1) excess profits duty shall be paid in respect of every pound of excess profit attributable to any wage, salary, fee, bonus or allowance in the nature of remuneration paid or credited to or received by or accrued to or deemed to have been received by or to have accrued to any person in respect of the holding of any office or employment in the course of any trade which is carried on by him as owner, part owner, principal or partner; and
2. (2) the deduction to be allowed in determining the amount of excess profit of any person, in respect of excess profits duty imposed by any country outside the Union, shall be so much of any excess profits duty so imposed as the Commissioner for Inland Revenue is satisfied was so imposed in respect of the amount of excess profit upon which, but for the deduction allowed in respect of the excess profits duty so imposed, excess profits duty would be payable for the period of assessment concerned.

We want to move an amendment to this paragraph. We have already explained its tendency on the motion to go into Committee of Ways and Means. The amendment is as follows—

1. (3) twenty per cent. of the excess profits duty shall be repayable in 1945-’46 and in 1946-’47 in respect of capital expenditure of any nature incurred by the industry in respect of which such excess profits duty was paid.

The hon. Minister raised this objection to this proposed reduction òr amendment of the excess profits duty that money which otherwise would be withdrawn from spending power will now be set free to be spent and that it will encourage inflation. This motion will not have such an effect on the inflation position. No money is set free here to be spent. The same amount is being taken from the taxpayer, although part of it is being kept for him. It is being withdrawn from usual spending and being put aside. It is being held by the State as a nest-egg for capital expenditure of any nature after the war. It is just at this stage that money will be most required for the expansion of industry. There has been quite a lot of depreciation of machinery in the past five years, and new machinery will have to be bought. If there is any expansion new machinery will also be required. The problem has always been where industry would obtain the capital. In the past five years it was impossible for them to build up reserves by the usual methods. The limits to profit were such that it was not enough, after the 8 per cent. was reached, to build up a reserve on a sound basis. What we are proposing here is that money which will be collected this year in the way of super tax should be set aside to the extent of one-fifth and that it will be repaid to the particular concern which paid it in after the war, within the next two years, 1945-’46 and 1946-’47 and that they can receive it back on condition that they utilise it for capital expenditure. It should not be wasted in dividends or arrear instalments on dividends, but should be used for the purpose of covering capital expenditure, capital expenditure which as I said before, will be particularly essential in the near future. I think on the one hand it will mean that just as much money as the Minister planned to withdraw from the public will still be withdrawn, and the inflation position will therefore remain as it is, but one-fifth of what is paid in is put aside for the object mentioned. In fact it is the system which has been enforced in England for the past five years already, and the Chancellor of the Exchequer only recently said that as a result of the system a fund was created which annually is increased by between £40,000,000 and £50,000,000 and which at this stage already amounts to £250,000,000. This fund is available there for industrial development after the war. It is a very sound principle to make such provision. The Minister will of course again say that in England they pay 20s. in the £ as excess profits duty. That is correct, but 4s. is put aside in this manner and a very large reserve fund is built up for the post-war period. But what happened in South Africa? The Minister took 15s. in the £ by way of excess profits duty, but on the remaining 5s. he also took 2s. to 3s. —it varies. You will therefore see that whereas in England 20s. in the £ was taken and 4s. put aside, no further tax was levied on the 4s. It was simply put aside and the amount held available for development after the war. I do not wish to detain the committee for long but for these two reasons I move the amendment. It will not make a tremendous change to the Minister’s Budget scheme. There is no scheme at all which he will have to abandon. The collection of the tax will be done as in the past, except that one-fifth is set aside and is repaid to the concern which paid it in if that concern after the war can show that it needs it for capital purposes. The objection of the Minister that it will encourage inflation falls away. Also the objection that it will mean a change in his system of taxation falls away. Now the Minister may say: But where will I find this amount of one-fifth which is set aside in this manner in order to balance my Budget? It is an amount of approximately £3,000,000. I do not think that it is asking too much that under the circumstances pertaining today the amount estimated for war expenditure two months ago should be reduced from 82½ million to 80 million. It will not even be a reduction of 3 per cent., and seeing that this change has come about in the war position, it is not unreasonable to expect that. It may be true that the cost of demobilisation is high, but it cannot be as high as the cost of the war, and where the Minister two and a half months ago was prepared to estimate the war expenditure at 82½ million we can reasonably expect that if he were to estimate it today he would put it at 80 million at the very highest. We see that in the Budget in England there is an appreciable decrease. The total Budget was reduced by 10 per cent., but in South Africa there is no reduction at all, but rather an increase of the total. That is the way in which to obtain that amount. It will not encourage inflation, it will not disturb the Budget scheme, and although the Minister does not see his way clear to announce a revision of the taxation system this year, he has this opportunity to prove that he is really serious when he says that he wishes to promote production. He has the opportunity not only of promoting production but also to provide for the taxpayer whom he will need in future—and if he is no longer the Minister, then someone else on this side of the House. We want him to afford the opportunity to enable the taxpayer in future to fall back on a reserve built up in this manner, if he needs it. I very much regret that the Minister will not take us into his confidence. I think that industry is entitled to know how long they will have the opportunity to set off their losses against this tax; will it be for one year or two, or longer? On a previous occasion I put the question to the Minister and he then referred me to what he had said before. I think he spoke about an appreciable time. The Minister must be a little more specific. He did not repeat what he said before. Or has he changed his plan? What is the position now? How long will the tax remain in force? How long can businesses who suffer losses after initial gains be compensated for those losses by the profits made in the past which were paid in by way of excess profits duty? I think it is essential that this should be known to the country and to industry in general, so that they can make plans for the future. It is a very simple matter, but it will be a test of the seriousness of the Minister in saying that something should be done to encourage industries and the development of industries which is so urgently required if we wish to raise the national income.

The point I wish to make is a very brief one, namely, that when the discharged soldier comes back again to his old store, or to his old suite of offices, to resume the business which has been interrupted owing to war circumstances, if he is not taking his pre-war standard of profits he will find it very difficult to carry on, in some cases entirely impossible. To save the time of the hon. Minister and hon. members I wish to read a statement given to me today by a Durban firm of chartered accountants with regard to the instance I quoted a few minutes ago—

This is only a small case, but there may be others where the hardship may be very much greater. We can concede that during the war period part of the capital of £2,000 may have been lost by reason of expenses, in storing furniture, or possibly by reason of the necessity of disposing of this when the trade licence was not renewed. I feel that a principle is involved, which being applied in terms of revenue, will cause a tremendous amount of dissension amongst returned soldiers. I think the case is a just one, and I commend it to the notice of the Minister.

