I regret that the Hon. Minister of Finance is indisposed and that he cannot be present in this House this morning. We know his disposition and we know that he will not be absent without very good reasons. We sympathise with him. The House will readily appreciate that to conduct a Budget debate without the Minister of Finance is very much like a production of Hamlet without the Prince of Denmark. In the course of the debate I shall sharply criticise the financial policy of the Minister of Finance. His financial policy is that of the Government and I trust that my criticism will be regarded as criticism directed against the Rt. Hon. the Prime Minister who in the final instance is responsible for that financial policy. Before dealing with the Budget itself I would like to correct a misrepresentation made by the Minister of Finance. The Hon. the Minister of Finance admitted in this House that since 1st April, 1940, the national debt has increased by £285 million. Since he felt that it was a large sum, he tried to put up a smoke-screen, and I would like to quote the Minister’s words in this connection—

The Minister gives us to understand that we should first deduct the £95 million and then we get the war debt. That is a misrepresentation. The Minister knows well enough that during the same period, viz. from 1st April, 1940, we received an amount of £69 million on loan account, and had we not participated in the war we would naturally have applied that amount towards meeting our national capital expenditure. Had there, therefore, been no war, or had we not taken part in the war, our national debt would not have shown an appreciable increase on what it was before the outbreak of the war. It would have been more or less the same figure. In the second place the Hon. Minister of Finance also tried to reduce the war debt in another manner or to represent it as being less. He tried to camouflage the position in regard to the war debt. He points to the £11 million which has accrued to the stabilisation fund, and the Reserve Bank fund. He also used that to reduce the war debt by that amount. The impression he tried to create was that this £11 million was in connection with the war and that it was brought about by the war itself for that purpose. That is also a misrepresention. The Minister knows well enough that the profits in the stabilisation fund and in the Reserve Bank fund are due to the increase in the price of gold and that the increase in the price of gold took place before the war broke out and before South Africa had decided to take part in the war. That is the position. I can quite understand the Hon. Minister of Finance being ashamed of the enormous increase in the war debt and that he should try to camouflage the position. But the fact remains that if South Africa had not participated in the war, our national debt would not have been one penny more than it was in 1940, had we spent the same amount in capital expenditure. The increase in the national debt is therefore war debt, pure and simple. It is a form of national debt, unprofitable debt, from which South Africa does not get one penny. It is the contribution by the Minister of Finance towards the creation of a sound and firm financial structure in South Africa. It is the millstone of £285 million which he has hung on the neck of South Africa and the future of South Africa. I can quite understand the Minister saying in his Budget speech that he was satisfied to leave it to the next generation and to history to express an opinion on that. I can quite understand that, because he will no longer be here to hear that judgment being pronounced, because I think it will be very unpleasant for him to hear that under his regime in South Africa our national debt simply doubled itself within the short space of six years. In the past we also waged wars and during the whole course of the history of South Africa, up to the beginning of this war, including all the development works and wars we have had, our national debt was only £285 million. In the short space of six years during which he has been in power the national debt has doubled itself. That is not the whole of the war account. That is simply the money we borrowed to pay for the war. In addition to that, enormous amounts were paid from cash reserves. It is somewhat less than the amount I mentioned a moment ago, but it is nevertheless the enormous amount of approximately £260 million. Then we still have the enormous pension debt, which may increase in South Africa. It is impossible to say at this stage what that pension debt is going to be. Our total expenditure in connection with the first world war was £45 million, and the pension debt which it has entailed to date is £20 million. That gives one some idea as to what this war is going to cost South Africa. One is still on the safe side in estimating it at round about £600 million. It will be close to that if not that amount. I am glad the Rt. Hon. the Prime Minister is present. That is the price South Africa is paying, not simply for the war but for the privilege of having a Prime Minister who only feels happy when he wages war. There has been talk of freedom and all those noble conceptions. We were told that through the war would be created a new, a better and a safer South Africa—a safer world.

Do you want to deny that?

Does anyone dare say that the world we are living in is safer than it was before 1939?

Yes.

Does anyone dare to allege that? Only a few days ago one of the great leaders in the war said that the world is today a hundred times more dangerous. Do these hon. members not know that all the nations, including America and England, are alarmed at the future; that they are more alarmed than even before in the history of the world? Mr. Churchill said that we fought to get rid of one dictator and now we have in his stead one who seeks to dominate the world; one who is greater and more powerful than Hitler and Mussolini were at any time. If ever we had a world where might is right, we have that world today. If ever there was a time when power politics ruled the day, where there is no such thing as national security, we have it today; and for that we have to thank our present Prime Minister; for that we scent nearly £600 million. I now come to the financial policy of the hon. the Minister of Finance. The fact that during the war years we freely borrowed and freely spent; the fact that during the war years, as the Prime Minister once admitted in this House, we shut our eyes and simply borrowed and spent without considering the costs—we do not look at accounts; the fact that all that money was spent in the most unproductive manner conceivable; the fact that all these things were done, resulted in the creation, in that way, of a semblance of prosperity in South Africa. A semblance of prosperity was created in the world and in South Africa in that way. There are still people in this country and in this House who consider that that is the right sort of thing, that the proper way to finance a country is to shut one’s eyes and to borrow and spend—that is the secret of national prosperity. Many people had that idea. On the other hand there are people who ask themselves this question: Have we not been creating a fools’ paradise for ourselves? This spending of money, this semblance of prosperity in which the country finds itself, is that not going to have a bitter aftermath; are the beautiful things we see around us not going to crash like a pack of cards one of these days, and are we not going to repent bitterly for what we did during the war years?

What a Jeremiah!

I shall not reply to that question, but this country has the right to know and the Minister of Finance should have given guidance to the country in his Budget speech. What South Africa and the people of South Africa have the right to hear from the Minister of Finance is this: Can we continue indefinitely as we have been doing during the war, borrowing and spending money in the most unproductive manner; and the more we lend arid spend the more we are creating that semblance of prosperity in South Africa? The people are anxious about the future, arid we have the right to hear from the Minister of Finance what would be the proper thing for South Africa to do now that peace has come and it is no longer necessary to camouflage the position—what is the proper position for South Africa? We search in vain in the. Minister’s Budget speech for a single word of enlightenment on the question which I put. I do not think I am exaggerating when I say that never before have we had a budget speech so devoid of a positive financial policy.

You say that every year.

Yes, that is what I venture to say. Never before have we had a budget speech so devoid of a positive policy as this last budget speech. The Minister of Finance calls this his first peace budget. I would like the Minister to point out to me one single place in the budget where he can say that the budget indicates that he appreciates the task of reconstruction during peace time; which indicates that he is doing, his duty in regard to it. I read through the Estimates vote by vote, and they are all the same as they were during the war years— even the Defence Vote. Over there sits the Minister of Defence. What is the position? The war is over. One can understand that it was not possible to let out all the defence secrets in the Estimates during the war years, but during the last few years I have been asking that when once the war is past we should restore defence expenditure to the sound position it was in before the war. What has happened? These are the Estimates we have before us; there is supposed to be a specification. I lay the charge against the Minister of Finance and the Minister of Defence that the specifications with which they are trying to mislead the public constitute nothing but deception. No one knows better than the Minister of Finance and the Minister of Defence that those specifications are not binding in the form in which they have been submitted to Parliament. That is mere information supplied to Parliament and it is by no means binding on the Department of Defence. The position is— that they do not say in the Estimates— that the Minister of Defence may, in terms of Act No. 27 of 1940 exceed any of these subheads by any amount, even to the extent of millions, and he need not come to Parliament for its approval by way of an additional appropriation. He knows that in terms of that Act there is such a thing as a War Expenses Account. That is a current account; it is not balanced at the end of the year. This money is being voted as a contribution to that fund. There may be a large amount in it because the balances are carried over from the previous year. Last year the amount was £8 million. The Auditor-General reports that during 1944-’45 an amount of £48 million was paid into the War Expenses Account over and above the amount voted by Parliament. Under the Act of 1940 the Minister of Defence and the Government can freely spend from that fund. It makes no difference what the amount is; they can spend it without Parliamentary approval. I say that Parliament cannot willy-nilly allow this a year after the war is over. No valid reason has been advanced for that. If we were to allow that it would mean the end of Parliamentary control over expenditure. I am going to propose an amendment, and part of that is definitely going to be that before we approve these Estimates the Minister of Finance or the Prime Minister should give this House the assurance that they will not shelter behind Act No. 27 of 1940, and that defence expenditure will not be exceeded without every excess being submitted to Parliament for approval by way of an additional appropriation. Let me make this quite clear: The war has given rise to a spirit of reckless expenditure. The financial conscience of the Minister has become dull; the financial conscience of the people has become dull; and the financial conscience of Parliament has become dull.

I want to say quite clearly that this side of the House is prepared to borrow and to spend money, but only when, in doing so, we create new and permanent sources of national welfare. We advocate a policy of expansion and development; we are prepared to spend money on it; but we are no longer prepared to tolerate the spendthrift spirit which is today rife in Government circles. It is time Parliament calls a halt. The Minister of Finance gets up and, in justification of his actions, he says that it is countering inflation. My attitude in regard to the matter is that money wasted—whether it is wasted by the Government or by the individual—has one and the same effect. When the Government wastes money you have the same inflationary effect as when the individual wastes money; and as far as I am concerned, if money has to be wasted, I would rather waste it myself than give it to the Minister of Finance to waste. And now I would like to deal with that part of the Minister’s budget speech which has provoked the most discussion, viz., his proposals to reduce war taxation. I want to say clearly and emphatically that the fact that the Minister has brought relief in taxation is not an achievement. It is not something for which he dare take credit.

Now that the war is over, there should have been taxation relief. In his budget speech, the Minister of Finance himself said that the standard of expenditure determines the standard of taxation. Since the war has now ended, it is obvious that there should have been a decrease in taxation. It is essential and inevitable. There are only two questions we must ask ourselves; not whether the Minister has brought relief, that is obvious; but the two questions are: (1) Has the Minister given the maximum relief he was capable of effecting, and (2) if he has given the maximum relief, is he spreading that relief equitably and proportionately over all those persons who were so heavily taxed during the war? These are the questions we have to put to ourselves. Let me say this quite clearly: If the Government is today canvassing for votes as it did at Caledon, and as its newspapers are still doing, with a taxation relief of £16 million, it simply goes to prove how impoverished that side is for anything to show off. They have nothing to show. All sections of the population endured hardships during the war, not simply one section. Commerce and industries knew that many of the taxes imposed by the Minister were injudicious and that they were to the detriment of our national economy, but during the war they put up with it. This side of the House and those who represent us were not in favour of the war policy; we rejected it; but Parliament decided, and we also had to shoulder the burdens.

And the advantages.

We often supported the Minister against our deepest convictions when he required money, and today, in common with all the other people in this country, we have the right to say that the necessity is now past, and we have the right to say: “Give us now what you are in a position to give us.” I want to lay against the Minister of Finance the charge that in his proposals in regard to taxation decreases he is revealing flagrant, unfair discrimination. I want to cast on the Minister this reproach: That when he was considering to whom he should accord relief, he was not thinking of the ordinary tax-payer whom he singled out year after year to help him bear his taxes. He forgot the farmer who was struggling along on his farm without farm labour, and who is now suffering under a drought; he did not think about the food shortage in this country and the necessity for encouraging food production. He did not bear in mind—and here I blame the Minister of Labour—that we had no strikes and no labour troubles during the war. The people did not selfishly think of themselves, even though the cost of living increased. They caused no trouble, but they were hoping that when once the war was over the Minister of Finance and the Government would bear them in mind. The Minister has forgotten the mine-workers of Johannesburg. During all the war years they did not get one penny increase in their wages—bonuses, yes, crumbs, but no wage increase during all those years. The cost of living increased, but they did not get one penny increase in wages. The Minister forgot about them. Now that the war is over, the Minister and the Government have been thinking of only one group. What has happened? The bells of peace had hardly finished ringing, when the Minister started the whole machinery of State and appointed a commission to investigate mining taxation with an instruction to bring out a report forthwith, as speedily as possible. And when the report was submitted he immediately adopted it and incorporated the suggestions in the taxation proposals. He as so concerned about the poor mining magnates, that I make no amends for saying that this budget is a mine magnates’ budget—it is a Hoggen-heimer budget, and nothing more. I put two questions and I shall answer them, because the Minister’s budget will have to be judged in that light. The first question was whether he is giving the people of South Africa the maximum relief he is capable of giving in regard to taxation. He is giving relief to the extent of £16 million. The question I wish to discuss is whether this is the maximum he is able to give, and I ask the House to follow me closely while I mention a few figure’s. I am just taking the Revenue Estimates and am leaving the Loan Estimates for the time being. During the past year we made provision under the Defence Vote for £45,375,000, and in these Estimates we are making provision for an amount of £18,350,000. On this one vote there is a saving of £27,000,000. I take a second vote, “Demobilisation”. One would have thought that this was going to be the great demobilisation year; but in the new Estimates provision is made to an extent of £733,000 less. Last year we spent £4,225,000 on UNRRA in the Estimates and this year not a penny. On these three votes alone the Minister is spending £31,983,000, or in round figures, £32,000,000 less during the coming year. We are endeavouring to ascertain whether he is giving the maximum relief which he is capable of giving. Here he is saving an amount of £32,000,000 on three votes alone. The Minister stated that last year he saved an amount of £4½ million on his Estimates. This year he is making provision for an additional £4 million. He is making provision for an additional £4 million on a Budget of £80 million, and without actually having new services he brings the Budget up to £84 million. It is characteristic of the Minister to over-estimate his expenditure. Now from the Estimates he should still have deducted the saving of £4½ million, which brings the amount which the Minister could have saved on the Estimates up to over £36,500,000. That is important. We want to know what is the maximum relief he ought to give. On three votes alone he saves £32 million and as regards the rest, last year he managed on £4½ million less than the amount he asked for. He may again save that amount. He therefore knows that he has £36,500,000 at his disposal. Now the Minister comes along and tells us that he has established a number of new services. I just want to enumerate them. Here we just have the following, as he gave them: Increased War Pensions; Scientific Research Council; Inland Air Mail Service; Increased Salaries of Public Servants, with retrospective effect; Contributions to the Pensions Fund for Public Servants; Extension of Health Services — an amount of £750,000; I should have thought it would have been at least £1 million; and finally, Import of Foodstuffs, £9 million, which gives us an amount of £15 million for new services.

What about the Police?

That has already been put into operation and we made provision for that in the Additional Estimates at the beginning of the year. The Hon. Minister is asking £4 million more than on the last Estimates, and the small additional amounts to which the hon. member is referring, are included in that On three votes alone he is saving £32 million. He can easily save £4½ million; new services amount to £15 million. The Minister therefore had at his disposal an amount of £21 million with which to reduce the taxation burden. He is merely giving relief to the extent of £16 million. The Minister is therefore needlessly retaining an amount of approximately £5,375,000. But there are two further considerations I would like to mention here. The Minister says that he requires £10 million for the import of foodstuffs. With that food will have to be bought. Not a penny may be spent on that without the approval of Parliament. Out of that £10 million he has to pay for the foodstuffs from overseas. I asked the Department concerned whether he intended making a free distribution of the foodstuffs in this country when it arrives. He said “No”. That means that the foodstuffs will be sold, and portion of the money will be recovered. It is misleading to say that the whole of the £10 million will be spent on foodstuffs. I cannot say how much the Government is going to pay overseas and how much the Government is going to recover in revenue in this country, but the amount he does not recover will be a subsidy. Let us suppose that to be £7 million. That leaves us with £3 million. The second consideration is this: I have already spoken about arrear taxes. The Minister said the amount I mentioned was excessive. We know that, since the time I spoke of it the position in regard to arrear taxes in South Africa has retrogressed considerably. There are people in South Africa who have not yet received their assessments over a period of three years.

They are fortunate.

But they will have to pay all their taxes at the same time. My computation is that the Minister can still recover at least another £3 million in arrear taxes. Therefore the amount which the Minister could have applied towards effecting relief is more than £11 million, apart from the £16 million which he is in fact appropriating for that purpose. The Minister is very fond of saying that we simply ask for a reduction of taxes without suggesting possible means. Here I have just done so on black and white. Over there are his officials. They can check all the figures. I hope the Minister will not come along again with the old tale that we are always asking for more without indicating where the money is to come from. We have just done so. I now come to the last part of my speech, and I now want to read my amendment because I would like to say a few words on that. I move, as an amendment—

1. (1) not to exceed Defence expenditure as specified in Vote No. 5 without the approval of Parliament by way of additional appropriation;
2. (2) to reduce substantially the incidence of direct as well as indirect taxation in respect of the lower and medium income groups;,
3. (3) with a view to the stimulation of food production and the reduction of cost of living, to encourage the agricultural industry in respect of the policy of taxation and relief from taxation in a measure equal at least to that extended to the gold mines;
4. (4) in view of the reduction of gold mining taxation, to pass a Silicosis Bill during the current session which will make provision for adequate pensions and improved benefits to all miners’ phthisis sufferers and their dependants; and
5. (5) not to enter into any financial and economic agreements or arrangements, either of an international or less comprehensive nature, which may handicap or hinder the development of our industries or which may be detrimental to the export trade of South Africa.”

That is my amendment and I would like to say a few words in connection with it. [Extension of time.] I have already motiated No. (1). It is not necessary for me to do so again. I now come to the second, the incidence, direct as well as indirect, of taxation in respect of the lower and medium income groups. We say that the incidence of taxation should be reduced, and that gives me the opportunity to come up for the ordinary man in South Africa. No other section of the community has been singled out to the same extent, year after year, to help carry the taxes, as the ordinary man in the street. I now want to read how, in the course of six years, the Minister has imposed seven-fold taxes on the ordinary tax-payer. On 28th February, 1940, he abolished the 30 per cent. reduction, thereby increasing the burden of taxes on the ordinary citizen by £2,165,000. That same year, on 28th August, 1940, the surcharge of 20 per cent. was introduced, and that brought in £900,000. The next year the Minister came with a brand new scale which incorporated all the increases and a little extra, and that meant another £980,000. In 1942 the Minister came along with his Personal Tax and Savings Fund Levy, which yielded another £1,500,000. In 1943 he increased the Personal Tax and the Savings Fund Levy, and imposed a surcharge of 15 per cent. on normal and super tax, which again meant over £1 million extra. In 1944 he singled out the farmers especially. Then he brought about changes in regard to the limitation of purchases of stock and improvements allowed to be effected, and he imposed an extra tax amounting to £640,000. Last year the only change he made—and here the change again involved the ordinary man in an amount of £180,000—was when the Savings Fund portion of the basic tax was abolished and the tax portion increased. To give you some idea as to how these taxes have been increased in the case of this class of person, I have endeavoured to compare the 1939-’40 figures with the present figures. It is difficult to do that in view of the amendment of the companies’ tax. At that time private companies paid as companies and not as individuals. I have, however, endeavoured as far as possible to find a uniform basis, and I think the figures I shall now mention reflect the position fairly accurately. In 1939-’40 the revenue derived from income tax and super-tax was £5,730,000, and, according to estimate, it would have been £17,300,000 for the current year. It has been increased from £5 million to £17 million. Now the Minister comes along and makes a few concessions. There are three of these. He writes off the Savings Fund Levy and he now allows a deduction in respect of children between the ages of 18 and 21 years, under certain circumstances, and he reduces the tax portion of the Personal Tax from 10 per cent. to 5 per cent. According to the figures given me by the Commissioner for Inland Revenue, and which I therefore accept as correct, the position is that before the war a married man with an income of £700 and two children paid a tax of £3 17s. 4d.; last year he paid £20 7s. 1d.