I wish to point out to the Minister that sub-paragraph (1) is not clear to us. Gradually a whole number of doubts are being aroused in our minds. If the Minister proposes to prevent the evasion of taxes in terms of the present law, we wish to assist him, but where the Minister here proposes taxing only a certain class of salaried man and creating more inequalities amongst salaried men, we have serious doubts. I should like to give the Minister the following example. A person is appointed, for example, as editor of a newspaper. His salary is more than £1,500. That means that if what he earns over £1,500 is regarded as excess profit, in terms of this paragraph, he must pay Excess Profits Duty. If he is only editor of the newspaper and receives £2,000 or £2,500, he does not pay Excess Profits Duty. But supposing lie has one or two shares in the company? We are afraid that there will be a hitch. Supposing for example a man is appointed as editor of the “Cape Times” or “Die Burger” and he has a few shares in the company. He is then a partial owner of the company, although he is a very small owner. That is not a matter of evading taxes. We now want to know whether he will have to pay Excess Profits Duty if he receives £2,000 as editor. We should like the Minister to clarify that point. Then I wish to move a further amendment—

1. (3) the statutory percentage fixed for the purposes of excess profits duty shall be increased in the case of companies from 8 to 10 per cent. and in the case of persons other than companies from 12 to 15 per cent.; and in the case of persons following a profession, the minimum pre-war standard shall be increased from £1,000 to £1,250.

The purpose of this is to meet new industries, new undertakings in trade and commerce. Old established concerns have a pre-war standard. They evade the excess profits duty but are caught by the special trades profits duty. New concerns however just have the statutory percentage of 8 per cent. on capital investments. Supposing one has a concern with a capital investment of £10,000. 8 per cent. on that amounts to £800 per annum. Say they get another £250, which makes it more or less £1,000. Does the Minister see any chance to build up a reserve fund for that new concern out of that? I should like the Minister to say honestly whether he thinks that a concern with a capital investment of £10,000, which is only entitled to a margin of profit of £1,000 before the excess profits duty is levied, can build up a reserve fund strong enough to enable it to withstand the storms of the post-war period? I am not one of those who believe that a depression must necessarily come after the war. With a good Government it is perhaps possible to prevent it.

Like we have now.

With the present Government I do not feel safe at all. But we all expect that the moment peace is made there will be a tremendous economic struggle amongst the nations of the world, and in order to resist that struggle our new concerns, especially those who began it during war time, must have a chance to build up a reserve fund, and my objection to the excess profits duty in its present form is that the Minister gives new concerns no opportunity to build up a reserve fund, especially in industry. The Minister can argue as he likes, but he still has to try to explain the figures given by the hon. member for Fauresmith (Dr. Dönges). Here we have the taxable income of industry from 1937 to 1943. At first there was a tendency for the taxable income to increase. In 1937-’38 the amount was £14,000,000, in 1939-’40 £16,000,000, but in 1941-’42 it fell to £14,800,000, and in 1942-’43 it fell to £13,000,000. The statement of the Minister does not satisfy one. The fact that excess profits duty was paid on it is applicable to all the other groups mentioned. Only industry shows this retrogression. I must honestly tell the Minister that there is anxiety right through the country. I have in my hands here a book “Protection and Indusrial Progress”. In that it is said that there is a growing feeling that after the war there will be a tremendous economic struggle between the nations.

It depends on who wrote it.

It is a friend of industrial development. It is said “England must export or perish,” and in America they say “America must export or rot”. Everyone will try to sell their products and our industries will go through a very difficult time, and my objection is that under the taxation proposals of the Minister our young industries are not given the opportunity to build up reserve funds. The Minister always tells us when we propose the reduction of taxation that we must tell him on what we can economise. Then he adds that we must not touch the war expenditure. Well, I will leave that, and I will tell him where he can easily save a few hundred thousand pounds, and I think in that respect I shall have the support of every section of the House: Dismiss the major portion of the controllers and put an end to the control system in South Africa. I hope the Minister is listening. The Government is spending just over £600,000 per annum on the system of control, and it does nothing but harm. Do away with the whole thing, with everything that does not fall under the Marketing Board, and the Minister will not only save £600,000, but will be doing a service to the whole country and a sigh of relief will be heard all over South Africa. He is always telling us that we should give him hints. This is a hint. It is easy, it will be popular, and he will be doing a service to South Africa. I think especially of building control. Take that away. I however know that I cannot discuss that matter here and I do not wish to go into it further. I therefore move my amendment.

The hon. member for Durban (North) (Rev. Miles-Cadman) has raised a specific point in regard to which I suggest he let me have the papers, and I shall go into it. He will realise that it is very difficult to deal with a point of that nature over the floor of the House.

†*The hon. members for George (Mr. Werth) and Fauresmith (Dr. Dönges) have proposed two amendments. I want first to deal with the speech of the hon. member for George and before I come to his amendment I have to refer to what he stated in reference to Sub-Resolution (I). I want to suggest that as he says he is prepared to assist us in combating tax evasion he might let this motion go through, and then when we come to discuss the provisions of the Bill he will be able to judge whether we have gone too far. I think he will then be perfectly satisfied. Take the case he has mentioned. You have someone who is a shareholder in a publishing company. The business there is that of publisher. The fact that the man draws a salary as editor of a newspaper published by the company does not prove that he draws his salary in the carrying out of the business in which he is a part-owner. I think in any case such an instance does not fall under this. But I say again we first have to look at the wording of the Bill. In resolutions such as this we cannot include everything. The resolutions have to be put generally, subject to the conditions and interpretations of the legislation that follow on it, and I think the hon. member will be satisfied when he sees the Bill. The hon. member has made a proposal in connection with the increase of pre-war standards. As far as this is concerned I should like to point out that our provisions in connection with the pre-war standard are at present far more liberal than in other countries, especially as we allow a wide choice of an alternative, which is not the case in other countries. In regard tp the statutory percentage, we are also more liberal there, at any rate as regards individuals. We allow 8 per cent. for companies and 12 per cent. for individuals. I do not know of any other country where a percentage of more than 10 per cent. is allowed for individuals. Now the hon. member wants to make it 15 per cent. I think our provision of 8 per cent. and 12 per cent. is very good in comparison with other countries. The hon. member wants to go further, and he wants to increase the minimum pre-war standard for the professional man from £1,000 to £1,250. I do not see how we can do that for the professional man if we do not apply it to all. The first difficulty with which the hon. member will be confronted is to give a definition of “professional man”. Who is a professional man? This is extremely difficult to define. Thus the increase would actually have to be applied generally. I see no reason why the minimum pre-war standard of people (which was already a concession in comparison with what happened elsewhere) should now be further increased. My hon. friend pleads the case of small new businesses. These are businesses who have derived considerable benefit from the war. But this concession will not be confined to those businesses. It will be of general application, and the large concerns with a big capital investment will benefit greatly. This will not mean a few hundred thousand pounds to the Treasury, but considerably more. I do not know whether my hon. friend meant it seriously, that I could save this amount on the control system. He knows that whatever criticism there is of the control system it would be very difficult to get along without it. If we are not satisfied with the present system we shall have to put something else in its place if we abolish this. I am sorry, but I cannot accept his amendment. The hon. member for Fauresmith proposed another amendment. He made his êxcuses for not being able to stay here to hear my reply. His amendment boils down to this—20 per cent. of the excess profits duty to be repayable in the years 1945-’46 and 1946-’47. So far as the form of the amendment is concerned an error has apparently crept in. His real intention cannot of course be that there should be a refund this year. He apparently meant 1946-’47 and 1947-’48. That is, however, a subsidiary point that is not of importance in connection with the principle.

Is the tax not levied in the year 1944-’45?

No, in this year, for the year that ends on 31st March, 1945. In many cases many of these people pay only at the end of the financial year or later. It would be very difficult to make a refund for the year 1944-’45. This is however not an important point. I only mention it to avoid misunderstanding. He appealed to the system in England. There is a difference between our system and the system in England. There the excess profits duty is 100 per cent.—20s. in the £. Under certain conditions 20 per cent. of that excess profits duty is refundable, virtually on the same conditions as those he suggested. But in our case the excess profits duty is 15s. plus the ordinary tax on the 5s., which probably brings it up to 15s. or 17s. and in exceptional cases to 18s. But here we go still further by providing for repayment in the case of losses. We are now engaged in making adjustments in respect of such losses. Our system is thus entirely different to that in England, and we cannot look for the good points in both systems from the point of view of the taxpayer and make that a system to apply here. That is what my hon. friend apparently desires. We have already undertaken a big responsibility in regard to repayments in respect of losses, and I do not think it is reasonable to expect that we should increase our obligations still further by increasing to 20 per cent. the refund of the excess profits duty in certain years. I ask again, where will we find the money? If we adopt my hon. friend’s proposal, as he has introduced it, we shall have to refund money this year. He has stated further that no inflation would be caused by his proposal. Well, if we were to make refunds this year we would be causing inflation. But he apparently did not intend it in that sense. Even if it were first repayable in the future we should be causing inflation in those particular years. We cannot get away from that. In regard to the question of where the money is to be found, the position is this. We shall have to find the money now and set it aside, and that implies additional loans and the increase of the national debt; or the money must be found in the years that lie ahead, and that will accentuate the difficulties of financing our postwar plans. I am sorry, therefore, that I cannot accept this motion and I hope that the House will also not accept it.

On a previous occasion I spoke in this House on the inequalities which I consider the Land Tax brings about in this country.

Order, order! The Committee has not come to that tax yet.

I was only referring to it. May I state that I consider that this excess profits duty is as unfair and unequal in its incidence as the Land Tax. It complies as little with the maxims of sound taxation as the other tax to which I previously referred. I consider that this pre-war basis works out most unfairly, particularly in the case of younger men and the newer businesses. Whether we like it or not the incidence of this pre-war basis is most unfair. I have an instance in my constituency of a few young men who started their lives as very junior civil servants originally in the Department of Posts and Telegraphs, and these three boys worked themselves up until eventually they started in business, forming their own company just before the war. Today they are very big business people indeed. This firm is allowed a pre-war standard of £234 because they started a few months before the war, and that is the income on which they have to try to repay their debts totalling probably £20,000, and also to live. Surely a tax which is so unfair and which allows people like that such a small basis of profit has something radically wrong with it and should be revised. I would like the Minister to reconsider the suggestion made by this side of the House, and from his side of the House, that this tax badly needs revision, particularly the pre-war basis of it. There is one professional man in Pretoria, quite a young man, who has been very fortunate. He had one great windfall in the year before the war. Today this man is doing a very big business and he is entitled to have an income of many thousands of pounds per annum purely and simply because he had one windfall in this pre-war year, and he enjoys an advantage over the three other men I mentioned. He has made thousands of pounds and recently stated that if he gets another cheque for £2,000 he will not yet be in the excess profits tax class. I hope the Minister will be good enough, particularly as we are now at the end of this war, to revise this tax, and that during this Session. These people to whom I referred with their £230 basis might have debts of £20,000 or more. How can they live and repay their debts, whilst in other instances a man with many thousands of pounds of pre-war basis has no debts to repay or on which to pay interest. To me it appears that the incidence of this tax is of such a nature that when one day we get our post-war depression this tax will cause a large number of post-war bankruptcies, probably more than we had after the last war. Surely today when we are so anxious to adapt ourselves to peace-time conditions and to be able to continue production in this country and to get the country economically on a sound basis the time appears to me to be ripe that the Minister should revise this tax and put it on a sound basis. I have come across instances of young medical men. The man’s father has paid for every penny of his studies. He comes back to this country and starts in his profession now. It is quite easy for such a man to earn £1,500 per annum today, and in fact the position is such—and I do not blame them —that they feel that when they have got up to their standard they do not want to go out at night and people can rather die, but they are going to sleep. But I know of another instance where a man bought an enormous lot of X-ray and other equipment costing thousands of pounds. He also has thousands of pounds of study debts but the two of them are on the same basis. To me it appears that there is no foundation or argument to maintain that these things are fair. This tax is not fair. Even in the Minister’s reply the day before yesterday on the Land Tax he stated that these are wartime taxes and that this particular tax is a wartime tax. We are now at the end of the war. Even if the Minister smiles at it, I am of opinion that it is essential that we should adapt ourselves as soon as possible to post-war conditions.

The hon. member cannot discuss the general principles of this tax. He must confine himself to the details before this committee.

Another point about this tax is that if a man has a big debt he takes a far bigger risk than a man who has invested a small sum of money, and to me it appears that the basis of this tax should be so altered that it should make allowances for the type of business in which an enormous sum of money was invested in comparison with the type or business in which a small sum of money was invested. But I do not think we can really call these things taxes. The Minister said they were levied with the intention of stopping inflation. On that subject Josiah Stamp says—

As I said before, to me it appears that this is a fine or penalty on a very large proportion of our people, and a very unfair fine at that. As I said before in my opinion this tax is intended simply to perpetuate a large income for the wealthy man who had a large income before the war, and a young man will not have an opportunity now ever to earn a large income and he has lost the opportunity of ever putting himself on a sound basis, so that in future he will be able to earn a large income. That is why the tax is unfair. It appears to me, with all due respect for the high standard of knowledge of our Minister of Finance that due to the fact that he specialised in a study of the classics, he is very conservative in his outlook. This tax, to me, is intended to create and maintain, or may I say to perpetuate a plutocratic aristocracy. The people who had much money before will still have money, and those who did not have any before cannot have any now. This tax is bound to affect the post-war industrial development of this country, and therefore I want to ask the Minister once more please to reconsider this tax very carefully. It is one of the most unpopular taxes in the country for all those young industries and new businessess which started during the war.

I must ask the hon. member to come back to the details of the tax.

That is all I have to say.

I should like to bring Resolution 2 (1) under the notice of the Minister, and later I shall move an amendment in connection with it, or, if the Minister will not accept an amendment at this stage, he will have to consider it at a later stage when the relevant Bill is introduced. I am speaking at the moment on the tax as it affects the medical profession, but even more as it affects our national health. I want the Minister to realise the full implications of this tax in respect of certain salary or compensation that is received by persons in certain professions. I want to point out to the Minister that the medical profession has during the last four years been shorthanded. The medical profession has actually in general had to do more work than it could do. The result is we had difficulty in the profession, and we have had many complaints of doctors not being able to do all the work they should do. Now the Minister says that where any medical doctor or dentist receives remuneration by way of an allowance of salary, be it £100 or £1,200, for part time services, he must pay excess profits duty on that if it brings him to the notch where he becomes liable for excess profits duty. We have the position that specialists are appointed by the university to give instruction to students, not by lectures but by work in the hospitals. They are appointed in the hospitals, and they have to render services and instruct the students in connection with certain matters. These persons receive perhaps £100 or £200 a year. They are already paying excess profits duty, and now they have to pay excess profits duty on this £100, which means that they have to give three-quarters of it to the State; in other words they will be getting £25 for their work.