Only £20.

For a married man with two children an amount of £20 is quite an appreciable amount. The Minister is now making a little concession, and that person will have to pay £16 4s. 11d.

Compare that with Australia.

We are now dealing with South Africa. Take a married man with an income of £800, also with two children. Before the war he paid £7 15s, Last year he paid £29 1s. 3d. With the relief now granted he will have to pay £24 15s. 11d. This side of the House is of the opinion that more relief should be accorded to the ordinary man. Also for him the war is over, and he wants to feel with the rest that the war is over. These people have not been receiving double salaries, and they should also feel in their homes that the war is over. We feel that the Minister should at least have abolished the 5 per cent. Personal Tax which has now been incorporated; that he should now adopt the principle that a rebate should be allowed for medical and hospital expenses. That is absolutely essential. When a man has had sickness during the year he should be allowed to deduct his expenses in connection therewith for taxation purposes. We also feel that a man with an income of £600 should revert to the position before the war when a married man in this category with two children did not pay income tax. The Minister can afford to bring about that change during this year. I now come to another proposal by the Minister, viz., his treatment of the gold mines as compared with his treatment of agriculture and secondary industries. I said that we advocate a policy of expansion. One of the things which we require today is to encourage our productive industries in South Africa. We have three productive industries, viz., the mines, agriculture and secondary industries. If we want to have the maximum production in South Africa, if we want to increase our national income in order to raise our standard of living, we have to encourage them. I will not take it amiss if the Minister takes steps to increase gold production, but I say at a time when famine threatens our country and we have to import £10 million worth of foodstuffs, food production in South Africa is of greater importance than the encouragement of gold production.

It is cheap.

The first concern of the Government today should not be to place the mines on a sound footing, but to place agriculture on a sound footing and to encourage the farmers. I want to suggest to the Minister of Finance and to the Minister who is acting for him today, to encourage production. In what way? Tell the farmer that if he occupies his farm and has a bond on it, either private or with the Land Bank, we are going to allow him, in paying off during the tax year, to deduct it as overhead expenses for the purposes of taxation. I suggest this to the Minister of Finance and to the person who is today acting on his behalf. If he wants to encourage production, what should he do? Tell the farmers: If you want to occupy a farm and you have a bond on it or a loan from the Land Bank for improvements, we are going to allow you, over a certain period, to bring your instalments in charge against overhead expenditure in your income tax returns. I predict that the farmers will then produce as they have never produced before. South Africa will then have food and will have no need to import foodstuffs to the value of £10,000,000. But the most important matter is this: Should we have trouble during the post-war period we will have a farming community in South Africa untrammelled by debts and one which will be able to weather the storms of depression which will come over our country. [Interjections.] Is the hon. member for Rustenburg (Mr. J. M. Conradie) against my motion? If not, let him help us. The Minister still has a margin of £11,000,000. He can do so if he has the goodwill. I now come to the secondary industries. I want to say a few words about that, because something has been mentioned about it in the speech of the hon. Minister of Finance, a speech which struck a discordant note. The Minister stated that they have always stood for the protection of our industries, and that they are still there to give reasonable protection, but that great international conferences are in prospect and international co-operation is important. Those words strike us as ominous. I would like to tell the Minister this: We also stand for international co-operation and we are prepared to render our contribution towards the recovery of world trade and world prosperity, but not to the detriment of South Africa.

The same old story.

In the Select Committee on the Bretton Woods Agreement we specifically asked the departmental representatives: “If we accept the Bretton Woods Agreement, do we sacrifice our right to have tariffs for the protection of our factories?” Their reply was: “No,” and there we take our stand. I have here figures which will indicate exactly what role secondary industries are today playing in our national economy, and I think it will be a good thing if I just take our national income before the war. Just before the war our national income—this is according to figures furnished by Prof. Ritchards— was £434 million. Revenue derived from agriculture amounted to £53 million, from mining £98 million and from factories a mere £76 million. See how the position has changed during the war years. Now our national income is estimated to be £844 million. Agriculture contributes £76 million, mining £96 million and the factories £125 million.

This is a good Government.

The Government gets the credit for that. It was stimulated by the war, but the foundations of industrial development in South Africa were laid by the Nationalist Party. We came along with the policy of protection and today it is still the difference between this side and that. That side stands for reasonable protection if it is not deleterious to British factories or to international co-operation, and we stand for effective protection in South Africa, because we know what role the development of factories plays in the economic and national life of South Africa. I must honestly say that I am of the opinion that with that margin the Minister could have done more towards stimulating industrial development in South Africa. He should have said in his speech that no new undertaking in South Africa after 1st July last year will be subject to excess profits duty. That he did not do. That is the least that could have been expected of him. And the people are waiting. With the margin he has he could have reduced the excess profits duties tax still further. I have now elucidated my amendment. The amendment in connection with the Silicosis Bill will be elucidated by the hon. member for Westdene (Mr. Mentz). The Minister has given relief in taxation to the extent of sixteen million pounds, and I produced proof today that he could have given taxation relief to an amount of twenty-seven million pounds.

But has it been proved?

I mentioned all the figures. He has given relief from taxation to an amount of sixteen million pounds; he could have done so to an amount of £27,000,000 if he only had the goodwill. But as I said on another occasion, the Minister was thinking here more about himself and his reputation as a Minister with surpluses than he was thinking, during this critical period, about the welfare of the people in years to come.

I second. The war is over. The people rightly expected to get a peace-time Budget at least this time. With great expectations one and all looked forward to the dawn of a better world which has so often been promised to us, but for the umpteenth time—and this time even more clearly than in the past—the Minister has shown that all his sympathy is only with the mines and the rich people of our country. Moreover, this Budget has also produced an irrefutable indictment of the incompetence of the Minister of Agriculture, of the party opposite, and of the total failure of the agricultural policy of this Government; but more than that, we regret that we have to stigmatise this Budget as a being a party manoeuvre and as therefore not presenting the true state of affairs to the people. We are told that demobilisation is a huge success and that every soldier will shortly be discharged. Huge supplies are at the disposal of the Department of Defence for sale, and from the proceeds of which inter alia new purchases for the Department can be made, and notwithstanding that the war has been oyer for some time, the Government is able in this Budget to give us only the trifling taxation relief of £16,000,000. If that should be true, it seems as if the Government itself does not attach too much value to the peace and the wonderful world which it promised us. But as I have said, we regard this Budget as a party manoeuvre. This political move, we can assure the Hon. Minister, is far too obvious a disguise to cover the shortcomings of the Government. Why, it is being asked everywhere, have we received only a meagre concession of £16,000,000 now that the war on which we spent annually plus-minus £100,000,000 is over? The answer in my opinion is very clear. If we have to believe the present Minister of Justice then this Government intends to cling crab-like to its position whatever Caledon might have told the Government directly or by implication yesterday. Hence that all possible methods must be applied to try and bring about a more favourable turn of events than we see throughout the country today, in view of the general election. This small concession of £16,000,000 places the Government and the Minister of Finance, from their point of view, in a most favourable position in order that the Minister of Finance may be in a position next year to produce an excellently camouflaged surplus, which of course will then be used to pay off war debts; but at the same time, what a mighty election weapon does that sort of policy not produce? In 1947, just before the general election, relief will be granted to the extent of £25,000,000 or £30,000,000, which we will most probably get next year as a decoy before the election by way of taxation reduction or better social conditions. This relief should not have been announced only next year in the 1947 Budget; it should have been a reality this year. Even the. Minister of Finance will probably be the last person to say that the burden of taxation under this Budget does not fall too heavily on the shoulders of the people. The Hon. the Minister and the Government want the people, of course, to compare the taxation position of today with that of last year and the year before, and to be delighted over the crumbs which they received this year. This hope that the people will stare themselves blind at one tree and not see the wood, is an idle hope. I maintain that in this Budget the masses of the people have received only crumbs. £16,045,000 is granted by way of relief, of which not more than £9,885,000 is in respect of the mines, excess profits duty and reduction of trade profits. If in addition we subtract the taxes which we can describe as class taxation which are paid by only certain sections of the community, such as the, surcharge on telephone accounts, the suspension of the increase on railway fares, the relief in respect of petrol and the abolition of the tax on new motor cars, which together account for £3,860,000, together with the amount already mentioned, then we have the total sum of £13,745,000. That leaves only an amount of £2,300,000 which has to be distributed amongst the masses of the people. Crumbs indeed and very few crumbs which the people themselves are receiving. It is peace-time now and the people will start thinking in a sober manner and look past this tree of £16,000,000 and compare the taxation position of today with the taxation position before the war. Only if we do that, do we realise that to all intents and purposes we are still at war today and that this Budget can in no way be called a peacetime Budget. If in addition we take into consideration the higher costs of living, the tremendous depreciation in the purchasing value of our money, only then do we fully realise how little the actual concessions granted by the Hon. the Minister mean to us. Only then will the taxpayer realise how much worse off he is in the year of peace 1946 than he was in the year of peace 1939. But I rose to second this motion of the hon. member for George (Mr. Werth) and particularly in connection with the standpoint of the Government with regard to our largest and most indispensable industry, namely, the agricultural industry, also as affected by this Budget. We could have used up all our time by merely, for instance, by way of the report of the Auditor-General showing why the Government in view of its slackness and its wasteful actions year after year, should no longer be entrusted with the State’s money.

But we consider the lack of policy and the wrong actions of the Government in connection with agriculture of such great actual importance, that we would rather confine ourselves to that. We are living in a time when everybody is beginning to wonder when the storm of the next depression is going to hit us. But above all, we are living in a time of a hungry world. Everybody is clamouring for food, also here in South Africa. The people as a whole, but in the first place, the farming community, have hoped for actual relief in this Budget and what have we received? In the Budget speech of two hours and fifteen minutes, the hon. Minister of Finance did not even once refer to this essential industry of South Africa. The Minister of Finance considers this huge and essential industry not of sufficient importance to refer to it even once in his long speech; this industry which affords a living to 35 per cent. of our European population and 78 per cent. of our nonEuropean population has received only stones for bread from this Budget. In the Minister’s announcement he could not hide the truth that his love and sympathy are only for the mines and the rich people of our country. As an excuse for the huge concession made by the Government to the mining industry in South Africa, the Minister, with the utmost self-satisfaction, referred to the report of the Commission on Gold Mining Taxation which at that stage had not even been laid upon the Table of the House. But did not the Government have in its possession a report which was no secret any more, but a report which has been public property for years, which has afforded the Government much time to go into the matter and to provide the necessary means of carrying out the recommendations contained in that report on the reconstruction of agriculture. What became of that report? Did it land up in the waste-paper basket or would the hon. Minister for Agriculture get up here in this debate and will he assert that the white paper outlining the Government’s agricultural policy is now the document replacing this thorough and excellent report of his own Department? That would be an insult to that sound document, because this white paper is nothing else but a white flag policy and is hardly worth the paper it is printed on. One looks vainly for anything original or drastic in this document except for the re-introduction of a few old schemes which the Government, as a result of its shortsighted policy, has for years left in abeyance, as a result of which it contributed to making the agricultural industry more uneconomical and less productive, this document for the rest consists practically of idle words, but even for the little which is being offered in this white paper policy, we find in this Budget in the second year of peace, not the least reflection. The war is over, and today in this Budget we do not find the abolition of war taxation affecting the agricultural industry which the people and the farmers expected, but rather a perpetuation of such taxation. The taxation on the wine industry, for instance, which we were assured in this House, would only be temporary war taxation, the taxation for which the hon. member for Paarl (Mr. Faure), the hon. member for Worcester (Mr. P. J. de Wet) and the hon. member for Malmesbury (Mr. J. C. Bosman) voted on that condition, still exists and today it has not been removed yet, not to mention having been reduced, and it seems to us as if it has now become a permanent taxation. The same applies to the taxes on tobacco, beer and cigarettes. Instead of having reduced these taxes, it appears to us as if the Minister of Finance thinks they should now be made permanent taxes. The same applies to the tax on transfer duties. A small amount of relief has been granted in this respect, it is true, but as far as the 3 per cent. is concerned, which has been imposed, we cannot but assume that the Minister is thinking of making this a permanent tax for at least as long as he and this Government are in power. As regards the only other taxation relief in which the agricultural industry will have a part share, that is, namely, the fixed property profits tax, we would like to ask the Minister of Finance why he has not abolished this tax altogether. Does he still believe in his contention of 1942 that it should counteract inflation? Why now that the danger of inflation is still greater than in 1942, why now partly suspend it? We must assume that the Minister no longer believes in that, as has also been proved in America by investigation that it does not in any way contribute to inflation. The inexplicable attitude taken up by the Minister in burdening these properties which he taxed in the first instance as a result of his wrong assumption, with this tax today, must remain. It is not only a wrong but a most unfair tax, and we want to express the hope that the hon. Minister, in the light of his experience, will still see his way clear to abolish this tax. As regards the other expectations which the public had, there is the question of the cost of living. In this respect the hon. Minister has bitterly disappointed not only the agricultural industry but the whole population. The concession in respect of petrol, telephone accounts and railway passenger fares, will have no or little effect worth mentioning on the cost of living. This reduction in taxation will not produce more or better or sufficient food. Also in this respect the Government shows it lack of understanding of the stimulation of food production and the reduction in the cost of living. Apart from the Minister of Lands, who does the ploughing on his Government farms on the settlements with petrol, farmers do not plough with petrol but with power paraffin. And if the Government wishes to encourage food production, and to reduce cost of living, why not take this opportunity in this budget to make some concession in respect of power paraffin? Is it really asking too much to expect the Government to understand even the most elementary principles with regard to greater production and more economical production, and that notwithstanding the fact that our food production position is most disquieting, so much so that even the United States feel concerned over the position in South Africa, the fact that our food production is 14 per cent. lower than before the war and that for three successive years now it has been below the average. I say that even America is concerned over the position South Africa is facing. When, may we ask, and is there any hope, that the Government will wake up to the reality of the position and see to it that the most important foundation of our national economy, namely, the agricultural industry, will be given its rightful status, not only as a means of existence for the largest portion of our population, but also as the only source of supply of our food? Or what must we take to be the policy of the Government in this connection? Is it what we see here in its White Paper policy? Referring to the protection which has to be afforded to agriculture, the following significant sentence is used—

South Africa, according to this Government, will have to prepare itself to compete in future as far as agricultural prices are concerned with the rest of the world. Can we compete with a country such as America with regard to which we read in the report of its Department of Agriculture—

But why is it that America is in such a favourable position that it can achieve a record food production? Listen to what one of the great leaders in agriculture in America tells us. He says—

I maintain that America can do this because it has a Government which is sympathetic towards its agricultural population, and does these sort of things which we cannot compare with the basis adopted by the South African Government. But I go still further. As I have said, we must come to the conclusion that this Government wants us to compete with overseas countries. Here the Minister of Agriculture’s own Department gives us the position with regard to the purchase of machinery. What do we find? We find that if we take the index figure in 1936 to be 100, then we find that the index figure for agriculture has risen during the past ten years to 175. In America the figure is only 135. In addition to this huge difference, which the farmer in South Africa has to pay for his requirements, the Government comes along and announces in its White Paper policy that we must be prepared in future to adjust our prices to those of overseas countries. To get more a accurate picture of the economic condition of our farming community, however, we must ascertain what portion of our total national income is received by the farming community. I want to take the figures for 1939 not only because that was the last year for which rigures were fully compiled, but also because they reflect a more normal position than we have today. The agricultural production was worth £51,056,000. From this amount must be deducted the following large items: Cash expenditure £15,608,000, wages and rations £17,600,000. That is a total expenditure of £33,208,000, which leaves to the farming community a net working income of £17,857,000. From this amount must then still be deducted interest on mortgage bonds £2,850,000, interest on loans £490,000, together £3,340,000, which leaves a net income for the farming industry of £14,517,000. This amount has to be divided amongst 696,000 Europeans, comprising 35 per cent. of the European population. We would rather not work out the amount received by each farmer; but we do know that this 35 per cent. of the European population receives only 11.8 per cent. of the national income. If we go further and we take the latest census figures, and we also look at the report of the commission on the structure of family income, then we find that of all the European farmer families in the Union, there are 32 per cent., or nearly one-third, who have an income exceeding £200. Forty-six per cent. have an income of less than £100. The median income was £116. One half of these families, therefore, have an income of more than this amount, and the other half have an income of less than this amount. In view of these irrefutable facts and in view of the fact that we are on the verge of starvation, is it conceivable that the Government has not yet produced an effective scheme not only to alleviate the position, but to save it? From this Budget we have received nothing. The only thing we have received is this White Paper policy. What we read in this White Paper is so typical. Just listen to what this wonderful scheme for the reconstruction of agriculture is—

This is the first time we hear that this Government is going to construct roads and bridges. It reads further—

The Minister of Transport announced the other day that he has a deficit, and as long as he had that deficit, we did not hear very much about new road motor services. But this wonderful paragraph concludes thus—

No, we do not want schemes which still have to be developed. We want completely prepared schemes. Are other countries in the world as short-sighted as our Government as to fail to take energetic steps in connection with their farming industry? What happened in Canada? Here we have the fact that in Canada the Canadian Government passed a Price Support Act in 1944. In 1944 the Canadian Minister of Agriculture came along and he said: We must save the position of our agricultural industry after the war. They do not start only now to develop schemes. They already had this Act in 1944. What do we find in America? There we find that the Government stated that the farmers in America also had a supported price under an Act amended in 1942. That was not done in 1946. In 1942 they already had this Act. What does America tell us?—

That is what we find in the message of the President of America to the Senate. I am confining myself to countries which have taken part in the war. I am not talking now of neutral countries because then members on the other side get hot under the collar. I now come to England and what does the Minister of Agriculture of Great Britain tell us? He says that the aim of the British Government is to give the agricultural industry an assured future. Here we have his words in the British Parliament—

Where is that?

This is Mr. Thomas Williams, Minister of Agriculture in England. Then he explains how this scheme will work—

And note this—

That is what has been done in England by the British Government. The Minister of Agriculture made this announcement. The stock farmers know two years in advance what minimum price has been fixed. They can breed and build up the cattle for the market because, as the British Minister of Agriculture said, they must know that they will receive a reasonable reward for the capital invested by them in their industry. Hence the British Minister of Agriculture comes along and he announces two years in advance what the minimum prices are going to be. The farmers can then start feeding their animals because they know 12 months ahead what the actual price will be. That is what is being done in other countries and one can be jealous of the farmers in those countries; but here in South Africa we have to be satisfied with a White Paper and schemes which still have to be drawn up. It is no use waiting until the crisis has come and then to try and solve the difficulty. No, sound and accurate planning must be done before the time. It is not the soldier who wins wars and battles, but strategy. This is our charge against this Government; that it has no prepared policy to enable us to win the fight against the coming depression and the already pinching hunger. What did we expect from this Budget and what is required in order to provide the necessary security, the necessary food and the necessary supplies to the nation as a whole? The farmers fully realise that their bread is buttered in the cities. For that reason the farmer must and for that reason he desires to be in very close contact with the consumers and the salaried people of the country. The arithmetic of agricultural progress became very clear during the past few years. Take the example of what happened in America. There we find that in 1932 when there were 11 million unemployed, the cash sales of agricultural products amounted to 5 billion dollars. In 1937 when the unemployment figure was reduced to 6 million, the cash sales increased from 5 billion to 9 billion. In 1941 when unemployment was reduced to 3 million, the cash sales stood at 11 billion, and 1944 when there was no more unemployment the cash sales of agricultural products reached the colossal sum of 19 billion. It is very clear to the farmer that what he should have and the support he should get, is that the salaried people and the labour classes should receive a wage which will enable them to buy from the farmer to such an extent that the farmer will also receive for his labours what is due to him. Here is South Africa we have the same position. When we had unemployment and low wages, we heard of a surplus of agricultural products, and uneconomic prices, which today have changed to acute shortages. In employment, supported by a living and decent wage, lies the solution to this problem. Freedom! Yes, freedom is most valuable to millions in this world, but security is absolutely fundamental. What is the least we have expected from this Budget? We expected that the necessary security for the agricultural industry would be provided to enable it to fulfil its duty, which it realises full well, as the food supplier of the nation. Take the year 1939 when we heard of surpluses and of shameful malnutrition of a large portion of the population. At that time the agricultural population purchased machinery annually to the value of £3 million; fertiliser to the value of £1½ million; and seed to the value of between £5 and £6 million was used. If our Minister of Finance did not show all his sympathy to the mines, even these items, apart from the question of capital redemption mentioned by the hon. member for George (Mr. Werth), would have presented a golden opportunity of providing us with a better quality and adequate supplies of food at a more economic price. Enable the farmer to acquire machinery, fertiliser and seed at a more economic price, and you will be surprised at the stimulating effect it would have on production. Subsidy and assistance in connection with seed is not something new for this Government. If we refer to the report of the Auditor-General, then we see on page 220 that the Government and the Department of Native Affairs have assisted the natives under the Native Trust with seed to an amount of not less than £59,000. That is not all. Those natives receive subsidies of 20 and 45 per cent. on the seeds. The Minister of Agriculture will tell us that they also have a seed scheme for Europeans. True, but the Europeans have to pay every penny for such seed. We do not get a subsidy on seed like the natives under the Native Trust. Then we also expected that the Minister of Finance would at least have abolished this tax of 70 per cent. which he imposed on improvements. It has undoubtedly contributed towards a detrimental effect upon production, and if he had removed it, it would have contributed towards increasing the production of the country.

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

When the proceedings were suspended, I was dealing with points in the agricultural policy in respect of which we expected concessions in this Budget. In the few minutes at my disposal, I want to mention one other point in this connection. The Minister of Finance used these words which also appear in the report of his Commission of Enquiry into mining matters—

Now it does remain an irrefutable fact that in South Africa we have as the largest industries, as the largest sources of employment, the mining industry and the agricultural industry. The one is transitory in character and the other is of a lasting nature. Now the Government comes along and adopts a principle against which we do not want to raise any objection, but the Government adopts the principle that the system of taxation of the country should not have a restrictive effect upon the development of the one industry, the one of the transitory character, namely, the mines. The agricultural industry, which is something permanent and upon which we as a pation may probably have to fall back, is not treated in the same manner and is not granted the same concession. On mines, on new mines, the Minister allows a deduction of the total investment of their capital. Existing mines he allows to deduct 20 per cent. We do not object against that, but we want to know why the Minister does not grant the same concession to agriculture. If he did not want to give it to the full extent, in heaven’s name why does he not allow farmers also to deduct 20 per cent. in cases where they still have a mortgage? That would have a wonderfully stimulating effect upon the production of our country; but as I have said before and want to emphasise once more, this is the policy by means of which battles and wars are won. That is why we are asking for an agricultural policy which will take courageous action also in the interest and the welfare of its clients; a policy which will place the knowledge and resources which the Government has at its disposal, at the service of the agricultural industry, and a policy which will strive after the most effective and maximum productivity and which will provide means to the agricultural industry to enable it thereby to help itself; a policy which will not only contribute to the advancement and security of agriculture but which at the same time will contribute to the ultimate security of the nation as a whole. Vainly have we waited for such an effort from the Minister of Finance. We believe that a Minister should be capable of being cautious, but he should not be afraid—afraid to cast his bread upon the waters.

Mr. Speaker, may I at the commencement just point out to the hon. member for George (Mr. Werth) that it is many years that I have been seeing him in this House, and every year, if it is not a case of a direct accusation of the Minister of Finance by him, there is certainly a very definite insinuation that the Minister makes some or other misrepresentation to the House. I do not think the hon. member should take up an attitude like that, because if there is one member of this House with undoubted integrity, quite apart from his great ability as an administrator, it is the Minister of Finance—[Hear, hear]—and I do not think that language like that redounds to the credit of this House and its dignity, more particularly when applied to a man of that standing. May I appeal to the hon. member for George in future not to use language like that, but rather to leave it to the House to judge? The hon. member will recall that every year that language is used by him, and invariably when the Minister of Finance replies to his attacks, he makes complete mincemeat, if I may put it that way, of the hon. member. He cannot deny that the Minister’s explanations and statements of fact convince this House, and that his accusations of the Minister were always entirely unfounded. As far as the speech of the hon. member for George is concerned, I do not think there is much in it that calls for a reply, but there is one statement made by him with which I propose to deal, namely, in regard to the debt incurred in connection with the war. We need not have heated debates about this matter. The difference between the attitude of the Opposition and that of the Government in regard to the war is well known to the House and to the world, but what I wish to repudiate emphatically is this suggestion that the debt we assumed shall be looked upon as a liability. I look upon that debt as the finest investment that this country could ever have made. It is quite easy to prove that. Leave sentiment aside and leave aside the question of whether it was the duty of the country to engage in the war or not, but speaking from a purely business point of view, I defy anyone in the House to tell me that had this country remained neutral in terms of the hostile attitude adopted by the Opposition in the beginning of the war, this country would not have been bankrupt.

Yes, just like Ireland.

Yes, and just look at Sweden. But what did we receive for that debt? Hon. members may laugh, but I can assure them that if we had not engaged in this war the industrial development of South Africa could not have taken place, and that it has expanded for the benefit of all is entirely due to the fact that we were engaged in the war. Because we were in the war, the other countries sent us machinery and the raw material we required. It is said that we adopt the policy of nursing the gold mining industry. If we had not participated in the war, the gold mining industry would have had to close down automatically. Other industries would also have had to close down, so that the country’s markets would have gone, the farmers would have been bankrupt, and there would have been no industry. No one can deny that. The hon. member for George (Mr. Werth) suggests by the expression on his face that I am talking nonsense.

England had to get our gold to buy American dollars.

Why talk about gold? There would not have been any gold industry if we had remained neutral. We were importing materials in the ships of the Allies, and these would not have been available to us had we been hostile. But for that support we received from our Allies our industries would have languished and closed down, and we would have been bankrupt. Hon. members opposite talk about confining our arguments to South Africa. Well, Mr. Speaker, let us take the facts as they have been disclosed here. What did we secure as the result of our participation in the war? We secured industrial development, and what is more we must remember that wealth is not always expressed in terms ’of £ s. d. An invisible asset that we did secure was the reputation we earned, a reputation so high that today you can visit Great Britain or America or any overseas country and as a South African you will be welcome. Had we remained neutral—and hostile—no one at present would have left these shores on business visits to any of those countries. But today we can go anywhere in the world and negotiate agreements with ease, they are made every day. And South Africa, Sir, will look on this debt first of all as an investment for the industrial development that has taken place and has been linked with the great name South Africa has established throughout the world. As a result development will take place to an extent that will make it clear that this is the soundest business investment the country could have had. The hon. member is concerned about this debt. But supposing we had followed his policy and the country had remained neutral and things had gone on the lines I have indicated, as Germany had won the war as the Opposition hoped, an everlasting burden would have been imposed on us, we would have been bankrupt and bereft of our freedom, our country and our reputation. That would have been our position had we lost the war. Instead of that we preferred, as I said at the outset, to follow our great leader and to walk the path of duty, and I say with all sincerity we, as taxpayers, will willingly pay the debt. I am sorry the hon. member should have suggested that posterity will pass an adverse judgment on this debt. But could he tell us how much of that debt was incurred to keep internal peace? What proportion of our military expenditure was necessitated by the attitude of the hon. member and those associated with him? Let that go down to history.

It cost Sweden £450 million to remain neutral.

The hon. member then stated that the Minister in his Budget speech had given no indication of Government postwar policy. Surely he knows the Budget is not the place to indicate policy; it is purely a matter of taxation. The Government’s post-war policy has been repeatedly indicated by means of Bills and White Papers.

It is a paper policy.

The hon. member may call it a paper policy, but we have just emerged from the war and we are now only in the first peace year. Give the Government an opportunity to go ahead with its peace or post-war policy. The only policy that, fortunately for them, has come the way of the Opposition is that we are in the throes of a terrific drought; they are exploiting that to the full.

The poor mines are suffering from the drought.

I am coming to that. Then, Mr. Speaker, I shall not deal in detail with agriculture; my colleagues will do that adequately.

But I do wish to refer to the mining industry. I have here a few figures which will indicate its value to South Africa. The number of Europeans employed in that industry is 36,688; absent on national service, 5,006; natives and coloureds, 312,079. The total amount of wages paid in 1945 was: Europeans £20,891,000; natives and coloureds £13,603,000; I have not the details available of the total consumption of stores in 1945 but it was £2,500,000 greater than before. That gives some indication of the value of the industry. I do not think I need take up any more time in emphasising its importance. If I was Minister of Finance I would ease the burden of the mining industry more than has been done. It is the life blood of South Africa. Without the mining industry our industries would perish and so would agriculture. If ever there was an industry that should be kept outside of politics it is the mining industry. It is held out that enormous wealth is locked up in the industry. But what does it consist of? A certain company owns a certain mine. That company is conducted in the usual way by the directors and the office-bearers. Who owns the shares? Not one individual. There may be thousands of people walking the streets in South Africa who are shareholders. The profits are divided amongst them by wav of dividend, and a large proportion of the profit goes into the coffers of the State. The mining industry is indeed the main source of revenue to the State. Foolishly we hold cut that it is a terrific sin that the Government should have reduced mining taxation by £3,000,000.

I never said that.

You criticised that. I say the more we can ease taxation so as to give a longer life to the low-grade mines, the better for the whole country. I want to assure this House that the Government has the backing of the country as a whole in trying to preserve the life of the low-grademines. Then take the case of the Free State; if we are not going to allow the investor a reasonable return by way of dividend, money will not be forthcoming for the development of those mines. The hon. member criticised the Government in this connection, but if he explained properly to the farmer the farmer would welcome this easement of taxation, for mineral development in the Free State will mean a great market for his products. I think the hon. member is in agreement with me.

I only wish to deal with one other matter, in reference to the fixed property profits tax. In 1942 the tax was 6s. 8d. in the £ in respect of purchases since the war up to the time of the Act, and thereafter it was 13s. 4d. The Minister has now amended the law so that the tax will apply only to purchases during the war, and the provisions of the Act will be withdrawn from 1st March, 1946. This law was intended for the duration of the war, its purpose being to stop inflation. I do not think it had that effect; on the contrary, I think it caused greater inflation. But whatever may have been its effects, that is now past. I would, however, like to suggest to the Minister that the tax should not apply as from the end of the war, that is if he does not see his way clear to withdraw the tax altogether. At any rate, I would ask that discharged soldiers who had to buy homes for themselves should be exempt from the provisions of the tax.

Hear, hear

The law is so unpopular that I think it should be withdrawn. It could be made 25 per cent. from the date of the purchase, but the tax should disappear as soon as possible.

I should now like, Mr. Speaker, to deal with the hon. members on the Labour benches, but very few of them are present. In this country the position has developed that if a man is a capitalist he is a sinner, and almost he has no right to exist. I propose to touch on the capitalist system; it is private enterprise against socialism or nationalism. I would point out to my hon. friends on the Labour benches that they seem to be Rip van Winkles in their ideas, and still adhere to the Karl Marx idea, to believe that under our capitalistic system the rich get richer and the poor get poorer. I am an out-and-out capitalist. I stand for private enterprise. I cannot tolerate communism or socialism of any kind, except that I say that the capitalistic-socialistic system is the one I subscribe to. I believe in private enterprise, in private initiative, in private energy in the development of the country. The State will, of course, tax that wealth earned by private enterprise to the extent it is necessary to help others who cannot help themselves, to provide for social security, hospitalisation, free education and various social services. That is the natural system. If a man is born with more brain, more character, more energy and ability than the others, why should he not be allowed to use those qualities and to earn wealth with them? No matter how much he may acquire for himself, the State takes a proportion to be applied for the benefit of the rest of the community. That is the ideal system. Now the hon. members of the Labour Party come along and say this profit motive is a terrible thing. I would ask any hon. member of the Labour Party who is employed in business if he has ever thought of applying this doctrine logically and giving all the profit he makes to the poor or to a charitable organisation? They want socialism, which would mean everybody is employed by the State, and everybody is treated alike, with the complete sacrifice of initiative and energy in their work. The profit system is necessary. You may have the profit on a cash basis, you may have the profit by way of some benefit, but as long as there is some inducement held out to a man, he will use his energy and initiative. The Labour Party’s socialisation usually takes the form of a cry: Let us provide employment for everybody. But if that system is going to decrease the efficiency of your work and to reduce initiative, the productivity of the country must suffer in the end, with the result that the workers themselves must suffer, and in industry the costs of production must rise. The only thing then that could keep us going would be protective tariff which in turn would involve us in overseas antagonism. The Government would have it flung at them: You are carrying out a system to suit your political purposes and now you are going to exclude all of us. It is well known that a policy of this sort produces a vicious circle and the evil effects react detrimentally on the whole country. Labour members declare they are only out for the interests of the workers. But to my mind their policy makes for the undermining of the whole future not only of the workers but of the whole country. I shall give you instances. The hon. member for Durban (Berea) (Mr. Sullivan), speaking the other day for the Labour Party, declared in this House that, provided the native was paid the same wage as the white man, he is prepared to allow him to do skilled artisan work. If the natives of this country are allowed to do skilled artisan work and if they are given equality in the industrial sphere social equality must follow. Then what is going to happen to the European worker in South Africa once the native worker is placed on the same footing as him, with the same wages and working side by side? The hon. member must appreciate when that stage is reached—and there are natives capable of getting there—that the natives become foremen, or perhaps fill posts such as secretary of a company they will be in charge of European girls.

That is happening in Durban now with the Indians.

I want to warn European workers in South Africa that is the sort of statement made by the Labour Party representatives. It is the declared policy of the Labour Party, and the European workers must wake up and realise where that policy will lead them. When natives are given the same wage as the Europeans the only way industries can be kept going is by arranging that the combined wages of natives and Europeans shall represent a wage rate at a level that can compete with overseas industries. Once the native worker is given the European fate of wages the European worker’s wages will have to come down. Is the European worker prepared to face that? I would like to ask the Leader of the Labour Party: Are European workers prepared to subscribe to a policy that will lead to their wage rates coming down? The hon. member has told the House that provided it was over a period of ten years he was prepared that natives should be taken on as apprentices in the building trade and at the end of that period be admitted as skilled artisans.

That is not the correct position; that is quite wrong.

The hon. member says that is not so. I hope I have not misread the statement. I read it in the newspapers and got it from friends. Perhaps the hon. member would repeat what he did say.

Am I in order, Mr. Speaker, in making a statement?

The hon. member would not be in order in making a statement, he may only make a personal explanation. He will have his opportunity when the hon. member for Vereeniging (Lt.-Col. Rood) has sat down.

Now I have pointed out the danger of that policy to the hon. member I do not know whether he realises that statement went further than he intended. That is how I read it, but I want to be fair and I shall leave it there. The other point I want to discuss with the members of the Labour Party is the manner in which the trade unions and the employers of labour have all these years conducted their negotiations. Right through the war there were no industrial troubles. Disputes were always a matter of negotiation and agreement. On this I want hon. members to agree with me; the old days of capitalism—that dreadful word capitalism—is a thing of the past. There is no such thing as capitalism exploiting labour today in the modern economic world. Employers and employees discuss the terms and conditions of employment, an agreement is arrived at, or the Wage Board fixes wages—so where does the capitalist get the opportunity to exploit labour? I am a capitalist. If through my efforts I can accumulate wealth and as a result of that wealth develop industries and thus provide employment for those less fortunate than I am, provide not only employment for my fellow beings but assist in giving them concrete social security, am I to be punished, am I a sinner for doing good to my fellows? Why does the Labour Party hold out the idea to the workers that when a man has accumulated wealth he is a man that cannot be trusted. Under our present economic structure they provide employment and they are the only people under the capitalist system who can keep the country going. It is a system too that brings about efficiency. Now the Labour Party for the sake of political advantage are endeavouring to persuade the trade unions to join them as a political party. The day the trade unions join the Labour Party as a political body means the end of trade unionism in South Africa. I support trade unionism as it is the best channel through which trade union leaders can protect the workers. Their leaders come to the employers and differences are settled. But the day the trade unions become political, industrial matters will not be discussed on their merits, but the leaders will be after political glory, ’irrespective of where the money comes from. I have never heard any statement of policy from the Leader of the Labour Party where he has attempted to lay down how he is going to finance this policy. That is a side he is not interested in. Then is it not better to leave it to people who can lay down a policy and also earn the money to provide the means of carrying it into effect?

What is industry going to do with native workers in the future?

I do not think it can be expected that I should change the subject of my speech to suit the hon. member. I want to make an appeal to all trade unions in South Africa, though the Labour Party is trying to persuade them to link up they should not do so, because today the membership of the trade unions is representative of all parties. If the Labour Party wishes to solicit any individual member of a trade union to join them I have no objection, but should the trade unions as such join, that would be the day of their death. So they should not lend an ear to that cry. Let Labour fight its own battles. I can tell the Labour Party all they can ever be in South Africa is the tail wagging the dog, but who would want to be the tail of a dog that is so thin that it can be wagged by its tail? In South Africa there are two parties and there is no room for any other. Europeans are the artisan workers, the real workers are the natives. While the natives have not the franchise they cannot belong to the Labour Party. With its small European numbers, the Labour Party cannot build up a strong party. Therefore members of the Labour Party should join this side of the House; they should make up their minds which side of the House they will join, and this is the side that they can best assist in building up the country and looking after the interests of the workers of South Africa.

They thought the best thing was to say goodbye to your people.