That point has already been disposed of.

Good. Then I come to another point. The Railway Department or the Department of Public Health or a private undertaking pays a doctor £200 to £1,200 for part time work that he performs for the State or for the private enterprise. He gives those services on the basis of a quarter or a half of the usual fees in practice. I take the case of a doctor appointed by the railways at £600 a year to do certain special work. He receives £600 for 400 operations and 600 consultations. That man is already paying excess profits duty. Now under this proposal he also has to pay excess profits duty on the £600 allowance or salary, which means that instead of receiving £600 he receives £150. Well, the doctor says—I am very sorry but I cannot work all these hours for £150 per annum. Consequently he resigns. I have in mind a case of a doctor who was appointed in the railway service as a surgeon at £1,200 a year. In private practice he was already earning £1,500. This means that he will not be receiving £1,200 from the railways but actually he will be getting only £300 a year for all the work he does.

Did he not fill that post before the war?

No, he has got it now. He has come back out of the army. He must do that work for the railways—about 400 operations a year. These are operations for which he would have charged about £20 in private practice. The man has to do £8,000 worth of work for £1,200 and now the Government comes with a law that compels him to give £900 of that £1,200 back to the State. As a result he is only getting £300 for all his work. Such a person says: No, I cannot work 365 days in the year for £300. Then we have the position of hundreds of district surgeons in the country. Fifty per cent. of them are paying excess profits duty because in the last few years they have been doing much more work than ever before. They can hardly cope with the work. Day after day we receive complaints about the work of these people. They cannot do the work, but in difficult circumstances they try to carry on. They are doing their level best, because they know that when the crisis is past they can have a period of peace in their lives and perhaps acquit themselves better for special work. They run the risk of impairing their health, because after this period, when the other doctors have returned from the army, they will have an opportunity to rest and to prepare themselves for special work. But under this proposal we shall arrive at the position that these people will be doing that work and getting practically nothing for it, with the result that they will not see any prospect of getting a rest in the future. In consequence they simply will not do the work. The Minister should take this into serious consideration, in the first place from the financial angle, and in the second place from the angle of national health. We must see to it that these people are at least assisted to do more work than they are really able to do at the moment. They have to overwork themselves. Well, in the circumstances let them do it; but then the State should not come and ask them to surrender three-quarters of the money they receive in salaries and allowances. I ask the Minister to give this matter very serious consideration so that we can actually encourage the people to remain in practice. These men do not want to remain in those positions. Medical practice and those positions have already sustained injury as a result of this tax. The Minister should therefore again go carefully into the matter and he should not reckon for the purposes of excess profits duty the amounts these men receive in allowances and salaries. I personally am not involved in this matter. If the Minister designs a better taxation system then I apparently will have to pay more. That has nothing to do with the matter, but I ask the Minister in all seriousness to exclude salaries and allowances of doctors and dentists from Clause 2. I want to propose an amendment.

Do not propose it now. Wait until you have heard my reply and then you can decide whether you will propose it.

Good. I shall do that.

I asked the hon. member not to propose his amendment. Should he still wish to propose it after he has heard my reply I think it will be better for him to wait till the Bill has been introduced. I have already told the hon. member for George (Mr. Werth) that we have to make these taxation proposals very wide and general in their scope; we cannot do otherwise. But when it comes to the Bill we can go into the particulars, and that will really be the time when amendments such as this can be proposed. Take one point, the question of persons holding educational posts; they will not fall under this. I think it will be much better if my hon. friend waits till we reach the Bill. I do not know whether the Bill will cover the points mentioned here.

But will you consider them?

I am prepared to consider them. Our real object with this proposal is that taxpayers should not be exempted on the ground that a part of their income is drawn from their occupation by way of salary.

We are at one with you there.

That is the object. As the position stands at the moment, as the result of a judgment of the court there is a wide scope for tax evasion. We do not want anything more than we originally had in mind when the Bill was adopted. As a result, however, of the judgment of the court it appears a big loophole has been created which is making things very difficult for us. I do not say that we can make exceptions in the case of dentists and doctors. But let us see what the Bill is and let my hon. friend discuss the matter with me and he can then, if necessary, introduce an amendment.

I agree with the Minister. We do not want to leave any loopholes. We do not wish to allow professional men to evade the law by appointing assistants and paying them large salaries. But we can nevertheless accord consideration to the question whether salaries that are paid by the State or by private enterprises to doctors and dentists should fall under the Act. I should like to give the Minister the assurance that we do not want to leave a single loophole but the instances I have mentioned are instances where the tax will retard the work. I shall not move my amendment at this stage’. I trust the Minister will have the matter investigated, because it is naturally difficult to enquire now into the implications of the Bill. I shall be glad if the Minister bears this in mind. It is difficult to grasp the implications of a Bill of this sort immediately, and I hope the Minister will not lose sight of it in drafting it.

I am not going to propose any amendment, but there is one point I should like to bring to the notice of the Minister, and that is the position of a man who has an appointment for which he draws a salary, but who does a little professional work outside.

He does not fall within the scope of this provision.

I am very glad to hear that. There is at the moment a shortage of actuaries with the result that actuaries who hold appointments in the big companies now and then have to do a little work outside.

This is not intended to apply to them.

I would suggest that the greater part of the income should be derived from the profession before a person falls under this.

In regard to the case I have just referred to may I ask the Minister in view of the fact these three persons established the business and had a pre-war basis of £230 what their position will be in the future. At the moment the Minister’s Department allows these people a salary of £1,500. That is the only way in which they can exist.

That is quite correct.

But what will the position be in the future?

This paragraph will not apply in their case.

I am glad to hear that, because otherwise it would have meant the position of these people would have been impossible. They would not have been able to live.

It is not intended to cover such cases.

Thank you.

Amendment proposed by Dr. Dönges put and the Committee divided:

Ayes—32:

Bekker, G. F. H.

Boltman, F. H.

Booysen, W. A.

Bremer, K.

Conradie, J. H.

Döhne, 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.

Malan, D. F.

Mentz, F. E.

Olivier, P. J.

Potgieter, J. E.

Stals, A. J.

Steyn, A.

Steyn, G. P.

Strauss, E. R.

Swanepoel, S. J.

Swart, C. R.

Van Niekerk, J. G. W.

Van Nierop, P. J.

Vosloo, L. J.

Warren, S. E.

Werth, A. J.

Wilkens, J.

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

Noes—72:

Abbott, C. B. M.

Abrahamson, H.

Acutt, F. H.

Alexander, M.

Allen, F. B.

Ballinger, V. M. L.

Barlow, A. G.

Bawden. W.

Bekker, H. J.

Bell, R. E.

Bodenstein, H. A. S.

Bosman, L. P.

Bowen, R. W.

Bowker, T. B.

Burnside. D. C.

Butters, W. R.

Carinus, J. G.