One other matter I should like to deal with is the question of the natives. My attitude towards the native is quite simple; in South Africa the Europeans must be the guardians of the natives and as such must treat them justly and fairly, see they are clothed and well fed, and from the medical point of view well provided for. But they must be regarded as the servants of the white men. We must be honest. So long as we give the native food and look after him decently he will always acknowledge the white man as his master. But we must treat him fairly. Now I find the Labour Party—the hon. member will correct me if I am wrong—are beginning to champion the native and to say what he should get and what he should not get. I can only see one black mark on the horizon. The Labour Party are doing that in order to ally themselves with native support in case they want to force certain issues in the economic world in South Africa. But that is a dangerous weapon. I hope that with some new blood in the party in the person of the hon. member for Berea the party will be stopped by him from proceeding with dangerous things of that description. Politics is not everything. We have to remember we all have to live in this country, that we have numerous colour problems, and the more we can keep these outside the political arena and solve them as guardians of the natives the better it will be for South Africa.

Mr. Speaker, may I be permitted on behalf of the Labour Party to express our regret at the absence of the hon. Minister of Finance owing to illness. We have had occasion to differ very considerably from him on many matters, but we do pay tribute to his conscientiousness and diligence in the discharge of his duties, both in the House and outside. In that way he is an example to all members in this House. Our benches are also empty today through an unhappy set of coincidences. Five of our members have serious illnesses in their families. Now, Sir, I do not intend to deal at any great length with the speech of the hon. member for Vereeniging. This is a debate on financial matters. He has deliberately prejudged the Labour Party before listening to their contribution to this debate. I propose, therefore, to make that contribution on behalf of the party, and I believe that in doing so I shall provide the House with an adequate answer to the allegations of the hon. member for Vereeniging. I want to evaluate this budget, not as one that applies to a socialistic economy, but in its realistic application to the present economic set-up in South Africa. It is a capitalist budget for a capitalist economy. I adopt two criteria in assessing the value of this budget to South Africa. Firstly, is it an adequate incentive to investment by private enterprise, by local bodies and the State? Secondly, is it an adequate incentive to work by making sufficient provision for the lower income groups of this country? Let us take first the incentive to investment. It is customary to refer to the turnover of the Johannesburg Stock Exchange, regarding that as a barometer of the flow of investment in this country. It has been argued that as at 30th September last the turnover for the year was £1,327 million, and as that was an increase on the previous year of £136 million, the investment position of the Union is sound. The very opposite might be the truth. The adequacy of investment funds available for capital development must be assessed very differently from that. How far does this budget provide an adequate incentive to investment? In an illuminating paper published on the Rand towards the end of last year, Professor Richards, an orthodox economist of considerable standing in this country, came to the conclusion that South Africa at present has not sufficient liquid capital at its disposal to meet the present needs of the country. That argument was based on the ordinary assumption adopted by economists that at least 12 per cent. of the national income should go into savings or investment. In 1939 the national income of South Africa was £433 million. The net investment in that year was £39 million, that is, only 9 per cent. Therefore, there was in the first year of the war a net investment deficit of 3 per cent. or, in figures, £13 million. Now, during the progress of the war, that investment deficit accumulated to considerable figures. At the end of 1945, on account of the war, the net investment, the pent-up demand for liquid funds for capital investment, has been estimated as £213 million. That is a tremendous leeway for South Africa to make up. But the position is not quite as bad as that. We spent on the war altogether £430 million. Most of that was non-capital expenditure. Perhaps—and the Minister of Finance has given us this figure—£100 million of the £430 million is now available for capital investment. Allowing for that £100 million, the Union’s capital available for investment is about £113 million I believe that we can almost meet that amount from our present resources; but what of the demand for liquid capital for 1946? Judging by the statements of Ministers, and on indications in the amounts from loan funds to be available to the country during the coming year, and also judging by statements emanating from the mines from time to time and from industry and commerce, it can, I think, be fairly stated that for 1946 the amount available for investment will be about £120 million. So our position is this: We have an unsatisfied demand for £113 million for capital development. We have to obtain during the coming year £120 million. Our immediate requirements then are £233 million. My point is this. Where are we going to get that from? If we have to get it all from the national income, we shall not reach that amount. We can take the present national income as £600 million. It is true that is only an estimate; I like the word which fell from Dr. Holloway, the Secretary for Finance, the other day when he said that it is not so much an estimate as a “guesstimate”. If we have a national income of £600 million, and take 12 per cent. of it, we get £72 million for savings and investment, to meet a demand of £213 million. It is true that there are idle funds in our banking institutions, but as against them there is also a heavy consumers’ backlog, money that was not used as purchasing power, largely because of the restrictions on imports during the war. Generally, then, the consumers’ backlog, the pent-up demand for consumers’ goods, tends to offset, if not to cancel, the accumulated idle funds in the banking institutions of the country. I believe, therefore, that it can be put in a general way, it can be reasonably concluded, that we cannot in South Africa at the present time from our own resources find the required capital for development in order to maintain full employment. Therefore we must go outside the country for capital. The crucial test in following out that line of thought in regard to this Budget is its relationship to the mining industry. There at least I find myself in fairly close agreement with the hon. member for Vereeniging. Our whole economy rests on the mining industry. It is in fact the basic source of all incomes in South Africa. Capitalism, irrespective of its merits, must protect the gold mining industry in this country, or perish. Now, if this Budget we are considering today stimulates investment in the mining industry, then I believe it will stimulate investment in all industries and increase the national income by doing so. The question is whether the Budget will increase investment in the country.

There is more capital than we know what to do with.

The hon. member is not talking scientifically. That is one of the loose phrases we found also in the speech of the hon. member for Vereeniging. The general reduction of £3 million in taxation in the gold mining industry, certainly has not been enthusiastically received by the industry. There is disappointment that the reduction is not considerably more. It is true that the special war duty of 22½ per cent. is gone, but the changed formula is stated to produce—and this is important— only a 10 per cent. increase in the money available for dividends. Despite the fact also that the Budget will be a very effective stimulant to new mining ventures, it can, I think, be concluded that the incentive to investment in mining provided for in this Budget, even if it is considerable, is not vigorous enough. I follow that thought out by applying it to industries, especially with reference to the excess profits duty, and the trade profits special levy. These to me, are both forms of the capital levy. They are therefore unquestionably deterrents to investment. Industrialists at the present time should be encouraged, and given every opportunity, to build up their reserves during these times of relative prosperity against any recession in business and industrial activity later on. The E.P.D., even at the reduced rate, is to me an unfortunate impost. It would have been wiser had the Minister decided, even if the sacrifices are considerable, to drop it altogether and adopt a steeply progressive income tax; or alternatively, if the E.P.D. is to be retained, I should like to see some reference to the intention of the State itself to create out of the proceeds of that tax a reserve of blocked savings to be held against a trade recession. In my opinion the weight of the taxes to which I have referred, and the usage to which they are to be put by the Minister, will be to some extent a hindrance to investment. What then is the position in regard to the incentive to investment afforded by the Budget? We have not sufficient liquid funds in the country to meet our capital requirements. We must induce overseas investors to invest in South Africa. They will want the assurance of a reasonable profit, and the assurance that the risks involved will be at a minimum. This budget, notwithstanding the criticism I have made against it, has this outstanding merit: it affords on balance a considerable incentive to investment. I believe the Minister will in that way achieve a considerable amount of success, and to a degree we do not quite appreciate at the moment. In respect of the first criterion of judgment I have advanced, the Budget, I believe, comes out well. Now, my second criterion of judgment is this. Does the Budget make adequate provision for the lower income groups? For the purposes of argument, I want to describe the lower income groups as all those earning less than, say, £360 per annum. The incentive to investment must obviously be ineffective if it is not accompanied also by a powerful incentive to work. It is indeed one of the anomalies of the capitalist system, that it can easily promote an incentive to investment, but it constantly fails to offer adequate incentive for work. I believe that this is the fundamental weakness of this Budget. No State can succeed if it neglects its human material. Our European population, judged by overseas standards, has now achieved a fair amount of efficiency; but that is not the case with regard to our non-Europeans. They must be taught to produce more and to do it with more efficiency. Social factors, however— and this Budget deals just as much with social factors as with financial matters—are against their doing more and better work and being more productive. Take for example the manufacturing industries. In these industries there are 364,000 workers of all races, of which 244,000 are non-Europeans. The average wage at the 1942 level for Europeans in the manufacturing industry was only £23 a month. For the coloured worker it was £9 10s.; for the Indian £7 10s.; and for the native worker only £5. Now, what do these facts mean? These wage levels mean ill-health, inefficiency, tremendous economic losses to the industrialists and the distributors of the country. Wages can only improve with productivity and efficiency. That brings me to the point I want to emphasise about the Budget. This Budget could have been a powerful influence in the promotion of efficiency and productivity in every section of the population. It could have done that by making more liberal provision for health, nutrition, education and housing. When I speak of the incentive to work, I mean that these factors constitute the fundamental basis of work. They are the real incentives to work. I shall refer to each of them briefly. Take housing, especially for workers of all races. Dr. van Eck has told us frequently that the provision of housing, particularly for low income workers, should be an important part, a primary part, of a public works policy in this country. We would be prepared to vote in this Budget expenditure up to at least £15 million to achieve this aim of adequate housing. Such a programme as Dr. van der Bijl has pointed out frequently, would have a tremendous impact on every industry in this country. But what does this Budget propose in regard to housing? It proposes to set aside a sum of £200,000 as the State’s share of the losses on national housing. Clearly therefore if that is the amount set aside for such losses, then the capital sum is not going to be anything like adequate. And education? I think of the vast volume of illiteracy in South Africa. Take the Transkei. There you have a vast number of adolescents going to waste without education. Less than one-third go to school; they are without work and without a mission in life. They will not get the education, or the work, or the opportunity, unless a comprehensive scheme of village life is worked out for them and education and industries are developed. Here I want to pay a compliment to the hon. Minister of Native Affairs, for I know that his line of vision runs in that direction. What I have said in regard to the Transkeian natives is also true of all sections of our native and coloured communities, both urban and rural. This Budget in the fight against illiteracy cannot make proper provision for the social development of the non-Europeans by increasing the previous year’s vote by only £500,000. Then consider the toll of disease in South Africa. We have malnourished millions in this land. One authority estimates that nearly half the native children die before reaching the age of 16; due to malnutrition. That is true also to a large extent of all the lower income groups. It means loss of work and loss of efficiency. I have tried to make an estimate; I find that loss of work-hours as a result of sickness is costing the employers of the country somewhere around £6 million per annum. I look at the Health Vote. We propose to increase that vote by approximately £1 million, for all services. That I submit is not a serious effort in the conquest of disease in South Africa. Consider, too, the food shortages in our country. The provision of adequate food is an essential incentive to work. Does the Budget prove that we are providing for a planned programme to double our food output from South African soil? We must formulate such a programme. The per capita figures of agriculture in South Africa — I am using international units—is appallingly low, as compared with New Zealand, where it is 2,573; Australia, where it is 2,600; Great Britain, where it is 500. Our figure is 360. In terms of £ s. d. that works out at average income for the European farmer in South Africa of £82 per annum; for the non-European £10. According to the figures of the Secretary for Agriculture of the United States the figure for China is £10 a year; for India, £4 10s. These figures prove the alarmingly low productivity and inefficiency of South African agriculture. The position calls for the investment by the State of public funds to meet our desperate necessity in regard to the food shortage. What we want—and it should have been initiated in the Budget—is a courageous and full-blooded drive for food in European and non-European areas. The Budget is sadly deficient in its provision for this. Now, Sir, economists are generally agreed on this, that any tax that we impose on the poorer sections, i.e. the workers, can be justified, if those taxes return or more than return to the workers beneficial social services. All those earning under £360 per annum are heavily taxed in this Budget; their food, their homes and their clothes are taxed. It is true that they have been granted some relief in connection with the personal tax and savings levy and by the abolition of the Railway surcharge. Most of the concessions, however, have been given to those in the higher ranges of income. All the time inflation is lowering the value of the workers’ income. Butter, milk and eggs have recently gone up in price; and clothing is exorbitantly high. I give the following figures in connection with inflation; these figures are more eloquent than any words of mine. According to the 1944 report of the commission on native bus services on the Rand—and it is not only the natives who have to buy in small quantities— the percentage maximum increase in prices on the 1940 level is as follows: Mealie meal, 90 per cent. inflation; meat, 100 per cent.; sugar, 88.8 per cent.; tea, 126 per cent.; milk, 50 per cent. Then we come to Durban. In the survey of Indian families made by the Natal University College the figures are still more startling. Such figures have to be considered in framing the Budget. Calculated on the 1939 basis, rice went up in Durban, for Indian families, by 430 per cent.; dholl by 140 per cent.; beans, 35 per cent.; condensed milk, 60 per cent.; dried fruit, 500 per cent.; tinned fish, 300 per cent.; and cooking oil, 150 per cent. In the crucial battle in which the country is engaged now— and this is a challenge to the Government; if it can meet this challenge its existence is assured for years—against disease, ignorance and want, this Budget to me is a terrible disappointment. In the interests of the masses of our people, regarding their health, their education, their hospitals, their social welfare, their pensions, their nutritional services, the Budget, as far as I can see, provides for an increase over the previous year’s expenditure for all these services, for all the promised social security, of only £4½ million. Such a Budget falls lamentably short of an effective incentive to work. It has forgotten the workers. To sum up, it can be regarded as a Budget satisfactory as a stimulant to capital investment. It fails, however, to meet the vital social needs of the workers from whom we draw our labour, who create our wealth, and on whom our markets and the future prosperity of our country depend.

I am sure that we all regret the absence of the hon. the Minister of Finance from this House on this occasion, and he will probably regret it even more, not only from the personal point of view, but because of the fact that this debate has become “curiouser and curiouser” as it proceeded. We have the peculiar position of the hon. member who has just sat down, and to whom one always listens with a great deal of respect, who has criticised the Budget, but has very rightly decided not to move an amendment to the Budget. I take it that the absence of an amendment is an indication that in spite of the criticisms he has been levying, in reality the Budget before us is fairly satisfactory. The Minister of Finance, after having successfully piloted South Africa through the war financially, has now by this present Budget set us firmly upon the path of post-war reconstruction, and the least we are entitled to expect from the Opposition parties is that if they are dissatisfied with it they should give some indication of an alternative policy. The hon. member who has just sat down complained—and I would have liked to see the face of the hon. member for Benoni (Mr. Madeley) if he had been here—that there has not been enough reduction of mining taxation. Fancy hearing anybody from the Labour Benches pleading for a reduction of mining taxation. Again I would have liked to see the face of the hon. member for Benoni when the hon. member advocated the abolition of the Excess Profits Duty. We have been accustomed to listening to arguments from the Labour Party in favour of heavier mining taxation and of bringing the Excess Profits Duty up to 100 per cent., and I realise by the attitude of the hon. member today that he is a strong man struggling with adversity, who is obviously out of place in the company in which he finds himself. Perhaps I might permit myself a few minutes on the speech of the hon. member, for Vereeniging (Lt.-Col. Rood). We had the position of the hon. member for Vereeniging, who instead of dealing with the principles of the Budget, and with the Opposition, devoted a great part of his speech to a theoretical exposition of antediluvian ideas on capitalism. I am not going into that question beyond quoting to my hon. friend and to the House what was said by a very much greater man; one who has vision, one who realises the way in which the world is moving, and who wants this country to fall into line with that movement. I refer to what was said by the Rt. Hon. the Prime Minister at the Victory Function in Johannesburg on 30th August, 1945. The Prime Minister said—and I am sure that is the feeling of many of us in this House also—

Unless we do that we are going to get back to the old reactionary fight. We want to develop this country along lines where we can have the fullest possible co-operation between all sections of the population in the interest of the community as a whole. I would like to quote on that point a statement that was made a few days ago by a visitor to South Africa, Sir Reginald Coupland, who is the Beit Professor at the Oxford University, and who in an address delivered at Johannesburg recently made a statement which I think everyone of us should pay attention to. He was referring to the change of government in Great Britain, and to the subject of democracy. Referring to the fact that the change of government came about in Great Britain, and the fact that it has been generally accepted, he said—

That is the position we are all aiming at. Those of us who have a progressive outlook all aim at that position. We want to pursue a middle course which will create a state of affairs where private enterprise is given its fullest opportunity for initiative subject to control against the exploitation of the people, and where labour gets its full share of the wealth that is being created, and where both sections can work together in the interest of the nation as a whole. On the other hand our friends opposite have moved an amendment. The hon. member for George (Mr. Werth) has shown how the Opposition party, the Nationalist Party, is wriggling from day to day. They do not know where they are. For the last few weeks in this House they have been busy trying to get this House and the country to forget their war record. They have been saying: “Why throw up the war to us from day to day; why not forget what we have done?” As the Rt. Hon. the Prime Minister said the other day, they want to hide their war record in a cloud of oblivion. I do not know whether it is in anticipation of the result at Caledon, but all of a sudden today the hon. member for George, in dealing with the Budget, comes along and reverts to the war issue. Every piece of criticism he levelled against the Budget and against the Government is based on the suggestion that South Africa was wrong to have participated in the war, that the Opposition was right to fight against our participation in the war, and that all the evils to which, according to them, we are now being subjected, are due to the fact that we went into the war. I say in that regard, apart from the material points that have been made by the hon. member for Vereeniging (Lt.-Col. Rood) in reply thereto, that not only has South Africa benefited materially, but what is of greater importance, it has benefited morally because we have stood with the United Nations to bring down Nazism in the world, and it is because of that that we are able to be alive today, and it is because of that that we are able to look forward to an era in which the lot of the people will be improved. The hon. member glibly talked about the fact that there is no peace in the world today. Of course there is no peace in the world in the ordinary sense of the word, but I would like to know what peace there would have been under their policy if Nazism had been successful. You would have had the peace of the grave, whereas today, although we have no complete peace yet because we are passing through the birth pangs in the rebirth of a new world, we are moving towards a world which hopes to give to the people generally an increase in their economic standards and which hopes to bring about economic and political co-operation between all nations in the world. Of course, it is bound to take time. I would be the last one to suggest that overnight we are going to have all differences at an end. It is bound to take time; we are going to have difficulties, but I believe that our attitude, our policy, the policy particularly indicated continually by the Rt. Hon. the Prime Minister, will bring about co-operation between the nations, not only between the Big Three but between the small nations, in such a way that the time will come when we will have a peaceful world and a developing world in the interests of all sections of the population. Then the hon. member for George in his criticism made a statement coming very peculiarly from the Opposition. He said we were getting away from the whole policy of parliamentary control. Having regard to the attitude of hon. members opposite in the past, I wonder whether it lies in their mouths to talk to us about parliamentary control. I want to quote from “Die Vaderland.” Only on 3rd July, 1944, Mr. Ben Schoeman, the leader of their party on the Rand, who is going with the hon. member for Beaufort West (Mr. Louw) on a propaganda campaign in Natal— I suppose to appeal to the prejudice of Natal in the interests of the Nationalist Party—

When the Herenigde Party came into power the whole foreign British system, which did not conform to the character and the tradition of the Afrikaner, would be changed. Under the Nationalist system the executive authority would be strong and independent of any accidental parliamentary majority.

When the hon. member for George talks about parliamentary control, I want to know whether he remembered what Mr. Ben Schoeman said, and I want to know whether the Nationalist Party has in any way repudiated that policy adumbrated by Mr. Schoeman which means doing away with parliamentary control.

I am amused.

I want to say a few words on the policy of the Budget, and there again I want to say that the Budget is not merely a statement of figures, as stated by the hon. member for Vereeniging, It is based on policy intended to bring about social and economic national reconstruction. The policy of the Budget, whilst it may not go as far as the hon. member for Durban (Berea) (Mr. Sullivan) would like—it does not reduce the taxes on the mines sufficiently, it has not abolished the taxes on the excess profit maker—is based on a progressive policy. If you take the £16,000,000 which have been applied to the reduction of taxes, everyone of the tax reductions can be said to have as its object the economic development of the country to the fullest extent, the encouragement of the mining industry in the working of low grade ore to a much greater extent than has been possible during the war years, the encouragement of the mining industry to work new mines to a much greater extent than has been possible during the last few years, thus creating a state of affairs whereby there will be an increase in employment, there will be an increase of expenditure by the mining industry, and thereby you will help not only agriculture but secondary industries as well. And the same applies to the taxes that the hon. Minister of Finance has remitted in reducing the excess profits tax, the fixed property profits tax, in the abolition of the personal and savings levy, thereby directly benefiting 130,000 people in the lower-income groups. The hon. Minister himself stated, quite rightly, that remissions of war taxation must take place gradually. All those remissions are calculated to encourage industry to the fullest possible extent and thereby to create employment and to create a bigger wage bill and thereby not only to benefit those who are engaged in industry as employees, but also to benefit the vast majority of the working people in this country, and that is sound policy, because by developing industry, by creating employment to a much greater extent than is possible at the moment, it means that you will increase the national income and that you will improve the lot of the working men of all sections of the population. The hon. member for George spoke of the lower-income groups, and the hon. member for Durban (Berea) also referred to the lower-income groups. I say at once that if we are to help the lower-income groups directly it is possible that the remissions in the Budget are not adequate. But the lower-income groups are going to be benefited by the policy of the Budget through the development of industry, and a very large section of them are getting direct relief by the abolition of war surcharges and by the reduction in the petrol tax. I know some people will say that it only helps the wealthy people, but it helps the poor people as well. For example, it helps the commercial traveller, it helps the taxi-driver.

How will it help the poor?

It will reduce the amount of money they have to pay into revenue and, without in any way interfering with their own particular income. There is the reduction in telephone charges; there is the reduction in railway tickets. All those things are calculated to help the lower-income groups as well as other sections, and taking those two factors into consideration I venture to say that this Budget has set us on the path of national reconstruction, along which we will be able to develop South Africa to an extent which will redound to the credit of this country and to the benefit of all sections of the people.

And then I want to touch on another aspect which, peculiarly enough, our friends have been very quiet about. They have spoken about the national debt. They have spoken about the fact that we have increased our debt by £285 million as a result of the war. But in reality a great portion of that has been spent on productive work also, as has been pointed out, and on improving the position generally. But they overlooked this fact, a very important fact, and I think it is a fact that should commend itself to the members of the Labour Party. By means of paying in the £3,300,000 of the surplus of last year to the reduction of debt, by means of paying £11,000,000 to the reduction of debt from the revaluation of gold in the Reserve Bank, by those means as well as by the amount that is at present lying in the sinking fund, the Minister of Finance has reduced our total national debt to something like £570,000,000, and of that total of £570,000,000 it is interesting to note that the external debt has been reduced to £9 million. When we talk of interest, it means that the interest that is being paid today on the national debt is being paid to the people of South Africa. It is true that there may be an inequitable distribution as far as that is concerned, but the fact remains that the total interest that is being paid, except the interest on the £9 million, is being spent in South Africa, and that the Minister of Finance is in a position if he thinks that certain people are earning or getting too much, to reduce that amount by taxation, so that generally speaking we have a position of which we can very well be proud. In fact, I am not so sure whether this policy of continually reducing the national debt is really as satisfactory as some people imagine. In my view the national debt of a country is the same as the capital of private enterprise. With that national debt you develop the country. It is the national debt that has developed the Railways. It is the national debt that has developed many other activities in South Africa, and to that extent it is an advantage to have a national debt.

As long as it is reproductive.

I want to say this as far as the national debt is concerned. Whilst it is a notable fact that we have reduced it very substantially, whilst it is a notable fact that out of £570,000,000 our external debt has been reduced to £9,000,000, I believe at the same time in the interests of ensuring that the path upon which the Minister of Finance has set us for national reconstruction, should be trodden more rapidly, more expeditiously and more extensively than it is at the present moment. We should not hesitate to increase our national debt. We have a great destiny. By extending the avenues and opportunities of employment and by gradually breaking down the great disparity which today exists between skilled and Unskilled labour, and so making a fuller and better use of our human resources we will create a big home market in South Africa which will enable us to go in for a policy of mass production in this country which will not only be to the advantage of South Africa but which will enable us to capture, as I believe we will ultimately capture, the African market and to some extent take advantage of the Indian market which is at our door. That is the direction in which South Africa has to travel if it is to take its rightful place, as I believe the Rt. Hon. the Prime Minister would like us to take, not only as a sound and progressive nation, but also as a nation which has to play a very big part in leading the African continent in the regional arrangements that are to be made, and will play a big part not only in the British Commonwealth but in the United Nations. To do that it seems to me that our policy must be less of caution. That is one criticism I want to make. The hon. Minister of Finance, in speaking on another subject the other day, spoke approvingly of the caution and the conservatism of his financial policy. I am glad to see that in the Budget he has not followed that policy of caution and conservatism. He has rather followed a policy of courage and progress, and I believe if we are to achieve the development that we stand for, our financial policy will have to be less cautious, les conservative and more courageous, thereby creating the means with which to build up a great South Africa, from which all sections of the population will benefit and which will place us in the position of taking a proper and justifiable part in the affairs of the African continent and in the affairs of the world as a whole.

I will not go deeply into the speech of the hon. member who has just resumed his seat. If I understood him aright he really wanted to tell the House and the general public that the relief the Government has extended to the gold mines will be adequate for the development of industry in South Africa, that it will ensure employment and that it will lead to the conquest by our industries of the continent of Africa, and not only that, but of India as well. I would only say that if this is the spirit which inspires members on the Government side I must exclaim: “Woe to South Africa.” I am sorry that the hon. member for Vereeniging (Lt.-Col. Rood) is not here. I would like to congratulate him on the enhancement of status which has made him now function in this House as an embryo Minister of Finance. I would again congratulate him, but nevertheless, while doing so, I would say at the same time that he has hardly done himself justice on this the first occasion on which he has acted as an embryo Minister of Finance. He really overstepped the mark by the attacks that he made on the hon. member for George (Mr. Werth). I do not say that he made deliberate misrepresentations, but he certainly did not correctly interpret the hon. member for George. I would not have spoken on behalf of the hon. member for George if he had a further opportunity to speak, but as the hon. member for Vereeniging, as the responsible second speaker on the Government side, ventured to put certain statements in the mouth of the hon. member for George, I regard it as my duty to show that either the hon. member for Vereeniging misunderstood him or otherwise he tried to make a point that was not fair. In the first instance he attacked the hon. member for George on the grounds that, according to him, the hon. member made statements here which do not hold true, and more with the intention of diverting public opinion from the point. I think hon. members will agree with me that the hon. member for George is a hard worker in the same sense as the Minister of Finance, and though he may base his conclusions like the rest of us on personal conviction, his figures are not conjured from the air, and I think, therefore, that this was not right on the part of the hon. member for Vereeniging to make that assertion. Apparently he misunderstood the hon. member. The hon. member for George did not raise any objection to the promotion and the development of the scheme laid down in this Budget in connection with mining development. I think the hon. member for George expressed the opinion of all in this House that the significance of mining in South Africa is such that the duty of every government is to ensure that its progress is readily promoted, that its existence is reasonably assured. But the hon. member for George made no objection; he put that positively; he had no objection to make to the measures proposed to promote mining. What he said was that seeing that this was being legitimately done for the gold mining industry the same obligation rested on the Government to see that the two other great industries of the people, namely agriculture and secondary industries, were also encouraged.

He said it was a Hoggenheimer policy.

He said deliberately that as the country is today lacking in food production this encouragement ought also to be given to agricultural development and secondary industries.

What about the Hoggenheimer policy that he spoke about?

This is the trend of his speech; these are the facts and the data. I did not hear the rest of it myself.

I said it was a one-sided Budget for Hoggenheimer only.

I should like to have permision now to proceed. I think the hon. member for Vereeniging, in any case, owes a reply to the hon. member for George and to the country. He maintained that while the Government economised a little on the expenditure of the previous year, which was a war year, that it should have eased the burden of the people. The Government should have reduced more taxes. The hon. member for George said the Government was obliged, or at any rate could have effected reductions to a total amount of £27,000,000 instead of £16,000,000. I should have thought that this was one of the first points that the hon. member for Vereeniging should have answered, and I think that both the hon. member for George and we and the general public would like to have a statement from the Government side in order to learn what the attitude of the Government benches is in connection with this statement by the hon. member for George. I should like to draw attention to one other feature of the speech of the hon. member for Vereeniging. He made the extraordinary statement that the war expenditure was really a very advantageous investment for the people. I do not want to go into that. If it is true for South Africa it apparently should also be true in respect of the other belligerent countries; then it should also be true for the British people, who have made an investment of at least £24,000 million. But the British people do not regard this as an investment. The British people are placing claims before the world on the basis of the sacrifices they have made, according to them, on behalf of the peace of the world. They say it was a sacrifice on their part and not an advantage. It is something for which they must be compensated. And though the hon. member for Vereeniging says it is a good investment for South Africa, I think that there his opinion came from the realm of sentiment. I should like to voice a few opinions in reference to the Budget itself. To me it was a disquieting statement on the part of the hon. member for Vereeniging, which fortunately was corrected later by the hon. member for Rosettenville …

The hon. member for Troyeville (Mr. Kentridge).

… that the Budget is not a conglomeration of figures; it is not merely a question of tax relief or tax imposition; it is indeed an expression of the policy the Government has for the following year. But when the principal speaker on the Government benches states that these are taxation proposals that have nothing to do with Government policy it is very disturbing to me. Then I would say he has either entirely misinterpreted the hon. Minister of Finance or otherwise this Budget is worth nothing.

In other words, he could not get a policy.

A Budget should, in the first place, take into account the policy the State was following for the development of the people, and that development can only take place to the degree that means are available either by way of revenue or loan fund. A Budget policy must be an expression of the policy the Government follows in reference to the development of the country over which the Government rules, and consequently it is alarming when a Government states that these are nothing else than taxation proposals. I do not think that anyone can approach the Budget with an unprejudiced mind without being struck by a few outstanding factors, and what has been the most striking to me is that as a Budget it is still drawn up with big figures showing the war psychology, the war sentimentality. And now I want to make this statement. I do not think it is right to find the Minister of Finance alone guilty for the contents of the Budget. I think the responsibility rests with the Government as a whole, and consequently I would rather direct my complaint to the Government than to the Minister of Finance. I think one of the outstanding features of the Budget is that the public are still saddled with outstanding taxes which could be very much less. I shall presently quote some data on that. In the second place it affords no relief to the lower-income groups. I think that if the Government is conversant with the conditions which actually slipped into the report which was quoted here this morning there would be far greater anxiety over the real economic conditions of the large majority, almost three-quarters of the population. The third feature is discrimination. There can be no doubt that in this case the gold mining industry has been preferentially affected. We have no objection to the policy the Government is following, but we maintain that if it is the opinion of the State that all that is necessary for the welfare of the future of South Africa is for the gold mining industry to be encouraged, this is an unsound and a dangerous standpoint, and we maintain that the claims of the gold mining industry are nothing more and nothing less than the requirements of the other industries. On the contrary, I believe that the Government of the country should give more and more attention to the fostering of agriculture and secondary industries, to the provision of food for the people. This is the first essential, and in the second place the day will arrive when the gold mining industry will no longer be able to play the role it is playing today in our economy, and consequently the Government’s second responsibility in regard to economic conditions is to look more and more to the day when our internal industries will be strong enough to replace the gold mining industry. In this respect I consider there is an amazing omission in the estimates, because no account is taken of the encouragement that industry requires under the present circumstances. I shall return later to the view the Minister expressed in this connection in his Budget speech. It is, of course, not sufficient for him or for us merely to say that it will lead to industrial development. The matter I want to discuss today is the danger in which industrial development is being placed as a result of the attitude the Government of the day is adopting towards international relations. Despite the fact that in the past statements were made by individual Ministers that we would give reasonable protection to our internal industries, and as this is being coupled with international developments and the prosperity of the world as a whole, it shows that there has been more and more a watering down of the Government standpoint. I should like now to deal with this point in more detail. I claim that the burden of taxation is still too high. The Budget has been formulated under the influence of the big figures with which the Minister and the Government have had to deal during the war. For the year 1938-’39 the revenue from taxation was £35,644,000; in the year 1944-’45 it was £115,000,000; in the year 1945-’46 it will still be £99,000,000. The difference between 1939 and 1946 is about £63,000,000. As the Government has reduced taxation by about £16,000,000 there is still a big difference remaining between the £35,000,000 and the £99,000,000. It implies that an additional burden of £63,000,000 has been placed on the shoulders of the people as the increase during the war years. That remains a tremendously heavy burden, and the people will rightly ask why this burden is still laid on their shoulders and why these taxes are being imposed today. It is a matter that has significance to all who have to deal with the lower-income groups. Everyone must feel worried over this burden of taxation when one bears in mind the lower-income groups. The State must feel anxious in the first instance because it is responsible for the welfare of the community as a whole. I do not think the Government can allege that the figures in the report that has already been referred to in this debate are not correct. I refer to the figures that were published in Report No. 28 of 1945. In that we have a return of family incomes for a large part of the population. I believe these figures are correct. A return was made about the years 1941-42, and if the Government believes that this information is not correct it is high time that it gives new information in order to remove any possible doubt. If these figures are correct the indifference of the Government to the lower-income groups borders on the criminal. The percentage of families amongst urban families who have an income of less than £400 per year is 71.5 per cent. in the case of the Cape Province. In Natal it is 60 per cent., the Transvaal 60 per cent., in the Free State 76 per cent., and for the whole Union 65 per cent; Practically two-thirds of the European population of the Union has an income of under £400 a year in the case of urban families. In view of this information the question arises what sort of existence this two-thirds of the community has, seeing that money has depreciated in value by half. How can they maintain a reasonable standard of existence? And these are the people who have to protect civilisation in South Africa. Really no lightening of taxation has come their way. It is not only the urban group who have to live in such circumstances. The platteland, the farming families who have to produce food, are in a similar position. We find that 45 per cent. of them have an income of under £100, while the percentage of families who have an income of under £200 is almost 68 per cent.; it is 67.9 per cent. These figures apply to about 90 per cent. of the community on the platteland. Now I come to another point. In the peri-urban areas an investigation was made in regard to 36,370 families, and 75 per cent. of them have an income of less than £400 a year. With this information before us, and with the present Budget before the House, the Government must answer to these people for not contributing to an improvement of their living conditions. It is now announced that they will have the benefit of the reduction of the petrol tax. I shall be surprised if 5 per cent. of these people derive any benefit from that. Mention has been made of the reduction of passenger fares. What does this mean to them? These people have to live in circumstances which can hardly be stated to be above the bread line. I maintain it borders on the criminal, yet nothing has been done for this section of the population. The Minister may perhaps state that these people do not pay taxation. I do not think the Minister will do that, because only an ignoramus could do that. We have indirect taxes in the form of excise duties which, according to the estimates, will yield about £19,000,000, and these people pay that indirect taxation on the articles they use and which fall under that taxation. Then there are import duties which, according to the estimates, will yield £14,000,000. They are the unfortunate victims of the reduction of purchasing power of money by 50 per cent., and it has appreciably decreased compared with 1941. These people are consequently in the position that their capacity for subsistence has been curtailed, and again it is the primary duty of the Government to ensure that the livelihood of these people is ameliorated. To me the position is very serious when we have regard to the consequences. I do not want to trot out a bogey; I do not want to pose as a prophet, but bearing in mind the present position, and seeing that no adequate measures are being taken for the maintenance of purchasing power, and the fact that two-thirds of the community in the lower-wage groups contribute nothing to direct taxes, and seeing that one-third of the population have to bear that taxation to the tune of £99,000,000, this can only be persevered with on two grounds. The first is that we should continue to depreciate the currency and encourage a certain amount of inflation, or we should so increase the production of wealth in the country that a large amount of money can be kept in circulation. No one can maintain that the increase of wealth has kept pace with the increase in currency in the country. A good deal of the credit is not based on wealth. It exists on paper after big speculation. There is no foundation for security in these estimates. Unless the Minister does one of two things, unless he goes ahead with inflation and continues it— which can have serious consequences should there be any retrogression, or unless he can arrange for greater production of wealth, it is clear where such a state of affairs is heading. It is one of the responsibilities that rests on the Minister of Finance to see that steps are taken in the immediate future to guard against these two evils, both great evils, and which may be disastrous.

Now I turn to industrial development in South Africa. The Government has taken the intelligent step of appointing a commission of enquiry into the position of gold mining in South Africa. I have not yet had the opportunity to read the report, but I hope to do this shortly. The Minister of Finance presented certain findings to the House. They appear to be sound conclusions, and I shall not dwell on them at the moment. But though the Government has been to the trouble of finding sound bases for a sound taxation system in connection with the mines, it has had equally sound bases in the findings of the Board of Trade and Industries in the report published last year. Certain recommendations were made on page 145. The Board of Trade and Industries suggested what the foundations of taxation should be. One of them is that taxation should be of such a character as not to be detrimental to the spirit of enterprise. The Minister may now say that there is so much ready cash in the banks and that there is so much credit that there is abundant opportunity for development. He may, indeed, say that the capital for development was there. There is a great lack of consumers’ goods, and, on the other hand, no opportunity to invest capital. That position will not continue for ever. We have uncertainty about the future, and this Budget has not reduced that uncertainty. The Minister will also say that capital is coming from abroad. That is accompanied with further problems. Only a sound policy, one based on sound principles, is necessary to ensure the future of industries. It is necessary that our industrial development should receive attention, because these industries already play an important role in the production of wealth in South Africa, I do not want to be unfair towards the gold mines. I admit it is an industry that distributes purchasing power, that it is a market for our products, that it provides us with a currency that gives us status in the world and which gave stability to our economic life in the past. But I would boldly state here that the assertions we have heard today and that we usually hear about the role that the gold mines have played in the country are an exaggeration of the significance of the gold mines today in our economic life. We’ must take into consideration the value of the gold mines to us as a source of employment. I take the figures for 1942. Then the industries gave a livelihood to 400,000 workers, of whom 150,000 were Europeans. This is far more than the 36,000 mentioned here today by the hon. member for Vereeniging. The wages paid out by industries was not £30,000,000 as in the case of the gold mines, but £65,000,000. South African raw material to the value of £80,000,000 was fabricated. The contribution to the real wealth of South Africa was £130,000,000. In connection with this information we must also take into account the fact that the gold mines are decreasing in importance and should the gold mines perhaps disappear one day their place must be taken by our industries. I should also like to mention this aspect. In the speech of the hon. member for Vereeniging what struck me was that though in the past he has always devoted himself to being an advocate for industries in South Africa and assumed the task of pleading for the protection of South African industries, he has with the enlarged status he has received and the new political situation really forgotten to do this. Without being presumptuous I think it is very necessary that we should give our attention to the needs that are supplied in South Africa by industrial development. In his Budget speech the Minister of Finance mentioned certain overseas negotiations in which South Africa had participated, and in which South Africa still intends to take a further part. The Minister has in that connection stated that South Africa, too, has an interest in international welfare and that we should endeavour to contribute towards it. Those were not his exact words, but that was the trend of his speech. We have no objection to South Africa declaring itself willing to work with other nations of the world in creating new world conditions. But then it must be on a clear understanding that it will not be effected by the formation of new groups. The conviction in the mind of the Afrikaner people is this, if there is further grouping there will also be further clashing of groups, which provided the spark for the two world conflagrations of the twentieth century, and if this is going to be the case we do not want to have anything to do with it. But if this is an honest attempt at international co-operation to ensure a new mode of life for the world we shall want to contribute to that. But the first requirement is that we shall contribute to the prosperity of other nations, but not before we see to the welfare of our own people. It is this that is a sound principle—that we should not concern ourselves about the welfare of other nations at the cost of the welfare of our own people. On the second of this month I read a report from which it appeared the Government of South Africa had received an invitation from the Government of the United States—and this invitation was sent to 14 countries besides the United States itself—to hold discussions. This in itself at once awakens doubt. Only certain nations were invited to take part in the trade conversations. This implies that certain others were excluded. I shall be glad if the Minister of Economic Development will clarify this aspect of the matter. If the object is to promote the prosperity of the nations of the world with such international discussions why should grouping be started? In this invitation certain fundamentals for action were laid down. In the first place South Africa, like the other fourteen, was asked what tariff amendments we were prepared to make so that the flow of trade, of manufactured goods, to our country could be increased. In the second place we were asked what expectation we had from other States in connection with concessions by tariff amendments.