Christie, J.

Christopher R. M.

Cilliers, H. J.

Clark, C. W.

Conradie, J. M.

De Kock, P. H.

Derbyshire, J. G.

De Wet, H. C.

De Wet, P. J.

Dolley, G.

Eksteen, H. O.

Friedman, B.

Gluckman, H.

Goldberg, A.

Gray, T. P.

Hare W. D.

Hemming, G. K.

Higgerty, J. W.

Hofmeyr, J. H.

Jackson, D.

Johnson, H. A.

Latimer, A.

McLean, J.

Miles-Cadman, C. F.

Morris, J. W. H.

Mushet, J. W.

Neate, C.

Oosthuizen, O. J.

Payn, A. O. B.

Payne, A. C.

Pocock, P. V.

Prinsloo, W. B. J.

Robertson, R. B.

Russell, J. H.

Shearer, O. L.

Shearer, V. L.

Solomon, B.

Solomon, V. G. F.

Sonnenberg, M.

Steenkamp, L. S.

Stratford, J. R. F.

Sutter, G. J.

Tothill, H. A.

Ueckermann, K.

Van den Berg, M. J.

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.

Amendment accordingly negatived.

Amendment proposed by Mr. Werth put and the Committee divided:

Ayes—33:

Bekker, G. F. H.

Boltman, F. H.

Booysen, W. A.

Bremer, K.

Conradie, J. H.

Döhne, 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.

Malan, D. F.

Mentz, F. E.

Olivier, P. J.

Potgieter, J. E.

Serfontein, J. J.

Stals, A. J.

Steyn, A.

Steyn, G. P.

Strauss, E. R.

Swanepoel, S. J.

Swart, C. R.

Van Niekerk, J. G. W.

Van Nierop, P. J.

Vosloo, L. J.

Warren, S. E.

Werth, A. J.

Wilkens, J.

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

Noes— 74:

Abbott, C. B. M.

Abrahamson, H.

Alexander, M.

Allen, F. B.

Ballinger, V. M. L.

Barlow, A. G.

Bawden, W.

Bekker, H. J.

Bell, R. E.

Bodenstein, H. A. S.

Bosman, L. P.

Bowen, R. W.

Bowker, T. B.

Burnside, D. C.

Butters, W. R.

Carinus, J. G.

Christie, J.

Christopher R. M.

Cilliers, H. J.

Clark, C. W.

Conradie, J. M.

De Kock, P. H.

Derbyshire, J. G.

De Wet, H. C.

De Wet, P. J.

Dolley, G.

Eksteen, H. O.

Friedman, B.

Gluckman, H.

Goldberg, A.

Gray, T. P.

Hare W. D.

Hemming, G. K.

Higgerty, J. W.

Hofmeyr, J. H.

Jackson, D.

Johnson, H. A.

McLean, J.

Miles-Cadman C. F.

Moll, A. M.

Morris, J. W. H.

Mushet, J. W.

Neate, C.

Oosthuizen, O. J.

Payn, A. O. B.

Payne, A. C.

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.

Stratford, J. R. F.

Sutter G. J.

Tothill, H. A.

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.

Wanless, A. T.

Waring, F. W.

Warren, C. M.

Waterson, S. F.

Williams, H. J.

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

Amendment accordingly negatived.

Original motion put and agreed to.

Fixed Property Projits Tax.

The Committee proceeded to consider the proposed fixed property profits tax.

I move—

I should like to move an amendment as follows—

The position is this; experience has taught us that an official buys a house within the period covered by the Act, say in 1939. He buys a house and he is transferred to another part of the country. He then has to sell his house to enable him to purchase a house in the centre to which he has been transferred. If he sells a house here he has in certain instances to surrender a third and in other instances two-thirds of his profit. Subsequently he has to buy a house at a higher price in the place to which he has been transferred. If the Minister of Finance accepts this motion he will be meeting Government officials as well as other employees who were not intended to be affected by the Act. The Act was introduced at that time with the object of restraining the man who speculates in land, but now bona fide cases are brought to notice which have come about by force of circumstances. The man is transferred by pressure of circumstances, and furthermore it is the Government that transfers him. I know for instance of a case where an official bought premises in Cape Town in 1939. Later he was transferred to Pretoria. He had to sell his property here and to buy a house in Pretoria at the top figure. I really think that the Minister should extend consideration to these people. When one examines the Minister’s past speeches in connection with the tax it is clear that his intention was to prevent speculation in land occurring. Here he is affecting the man who has been compelled not by his own action but by circumstances, the acceptance of a transfer, to sell his house and to buy another house, for which he has to pay more. I think this is one of the most reasonable proposals that could be made, and I want to appeal to members in all quarters of the House to meet those public servants who in most cases receive low salaries, by supporting this amendment. I think it is necessary that all members of the House should support this amendment with the greatest sympathy.

I am sorry I cannot accept this motion. May I first say this. This afternoon I stated in connection with other motions that it would be better if the proposals were made when the legislation is before the House. I repeat this, because there are certain expressions it is necessary to define, the meaning of which is not clear. If my hon. friend, for instance, moves his amendment on the Bill —which he can do without getting this amendment through—we shall know what he means. But what are the circumstances in which a man will be obliged to sell his house? It is true he may be transferred by his employer. Well, must he sell his house? He may perhaps be able to let ft. He may be selling his house at a profit. He goes to another centre, he may have an opportunity to live with a family there. He may not be compelled to buy another house.

That is far-fetched.

He may be able to get accommodation.

Accommodation is not to be got anywhere.

Some people can get them. He may be transferred to a place where he can find accommodation, or he may be transferred to a place where the will be able to buy a house.

Where, for instance?

In George, for instance.

No, there are no houses to be had there.

He may be transferred to a place like Kenhardt.

He will not be able to get a house there either.

If he cannot get a house he may be able to find accommodation at an hotel. I say, therefore, that before you consider such a thing you must know a little more about what it signifies. The danger of such an amendment is, of course, that it will open the door wide for a much greater extension. It is not only amongst public servants that there are hard cases. There are other instances of that sort. There are instances that have arisen not exactly owing to the fact that persons have been transferred and compelled to sell their houses. They may be obliged for health reasons to sell their houses. If we accept this amendment we will be throwing the door open wide to many other cases, and consequently I am not prepared to accept it. The hon. member may be able to draft it more specifically when the Bill is before the House.

I do not know whether the Minister wishes to indicate that he will consider such an amendment favourably when the Bill is before the House.

I will consider it; I should first like to see what it is.

Here is a public servant who is transferred by the State from Cape Town to Pretoria. Everyone knows that he has a house here in which he and his family reside. Now he is transferred to Pretoria, where no accommodation is obtainable. He is forced to buy another house there. There is nothing vague about the amendment. If the man has a house here in which he and his family live, and he is transferred to another part of the country, where he cannot obtain accommodation, and where he is compelled to buy a house, it is only reasonable that this amendment should be accepted.

The amendment does not say that he must sell the House.