They only want information.

I want to assume that the discussions will cover this matter. Then the responsibility will rest on the Minister, before he takes part in those discussions, to inform the House fully in reference to the import duties he believes can be reduced. I think this House is entitled to know what concessions the Government is prepared to make and in how far it will affect our policy of protection. On the other hand we also wish to know what the Minister is going to ask for the promotion of our exports. We should like to encourage and stimulate world peace and the welfare of nations but we do not want to link it to the formation of groups which can increase friction until it comes to the burning point. But we have an invitation to participate in international discussions, to promote international trade, and we should like to have information in advance about the Government’s plans, and we should also like to sound a warning against a flippant attitude towards our own country’s industrial development. I think we should remind the Minister that from the farming angle South Africa is not a rich country but a poor country. It has already been shown in the present circumstances that South Africa’s farming cannot comply with the needs of our population in respect of foodstuffs. South Africa is a poor agricultural country and consequently it will be a crime for the sake of the export of agricultural products—of which we can export very little—that we should grant favours which can be detrimental to our protective tariff. If I have the time I should like to go into this matter. There are a few agricultural products which we could eventually export in small quantities. I do not want to anticipate the future. But if we make provision for our own people there will be very little to export. There will be a little fresh fruit, wine and spirits, a little sugar, eventually perhaps meat, but there will be very little for export. I repeat that we should do nothing detrimental to our protective tariff in order to gain advantages for this export, because the future of South Africa will be based on industrial development. The only prospect South Africa has is in regard to industrial development. I want, to warn the Government not to deal lightly in regard to industrial development when tariff reductions are asked for at an international gathering. There are commodities like wool diamonds, and gold, that we export, but which do not require any favouring. Our base metals ought to be worked here first and that applies also to skins and hides. Seeing that we have advanced so far as to develop a considerable number of industries to a reasonable extent we should do nothing detrimental to that development. I have footwear in mind. This is an industry of which South Africa may be proud. As a result of the protection that has been granted it an industry has been built up which can produce of the best. What is going to be the Government’s attitude in respect of the footwear industry? You have the iron and steel industry, which is a fine industry, although it only fulfils at present a third of our requirements. What is the Government’s attitude going to be? There is engineering, which has been built up appreciably, and what is the Government’s attitude going to be. We have a considerable number of primary products that are fabricated here because they are necessary for the independence of our people, and what is the Government’s policy going to be in reference to tariff protection in that respect? My time is up and I must conclude. This Budget is linked up with overseas negotiations. I have mentioned those proposed discussions. There are two countries especially which can insist on tariff reductions. One stands in the position of “export or die” and the other is in the position of “export or fight”. Are we going to be landed between the two millstones? Here we must look to our own existence, to our own industrial development and to the welfare of our own people. We will only say to the Government that we must be prudent. Let us make our contributions to world peace and to the welfare of other nations, but let us first see to the prosperity of our own country.

The attack on the Budget today, I think has been singularly weak. The hon. member for George (Mr. Werth) in an effort to criticise it brought forward very little upon which one can fasten one’s teeth. He started off by attacking the growth in the national debt during the war period, and several other speakers have dealt with that matter. I put it to the hon. member for George that no other country in the world has increased its national debt by so small an amount as South Africa, no country comparable in size to South Africa, whether it was belligerent or non-belligerent.

In proportion to its population?

Yes. When we take an increase which has been set out as £285 million, and from it a number of millions will fall to be deducted, and when we bear in mind that about £95 million of this money is invested in productive sources. I put the challenge to the hon. member for George, as to whether he can name one other country, that is in a more favourable position than South Africa, and ask would not any other country be glad to be in the happy position in which South Africa finds itself. I put it to the hon. member that if he had drawn up the Budget himself, he would still have found much in it open to criticism. It is a complex Budget, so complicated, that in the short time at the disposal of a member in this debate he can only touch upon a few aspects of it. It is a balanced and sound Budget, framed along orthodox lines. I do not assert for one moment that no one can quarrel with the Budget, but fundamentally and on a broad examination of the whole Budget, it is sound and orthodox and in conformity with the policy followed during the war years, a policy which has brought South Africa to the very high status that it today occupies in the world. I do not think that that can be denied. I think the price we have paid for the increase in the national debt due to the war can quite rightly be described as a well-made investment as far as South Africa is concerned. The fruits of development from that investment may be found throughout the length and breadth of the country. Hon. members have quoted figures here today to indicate the tremendous increase in the national income, an increase of approximately 50 per cent. during the war period. That in itself must far more than compensate for the increase in the national debt due to the war. This Budget is not easy to criticise unless one goes to extreme limits. There are big fundamental issues involved and as the first of two steps in the process, the Budget is a good Budget. Doubtless there are many who would have liked to see greater remissions.

That is the chief objection to the Budget. It does not give relief from taxation.

Naturally one wants greater relief, but let us examine that position. The Minister in the first place has completely revoked certain taxes.

They are all small amounts.

Yes, but I do not think we can quarrel with him for doing so. I think it is a good thing to clean them off the slate. I think the time has come when this country should as rapidly as possible clean the slate by getting rid of all the war taxes, and come back to a normal and simple basis of taxation, where the revenue of the country is produced from the broad back of the taxpayers, and not in dribs and drabs from sectional interests. If there is a criticism, which is justifiable, it is the criticism that the system built up during the war has been far too complex and inequitable. It has singled out certain persons for heavy taxation, whilst persons of equal standing— equal income — have by comparison been lightly taxed.

That is common ground.

Then we come to the substantial reduction in the price of petrol. I think we are all glad of that. There is also a reduction in the fixed property tax.

The whole thing should have been scrapped.

I am inclined to agree.

We are on common ground again.

He is getting on dangerous ground.

We come to other items where there has been a partial remission of taxes. With regard to excess profits duty there is a remission of 25 per cent., and 23 per cent. on the trade profits special levy. When we come to the one tax which does affect everyone, the personal and savings levy, the nett remission is 80 per cent. That is the biggest of the partial remissions.

That is part of the whole income tax and must be regarded from that point of view.

Yes, but I submit that in this problem it is correct to take the view that first of all there should be remission from those taxes, which are sectional and discriminatory, and then from those taxes, which fall, on the general body of tax-payers. This remission of 80 per cent. is from a tax which falls on the broad back of the general body of tax-payers, so that the Minister in deciding upon the remission, has taken a fair line through the whole structure, having regard to the fact that he has a certain amount of money available, £16 millions …

It is £27 million.

With further expenditure the nett figure is reduced to £16 million. I grant that its is undeniable that the remission on war expenses account amounts to £27 million, but there are many other increases in expenditure, and I can see the difficulty which would arise if an attempt is made to remit all the war taxes at this stage. It is a very difficult thing to put these taxes into watertight compartments, and I think in all the circumstances, with minor exceptions, the Minister is to be congratulated on the way he framed his Budget.

You are speaking as the mouthpiece of mining interests only.

Oh no, but I come now to the next point made by the hon. member for George, that this is a Hoggenheimer Budget. If ever a budget was not a Hoggenheimer Budget, it is this one. It cannot be described in that way. We have in the mining industry quite a different position from the position prevailing in commerce, industry and agriculture, where profits have increased during the war period.

Yes, you get a fixed price for your product.

The mines have a fixed price for their product in a time of ever increasing working costs.

That applies to all industries.

Having enjoyed an increase in price during the war, which today is 16 per cent., but has been less in recent past years, I want to say that I wonder what the increase has been in farm and other products —never as little as 16 per cent. The result of such a position has been that we have burdened an industry, which has suffered a very considerable diminution in revenue in profits and in dividends. I do not wish to weary the House with figures, but I think these figures are important. I have the comparative figures for 1940 and 1944. The taxable profit in 1940 was £37 million. In 1944 it fell to £24 million, a fall of £13 million. In the face of that, they have had to pay the Gold Mines Special Contribution.

They were simply working a little lower grade ore.

That is not the explanation. The working costs per ton rose from 20s. 9d. in 1940 to 22s. 9d. in 1944. There may be a fixed price for the product, but there is no fixed price for working costs. Although the taxable profits have fallen by £13 million, what did they pay in income taxes? In 1940 they paid under £20 million and in 1944 over £16¼ million, a difference of £3½ million. Of course, the inevitable happened. The shareholder had to pay the difference, and the balance in the hands of the mines fell from £17¼ million in 1940 to £7¾ million in 1944, a difference of £9½ million. So that of the fall in profits of £13 million the shareholders absorbed £9½ millions and taxation absorbed £3½ million.

Tell the House about the relief the gold mines got last year.

That was a bagatelle. Now we have the report of the Special Gold Mining Taxation Committee, and it has not disappointed us. I well remember the excellent work a similar committee did in 1935, and the committee of 1945 has repeated history. It is a credit to this Government that it has accepted the report and has come forward with progressive views upon the taxation of the gold mining industry. I have not the time at my disposal to enlarge upon this aspect, except to say that the various points enumerated by the Minister in his budget speech are in the main eminently sound, and in measure that this budget places the gold mining industry on a sound basis, it equally places South Africa on sound foundations as regards industry, agriculture and commerce. The hon. member for George shakes his head. I would like to ask him what he would do in these circumstances. The remission granted this year is just over £3 million, and it is a very small amount having regard to the fact that the mines pay increased taxes in the face of falling profits. In the case of commerce and industry, E.P.D. is only paid on the increase in profits, not the decrease in profits. The abolition of claim licence moneys is welcomed. Its effect is more or less unknown to the man in the street, because under the present law in certain cases claim licence moneys are remitted. The abolition of the pass fees is also welcome relief. Relief from any expenditure affecting working costs is relief in the right direction, and I would like to see the Minister go further, because there still remains imposed on the mines indirect taxation of considerable dimensions, indirect taxes which probably aggregate 6s. a ton milled, and if it can be brought about that all indirect imposts are substantially reduced, the effect on the economy of South Africa will be profound; it will have an equivalent effect to dropping a stone in a mill-pond and watching the ripples spread. It will have its effect in every corner of the country. With regard to amortisation, the step to regard, in the case of new mines, capital expenditure for amortisation purposes as an expense is a real step forward. I am here only perplexed at the proposal with regard to new capital expenditure by existing mines, and perhaps in his reply the Minister will explain what he meant in his budget speech, because he mentioned that existing mines spending fresh money will amortise such expenditure at the rate of 20 per cent. per annum on the balance. I want to ask him: What is, for example, to be the position of a mine with a life of less years than such a basis would ulitmately require Twenty per cent. on the yearly balance would take many years. I could understand it if he said that expenditure would be amortised over five years, but, perusing carefully what he said, I find that he made it clear that the 20 per cent. would apply to the balance. I now come to the proposed formula tax. The formula is a somewhat unknown quantity at the moment, but there is one disturbing element about a single tax to which I want to draw the Minister s attention. Under the permit tax system, there is an abatement of £20,000. It is obvious that with a single tax it will not be possible to continue the rebate in this form, and the effect will be to increase the taxation on the smaller mines, and here I wish to put forward a plea for the smaller mines. The effect will be to increase taxation considerably. I have some figures. In the case of one mine the taxation on the present formula is £900, and will be increased to £2,400. In another case it will increase from £900 to £2,900, in another case from £3,700 to £10,000, and in another case from £7,800 to £14,000. This introduces a very serious situation, which I think calls for careful consideration.

Is that only in the case of small mines?

It is in the case of all mines whose income is £20,000 or less. The abatement has a diminishing effect and ultimately disappears. I want to make the suggestion, and I put it forward as a possible solution to the problem that the abatement should be retained as it is in the present Act, but made applicable only to gold profits exceeding 15 per cent. At present this abatement does not apply to the flat 15 per cent. tax. In that way we would preserve a pari passu position and overcome the problem which is causing some alarm at present. There is insufficient time to deal with certain aspects of the remaining taxation, but we will have an opportunity later in the Committee of Ways and Means to do so. At the moment I just want to say this, that I think the greatest disappointment arises from the Minister’s statement that he considers the system of apportionment of the profits of private companies to be sound in principle. There is a most deeply-rooted objection to this principle of apportioning profits, and I want to say this in conclusion, that there is no possible analogy between a private partnership and a company. The system of apportionment applies in the case of the private partnership, and correctly so, for this reason, that in a private partnership the profits of the partnership are credited to each partner, who receives the share of profits, which is actually credited to his account and becomes his own property. But that is not so in the case of a company, and that is where the fundamental difference comes about. In the case of a company the undistributed profits are not credited to the individual shareholders, but remain as a reserve in the hands of the company. They are not available to the shareholders, in the sense that they have no legal claim to them. The shareholder in the private company can handle only what is paid to him by way of dividends. There is a fundamental difference, and I hope the Minister will give this particular aspect further consideration, because the impost of this apportionment principle is bearing most unjustly. It is a simple matter for a person to get an assessment for tax, which far exceeds the income he receives. It has a handicapping effect on development, because no one wants to put money into a private company, when he is subject to paying tax on the pro rata share of the parofits, when he has no control of that pro rata share. We see the natural result, an attempt on the part of members of private companies to turn those companies into public companies and to get quotations on the Stock Exchange in order to get rid of this problem. No less a person than Dr. H. J. van der Bijl has stressed the difficulty that apportionment introduced into the operations of the Industrial Corporation, and I want to appeal to the Minister earnestly to revise his views in this matter, and to give some consideration to this question, which in his next Budget will prove to be one of the most difficult problems facing him.

The hon. member for George (Mr. Werth) roundly condemned this Budget. He referred to a Hoggenheimer Budget and said that the gold mining industry has been treated in such a manner as to shift the burden of taxation on to agriculture and secondary industries. That is the way I understand it.

No, I did not say that.

You said there was discrimination in favour of the gold mining industry.

I wanted agriculture to be treated in the same way.

I would like to say that in my view the Budget as it stands is sound and well balanced. I have always applied the test of judging the impact of a Budget on the general economy of the country. I think it is agreed that such impact should not be abrupt or severe so as to cause wild speculation, nor should it go to the other extreme of causing severe recession of commercial and industrial activity. I think if one applies that test and examines the response to the Budget we may say generally that the Budget has been soberly and favourably received. Now I would like to examine the effect of this Budget on the three main branches of our industry, the points particularly made by the hon. member for George. There is a total remission of £16 million. The hon. member for George said that that could quite easily have been £27 million. I did not quite catch how, but I did gather that he meant that the £10 million which the Minister has set aside to be used for the importation of foodstuffs, on the reselling internally of which we would recover £7 million.

I said that of the £10 million he would recover £3 million.

Anyway, that represented one way in which he was going to recover portion of the £11 million. I have no doubt that the Minister will be able to give a suitable reply to that. It seems to me that if it is in fact so, it is an inexcusable lack on the part of the Minister to make a mistake of that magnitude, and one does not think it is likely that such a mistake would be made. I am afraid that when the Minister comes to deal with the criticisms Gf the hon. member for George, he will deal with him very thoroughly on this point.

You hope so.

There was a remission of £3,200,000 to the mining industry. In making that relief possible the Minister has adopted an expedient which is in line with Government policy of reducing working costs by remitting native pass fees, amounting to £400.000, and claim licences, which amount to £300,000, and he has surrendered the special contribution amounting to £6,800,000, a total remission of £7,500,000, but against that he has scaled up the taxation by altering the formula. I have not the time to go deeply into the details of this formula, but it seems to me that it will have a favourable effect on the low grade ore mines, which again is in line with Government policy which is to encourage the mining of low grade ore. There is another respect in which he has changed his taxation principles, and that is he has allowed the amortising of the capital charges on new mines in respect of all expenditure ranking for redemption purposes. He has allowed the entire amount to rank as working costs. It is obvious that that must have the effect of encouraging the opening of new mines. Then again, in a different form he has allowed a similar reduction in the case of producing mines, and in this case it will have the effect of encouraging the older mines to undertake deep level mining which is also a feature very much to be desired, especially on the Rand, where we are now meeting rich ore, at very deep levels. With regard to the opening of the new mining fields, which I regard as of the very greatest importance to this country, I do hope the Minister of Railways will bear in mind the importance of providing adequate rail and road services, and that the Government as a whole will bear in mind the importance of providing power services so that these fields may be opened up at the earliest possible moment. I would like, Sir, to refer to the impact of the Budget on secondary industries. The main relief industry will derive from the Budget is with the reduction of E.P.D. and the modification of the trades profit special levy. Great play has been made of the fact that we must build up our secondary industries. It has been said that the mines are a wasting industry, that eventually they must be worked out, and there must be something to replace them. But when I am told secondary industry can ever replace the gold mining industry I have serious doubts. I am inclined to think that our future development will rather be diverted to the agricultural industry. And there I come to the third branch of our industry.

The first.

Yes, I regard it as the most important and the first, and I want to refer the hon. member for George (Mr. Werth) to the White Paper issued by the Prime Minister’s department in regard to agricultural policy. I think he will find Government policy very clearly laid down in that little pamphlet, and I think it should be the policy of the country and of this Government to make use of the capital assets now lying in the gold mines and which we should extract to the greatest possible extent and divert towards the conservation of our soil, the conservation of our water resources, and generally to the building up of our agricultural system. I foresee the day when we shall be forced to depend on the products of our agricultural industry to provide us with the necessary exchange to enable us to import such consumer goods as we may never be able to manufacture in this country. There is one more point that was mentioned by the hon. member for George. He referred to the amount to be remitted to the gold mining industry, and in his amendment he asks that the Government should bring forward a Silicosis Bill. That again is in line with Government policy and was mentioned in the speech from the Throne. I am confident, and I am sure the majority of members of this House are confident, that the Government will bring forward a Bill this session which will meet all the wishes of those concerned and be to the benefit of all sections of the gold mining industry.