He has to sell his house here in order to buy another house in Pretoria. I consider that the Minister in this connection is rather headstrong in respect of public servants. He knows a number of public servants have already had this experience in the past; and not only public servants but other persons as well. Take, for instance, the employees of a municipality or a bank. Take the case of a bank manager; though a bank manager is perhaps not a good example because in most cases the banks provide their managers with houses. But take the case of a big business whose officials are transferred from one place to another. Many people are placed in this position. Many of them come to us and complain. They write to us: I have a nice house here and now I have to go to Pretoria, I cannot obtain accommodation there, and I shall have to buy a house there at a tremendously high price, and give one-third of the profit I make on the sale of my house to the Treasury. I can well understand the Minister wants to get as much money as possible from the public, but here you have the specific case Where a Government official is obliged by the State to transfer to another centre; and I consider it is the duty of the State to meet that official. It should do that not only in such cases but in other cases of employees in industries associated with food production, such as co-operatives etc. I consider the Minister will be shortsighted if he does not accept this amendment. We are endeavouring to expedite matters by proposing amendments at this stage. We would rather introduce at this stage what we would have to introduce when the Bills are before the House. We want to test the Minister’s attitude now, and we consider this measure will hit public servants hard. I know of public servants who have lost hundreds of pounds as a result of their transfer, and this is one reason why the public service is today so unpopular, because Government officials feel they are not being properly treated by the Government. Government officials are not in a position to make thousands of pounds. They have only their salaries to live on, and the little that they can save. We only wish to step into the breach on behalf of these people who are in the public service and who work in the interests of the community. I believe the Minister will be unreasonable if he does not accept this amendment.

Could the Minister tell us whether the tax imposed is to fall with equal force on the agent who merely acts as an ntermediary for passing the property from one owner to the other as upon the man who undertakes the sub-division of the property, the selling of it in separate sub-divisions—say in a township—and the advertising and various other activities to be engaged in? It seems to me there should be some measure of difference between the man who is merely acting as an agent in negotiating a sale of property as it stands from one person to another, and the person who is engaged in subdividing and selling the property in the form of a township. I wonder whether the resolution is so worded as to make it clear whether both these individuals who are occupied in widely different activities are required to pay the same taxation under this resolution.

Yes; the hon. member has raised a point there to which I am prepared to give further consideration. This resolution is, of course, in quite general terms, and that point could receive further consideration when the Bill is before the House.

Amendment put and negatived.

Motion put and agreed to.

Excise Duty on Beer and Stout.

The Committee proceeded to consider the proposed excise duty on beer and stout.

I move—

In terms of Section 9 of the Excise Act No. 45 of 1942, the increased excise duty on beer brewed at a specific gravity below 1046 degrees and on stout brewed at a specific gravity below 1065 degrees is payable on all such beer and stout which was not delivered from the stocks of manufacturers before 28th February, 1945, as well as on any subsequent additions to such stocks.

Agreed to.

Customs Duties.

The Committee proceeded to consider the proposed customs duties.

I move—

1. (1) In lieu of the limitation in terms of the second proviso to sub-section (1) of Section 82 of the Customs Act No. 35 of 1944, of the amount of the dumping duties, mentioned in paragraphs (a), (b) and (c) of Section 83, to one-half of the value of the goods concerned, the Minister may limit the amount of such duties to a percentage of the value of the goods for duty purposes, or alternatively to a specific rate per unit of quantity, volume or weight, such percentage or alternative specific rate to be determined by the Minister.

The hon. Minister has explained his object with this resolution is to prevent dumping in South Africa. We can understand that. If dumping from overseas countries occurs on a big scale it may be necessary to impose dumping duties to protect our industries. No objection has ever been made to any reasonable dumping duty. But while precautions are taken here to protect our industries against dumping, I want to ask the Minister who is responsible for the Department whether he has ever thought of a scheme to prevent dumping taking place from South Africa to overseas countries. The Minister will recall that in the past food has been “dumped” out of our country in a scandalous way in order that employees in other countries might get cheap food, while our people have to pay a high price for the same food. A friend of mine, a student of economics, told me that when butter was 3s. 6d. a lb. here and he was reading in the papers about the great butter shortage in South Africa he saw great quantities of South African butter in London shop windows offered at 5d. a lb. We feel it is extremely important that our workers and also our middle-class people should be protected so that no commodities from South Africa should be dumped at the expense of our own people.

The hon. member has broached an important point which really does not come within the purview of this motion. He has alluded to the reverse process and has pointed out that in the past food has been exported from our country on a big scale, whilst our own people have had to go without, and I can only express the hope that this will not happen in the future.

Motion put and agreed to.

I move—

1. (2) That where the value for duty purposes, as defined in Section 88 of the Customs Act No. 35 of 1944, of any goods imported into the Union exceeds ten pounds, such value shall be calculated to the nearest one pound and duty assessed accordingly, and for this purpose the amount of ten shillings shall, when it forms part of an incompleted pound, be deemed to be less than one-half of one pound.

Agreed to.

Personal and Savings Fund Levy.

The Committee proceeded to consider the proposed personal and savings fund levy.

I move—

1. (a) a basic tax of five pounds if the chargeable income of the taxpayer for any basic year subsequent to the year ended on the thirtieth day of June, 1943 amounted to two hundred and fifty pounds or more: Provided that in the case of a taxpayer who is a married person and whose chargeable income for any such subsequent basic year did not exceed three hundred pounds, the basic tax payable by him shall be three pounds; and
2. (b) a surtax of twenty per cent. on every completed pound of the normal tax payable by the taxpayer in respect of the basic year; and
3. (c) a surtax of ten per cent. on every completed pound of the super tax payable by the taxpayer in respect of the basic year.

Agreed to.

Stamp Duties.

The Committee proceeded to consider the proposed stamp duties.

I move—

Schedule.

Subject to a minimum of 6d. and a maximum duty of £5.

Agreed to.

I move—

Agreed to.

House Resumed:

The CHAIRMAN reported the resolutions on income tax, excess profits duty, fixed property profits tax, personal and savings fund levy, stamp duties, excise duty on beer and stout and customs duties and the amendment of the Law Resolution.

Report considered and the resolutions adopted.

Mr. SPEAKER appointed the Minister of Finance and the Chairman of Committees a Committee to bring up the necessary Bill or Bills to give effect to the resolutions now adopted.

The MINISTER OF FINANCE brought up the Report of the Committee, submitting three Bills.

I wish to refer to the administration of the Public Service Act in relation to the cases of internees who were in the public service at the time of their internment; and I wish particularly to draw attention to what seems to me irregularities in the treatment of the cases to which I wish to call attention. The Minister has kindly laid on the Table a list of the names of the internees, the grades of their appointments and the salaries they were drawing. Forty-seven members of the public service are on the list, 27 members of the prisons service and 78 police. He also has laid on the Table a list of those who after their internment received promotion, and he has produced also a list of those who are to be promoted. Now, Sir, one would like to know whether these men were suspended in terms of the Public Service Act when they were placed in the internment camps. They were put in these internment camps for a variety of reasons. There were those who were found in the possession of explosives. There were those, I think who actually used explosives, in some cases with loss of life as a result of the explosions. And there were those who cut telegraph wires and indulged in other forms of sabotage. Altogether their conduct was in strange conflict with what was required of them under their contract with the Government. When I speak of a contract with the Government I wish to make it clear that recently an organ of the Press has referred to the fact that these internees had not committed any crime or been tried by any court; tins was written by a man who was singularly ill-informed about the relationship between the State and the public service. I have been a public servant myself, and I know that the whole of the contract between the public servant and the State is based upon good conduct. Any serious departure from the code of good conduct is punishable by dismissal from the service, and for milder offences other punishments downwards to a light penalty or a fine are provided. But you can be called upon to forfeit your employment by reason of your misconduct; wherever serious misconduct is proved there are the severest penalties. The structure of the Public Service Act lays down that where a man is charged with an offence it is the duty of the head of the department to charge him, in terms of the procedure ordained by the Public Service Commission. They are responsible for the administration of the Act, not the Minister concerned. I see no record among the documents tabled by the Minister as to whether these persons were suspended. Provision is made under the Act for their suspension when a charge is made against them. They can be suspended without pay, and should they be found guiltless of any offence, at the end of their trial there is provision for the restoration of the money of which they have been deprived. As I say, there is no record and there has been no intimation in the various questions answered in this House as to whether there was any suspension whatsoever. But I wish to point out what a strange measure of appeasement seems to come in to the treatment of these men by heads of departments or the Public Service Commission. I shall refer to the case of a man who was interned, who was released and given limited freedom on a farm, and who after his release had paid to him the sum of £700, representing accumulated pay. Now. Sir, I assume that these cases must have been cases for suspension, or they could not have been cases for internment, and when one finds a case in which a released internee receives £700 accumulated pay one can only hope that the case of the soldier who is fighting for his country is treated with similar generosity. Let us hope that while the soldier of the same rank in the public service is absent fighting for his country his pay is accumulating, and when he comes back let us hope he will receive his £700 of accumulated pay in the same way as the internee has received his reward. But I doubt very much whether that will be so. When you come to contrast the case of the soldier with that of the internee, it will also occasion disappointment in so far as concerns the promotion of the soldier. Take the young man who has gone from the service as a clerk, who has fought his way up until he is a lieutenant-colonel in the South African Air Force. I know of such a man, now a lieutenant-colonel in the Air Force who is receiving good pay. When he comes back is he on the list of those to be promoted? Is there such a list for the promotion of returning soldiers? I want to know whether there is such a list, and I should be very glad to see it. It would give me great gratification to see the list of the distinguished fellows who have fought their way up from clerkships in the service, from the position of privates in the Permanent Force, until today they are colonels in the Air Force receiving good pay. But what of their future? Is their future to be as rosy as that of the internees? I very much doubt it. The internee has his dependants provided for. They are given just as good an allotment as is received from anybody on the books of the Social Welfare Department. I think, speaking roughly they get as much as £8 in the cities, £7 in the larger towns and £5 a month in the rural areas without cost to their husbands or themselves. As far as the diet is concerned, I think the rations in the internment camps are very generous, and the internees are even, I believe, supplied with wine or beer free. [Time limit.]

Yesterday evening, before we adjourned, the Minister in reply to a question stated that persons who belonged to the Broederbond had to resign because the Government felt it was a political movement. That is the only fault he can mention. Now I want to ask the Minister whether if this was the fault and it was regarded as a political movement, why these people were not dealt with under the Public Service Act. Why was it necessary to proclaim a war measure to get rid of them? People in the Provincial Administration may indeed be members of a political party provided they do not play a leading rôle in the party. Thus people may belong to a political party and they are not compelled to resign. But in respect of the Broederbond the reason is given that they are attached to a political movement. Take the case of the railways. There they take a lively share in politics. Now I should like to know why the people who belong to the Broederbond are treated differently to other people who work in the Provincial Administration or who are on the railway service and belong to political parties. Is there any other reason why steps are taken against members of the Broederbond?

With reference to the hon. member for Pinetown (Mr. Marwick), at his request I laid on the Table a list of all those officials who had been interned. Most of these men have been released as a result of investigations made by the people responsible for their internment. Three of the members the hon. member referred to have been promoted, and he takes serious exception to that. Under ordinary circumstances I would agree with him. But in respect of these three cases where promotion occurred, the first was the case of Strobos, who was interned for about three weeks, when it was discovered he was wrongly interned. Accusations had been made against him that were totally unfounded, and I would ask the hon. member for Pinetown or any other hon. member, whether he would expect the Public Service Commission, the head of the department or the Minister of his department, to use that as against him when he is entitled to promotion in the ordinary way? The same thing applied to Potgieter and Zandrag. In Zandrag’s case the Public Service Commission instituted an enquiry for the purpose of dealing with him under the Public Service Act, and the result was he was found not guilty and released unconditionally from internment. It was not I who functioned in connection with the internment of these people. The Minister of the Interior, my predecessor, had control, and subsequently the Minister of Justice took control. These people were interned on evidence laid before the responsible authorities, and Mr. de Villiers was the gentleman who was appointed to check up this evidence; and these people—some of them stayed in the internment camp for six months but all of them have been released. I say without hesitation that if in any of these cases the Public Service Commission or the head of the department, or the Minister, could have brought a charge under the public service regulations these charges would have been brought, and the men dealt with. I do not want to pursue the matter any further. These people were interned and they have been released; but if the department or the Minister was able to bring evidence against them they would have been charged and dealt with, and I can only conclude that that was not done because the evidence could not be brought or it could not be disclosed. The evidence that was responsible for the internment not only of these people but of many others was given under the pledge of secrecy, and that pledge was observed and will be observed by the Government.

You should disclose evidence like that; it is false evidence.

I have told the hon. member exactly the position in connection with the matter. If these people could have been charged under the Public Service Act they would have been charged and dealt with. In the case of the first official who was promoted the evidence was false and he was released within three weeks. Zandrag was found not guilty by an enquiry under the Public Service Act. I have given the hon. member all the information I have on the matter. I am not going into the point raised by the hon. member for Graaff-Reinet (Mr. G. P. Steyn) in regard to the Broederbond. The Prime Minister dealt with that when the hon. member brought it up. The Government, as a government, issued that war measure, and the Departments of State must carry out that war measure.

Why did you not deal with them in terms of the Civil Service Act?

I cannot pursue the subject in regard to the Broederbond, because action was taken by the Government, and the Prime Minister dealt fully with it when hon. members tackled him in connection with his vote.

He was instigated by the Minister of Lands.

In regard to the Minister’s explanation, if we may call it an explanation, of the release of the internees, I can only say that he has not dealt with the non-observance of the Public Service Act which lays down that where a charge is made against a public servant that charge has got to be brought against him by the head of his department and the Public Service Commission then comes into operation ….

If they had the evidence they would have laid the charges.