There is no pleasanter or more entertaining debater in this House than the hon. member for George (Mr. Werth). I realise that he, as the financial wizard on that side of the House has to play a part, and he plays his part very well indeed considering the poor material he has to build it up. The hon. member really loses his own personality in the act which he is doing and he brings to this House a sense of drama and interest in a speech which lacks any real material foundation for criticism of the Budget. But he does it very well and in a most pleasant manner. In fact at times I have felt myself influenced by his drama; and I think if this were a Latin country and the people were more emotional he might well capture their imagination and win the day. But we are hard-headed South Africans and that sort of thing does not influence us very much. There are four points he made that I could sort out of his speech. The first point was £400,000,000 had been wasted to make South Africa more secure but she was less secure now than before the war. He referred to the Hoggenheimer Budget. He referred to the fact that the middle classes did not receive any benefit from the Budget whatsoever, and he referred to the fact that the agricultural industry as a whole had been sadly neglected and that instead of encouraging the production of food it rather encouraged mining. Dealing with the first point with regard to the waste of Government money I would say let us judge it in the same way as he would judge a private balance sheet in his business. In the first place we know this war has cost us £400,000,000 odd. We know our debt is increased by £280,000,000; these are his figures, and I do not wish to question them. He states that if we had remained neutral we would have avoided all that cost, but that is not correct. If we had remained neutral we would have had to spend money on the defence of the country, in the same way as all neutral countries had to do. We have had the example of Sweden quoted to us. Sweden increased its debt by £480,000,000. Turkey had to go in for a big defence scheme. And I am sure that in South Africa even the Nationalist Party will not have been prepared to hand South Africa over on a plate to the Japanese. They would also have been prepared to defend the country. So I say money would have been spent during the war in any case. Therefore the interpretation he gives to the expenditure of £400,000,000 is quite incorrect. On the other hand we have heard from the hon. member for Houghton (Mr. Bell) in regard to the effect on the national income. Our national income has increased tremendously during that period. I think the figure for 1939 was about £350,000,000, and it has increased to £600,000,000. Would that increase have occurred if we had been neutral? We know that our mining industry would eventually have been at a standstill. We would not have obtained the machinery from Great Britain or America to keep it going. We also know we have obtained raw materials which in the ordinary course we would not have been able to do. South Africa would have been in an isolated position and therefore economic and industrial development could not have taken place. Actually a commission had to go to America to put our case before them, and they would not have looked at us had we been a neutral country. The other point we had in mind on this side of the House is there were moral obligations, and although the Opposition—excluding the Labour Party and the Dominion Party—did not recognise that, we had those obligations, and I say we emerge from the war a nation morally proud of our achievements. Internationally we would have been ashamed of ourselves if we had not entered the war when we did. I would like to refer to the hon. member for Durban (Berea) (Mr. Sullivan) and to congratulate him on the constructive way he has put up his case and continues to put up his case, regardless of criticism. I am, however, rather puzzled at the hon. member, because in his speech he referred to his criticism of the Budget and he said in his opinion the E.P.D. should go. He also said there was no incentive for investment and that the United Party as a government has not solved the problem of providing an incentive to the working man, in which he included the native. I cannot follow that up with the hon. member’s point of view regarding the no confidence motion amendment of the hon. member for Benoni (Mr. Madeley). The House will remember that in this amendment it was stated—

The hon. member for Berea seconded that motion, and yet—quite rightly—he says you must give incentives for production and take away E.P.D. That is our cry. It has never been the Labour cry. The hon. member for Benoni has stated in this House, for his part E.P.D. should be 20s. in the £ and remain for good, while the hon. member for Berea says it should go. That is our argument here, that there should be this incentive to investment. The hon. member for Benoni would leap up in the air with rage if he had heard that. He would have said: You do not need an incentive for investment, you can turn out the money in a machine, money will come from overseas. But that was the policy of the hon. member for Berea, and I congratulate him; at least it is a sane policy. That brings me to the various points the hon. member did raise. He raised the point of the incentive to the working man. He said we had neglected that aspect of our economic outlook. I agree with him. I say that is what is needed; in the combination between capitalism and labour some incentive is needed for the working man to produce. We saw the results in Durban, where a man paid a bonus to his bricklayers, with the result that 800 houses were completed a year before the contract date. The hon. member’s place is not on that side, but it is with us in developing a sound economic outlook which will set South Africa on the path of progress and embrace not only European workers, but native and coloured workers. On the other hand, the hon. member for George seemed to get the jitters. He said there is not enough conservatism in the budget. According to him, the Minister has been profligate in his spending, and that he should be more careful. We say, let us develop with courage and enterprise and solve our problems, as we can solve them, not on sectional lines, but with the idea that South Africa should go forward as a nation.

This is the first budget I have had the pleasure of listening to, and I was hoping it would be possible to raise a debate of such importance above the usual level. It should be possible on an occasion like this to forget differences and to give credit where it is due. It seems impossible to discuss many subjects in this. House without the differences of the past creeping into the debate, and it seems to me that the only way to solve our difficulties is to start a really virile policy of immigration and to get a large white population into this country which in the end will have the effect of obliterating these differences and bitternesses. In a way I listened with interest to the address of the hon. member for George (Mr. Werth). I understand if ever my friends on the opposite side come into power he will be their Minister of Finance, and I must say I have a great regard for him, for his charming and disarming smile, and I was rather disappointed at the somewhat unfair way in which he presented the budget to the House from the Opposition point of view. But, before I go on to that, I should like as a young parliamentarian to take him to task; I am sorry he is not here. The hon. member for George, after painting a dark picture of the financial position of this country, made this statement, that the position was due to the fact that we had a Prime Minister who was never happy unless he went to war. A statement like that, an attack on that sort on the Rt. Hon. the Prime Minister, is not only unworthy of the hon. member for George, but it is unworthy coming from that side of the House. If we had not had the Prime Minister leading this country at that very difficult time this country might well have followed the path of dishonour instead of the path of honour. It is true that a large debt was incurred during the war but it is a debt that will pay heavy dividends in the future. The name of South Africa is honoured throughout the world, and our boys have shown what fibre they are made of. The only thing that has been a matter of grief to me is that the policy of the Opposition kept so many of our young South Africans from joining our forces, from seeing the world, and from being able to say to themselves: we have fought for our Father-land when it was in danger. The question of the war debt has been fully discussed, but I would like to remind hon. members on the other side of the House that there is certain credit due to the Minister of Finance. He has reserved large sums for social security, for the increase of the police force, and an improvement of the pay of that fine body of men. They must realise that was necessary seeing that they so severely criticised the Government on account of the crime wave. I think the hon. member for George drew the wrong implication from the statement made by the Minister of Finance in regard to the protection of industry. It is the set policy of this Government to protect secondary industries, and the Government is carrying out that policy. The Minister of Economic Development not long ago said he had undertaken to give secondary industry in this country additional protection for two years, during the transition period by the continuance of import control. That shows the Government is keeping faith as far as secondary industries are concerned, and my hon. friends on the opposite side need have no fear in that particular direction. According to the figures from Professor Richards’ book, quoted by the hon. member for George, secondary industries are contributing £153,000,000 to the national economy of the country, so the Government must protect secondary industry. I would say this to the hon. member for George, that you cannot keep raising your tariffs against goods from outside because it causes retaliation on the part of other countries and we must have a market for our goods. Consequently it is not possible to raise the tariff beyond a reasonable limit, and the way to assist our industries, provided they are economically run may be to give subsidies to our industries so as to bring the price level of their products on to a competitive basis. The farmers have had many subsidies, and I do not see why industry should not have subsidies if it is in the interests of South Africa; and the development of our secondary industries certainly is in the interests of the country, because we cannot rely solely on the mines for our national economy. The mines are a wasting asset, and when the mines disappear our secondary industries must be so well established that our national economy will be on a sound basis. I should like to offer certain criticisms I have to the Budget. I think the Minister of Finance would have been well advised to abandon the fixed property profits tax. I understood from him that tax was to prevent inflation of the price of immovable property, but I think it has entirely failed to achieve that object and it has in fact inflated the price of immovable property by freezing properties and thus enabling owners of property not subject to that tax, to sell their property at higher prices. I hope the Minister will reconsider that matter and abandon this tax. If he must have money from that source it would be a much fairer way to have a tax of ½ per cent. or 1 per cent. on all property sales, which would be equal to about 1d. or 2d. in the £, on all land sales. I maintain he is stopping the building of houses by keeping this tax.

Like everybody else, Mr. Speaker, I very much regret the absence of the Minister of Finance. I perhaps have a special reason for regretting his absence because I wanted to talk to him not so much in his capacity as Minister of Finance but as Minister of Education. There is no doubt that South Africa is in many respects an odd country. We are supposed to be a Union, but in some matters for all the Union there is we might as well be four different countries instead of four different provinces. Take, for instance, this matter I desire today to discuss with the Minister of Education, this matter of extending the school farms that the Transvaal has set up over the last ten years to the rest of the country. There is no doubt after ten years experience that the Transvaal has developed what is, I suppose, the finest example of rural education that any country can have. The Transvaal Education Department has transformed the education of its country children from a backward and rickety affair to an education that will fit the country child to compete on equal terms with the children in the towns. In 1936 it set up an experiment. It has developed that experiment over ten years until today, in 1946, what was the experiment of 1936 has been proved by ten years of concrete experience to be one of the answers, if not the whole answer, to the poor white problem of this country. But for all the reactions the Transvaal experiment has had on the rest of the country it might not have existed at all, and yet the situation that the Transvaal strove to remedy in 1936 is a situation that exists throughout the country. The North-West Cape has exactly the same problems as the Transvaal had, a widely distributed rural population, a scattered people, and backward children. The Transvaal decided the time had come to do something about it, and proceeded to take action. It did so with success, and this is what it did. Instead of taking the school to the child it did the reverse. It brought the child to the school. It has been the general practice in rural education in this country to set up small schools scattered about on farms, schools which in the nature of things must be unsatisfactory not only from the point of view of education, but in addition expensive as well. Instead of that the Transvaal went for a system of Centralisation, it brought the children to the schools. It set up centralised schools and school farms. The centralised schools are for preparatory education and the school farms for the elder children, these latter going up to Standard VIII. It made of these centralised school farms boarding schools so that children who came there, however backward their original education, however poor their homes, however badly fed and undernourished they might have been, were given a chance for the first time. They were properly fed, they were properly taught in fine school buildings which have cost the Transvaal in the last ten years about £500,000 for school farms and about £500,000 for centralised schools. They were given an education and physical rehabilitation that has achieved miracles. When I use the word “miracle” I mean it, because I have myself seen what a year at a centralised school or a school farm can mean for undernourished children. It has not only rehabilitated the children physically but it has given them an education which for the first time in the history of rural education in this country enables the country educated child to go into the towns if he wants to and compete with town children. It has been expensive but magnificently worth it, and anyway it is not all loss, because by setting up these nine school farms and 44 centralised schools the Transvaal Education Department has found it possible to shut down no fewer than 320 of the poorly equipped farm schools. That has meant a great saving to the Education Department in the Transvaal. I do not want the House to confuse the school farm the Transvaal has set up with the farm schools well known through the Union. The school farm begins by the Transvaal Educational Department buying a farm, and on that farm putting a farm manager to, as it were, teach the children as well as farm. On that farm its sets up a proper school with a proper curriculum and a domestic science department, a woodwork department, a library, playing fields and so on, and in that farm school children are given in addition to the ordinary curriculum that all Transvaal school children have some training in practical farming, I do not want the House to run away with the idea they are given proper farming training. The point is they are given the ordinary curriculum with a farming bias so that the children may develop an interest in farming, and if they want to go in for farming they are not, by their education, cut off from their roots on the land. That is important because it does mean that the country child retains his love for the land, which he so often loses when he goes to schools and hostels in towns. The school and hostel system in the towns cuts him adrift from his moorings in the country. It does tend to make the country child believe that the only possible pleasant life is town life with town amenities. Whereas the school farm and the centralised school do show this is not necessarily so. They keep in the child that feeling for the land, which is so important if we are to stop the drift to the towns which is constantly deplored in this House. That drift from the land is a problem that is common to all countries, and if it has been particularly marked in this country it is, I firmly believe, because of the nature and the kind of education we have hitherto given the country child in this country. Until the Transvaal experiment there was no attempt to give the country child a country background; there was no attempt to give the country child some of the social amenities, some of the games and sports, to give the country child the library facilities and the general training facilities that the town child had. Well, all those things the country child is now being given on the school farms, and I would like to urge upon the Hon. Minister that this has now become a national matter. I would like to urge upon the Minister this important fact, that this educational method is a means of combating the poor white problem, because as the House very well knows the poor white problem is in its essence a matter of under-feeding and ignorance. The poor white becomes such not because the stock is bad—it is in the main good, sound pioneering stock—but poor white-ism comes because of the large distances and the far-flung nature of the country areas. The result is that hitherto the children in scattered areas have not been given an opportunity of being educated; they are not fed properly either in many instances; and these school farms by combating this ignorance and by feeding the country child properly, where he has not been properly fed before, is an effective measure, indeed, the only means of dealing with the poor white problem. For that reason alone, if for no other, I would urge upon the Minister of Education, to call a conference of the Directors of Education and the Administrators in committee of all four provinces. The great spaces of the Free State and of the North-West Cape would be fertile soil for similar experiments for what has been so successfully carried out in the Transvaal, so let the Minister call a conference, to point out to the various Administrators the benefits that the Transvaal has won by means of this very successful experiment, and to urge upon them to try to carry out something similar in their own provinces. I think it is his job as Union Minister of Education to forward the general advance of education in this country and co-ordinate it, and I feel that not only as Minister of Education but in the general national interest he must take cognisance of what is being done so successfully in the Transvaal. It is a matter that I have very greatly at heart, and I am hoping that the points I have made will be put to the Hon. Minister of Education and that he will consider ways and means of extending the benefits of the Transvaal experiment to the rest of the country. That is the main object of my speech today.

There is another object which is allied to it from the point of view of nutrition and that is the question of margarine. I would like to ask the Minister of Agriculture whether he will not at last see his way clear to make a bold effort to remove this question of the manufacture of margarine, which really does not fit in with his Department, from the hands of the Dairy Control Board, and transfer it where it rightly belongs, and that is in the hands of the Hon. Minister of Economic Development. The manufacture of margarine, is after all, an industrial matter. It should not be possible for the Dairy Control Board, of all boards, to have it in its power to stifle the development of what it might consider as potential opposition—quite wrongly in my view, but nevertheless it does so consider it. It is an anomalous position, indeed a ridiculous one, that agriculture should have the say over industrial production. So I would urge the Minister of Agriculture to rid his Department of a source of trouble and to hand over the manufacture of margarine to the department where it essentially belongs, the portfolio of Economic Development.

I would like to say a word or two on the subject of the “fixed property” tax which the hon. Minister is continuing, and in respect of which he is reducing the amount by 5 per cent. for every six months. I want to put in a plea for the returned soldier in this respect. This tax falls very heavily on those who have been serving in the army and who have come back, who have been demobilised and have had to buy property in a very inflated market. I think that the least that the hon. Minister can do is to relax this tax so far as the returned soldier is concerned. It would not mean a very great loss to the Treasury, but at any rate it will be a gesture on the part of the Government towards the returned soldier. Now I would like to quote a letter that I received today from a returned soldier, a letter which puts the case very clearly. He says—

He goes on to say that he eventually bought a property of the same dimensions with the same accommodation as the one he had sold for £2,500, and he had to pay £5,250 for it. This goes to show that the returned soldier is under a very great disadvantage in regard to buying a home for himself, and I do appeal to the Minister to relax this fixed property tax so far as the returned soldiers are concerned. I think it is the least that the Government can do.

I understand that this debate embraces the Railways and Harbours Budget, and I would like to say a word or two to the hon. Minister of Transport. He has recently undergone a very severe trial lasting four days when he submitted to many criticisms of the Railway Department. May I have the Minister’s attention? I was saying that the Minister of Transport was subjected to very severe criticism over a period of about four days on the Part Appropriation Bill, but I want to vary the monotony so far as the Minister is concerned, and I want to congratulate him on his enterprise in giving out a contract for two tugs to be built in South Africa, which is virtually a commencement of a shipbuilding industry in this part of the world. I am aware, of course, that a small craft called the Lady May was built in Durban in 1895, but I think it is to the Minister’s credit and I give him full credit for it that he had the enterprise to put out on contract the building of two tugs which were built in Durban and successfully launched. I was present at the launching of one of those tugs, and but for the fact that an Admiralty crane was employed of very great lifting capacity to lift these craft off the wharf and to put them in the water, it would not have been possible to launch the tugs at all. It was entirely due to the fact that this very high capacity Admiralty crane was used that the launching was possible. I hope that the Minister will excuse me for speaking of my home town and that he will not accuse me of parochialism, but I think the head of the Durban Bay is most suitable, and it has been favourably reported on by experts as most suitable for shipbuilding, but unfortunately there is no slipway there, and I know that the Railways and Harbours need a considerable amount of ground for workshops and marshalling yards, but there is still ground for a slipway. Seeing that Durban is the nearest port to the great coal mines and to the great steel industries in the Transvaal, Durban is the most suitable place for a shipbuilding industry, and I do earnestly appeal to the Minister not to rest on his oars, but to see that the accommodation is made available for a slipway, and to give out further contracts for ships to be built in South Africa. I understand that it is contemplated to build coasters, and although they are small I think a start should be made in that respect.

There is one other small matter to which I would like to draw the attention of the hon. Minister, and that is the question of a parcels depot to be situated somewhere centrally in Durban. My colleague, the hon. member for Durban (Central) (Mr. Derbyshire), brought the matter up a short while ago, and I wish to support what he said. If anyone wants to send a parcel away in Durban, one either has to travel to Cato Creek, a very inaccessible part of the town, or else go to Congella, which is very far from the centre of the city. Surely it is not impossible to have a depot in some central position where these goods can be despatched. In days gone by Berea Road Station was available for despatching goods of this description, and I would suggest that the Minister take this matter up and see that the people of Durban are afforded an opportunity of despatching goods from some central place within the city boundaries.

There is one other matter to which I would like to draw the attention of the hon. Minister. It is the question of the Zululand train. A lady reported to me that she had come from Zululand to Durban, and that she intended to catch the Pullman to take her as far as Gilletts. But the Zululand train was late, and on arrival there were no porters whatsoever to attend to her luggage. She is an elderly woman, and could not carry her luggage herself. There were no porters whatsoever to meet this train from Zululand, probably because it was a little late. The result was that she had to wait until she could find someone to help her, someone other than a porter, and the result was that she missed the connection with the Pullman and had to take a taxi to her destination, and the taxi fare amounted to £2. I hope that the hon. Minister will also pay attention to this complaint, which was made to me by an elderly lady in Durban.

If this Budget were to be described in a short sentence I would describe it as a “sock the rich” Budget. Of course, if there is one thing that the Budget does, it relieves the poor man and it adds an additional burden to the super tax-payer. That is not an action on the part of the Rt. Hon. the Minister of Finance which will bring tears to anybody’s eyes. But there are certain aspects of the Budget which I think might have been dealt with in an easier way towards the existing tax-payers as a body. The Minister has saved a sum of £11 million and instead of appropriating this sum to some suspense account or in a manner which can be appropriated to the relief of the taxpayer he has appropriated it towards a reduction of debt. I feel that in view of the fact that it is this particular body of taxpayers which has borne the burden of the war, that that was not a fair thing for the Minister to have done. The Minister justifies his action by saying that it is no use our saying that posterity will pay; we are posterity. But if a bachelor may be described as posterity, I as a married man and father can regard myself as an ancestor, and I do not see why he should allocate to me a burden which could quite well be passed on, if not to future generations then to future years.

I think that one of the most remarkable speeches which has been made here today is the speech of the hon. member for Durban (Berea) (Mr. Sullivan). Other speakers have commented on the fact that while the Labour Party stands for the non-profit idea in finance and in the general administration of the affairs of the country no stronger speech in favour of the profit motive could have been made than the speech made by the hon. member for Berea. It was in essence a capitalistic speech, it was a speech in which he pointed out that if the resources of this country were to be favourably developed it would be necessary for this country to get capital from outside on a basis which would pay the capitalist outside to invest in this country. How can you have profits for the foreigner and no profits for your own people? We have often felt that there is no sincerity in the principle which has been enunciated so often by that party that the profit motive must go. We know that the profit motive is the underlying motive which stimulates enterprise, energy and ability, and the hon. member’s speech was, strongly in support of that idea. I must say that while the hon. member for Berea has taken up that attitude, it is diametrically opposed to the attitude of the hon. member for Benoni (Mr. Madeley). The attitude of the hon. member for Benoni has always been to “put a spoke” in the profit motive in this country and in doing that he has during the period of his office done irreparable harm to South Africa. No man is more responsible in my view for the present shortage of housing in this country than the hon. member for Benoni by means of the legislation introduced by him and the trade union principles which he is amongst the very first to support. I have before me a cutting from the “Rand Daily Mail” of 1st March, 1945. It is in these terms—

If that was the attitude of the hon. member for Benoni during the period he was in office and if that is the way in which he dealt with this crying problem, the necessity for training young people so that they can in the future take their place as artisans in this country, what prospect is there for any hope that he would do anything better than he has done if he were once again given a chance?

A number of members have referred to the Fixed Property Profits Tax. I must say that that is the ugliest child that the Minister of Finance has produced, and like so many doting mothers who produce an ugly child he regards it with even more affection than any of the finest legislation he has introduced. The Fixed Property Profits Tax is the evil spot in what is really a brilliant series of financial legislation by the Minister. I do not think anywhere in the British Commonwealth is there a Minister who during the war has been able to finance his country more ably than the Minister of Finance has done. He has been able to extract from a small population an enormous income without in any way handicapping the prosperity of this country and without in any way handicapping its future. But why in the face of such a record the Minister should persist in hanging on to a tax which is almost universally condemned is one of the curiosities of genius. That is the only way in which I can describe it— the curiosity of genius. I would like just to quote the opinions of a few people who are competent to judge as to the effect of this extraordinary tax. First of all I would like to quote an article by Prof. C. S. Richards, written in the South African Journal of Economics in September, 1945, and before I quote it I want to preface my quotation with this remark, that the Minister has always justified this tax on the ground that it will tend to prevent inflation, which of course, is an evil that it is his duty to try to prevent. But it has not had that effect. It has actually had the effect of stimulating inflation. This is what Prof. Richards says—

And then he quotes figures to show that the maximum sum produced by the tax was in 1944-’45 £725,000. That is a Prof. of Economics. And the next quotation that I propose to read to the House is one by the Transvaal Land Owners’ Association. They are people who are intimately connected with the purchase and sale of land. One may say that they are interested but everyone is interested in this sort of thing and the question is whether their judgment is of any value of not. I am going to quote from the report of the Transvaal Land Owners’ Association, where this paragraph occurs—

Lastly I have a letter here which was addressed to the hon. member for Johannesburg (West) (Mr. Tighy) which he has handed to me, from the Builders’ Association in which they also condemn this tax in these words—

They suggest that vacant and purely residential stands purchased should after 1st March, 1946, be completely exempted from the tax, even though they changed hands during the period in respect of which the tax was leviable. The idea of prolonging this tax in the way in which the Minister has suggested seems to me an extraordinary idea. Why not abolish it? It is quite true that some people may gain. But why should the person who purchases in February, 1946, have to pay a tax of 13s. 4d. in the £ and the person who purchases after 1st March be completely exempted from the tax? That is surely an absurd state of affairs, and if it is possible to appeal to the Minister, I would appeal to him to face the position and to repeal the tax in toto.

I am sorry that the Minister has not seen fit to announce a revision of our income tax law. Our Income Tax Act contains provisions which are possibly crueller—and I use the word advisedly — than those contained in any other Income Tax Act in the world. I refer, for example, to the existing Act. Under that Act a person who may have an income of two or three thousand a year or more and who omits an item of £100 is liable to be taxed at a treble rate in respect of the whole of his income. I do not know whether it was intended that the amendment should have that effect, but that is the effect as it stands today. Fortunately, in the present Commissioner of Inland Revenue, who is a very able and experienced man, we find a man who tries to hold the balance evenly between the tax-payer and the State, and who recognises the severity of some of these provisions, and he tries to do what is the fair thing. But the idea that a provision of that nature should be on our Statute Book is absolutely wrong, and the first opportunity should be taken, and I hope will be taken, by the Minister of Finance, to re-introduce the provisions of the old Act, under which the delinquent, the tax-payer who omitted an amount, is liable to treble tax only in respect of the amount he omitted. There are other provisions which it is not necessary for me at this stage to go into, but there is one which I raised number of years ago, namely that the idea that the Commissioner should be able to treble tax without an appeal is quite wrong. The reply given by the Minister at that time was that during a war, we must not weaken sanctions. At that time that was a fair answer, but I do think that these provisions which allow the most severe penalties to be imposed without appeal, should now be modified. Another matter to which I wish to refer is the necessity for a revision of the Companies Act. Our Companies Act, which is largely based on the English Act, has not been revised for a number of years. The idea of the State keeping a fatherly eye on companies has been long recognised, and during last year a commission was appointed by the English Board of Trade which made a report and proposed a large number of amendments to the Act, practically all of which are being adopted by the British Government. Speaking from memory, I think there are something like fifty amendments. I have read that report, and I must say that the conditions in this country require that something similar be introduced here. I will give just one example. Many of the big houses have their boards of directors filled entirely with nominees. These people hold qualifying shares in a representative capacity only, but hold nothing for themselves. They are simply called upon to vote in accordance with the dictates of the employer. The proposals of this commission in England have been that every director should have a personal stake in the company, and to declare to shareholders whether he holds the shares of anyone else or not, and whether the amount of money he receives in respect of being a director has to be paid to someone else or not. That is the correct idea. Otherwise a director’s position becomes farcical. But that is the position in many companies here. I think the time has come when this whole matter should be gone into and when the rights of minority shareholders in companies should be protected. The position in regard to private companies also wants overhauling, and the experience gained during the last twenty-five years—our Companies Act was passed in 1926 and amended in 1939—but not on the lines of this report— indicates that the Government should consider the question of appointing a similar commission here, so that the newest ideas can be introduced in the Companies Act. On the whole one is bound to admit that the Budget is a satisfactory one, but the effect of the decreases which the Minister has given, I am afraid will be purely illusionary. Whilst he has taken away certain taxes, for example in respect of the excess profits duty, they still may be paid by super tax payers and others. The result of all this is that next year, instead of having a surplus of £11 million, the Minister will come to the House with a surplus of perhaps £15 million. But I hope that when he does that he will not do the same old thing again, and pay it in reduction of debt, but will use it to expand social services in this country, which will require millions of pounds and are necessary for the welfare of the country.

I am sorry that the Minister of Finance is not here, because I wanted to congratulate him for remitting £3 million in taxation on the mines, which will be of general benefit to the low grade mines.

You are listening to his master’s voice.

I want to mention one of the mines in my constituency, the Langlaagte Estates, which I understand is just about to be closed down. I am taking some figures from the “Mining Journal.” I understand that in November—and I mention the month of November in particular for this reason because in a later month there is a clean up, but I do not think any clean up was done in November—that mine produced £88,426 worth of gold, and the profit made on that was only a matter of £3,167, which left the mine with an expenditure of £85,259, money which was put into circulation during that month. The point I wish to make is this, that when we realise that an amount of £85,000 is put into circulation every month, we should try to avoid closing down such mines. The information I got is that there is practically one million pounds worth of gold in that mine still, and I think some encouragement should be given to prolong the life of that mine, in order to put that amount of money into circulation. When we realise the benefits conferred in connection with employment, expenditure on stores, etc., it is an important matter. I am sorry the Minister is not here as he may have been able to give me some information as to how that £3 million will be distributed. If it is possible for the Government to make a contribution of £1,000 a month, that might be a means of keeping such a mine going for another two years. Another point I wish to bring forward—and I am sorry the Minister of Mines is not here—is the question of closing down mines. I have just said that I am told that there is a million pounds worth of gold left in the Langlaagte Mine which is about to close down. That is a very unsatisfactory piece of business. I am informed that a commission is supposed to go into the matter before a mine closes down, but my information is that in the case of two or three mines that has not been done; they have been closed down without a commission being asked to report. If that is so, then I hope that some attention will be paid to the charges I am making, so that this state of affairs will be avoided in future, because closing down the mines is an important matter. There were no less than 900 Europeans employed on the mine at one time, but that has now been reduced to 700, and taking men away from the place where they worked for thirty or forty years is not a light matter. It is something which many of these people will not get over, because they are too old to be employed by new mines now. I do not know whether my information is correct, but I have been told that it is so in the case of the Wit Deep. That mine had five years of life before it if it were worked properly, and it should never have been allowed to close down. The Ferreira Deep was also in my constituency, and that mine was closed almost two years before it should have been, and the reason I understand was that the manager of that mine was after another job which he particularly wanted, and therefore he wanted to see the mine closed down so that he might get the new job. I hope that something will be done in connection with this important matter. I want to mention one more matter, namely, the question of letting houses. I know that a board has been appointed, but the way things are carried out amounts to a serious interference with the liberty of the subject. I know that something had to be done, but I want to appeal to the Minister and the Government to see that this emergency measure is done away with as soon as the need for it has passed.

I have listened with patience and with interest to all the contributions made to this debate, but to no contribution did I listen with greater attention than that which came from the representative of the Labour benches, the hon. member for Durban (Berea) (Mr. Sullivan). I think the claim that his speech is a direct indication of the policy for which the Labour Party stands is to assume something that is not correct. Those hon. members who listened to the hon. member for Durban (Berea) must have been impressed with his criticism of a capitalist Budget from a capitalist point of view, but he introduced his remarks by saying that he was not prepared to put forward any amendment to the Budget. That might come at a later stage, he said, but his criticism was directed to this Budget from purely the capitalistic point of view, and he asked the House to judge, in the light of his criticism, whether or not as a capitalist Budget, it afforded the opportunities which are claimed for it. He claimed that the real essential of a capitalist Budget was to afford secure opportunities for profitable investment, and in his criticism of this Budget he said that it afforded excellent opportunity for profitable investment, particularly in the gold mining industry. Then he examined this corollary for profitable investment, which is the incentive to work, because there can be no profitable investment if there is a go slow policy on the part of the workers, and his criticism directed from the aspect of whether or not there is sufficient incentive to work, was that the Budget had fallen far short in this respect. Any criticism directed to the hon. member from any other angle is unfair. The hon. member does not need me to champion his case or his socialistic economics. I am not a socialistic economist, and the reason for my sitting on this side of the House is because I am allied to the capitalistic economics which are adumbrated and supported by the members on this side of the House. I am, however, one of those liberal-minded people who object to the flagrant advocacy of the fundamental idea of capitalism as we understand it, namely, the exploitation of every opportunity to buy in the cheapest market and to sell in the highest market. That is a fundamental conception of the capitalist system. We all adopt it as far as we can in our private life.

None of us gives more than we are forced to give, and we all try to get the maximum amount for our goods and services. That is one of the inherent characteristics of human nature, but human nature also has to be graded, and where we have an obligation to exist with others in a community of nations we must restrict our human characteristics, and I am one of those who belong to the capitalist system, in the hope that it will be able to produce for the benefit of the less privileged some of the things they need. I am in favour of giving equal opportunities to every citizen of the State. He must be afforded the maximum opportunity of making the maximum contribution possible to the State. There are unfortunately many people in the State who are unable to make any contribution at all. We are not prepared, because of our Christian feelings, to let them go to the wall. They must be provided for. It would be an impertinence on my part to attempt to dictate any cogent criticism to the Minister of Finance on the manner in which his Budget should be presented to the country, but I will say this, in answering the hon. member for George (Mr. Werth), that we have in this country two primary industries, gold mining and agriculture. It is true that we have some secondary industries, but there has always been a claim by the industrialists in this country that one should build up as high as possible the tariff wall in order to ensure for the producer an article 100 per cent. dearer than it can be bought on the international market. I am prepared, like most nationalists, using the term in the wider sense as a proud citizen who is national in his outlook, that there must be secondary industries, and that the only justification for the existence of secondary industries in this country is that they should afford a higher standard of living to those who work in secondary industries. In other words, the justification for the establishment of a secondary industry, the justification for asking the consumer to pay more for an article produced in this country than he has to pay for the overseas article, will be the amount of human happiness enjoyed by the employees in the protected industry. There can be no justification for the establishment of secondary industries, unless maximum opportunities are given to the employees in the industry. And this is where the Budget could see to it that the maximum amount of protection, which after all is a subsidy to that industry, is expended not in profit to the shareholders, but distributed amongst the workers. And that is why I am allied to this side of the House. My other criticism of the hon. member for George is that the national economy cannot be based on agriculture if the agricultural industry in this country can only exist by exporting its surplus at the expense of the internal consumer. We know very well that wheat, sugar and everything else in this country, every ton is exported as the result of the consumer paying for it. The export of primary products can only be justified if the social and economic working conditions of those who work to produce that primary product are improved to the same extent and by the same amount as the subsidy received by the industry. Take our maize. Every bag of maize we produce over and above our internal consumption is exported. What for? Is it exported at world prices? No. The internal consumer is forced to pay 5s. for every bag exported. There can be no sound national economy based upon the protection of secondary industry or primary products if the export market is subsidised. I want to appeal to the Minister to maintain a balance between producing on the ordinary economic principles applicable to capitalist states, and providing opportunities for profitable investment, and limiting the application of those profits to the benefits of the people who work in the industries in this country. Then and then only will we continue to give them any support. One will be entitled to criticise the measure of contribution which the worker gets in the form of a standard of living, and hope and encouragement for the working man in this country. There are many men in this country who made their contribution during the war in the hope that South Africa will be able to give better opportunities to the less privileged people in the country, and as long as the Government is prepared strenuously to advocate and sincerely to apply the curtailment of profits for the benefit of these less privileged people, so long will they get the support of every section of this country. The application of our financial system has, in respect of the provinces, been changed on many occasions, and some little time ago there was a readjustment of the financial position between the Union Government and the Provincial Administrations by an increase in certain subsidies which the Provinces got from the Government on condition that they were prepared to give up certain provincial revenues like licences. I am thinking at the moment of liquor licences. Nineteen years ago the Cape Province gave up its licence revenues and the Government in turn took over the charitable institutions which had been under the care of the Provincial Administration. That was also done in the Free State and the Transvaal, but not in the Natal Province, probably because in Natal they received more in licences than they spent in charities.

It could have been because of mistrust.

That may be. I want to draw the Minister’s attention to a particular charitable institution to which I am devoted. It is an institution catering for the needs of non-European blind children throughout the whole of the Union, drawing children from Natal and the other three provinces. The hospital side of the institution was registered as one of the charitable institutions under the ordinance passed by the Cape Provincial Administration in 1919. The institution was financed by the Government on the £ for £ basis, the Government giving £1 for every £1 collected by the public. It is perfectly true the Union Government pays 100 per cent. of the teachers’ salaries in that institute, and that it is prepared to subsidise instructors’ salaries to the extent of 50 per cent., and to pay £ for £ in respect of all capital charges. But my criticism in respect of capital charges is that development is being stopped by reason of the fact it is very difficult to induce the Central Administration to approve of the development plans framed by these institutions. The Central Administration is prepared to pay 50 per cent. provided it has a say in determining the amount of development which shall be offered to that particular institution, and if it is prepared to support and to approve of the plans of that development. There is a change there, and I hope the Minister in charge of the Bill will do everything he can to permit of these people working in a charitable cause having a wider discretion in the adoption of plans. With regard to the maintenance of the children in the institution—which is just outside the Cape Peninsula—there are 150 to 160 blind people there, and the charges for the hostel accommodation are very considerable. The subsidy paid by the Union Government for every child who comes into the institution is a matter of about £21 per annum. You cannot keep a blind child in an institution like that on anything like £21 per annum. There was an agreement between the Provincial Administration and the institution in regard to the children who came into this school. It was agreed they would subsidise the school under the Act of 1919 and be prepared to pay 50 per cent. of the cost of maintaining those children, that is the difference between the amount paid by the Union Government and the actual cost of the maintenance of the children. For the first three years after the Central Administration had taken over the obligation to provide for the charitable institutions of the Union it paid every penny of the obligations in respect of that institution. But then there was a conflict between the Department of Education and the Department of Social Welfare, it was considered that the obligation to subsidise was a social welfare obligation. Then there was a readjustment of the obligations between the Department of Social Welfare ’ and the Department of Union Education. It was felt two governmental departments should not look after the one institution, even though one was a hostel where the children were provided with maintenance and amenities. The result was everything went over to the Union Education Department, but the obligation under the Charitable Institutions Act for the payment of a subsidy in respect of children who came to the institution fell away. That institution has today a deficit on the last calendar year of £1,684 in respect of the maintenance of the blind children who came there from the Transvaal Province. There is a deficit of about £300 or £400 in respect of the children from the Free State. The Union Government is prepared to pay no more than it has done, namely the obligations under the ordinance, and the Union Education Department, in contradistinction to the Department of Social Welfare has repudiated the obligation to give any subsidy at all other than this £21 per annum in respect of children from the Transvaal and the Free State. Let me say there is always a very great desire on the part of the general public to support any deserving social cause and it is perfectly true one is able to finance at the expense of future development and of the amenities which should be provided in such an institution—one is able to provide for these children who come from outside provinces at the expense of future development. I hope the Minister will take into serious review the departmental attitude on this question and the prejudice which is being sustained by a national institution catering for children who come to us from other provinces.

If the Minister agrees I should like to move the adjournment of the debate.

Yes, you can do so.

Then I move—

I second.

Agreed to.

Debate adjourned; to be resumed on 11th March.