My whole point is, if these charges had been laid in accordance with the Public Service Act …. [Quorum.]. Mr. Chairman, I was dealing with the Minister’s reply in regard to the internees who were released, and I again wish to emphasise that the provisions of the Public Service Act are clear that where a man is accused of an offence he must be charged by the head of his department, and then the Public Service Commission must come into operation in regard to his trial—and had that been done at the time, I have not the slightest doubt that sufficient evidence would have been forthcoming to justify them being found guilty. Is it likely that after four years you will find the witnesses who were able to testify as to the facts at the time and who did give evidence then? In regard to one of the persons mentioned by the Minister as having been promoted, I want to say that I have received information during this Session from one of those who dealt with the arrest and the original investigation against the accused, and the statement of that person is that there is not the slightest doubt of this man’s guilt. So that when the Minister gives us his version of what the evidence is which existed four years ago, and what it means today, we are bound to doubt the innocence of the accused. The Minister’s proper duty and the duty of the Public Service Commission was to have recorded that evidence at the time and to have acted upon it at the time. It is because of the slackness of the administration that these men have not only escaped punishment, but today the Minister in his excessive concern and care, and I could almost say affection for them, is promoting them. I want to contrast with the actions of the Minister the treatment of soldiers who are being offered appointments as instructors in the Agricultural Department for the purposes of training would-be farmers amongst the returned soldiers. The salary offered to these men is £200, a temporary appointment, no privileges and no outlook of any kind. These, so far, are the only offers which have been made to returned soldiers, under the authority of the Public Service Commission. I want to show the kind of promotion that the internees have received. The Minister, in the list that he provided to me, has made no mention of the gentleman who returned from his internment to receive £700 in the way of accumulated pay. He was appointed as the principal of a crafts school at Adelaide. That is a school which carries a salary of £600 per annum for the principal. He was subsequently appointed to be a principal, in the same department, of a school at Bloemfontein and in that position he gets between £600 and £700 per annum. One of the promoted men receives a salary of between £800 and £900 per annum. The other one receives a salary of £340 to £500 per annum, in which capacity, I understand, he is an assistant magistrate. Those of us who object to being tried by ex-internees will have the possibility of being tried by him or having our cases heard by him in his new appointment. There are none of the promoted internees who are to attain to anything less than £500 per annum, but the soldiers are being offered temporary employment at £200 without privileges. I have asked whether the Minister can tell me what prospects are held out to men who belong to the service and as clerks went to the front, and who are today lieutenant-colonels in the Air Force. I want to know. The public is anxious to know and entitled to know. What kind of hope has the returned soldier of any kind of employment and any kind of advancement above those who are already in the service, those soldiers who served the country well, to the good name of the country and of her arms? I take the strongest exception to the treatment of the internees who have been treated as though their promotion is a right. I should like to remind the Minister, as one who has had considerable length of service, that promotion has never been a right that can be sued for in any service. No public servant can demand promotion or sue for it. It is no right at all. It is a privilege which is conferred upon him by an autocratic Government if they think fit. If the Public Service Commission conceded the promotions made here under the impression that there was a right on the part of the internees to have it, it was given under an entirely false impression. I want to know and to press the Minister to tell us what the prospects of the soldier are. He has told us virtually that the other people, the internees, have a clean slate. I am not content to agree that the people who were in possession of explosives—and I shall be able to indicate those in due course—those who used explosives—and I shall be able to indicate those in due course—Should have a clean sheet and nothing further said about it. As long as I live the list which was laid on the Table of the House will be the property of those who want to know and who will in due course ask what are the rights of the soldiers. I shall do everything in my power to make it clear to the soldiers that in their absence this sort of promotion was meted out to the people who sabotaged their effort and did everything they possibly could to destroy public buildings and to use explosives in subversive and entirely improper ways, and who in other ways were nothing but a discredit to the public service. I look forward to the time when the soldiers will be strongly represented in this House by soldiers.

In reply to the hon. member for Pinetown (Mr. Mawick) with regard to soldiers, all soldiers are dealt with by the Public Service Commission as regards promotion. Many a private had a double promotion, as well as officers. Speaking about the post office, many of our people have had treble promotions and yet they are still away on active service. All these people are considered by the Public Service Commission when it comes to promotions just as if they were carrying on their duties, even though we do not know how they might have performed their duties if they were here. The fact that they are absent does not prejudice them in any way. Take the colonel in charge of the Army Post Office. That man has had two or three promotions, well deserved. Others in the Post Office have also received promotion and the same was done in other departments. The Public Service Commission treats all these people as if they were doing their duty, and what they did is taken into consideration. We are going to be confronted with some of these officials who did magnificently at the front and got decorations. The Public Service Commission must take cognisance of these people. Military service is good service as far as the Public Service Commission is concerned. The hon. member need have no fears, worries or troubles in that regard.

How many can you name who got promotion?

I cannot give you that off-hand.

Name one.

Mr. McDonald who is in charge of the Army Post Office.

Surely he is serving in a branch which is only an extension of his ordinary service.

He is away on active service.

I do not deny that but I say it is a singular case.

The hon. member is a great questioner. If he puts the question on the Order Paper I will try to give him the information he asks for. I cannot carry all these names in my head. But I do know that the policy of the Public Service Commission is that none of these men are prejudiced and service at the front is good service.

The Minister says that the serving soldiers are not prejudiced. This is the language of red tape. I want something more than that. I want them promoted. It is idle to tell me that they are not prejudiced. I am an old civil servant and I know what that means. It means nothing. The man I speak of who went to the front, taking his life in his hands, has not had one jot of consideration from the Public Service Commission unless he was here to press his claim and to present himself for whatever promotion was going.

I have just been informed by the chairman of the Public Service Commission that between 4,000 and 5,000 men have been promoted whilst in the army.

I want better information about that. Is it nominal promotion merely from one increment to another? What sort of pay is connected with it? No public servant I know who has been in the army has been promoted. Those who got promotion are men who returned with the First Division and have been back in their jobs. I have been talking about the ordinary man who went from here as a clerk and returns as a Lt.-colonel. He is not given promotion. In the language of the “service” he is a prodigy. He is a case for future consideration. He is not prejudiced. That is all that can be said about it by the Minister, and that is all the money we can put into their pockets. And the case of the man who went from here immediately upon his appointment and who was unable to report himself for duty in the service is as bare of promotion today as on the day he left. In the meantime men were appointed to other departments who received rapid promotion and superior pay, men who never did any fighting. They have no greater qualifications then the man who did not report himself for duty but answered the call of his regiment. They have gone over his head while he fought for the country. It is idle to say the soldiers are not prejudiced, when that sort of thing happens and internees are promoted. When a promotion is made someone in the service is superseded because of the other man’s superior claims, which will remain superior claims, like those of the internees who were promoted. I think the whole fault lies with those who acquiesced in the procedure in not having the evidence placed on record at the time in the proper manner, in a manner upon which it could have been acted upon by an enquiry under the Public Service Commission. If that had been done everyone of these cases would have been capable of proof and of proper penalties, but instead of which we now find actions of appeasement in the treatment of these cases, these men have got off scot free, and they are being coddled and pampered by the authorities as if they are people who have some grievance. It is most absurd and as regards the public service man who has deserved promotion, it is wholeheartedly condemned.

Vote No. 23—“Public Service Commission”, £33,900, as printed, put and agreed to.

Vote No. 24—“Printing and Stationery”, £540,000, put.

House Resumed:

The DEPUTY-CHAIRMAN reported progress and asked leave to sit again; House to resume in Committee on 2nd May.